Business News

 While New Zealand as a country becomes greener in its thinking,  it still lags well behind the world in the actual adoption of policies such as alternative fuels for vehicles. New Zealand is at the bottom of a list of 40 countries for businesses considering, or having already introduced, alternative fuels for their vehicles. Simon Carey, Partner, Grant Thornton New Zealand, said that only 7% of the companies surveyed had considered or were using alternative fuels against a global average of 24%. Japan (48%) led the way followed by Malaysia, the Philippines and Turkey, all on 46%. The United States was 27%, the United Kingdom 24% and Australia 15%. “At first glance the figures look terrible, but need to be put into perspective in light of the make-up of the New Zealand economy, our geography, and the improving awareness and acceptance of green initiatives. “There is certainly a lot of work to be done, but we are moving in the right direction,” he said. Carey cites the lack of big businesses in New Zealand as a key factor at our lack of adoption of alternative fuels, and the logistical headaches caused by our elongated country and rugged terrain. “Basically we are a country of small to medium sized businesses that do not have the balance sheets and fleet size to make an impact. And for many of these businesses, since the Global Financial Crisis, the last few years have been all about survival rather than adopting green initiatives, which might put pressure on their bottom line. “Half of the New Zealand businesses noted cost as a deterrent while 37% were concerned about the difficulty in refuelling or recharging their vehicles given New Zealand’s ribbon-like infrastructure,” he said. Carey said that all was not necessarily gloom and doom as shown by […]

Auckland’s water charges are putting businesses at risk and driving others away, the Employers and Manufacturers Association has told the Auckland Council and Watercare hearings.  “Water and waste water charges are delivering a big injustice to many Auckland businesses,” said Peter Atkinson, EMA’s spokesperson on local government.  “They’re putting many businesses at risk,” Mr Atkinson said. “We know of several firms at risk of losing business or even closing down because of them. “Businesses in several areas of Auckland are facing waste water charges in this form for the first time but the transition to the new single charging system is being managed badly.  “The new charges include businesses paying 60 per cent more for water and waste water than residential users.  “The differential is totally unjustified. There was no differential under the previous regimes.  “Watercare advises it costs no more to process water and waste water for residences than for business. “Auckland Council is entirely responsible for the new charging requirements. It sets the policy obliging Watercare to implement them.    

The month of March finished off a healthy quarter of growth for New Zealand’s manufacturing sector, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for March was 53.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This followed results of 56.0 in February and 55.1 in January. Across the quarter, this produced an average of 54.8 – the highest March quarter average since 2007.  BusinessNZ’s executive director for manufacturing Catherine Beard said that the first three months of 2013 have got the sector off to a solid start. “Given it was the first time since early 2011 that we had consecutive monthly expansion across all main sub-indexes, the positive outcome also saw previous elements of the sector that had been previously struggling experience uplift in March. “It was particularly pleasing to see employment show a second consecutive increase in activity after spending eight of the last previous nine months in decline. Also, metal product manufacturing (55.6) made a welcome return to expansion following seven consecutive months in contraction, mainly due to significant lifts in production and new orders.” BNZ senior economist Craig Ebert said, “The latest PMI, and the manufacturing component of Tuesday’s NZIER Quarterly Survey of Business Opinion, are singing from the same song sheet. It’s not a power ballad, but it’s far from a dirge.” All five seasonally adjusted main diffusion indices were in expansion for March, and the first time there was consecutive monthly increases across all five indices since the start of 2011. New orders (55.3) led the way for the first time since July 2012. This was followed by production (53.0), which fell back to levels of expansion seen in December. Employment (51.5) recorded its highest result since […]

