By Kirk Hope*
(This article is part of Interest.co.nz's Election Series).
Looking at our economic prospects, it’s hard to get past the border. Smart border management policies are now the key determinant of our economic health.
Global market research firm IbisWorld says the closure of New Zealand's border will result in an almost 4% contraction in gross domestic product this year.
New Zealand’s fortunes have always been tied to the outside world. The world is our market for foods and other goods we produce, just as the world is our customer for international education and tourism.
The closing of the border because of Covid-19 is hitting the economy hard so we need a plan for iterative reopening, based on risk levels and robust mitigation strategies. Rather than blanket closure, we should allow entry in cases where there is no or minimal risk of infection.
First, we should look at countries that are entirely Covid-free. For example, people from Pacific island nations that have no incidence of the disease should be allowed entry (after repeated negative tests and a period of quarantine).
This is important because of the shortage of workers that touches on all regions and industries, but particularly in those sectors which that are the backbone of our economy like horticulture, viticulture, and dairying.
There are currently not enough NZ workers to service these critical industries for this season. This will have an immediate impact on our national livelihood. It will be incredibly frustrating if fruit is left on the ground this season because the government has not had an accurate enough assessment of skills shortages in the domestic labour market and immigration and border management settings
Second, we need exemptions for high skills. We need to allow entry by high-skilled workers from countries affected by Covid-19, with appropriate precautions for example those individuals should receive repeated negative tests, go through quarantine, and be subject to ongoing tracking and tracing.
High-skill exemptions are needed because many industries rely on individuals with specific technical skills that are in short supply here, like IT professionals, engineers, and others. Many New Zealanders jobs rely on NZ businesses having appropriate access to these skills.
Third, we need to open the border to overseas investment. Right now we have a backlog of investors waiting for approval to invest, and while they are starting to be processed, they are not able to get final approval, and are not included in the border exemptions criteria, effectively sending the message that New Zealand is not open to the innovative businesses that could bring new economic opportunities.
These three key areas of border control need immediate attention, but other changes are needed also.
For example, we need clearer and simpler rules for entry that everyone can understand, even if some of these rules are subject to longer timelines or specific risk criteria being met.
There also needs to be a more inclusive and pragmatic approach to physically managing the border.
Duly screened private sector companies should be mandated alongside the Government to carry out testing, tracing and user-pays quarantine and isolation services, subject to strictly enforced Government specifications.
New Zealanders need to be able to have confidence that their own safety is not being put at risk – but it cannot be sustainable to have only the armed forces and the police undertaking the security management of quarantine on a long-term basis.
There needs to be inclusive consultation with the NZ software industry over critical work on tracing technologies. We have to think about a layered approach to contact tracing information as no one database will provide the silver bullet.
Layers of information and a data driven approach to contact tracing will shorten the time for identifying close contacts in the event of community transmission. Achievement of this objective needs to include the private sector and utilise a partnership and team approach that helped NZ successfully address many of the early challenges of Covid.
With a careful focus on risk mitigation, more regard for overseas skills and capital, and better use of the private sector, New Zealand can have the smartest border in the world, and leverage that to unlock the many economic opportunities that our place in the world offers.
*Kirk Hope is Chief Executive of BusinessNZ.
48 Comments
The investment criteria dont allow you to buy land without developing it. Likewise you cant buy an existing residential house / apartment or a lifestyle block.
However you are absolutely correct that there is no requirement for the funds to create jobs. In fact there is a benefit at the moment to holding NZ equities as for Investor 2 applications you can get a discount of 250k if you put a certain amount in marketable securities.
The only benefit is gained by the banks who charge their clients brokerage and custody.
All good points, but try telling that to a Gubmint driven by technocrats (who, being silo'ed in their professions, always lack an overall strategic/economic/business sense) and led by politicians who are observably business-ignorant and risk-averse. But it's Fer our Own Good, see?
but try telling that to a Gubmint driven by technocrats (who, being silo'ed in their professions, always lack an overall strategic/economic/business sense) and led by politicians who are observably business-ignorant and risk-averse
What a stupid brain dump. Public sector workers makes up 18% of NZ's total workforce. You're suggesting that these people shoulder the entire blame for electing and being led by worthless politicians.
Let me share insights I have gathered over the years of working as a technical consultant in Wellington. The sheer majority of professionals within the public sector are operational-focused and have to work within the policy and regulatory frameworks, decisions for which are made by ministers. This is very much like the relationship between functional teams within an organisation and the board of directors.
So is a lack of business, strategic or economic oversight to be blamed on functional workers or the shareholders who elect those board members to "direct" the organisation.
What a load of rubbish
So you would go out of your way to spend millions of dollars creating a long term system for importing and testing and monitoring "cheap" imported labour, just so you can have cheap strawberries at Christmas.?
The better long term plan is to cease this importation and risk and expenditure immediately, live within our means, rebalance the economy so that hard work is rewarded and encouraged.
Once we have a solid internal economy again, and only when a proven vaccine is available and widely distributed, then we can consider what level of international commuting is appropriate.
