New Zealand needs more of a master plan

We need big investments and that infrastructure actually will support greater productivity in our sectors.

Air New Zealand chief executive Christoper Luxon is keen for business to play a larger role in “supercharging New Zealand’s success”. In a video interview for the Herald’s Mood of the Boardroom leaders’ series, Luxon explained that meant business contributing with government and with community leaders to progress New Zealand forward.

“This can’t just be left to one of the actors in the economy,” he said.

Luxon said he wanted New Zealand to be more strategic as nation. “I was recently with the Minister of Transport in Singapore, and we were looking out from his office as he talked about a 2040 plan for the infrastructure across the country.

“And, you know, they’re reclaiming land and building tube stations, as I understand it, up to five, seven years before they actually need them. But they’re in place, investing ahead of the curve and ahead of the growth.

“As New Zealanders we have been raised to be highly tactical and self-reliant. But we tend to react to crises — and actually it’s very much in our DNA — but the challenge is to have more of a master plan of where we want to go.”

Attracting investment in today’s environment, is very cheap. “I think the bigger challenge is for us to have the vision of where we think we need to go. We need big investments and that infrastructure actually will support greater productivity in our sectors, and we still haven’t done a nearly enough good job of that.

“If I take my own sector of tourism, we’re really proud of the progress we’ve made in terms of tourism, and it’s been tremendous. But the reality is that we are about mid table in terms of the productivity that we get out of tourism, and what I mean by that is the value of tourism divided by the number of employees working in it; we’re about midtable in the world. And if we could get ourselves to the top 10 per cent there’s another $9 billion to add into the tourism sector.

And I’m sure it’s the same in primary industry and I’m sure it’s the same in dairy and other parts of the economy as well.

Immigration is actually a good thing for this country. We don’t want to be a country of anti-immigration. It just has to be the right kind of immigration with the right kind of skills, coupled with the way that we develop our own people locally. On housing — that’s a real challenge for us. And again, it’s a function of the strategic thinking to invest in housing before that demand starts to hit us, and obviously we’ve got some serious catch-up and some serious challenges there.

We’ve had a situation where a number of our major construction companies — Fletchers, Hawkins — have come under pressure. Do we actually have the companies here to shoulder the infrastructure build that we need? I’m not sure about that. I think we have. But equally, there might be more innovative solutions. I was quite interested in the thought that we might be able to partner with the Chinese companies to build critical infrastructure; that we might be able to open up classes of immigration and a pathway to citizenship for workers to help us build the critical infrastructure that we need so fast.

How would you have that conversation, in a polarised environment?

I think a lot of it is actually just taking a step back and explaining the burning platform that we see. And I think New Zealand is essentially, in an infrastructure sense, a country that was built for three million people with a million visitors. Today we’re almost five million and four million visitors, and part of the maturing of our country is really the fact that we have to make investments ahead of it. That’s no different from what we do in business. Air NZ today is, you know, 35 per cent bigger than it was five years ago and we’ve had to invest in capital in order to actually create those opportunities for us.

“I think a lot of it is actually taking a step back and explaining the why, and getting really clear about what the implications of all of that is. And communicating that to everyone across the economy is really important.”