Business News

An integrity group has started a project to help keep New Zealand corruption-free.  The group of New Zealand business and justice organisations has developed anti-corruption training courses, to be launched in Auckland today. The group includes BusinessNZ, ExportNZ, Serious Fraud Office, Transparency International, Deloitte, Chapman Tripp, Institute of Directors and NZ Institute of Chartered Accountants. The material for the courses was donated pro bono by the Serious Fraud Office, Transparency International (free online training), Deloitte and Chapman Tripp (free online and in-person training).  The training courses aim to raise awareness of the risk of corrupt practice and to help businesses and other organisations deal with such practice by others.  More international dealings by New Zealand businesses and organisations means many could now be exposed to unethical business practice in other countries. Exporters, importers and those with business partners in other countries might be operating in areas where bribes or kickbacks are common and need to know how to avoid being drawn into such dealings. New Zealand has a valuable reputation of being corruption-free, being ranked first equal in the world for freedom from corruption, according to Transparency International surveys.  “Our freedom from corruption is of immense value to New Zealand businesses and the New Zealand brand, and the anti-corruption training will help maintain this standing,” BusinessNZ Chief Executive Phil O’Reilly said.  After the initial launch of the initiative training courses will be run through the country by the member organisations involved.

“Budget 2014 delivers a range of good news for New Zealand business,” PwC Corporate Tax Leader Geoff Nightingale says.  “The return to surplus and the forecast reduction in debt relative to GDP delivers a stable fiscal platform that will give business the confidence to invest. It’s that business investment will drive economic growth and employment. “Keeping Government expenditure increases to a rate lower than economic growth will reduce the pressure on rising interest rates and inflation, leading to less pressure on our exchange rate.  “Business will welcome specific measures such as additional funding for science and innovation, and to expand and support our access to markets in China, South America and the Middle East. “Infrastructure investment in transport, health and education will all support the business climate in New Zealand. “Further reductions in ACC levies of $480m in 2016 will further lower costs for employers making New Zealand business more competitive.  “We welcome moves to assist R&D intensive businesses by providing tax credits for loss-making start up R&D and allowing tax deductions for previously non-deductible “blackhole” R&D expenditure. “By showing prudent fiscal management with some targeted additional spending, Budget 2014 should be well received by New Zealand business as providing the right economic settings to pursue business growth,” concludes Mr Nightingale.  

Despite a dip, New Zealand’s manufacturing sector remains in solid expansion, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for April was 55.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.8 points lower than March, although similar to results experienced over the last eight months. The sector has now been in expansion for 19 consecutive months, with the first third of 2014 averaging 56.4. BusinessNZ’s executive director for manufacturing Catherine Beard said although the level of expansion wasn’t as strong as the previous month, activity was still healthy and positive across most of the sub-indices recorded. “Comments from respondents remained more positive than negative, although a contributing factor to the lower level of expansion that came through was the lower number of working days in April because of the Easter/ANZAC break.” BNZ economist Doug Steel said, “Despite what looks like a holiday-induced slowdown in April, the trends in the PMI are strong and especially so in employment. Buoyant construction and agriculture sectors look supportive on the demand side.” Four of the five seasonally adjusted main diffusion indices were in expansion during April. Production (55.3), deliveries (55.3) and new orders (55.2) displayed almost identical levels of expansion, while employment (54.5) returned to levels seen in February. Finished stocks (49.3) were the only index to show any level of contraction, and returned to levels seen in February. All four regions were again in expansion during April, although differences were evident. In the North Island, the Northern region (53.0) decreased 6.2 points, while the Central region (51.3) fell 6.3 points after consecutive months above 57.0. In the South Island, the Canterbury/Westland region (50.1) only just managed to remain in positive territory, while the […]

Professor Kate McGrath. Picture courtesy Victoria University of Wellington Image Services. Continued funding of the MacDiarmid Institute for Advanced Material and Nanotechnology, hosted by Victoria University of Wellington, is confirmation of the contribution the Institute is making to New ZealandÕs economic future says Director, Professor Kate McGrath. The Institute is one of six Centres for Research Excellence (COREs) which the Tertiary Education Commission today announced will receive funding of just under $210 million over six years from January 2015. The MacDiarmid Institute is a national network of seven organisations five universities, one crown research institute and Callaghan Innovation bringing together researchers who develop and apply cutting-edge techniques in physics, chemistry and engineering and partner with business to take innovative new technologies to export markets. Named after Alan MacDiarmid, who was awarded the Nobel Prize in Chemistry in 2000, the MacDiarmid Institute was one of New Zealand’s first COREs. Professor McGrath says today’s funding announcement is an endorsement of the vision and plans the MacDiarmid Institute is implementing to deliver growth and value to New Zealand’s economically-important high-value manufacturing sector. She says the Institute is also making a significant contribution to mentoring emerging entrepreneurial scientists and training the next generation of science teachers who can motivate young New Zealanders to pursue science-based careers. “Our focus is on delivering excellent research and education, inspiring New Zealanders, training New Zealand’s future leaders and advancing this country’s future. Continued support for our work shows we are on track to progress this programme.” Professor Mike Wilson, Pro Vice-Chancellor and Dean of Science at Victoria University, welcomed the funding announcement and says Victoria is proud to host a world-leading Institute which includes many of New ZealandÕs top materials scientists. The MacDiarmid Institute has 36 Principal Investigators who come from Victoria University, the University of Canterbury, Massey […]

