“I came in, just as dawn was breaking over the city and looked out and thought: ‘Jesus. This is a ghost town.’ Nothing was happening.”
That was Auckland Mayor Phil Goff’s reaction from his 27thfloor office on the first day of the nationwide lockdown, a memory he says has stayed with him because of how scary it was to see his city closed down and abandoned.
Throughout the pandemic, Goff says he has been in constant contact with Prime Minister Jacinda Ardern.
His first difficult decision was made back when New Zealand had just five recorded cases of Covid-19. That was to cancel the Pasifika Festival in mid-March — a decision made even harder since it was also cancelled in 2019 following the Christchurch mosque shootings.
Ardern was worried from a foreign affairs perspective that the festival, which celebrates Pacific Island communities, would spread Covid-19 back to the Pacific Islands when performers and stallholders returned. Goff knew the scale of the event would make it impossible to enforce social distancing. Just two weeks later, Auckland was in strict lockdown.
Goff says, in hindsight, that was absolutely the right decision to make — noting that it had a very real chance of becoming a super-spreader event.
“What was really important was that one message was going out to the community, so the Prime Minister wasn’t standing up saying one thing and the mayor of the country’s biggest city saying something quite different.”
Goff says the government’s leadership and communication has been pretty good throughout the response, though he jokes that he hates answering phone calls from Director-General of Health Dr Ashley Bloomfield.
“Because it usually means that we’re headed for a bloody lockdown!”
But he also acknowledges that he has had concerns with aspects of the response: “I indicated before the last two lockdowns what some of those worries were and raised them, and had discussions with Ministers about how I think we might be able to do things better.”
Back in January, before the Northland scare, Goff wrote to the Minister of Covid-19 Response, Chris Hipkins, and Health Minister Andrew Little urging the Government to bring local councils to the table when a local outbreak occurs.
“But everything is relative,” Goff says. “Just because we’re among the best in the world doesn’t mean to say we can’t continue to do better.”
Goff says that when New Zealand was plunged into level 4 lockdown, top of mind for him were the city’s most vulnerable.
Auckland Council set up a food distribution centre at the unused Spark Arena to keep up with demand. Those unable to get to the supermarket or suffering financial hardship were eligible for food parcels, which were couriered to people’s homes.
When Auckland City Mission was overwhelmed by the unprecedented demand for meals, Auckland Council’s cafeteria staff stepped in, “working all the way through the lockdown preparing thousands of lunches for people,” Goff recalls.
Auckland Council worked closely with Carmel Sepuloni — the minister appointed as the liaison between Goff and the Government — to ensure the homeless were housed during the lockdown.
“We couldn’t leave them on the street, those sleeping rough would be among the most vulnerable because so many have co-morbidities,” Goff says.
They managed to get all but about 20 into motels and provided wraparound services to help with associated social problems.
Another group that was identified as at risk were those that were living alone. Goff says, “no one knew how they were getting on”.
The city’s librarians — unable to work with libraries closed — were put to work phoning the most isolated in the city. “We couldn’t contact everybody, but we singled out those people that were living alone and weren’t connected to the internet — and we called 17,000 of them,” Goff says — adding that on the whole they were coping well, “the only problem was how to end the conversation!”
Goff formed a business advisory panel to help work through issues and assist with the city’s transition back to normal economic activity when the lockdown was lifted.
The panel met regularly, acting as a conduit back to government and to provide feedback to the business community.
With hopes that events including the America’s Cup and Apec would create a boom year for Auckland in 2021 dashed, then-economic development agency Ateed (now merged with Regional Facilities Auckland to become Auckland Unlimited) brought business and political heavyweights together at an emergency economic summit to discuss what should come next.
The “Auckland’s Future, Now” summit held following the first lockdown, provided a forum for an Auckland-specific, business-focused discussion by business leaders and stakeholders to address the economic challenges the city was facing, resulting in a plan to grow the economy from the hit it had taken.
Speaking to a business audience last week, Finance Minister Grant Robertson said discussions at the Auckland Summit and other forums had fed through to the government’s economic development strategies.
“We are looking at a new and different approach to regional development, which we’ll have more to say about when we get to the Budget,” Robertson said.
With borders closed and unemployment expected to spike, it was clear Covid would have a savage impact on Auckland’s finances.
“We knew we could well get double-figure unemployment,” Goff says. “I remember during a meeting, one councillor was in tears because they’d never seen anything so grim.”
An emergency budget was developed to respond to the impact of Covid-19 on Auckland Council’s finances – Goff notes how well councillors worked together on it, requiring many long hours.
Growing up in a family that suffered heavily because of the Great Depression, Goff says this experience showed him that the then-government’s focus on balancing the books back then made the Depression deeper and longer.
“If we cut everything back, we’d be part of the problem — not the solution,” he says. “We knew we had to maintain core services and make sure rubbish continued to be picked up, water supplies weren’t failing and the grass was cut at parks.”
The decision was made to suspend the accommodation provider targeted rate, and give ratepayers the option to defer rates payments.
Goff says the uptake of the option to defer rates has been quite small — “an indication of how quickly the recovery has happened.”
But elected members had to make some difficult decisions.
Staff numbers were reduced and lower-priority projects deferred to achieve savings of $120 million.
“We also started selling off surplus property that the council had previously resisted doing,” Goff says.
“We knew what we needed to do was invest in infrastructure.”
Construction was seen as the obvious solution to reinvigorate the economy, create jobs, and achieve long-term goals for the city.
“We were facing a crisis, but longer-term we needed to keep infrastructure going, keep up the response to climate change and keep environmental projects going,” Goff says.
The emergency budget has now evolved into the 10-year “recovery” budget. It puts back $900m that was cut, including $550m for transport, $145m for water infrastructure, $54m for stormwater and $65m for community facilities.
It proposes a one-off rates increase of 5 per cent, which Goff says is not extravagant compared to Wellington’s 14-17 per cent — “and their infrastructure is just collapsing all around them because they haven’t done the renewal work.”
He says the 10-year budget has preserved the critical things that are really needed, although “a little bit of icing on the cake has been lost” in areas like town centre rejuvenation.
“There are things that we’ve had to put off that would have been good to do, but the essential things will be done.”
One area that Goff would have loved to go further with is climate change.
The 10-year budget puts an additional $150m into climate change initiatives, however the discussion document shows an alternative investment package of $320m was rejected that would have allowed more significant climate action work.
Goff says the initiatives will still have an impact: “We will lower emissions, and significantly lower them on a per capita basis,” he says.
“The challenge we have got is that the prediction of population growth is about 22 per cent. That’s more people using all the things that create carbon emissions. We are working really hard with the government and the Climate Change Commission to look at how we can bring forward some of the projects.”
He wants the adoption of electric cars sped up, acknowledging that the current price differential makes the decision difficult.
Another area Goff says central government can help with is cycleways.
Cyclist numbers are significantly up — in 2014 Auckland had 800,000 cycle trips per year, the figure now stands at some 3.7 million. But there is criticism from some that cycleway progress is painfully slow — and Goff agrees.
“We want to work with central government to maximise the programme,” Goff says. “Neither the Transport Minister Michael Wood nor I are satisfied with the speed at which we’re able to put cycleways in place.”
