More subdued growth, due to persistent spare capacity in the global economy following the global financial crisis, has been a key feature of the current New Zealand business cycle.

This is a key take-out from a review of the current business cycle, published today in the Reserve Bank Bulletin.  Listen to the Behind The  Bank Bulletin

The article summarises developments in the New Zealand economy since 2008 through the lens of monetary policy.

The article identifies five key phases: the global financial crisis of 2008-09; ‘green shoots’ recovery (mid-2009 to mid-2010); domestic caution and global uncertainty (mid-2010 to late 2012); commodity boom and construction upswing (early 2013 to mid-2014); and persistently low inflation (mid-2014 to present day).

Despite extremely accommodative monetary policy settings, growth in major advanced economies has proved to be slower than in past expansions. Growth in New Zealand has also been more subdued than in past business cycles, in large part due to weakness and uncertainty abroad. Against this international and domestic backdrop, consumer price inflation in New Zealand has been low.

A follow-up Bulletin article — due to be released in the coming weeks — will present some of the key features of the business cycle and the insights for monetary policy that have emerged or been reinforced.

| A RBNZ release  |  March 29, 2017   |||

Computer services and machinery manufacturing firms led the way in an almost 30 percent lift in business spending on research and development (R&D) in 2016, Stats NZ said today. Businesses spent $1.6 billion on R&D in 2016, up $356 million (29 percent) from 2014.

The computer services sector had the biggest dollar-value increase in R&D within the business sector, up $125 million (40 percent) to $436 million in 2016. Computer services firms include New Zealand businesses providing services such as producing and distributing software, and web design.

The second-largest increase in business-related R&D spending was for machinery and equipment manufacturing, up $105 million (37 percent) to $392 million in 2016. These firms include high-tech manufacturing firms developing new products and services for sale in New Zealand or overseas.

Total spending on R&D by businesses, government, and higher education was $3.2 billion in 2016, up $531 million (20 percent) from 2014. R&D in the higher education (university) sector lifted and government R&D had a modest rise, but the bulk of the overall increase was from business spending.

“R&D spending is about investing in New Zealand’s future. It paves the way for new and better products or more efficient ways of doing things, although the process can take years,” business performance senior manager Daria Kwon said.

“While higher R&D spending is a key driver of economic growth according to some studies, it is not a guarantee that a business will be more creative or profitable.”

All services sector groups spent more on R&D in 2016 than in 2014, with an overall $203 million (32 percent) increase to $835 million. In the higher education sector, universities' R&D spending was up $143 million (18 percent) from 2014 to $960 million in 2016.

Graph, Research and development expenditure, by sector, 2008 to 2016.

Data and analysis

Research and Development Survey: 2016 – for more data and analysis

|  A STATSNZ release  |  March 29,2017   |||

Colour Graphic Services is offering free ‘colour health checks’ for offset, digital and wide-format printers at PacPrint in May.

Printers can print the free test forme to the best of their ability on the device of their choice and bring it to CGS’s stand B62 at PacPrint, where ‘Colour Doctor’ David Crowther will analyse and provide feedback on their colour performance. “The test provides printers with a report and detailed information about where their colour quality is at on the device they printed it on. We’re measuring it against the ISO standard for print, which is the basis for colour quality, so they can see how close they are and we can advise what they should do,” Crowther said.

The health check will be performed using ISO 13655-compatible Techkon spectrophotometers, and compared against the ISO 12647 colour standard using Mellow Colour software. The program will provide a detailed report within seconds, identifying colour issues and suggesting remedies.

Printers interested in the health check can obtain the forme by emailing This email address is being protected from spambots. You need JavaScript enabled to view it.. “The file we send in advance is big, around 200MB, so either high bandwidth or a file sending service such as DropBox or SendStuffNow can be used. It’s a PDF so can easily be put into the workflow and printed out,” Crowther said.

