A week in advocacy 

Covid economic data
Covid-19’s effect on the economy was laid bare in economic data released this week.  NZ’s GDP fell 1.6% in the March 2020 quarter, a greater quarterly drop than any during the global financial crisis.  And while BusinessNZ surveys showed a slight pickup in the manufacturing and services sectors during the last month, they were still in negative territory: PMI and PSI results were both below 40 (index readings under 50 indicate a sector is declining).
 

Forecasting pitfalls
Volatility of economic data is making forecasting difficult, raising issues for companies subject to NZX continuous disclosure rules.  Australia has temporarily relaxed its continuous disclosure rules to avert the risk of opportunistic class action litigation against companies whose earnings forecasts are found to be inaccurate.  NZ has decided against following Australia’s lead as class actions are less common in NZ, but the NZ Law Commission is currently investigating regulating class actions anyway.  BusinessNZ supports the investigation: “The value of class actions is that they enable large entities to be called to account, but they can also enable opportunistic commercial litigation,” BusinessNZ CEO Kirk Hope said.

NZ-UK trade deal under way
With the Brexit decision behind it , the UK is now joining negotiations towards a free trade agreement with NZ.  A public consultation in the UK  shows 70% of Brits support a trade deal with NZ, but UK farmer lobbies still want to protect their lamb, dairy and salmon from NZ products flooding the market.  ExportNZ’s Catherine Beard says it's essential that the deal enables better access for our food products, which are unlikely to be a threat to UK farmers as our seasons are counter-cyclical and our food products complement UK production.
 

Investment and data for food brands
New research on the future of NZs food-producing sector says more investment is needed for developing innovative new food products - but obstacles exist.  Much food production is by cooperatives, and the cooperative model makes it hard to get adequate investment for new products; meanwhile, many smaller farms are overcapitalised, preventing them from diversifying into new products.  And the report says NZ food branding needs to be supported by better data - environmental production methods, product tracing and proof of provenance such as Buy NZ Made or New Zealand Grown certification.
 

Getting skills from overseas
NZ’s border remains closed, and tighter rules for importing ‘critical’ workers were released this week: they must have skills that are needed for critical projects and are not available here, must be paid over $106,080 p.a., and the employer must pay for quarantine.  Other than critical workers, it may become harder to import or retain migrant staff more generally, as many NZers have been laid off and are now available for employment.  BusinessNZ’s Rachel Simpson says availability is important but so are the right skills, and it will be important for work visas to be approved where available NZers don’t have the required skills.
 

 Apprenticeships Boost good for business
The wage subsidy for apprentices announced this week will help businesses build a skilled workforce for economic recovery, says BusinessNZ CEO Kirk Hope.  "With the border closed and immigration uncertain, the need for a skilled workforce will become more critical.  Making sure we still have a skills pipeline for when things pick up will also be important.  As more people are having to change jobs and careers, it is good to see Government sharing the cost of training with business.  The Apprenticeships Boost recognises that  this is not just course fees, but also the wage costs of having staff that need investment and skills to contribute to business productivity.”

 

How competitive is the NZ economy?
Business owners and executives are invited to take part in survey on NZ’s competitiveness.  The survey for the World Economic Forum asks business people about their environment for doing business, and ranks countries’ competitiveness accordingly - last year NZ was judged 19^th most competitive economy in the world.  Please take part in the survey here to help find NZ’s competitiveness ranking for 2020.