ACT's David Seymour on the positivity of business, a desire for easier foreign direct investment rules, the RMA & more

The ACT Party says business initiative is a positive thing for the economy as a whole.

But it says the Labour Party regards business as a danger that needs to be brought under control. 

"Business has had such a rough ride both in the rhetoric and in the regulations of the Government," says ACT's leader David Seymour.

"It is time to start celebrating business as a force for good."

Seymour argues a creative and productive private economy could produce the wealth needed for challenges like climate adaptation and an ageing population. 

Governments would never have the ability to achieve the same thing. 

"Many of our MPs are business people or from business families, and they know governments can do only so much," Seymour says.

Seymour was speaking at the launch of its election policy on productivity and the economy. 

"(Currently), cabinet papers require Ministers to ask whether policies will have Treaty, gender, climate or other implications," ACT's policy document says.

"ACT will ask how policies impact productivity and economic growth.

“An explicit objective of economic growth will focus the minds of the public service, allow Ministers to shoot down anti-growth policies, and ensure voters can hold the Government accountable for its performance."

Seymour says decades of poor productivity indices gave New Zealanders high prices and low wages even before the latest spurt of inflation, which made things worse.  And they prevented the accumulation of enough money to deal with the serious problems of the future.  

And he says Labour policies are aggravating the problem. 

"Labour has a suspicion of business that comes through in their rhetoric and their regulatory policy. 

"If you look at this grocery commissioner for example, we are not going to get cheaper groceries, what we are going to get are more compliance costs.

"And every $100,000 of extra compliance costs will not be paid by the Government, it is going to be paid by the customers trying to get their milk and bread."

To fix this, Seymour calls for a boost to productivity right now.

"If we don't start thinking about it now, we will look back In 20 years and look at what we could afford in terms of health care and medication and adaptation to climate change back in the golden age of 2023 and find we have slipped further behind.

“Poor productivity growth should be a crisis for New Zealand, but successive governments of both stripes barely talk about it, let alone do anything about it."

Too hard for foreign direct investment

ACT is also calling for easier foreign direct investment rules.

"Right now we are one of the hardest places in the world to send money to as a business - our Overseas Investment Office sees to it that it is difficult to invest here."

And there needs to be more skills and a higher rating for initiative.

"You need innovation.....you need a culture of creativity and success, we don't have that right now, particularly for the last six years.   

"The Government has done one market study and one regulatory review after another, and the underlying tone of this message is that somewhere, somehow, someone is up to no good, and if only there was another rule, a review, a market study, another regulation, they could be forced to do well.

"In fact business is a force for the good, it is a voluntary cooperation among people who come together, investors with their savings, entrepreneurs with their ideas, workers with their time and talents, and customers with their needs, to achieve something they could not do alone," Seymour says.

Hipkins says Labour not anti-business

However, the Labour leader Chris Hipkins is emphatically denying that his party is anti-business.   

Speaking to reporters in Wainuiomata, he listed several things his government has done to help business. 

They include the wage subsidy during Covid, tax credits for research and development, and the boost to the apprenticeship scheme.

"There's no doubt that the current economic climate is a challenging one for New Zealand businesses," Hipkins says.

"It has been like this for the last three years.  We have done a lot to support our Kiwi businesses through an unprecedented time."

Also mentioned by Hipkins are the easing of immigration rules and the expansion of Free Trade Agreements to cover almost three-quarters of New Zealand exports. 

The Council of Trade Unions is also questioning the ACT position, especially regarding the focus on economic growth.

NZ the best place in the world to do business

Its economist Craig Renney says this growth is not the only thing that matters.  It is true that it can pay for services like health and education, but what matters is the wellbeing that it delivers, not economic growth on its own.    

"I am not here because of a GDP number," he says. 

Renney also queries Seymour's assertion that New Zealand had become anti-business under Labour.

"I would refute Seymour's point that New Zealand does not make it easy for businesses," he says.

"According to the World Bank, New Zealand is the best place in the world to do business. It is always either us or Singapore.

"You can establish a business on line in New Zealand in 15 minutes....we don't have some of the protections for workers that exist in other parts of the world, so I would refute David's point. Establishing a business in New Zealand is relatively straight forward," says Renney.

Meanwhile, ACT has listed several concrete ideas to put its goals into practice.  One would require putting productivity at the heart of every decision the Government makes. 

It is also pledging to reduce taxes so resources are directed towards private individuals, not the Government. The party says New Zealand is highly taxed relative to other Asia Pacific countries. 

RMA changes proposed

ACT would also ease the rules for building new houses. It says the Resource Management Act was an expensive obstacle to development and the current Government reforms have made it worse. Instead, there would be a presumption in favour of development, a limitation on the number of people who could object to projects, and compensation for people directly affected by a project. 

In addition, overseas investment would be easier, labour laws would be amended and fuel taxes would be replaced by road pricing mechanisms including toll roads.  GST on new residential projects would be shared with local councils. 

All regulations would be scrutinised to make sure they work properly and there would be measures directed at farmers including repealing the ban on genetic engineering, along with the Zero Carbon Act, He Waka Eke Noa and the Significant Natural Areas Act.

There would also be conversion of existing State Owned Enterprises into the same Mixed Ownership Model - 51% state owned - as works with three big electricity companies. The money gained would pay down debt and the state budget would fall by around $9 billion a year. 

The party would set an explicit target for New Zealand to be in the 10 fastest-growing economies in the OECD, and aimed to do this with higher productivity.

"Yes, Kiwis work hard. We have some of the longest hours and labour participation rates in the developed world. Productivity is about working smarter to produce more wealth for the hours of work and dollars of investment that go in. Unfortunately, New Zealand productivity has declined for 50 years.

"Productivity is not everything, but it’s nearly everything," ACT says.

"New Zealand’s productivity has been on a long slide, and yet successive Labour and National governments have not even paid lip service to it. In order to have the things people in first world countries expect, government’s attitude to productivity will need to change."

It says the problem will get worse in future, with more expensive pharmaceuticals, high costs of caring for an ageing population and the difficulty of attracting skilled people in a global “war for talent”, among other problems. 

ACT says higher productivity can help solve these problems, yet it has been mentioned on only rare occasions by the current government.