The late Sir Paul Callaghan once said that the brilliance of New Zealanders was in the ‘niches’ – and the global success enjoyed by winners of this year’s World Class New Zealand Awards is a testimony to those wise words. The category winners for the 2013 Awards, a New Zealand Trade and Enterprise initiative delivered by Kea New Zealand, were announced today. Internationally successful pioneers in the fields of animal health, sustainable fuels and the manufacture of microchips have wowed the judges of the prestigious awards this year, making their mark in the world in precisely the way last year’s World Class New Zealand Supreme Award winner Sir Paul envisaged. First presented in 2003, the annual World Class New Zealand Awards honour internationally successful Kiwis, and one ‘Friend of New Zealand’, who have greatly contributed to the country’s reputation and connectedness on the world stage. Bill Buckley takes out the Manufacturing, Design and Innovation category, having achieved phenomenal international acclaim for Buckley Systems, a thriving business that manufactures components for the machines that make 90 per cent of the world’s silicon chips. Dr Sean Simpson, winner of the Science, Technology and Academia award, co-founded Lanzatech, which is at the threshold of solving some of the biggest problems facing the sustainable fuels industry today. Dr Doug Cleverly, winner of the Life Sciences category, is the Managing Director and Co-Founder of Argenta, a company that exports cutting-edge animal health solutions to 36 countries across the globe. New Zealand managers have also been acknowledged this year for achieving at the highest level of global business. Judith Hanratty, a former company secretary for BP, and Geraldine McBride, former president of SAP North America, have won the Investment and Business and Information and Communications categories respectively. Rounding out the category winners are two household names. Annabel Langbein, cook, food writer and publisher, has won the Creative category for building a global foodie business, and […]

Any decision not to let Auckland’s port expand under its new plan is effectively a decision to close it down, the Employers and Manufacturers Association says.  “In the absence of an alternative, and there is none, the port at Auckland is essential for the city and for New Zealand,’ said Kim Campbell, EMA’s chief executive.  “We can’t understand where those opposing it are coming from, with so many jobs at stake. “Business and consumers need the port to expand its footprint modestly so it can re-organise its operations to allow it to become at least as competitive as the Port of Tauranga. “But nothing will happen until the long running industrial dispute with the Maritime Union is settled. “The port has said it will abide by the mediator’s ruling on this and its time the union did likewise. “Without the planned development all our northern ports will be full to capacity in short order.  “Tauranga couldn’t handle the recent overflow from Auckland, and expansion at Whangarei is limited.  “Shifting the port elsewhere would incur costs of at least $4 billion plus back up infrastructure. “Access to waterfront land is being satisfied by the Wynyard Quarter developments and that will soak up investment for the foreseeable future.”    

When it comes to optimism about the economy, South Islanders are much more bullish than North Islanders with twice the number of Mainlanders being “very” optimistic compared with their northern neighbours. The Grant Thornton International Business Report (IBR) shows that 16.8% of South Islanders are very optimistic about the economy in the next 12 months compared with 8.10% of the North Island. Simon Carey, partner, Grant Thornton New Zealand Ltd, said that the gap narrows when talking about optimism overall with 65.2% of South Islanders being optimistic compared with 61.6% of North Islanders. “These optimism figures are supported throughout the survey with South Island firms expecting to generate more revenue than North Island companies (68.4% to 66.7%), generate better selling prices (46.3% to 38.4%), employ more staff (44.2% to 34.3%), invest in plant and machinery (62.1% to 54.5%) and pay higher wages with 80% looking to increase salaries in line with inflation and above compared with 72.7% for the North Island. At the generous end, 22.1% of South Island firms will increase salaries at levels above inflation compared with 19.2% for the North Island.  “Optimism in the South Island has been trending ahead of the north for some time as evidenced by the research which revealed that 45.3% of South Island firms employed extra staff in 2012 compared with 29.3% for the north. These employment figures were further reinforced by the fact 25.3% of North Island firms decreased their staff in 2012 compared with 16.8% for the south.” Over the last month or so the gap has narrowed with North Island sentiment being lifted by the bubbling Auckland housing market. “South Island levels are tapering mainly because the high end growth that businesses were looking for is now occurring so the expectation levels that drive a business owner’s optimism are […]

The New Zealand Qualifications Authority is currently overseeing a mandatory review of all qualifications at levels 1-6 on the New Zealand Qualifications Framework (NZQF). The Targeted Review of Qualifications aims to reduce the duplication and proliferation of qualifications; to ensure that qualifications meet the overall needs of a particular sector and are useful, relevant and fit for purposes; and meet the new requirements for listing qualifications on the NZQF. Qualifications within the Mechanical Engineering sector are due to be reviewed during 2013. Competenz will be leading this review on behalf of NZQA and is now seeking to appoint a Governance Group to provide strategic direction, guidance and project oversight. HERA is one of the nomination bodies for the Governance Group and are seeking an industry person who is a leader and strategic thinker, willing to put his/her view forward and consult with membership. At this stage in the review this is about the big picture governance and not the specific subject matter which will be consulted on later on in the review process. Please contact the HERA Director with your CV if you feel you are able to contribute and would like to be considered in the nomination process.  

