Hobson Article - December 2016
Amongst the many stories vying for our attention over the past few weeks, many of which relate to the challenges of growth in Auckland – construction costs, traffic congestion, the impact of the RMA and other government regulations, there is one you may not have noticed. New Zealand has been ranked the top country in the world for ease of doing business.
Can this really be the case? Yes it can.
The World Bank’s Doing Business report, which is an annual study measuring government regulations and their effect on business across 190 countries, puts us at No. 1 for the first time. For the past two years we have ranked second after Singapore.
The report is made up of 10 different indicators that affect the life of a business. New Zealand ranks first in half of these including starting a business, dealing with construction permits, registering property, getting credit, and protecting minority investors. The report also notes New Zealand’s strength in procurement through our online procurement process and that we have made paying taxes easier and cheaper. The authors must have noticed the SME friendly tax package in the 2016 Budget.
The report highlights the good work government agencies are doing through our comprehensive Business Growth Agenda to reduce the cost of doing business and create a competitive and productive economy that provides more and better paying jobs.
The Hobson readers, whether they’re running their own business from their front room in Parnell or Remuera or part of a great enterprise in Newmarket or the city, may be perplexed by this finding. Particularly if they’re currently battling some form of regulation. This country, at national and local government, is far from perfect. The survey result reminds us, however, that all countries struggle with the sorts of issues we experience. Overall, we handle them better than most.
And we need to. We’re a small economy that seldom enjoys economies of scale, we’re distant from markets and we don’t have much weight to throw around when it comes to setting the rules of trade. That’s why we must strive to do better than other countries. Government must continue to manage finances better than others, so that investors have confidence in our financial sustainability. And we must steadily and systematically review our laws and regulations to ensure they achieve their purpose as efficiently as possible. We know there is always a lot of room for improvement.
I’ve just come from opening a tourism investment conference. Tourism spending has increased an astonishing 20 per cent in the past year, to nearly $15b. More of the world is waking up to the beauty of this country and they want to enjoy it and they want to buy our products. We have a great opportunity over the next decade or so to do very well. It’s good that the world thinks this is an easy place to do business; we’re determined to build on that reputation and to take it further.