Too often these days, the fashionable thing for our political and business classes to do is prattle on about the long-term’s importance. It makes them feel noble and has the added benefit of being talk for which they’ll be totally unaccountable.
The reality is there is no long term without the short term, and we need more economic growth to grow jobs and income and ultimately keep New Zealanders in our country right now. Getting growth is an urgent issue the government should feel daily pressure to perform on because it is their policy settings that make all the difference.
Boost tourism by considering visa-free entries for important markets
Tourism isn’t back to pre-Covid levels. The last figures I saw had us at around 85% and slowly growing. This is progress but not enough.
The difference between this current state and 100% (or higher) is hotels, restaurants, and retail not making profits today when they once were, and should be again.
What’s more, the feedback I receive is that for a government that is pro-business, it’s making it harder and costlier, not easier, to get into our country and spend lots of money having fun.
Indeed, with recent policy changes, getting a visa and coming to New Zealand for a holiday is now more complicated, takes longer, and costs more for Asian tourists.
If you are Chinese, you now need to fill out more paperwork and obtain certified translations into English at a higher cost—about 2500 RMB (NZ$590)—which creates confusion and complaints, including that Australia is much easier and cheaper. Clearly, our current policy positions are barriers to coming. Asian travellers book later – often last minute – than European and American visitors, and with confusion about English language requirements, for example, they may well just spend their money elsewhere.
I’m told, for example, that the 2500 RMB ($590) for our visa gets you a few days in a nice place in Thailand. Why then would we make it harder for higher-value customers?
Tourism has been our number one performing sector in the past.
Let’s not be sniffy about it – let’s have policies that go for growth.
One such policy would be to resume a fast-track process we’ve seen before, where at least higher-value customers – say, business class and gold members of the incoming airlines – can get in more quickly and smoothly.
But what about being even bolder? Earlier this year, Chinese Premier Li Qiang announced 15-day visa-free travel to China for New Zealanders. I’ve taken advantage of it twice since then. It means that now, as a Kiwi, it is as simple as having a valid passport, buying your tickets, and getting on the plane. Couldn’t we reciprocate? China is no longer a poor country. It has hundreds of millions of middle classes with options.
Let’s get more of them back here, enjoying and, more importantly, spending.
Finally, it would be remiss not to mention another country with over a billion people.
The Economist magazine has written a fair amount recently about India’s burgeoning middle class, who want to travel on holidays.
It says overseas spending by Indian travellers tripled between 2010 and 2023 to US$33 billion. One forecast suggests it will rise again to US$45b next year.
Indian travellers are some of the latest to make decisions about coming, and the feedback on Immigration NZ from Indian VIPs I have interacted with is very negative. As one high-net-worth individual said to me: “Don’t you want me to visit you?”.
Let’s also look to streamline processes for at least higher-worth Indian travellers and possibly consider something more radical, like the short visa-free period I have suggested for China.
In India’s case, I accept there will be some fish hooks. India is a very big country that’s still developing, and there could be overstaying problems. But it could also be the economic pros massively outweigh the cons. Fully utilised hotels, motels, restaurants, bars, bungee jumps, and campervans — that could really be something.
Provide more enabling investor migrant settings
Currently, the settings for the investor migrant residency path say you must bring $5 to $15m into New Zealand to invest in something approved by New Zealand Trade and Enterprise that isn’t a listed company and, therefore, will be fairly illiquid and with elevated risk.
Funnily enough, almost no one now applies in these categories like they used to.
Get on with getting more international students
As with tourism and investor migrants, international student numbers are also still well down from pre-Covid times, and the policy settings in place, formally and informally, seem to be clearly opposed to getting us back to where we have been.
Remember, this was once a $5b sector for New Zealand, bigger than, say, the wine and fintech export sectors today combined.
New Zealand needs more export sectors of scale if we are to reach the Government’s lofty (and long-term) goal of doubling exports, growing jobs and incomes, and keeping Kiwis here.
Settings should be urgently reviewed to make them more attractive.
The window is now as naturally more alluring markets, such as Australia and Canada, pull back.
One comment I have heard a couple of times is that this doesn’t necessarily need to include an inevitable path to residency for the student.
Australia and Canada have had relatively more relaxed international student requirements and higher residency ones, and we could learn from this, boosting this export services sector without automatically selling jobs and residency to each student afterward.
I’ve deliberately written here about some challenging sectors in recent times.
Some can be quite fickle about them, thinking we don’t need or want them as much as others anymore.
I disagree, but I would argue that in any event, right now, we are in the position of not having enough sectors going well to be complacent about these formerly top breadwinners.
Our short term really matters, and we need growth where we can get it in it.
Auckland Business Chamber is an advertising sponsor of the Herald’s Dynamic Business report.