Vision for Auckland
Goff’s vision has always been for Auckland to be a world-class city where talent wants to live. Covid hasn’t changed his view.
He is proud of the progress made toward the infrastructure deficit he inherited, pointing to the recent opening of Te Komititanga square outside Britomart Station, the Quay St precinct that is close to completion, and his insistence that Watercare bring forward its programmes:
“When I saw their response to last summer’s drought, I said it’s just not satisfactory that a city might be placed in a situation where we would have to limit the number of days a factory could operate because of water shortage — we will fix that.”
When asked how he keeps a smile on his face, Goff says he’s a perpetual optimist, “which I think you have to be to survive in politics”.
“I think we have got the glass half full here. I can see so much around the city where there is decent progress being made,” he says.
“Those are the things that keep you smiling — not the comments you see on your Facebook page.”
https://www.timmccready.nz/wp-content/uploads/2021/03/Phil-Goff-Tim-McCready_2021.jpg461854tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2021-03-05 15:08:082021-03-06 15:18:38Project Auckland: Covid 19 coronavirus tests Auckland mayor Phil Goff’s optimism (NZ Herald)
It has been three years since Prime Minister Jacinda Ardern called climate change “my generation’s nuclear-free moment”.
While the previous Government was unable to declare a climate emergency in the last term — believed to be because Labour’s coalition partner New Zealand First blocked it — she has now made it a priority with a declaration of a climate emergency.
Since Covid swept the world, it has done a lot to emphasise the social and economic inequalities that exist globally. The harsh reality of the lockdown exposed that, even in New Zealand, women and low wage workers were most impacted by job losses and reduced work hours.
Similarly, the relationship between climate change and inequality will see those who are disadvantaged suffer disproportionately from the adverse effects of global warming. The need for action to achieve New Zealand’s vision of a thriving, climate-resilient, low emissions future is widely understood.
The same areas that New Zealand used to successfully respond to the Covid-19 outbreak are needed to address global warming: listening to scientists, public policy and international co-operation.
When US President-elect Joe Biden spoke with Ardern for the first time since the US election last month, he spoke positively about her handling of the pandemic and said he looks forward to working closely with her on common challenges, including tackling climate change. Biden has named ex-US Secretary of State John Kerry — one of the leading architects of the Paris climate agreement — as his climate envoy.
“America will soon have a government that treats the climate crisis as the urgent national security threat it is,” said Kerry.
This break from the Trump administration’s climate policy will put our Government to the test, and necessitate that our ambition reflects our action.
Speaking recently at the Institute of Financial Professionals in New Zealand (Infinz) conference, Climate Change Commission chair Dr Rod Carr said the commission’s current programme of work is to produce the first emissions budget out to 2035 — and to the extent that we are not on track to achieve our domestic targets and global obligations, advise on a reduction plan that will reduce those emissions having regard to a wide range of impacts.
“It is important to understand that climate action is now mainstream conversation, and understand what is to be done, by who, and by when,” he said.
New Zealand emits about 80 million tonnes of carbon dioxide-equivalent greenhouse gases every year, and under the international accounting rules sequesters about 10 million tonnes, largely through forestry. Nearly half of those emissions come from agriculture.
The challenge for New Zealand, says Carr, will be that although our form of pastoral agriculture may be one of the most efficient ways of producing meat and milk protein in pastoral agriculture, there may now and in the future be ways of producing meat and milk proteins with an even smaller greenhouse gas footprint.
Of the remainder of our greenhouse gas emissions, transport makes up about 40 per cent. It is a growing contributor, with household transport emissions increasing by 15 per cent between 2011 and 2017.
Carr says this will be one of the major challenges that will go to the heart of both the allocation of capital by private vehicle owners, fleet operators and government infrastructure providers.
“Converting ground transportation to low or no emissions is a 100 plus billion-dollar investment challenge over the next 30 years,” he says. “Known technologies exist. They largely require electrification, and that electrification needs to be provided from renewable energy sources, unless it is to continue to contribute to greenhouse gas emissions.”
Navigating our economic recovery from Covid-19, while finding solutions for our climate change challenges will require a substantial and coordinated response. This will mean making sure capital is deployed to support the new age, new technologies, and new and necessary ways in which we conduct business.
Covid-19 exposed major weaknesses in our society. But it has also given us the impetus to make fundamental changes that will address inequality and fuel an economic recovery that is long-lasting and sustainable. Without a handbrake on the Government — and with a renewed impetus from international leadership to deliver — now is the time to make sure New Zealand isn’t left behind.
https://www.timmccready.nz/wp-content/uploads/2020/12/Covid-opinion-Tim-McCready.jpg8221123tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-12-04 14:30:302020-12-07 14:39:36Opinion: Covid-19 provides impetus for fundamental change (NZ Herald)
Newly appointed Cabinet Minister Michael Wood has high ambition for his transport portfolio. Some of the top-line goals he says are priorities, are to get the city moving, improve freight connections, safety, and progress decarbonisation.
“A lot of this work was set up in the last term, I really see this term as about driving those things through in a practical way and getting them done through projects and programmes,” he says.
Wood says the additional components since the Government’s last term is the “build back” aspect — the fact that infrastructure investment will also be a critical element of the economic recovery and rebuild from Covid-19.
“We are looking at a $54 billion transport pipeline over the next ten years that we’re able to deliver and that is going to be really significant on the jobs front, on the skills development front, on the productivity front as well.
Auckland light rail, a personal pledge
The coalition government was unable to reach agreement on light rail last term. Cabinet suspended progress on the flagship project until after the election. Since then, Wood has taken over the portfolio from Phil Twyford, and for him, making progress on the project is personal.
One of Wood’s key promises when campaigning in the Mount Roskill by-election in 2016 was to fast-track a light rail system from Auckland’s Wynyard Quarter to his electorate in Mount Roskill.
The project will connect the two largest employment hubs in Auckland — the central city and the area north of the airport — along with the Government’s largest housing development in Mount Roskill and Māngere.
“As much as anything it is about connecting up the network,” says Wood. “It is not just people using that line, but from it they will be able to access the western line, the northern busway, the southern line, the airport, out to Botany — and you’re adding greater additional capacity to the whole public transport network in Auckland.”
He is now getting up to speed with the detail of the two options put forward during the competitive bid process by Waka Kotahi NZ Transport Agency and NZ Infra (a consortium that includes the NZ Super Fund and CDPQ Infra, a Quebec-based pension fund). “There are questions that come up — methodology, the route, financing, ownership structures — and we need to work very carefully through those,” he says.
But Wood says the project will go ahead on his watch. The next milestone for the project will be a report from the Ministry of Transport, which was tasked by the previous Cabinet to do further work and consider the best option for the project.
“We want to get the decision right at this point,” he says. “As Auckland continues to grow, if we don’t make these kinds of investments we are going to choke on our own growth.”
Open-minded but cautious
As the new Minister, Wood is coming up to speed with several issues in the portfolio, including congestion charging and his level of appetite for public-private partnerships to fund and build transport infrastructure.
On congestion charging, Wood says he will soon receive a report from the Ministry of Transport with analysis into the impacts of various congestion pricing scheme options, and their technical requirements. He says he wants to see what the analysis shows, describing his position as “open-minded, but tinged with a bit of caution as well.”