A CGS press release says taking advantage of the free service at PacPrint could provide a saving of hundreds of dollars, as the same process in a metro area would cost between $495 and $995 to produce, measure and report on the test forme.

|  A CGS release  |   March 27, 2017   |||

With its complex rules, fine print and lengthy processes, it’s little wonder that the $NZD1.85 trillion dollar insurance industry has a terrible reputation for trust and customer service. In a recent global survey from accounting firm E&Y, consumers ranked insurance below banks, car manufacturers, online shopping sites and supermarkets for trustworthiness.

A newcomer to the field, Auckland based Digital Squad hopes to reverse that reputation by using Artificial Intelligence (AI) - more specifically technology and behavioral science to create a faster and more transparent service.

The start-up, a collaboration of behavioural economist, Shane Chand, and AI and cryptography specialist, Anvesh Katuri, set out to create algorithms that make it easy and quick to sign up and approve claims – in minutes rather than days.

"AI-SURE will use Machine learning to eventually handle the entire claims process – from triage, through fraud mitigation and down to the actual payment by wire.A big challenge for AI-SURE will come when it faces a flurry of claims from a major natural disaster such as the Christchurch quakes" Shane said.

"Whilst till in testing phrase and far from deployment, the software is looking very promising so far" he added.

U.S based venture capitalist and billionaire Mark Cuban predicted recently that the world's first trillionaires will actually be entrepreneurs working with artificial intelligence.

|  A PRWire release  |  March 28, 2017   |||

In 2012 it was reported, based on a Public Trust survey, that over half of New Zealanders over the age of 18 don’t have a will! Since that time it appears little has changed, as Public Trust referred to the same statistic in its 2016 Annual Report. It’s even worse for younger people, where 66% of 25 to 39 year olds don’t have a will.

Given that wills are so important, how can this be?

Public Trust thought that part of the problem is that many people believe that if they die without having made a will, their entire estate would automatically go to their partner, so they wouldn’t need a will. Of course that is not what actually happens, and there is a need for ongoing education on the need for a will and the issues that can arise without one.

Younger people may also believe that don’t have any assets, which is unlikely to actually be the case at the time they die, particularly when KiwiSaver is taken into account.

There are likely to be other reasons though:

• A large one will be the actual or perceived cost of seeing a lawyer. The reality is that traditional legal services simply cost too much for many normal people. As James Greenland wrote in his excellent article on the access to justice gap, Mind the Gap, “You can't pay $500 per hour when you earn $500 per week”.
• Wills are an emotional thing to do, and people might feel more comfortable exploring their options before they commit to formalising and signing a will. As Public Trust's Alex Polascheck was reported to have said, drafting a will was "quite an emotional thing to do" and sometimes people found it too difficult.

Over the past few months we’ve been looking hard at this issue with leading wills and trusts lawyer Matt Hay, of Succeed Legal. We just didn’t feel that the existing situation is anywhere near good enough, and wanted to do something about it.

Then we hit on an idea. At LawHawk we have been wanting to create a free document that anyone can use, without obligation, to see just how powerful our HotDocs document automation solution really is. Rather than create a pretend document people could play with, we thought why not create a real will that anyone can use for free in the privacy of their own home? That would resolve any issues of cost or emotional difficulty. They can play with various options, and see what their will might actually look like in real time.

Try our free will now

Of course there’s a concern that non-experts using a real will could get themselves into trouble, which is why there’s a need for expert advice and we still want to see people using lawyers for wills. Maybe more will if they know it will be easy and affordable. We decided to strip out some of the more complex options which are in our paid version that is better suited for lawyers to use, and to make it really easy for people to get help from Matt and his team at Succeed Legal, or any other law firms that would like to work with our will to offer high quality advice to will makers at great value.

Lawyers - join our legal directory here

Most wills – particularly for those who currently don’t have them - are likely to be quite simple, and would involve the will maker giving everything to their partner, or if they had also passed away, to their children. Additionally, the will maker should make clear who will be guardian to any minor children, and what they want to happen to their body. This is all possible within the completely free version.