 The final Vocational Pathways launched today by Education Minister Hekia Parata and Tertiary Education, Skills and Employment Minister Steven Joyce is a good start towards making learning more relevant for more New Zealanders, says BusinessNZ. Chief Executive Phil O’Reilly says “Business has been concerned for some time with the performance of programmes provided for secondary school aged students and it’s good to see something concrete being done to connect students’ learning with further education and job options.  “Up until now, it’s been hard for secondary school aged students to find an alternative pathway outside of the university route – a route that many young people do not find appealing or relevant.  “The current arrangements aren’t working for many young people. Students can often end up leaving school with qualifications and credits not particularly relevant to business. Or worse, they leave education without the basic skills like maths and literacy, severely limiting their future opportunities. “This initiative shows that the secondary and tertiary education sector can be responsive to industry and learner needs. It’s a helpful tool, but not a complete solution. More needs to be done towards blurring the lines between education and work, and to better connect education with employment. “It means making better connections between parents, employers and teaching professionals. They all need to be leaders of this process.  “The business community expects all secondary schools and tertiary education organisations to be held accountable for delivering effective programmes. Programmes need to successfully equip our young people to be productive and successful members of our communities, including the skills the business community needs.  “I believe these pathways will make you a better citizen, whatever you end up doing. It’s not necessarily about pre-determination of a career. It’s about students making informed, confident choices, and giving them control over their […]

Global CEOs rate China as the world’s top destination for foreign investment, which is consistent with its significantly expanding economy, according to a global survey by PwC and the China Development Research Foundation. The survey ‘Choosing China: Improving the investment environment for multinationals’ found more than half (56%) of CEOs surveyed chose China above other major and emerging economies including Brazil, Russia, India and the US.  Worldwide CEOs say they were attracted to China’s expanding consumer markets, skilled talent pool and government incentives. “China attracted NZ$133.8 billion (US$111.7 billion) of foreign direct investment in 2012 from multinationals seeking to tap into China’s success,” says PwC New Zealand Partner and China Sector Leader Colum Rice. “China’s economic transformation is absolutely dependent on its ability to continue to attract foreign investment. Yet, it faces new challenges as emerging markets become more competitive. Over recent years, we have seen increasing levels of Chinese investments into New Zealand but what the survey highlights is the emphasis that China is placing on attracting inbound investment. This brings into sharp focus the increasing level of competition which New Zealand faces for foreign direct investment,” adds Mr Rice. The survey found less than 10% of CEOs from smaller companies (operating in less than five countries) have operations in China. “China now needs to promote itself as a place of opportunity for smaller and more specialised businesses to keep the investment renminbis flowing in. All the low hanging fruit is gone and this places Kiwi businesses in a strong position. “New Zealand needs to work hard at selling the benefits we can offer growth hungry China, in terms of the innovation we can bring and financial capital we can help attract. “For Kiwi companies with the IP, brands, relationships and knowledge Chinese businesses crave, a partnership could offer […]

The Commerce Commission has today released an updated timetable for completing its determination of a cost-based price for wholesale broadband ¬¬– the unbundled bitstream access (UBA) service.  Telecommunications Commissioner Dr Stephen Gale announced that the Commission will hold a conference on 12 and 13 June to test the views expressed by industry in submissions and cross-submissions on the draft UBA determination. The Commission expects to finalise the UBA determination in August 2013.  The Commission has fully reconsidered its timetable in light of the ommissionGovernment’s announcements that it intends to defer the date on which the new UBA price will come into effect to sometime in 2015, and that it will initiate a statutory review of the policy framework for telecommunications regulation. The Commission consulted with industry on the implications of the Government announcement, and on whether any changes to the Commission’s timeframes were appropriate. Amendments to the legislation in 2011 introduced a cost-based price for UBA from December 2014. The Commission is required to make ‘reasonable efforts’ to complete the UBA price determination – using international benchmarks – by December 2012, and to allow sufficient time to derive the UBA price from a cost model by December 2014, if requested by industry.  “Despite the proposed deferral of these 2014 deadlines, we have concluded that the grounds for delay are insufficient to outweigh the ‘reasonable efforts’ imperative in the Act,” said Dr Gale. “It is possible that a cost model will be required for the UBA price, and that this task will be combined with the cost modelling that is now underway for the underlying copper local loop. The timeframe for such a combined review would be likely to extend into 2015 and may be more compatible with allowing for changes arising from the review of the Telecommunications Act.”  Unbundled bitstream […]