“We haven’t got any international comparators with a fully integrated road pricing system that some people are proposing,” he says. “I’d be a little bit cautious about leaping into that although I am open-minded to the fact that it could be a useful tool for demand management and managing congestion.”
He says there is a sequence in question before Auckland could go down a congestion charging track, which would ensure that are effective public transport alternatives in place before imposing charges on people for using private vehicles.
It raises an equity issue — Wood says that while congestion charging wouldn’t necessarily change the way he moves around the city, for those on low incomes it would.
“I would want to see some good analysis and thinking around it before I’d be prepared to take it further,” he says.
Wood says he is also open-minded about the use of public-private partnerships to fund transport projects, but wants to take care to make sure the arrangement is right for New Zealand’s interests.
“I have a responsibility to look after the Crown’s position and make sure that any arrangements we enter into are done responsibly, that the long-term value is right and that the risk allocation is right,” he says.
Wood says while there are calls to keep adding to the transport pipeline, it will be important to ensure New Zealand has the workforce to deliver. An underdeveloped workforce strategy has been a long-term problem for New Zealand, particularly in the infrastructure sector.
“In the long-term, we have a vision to build up a largely domestic workforce that is capable of doing that work and capable of sustaining it over a long period of time,” he says, pointing to the Government’s free trade training and apprenticeship scheme that was put in place is part of the Covid-response as one way this is being encouraged.
“A lot of work done in the previous term was done by a group of ministers to get the construction sector to work more collaboratively on skills and training along with procurement and all the other range of issues. It’s a work in progress there.”
Wood says that at this point there will still be a requirement for the workforce to be supplemented with offshore labour as well — particularly in specialist areas.
Eye to the future
Over this term, Wood says he expects to deliver on the manifesto that Labour was elected to implement.
“That will include rolling out those investments that are already in place, but not yet delivered. The big programme that’s in the Government Policy Statement on Land Transport (GPS), the shovel ready projects and New Zealand upgrade projects, light rail.”
He says the Government is very committed to carrying forward its balanced approach to transport — “there are a mix of transport priorities — yes, roading, but also public transport, rail, walking, cycling, coastal shipping as well,” he says.
“We want to get the right solution to the particular transport problems we face in different areas and be mode neutral — starting out with what are we trying to achieve and then considering what mode and what investment is going help to get us there.”
Wood says the Government is very conscious that if it doesn’t keep up the core investment in maintenance on the state highway network and regional roads they will degrade very quickly.
“There is a big spend that is going on there as well — not necessarily building new roads, but making sure that they are maintained well and that there are constant improvements in terms of the safety profile of them as well,” he says.
He says another big aspect of his role will include the agenda around decarbonisation.
“Next year we get the first carbon budget from the climate commission — and transport is about 20 per cent of it.”
One thing that Wood makes clear: the next three years won’t be about reformulating plans and new strategies — it will be about delivery.
“After a lot of planning, the fruits of that are going to start to be seen,” he says.
— Additional reporting Fran O’Sullivan
https://www.timmccready.nz/wp-content/uploads/2020/11/Michael-Wood-Tim-McCready.jpg736669tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-11-20 21:49:512020-11-20 21:49:51Infrastructure: New Transport Minister Michael Wood says let’s get transport moving
Water is New Zealand’s most valuable asset and the biggest infrastructure challenge of the next decade.
That is the view of Fletcher Construction chief executive Peter Reidy, who says New Zealand’s water infrastructure is well overdue for investment as pipes reach the end of their useful lives.
Reidy says that more than a third of wastewater treatment plants will require re-consenting within the next decade, and almost a quarter are operating on expired consents. Conservative estimates are that the cost of upgrades and renewals will be measured in billions of dollars.
“The public’s environmental expectations are also increasing and the consequences of climate change, including more frequent and more intense droughts, require urgent attention,” he says.
Over the past three years, central and local government have been considering how to address the challenges facing delivery of three waters services (drinking water, wastewater, stormwater) to communities. The review followed the 2016 Havelock North campylobacter contamination crisis that exposed systemic issues in the regulation and provision of three waters.
The result has been the establishment of Taumata Arowai as a Crown water regulatory body to administer and enforce a drinking water regulatory framework, with additional oversight on improving the environmental performance of wastewater and stormwater networks.
In July this year, as part of the Covid-19 stimulus, the Government announced $761 million in funding to maintain and improve three waters infrastructure and to support the reform of local government water services delivery arrangements.
At the funding announcement, Local Government Minister Nanaia Mahuta said there are “massive looming costs across the three waters networks” and the current delivery arrangement, particularly for smaller rural and provincial councils, are not well-placed to meet them.
Although councils currently own and manage most water services, the investment from Government was made contingent on local councils opting in to the government’s wider reform programme.
Fletcher Construction supports the Government’s plans to reform the way we manage water.
“At the end of the day it is all about customers — improving environmental standards, value for money and productivity for customers,” says Reidy. “Having water utilities at scale will also allow for greater investment in digital solutions to water.”
Fletcher Construction has brought together two of its businesses — Fletcher Construction Infrastructure and Brian Perry Civil — to support the establishment of capital construction plus operations and maintenance for water assets to help local government meet their challenges.
In September, Fletcher Construction along with Fulton Hogan signed a $2.4 billion contract with Auckland Council-owned Watercare Services for the delivery of water and wastewater infrastructure for Auckland over the next 10 years.
Watercare said the long-term, collaborative partnership is a first for New Zealand. The planned programme of work — rather than discrete projects — is expected to help drive greater cost-efficiency and innovation. A key goal is Watercare’s aim to reduce carbon in infrastructure by 40 per cent by 2024, to reduce the cost of its infrastructure programme by 20 per cent by 2024 and to “improve the health, safety and wellbeing of all people involved in delivering our infrastructure by 20 per cent year-on-year.”
Reidy says the 10-year partnership with Watercare was secured under a new enterprise model which has audacious cost and sustainability goals. “This is a transformational model of partnership built around carbon reduction, safety improvements and cost savings that challenged our team to collaborate across their specialty areas,” he says. “Watercare has changed the way it partners and that has stimulated Fletcher Construction to respond in a way that puts safety, sustainability and innovation at the core of our model.”
Reidy says it is that kind of model that could work across the country.
“With Wellington Water we are also offering more than just a straight subcontractor model. And that’s because real progress can be made when deliverers are embedded within planning and project teams.”
Reidy says the Government has started this conversation, but we all need to collaborate together to find the solutions. “That’s critical for our cities, our waterways and our people,” he says.
https://www.timmccready.nz/wp-content/uploads/2020/11/Peter-Reidy-Tim-McCready.jpg723500tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-11-20 21:46:472020-11-20 21:47:31Infrastructure: Bridging the troubled water gap (NZ Herald)
The Covid-19 crisis has not sated the appetite for investing
When the Covid-19 pandemic struck, some suggested that investing sustainably is something best-suited to a bull market — a “luxury good” or “nice-to-have” — but among the first areas to be cut back when times are tough and the economy is receding.