Available until 30 April

We’re planning to run the free will as a trial until 30 April to see how it goes. We would love to see as many people as possible try the will during that time and, if they’re happy with the outcome, drop those terrible numbers of people without wills.

The system – both free and paid versions - is also open to any lawyers and trustee companies who would like to use it. Please just get in touch if you have any questions, and we are happy to offer training so you can provide your clients with high quality and efficient additional advice.

The intestacy process costs both time and money, and lack of clarity as to the will maker’s intentions can lead to ugly family disputes. This could make a real difference to the lives of many New Zealanders. If you know anyone who doesn’t have a will, or whose will may no longer be up to date, please encourage them to do something about it this month. It will only take a few minutes, and there is no cost. What is there to lose?

|  A LawHawk release  |  March 26, 2017   |||

Leading credit rating agency Moody’s Investors Service has reaffirmed New Zealand's highest possible Aaa sovereign credit rating with a stable outlook, highlighting the country's high economic resilience, effective policy making and very strong fiscal position.

"The latest Moody's credit rating statement is a very positive endorsement of New Zealand's economic performance and the Government's policy settings," Finance Minister Steven Joyce says.

"Moody's expects that New Zealand will be one of the fastest-growing Aaa rated economies over the next few years. It notes that New Zealand's strong population growth, including through immigration, lifts the country's economic potential.

“The Agency also notes that New Zealand's number one world ranking for ease of doing business supports the country's robust growth outlook.

"Moody's draws attention to New Zealand's targeting of and subsequent achievement of a Budget surplus in 2014/15 as evidence of the country's effective policy making.

"Finally it notes that the Government's focus on preserving strong public finances provides New Zealand with the room to buffer the economy from any future economic shocks or natural disasters."

Mr Joyce says the Government will continue to implement its strong economic plan, focusing on building better public services and infrastructure, steadily reducing net debt, and ensuring the benefits of economic growth are shared with Kiwi families.

"This latest report from Moody's underlines the benefits of all the work New Zealand has done over the last few years to strengthen our economy and our country's finances. It's a tribute to the hard work of all Kiwis and a position we can all take real confidence from,” Mr Joyce says.

Moody’s credit analysis of New Zealand is available here.

|  A Beehive release  |  March 25, 2017   |||

The annual trade deficit for the year ended February 2017 was $3.8 billion, the largest since April 2009, Stats NZ said today.

The export of a large drilling platform in 2016 inflated annual exports and reduced the annual trade deficit over the period from February 2016 to January 2017. Drilling platforms, some worth hundreds of millions of dollars, are counted in goods trade as imports when they arrive in New Zealand and as exports when they leave, even though they are typically leased for the period they are in New Zealand.

If the drilling platform export of 2016 is excluded, the annual trade deficit of March 2016 would have been $4.0 billion, just under the $4.1 billion deficit in April 2009, when the annual deficit was last over $4 billion.February month

Goods exports fell $232 million (5.5 percent) in February 2017 compared with the same month of the previous year, largely due to the export of the drilling platform in February 2016. Excluding this single export, goods exports showed little change, up $35 million (0.9 percent).

“There were mixed results for New Zealand’s other export commodities in February 2017,” international trade statistics senior manager Daria Kwon said. “Exports of dairy, meat, and fruit were up, but other primary produce exports, including fish, wool, and casein, were down compared with the same month of the previous year.”

In February 2017, dairy exports were up $55 million (5.6 percent) in value, led by rises in the value of butter and other milk fats (up $45 million), and milk powder (up $20 million). These rises in value were despite quantities falling for both these commodities, and follows a similar pattern to recent months.

Imports rose $154 million (4.0 percent) in February 2017, led by a large rise in crude oil (up $101 million). Crude oil rose in both price and quantity compared with the same month in 2016. In general, prices for crude oil imports were lower than average in the first four months of 2016.

