NZ minimum wage rates to increase by $0.45 from Monday, 1 April 2024
Employers will be subject to minimum wage increases from April this year.
But is this how other countries view us? Over the years we have arguably performed strongly at attracting capital given our small economy, investment market and geographical isolation.
Low corruption, ease of doing business and a talented labour pool have worked in our favour. High net wealth individuals from the likes of the US, UK, Hong Kong and Singapore have been moving to New Zealand and/or investing billions into the Aotearoa New Zealand economy. In addition, they have created jobs, intellectual property, paid taxes and contributed positively to our GDP.
They choose our country for many reasons including the investment market, lifestyle, climate and political stability, and six months into the 2023 year we continue to see consistent interest in New Zealand as a business destination.
However, there is little doubt that there have been global and domestic headwinds – and in August 2022, government changes to the investor visa policy effectively eliminated our ability to attract this overseas capital going forward.
Non-resident individuals were previously required to invest either $3 million or $10 million into “acceptable investments” and satisfy a range of conditions. However, instead of tweaking the list of acceptable investments, last August the government raised the investment required to $15 million, and imposed more stringent English language requirements.
These policy settings are not on a par with competing offshore markets and have reduced approved investor visa applications from 300 to 400 annually to only a few by May 2023 (after the policy’s introduction).
Baker Tilly Staples Rodway co-hosted an investment and relocation seminar series in Singapore in February this year. It highlighted that, while internationally there remains a fondness for New Zealand as a lifestyle destination, our policy settings are now damaging our ability to attract new migrant investment, which results in lost opportunities from ongoing investment and other benefits from this sector.
Despite the headwinds to our investor visa market, we continue to see capital inflows at the corporate level. Baker Tilly International has a large global footprint and here in New Zealand we are fielding enquiries from our network for expansion and growth-oriented advisory services. Sectors of interest include sustainable energy, residential construction, tourism and carbon credits. However, what is also obvious is that offshore businesses considering a presence in New Zealand have become cautious over the past year.
Another positive, with New Zealand events back on the calendar, is that non-resident entertainers are expressing interest in running tours across the country to showcase their talents. In particular, our Australian neighbours are looking at us as an opportunity to travel abroad, expand their horizons and tap into the kiwi dollar.
Overall, the fundamentals of the New Zealand market remain relevant to global business. We are a food bowl, we have an abundance of resources, a skilled labour market and are annually rated as one of the easiest places to do business.
However, our country is capable of better outcomes than we are currently achieving and that starts with policy settings aligned to a strategic approach to people and capital attraction.
DISCLAIMER No liability is assumed by Baker Tilly Staples Rodway for any losses suffered by any person relying directly or indirectly upon any article within this website. It is recommended that you consult your advisor before acting on this information.
Cookies help us understand how you use our website, so we can serve up the right information here and in our other marketing.