Internationally, it seems that investors have not just stuck with sustainable investing, but have embraced it. Instead of a luxury good, sustainability is seen as a necessity and an idea whose time has come.
The new reality the world is facing has forced investors to consider risk differently, and has highlighted the interconnectedness between social, environmental and economic challenges.
JP Morgan ESG & Sustainability heads Jean-Xavier Hecker and Hugo Dubourg say: “Over the long run, Covid-19 could prove to be a major turning point for ESG investing, or strategies that consider a company’s environmental, social and governance performance alongside traditional financial metrics.”
Indeed, a survey run by JP Morgan asked 50 global institutions (representing US$12.9 trillion in assets under management) how they expect Covid-19 to impact the future of ESG investing. It showed some 71 per cent think it is “rather likely”, “likely”, or “very likely” that a low probability-high impact risk like Covid-19 would increase awareness and actions globally to tackle high impact-high probability risks such as those related to climate change and biodiversity losses.
More immediately, the pandemic has seen investors turn to sustainable and responsible investments as a form of safe haven. This is because companies with strong records on employee relations, environmental sustainability and corporate governance tend to do well over the long-term.
Closer to home, the Aotearoa Circle’s Roadmap for Action identified some of the domestic social inequalities that have been highlighted by the Covid-19 crisis, including:
·Those on lower wages, and females, have been more impacted by job losses and have less certainty about when their jobs may return.
·Those on lower wages have less capacity to absorb financial shocks, meaning their wellbeing has been more impacted by Covid-19.
·Those without digital access or capability have been further excluded from accessing essential health and other services.
·Those with essential jobs are the people we rely upon during a pandemic. Yet they receive little compensation above the minimum wage. This has led to the stark realisation that we need to value these people differently and need to re-think our ideas of value.
The Aotearoa Circle says the rapid behavioural change in response to the pandemic has shown how innovative and adaptive we can be.
It suggests that governments stepping in to become some of the largest consumers via various stimulus programs presents a crucial opportunity to serve two purposes: economic recovery and a climate change crisis recovery.
The Roadmap for Action says: “Our recovery needs to look to reduce the social and environmental imbalances that disrupt our society, and make our economy more resilient for the next generation.
“If the huge stimulus does not simultaneously contribute towards a more resilient, sustainable economy, or worse, sets us back in our response to those issues, there are real risks we leave ourselves further exposed, and we are putting ourselves at a higher risk of funding shortages to achieve such a transformation in future.”
Co-chair of the Sustainable Finance Forum and New Zealand Super Fund CEO Matt Whineray says while the pandemic and the consequential economic destruction looms large, the existential crisis that is climate change is not going away — and will continue to worsen.
“Responding to the pandemic in a way which exacerbates the climate crisis, would be a global policy failure,” he says.
While New Zealand may have lagged behind some of the large international markets, investment in areas that reduce global carbon emissions and address essential social services is rapidly growing.
For example, New Zealand’s sustainable bond issuance is becoming a relatively significant asset class of its own. ANZ/ Bloomberg’s analysis of sustainable bonds in New Zealand by year shows a dramatic rise in issuance from $106m in 2017 to $2.125b in 2020. Over the past three years, some $2.7b in wellbeing bonds have been issued by government housing provider Kāinga Ora to fund sustainable and affordable social housing.
There is also a growing expectation from New Zealanders that their KiwiSaver providers focus on responsible and ethical investment opportunities that deliver positive outcomes aligned with their values.
Further compounding this demand is the rapid growth in millennial investors. This will become even more significant as the largest ever intergenerational transfer of wealth occurs in the near future, putting some US$30 trillion under the control of millennials in the US alone.
A 2019 Morgan Stanley report says 95 per cent of millennials are interested in sustainable investing (compared to 85 per cent of the general population). The report also showed that 85 per cent of millennials believe it is possible for their investment decisions to influence the amount of climate change caused by human activities and 89 per cent say their investment decisions can create economic growth that lifts people out of poverty.
As the government and large corporates in New Zealand ramp up the delivery on their productivity, social and environmental aspirations, the call from investors for increased sustainable investment opportunities will be answered.
Investors will likely embrace the opportunity to provide some of the significant capital flow that will be needed to help ensure New Zealand’s economic recovery is long-lasting and sustainable.
https://www.timmccready.nz/wp-content/uploads/2020/11/sustainability-tim-mccready.jpg583747tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-11-03 12:34:502020-11-06 23:39:37Sustainability is a necessity now
Prime Minister Jacinda Ardern is admired by chief executives for her leadership during a challenging term in government, writes Tim McCready
Jacinda Ardern’s leadership has been tested over the past three years: the Christchurch terror attack, Whakaari/White Island disaster and pandemic are front of mind for respondents to the Herald’s 2020 Mood of the Boardroom Election survey.
They rate her leadership at 3.88/5 on a scale where 1= not impressive and 5=very impressive.
A property CEO says what Ardern has coped with in her three years at the helm is nothing short of unbelievable: “It’s hard to think of anyone who could have handled these challenges with the same deft touch as she has demonstrated.”
“Would I rank her as highly without those extraordinary events? Possibly not — but that’s hypothetical and irrelevant. Does she have some huge challenges in front of her as far as the ‘new normal’ is concerned? Goodness yes. Does that change how much credit she must be accorded for her performance to date? Not in my view.”
“It is hard to imagine a more difficult term for a first-term Government that has been out of power for three terms,” says Deloitte CEO Thomas Pippos. “The Prime Minister’s leadership in some of the key challenges the country has faced has been without a doubt very positive.”
CEOs rate Ardern’s integrity (3.57/5) and courage (3.67/5) among her top capabilities, along with her ability to adeptly communicate and demonstrate empathy. They say these are attributes that can be leveraged internationally to help New Zealand in its recovery following Covid-19.
“She has led the country through some of our most challenging moments in recent history, and her empathetic style has clearly resonated both locally and globally,” says Spark CEO Jolie Hodson.
The PM’s ability to form a coalition is also rated highly by CEOs among Ardern’s capabilities (3.51/5), having successfully negotiated her way into power following the 2017 election. Alongside this is her rating for political management (3.33/5) — demonstrated by her ability to lead a stable Government over three years — which many previously considered unachievable with Winston Peters’ involvement.
But executives say Ardern has been let down by her MPs and Labour’s inability to deliver on 2017 election promises including KiwiBuild and Auckland’s light rail.
“An outstanding leader on all fronts, sometimes let down by members of her team,” says the NZIBF’s Stephen Jacobi.
A healthcare boss says she is great at leadership in a crisis, but “lacks plans for a future pathway forward and has no credibility on implementation of any policy”.
This worries CEOs, as they say the “hard stuff” for New Zealand is only starting now and her ability in this is yet to be proven.
Ardern’s lowest scoring capabilities from CEOs are for her vision and strategy for New Zealand (2.56/5) and economic management (2.17/5).
Beca Group CEO Greg Lowe says when coming into power, the Prime Minister promised to govern for all New Zealanders. “While she has handled some situations very well, we are still lacking a long-term plan for New Zealand that we can all get behind and make progress on.”
Key Performance Indicators
The highest scoring KPI for the Prime Minister from CEOs is her management for the response to the Christchurch terrorist attack (4.50/5).