The monthly trade balance for February 2017 was a deficit of $18 million, in contrast to the surpluses of recent February months.

Overseas Merchandise Trade: February 2017 – for more data and analysis

|  A STATSNZ release  |  March 24, 2017   |||

Foreign Minister Murray McCully has announced that New Zealand will open a High Commission in Colombo, Sri Lanka.

"Establishing a High Commission in Colombo is a sign of New Zealand’s commitment to strengthening the relationship between our countries," Mr McCully says.

“Sri Lanka is rebuilding after a generation-long civil war, and we are keen to support that process politically and through a broader economic relationship. It is a growing economy, has a major dairy market and has expressed its interest in learning further about farming from New Zealand.

“Sri Lanka offers increasing value and diversity to our exporters, and is a trade gateway to a fast-growing part of Asia.”

The Government, through Budget 2017, has committed $6.2 million in capital funding to establish the High Commission and a further $8.9 million to cover operating costs over the next four years.

The new funding was announced today as part of the launch of Trade Agenda 2030.

More information can be found at www.mfat.govt.nz/tradeagenda2030

|  A Beehive release  |  March 24,2017   |||

Good morning.

Can I start by thanking the International Business Forum and the Auckland Chamber of Commerce for hosting this event.

And can I acknowledge your guests and my ministerial colleagues.

In particular I want to acknowledge Trade Minister Todd McClay, who along with Foreign Minister Murray McCully is doing an excellent job of promoting our interests overseas.

I think Todd and Murray would admit that some parts of that job are not too difficult.

After all, we have an enviable reputation around the world.

New Zealand is renowned for its great lifestyle, safe and friendly communities, good public services and a clean and green environment - all underpinned by a stable government and a growing economy.

It's no wonder that we've changed from being a place many wanted to leave, to one Kiwis want to return to.

I’m proud of what New Zealanders are achieving, supported by this Government.

Wages are rising and more jobs are being created every day.

We’ve supported the country through difficult times while continuing to invest in better public services, and in particular helping those most in need.

We’re building more infrastructure like schools, hospitals, housing and roads.

And we’re doing all that at the same time as getting our books back in order.

There’s no doubt we’ve made some very significant strides forward as a country.

But the job is far from done.

We’re now in a position to achieve things we hadn’t even thought possible 10 years ago.

We have a rare opportunity to prepare for the long-term and solve some of the more difficult social and environmental issues that governments have grappled with for decades.

I am determined to do that.

We’ve learnt over the last few years that first and foremost the government must promote and encourage a strong economy.

Everything else flows from that.

The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth.

A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world.

I cannot over-state how important trade is to New Zealand, and how closely it is linked to our prosperity.

Successive New Zealand governments have built a broad network of high quality free trade agreements.

Our first FTA - CER with Australia - created one of the most seamless cross-border marketplaces in the world.

We have secured high-quality agreements across greater China, including the mainland, Hong Kong and Taiwan, as well as with Thailand, Singapore, Malaysia and Korea.

These agreements have delivered real results that have always far exceeded our expectations.

Our goods exports to mainland China are now four times what they were before the FTA.

And just six months into our agreement with South Korea, our wine exports there have increased by 30 per cent.

Together with Australia we have negotiated a trade agreement with the 10 ASEAN nations.

We now trade more with these countries in a week than we did a year in the early 1970s.

New Zealand is at the heart of the ongoing regional integration process in Asia, and we are one of the 16 nations involved in the Regional Comprehensive Economic Partnership negotiations.

Those 16 countries represent more than three billion people and a total GDP of around $US23 trillion.

A more open, integrated Asia Pacific is an increasingly important part of New Zealand’s economic future.

It is the world’s fastest growing region, and it is shifting from investment driven growth to consumption that better fits our profile of soft-commodity exports.

