OPINION
With luck, we will know the shape of the new Government later today, when the results of special votes are released.
We need ministers to get to work quickly and deliver what voters supported. And that is change. We need the new Government to work alongside the productive economy to address New Zealand’s many challenges.
We are struggling to bring inflation under control, rising interest rates are putting pressure on households, business confidence is weak, unemployment is starting to rise, social services aren’t delivering and we have a growing infrastructure deficit.
While we might not be in a technical recession, for many businesses and households it sure feels like we are. So, what should be done?
The message from our Employers and Manufacturers Association (EMA) members is clear – they want the Government to back them to succeed. This change in attitude was the primary request in our pre-election policy manifesto.
At a simple level, that means a Government focused on delivering policies that rebuild confidence in the economy and that encourage investment, innovation and entrepreneurship.
Why? Because it is the business community that will drive our economic recovery, creating high-paying jobs, paying the taxes and making the productivity gains that are needed to lift our living standards.
That is why a focus of the new Government must be on enabling investment.
To achieve higher productivity, we need investment in technology, skills, services and manufacturing capability. And to achieve higher export returns, we need investment in distribution, market coverage and product development.
There are some immediate investment pools we can target. Investor migrants have made a significant and positive impact on New Zealand businesses, bringing dollars, enterprise, experience and global contacts.
Unfortunately, we closed the border to these migrants during Covid, stalling applications valued at billions of dollars in the Immigration NZ pipeline. The business experience and contacts these investors bring can help emerging Kiwi businesses to compete internationally.
If you attend any innovation or early-stage investment ecosystem event in the upper North Island, you’ll see the positive impact new New Zealanders are having. They’re helping pave a path to higher-wage jobs and more successful companies.
If the new Government wants to encourage foreign buyers to acquire luxury homes at a premium, let’s also get them contributing to our companies and their workers as well. Private infrastructure funds would be another good destination for those investor dollars, given our need to see rapid progress in narrowing the infrastructure deficit.
The need for infrastructure investment is urgent given the reality of climate change.
We will face more severe storms in the years ahead, and it is simply not an option to have regions effectively cut off, as happened with Cyclone Gabrielle. World-class infrastructure also means we can improve our productivity because we are making it easier to move our goods, services and people around.
Foreign investment
We need to be more open to foreign investment and exploring options such as infrastructure bonds, public-private partnerships and greater use of tolls, congestion charging and other revenue streams. We also need to make it easier to build infrastructure. Whether it’s roads, rail, hospitals or schools, it simply takes too long to build things in New Zealand.
That is why we need to rethink our resource management legislation. There are aspects of the new Resource Management Act replacement regulations that could work well, but there are also concepts within it that are untested and could take years for courts to define.
It’s one of the reasons the incoming Government wants to go back to the old RMA, with a beefed-up fast-track component, to get its infrastructure programme moving. While it’s doing that, it will have another look at what new rules and legislation could look like.
We have long taken pride in how easy it is to set up a business in New Zealand, but the same cannot be said about how easy it is for businesses to operate – especially our small and medium enterprises. It’s time to remove the shackles and let them thrive.
We need to improve the flexibility of our employment market, making it easier to source the right talent and create a unique working environment that can grow our businesses and people. That means scrapping Fair Pay Agreements, which seek to reduce flexibility in workplaces.
Bring back 90-day trials
We also strongly support the return of 90-day trials for those businesses that want to use them. Such trials allow employers to take a risk on employing someone who might not have the right skills or experience but who has the right attitude.
They can help those on the edge of the employment market, such as long-term beneficiaries and those with a troubled past, into a job because they are given an opportunity they might not otherwise have received.
We need to rethink how we calculate future increases to the minimum wage. In the past five years, the minimum wage has increased 45 per cent. In recent years, employers have found out about significant minimum wage increases from the Government as late as February, for implementation in April. That makes it impossible for them to plan and budget appropriately.
That is why we need to link future minimum wage increases to an index, such as the consumer price index. Increases to superannuation and other benefits are linked to an index, so there is no reason why the same shouldn’t apply to the minimum wage. This will provide businesses with greater certainty about future increases and will help remove the politics of setting the minimum wage.
The other area of employment law that needs work is the Holidays Act, which is broken. It is too complex and leads to miscalculations and compliance errors. For example, the 10 days of sick leave should be calculated the same as other leave entitlements for part-time workers.
If you work one day a week, you should not have the same sick leave entitlement as someone who works five days a week. That is just not fair.
Our businesses are also crying out for skilled workers, in demand around the world. We need our immigration agency to act more like a national recruitment agency than a gatekeeper. We must keep workers, businesses and their customers safe – so many of our members have been affected by crimes of opportunity that have reached epidemic proportions.
More long-term, we need to rethink how our education system works. Our members tell us too many young people lack basic numeracy and literacy skills. The education system needs to better deliver for all New Zealanders.
The EMA and our members stand ready to support the incoming Government and roll our sleeves up to deal with the challenges ahead. With a clear plan, the private sector will invest alongside the Government, in time, dollars, ideas and, above all, immediate action.
Brett O’Riley is the chief executive of the Employers and Manufacturers Association.
New employment data this week will reveal the impact on jobs.