The good and the bad of the year in business
It was probably the key reason for low levels of business confidence in 2018 that are only now beginning to ease.
Less surprising was the Ardern Government’s move towards greater intervention in the economy.
In some cases this has been very positive for business – for example, regarding research and development (R&D) assistance.
Labour’s policy to introduce R&D tax credits for all qualifying businesses in addition to the R&D support already provided by Callaghan Innovation has been well received by many businesses that previously would not have been eligible for any innovation support.
It’s an important move because the ability to innovate is the main way for businesses to stay competitive. These days the only way to compete effectively is by creating new products, services and approaches to business.
The NZ First-inspired Provincial Growth Fund is another intervention gaining positive mention by business in regional areas of New Zealand.
Businesses involved in activities such as aquaculture in Coromandel, goat farming in Southland, tourism and dairy processing in Westland, kiwifruit in the Bay of Plenty and forestry in Northland have all gained from the fund, while infrastructure for rail services, cycleways and digital connectivity have been boosted.
Perhaps the biggest gain for business this year was the successful completion of the CPTPP trade deal. This huge trade agreement between 11 Pacific rim countries will significantly reduce the tariffs that New Zealand exporters must pay to sell their goods in large, desirable markets such as Japan and Canada.
The fact that the Ardern Government went so strongly after the CPTPP after being opposed to its predecessor, the TPP, may have been surprising, but it was a reversal that many in business welcomed.
Finally, the reversal most cheered by business was the Government’s decision to overturn some of the more rigid elements of its new employment law.
The Employment Relations Act now contains more support for union activity in the workplace, but has also been stripped of excessive provisions that would have cornered businesses into multi- employer collectives against their will.
Looking at the effects on business of the first year of this Government, it’s clear that not all policy moves in 2018 were expected and not all were bad for business.
In 2019 enterprises and their representatives will keep on engaging with Government and its three component parties to seek continuing improvements for the environment for business.
Kirk Hope is the chief executive of BusinessNZ