ASEAN nations are expected to consume three times more dairy in 2050 than they did in 2007.

Their meat and fruit intake will double.

And beef consumption in China is expected to more than triple in that time.

Those are hugely significant opportunities for New Zealand producers and we need to be ready to help meet those needs.

Fortunately, we are well placed to take on the world.

We know how to produce high quality products that other countries want.

We have fewer than five million people but produce enough food to feed nearly ten times that.

We have an educated, ambitious and highly skilled workforce.

And we are one of the least corrupt countries in the world.

People like doing business with us, and that’s an excellent starting point.

Free trade agreements have allowed our exporters to diversify into new products and new markets – meaning we are more resilient to international shocks.

Although it remains a hugely important part of the economy, dairy no longer dominates our exports as it once did.

We’re seeing solid growth in tourism, wine, ICT, education and many other sectors.

Between 2014 and 2016, global dairy prices fell markedly, and as a result annual dairy exports fell by $3.3 billion.

But because of our diversified export portfolio, non-dairy exports grew by $5.9 billion over the same period.

I am often bemused by opposition to free trade.

It makes me think that governments have done a poor job of explaining the benefits.

They are indisputable.

Our exports are now worth $70 billion and they continue to grow, supporting hundreds of thousands of Kiwi jobs and households.

The dairy sector alone employs over 40,000 people, and supports the jobs of many more.

The tourism sector employs around 190,000.

And exporting firms employ an average of 20 people compared with just three staff in non-exporting businesses.

Trade is part of the reason why New Zealand is growing more strongly than most developed countries.

It’s part of the reason why the average wage is up 26 per cent since National was elected in 2008.

It’s part of the reason why over 370,000 jobs have been created since the height of the GFC.

And it’s a lot of the reason why the cost of living remains historically low, with things like cars, appliances and cell phones becoming more affordable.

Our lives would be poorer without free trade.

I acknowledge we have seen in the past that free trade can lead to significant change for some industries.

That change can be painful for some people working in those sectors.

But New Zealanders, with support from the Government, have shown an impressive ability to adapt and to thrive.

Ultimately, free trade is why New Zealanders are getting ahead and they now see a country confident in itself, more prosperous - more certain of sustained success.

It’s because we have one of the most open and competitive economies in the world that our farmers are today among the world’s most efficient, our wines among the most sought after, our reputation for ingenuity is respected internationally and why Kiwis are known for their work ethic and can-do attitude.

As Prime Minister, every week I have the honour of meeting these kinds of people.

I see many of you here today.

Leaders, entrepreneurs and risk takers.

I see people who are backing themselves and their businesses on the world stage and succeeding.

New Zealanders who are taking other Kiwis with them and providing jobs and incomes to Kiwi families.

New Zealanders who are creating international connections, growing our global reputation and adding value to our country.

We all recognise you and your success.

And we recognise those who have helped your businesses conquer the world, because as you all know, you haven’t done it alone.

There are many thousands of New Zealanders who can look at businesses like Air New Zealand, Xero, Orion Health, Zespri, Fonterra and Icebreaker, and take pride in the knowledge they played a part in their success.

The challenge now is to sustain that growth and to share it.

We know that when your products are in markets overseas they can compete on quality and cost of production.

As a Government, our job is to help you get your goods on those shelves and compete on price by removing tariffs and other barriers.

So I want to assure you, the National-led Government will continue to forge new trade opportunities and help our businesses take advantage of those opportunities.

While our existing agreements have raised our standard of living, our ability to create new and better ones will determine whether our success is sustainable.

We have our work cut out for us.

While many countries continue to push for open borders and greater integration, the voices of protectionism have grown both internationally and even within our own Parliament.

You may have noticed our political opponents have become increasingly fearful of the world and more inward looking.

We in the National-led Government are outward looking.

Where they lack a belief in the ability of New Zealanders to succeed on the world stage, we look to our horizons and see a platform to greater prosperity.