Says director Anne Walsh: “The Christchurch Call showed international leadership in bringing change globally as to how multinational digital companies operate differently in the spread of terrorism and misinformation”.
The handling of the two other major crises over the past year also rate among Ardern’s top KPIs: Whakaari / White Island (3.94/5) and the Covid-19 crisis (3.90/5).
“No one would wish them on any PM. Jacinda has demonstrated genuine compassion towards her constituents,” says Precinct Properties chair Craig Stobo. “She is an outstanding politician who may be able to govern New Zealand without a coalition partner.”
The Government’s Covid response is a key part of Labour’s election campaign, with Ardern pointing out that relative to other countries, New Zealand is more open. She says our recovery is on track to be better than Australia’s with lower debt and unemployment levels and fewer deaths.
Ardern’s charismatic performance has received admiration on the international stage this year, with stark contrasts made between her Covid-19 response to the likes of US President Donald Trump and UK Prime Minister Boris Johnson.
Her ability to leverage her brand for New Zealand’s international advantage has again rated highly with CEOs scoring this 4.23/5. Says Erica Crawford, “She is one of New Zealand’s best assets on the global scene, she needs to cheerlead New Zealand.”
Another high-scoring KPI for Ardern is her political performance (3.84/5).
It will be disappointing to Ardern that child poverty reduction, a portfolio for which she is responsible for and has expressed a strong desire to address, was her second lowest KPI, receiving a score of 2.10/5.
But one of the most troubling KPIs for executives is Ardern’s ability to build confidence within the business community — for that they rate her 2.13/5. They say that Ardern’s repeated calls for kindness and empathy in politics alone do not make a great leader: “you need a workable plan and know-how to deliver it with and through others”. A director says “she does not inspire confidence that she understands business — but she does need business to succeed to generate jobs and pay taxes.”
They say her success as leader is driven mostly by the figurehead aspects of the role. But notes a professional director: “the hallmark of great leadership is having a superb team around you — and apart from Robertson — she just does not have that”.
“Labour has a very superficial engagement with the business community,” says a multinational boss. “They do the bare minimum and have no ministers outside of Grant Robertson who really understand business at all.”
https://www.timmccready.nz/wp-content/uploads/2020/10/JacindaArdern-Mood-of-the-Boardroom.jpg683488tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-10-03 14:32:172020-10-03 14:35:42Mood of the boardroom: How business leaders view Jacinda Ardern (NZ Herald)
Chief executives send a clear message to Minister of Finance Grant Robertson: You’ve done well, but the real test is yet to come. It is testament to his performance in the wake of Covid-19 that, asked whether Robertson has been a credible Minister of Finance, an overwhelming majority of CEO respondents to the Herald’s 2020 survey — some 91 per cent, said Yes. Just 5 per cent said No; 4 per cent were unsure.
This rating is up considerably from last year. Robertson’s rating in the 2019 Mood of the Boardroom survey had 54 per cent of respondents say Yes to that same credibility question and 29 per cent unsure.
He is the highest-scoring minister, receiving a rating from respondents of 4.18/5 for ministerial performance. To put this score into perspective, this is the highest rating a Minister has received in the Mood of the Boardroom Survey since then-Finance Minister Bill English in 2016, where he received a rating in John Key’s Cabinet of 4.51/5.
On his performance as finance minister, the word “capable” was frequently used. Fletcher Construction CEO Peter Reidy says he is “capable, calm and credible”.
NZ International Business Forum executive director Stephen Jacobi describes Robertson as “a source of strength and stability for the Prime Minister and the Government”. Says a transport executive: “thank goodness he is influential in cabinet”.
Beca CEO Greg Lowe says that Robertson has a good grip on the economy, its drivers and what makes it succeed. “He is a hardworking and capable minister,” he says. “Engagement with business is good but we could improve the teamwork between government and business.”
It was this influence that saw him fulfil Labour’s 2017 campaign promise to reduce net core crown debt to below 20 per cent of GDP in 2018.
“Robertson has done a superb job for three years,” says a government relations firm boss. “Where are the loony lefties now who cried out for him to spend spend spend when New Zealand had a sizeable surplus? He stared them down — thank God!”
Since the early days of the Covid-19 crisis, Robertson has proven his mettle in the eyes of New Zealand’s business elite. He has grown into this role and was superb throughout Covid — “whether we agree with his policies or not”, says a real estate boss.
He rolled out the wage subsidy just days after the Government’s response to the pandemic was put in place. The subsidy was initially for 12 weeks over the lockdown period, then extended a further eight weeks for businesses still experiencing a significant hit to revenue. A third extension was announced when Covid re-emerged in August.
The Government also introduced a temporary 12-week income relief payment for those who had lost jobs, low interest and interest-free loans for businesses, and changes to the tax system to encourage investment.
Many top business leaders responding to the 2020 Mood of the Boardroom survey say their companies accessed the wage subsidy — 41 per cent received the first iteration, 16 per cent received the second. “This was an excellent initiative. Quick and sharp response,” says a healthcare chief.
Some see it differently. A banking chair says “as Minister of Finance, he has held the line in a number of areas, but has allowed Government spending to run riot over the pandemic”.
Independent director Cathy Quinn says the wage subsidy was “an important step to keep people in work and the economy going.”
But she says we now need business to adapt to the tough new environment as the Government can’t afford to subsidise indefinitely.
An executive in the transportation sector says “the real test will be if he gets back and whether he can drive quality spending as opposed to a lolly-scramble”.
Mainfreight CEO Don Braid says Robertson has performed well under the conditions — but notes “the real challenge now lies ahead”.
That challenge is New Zealand’s economic recovery, and the hefty Government debt. According to the Budget, Government debt will peak at 2024 when it hits $219 billion (just under 60 per cent of GDP).
Robertson insists New Zealand will pay down its increased debt over time, through growing the economy. He has ruled out cutting significant public services and income support.
“When I look back to the late 80s and early 90s I saw a different kind of approach to recovery from a downturn, one that was more of an austerity-based one — it was young people who bore a lot of the brunt of that. I am determined we won’t allow that to happen.”
The Government’s approach was to invest in young people now through training and job support.
Chair of Precinct Properties, Craig Stobo, says Robertson has been “unruffled and steady,” adding “the spectre of the 80s economic reforms informs his policy preference”.
It is unsurprising most CEOs focused on Robertson’s performance in relation to the Government’s Covid-19 economic response. However, there is underlying disappointment that he has — so far — lacked long-term vision, and hasn’t used his position to deliver on the transformational change Labour campaigned on in 2017. A real estate boss says: “he lacks depth and strategic focus — it is all about the now.” Adds an executive recruiter: “I have severe concerns over his lack of focus and long-term thinking.”
The chief executive of an investment firm says: “He did a sound job in his first two-and-a-half years but he had the opportunity to create a massive lasting legacy and transformational change with the big spend up and appears to have wasted the opportunity on instead spreading money in every direction.”
Paul Goldsmith: Needs confidence, clarity
New Zealand’s top chief executives want Paul Goldsmith to find confidence and clarity.
National’s finance spokesperson has yet to make a major impact with many top business leaders, perhaps because he has been overshadowed during National’s leadership turmoil.
