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The future starts with a strong economy

By Mike Horne, Chief Executive, Deloitte New Zealand

Election year has encouraged us to look back at the obstacles we’ve faced over the last three years; many of them ongoing, and critical to the future of the country. Persistent inflation, a cost-of-living crisis, unaffordable housing, public health system waiting times, declining literacy and numeracy rates, and an increasing crime rate are just some of the issues driving the agenda for a reprioritisation of government focus. These issues have only been exacerbated by recent events like the global pandemic and unprecedented lockdowns that followed, Cyclone Gabrielle, flooding, and other adverse weather events, to name a few.

The Deloitte and Chapman Tripp Election survey, conducted by BusinessNZ, provides a platform for the New Zealand business community to voice their opinions as we look down the barrel of the General Election. And in 2023, the business community’s take on the situation is somewhat sobering.

Respondents identified major structural challenges that will need to be addressed by any post-election government before we can truly build the foundations for Aotearoa’s future. Factor in significant global economic headwinds and an uncertain geo-political environment, and New Zealand has a tough road ahead to balance its priorities.

The only constant we can rely on as we look to the future is change, and to contend with it, we need to make some deliberate choices with our constrained resources, capability, and capacity.

The majority of New Zealand businesses have expressed concerns over the lack of a coordinated government plan to raise New Zealand’s economic performance. This uncertainty around the future of the economy is amplified by a perceived increase in the cost of doing business over the last three years – attributed to changes made by the Government. In line with this, businesses are expressing a desire for stability on tax that likely reflects an interest in enhanced clarity and deliberateness of spend.

The business community has voiced plenty of other issues, including the cost of climate change, with sustainability at the forefront of business strategies as they plan for an uncertain future. The effects of climate change and other weather disasters have bought New Zealand’s significant infrastructure challenge to the forefront as well. It will require an unprecedented period of investment, alongside a critical need to drive awareness of the broad-based benefits of smart and responsible infrastructure.

To add to their woes, businesses believe that compulsory education is not setting up young people with the skills they need to meet the needs of their businesses in the future. With artificial intelligence emerging on the scene, businesses are considering it as part of the solution but understand that in many ways, AI only amplifies the need to have access to people with the right capabilities.

In an environment shrouded by varying issues and threats, New Zealand businesses are also worried about the state of the country’s finances. This speaks volumes about the ability for our private sector to operate with confidence and provide the economic underpinning that is critical for wider societal prosperity.

The mood of business is sombre as respondents look to a post-election government to start actioning change. But the onus is also on the business community to work alongside those in the government to facilitate and support the change that is needed. It can be acknowledged that it is much easier to navigate these massive shifts in a strong economy – something the post-election government will need to address first.

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