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Advocacy for business by the BusinessNZ Network | |
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Latest stats for the March quarter have been mixed for business. On the negative side, activity in the services sector was down 0.6%; retail trade and accommodation were down 1%; and wholesale trade was down 0.1%. Meanwhile, GDP shrank 0.1% and inflation increased by 1.2% in the quarter, and the latest month's PMI showed continued contraction. On the positive side, there were increases in activity in construction, mining and real estate, and business investment in non-residential buildings, plant, machinery and equipment and transport equipment grew 2.8% in the quarter. | | | |
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Profit-taking not causing inflation |
NZ’s inflation is not being driven by business profit-taking, according to new research. BusinessNZ’s Catherine Beard says allegations overseas of inflation caused by firms’ profit-taking are not borne out in NZ. “About 75% of price increases in the non-financial sectors of the NZ economy are made up of the cost of inputs, and the remainder is made up equally in wages and profit - some sectors are making less, and even entering negative-profit territory,” she says. | | | |
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Investing for productivity |
Research shows firms can become more productive with the use of new technology. But adopting new technology is expensive, and many firms need access to overseas investment to make the move - the Overseas Investment Act should be made less restrictive so firms can access foreign investment to get more tech, BusinessNZ CEO Kirk Hope says. Other moves that could help include cutting corporate tax and extending the R&D tax credit scheme to allow NZ businesses to afford more tech. | | | |
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An Amendment Bill proposes changing the purpose of the Crown Minerals Act - from “promoting mining” to “managing mining.” Such a change would deter mining and lead to an undersupply of minerals for NZ’s energy transition, the BusinessNZ Energy Council says. National MPs on the select committee considering the Bill have agreed that this change in focus would hold back mining and reduce royalties; as a result, the select committee can't unanimously recommend that the Bill should proceed. | | | |
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Carbon markets fail to clear |
NZ now has an oversupply of emission units following insufficient bids in both carbon auctions this year. The failed 2023 auctions may be the result of firms stockpiling extra units last year, fearing carbon price rises following Climate Change Commission recommendations. In fact the carbon price has fallen to around $65 per tonne. The BusinessNZ Energy Council says volatile trading is likely a response to regulatory uncertainty from frequent ETS settings changes, a looming ETS review, and significant differences in the carbon policies of political parties contesting this year’s election.
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Latest election policy announcements affecting business show Labour would make permanent the $500 a month subsidy to employers for the first 2 years of apprenticeships and would not impose a fertiliser tax; National would create a new infrastructure agency to pursue PPPs, allowing tolling and fast-track consenting; would ditch the He Waka Eke Noa agricultural emissions agreement, but continue to support Net Zero by 2050, and would allow regulated genetic modification; and ACT would have only two income tax bands (17% below $70k and 28% above), overhaul the RMA, and have a Minister of Regulation to cut red tape…
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AdvocacyUpdate is an update on recent activity & advocacy by the BusinessNZ Network | |
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