“Paul, like many in the opposition have been starved of oxygen in terms of public voice or debate,” says Deloitte CEO Thomas Pippos. Precinct Properties chair Craig Stobo has a similar view: “He has emerging credibility but low share of voice.” The 2020 Herald Mood of the Boardroom survey asked executives whether Goldsmith presented as a credible future minister of finance. Fifty-three per cent of respondents said Yes; 22 per cent said No.
The remainder — a significant 25 per cent — say they are still unsure, with many noting Goldsmith has lacked visibility at a time where strong opposition is needed.
“He’s been meek,” says an executive in the wine industry.
“He should have had a field day with this Government,” says an investment banker. “But he has been very quiet in Opposition.” Another high-profile banker says: “I haven’t seen enough to suggest he is a credible future minister of finance, but give him the benefit of the doubt.”
“Based on what little I have seen, he seems to be okay — but I am not ready to say ‘yes, he’s a credible future minister of finance’,” adds a recruiter.
This morning, Goldsmith will debate with Finance Minister Grant Robertson at the launch of the Mood of the Boardroom Election Survey. Several of New Zealand’s top bosses note that compared to Robertson — who received a positive response from 91 per cent of CEOs — Goldsmith lacks credibility.
Grant Samuel managing director Michael Lorimer says Goldsmith does not have a good grasp of the issues: “This was evidenced at last year’s breakfast debate and he has not improved since,” he says. “He needs to put up ideas — not just point out the faults in the Government,” says a healthcare boss. “While I don’t like Labour’s policies, I think Grant Robertson is a far better and more credible Minister of Finance.”
“He’s not as strong as Grant, but he has made some excellent suggestions and would be tested if he became minister, which would give him the chance to raise his credibility.” says an executive in the real estate sector.
But Goldsmith should take heart. The Opposition finance spokesperson is typically challenged when compared to an incumbent who has become established in the role.
Robertson also faced a hurdle connecting with the business community prior to taking the helm.
In the 2016 Mood of the Boardroom survey — when Robertson was up against Bill English — one banker suggested Labour should replace him with “someone who understands the portfolio, like David Parker”. In the eyes of CEOs, Robertson is now their top performer.
Goldsmith took on the finance portfolio in June last year and was elevated to third in the party’s parliamentary rankings under Simon Bridges’ leadership.
He won praise as Opposition finance spokesperson in the early days of the Covid-19 pandemic.
Goldsmith commended the Government for the wage subsidy package and its Covid leave support. But he also called for more targeted and specific support for business with more rigorous measures around it if a wage extension was introduced — something that is now being debated as it comes to light that some large, profitable companies likely took advantage of the subsidy.
The tone he used to deliver his criticism of the detail in the Government’s economic response was in stark contrast to then-leader Simon Bridges, which drew strong condemnation and ultimately led to his demotion.
“Paul has continued to work hard and push on detail,” says a transportation boss.
Goldsmith retained the finance portfolio under Todd Muller’s brief stint as leader but dropped in ranking to number five — bouncing back to number three when Judith Collins assumed the leadership.
Despite his backing in the role by three leaders, CEOs say Goldsmith is still yet to prove he’s got the chops to run the government books. But they also acknowledge he is in an unenviable position, following in the footsteps of some high-performing predecessors — former National Party finance minister Bill English consistently rated top of cabinet during his tenure as finance minister.
“I compare him to Bill English — a hard act to follow,” says a CEO in the agricultural sector.
“I like Paul — and he is smart,” says a top lawyer. “But scratch beneath the surface and he can’t answer follow up questions.”
Another major concern raised by CEOs is Goldsmith’s lack of ability when it comes to communicating and connecting with the business community and the broader public.
“He is not really a retail politician, but he is extremely bright and is a very fast learner,” says a professional director.
“He is not yet credible, but he has the brain, if not the communication skills — he’s very dry,” says a lobbyist. A CEO in the transportation industry says he lacks mana and presence — “too much IQ and not enough EQ!”. Another CEO shares a similar view: “He’s dry, but capable.”
The head of an investment firm sends the following advice to Goldsmith: “He needs to command the key points and deliver them with more confidence and clarity.”
A real estate boss gives a backhanded compliment — referring to Goldsmith’s extracurricular interests: “He’s an excellent art historian.”
https://www.timmccready.nz/wp-content/uploads/2020/10/Grant-Robertson-Paul-Goldsmith-Mood-of-the-Boardroom.jpg9101302tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-10-03 14:31:062020-10-03 14:35:50Mood of the boardroom: CEOs compare finance rivals Grant Robertson and Paul Goldsmith (NZ Herald)
Some sectors have even taken on staff writes Tim McCready
Business leaders say the wage subsidy the Government implemented to support firms that had taken a revenue hit from Covid-19, was an important step to keep people in work and the economy going.
The Mood of the Boardroom 2020 survey revealed 41 per cent of respondents accessed the first round of the subsidy, and 15 per cent — the second round.
The subsidy was received across myriad industries, and those that took it up say it was a quick and sharp response that bolstered confidence and saved jobs. “I think this saved many jobs,” says a healthcare boss. “We did not make people redundant because of this, and they remain employed post the subsidy ending.”
“It was a significant help during times of extreme uncertainty to support staff and give them surety of employment,” says Fulton Hogan CEO Cos Bruyn.
There have been reports of some companies rorting the system and claiming wage subsidies they may not have been entitled to but some survey respondents say although they may have been eligible for the support, their businesses chose not to take it up.
LIC chief executive Wayne McNee says given how the business performed for the full year, the firm chose not to use it. A tech CEO says, “we felt it was a badge of honour not to need or use the wage subsidy in the first or second round”.
Chief executive Don Braid says Mainfreight applied and received $10.6m — qualifying under the rules. “But we returned the full amount when we recognised we were better off than others and could see improvement occurring.”
One CEO says their company accessed the first round, but repaid it in full as soon as it was clear the impact of Covid was less than projected. “It was hugely helpful in giving us the confidence to maintain full employment and remuneration at a time when some competitors were cutting one or both.”
But business leaders caution: “We need business to adapt to the tough new environment and the Government — and indeed New Zealand — can’t afford to keep subsidising business indefinitely.”
Business resizing — not just down
The buffer provided from the subsidy has no doubt saved jobs. Exactly half of the survey respondents say they haven’t had to downsize staff during the pandemic.
But even so there have been a significant number of casualties from the crisis — some 17 per cent say they have had to downsize by more than 10 per cent. Although some note the full impact of job losses will be revealed once the ventilator of the wage subsidy wears off.
The most dramatic reduction in staff numbers has been in the tourism industry.
But 8 per cent of respondents say they have upsized due to the impact of the pandemic. These are from a range of sectors, including food and agribusiness, banking, investment, professional services and IT firms. There have been several reasons for the staffing increase.
“We are taking the approach of investing through this crisis,” says ASB CEO Vittoria Shortt. “This means providing permanent roles for contractors and recruiting more people into our business.”
Chapman Tripp chief executive partner Nick Wells says there have been fewer departures from the firm: “Few want to leave for overseas, so we have grown slightly compared to what we would typically expect.”
