NZ 3rd in doing business survey – govt keen to do better

New Zealand has kept its third place in the World Bank’s doing business survey.

The overall ranking came from nine categories. We were first for starting a business and protecting investors, second for getting credit, third for registering property, ninth for enforcing contracts but only 16th for closing a business, 26th for paying taxes and 28th for trading across borders.

The overall ranking makes New Zealand one of the best countries in which to do business but a media release from Finance Miisiter Bill English and Minister for Regulatory Reform Rodney Hide says the government is keen to do better.

“This report confirms our reputation as a quality investment and business destination, and a country that promotes business confidence,” Mr English says.

“Across most of the nine indicators New Zealand compares very well internationally, which reflects the quality of our regulatory frameworks and the Government’s economic policies.

“However we believe there is still room for improvement. That is why we are continuing reviews of major regulation, which are aimed at cutting red tape and creating an environment where business can thrive,” Mr English says.

Mr Hide said the World Bank report highlighted the fact that onerous or poor regulation deterred investment and stifled growth.

“This Government is committed to increasing productivity by removing superfluous regulation that grew unchecked though much of the past decade,” Mr Hide says.

“Creating better regulatory conditions lifts business confidence, which in turn flows through to investment and jobs.

“Having a simple and transparent regulatory environment also helps attract international investment and we need to ensure New Zealand remains globally competitive,” Mr Hide says.

If Mr Hide put on his other hat as Minister for Local Government he would find plenty of scope for reform.

Regional, city and district councils have a plethora of regulations and red tape which appear to be designed to make doing business harder with no apparent benefit for anyone but the bureaucrats who make and enforce the rules.

Just one example: a couple set up a homestay in the country and sought permission to put up a sign. This was granted but only if it was erected at or a short distance from their gate.

The gate was immediately after a sharpish corner. The applicants pointed out that putting the sign a few metres further from  he gate, still on their property, would mean drivers would see it before they got to the corner rather than while rounding it which would be safer.

The council official agreed with their reasoning but said the rules didn’t allow for signs that far from the gate.

Owen McShane has more examples:

Farmers and all those other “cultural industrialists” are being bombarded with extra costs from all directions. Dairy farmers may well be our most successful export industry but tall poppies present a more attractive target for the ticket clippers. 

Most of these costs are generated by territorial local authorities, often in response to panic campaigns from ecological ideologues, underpinned by junk science. 

Regional Council farm inspectors – with no training, but carrying long books of rules – have directed a farmer to concrete line his silage pits, at a cost of about $70,000, even though there is no evidence that the pits are causing a problem. 

Farmers are fined thousands of dollars for machine failures that discharge some effluent to ground, even when the courts agree there has been no damage to the environment. 

When a winemaker friend started winemaking 10 years ago he needed a single licence, costing $150 a year to make and sell his wine.

By 2009 he needed a raft of licences, costing thousands of dollars, many of which require him to attend courses, such as how to deal with violent drunks. He has never had an issue with drunks in 20 years. 

He now needs a Food Safety Plan, a Hazard Analysis and Critical Control Point Plan, and a stream of ever-changing resource consents. All of these require auditing and monitoring.

He finally quit the industry.

What is most worrying is that because these costs are imposed and incurred literally at “the grass-roots,” central government seems to be largely unaware of their scope, their range and their fiscal impact. . .

The previous government gave local bodies more powers, at least some of which have resulted in more red tape and higher costs for businesses and individuals.

This needs to be addressed if we’re to maintain or improve our ranking for ease of doing business.

Our ranking for doing business was matched by a third place in the United Nation’s Human Development Report.

That looks at social factors including health, education and living standards.

16 Responses to NZ 3rd in doing business survey – govt keen to do better

  1. JC says:

    Its amazing, isn’t it.. we score so well on these studies for competitiveness, doing business and so on.. yet we are at the bottom of the OECD.

    I suspect the main reasons why are stated above.. that we cant close a deal and we don’t like cross border business. We are as keen as mustard about business but only on our (narrow) terms.

    JC

  2. robertguyton says:

    Ele – you aren’t making sense.
    New Zealand, you report, has maintained its place.

