How to keeping growing

January 15, 2014

Business confidence is at a 20 year high lifting jobs, profits and investment:

New Zealand business confidence climbed to a 20-year high in the fourth quarter, lifting expectations for profits, hiring and investments, and raising the prospects for inflation to start to accelerate.

A net 52 percent of businesses were optimistic in the December quarter, seasonally adjusted, the highest since June 1994 and up from 33 percent three months earlier, which was itself the highest in more than three years, according to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion.

Domestic trading activity, which is closely aligned with economic growth, climbed to the strongest since March 2005, with a seasonally adjusted net 15 percent of firms experiencing a pickup in their own activity. Expectations for the coming quarter rose to 32 percent from 24 percent.

“This quarter every region in our survey was doing better,” said Shamubeel Eaqub, principal economist at NZIER. “Until recently much of the recovery was concentrated in Canterbury. This has now broadened to most regions across New Zealand, which points towards a more sustainable and stable recovery.” . . .

Sustainable and stable are very reassuring words, much better than boom and bust which have been used, and experienced, too many times before.

How to build on this and ensure the good times grow is the challenge, as Economic Development Minister Steven Joyce points out:

The top independent world economic brains in the OECD and IMF expect us to continue to outstrip most developed countries in the next couple of years.

At last, we have the potential to make a serious move up that fabled OECD ladder. Net migration to Australia has also dropped sharply. At around 1000 a month, it’s about a quarter of what it was, and close to its lowest point over the past decade.

There are risks – the world remains in economically uncharted waters. However, if we remain cautious and conservative in our approach, we should do better than most.

And, of course, one or two good years do not change the fortunes of a country. We need many years of higher growth to provide better opportunities for Kiwis and their families. . .

The dairy trade, particularly with China, and the Christchurch rebuild are contributing to the growing economy but they are only aprt of the story.

What’s most encouraging is that a range of our companies across a number of industries are successfully selling their goods and services around the world, despite tough economic times.

In industries like ICT, high-tech and medium high-tech manufacturing, engineering services, tourism, international education, wine and other food and beverages, New Zealand firms have got leaner and more savvy in the past few years and all that work is starting to pay off.

The big thing driving the success of our entrepreneurs is their commitment to innovation; to developing products that allow them to demand a premium price in world markets. It’s that which determines their long-term success. . . .

The government has helped by removing road blocks that discourage investment.

A lot of work has been done and laws have been changed to ensure New Zealand is more welcoming of new investment while protecting against the risks. You need constant new investment to replace some of the old industries that become obsolete as a result of revolutionary technologies such as the internet.

So how do we keep growth happening? How do we lift New Zealand’s longer term growth rate so that we add more jobs, reach our potential, and become a true “Pacific Tiger” rather than just a short-term success story? I think there are several key things:

1. Keep opening our markets and building strong people to people relationships. The lesson of the China FTA is obvious. If we can get a good TPP deal, then we should grab it – along with other FTA and trade opportunities.

2. Innovate, innovate and innovate. The National-led Government is putting a lot of taxpayers’ money into assisting firms and their ideas. As a country we are starting to see the power of innovation in our industries but we need to keep lifting private sector investment in research and development to international norms.

3. Keep building the skills of a successful and innovative trading nation. Encourage more of our young people into the careers that breed innovation, like engineering, ICT, and science.

4. Encourage more capital to invest in New Zealand. The mixed ownership programme has helped set up a stellar year for our stock exchange. We need to build on that. Capital investment in competitive industries creates sustainable jobs.

5. We need to keep removing red tape and provide certainty to investors, especially in resource industries. That means making decisions quickly and effectively, while also working to improve environmental outcomes.

6. We need to keep building infrastructure to support a growth-oriented country. Great progress has been made in electricity transmission and ultra-fast broadband. Those projects need to be finished. And we need to keep investing in our transport systems for safety and efficiency. That means high-quality four-lane roads in and out of our main centres, resilient highways elsewhere, and quality public transport that people want to use.