A professional director says one of her companies initially pushed pause on recruitment — “however it very quickly became apparent that the needs of our customers required us to accelerate progress in order to continue to help with their evolving needs.”
CEO Chris Quin says Foodstuffs North Island upsized 6 per cent at peak due to panic-buying and growth in online.
Mixed impact on production levels
CEOs were asked how Covid will impact production levels within their businesses. The result is mixed over the coming two quarters, with a few (4 per cent) expecting a significant decline of more than 80 per cent, but others expecting no impact or even growth in production levels.
A law firm head: “We saw a decline over the past three months that averaged out at 20 per cent. A trend in the right direction is now evident — but still down year-on-year.”
Most in primary industry and food and beverage say they don’t expect to see a significant impact in the coming months. “Demand persists for premium infant formula in the China market,” says director Ruth Richardson. “Demand signals remain very positive,” says an agribusiness boss. “But we do have a lingering concern — perhaps through our approach of being constructively paranoid — that the music will stop and there won’t be enough chairs.”
As has been the case for many aspects of Covid-19, CEOs say in many cases production levels will depend entirely on the pandemic — and therefore the future remains uncertain.
“It depends totally on expectations of further Covid incursions, shutdowns and the opening of borders to both shows, sports teams, artists and tourists,” says non-executive director Joanna Perry.
From a food and beverage boss: “This is a hard question to answer looking forward as it all depends on the Government’s ability deliver on its elimination strategy.”
Production is clearly not just a domestic issue. A slowdown in world trade growth (which CEOs score among their highest international risks at 7.64/10 on a scale where 1= no concern and 10=very concerned) contributes to general uncertainty and nervousness in the business community in terms of future production levels.
MinterEllisonRuddWatts’ Lloyd Kavanagh: “We need to plan for each of the scenarios, and be agile in adapting depending on what unfolds. We can’t project one outcome when there are so many variables.”
The disruption in the way businesses operate as a result of Covid-19 has been a catalyst for businesses to adopt new technologies more quickly than they expected and accelerate their use of existing technologies. McKinsey estimates this rapid migration to digital technologies has seen us vault five years forward in consumer and business digital adoption in a matter of around eight weeks.
The Mood of the Boardroom survey asked CEOs how the Covid-19 crisis has changed the way in which their business is conducted.
On a scale of 1 to 5, where 1= strongly disagree and 5=strongly agree, the top-rated changes to businesses are: increased use of online meetings (4.63/5), increased use of technology (4.45/5), more flexible working (4.36/5), accelerated growth of e-commerce (4.33/5) and reduced international business travel (4.31/5).
Beca’s CEO Greg Lowe said he was surprised during the initial lockdown at the effectiveness of working from home both for Beca and for its clients.
“The increased use of virtual meeting technology has not only increased the skill levels of all of us, we have realised that we can be more productive from remote locations and carry out more of our business activity remotely than we thought.”
Beca managed to maintain its delivery to its clients with thousands of people working from home — but that this is not a sustainable business model in the long term.
“Building relationships, developing people, creating more effective teams, increasing productivity all needs some form of person to person engagement. While undoubtedly we will see more flexible working (for many reasons) and less travel, I do not believe that large numbers of people want to work permanently from home.”
The adoption of flexible working saw one energy CEO reduce their organisation’s footprint and rethink the use of office space. But an investment fund boss reckons the importance on office space from more people working from home is overrated — “but this will be impacted by economic factors”.
Precinct Properties chair Craig Stobo says “the Covid wave has accelerated the digital wave”. Another executive in the tech sector says New Zealand should “use this to become a digital nation!”
A property CEO says Covid has given their organisation a greater appreciation of the critical importance of business continuity planning. “It is no longer a ‘nice to have when we get to it’ item on the board agenda.”
An increased focus on staff wellbeing and social purpose was also mentioned from executives spanning various industries as a major change from Covid.
“We have had a complete rethink on the role of HR and how teams work — including salary and incentive structures,” said one CEO in the utilities sector.
https://www.timmccready.nz/wp-content/uploads/2020/10/Subsidy-Mood-of-the-Boardroom.jpg683488tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-10-03 14:27:442020-10-03 14:35:57Mood of the boardroom: Wage subsidy a jobsaver for many (NZ Herald)
Support for transtasman travel but only when safe, reports Tim McCready
The transtasman bubble proposal should be progressed once the Covid-19 flareup in Australia is under control. That is the message from New Zealand’s top CEOs in the Herald’s Mood of the Boardroom survey.
The result was overwhelming — 94 per cent of respondents are in favour, 5 per cent are unsure. Just 1 per cent of respondents say we shouldn’t continue to progress the initiative.
CEOs placed myriad caveats — “only when safe”, “define ‘under control’”, “risk must be minimal before relaxing”.
“It’s something we should keep a watching brief on,” says a tech entrepreneur. “Nothing in Australia gives me confidence in their capabilities to contain.”
Deloitte CEO Thomas Pippos asks: “The question is what does under control mean? At one stage Victoria was considered under control.”
“The latest outbreaks seem to show this is less likely and riskier than first envisaged,” says Chapman Tripp chief executive partner Nick Wells.
Some CEOs say we shouldn’t be progressing until there is no community transmission on both sides of the Tasman.
“We need zero community transmission in each country and rapid tracing technology that crosses borders to even be considered,” says a dairy industry boss. “Rapid testing may have a role to play when and if it becomes available.”
But others are amenable to travel with cases present in the community — so long as steps are taken to ensure the risk remains low.
“Progress on pandemic management and the use of technology can both be used to provide a quarantine-free system for travel with selected countries,” says Beca CEO Greg Lowe. “We just need to get on with solving the technical challenges so we can implement when the health settings are right. No one wants to be unsafe, but we do need to have a plan.”
Australian Prime Minister Scott Morrison has said Australia is working on a “hotspot” model that would not necessarily require zero transmission. He said this could also extend to Covid-free parts of New Zealand.
Morrison said all states and territories except for Western Australia had agreed to an update of the roadmap to recovery, with the goal to reopen their borders by Christmas. It will focus on testing regimes, data sharing and interstate borders — rather than issues like hospitality venue capacity.
Jacinda Ardern has said that — so far — Australia’s hotspot model will not be reciprocated holus-bolus. “Ultimately, for the hotspot arrangement, it doesn’t change the work that we’re doing on the bubble which is focused on putting New Zealand and Australia in the position to have quarantine-free on both sides of the Tasman. Right now though, neither country is in a position to offer that in its entirety because it’s just not safe. “If a New Zealander chooses to go to Australia because there is no quarantine, they will know that they’ll be covering the cost of their quarantine on return to New Zealand.”
Back in May when a travel bubble with Australia looked promising, the Trans-Tasman Safe Border Group was established, co-ordinated by the Australia New Zealand Leadership Forum.
The group — made up of 11 government agencies, six airports, two airlines, health experts and airline, airport and border agency representatives from both Australia and New Zealand — submitted a blueprint for transtasman travel to both governments with the objective of removing the need for quarantine.
Auckland Airport CEO Adrian Littlewood was part of the effort, and said at the time “New Zealand and Australia have a great opportunity to really set some potential standards for travel restarting around the world.”
Its original aim was to have the bubble operational and flying by the July school holidays.
