NZ at risk of losing competitive edge to Asia – report
Business New Zealand says a more competitive national economy is likely to be immune from exchange rate fluctuations.
The government's third report in its business growth agenda focuses on building skilled and safe workplaces.
To do that, it wants to improve educational achievement, strengthen the tertiary education sector, move more unemployed people into work, attract more skilled migrants and create regulatory flexibility for business.
Business NZ chief executive Phil O’Reilly says a competitive economy depends on a number of different factors coming together and is less likely to suffer the effects of a high exchange rate, unemployment or growth.
The high kiwi dollar has been the subject of political debates in recent weeks, with the Greens wanting money to be printed as a way of lowering the exchange rate against the US greenback.
It has been hovering above 80 US cents for the past week.
“The business community has been asking for better skills policies along with better policies to support exports, innovation and other factors necessary for a competitive economy,” Mr O’Reilly says.
He admits the change needed to achieve a more competitive economy is huge and there is plenty of work to be done.
The government’s latest report, published by the ministry of business, innovation and employment, has labelled a skilled workforce as the "engine room" of a thriving economy.
It acknowledges the global labour market is becoming increasingly competitive, especially as China and India markets grow.
It says competition for skilled migrants will increase in the future as developed countries look offshore to fill the gaps in their ageing workforces.
“New Zealand’s workforce is generally well educated, English speaking and adaptable – qualities that make us highly employable across the world. This means New Zealand businesses will face more competition for skilled labour at home and abroad in years to come.”
One of the report’s main concerns is attracting skilled migrants and investors to New Zealand. It says immigration’s essential-skills-in-demand list is under review to make sure it is targeted to current labour market shortages while ensuring New Zealanders are not left without work.
It has also outlined the need for a youth "starting-out wage" – announced yesterday – as part of its plan to make the job market more responsive. The wage will be set at 80% of the minimum wage for 16 to 19 year olds who are either starting a new job or re-entering the job market after a period of time on the benefit.
The latest report follows two previous studies focusing on building export markets and innovation.