Managing economic growth is the key

New Zealand will continue to experience economic growth but the impact of this growth on housing, infrastructure and skills must be managed carefully, says the chief executive of BusinessNZ, Kirk Hope.

“We are experiencing unprecedented demand for our goods and services including tourism, both domestically and exporting, but there are plenty of big issues over how we continue to facilitate and enable that level of economic growth,” he says.

“There has been a significant underinvestment in infrastructure, we haven’t built enough houses for people to live in, and are we confident that our education system is geared up to provide skills of the future?”

Hope believes a transport network involving road, rail, sea and air should be truly connected and operating efficiently.

There should be a long-term play around infrastructure build — the roads of national significance are just part of it. “There’s no lack of capital to build infrastructure but our resource and planning law makes it tough. The infrastructure build is being played out slowly. And it’s critical for the regions to have quality infrastructure so they can continue to grow.”

Hope says people might find living in certain parts of the country, such as Auckland and Queenstown, too expensive and they are moving elsewhere. But housing affordability is having an impact on businesses — these people are going to new jobs but the businesses they are leaving are finding it hard to replace their skills.

Hope says because of the demand for goods and services there is a mismatch of skills coming out of the education system.

“We have different parts of the tertiary sector responding in different ways. It is important that the funding mechanism through Tertiary Education Commission is more outcome focused than having bums on seats.

“The Industry Training Organisations (ITOs) are responding better to the market but perhaps they are more tied in with employers.”

Hope says over the next four to five years 200,000 more service workers are needed, and they are being trained by ITOs. “As a result of the demand, we are importing a lot of skills and this has its own challenges.

“Do they want to live in some parts of New Zealand? There have been examples of people experiencing exploitation. That’s not a good thing.

“We don’t have much time responding to a funding incentive process through TEC. We are engaging and trading with Asian countries and they are able to move their education rapidly.”

Hope also wants a faster timeframe for New Zealand’s public policy process. “We are very good at public policy but the process needs to be more responsive to different sectors.”

— Graham Skellern