The global economic crisis is the number one issue for US companies wanting to do business in New Zealand according to the 6th annual American Chamber of Commerce in New Zealand (AmCham) survey of US companies operating in New Zealand. The survey was carried out just prior to the election, revealing insights into business’ concerns at where the country is heading.
The clear message to the new National government is “Make it easy to do business here”. With New Zealand’s economy being small, business wants the government to:
- Modify unfriendly legislation such as the Employment Contracts Act, RMA, ETS
- Implement a competitive tax rate
- Do more to attract immigration and stop the ever increasing brain drain overseas.
- Create an environment to grow our capital markets
AmCham President Mark Fitz-Gerald said one of the key objectives of the annual AmCham business climate survey was to reveal potential road blocks – both large and small – that might hinder further overseas investment in New Zealand and prevent increasing trade, in particular from New Zealand to the US.
As a result of the economic situation only 35 % of respondents were considering any new investment in another venture in New Zealand or expanding their New Zealand operation, down from 60% in 2007. Those considering downsizing or looking at relocating overseas remained constant at 12% and 8%. However, on the positive side 60% still expected sales growth in the coming year comparable to 68% last year.
The skills shortage, number one issue for the past 3 years, was still regarded as the second most important issue (69% of respondents noted they were facing a labour/skill shortage) with key shortages in Sales and Engineers, followed by Service Personnel and IT. The other issues to register significant concern were currency fluctuations and the increased costs associated with doing business, notably fuel costs and salaries.
The survey also found that recent tax changes have had a positive effect on just 28% of businesses, and when questioned if the Research and Development (R & D) tax credits were likely to attract any new or additional R & D investments in New Zealand, 90% said no, although no indication was given by respondents if R&D would be lost from New Zealand if the R&D tax credit scheme were to be removed
Less than a quarter of respondents cited that the New Zealand Government’s policy on climate change has had any effect on their business to date.
Notwithstanding the lack of trade and tariff barriers in NZ, some 40% of respondents believed that an FTA between the US and NZ would be beneficial to their business.
In the coming months, AmCham will be arranging meetings with members of the new National government for members, enabling members to discuss these issues and to look at ways of solving them.
