The EMA was not expecting much for business from the Wellbeing Budget 2019, but it was still disappointed it did not tackle some of its members' key concerns.

Chief executive Brett O'Riley (pictured) says the 8500-strong member organisation's focus is primarily on employees and their workers.

"Nobody would argue that people's overall wellbeing is important, and there is no doubt that a happier, healthier community is a more productive one. We do welcome the investment in mental health as it is a cost to everyone in different ways, including business, and any improvement in this area would benefit everyone," says Brett O'Riley.

"However, greater recognition could have been made of wellbeing in the business sector as a healthy economy provides the funding to deal with the difficult and complex social issues the Government is tackling," he says.

From an EMA member point of view, the best news for business probably came ahead of today's budget with the decision not to introduce a capital gains tax.

Mr O'Riley says two positives were the $300 million of expansion capital for start-ups will be able to access in order to grow, and $197m to tackle homelessness through Housing First, a social housing initiative that could further the construction sector.

With a key part of the economy's success linked to being competitive in the digital age, and the EMA welcomes today's announcement of $6.8m over four years to future-proof New Zealand's manufacturing industry, as well as the additional $157m for research and innovation linked to low emissions.

This ties in to another of the major challenges for members is getting the people they need. While the EMA is pleased to be involved in the crucial Future of Work project, more focus is needed to achieve an employment framework that supports future growth. In addition, the immigration backlog needs to be addressed.

"However, we would have liked a greater focus on investment in and certainty around much-needed infrastructure and its funding in transport and distribution networks. New hospitals and schools infrastructure is good news and could also benefit the construction sector. It was also great to see funding for the National Infrastructure Commission.

"But, distribution networks in the upper north island are choking. This infrastructure is essential as businesses have to be confident that at the very least they can move goods efficiently and effectively, and provide their services when and where they need to. If the Government was serious about its investment in rail then the much-needed third main line out of Auckland would have been built by now. And really, the fourth should have been done at the same time."

EMA members are also suffering as a result of the cost of compliance due to the raft of new legislation, which is bringing more change, more rapidly to the business environment since the late 1980s.

"As a result of this we commissioned work to measure the financial impact and business – particularly in the small to medium sector. What we learned was that New Zealand effectively stopped measuring the cost of new regulation to business in 2012," says Mr O'Riley.

"We know that in 2016 when the last study of those costs was attempted - using that 2012 data - was put at $5 billion annually, and we know our members are feeling this acutely."

"We look forward to working with the Government on transitioning towards a sustainable, low emissions economy in a way that is considerately and consistently implemented for business," says Mr O'Riley.

"The Wellbeing Budget 2019 uses the business-driven growth previously in the economy to fund an extensive social wellbeing programme. Our hope is that in 2020 the budget focuses on driving better productivity, higher wages and further growth in the economy to underpin the ability to continue to maintain New Zealand's quality of life and social wellbeing."

Good news for manufacturers in Wellbeing Budget 2019

The EMA and The Manufacturers' Network (TMN) welcomes the Government's announcement today of its support for manufacturers in adopting new technologies.

EMA chief executive Brett O'Riley says the announcement of $6.8 million over four years to future-proof New Zealand's manufacturing industry will help members understand and utilise digital technologies in order to be more productive and develop new products and services.

"Our manufacturing industry makes up 12 per cent of GDP, makes up half of our exports and employs 241,000 people. This will help create more high-value jobs in the sector," he says.

"With TMN we will be able to offer more practical support for manufacturers who want to take up Industry 4.0 and other advanced approaches to digital technologies to deliver process improvements, efficiency and enable them to be innovative.

"Manufacturing globally is undergoing massive technology changes and there is an opportunity for New Zealand's manufacturers to embrace these changes and be more competitive," says Mr O'Riley.

This commitment by Government will enable manufacturers to see how digital technologies can be used, increasing factory visits and expanding peer-to-peer learning and programmes already established by TMN.

"This approach sees manufacturers open their doors to others in the industry and share insights to improve productivity and meet customer needs using digital technologies.

