Tough questions for NZ business to answer

New Zealand business needs to answer some tough questions if it wants to foster a beneficial trans-Tasman commercial environment.

“Success in 30 years’ time would be a wealthy New Zealand successful in world markets and in Australia," Business NZ chief executive, Phil O’Reilly says.

"What will we be doing differently, or the same, with Australia to achieve that outcome?” That is the question he says business needs to answer.

Speaking to NBR Online after last week's Australia New Zealand Leadership Forum in Sydney, Mr O'Reilly says his organisation needs feedback about what business here sees as the “big issues”.

“If New Zealand is going to be successful in business in 30 years, whatever we do with Australia in the next 30 years will be massively important,” he says, adding what New Zealand business does not do with Australia will be equally as important.

These differences, however, are not yet clear, so feedback is needed.

“Then we can give good advice, not only to the New Zealand government but to the Australian government, too.”

The two-day forum saw business leaders from both countries discuss Closer Economic Relations and opportunities in Asia.

Mr O’Reilly says work between the conferences, including the establishment of policy committees which regularly discussed a range of topics including tax and border access, prevents the same issues being rehashed.

“Having these discussions during the year means when we turn up at the forum, discussions are more pointed.

"It is not an event - it is part of a process. Otherwise you come back year after year and discuss the same things.”

Double taxation on dividend returns, however, is yet to be addressed and was one of the vital issues Mr O’Reilly said the CER needed to deal with ahead of the forum.

“The biggest thing remains the recognition of imputation and franking credits. That is clearly the biggest issue when we think about regulatory coherence across the Tasman.” 

Despite “a good deal of commitment from both sides, a solution is yet to be found".

“There will be more work done, not only in the context of the joint New Zealand Australian Productivity Commission.

"The New Zealand and Australian business community is committed to this, the New Zealand government is committed to it, but the Australian government is not.”

Mr O’Reilly says evidence- based debate on imputation, not just on costs but on dynamic benefits, need to be presented to the Australian Treasury.

“The forum didn’t think there was enough evidence on what the benefits might be. This may include improved trans-Tasman investment flows, among others. It’s the dynamic impact of this change that we want to examine,” he says.