Business needs better access to rapid antigen tests (RATs), BusinessNZ says. Air NZ is now using RATs to get isolating staff members back to work sooner. Other firms want to do the same policy but have been unable to buy the tests following a Govt ban and global supply constraints. The ban now overturned, RATs imports are on the way, with more large orders facilitated by BusinessNZ Network - but this is less ideal than e.g. Australia where these are now widely available in supermarkets and where plans for local manufacturing of RATs are under way.

NZ recovered quickly from the Covid-19 shock thanks to effective virus containment, job protection measures and highly expansionary macroeconomic policies, but the economy is now overheating, the OECD says. Risks are rising from a delayed border opening and the prospect of lower export prices if China’s economy falters. Domestic risks include unsustainable levels of government support, high household indebtedness, and the possibility of a sudden house price correction. The OECD says the NZ Govt should withdraw fiscal stimulus rapidly, commit to long-term debt-to-GDP targets, and take action on unaffordable housing.

BusinessNZ surveys show Covid-19 continues to affect sectors differently in NZ, with the manufacturing sector expanding while the services sector still struggles. The PMI for last month shows manufacturing expanding at a faster rate, at 53.7 (readings above 50 mean expansion), 2.5 points higher than the month before. In contrast, the PSI shows the services sector still contracting, at 49.7, although contracting more slowly than previously. BusinessNZ chief executive Kirk Hope said that the ongoing move towards climbing out of contraction is encouraging, but illustrates the difficult period many service businesses are facing.

BusinessNZ seeks public discussion on a proposal for a NZ Income Insurance Scheme (NZIIS) that would support people unemployed through redundancy or illness at 80% of normal pay for up to 7 months. The scheme would help people  return to work with retraining or rehabilitation. NZIIS would be run like ACC, funded by employer and employee levies. BusinessNZ says the proposal's a better option than existing unemployment benefits or suggested compulsory redundancy compensation, neither of which focus on returning to work. Views on the proposals are sought here. 

BusinessNZ has raised concerns about the market investigation into the price of building products, saying it is the second time a market investigation has raised the possibility of requiring the separation of firms’ wholesale and retail functions (regulatory vertical separation). The Commerce Commission recently made the suggestion in its ongoing grocery market investigation, and has now raised the issue for the building products sector. BusinessNZ says market investigations should refrain from recommendations that could lead to regulatory overreach and significant interference in the market.

NZ has again claimed the title of  ‘least corrupt country’ in anti-corruption rankings. The latest Corruption Perceptions Index ranks NZ first equal with Denmark and Finland for absence of corrupt payments, open government, freedom of expression, civil liberties and independent police and justice systems. BusinessNZ Chief Executive Kirk Hope says NZ’s reputation for honesty and transparency is a great advantage in conducting international trade and other dealings: “We need to continue to uphold our standards and institutions and maintain this enviable position.”