    “New Zealand has kept its third place in the World Bank’s doing business survey.”

    You list Owen’s complaints, then state that …

    “This needs to be addressed if we’re to maintain or improve our ranking for ease of doing business.”

    That is not logical. Surely we must do as we are doing to maintain our present good ranking. If we are third, why are you not satisfied with that?
    We are not 152nd!

  3. homepaddock says:

    Being better than all but two countries is good but it doesn’t mean we don’t need to do better, Robert.

  4. Looks like we are getting good at coming third I blogged about our other 3rd place http://hamishinauckland.wordpress.com/2010/11/06/the-real-wealth-of-nations/ here. I agree with your comment to Robert 3rd isn’t good enough. Lets go for being the best.

  5. Cadwallader says:

    The Local Government Act 2002 is the most rapacious legislation outside the revenue legislation, ever enacted in this country. It is a revenue gatherer based on whimsy and the caprice of local authority pen-pushers, who in tandem with this statute, control property usage under the RMA. Freedom lovers need to be wary, very wary!

  6. robertguyton says:

    Ele – your view lacks balance. Your desire to be better or even best at business makes you willing to open the gates on controls that protect other aspects of our life here in New Zealand. You cite ‘examples’ from Owen McShane as if they were facts that support your case, yet you support his claims, for example, when he bristles at a farmer being fined ‘for machine failures that discharge some effluent to ground’.
    Ele! I’d have thought that you would be supportive of action taken against instances of pollution of the rural environment like that!
    I’m appalled.

  7. homepaddock says:

    I share Owen’s concern over fines for discharge to ground of effluent after mechanical breakdowns when there is no damage to the environment.

    Some councils have (possibly unofficial) policies that if breakdowns or anything else beyond their control (extended periods of rain/snow) are reported and everything possible done to fix them they won’t prosecute. That means farmers work with councils to minimise any damage.

    Friends tell me that Environment Southland was very understanding about problems when farmers reported them after the snow.

    Mechanical breakdowns/bad weather can happen even with the best systems and people. Fining people for discharges after that is a bit like fining someone for careless driving if they crash after a tyre blows out.

  8. Cadwallader says:

    The point needs to be made that Local Authorities have powers to control land over and above any ethic of environmental protection. The RMA dictates usage of private property while not referring to private property owners’ rights. Not once! And guess what? Private property owners pay for the ability of Local Authorities to castigate them, fine them, and in some instances, evict them!

  9. robertguyton says:

    Mechanical breakdowns where effluent is involved should be covered by failsafe systems to prevent the discharge of material that emperils the environment, I’d have thought.
    The ‘tire blows out’ example isn’t analogous in that failures in effluent spreading gear is far more common than crashes due to tire blow-outs and there are technological solutions to that threat.
    ES is very understanding about these matters, as am I 🙂

  10. robertguyton says:

    Cadwaller – “The point needs to be made that Local Authorities have powers to control land over and above any ethic of environmental protection”

    You’ll know Cad, that LA’s are responsible for more than just ‘ethics of environmental protection’.

  11. Cadwallader says:

    Yes Robert, but I have found that it is under the guise of environmental protection that LA’s are at their most pernicious. Environment protection seems to be a convenient platform for all manner of controllers, NB The New Zealand Green Party!

    A now deceased sage for whom I once worked, maintained the mantra that council’s have only one correct use, the provision of sewerages and footpaths. The social pandering roles grew much later and essentially without rate-payer mandate.

  12. robertguyton says:

    Cad – the LA’s are a platform for the Green Party?
    How do they manage that (clever Greens!)?

  13. Cadwallader says:

    Robert: Did I state that? I don’t think so…

  14. robertguyton says:

    Environment protection equals ‘social pandering’ Cad?

  15. Cadwallader says:

    Robert, you haven’t answered my last point. Again: Did I actually make the last statement you allude to? I don’t think so… This is one blog where monosyllables aren’t generally required.

  16. robertguyton says:

    Cadwaller. Again: Does environment protection equal …
    Just joking.
    No,you didn’t ‘state that’. What a pedant!
    I couldn’t really answer your charge, could I, with a monosyballic ‘no’ 🙂

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