And in my view, right now, that period of time could well be a further 12 months.
i saw that on the news last night and spat my coffee out at whom was complaining they could not get strawberry pickers and needed imports.
you have to work your arse off just to make min wage
http://www.perrysberrys.co.nz/employment.html
These people do know their information is searchable right? A 2.8 million dollar house (1.7mil tax-free capital gain in the last 10 years) in Remers and you think paying legal workers at least minimum wage for the actual hours they work is some kind of undue hardship? Reality is about to kick these plantation owners in the face.
There's plenty of kiwis to work in horticulture, viticulture, dairying. Just not when it involves doing hard labour for rubbish pay. If these workplaces lifted their pay rates, they'd find workers easily. But no, lets bring in cheap overseas labour to keep wages low across the country
I wonder if the horticulture industry is shooting itself in the foot by making do with a few hundred imported workers this picking season and training up locals and foreign workers already here for bulk of the remaining workload. Same goes for the construction industry in moving away from an overseas workforce and hiring local apprentices.
Are they sending the wrong message that their sectors hire locals, build up their skillset, pay them higher wages, and in the process, boost NZ's productivity and prosperity when unable to import low-wage workers?
Wouldn't the free market take care of that problem in the long run? Quite hypocritical coming from the same people who vote right-wing because of their faith in market forces.
I think higher wages force farmers to grow agricultural items in NZ that have a market premium enough to turn over a decent profit despite the high wage bill or come up with innovative ways to reduce labour input.
Isn't that the argument against minimum wage; that it takes away the motivation to work? How about higher wages motivating to be productive and efficient? Is the market really 'free' if it is only supposed to work in one party's favour?
Advisor, you do realise that NZers pay according to the international price, primary producers get? The higher the offshore price received, the higher the food cost to kiwi families.
Or are you of the opinion some are, that we need to have a 2 tier food system. Lower quality, imported food for kiwi families, with all our quality food sent off shore?
That works so long as the workplaces don't have to pay the $3,300 inbound quarantine fees ....
Mrs Perry of Perry's Berries interviewed on ZB radio this morning tried to explain away piece-work pay rates of $2 per hour for someone who is not super-fit and can't pick the quantity of stawberries that achieves an hourly rate of $36 per hour. If you can't pick the required rate you don't even get the minimum wage. Try relocating baristas, hospos, chefs, liquor store slaves into that world and tell them they'll be lucky to earn $4 an hour
They complained in 2019
Complaining again in 2020
The owner of Perry's Berrys, Francie Perry, says the Government has refused to allocate her vital overseas workers necessary to pick her crop as part of the controversial "recognised seasonal employer" scheme. She says she is just one of many horticulturalists in the country in crisis and it could cost thousands of Kiwi workers their jobs as well. Perry's Berrys have invested millions in its strawberry plants, with harvesting starting in three weeks. But with no overseas pickers, it could be wasted. “Devastated, we really need 150 pickers,”
https://www.tvnz.co.nz/one-news/new-zealand/kiwis-could-pay-more-than-d…
Open up your books. Tell us what the lower quartile average pick rate and hourly earnings was for the 150 pickers you employed last year. Then we are going to drop that pick rate by 10% to account for lack of experience for new pickers. That will be the pick rate needed for $20 per hour. Pay that or stop whinging.
Even better if they invest in tech that reduces labour (and unpleasant labouring jobs they are) and increases productivity. Listening on radio yesterday to grower talking about the need to climb 25000 vertical metres per ha on ladders and the physicality of such work. Then he said they may have to buy more platforms etc due to labour shortages. Exactly! This is how the market undistorted by cheap, compliant imported labour should work. E.g. https://galaxygroup.co.nz/tecnofruit/
ive seen plenty of tech every year at field days but farmers and growers never buy it as it has always been easier to get cheap labour brought in
https://www.abundantrobotics.com/
https://www.stuff.co.nz/business/farming/dairy/87256192/automatic-milke…
Kauri. The fruit in the video is grown on some sort of trellis system - UFO, espalier etc. A lot of stone/pip fruit in NZ are grown as trees - usually centre leader style. And it was apples. Courses for horses. Some interesting work in NZ developed robotics happening. Some varieties are better suited than others.
I had hoped we could use the Icelandic approach, which had worked well until someone didn't follow the rules: https://www.icelandreview.com/society/covid-19-in-iceland-violated-isol…
Hopefully that person gets a lengthy stay in prison.
Here's an idea for NZ business. , "Meet the market"
That is, pay reasonable wages to New Zealanders. And more importantly give guaranteed income in horticulture and don't casualise to load all risk onto workers.
Skilled workers get good pay. Lets make the threshold $120K and evidence that via the actual cash that flows in for each for PAYE.
Capital. We have seen this rorted before.
And capital flow is not quarantined like people. So, whats the problem?
to be fair it is good we bring people from the islands to do the picking, it saves the NZ government sending money up to the islands.
do they get paid rubbish, yes thats why most kiwis wont do it, they are lucky if they can send back 10 k for 8 months hard work, but 10k is a fortune to them
they only thing i would do is fly charter flights to whenuapai, away from the border to minimize cross contamination, and for the countries that have been covid free they could be put up in a hostel bubble on a farm they are working on with three covid tests , one before they board the plane then day 3 and 12 before they are free to wander down to the shops
Yo got it exactly wrong, the pay is rubbish because we allow it. With current food prices it would be perfectly affordable to have a decent pay for workers yet it is easier to have larger distribution and supermarket margins when you can employ people for an indecent salary.
