Infometrics chief forecaster Gareth Kiernan and senior economist Brad Olsen discuss “Fortress New Zealand”, and how to reopen to the world.
Each week Stuff asks New Zealand’s business and community leaders how they think the economy is going, and what they believe are the biggest challenges.
Matthew Tūkākī, is chairman of the National Māori Authority and of the Ministerial Advisory Board of the Ministry for Children, Oranga Tamariki.
Tūkākī says he is optimistic about the economy for no other reason than we have been able to weather “a significant storm”.
However the storm has highlighted that some industries, like tourism, hospitality and international education, need to ponder their future. And it’s also highlighted shortages of teachers, nurses, technology specialists and more which needs to be addressed.
How do you feel the NZ economy is tracking currently?
When compared with other economies in the OECD, and given the pandemic, it’s tracking pretty solidly. The Māori economy itself is strong with the Reserve Bank estimating at the beginning of the year its value was $68.7 billion but actually that doesn’t necessarily take into account the social and health services side of the Māori economy that could easily be above a billion dollars per annum given both the investment going into those sectors but also the demand driven side.
The other open question is what is happening in the housing and supply side of the economy and what our overall asset base is looking like. But, overall, we are going better than forecast as we went into the pandemic
What are you most concerned about right now?
I am concerned about the challenge of global supply, logistics and transportation supply lines moving back to some sort of normality in the later half of this year. This is both for import of goods given we are seeing shortages in building supplies and materials and given we still have a great deal of fresh and primary produce needing to move offshore.
Another area is ensuring our business community are recalibrating to meet the changing nature of work – that includes working from home but also work from home and maintaining important offshore relationships.
I am deeply concerned about the growing tension between Australia and China and New Zealand being dragged into it given our position in the region and also with Australia. That says to me we need to do more to diversify away from being reliant on China to stave off what happened in the seventies when market access was restricted in Europe. By that I mean we need MFAT to work at pace to not only finalise free-trade agreements with the UK and the EU but also expand on opening new markets in places such as South American and South East Asia.
We also need to double down our effort to spread the risk of reliance on only a handful of industries such as the primary sector – invest more into high yield manufacturing, technology and services.
My concern around Māori business is not being as visible as trade agreements are being negotiated or as new markets are being developed.
What has the last year taught us about the NZ economy?
The last year has taught us we need to adapt and move quickly off the lessons we have learnt from what a pandemic means. There will be another one as certain as death and taxes – so we need to look at how we responded and embed some of those systems that enabled wage subsidies to flow.
Another lesson is ensuring our small businesses are getting the investment and support they need to work online, sell online, meet online and trade online.
The other lesson learnt was the standing up of programmes on the social economy side of things that saw Māori communities and organisations step up even in the absence of funding. So knowing what we know now what more can we invest in to prevent barriers being put up down the track.
Are you optimistic or pessimistic about the economy this year? Why?
I am optimistic about the economy for no other reason than we have been able to weather a significant storm – but that storm has highlighted industries that need further work and to sit down and think what their future is – that includes tourism, hospitality and international education.
But more so we need a national workforce plan – we have shortfalls in major industries that has been known now for many years such as teachers, nurses, technology specialists and more. We respond to this by importing skills – we need to address the engine room of the economy.
What is the biggest challenge facing New Zealand?
We need to think big once again. We run the risk of falling back into isolation at the bottom of the world. We need to be bold and brave in our outlook and once again punch above our weight both regionally and internationally – and often that means a cessation of fighting with each other on the small things. At the end of the day we all agree on the big kaupapa but we end up all trying to be a chief. So; our challenge is not seizing the opportunity that comes from a pandemic, not just push a reset button but grow and lead.
– The Monitor is Stuff’s unique set of insights to help the business community better understand the economic landscape, and maximise their success. Alongside the quarterly snapshot is an economic index showing the speed of growth across different parts of the economy.