Incentives to attract investment in safe haven NZ

Media Release 3 November 2003

Incentives needed to attract investment in safe haven New Zealand

An American Chamber of Commerce business issues survey of US companies operating in New Zealand has found that this country is a safe, stable place to invest but offers no real incentives to do more.

All of the 85 respondents, who included a high percentage of Fortune 500 companies, had clear views on what the Government needed to do to attract greater foreign direct investment and create a competitively attractive business climate.

Top of the wish list was a call for government to stimulate domestic economic growth through reviewing monetary and taxation policies, solving infrastructure problems especially roading, electricity pricing and broadband access, reducing compliance costs and red tape, lifting the skill base to meet the needs of new and emerging technologies and creating a more user friendly business environment.

Resource management and employment legislation were singled out as examples of excessive regulation and intervention which increased the general perception respondents have of the government being anti business, with a negative attitude towards foreign companies, particularly US companies.

However, only three of the 85 survey respondents, had plans to relocate their New Zealand operations overseas while 10 were looking at downsizing.

On the positive side, 29 indicated their intention to consider new investments here and 58 said they were forecasting sales growth in the year ahead.

Respondents liked New Zealand’s “can do” attitude and innovative, entrepreneurial spirit, along with the environment, lifestyle benefits and being a safe place.

Some saw the country as a “a microcosm of the US market” but smaller with an export oriented economy and stable, honest and open government.

While most continued to support a Free Trade Agreement with the US few of the respondents saw it as a real likelihood and had not become involved in the lobby to date, although many had indicated that they were now prepared to make the commitment to enable progress to be made.

The survey, conducted in June and July by email, will become an annual business climate barometer for the American Chamber of Commerce in New Zealand to direct its focus in championing bilateral trade, commercial and business ties.

The results are being presented to government and the business community as a catalyst for discussion to solve the roadblocks to investment.

The survey questionnaire and findings can be found on the AmCham website at www.amcham.co.nz

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