New Zealand chief executives are much less concerned about the stability of capital markets than their Asia Pacific counterparts, a new PricewaterhouseCoopers survey suggests.
The PricewaterhouseCoopers Global CEO survey canvassed business and public sector leaders around the world for their thoughts on the economy and relevant issues.
And it found that while 66% of Asia Pacific chief executives saw the lack of stability in capital markets as a threat to growth, only 33% of New Zealand chief executives saw it as a threat.
They were also more likely to expect to finance future growth through the debt markets (one in three compared to one in four globally).
Bruce Hassall, PWC’s New Zealand chief executive, said the fact New Zealand’s business leaders had confidence in the credit markets was probably due to the stability of the Australian banks that dominate our financial system.
But he said one of the leaders’ comments that really stood out to him was from Fletcher Building chief executive Jonathan Ling, who took aim at New Zealanders’ attitude to savings and debt.
“New Zealanders are not good savers. They spend everything they have and will use debt to support a lifestyle,” Mr Ling said. “They have been doing it for the last 20 years.”
The survey also found that 71% of chief executives believed the government would implement more consumer protectionist legislation as a result of poor finance company governance.
However, only 35% thought that more regulation was actually needed.
Another feature of the survey was that while chief executives were generally in favour of greater harmonisation with Australia, there was some divergence over what form it would take.
“Some considered New Zealand and Australia will ultimately end up with a single currency and a single economy,” said the report.
“Others were clear that New Zealand should maintain its independence via its own policy and regulations and only harmonise on matters that would bring benefits.”
And despite being in favour of greater harmonisation some chief executives were also sceptical about whether it was realistic, saying that Australia would benefit more from harmonisation with the United States and Asia.
As if to illustrate the differences between the countries, New Zealand chief executives saw Asia, Eastern Europe and the Middle East as potential growth areas while Australian leaders are focused on Africa, Western Europe and Asia.
According to Mr Hassall, this shows that the areas of focus are those with highest demand for what each company offers.
“I think the key difference is that trading partners see Australia and a mine and New Zealand as a garden. This just reflects our different commodity export bases."
Wed, 27 Jan 2010