"Today's announcement also links to other activities the Government and TMN are already supporting. This includes Skills Shift under the Future of Work Forum, which aims to understand how well prepared we are to cope with the changes brought about by these digital technologies," says Mr O'Riley.

The Wellbeing Budget contains spending that would be positive for business and the economy, says BusinessNZ.

Chief executive Kirk Hope (pictured) says the focus on innovation, research and skills would help more businesses develop at higher levels and grow the economy.

"The Budget recognizes that commercialization of new ideas is often constrained among mid-sized firms and makes a $300 million provision to support this.

"Another $157 million to assist firms in developing high-value low-emissions products recognises the deep need for research to come up with business solutions to climate change.

"New Zealand was the world-leader in initiating the Global Research Alliance on Agricultural Greenhouse Gases and it is pleasing to see this supported with an $8.5 million provision in the Budget, along with $25 million for the Agricultural Climate Change Research Platform."

Mr Hope said business wants to ensure that the current reform of vocational education will increase the the number of people in on-job and other vocational training. He said the allocation of $197 million was a positive sign in support of that goal, and the allocation of unused Fees Free funding towards this was appropriate.

Investment in equipping young people with civics knowledge, financial literacy, and key workplace competencies was also important for business, Mr Hope says.

"One area where business would have liked to see more investment is in infrastructure that supports growth. We would also appreciate a fuller explanation of the Government's infrastructure strategy, and how it fits into its wider economic strategy.

"The relatively robust figures seen in today's Budget are dependent on the economy continuing to deliver growth so that tax rates can finance the Government's ambitious expenditure programme. The trick will be to ensure the economy keeps growing sufficiently to ensure promised funding can be delivered to critical areas in a timely way.

"If tax revenue falters over the period, there could be some risks in delivering the proposed Budget surpluses while hoping to reduce debt."

We present here the highlights of Budget 2019 that we think most directly affect our members' ability to sustain and grow their enterprises.

Here is quick run-down of Government funding for the next four years (unless the timeframe is stated otherwise).

Employment

• Pay equity: $1 million will be made in the Wellbeing Budget to assist the claims process, and reduce barriers previously experienced by people making pay equity claims," Iain Lees-Galloway said.
  "This includes funding for the Ministry of Business, Innovation and Employment to develop online tools and resources which will improve peoples' understanding of the pay equity claims process, by providing guidance and data for their claims. This will help reduce disputes, improve bargaining processes and lead to enduring pay equity settlements."
  
  "By making court action a last resort, we will lower the bar for initiating and resolving a pay equity claim."
  Further changes proposed by Select Committee include:
• Providing clarity on the threshold for making an arguable claim, by clarifying 'predominantly female' as a workforce that is, or historically was, approximately 60 per cent or more female.
• Removing the requirement to undergo facilitation before seeking a determination in disputes, to maintain a low threshold to commence bargaining and provide the Courts with greater discretion.
The Equal Pay Amendment Bill is expected to pass into law later this year. You can read the tabled Select Committee Report: Final report (Equal Pay Amendment Bill) 103-2.

Read more

Education

• Vocational education: $197 million of underspending on the Fees Free programme will go towards implementing the Reform of Vocational Education, which is currently under consultation.
Read more
• School leavers: $3.5 million to better equip young people for life after school. All secondary schools students will have access to programmes that will provide civics knowledge and skills, financial literacy, and key workplace competencies. These include key skills like how to enrol to vote, apply for a mortgage, save for a mortgage and write a CV.
Read more

Environment

• Forestry sector: $58 million to allow Te Uru Rākau (Forestry New Zealand) to increase its regional presence to ensure foresters and landowners have the support they need and will also see the agency focus on the Government's goal of developing a sustainable, domestic forestry workforce.
  In addition to being able to double its regional presence in the next two years, Budget 2019 will enable Te Uru Rākau to achieve the following outcomes, over the next four years:
• Development of a modern Forestry Strategy setting the strategic direction for the sector covering commercial and indigenous forestry, trees and wood processing for the next 20 years;
• Review the Forest Act 1949 to reflect developments in domestic and international approaches to sustainable forestry management;
• Implement a workforce strategy to provide sustainable jobs, training and clear career pathways;
• Research factors affecting the wood supply for local wood processors;
• Build a new office in Rotorua to accommodate the anticipated growth of regional staff and demonstrate the value of using wood in construction;
• Provide easy access to Te Uru Rākau research material to support decision making through the development of a knowledge hub.