Just look at the mega mansions of the Marlborough wine growers. They say they can only pay low wages to islanders but are making millions profit. They even charge the workers to live in packed dormitories. The exploitation is the closest thing in NZ that I have seen to the disgraceful exploitation that occured in the cotton fields of alabama 200 years ago.
There are lots of lies told about pay rates. The problem for young Kiwis working in horticulture lies in this quote from a horticulture website.
"..... Due to the seasonal nature of our work we are only able to offer casual work on an-as-and-when-required basis, work is not continuous...."
It gets worse. Every year I see students travel into the area, work a day or two, then be laid off permanently no work. But the RSE workers are kept on because they are on contracts. NZers are harmed because they have been used as the emergency disposable workforce.
A great asset to have those disposables, which is why every year you see the media releases claiming a shortage.
If you are 17, living with mum and dad, with no outgoings for food and accommodation, you can do ok in a summer. If you have to pay your own way it's a disaster.
And every year there are kiwi students who work as pickers, stay the season, and earn $25+hr. ;-) A grower this year has had lots of interest from uni students, but a significant number want from 23 Dec - 10 Jan off. The cherry season is 6wks max but for single or double varieties it only lasts around 2-3weeks. Early January is the peak of the season so, wanting till 10th Jan - the season could be finished by then on some orchards.
NZers are not harmed because of RSE workers. NZers choose to be employed - or not, and for many RSE workers they are still working long after the kiwis have returned to study or gone on holiday. Some young kiwis return to orchards for years, some give up after a couple of days.
I know what the last cherry season was like Casual Observer. Pretty tough for worker and growers both. Lets describe it as bitsy and erratic.
So $25 ph. Somedays yes and somedays maybe and some weeks none.
I understand the challenges of horticulture. I wouldn't go there myself.
But that's no excuse for loading such risk onto employees.
More of the same old same old from National:
- Allow skilled workers and Recognised Seasonal Employer (RSE) workers to enter New Zealand
- Create a fast-tracked Primary Sector Visa
https://www.rnz.co.nz/news/political/426807/national-pledges-to-ease-le…
How about a six-month COVID Summer. Anyone on a Winz benifit can keep 100% of it and work as much as they like with no abatement. All jobs must be listed with WINZ to qualify and subject to full audit on pay rates, hours worked, conditions etc to legal minimum standards. That would give the economy a kick in the ass. Costs the government very little in reality. Or it proves beneficiaries really are useless and lazy.
It's not the odds that mater most, it's the consequences of losing.
We've had a risk based biosecurity regime operating in NZ for about 30 years now and in that time there has been a plethora of incursions that have added to costs of production (Kiwibank PSA) and in some cases loss of export market opportunities (veroa mite and export of queens).
Human life is at stake this time, therefore consequences of a glitch (loss if the bet) is very dire and cannot be made right by doling out some money.
Any opening up of the borders absolutely needs to be total control and compliance and not a profit driven service.
An Auckland restaurant and its owners have been ordered to pay nearly $50,000 for exploiting a migrant worker. The worker had been asked to make a premium payment in order to secure her work visa application, and had also been underpaid.
auckland-restaurant-ordered-pay-nearly-50-000-exploiting-migrant-worker
Keep em coming eh Kirk?
"This is important because of the shortage of workers that touches on all regions and industries, but particularly in those sectors which that are the backbone of our economy like horticulture, viticulture, and dairying.
There are currently not enough NZ workers to service these critical industries for this season."
OMFG. Not enough workers in NZ... with half the tourism, airline sectors out of work.
What he means of course is "Not enough desperate people who will take any job, work like dogs all hours of the day and night for minimum wage"
This seems like an industry-funded narrative/ think tank piece. Use of the word "smarter" and making statements like they're facts feeds the 'opinions' of know-it-all wanna-be business types too simple to see that they're desperate to get the curtain back in place so we no longer see the truths exposed this year. These comments give me hope but we're up against big money. Keep the borders shut and let's modernise NZ and lead the world by example
This seems like an industry-funded narrative/ think tank piece. Use of the word "smarter" and making statements like they're facts feeds the 'opinions' of know-it-all wanna-be business types too simple to see that they're desperate to get the curtain back in place so we no longer see the truths exposed this year. These comments give me hope but we're up against big money. Keep the borders shut and let's modernise NZ and lead the world by example
Re this bit: "Duly screened private sector companies should be mandated alongside the Government to carry out testing, tracing and user-pays quarantine and isolation services, subject to strictly enforced Government specifications" - isn't this risky? We had to bring in the police and military because the private hotels were not managing quarantine properly. And couldn't it lead to a fragmented testing and tracing system and lower standards? And if a 'duly screened private sector company' didn't do the job properly, and there was a cluster of covid infections as a result, who will pay for the consequences? That private company? And agree with the comments by others about paying out people more to incentivise them to work.
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