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The No.1 issue for US companies in NZ

November 28 2007

Skills and labour shortage cited – again – as No.1 issue for US companies in NZ

AmCham ‘think tank’ to develop fresh takes on solving problems

Give us more skilled workers was the call – for the third consecutive year – from most of the American companies polled in the 2007 American Chamber of Commerce in New Zealand (AmCham) Business Climate Survey.

The annual survey of US companies doing business in New Zealand revealed the chronic skills and labour shortage was the key constraint for nearly 70 percent. This was up from 52 percent in last year’s survey and 50 percent in 2005.

“We had an excellent response from members – nearly 50 percent of the US companies doing business in New Zealand responded. Overwhelmingly they reported that the skills and labour shortage is the single biggest impediment to them doing business in here.” said AmCham President, Mark Fitz-Gerald.

He announced that AmCham would set up a think tank of members to clarify the specific areas of concern before developing potential solutions and discussing these with the Government and other relevant parties early in the new year.

“In their responses the companies strongly urged the New Zealand Government make it easier for skilled immigrants to settle here, improve educational standards and provide tax incentives for initiatives such as training,” Mr Fitz-Gerald said.

While getting skilled workers and managing tax and exchange rate issues were cited as slowing business growth, he said overall the surveyed companies were positive about New Zealand as a place to do business.

“Nearly 70 percent of the companies anticipate sales growth this year while 60 percent said they were looking to expand their New Zealand operations or make new investment in another venture here.

“Importantly, with many multi-nationals and US companies looking to source the likes of call centres off-shore and to hub business operations in a region, New Zealand is not only of interest to them in terms of a share of the domestic market but also has value in their international operations.

“Among the reasons are New Zealand’s time zone that provides a bridge between the US and Asia, we’re English speaking and we have a quality standard of education.”

He added the costs of establishing here were competitive, with staffing costs being 30 per cent less than in Australia and on a par with Singapore. “The cost of building or renting premises is also significantly cheaper than in a number of other countries.”

Mr Fitz-Gerald said one of the key objectives of the annual AmCham business climate survey was to reveal potential road blocks – both large and small – that might hinder further overseas investment in New Zealand and prevent increasing trade, in particular from New Zealand to the US.

“The survey also polls for the positive aspects of doing business in New Zealand and we are pleased to report that most US companies with operations here are encouraged by the current business environment,” he said.

Other comments and recommendations made by survey respondents include:

Climate change
Although New Zealand’s keen interest in climate change was not considered a key issue for most of the US companies, compliance and regulation impacts remain a perennial concern.

Several companies were critical of the New Zealand Government’s policies for sustainable business practices with one saying the absence of official standards measures allowed for a large amount of ‘greenwashing’ where consumers had no way of validating suppliers’ claims.

Employee rights
One of the companies surveyed reflected a broader concern in saying: “give the employer equal rights with the employee – the current emphasis on employees restricts the way businesses can operate… the risk of personal grievance cases in getting rid of non-performing staff is too great”. Another said it should be better understood that employers, multi-nationals included, did make a very positive contribution to New Zealand’s economic development and that the Government should support businesses as well as employees.

Copyright laws
The New Zealand Government was also urged to pay attention to beefing up this country’s copyright laws so that they are in line with the rest of the western world, with one of the surveyed companies stating revenue had been considerably impacted in the past three years due to copyright infringement via the internet.

The healthcare sector also came under scrutiny with several companies urging changes to the PHARMAC model along the lines of industry recommendations. These include ensuring New Zealand’s medicines availability is benchmarked against other equivalent OECD countries, increasing funding and greater transparency.

Several companies recommended the Government should directly facilitate more investment in telecommunications infrastructure and take action to ensure a more competitive environment to secure better, more affordable broadband services for businesses and individuals.


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