Finally – and above all – we need to make responsible fiscal and economic decisions that keep the tax burden low and pay off debt. We need to keep rewarding New Zealanders with efficient public services and lower income taxes than elsewhere. It’s talented, hard-working Kiwis who get out of bed every day that make all this happen. Kiwis strive and succeed because they see the benefits of their hard work. If politicians keep remembering that then New Zealand will truly become a Pacific Tiger.

That of course requires a National-led government.

Any alternatives are focussed on taxing and spending, on redistributing rather than growing, and appealing to envy rather than aspiration.


January 15 in history

January 15, 2014

588 BC – Nebuchadnezzar II of Babylon laid siege to Jerusalem under Zedekiah’s reign.

69 – Otho seized power in Rome, proclaiming himself Emperor of Rome, but rules for only three months before committing suicide.

1493 – Christopher Columbus set sail for Spain from Hispaniola, ending his first voyage to the New World.

1559 Elizabeth I was crowned queen of England in Westminster Abbey.

1622  Molière, (Jean-Baptiste Poquelin) French playwright, was born (d. 1673).

1759 The British Museum opened.

1842 Blessed Mary McKillop, Australian  saint, was born (d. 1909)

1870  A political cartoon for the first time symbolised the United States Democratic Party with a donkey (“A Live Jackass Kicking a Dead Lion” by Thomas Nast for Harper’s Weekly).
1889 The Coca-Cola Company, then known as the Pemberton Medicine Company, was originally incorporated in Atlanta
1892 James Naismith published the rules of basketball.

1893  Ivor Novello, Welsh composer and actor, was born (d. 1951).

1902  King Saud of Saudi Arabia, was born (d. 1969).

1906 Aristotle Onassis, Greek shipping magnate, was born  (d. 1975).

1909 Jean Bugatti, German-born automobile designer, was born  (d. 1939).

1913  Lloyd Bridges, American actor, was born (d. 1998).

1914 Hugh Trevor-Roper, English historian, was born (d. 2003).

1919  Maurice Herzog, French mountaineer, first to ascend an 8000m peak, Annapurna in 1950, was born (d. 2012).

1919 – Boston Molasses Disaster: A large molasses tank in Boston burst and a wave of molasses poured through the streets, killing 21 people and injuring 150 others.

1929 Martin Luther King, Jr., American civil rights leader, recipient of the Nobel Peace Prize, was born (d. 1968).

1936 The first building to be completely covered in glass was completed in Toledo, Ohio ( built for the Owens-Illinois Glass Company).

1943 – The world’s largest office building, The Pentagon, was dedicated in Arlington, Virginia.

1966  The government of Abubakar Tafawa Balewa in Nigeria was overthrown in a military coup d’état.

1969 The Soviet Union launched Soyuz 5.

1970 After a 32-month fight for independence from Nigeria, Biafra surrendered.

1970 United States Vice-President Spiro Agnew’s three-day visit to New Zealand sparked some of the most violent anti-Vietnam War demonstrations seen in this country.

 Anti-Vietnam War protestors greet US Vice President
1970 – Muammar al-Qaddafi was proclaimed premier of Libya.

1973 Citing progress in peace negotiations, President Richard Nixon announced the suspension of offensive action in North Vietnam.

1977  The Kälvesta air disaster killed 22 people, the worst air crash in Sweden‘s history.

1986 The Living Seas opened at EPCOT Center in Walt Disney World, Florida.

1991  The United Nations’ deadline for the withdrawal of Iraqi forces from occupied Kuwait expired, preparing the way for the start of Operation Desert Storm.

1992  The international community recognised the independence of Slovenia and Croatia from the Socialist Federal Republic of Yugoslavia.

1993  Salvatore Riina, the Mafia boss known as ‘The Beast’, was arrested in Sicily after three decades as a fugitive.

2001 Wikipedia, a free Wiki content encyclopedia, went online.

2005 – ESA’s SMART-1 lunar orbiter discovered elements including calcium, aluminum, silicon, iron, and other surface elements on the moon.

2009 US Airways Flight 1549 made an emergency landing into the Hudson River shortly after takeoff from LaGuardia Airport in New York City. All passengers and crew members survived.

Sourced from NZ History Online & Wikipedia.


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