And where they seek to impose constraints, we choose to stand behind those people willing to put themselves forward.

We know that if we open doors New Zealanders will walk through them, creating opportunities for themselves and others.

But we mustn’t take this for granted.

The biggest threat to our economic success at the moment is disruption of international trade.

New barriers and less integration would do exactly the opposite of what their champions claim.

They would mean consumers pay more, have less choice and the world would be less efficient.

There would be fewer jobs, incomes would grow more slowly, and we would make slower progress on the challenges we face as an international community.

That means less confidence and greater instability.

It is a depressingly backward scenario and there would be no winners.

Free trade has helped spur the strong growth we have seen in our region, made it more stable and lifted millions of people out of poverty.

That is part of the reason we were disappointed with the decision of the US to withdraw from the TPP.

TPP would have improved regional trade and it would have ensured the US maintained its influence and leadership in the Asia Pacific.

Instead it has left a vacuum for others to fill – and it is up to the remaining signatories to provide the leadership needed to get some sort of agreement over the line.

Because make no mistake, while the US withdrawal is a set-back, it is not the end of the road.

We will continue to work with our TPP partners to investigate a way forward.

The potential rewards are too great not to try and we have been heartened by the positive response to our efforts so far.

Trade negotiations have never been easy.

The US has said it will focus on bilateral trade deals and Brexit has created some uncertainty around access to two of our largest export markets – the UK and Europe.

But there are many more reasons to be optimistic.

Many of the world’s largest economies remain committed to open trade.

That was made very clear to me on my visit to Brussels, London and Berlin earlier this year and in my recent meeting with Australian Prime Minister Malcolm Turnbull.

I am meeting with Chinese Premier Li Keqiang on Sunday and the Chinese have strongly advocated for the benefits of globalisation and increasingly open trade, as have Mexico and Japan.

We must remain ambitious and continue to make the case for free trade in a world where opposition has become louder.

So today I am pleased to launch the Government’s updated trade strategy.

Trade Agenda 2030 underlines our ambition to remain a champion of free trade.

It will see us work towards more secure and predictable market access, with a focus on eliminating tariffs and addressing non-tariff barriers to trade.

The latter are estimated to cost our exporters nearly $6 billion a year in the APEC region alone.

We’ve set an ambitious target of achieving FTA coverage for 90 per cent of our goods exports by 2030 – up from 53 per cent today.

Those of you experienced in trade will realise just how challenging that target will be.

But I’m sure you also realise the massive potential benefits.

If we have broader coverage of free trade agreements, our exporters will have more flexibility to take advantage of opportunities as they arise and to better adjust to a downturn in any one market.

Trade Agenda 2030 sets out the reasons why further investment is needed to make this happen.

The Government will commit an extra $91.3 million over the next four years through Budget 2017.

We will establish two new diplomatic posts.

A new Dublin Embassy will support an intensified relationship with Ireland and the EU.

This will be especially important following the UK’s departure from the EU, and as we continue our EU FTA process.

And a new High Commission in Sri Lanka will advance New Zealand as a trusted partner in South Asia.

We will also strengthen the public service’s capacity to negotiate new free trade agreements, build on existing ones and to tackle non-tariff barriers.

We will make it easier for exporters to alert the Government to any trade barriers and ensure MFAT and MPI respond quickly and effectively.

We will also provide more intensive support to businesses to help them negotiate access issues, which can be complex.

New Zealand’s trade profile is also changing, with overseas investment, trade in services, and the digital economy all growing parts of our trading future.

So Trade Agenda 2030 will support the development of new businesses so our exporters can make the most of globalisation and technological advances, and NZTE will provide improved support for digital services exporters.

Finally, we want to do a better job of providing more information to the public about trade deals.

So Trade Agenda 2030 comes with a commitment from the Government to engage New Zealanders more on trade and do that job better.