Prior to the Covid crisis, New Zealand was the most popular outbound travel destination for Australians, with 1.5 million visitors arriving from Australia in 2019, accounting for 40 per cent of all foreign visitors to New Zealand. Australia was the most popular outbound travel destination for Kiwis. New Zealand is Australia’s second largest source market for visitors, with 1.4 million visitors in 2019, accounting for 15 per cent of total visitors to Australia.
Unsurprisingly, a travel industry CEO is supportive: “It absolutely should be progressed — our economies and social structures are too intertwined.”
Chairman of the New Zealand Initiative Roger Partridge says the open border will be significant: “We all have an interest in Australia succeeding and expanding our ‘domestic’ marketplace for tourism by an extra 20 million people.”
Precinct Properties chair Craig Stobo reckons the industry should be innovative in its thinking. “We had 1.5 million Aussies come last year … tourism will have to go for a high-margin value proposition — not a low value volume growth strategy as we have done in the past,” he says.
Most CEOs agree quarantine-free travel across the Tasman is unlikely to happen soon.
“With the rate of community transmission and the time it will take to get this under control, we should not expect or depend on this opening up in the next three months,” says marketing boss Anne Walsh.
https://www.timmccready.nz/wp-content/uploads/2020/10/Transtasman-bubble-Mood-of-the-Boardroom.jpg378651tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-10-03 14:25:362020-10-03 14:36:04Mood of the boardroom: Resurgence pops plans for transtasman bubble (NZ Herald)
In any normal time, the political leaders would have been put through their paces and challenged by business chiefs on their election policies.
The 2020 election is like no other.
The Covid-19 restrictions in Auckland saw BusinessNZ move the conference online.
Instead of a pumping crowd, there was a sea of empty chairs. Mask-wearing journalists and a guy who sanitised the lectern in between four political leaders: James Shaw (Green Party), David Seymour (Act), Judith Collins (National) and Jacinda Ardern (Labour).
Winston Peters (NZ First) appeared through video-link and BusinessNZ’s members watched online.
Tim McCready summarises the show.
Labour Leader Jacinda Ardern was positive. She highlighted everything her Coalition government had done to support business through Covid, and reiterated “the best economic response is a strong health response.”
“Ours is a response I will defend as being among the very best in the world, because not acknowledging that would be a disservice to five million new Zealanders who made it happen,” she said.
2020 has not been easy: “For business it has been hard and disruptive — a pandemic sweeps away business as usual. It is incredibly hard for business to plan in a global pandemic.”
But she said there was a limited window of opportunity to leverage our reputation as a “clean, green, and safe nation”.
“We will launch an investment attraction strategy… and compete to win the global companies we want to invest in New Zealand and locate part of their business here.”
Ardern said New Zealand could use its standing to attract more investment like Microsoft’s plant establish its first data centre in New Zealand.
“We have a plan and we are rolling out that plan … “Supporting our people, our businesses, and our international reputation”.
National leader Judith Collins spent a significant time pointing out the flaws in the current government — beginning with its response to Covid.
The prospect of yoyo-ing in and out of lockdown is a significant impediment to business, and she criticised what she called the “mind-blowing stupidness” that saw the Government allow corner dairies to open during lockdown period but not the butchers and greengrocers next door to them.
“Let’s put essential industries aside. We should be looking at what’s a safe industry.”
She was also vehement in her denunciation of Labour’s failure to fulfil its promises.
“We would not promise to build 100,000 houses in ten years. We would not promise light rail up Dominion Road and then not do it. We would not cancel or delay 15 roads. We will deliver on what we promise,” she said.
Collins spoke of her vision for New Zealand in the wake of Covid-19.
“It’s an opportunity for New Zealand which we can either ignore and worry about everything that might go wrong, or we can seize the opportunities.
“It is a time for vision. That vision does not mean going back to the past.”
New Zealand First Leader Winston Peters joined via video link from his hotel room, while on his bus tour of the South Island. He started by criticising the Labour-led Government asking “what are we doing in lockdown in the South Island when [the re-emergence of Covid-19] is an Auckland issue?”
He said New Zealand is entering a completely new era — “we are not going to revert back to how things were just a few months ago”.
The Greens also came in for criticisim. “If you are sceptical that ‘woke’ is a problem, let me say: ‘Green school’.” Labour’s proposed Matariki holiday was also slammed, along with its proposal to increase the top personal income tax rate to 39 per cent — “taxing people will not regain our prosperity.”
As for New Zealand First, Peters said it is standing on several platforms, “one is the experience we bring to office and the moderating presence we have in Government. And if you doubt that, just two words: capital gains tax.”
He wrapped up saying he cannot believe the level of carelessness about the election: “Don’t stuff the country. That’s what the election is about. Don’t stuff the country. You’ve got two votes — buy some insurance.”
The Greens don’t always get an easy run with business. But many have an affinity with Greens co-leader James Shaw who was in his element at the BusinessNZ election conference.
He laid out three areas he thinks the NZ economy can expand on, which don’t require the physical movement of people.
Shaw pointed to NZ’s growth in weightless exports over the last couple of decades — particularly in the ICT sector.
He wants to establish a digital export office at NZTE to give the sector focus and significantly boost exports.
Sustainable agriculture was another opportunity with “value over volume” sitting nicely alongside environmental sustainability. “We need to move more towards supporting farmers and growers to enable them to take advantage of that and support them through the transition,” he said, adding that he’d love to finally be rid of the false narrative of town versus country.
But if he had to pick a winner for New Zealand, Shaw said it would be the development of electric transport. He said NZ has an advantage here — including using technologies developed for the America’s Cup: “We have a niche industry that is starting to emerge here that I think we could encourage and grow — that will ultimately lead to significant exports as the whole planet addresses the need to decarbonise.”
Act leader David Seymour opened up by likening the Government’s borrowing to “fiscal child abuse,” due to the amount of debt that future generations will have to deal with.
He told the BusinessNZ audience that New Zealand needs to stop comparing itself to Victoria and Sweden, and instead seek to do better. “Why are we not Taiwan?,” he asked. Seymour suggested we’d have a better outcome if we relied on both the public and private sector in our Covid-19 response, and not just the Ministry of Health.
In terms of encouraging future growth to aid our recovery, Seymour said we need to allow businesses to grow without restriction.
He said the current regulatory environment is unattractive to value-added tech — citing genetic engineering as an example — and thinks we could make good progress in this area if not for the “medieval superstitious genetic engineering rules”. It was a similar situation for fintech: “we might be able to get Kiwis back if our regulations weren’t so hostile.”
Foreign investment restrictions should also go: “We desperately need capital to raise productivity, we need to strengthen relationships and investment connections with democratic OECD countries.”
“There is no better vote you can give to raise the standard of debate in parliament and ensure we come out stronger as winners.”
https://www.timmccready.nz/wp-content/uploads/2020/10/BusinessNZ-conference-Mood-of-the-Boardroom.jpg620651tim.mccreadyhttps://www.timmccready.nz/wp-content/uploads/2020/03/TimMcCready_banner.pngtim.mccready2020-10-03 14:24:022020-10-03 14:36:12Mood of the boardroom: The show must go on — online (NZ Herald)