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2014, shows total sales in March 2014 increased 12.57% (year on year export sales increased by 29.33% with domestic sales decreasing 3.05%) on March 2013.  The NZMEA survey samplecovered NZ$403m in annualised sales, with an export content of 55%. Net confidence was at 0, down on February’s result of 35. The current performance index (a combination of profitability and cash flow) is at 101.7, up from February’s result of 98.7, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, down from 105 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104, down on February’s result of 107.67. Anything less than 100 indicates a contraction.  Constraints reported were 53% markets, 20% capital, 13% production capacity and 13% skilled staff. Net productivity was unchanged on last month. Staff numbers for March increased year on year by 0.33%. All staff segments, tradespersons, operators/labourers, supervisors, managers and professional/scientists, reported a moderate shortage for March.  “This month showed generally more of what we have been seeing over the last few months, domestic sales falling (it is worth noting that few of our members are directly related to construction), while export sales increases, however export sales are returning little margin with an elevated currency. Net confidence fell, indexes were mixed and staff numbers increased slightly.” “Comments were also mixed, but it is clear the exchange rate is having an effect on those supplying the domestic economy by increasing import competition, while remaining an issue for exporters.” “The Reserve Bank of New Zealand (RBNZ) raised interest rates for the second time last week which puts further pressure on the exchange rate. The RBNZ keeps on saying that the current level […]

Australian Productivity Commission Chairman Peter Harris says in a report that Australia hasn’t been productive in recent years .  “Australia’s productivity performance has fallen well behind that of most other developed economies for more than a decade. Reasons for this, include differences in the rate of investment growth. But the picture painted in the statistics calls for strong policy attention, particularly in the current era where the recent record terms of trade will no longer support continued income growth,” Harris said in a statement.  The report focused on three important areas: the effect of price distortions on productivity; Australia’s 2012-13 productivity performance and productivity in manufacturing. Agriculture, mining, manufacturing, utilities and information technology showed the most unproductive trends, particularly businesses of petroleum, chemicals, small wine-makers, artisan bakers and regulated pricing of electricity and water. The agriculture industry productivity fell at 5.8 percent, minging at -4.9 percent, manufacturing at -0.5 percent, electricity, gas water and waste at -1.8 percent and and information, media and telecommunications at 7.2 percent. However, he said a good sounding policy could effect change. Harris pointed out the current policies of water companies, for example, were forced to invest in more costly sources like desalination and recycling instead of deciding to charge more when there is lack of supply. The chairman said this reduced productivity for the water industry. While economic experts debated that Australia has no productivity problem because of labour productivity, the growth in the industries overall were feeble. “It’s a global bother, but we are the ones with persistent negatives and that’s a bother to me. Whatever the case, it means we are not doing well enough to justify continuing high growth in incomes.”  With the report, the commission sought to call the government to act on the problem through strengthening the labour market […]

 Today’s announcement by David Parker and the Labour Party if done well, might be a game changer, aligning monetary and fiscal policy to deal with the pressures that face our economy here and now, say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “This is a big step, but it is something that has developed around the world. The days of one target (inflation), one lever (OCR) monetary policy are numbered; we now live in a complex world of multiple targets, and multiple levers – crucially this change fits the framework of other policies announced by Labour last week.” “Targeting our external balance as well as inflation will lead to lower exchange rates over time, and consequently better outcomes for our entire economy, allowing New Zealand to earn its way in the world.” “The introduction of a savings lever to dampen inflationary pressures in addition to interest rates is a good move; it will remove the Reserve Bank option to deflate the tradeable sector in order to keep headline inflation inside the target band via an overvalued exchange rate.” “This is an important strategic change, combined with signalled fiscal policy changes to re-balance investment incentives (remove the capital gains tax exemption), encouraging greater value add from more research and development (R&D tax credits) and increasing productive equipment investment (accelerated depreciation); all speak to a coherent re-emphasis of the importance of the tradeable sector. We should never forget that a balanced current account matters to each of us as individuals and to us all collectively as a nation.” “I have seen comment that a lower exchange rate will result in higher costs, but an overvalued exchange rate is a sugar rush to consumption that has little substance. In any event, research by the Reserve Bank […]

AsureQuality is pleased to announce the appointment of John McKay as its new Chief Executive Officer (CEO), commencing 3 June 2014. John is an experienced international business leader who comes with proven experience in the food and dairy sectors and has a strong customer partnership approach. He is currently CEO of Hansells Food Group where he runs a diverse and complex business including four manufacturing sites, and sales and distribution companies in New Zealand, Australia and the United Kingdom. John has extensive international business experience in Asia, Latin America and Europe including the role of Global Brands Director for Fonterra based in Singapore and Marketing Manager (Europe) for American Express. He has experience working with and forming joint ventures, having worked with Fonterra’s joint venture partners in Venezuela, Taiwan and Malaysia.