This will be done in part through the establishment of a Ministerial Advisory Group made up of different stakeholders including unions, business leaders, iwi and NGOs.

We will lead on trade – just like we did in instigating the TPP, and just as we are in keeping it going.

The Government will progress existing negotiations and start new ones.

We are on track for a formal launch of negotiations with the EU later this year and we are ready to negotiate with the UK when it is in a position to do so.

We are nearing an agreement with the Gulf States and negotiations with our Pacific neighbours on Pacer Plus are well advanced.

The RCEP negotiation I mentioned earlier has also been making steady progress, and we will continue to push for a commercially meaningful outcome.

We are also exploring new opportunities, including in Latin America and with India, where our trade ties are currently limited.

We will engage with the new US Administration on opportunities for deepening trade and economic ties with the United States.

And as we expand our network of FTAs, we will look to extract maximum value from the agreements we already have, and to build on them.

The most tangible example of that is the agreement last year to upgrade the China FTA.

And I look forward to discussing this process further with Premier Li during his upcoming visit.

Ladies and gentleman, the evidence in favour of free trade is irrefutable.

It creates jobs, boosts incomes and prosperity, and it puts us on the world stage.

As a Government, we are working hard to help create a level playing field for our exporters.

And we are incredibly proud seeing New Zealanders succeed.

There is so much to gain from advances in free trade.

I am committed to seeing those gains, and on behalf of all New Zealanders this Government will not stop working to achieve them.

Thank you.

|  A Beehive release  |  March 24, 2017   |||

 

 

Today, the Productivity Commission published its final report on the Tertiary Sector. At the same time, the OECD Environmental Performance Review of New Zealand strongly highlighted the need for a fundamental change in our approach to building wealth sustainably in this country. The need to create an effective education system that can provide much needed skills to facilitate growth and innovation in high-value activities, such as manufacturing, connect these reports, say the New Zealand Manufacturers and Exporters Association (NZMEA).

“The OECD report clearly shows that with New Zealand having the second-highest level of greenhouse gas emissions per GDP unit in the OECD, a continued emphasis on increasing primary production and tourism will not allow us to meet our international climate change obligations. We need to create wealth by growing our high-value industries. The biggest handbrake on growth there, however, are skills shortages that are crippling in some instances now and will only get worse with the rapid technology changes occurring in high-value manufacturing, for example.” said NZMEA Chief Executive Dieter Adam.

“One could have expected an 18-month review of our tertiary education system by the Productivity Commission to at least recognise, let alone address, the fact that we have a largely publicly funded tertiary education system that fails to deliver what New Zealand needs to grow its wealth as a nation. Unfortunately that is not the case – the Productivity Commission has widely missed the mark here in providing a response to skill shortages.

“Instead, we get a strong focus on the academic side of the tertiary sector and the suggestion that more free-market initiatives will enable to tertiary sector to meet its future challenges. As if we didn’t have enough problems currently maintaining quality in a sector where some barriers to entry are low and oversight can be patchy at best. The Commission’s report also aims to make the system even more student-focused, instead of offering suggestions for how to develop a well-functioning and efficient education system that balances the need to meet student desires with the overall needs of our economy to grow on a sustainable basis.

“A balanced system could be achieved, for example, in part by incentivising studies in areas that we know have current and future skill shortages. For example, the incentives offered by government to those taking up apprenticeships in priority trades and construction in 2013. At the same time, businesses also need to be supported to do their part in training and up-skilling their own workforce.

“The Productivity Commission’s report does have some positive suggestions, particularly the need to review and improve careers advice in schools, and expanding the idea of lifelong learning, helping people continue to gain new skills and adapt to changes over time. All in all, however, it substantially misses the opportunity to address one of the more important issues we are facing as a nation – how to equip future generations with the ability to find rewarding careers in an economy subject to strong winds of change.” said Dieter.

|  An NZMEA release  \  March 21, 2017   |||