ANZ's David Hisco draws on his trans-Tasman experience to highlight what he sees as long-term benefits from tough decisions taken in NZ

By Gareth Vaughan

ANZ New Zealand CEO David Hisco has been busy of late telling his fellow Australians they could do worse than look at the New Zealand economic example.

Firstly there was a Sydney speech to a business audience where Hisco said he applauded Australian Prime Minister Tony Abbott for announcing on election night Australia was open for business. But, he said, New Zealand already was open for business, comparing New Zealand's tax system favourably with Australia's.

Then in an interview with The Australian in the wake of the Abbott government's controversial budget, he said Australia needed to take some "tough medicine" as New Zealand had already done.

Asked in an interview with interest.co.nz whether these were David Hisco views, ANZ views or both, Hisco said they were him making comparisons between the two countries having lived in both.

"I came to New Zealand first in the late 90s to run UDC Finance after the motor manufacturing industry had been shut down here. And I remember the country going through the adjustment period for that. The outcome has been that the man in the street is driving a newer car and he's buying it at a lower price. And whilst there was an adjustment for those who lost their jobs at the time, 20 odd years on you look at it and go 'it was probably the right decision.' A little bit of medicine was taken," Hisco told interest.co.nz.

"And then you look at what has happened in Australia with the money that has been poured into the motor manufacturing industry, and it has still got to a point where 20 years on it hasn't been able to be sustained. They're in a situation where New Zealand was. And I think you look at that and go 'that's an example of New Zealand having got on with the job a long time ago'," Hisco added.

"I think tax reform's another one. New Zealand did a lot of work around tax reform. Australia has got quite a complicated tax system and if you want to be globally competitive, all those sorts of things get in the way. And I think these are the things that they (Australia) have to look at. So it's probably just me making a comparison from having been on both sides of the fence."

In Australia Ford, Holden and Toyota have all announced they'll end car manufacturing in 2016-17. This will cost tens of thousands of jobs, but comes after billions of dollars worth of government subsidies helped keep the industry afloat.

In his March speech in Sydney Hisco noted New Zealand has about 4.4 million people, but survives with a 33% top tax rate, no capital gains tax, no payroll tax, and a GST rate only 5% higher than Australia’s.

"New Zealand really is open for business. Australia has over 23 million people, a 47.5% top personal tax rate … let me spell it out - that’s 14.5% higher than New Zealand … capital gains tax, stamp duties, and a raft of other taxes," said Hisco.

"Australia, once again, had the benefits of a resources boom … the longest economic expansion and the largest rise in incomes ... that a developed country had ever known. But you would have to ask: what has Australia got to show for it?"

And he told The Australian that more than 20 years of growth in Australia, plus “plenty of money for handouts” had lulled people into believing the country could not “end up in a ­really bad position”.

“NZ has taken some tough medicine ... Australia has got to take the same medicine we took to get ourselves in a better position. But it will get better,” Mr Hisco told The Australian. “Kiwis actually knew they needed something. I’m not sure Australians realise that they need to do something different or they’re going to get the same outcome.”

Hisco was managing director of UDC, ANZ NZ's finance company, between 1998 and 2000. He succeeded Jenny Fagg as ANZ NZ CEO in September 2010. An Australian, Hisco has worked for ANZ for more than 30 years. Immediately prior to his current job, he was ANZ's commercial group managing director based in Melbourne.