Read more


• Waterways: $229 million Sustainable Land Use Package for projects to protect and restore at-risk waterways and wetlands and provide support for farmers and growers to use their land more sustainably.

Read More


• Climate change: $107 million to ensure the economic transition required to deliver emission reductions is effective, efficient and just.
  This means the Climate Change Commission can provide the advice, guidance and monitoring New Zealand needs to reduce greenhouse gas emissions, in line with our goal of limiting global warming.
  
  The Budget also includes funding to implement an Emissions Trading Scheme (ETS) auctioning platform.

Read more


• Recycling: $4 million to help the Ministry for the Environment work on improving recycling and resource recovery and shifting New Zealand to a more efficient zero waste economy. It will build on work underway to improve the data on waste and develop mandatory product stewardship schemes for tyres, lithium batteries and refrigerants.
  The new funding will help implement a national resource recovery programme in response to China's waste ban and action on single use and problem plastics.
• Biological waste: $18 million to continue the Bioresource Processing Alliance and Product Accelerator.
  The Bioresource Processing Alliance co-funds and co-develops innovative products or processes that turn low value biological waste streams into new high-value products. The Product Accelerator also helps develop technologies that create new products, new market opportunities and grow New Zealand's exports

Read more

Business development

• Investment funding: $300 million funding administered through the Venture Investment Fund aimed at mid-sized companies earning $2-15 million.

Read More


• Manufacturing: $6.8 million to future-proof New Zealand's manufacturing industry, helping it to get to grips with digital technologies in order to be more productive and develop new products and services.

Read more

Infrastructure

Definition: the basic physical and organisational structures and facilities, eg, buildings, roads and power supplies, which are needed for the operation of a society or enterprise.

• Clean energy: $27 million to set up the National New Energy Development Centre in Taranaki, alongside $20 million over four years to establish a new science research fund for cutting edge energy technology to look into the likes of organic photovoltaics, super conductors, nanotechnologies and inductive power.
  The centre will be established on a strong foundation with pledges of collaboration and support from the energy sector, research organisations and supply chain businesses – both local to Taranaki and from around the world.
  "This centre will complement our investments in hydrogen, Green Finance Ltd, the Zero Carbon Bill and our upcoming renewable energy strategy to help New Zealand create new jobs in new industries while moving away from fossil fuels that cause climate change," PM Jacinda Ardern says.

Read more


• Rail: $1 billion funding boost over two years to redevelop KiwiRail. This includes:
  • $375 million for new wagons and locomotives,
  • $331 million to invest in track and other supporting infrastructure,
  • $35 million to begin the process of replacing current ferries that are nearing the end of their lives, and
  • $300 million from the Provincial Growth Fund allocated for investment in regional rail initiatives.
  
  $405.5 million to cover the Crown's share of forecast cost increases to build the Auckland City Rail Link, and finalises previous allocations of funding for the project.

Read More


• $197 to tackle homelessness through Housing First, which will fund 1,044 new places and will boost the construction sector.

Read more

Innovation

• Low-emissions products: $157 million for innovative businesses with initiatives to support businesses to become more productive and develop high value low-emissions products, including $26 million for start-ups to fund innovations towards a zero carbon economy.

Read more

Our complimentary Member Briefings cover the latest in economic and employment information to keep employers up-to-date with the New Zealand business scene.

In this year's Winter Briefing we'll cover:

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The EMA opened the doors of its new Chinese Business Centre at its Auckland site last week.

The Centre reflects the expansion of one of the fastest growing parts of the business community and will provide Chinese members with access to expertise on doing business in New Zealand.

The Chinese Business Centre is part of the EMA Partner Hub, a co-working and knowledge-sharing space managed by a Mandarin-speaking EMA employee.

Brett says he is delighted the EMA is sharing spare space at its Grafton, Auckland headquarters with the Chinese business community.

He says, "We want to work together to make it easy for Chinese businesses to set up in New Zealand, understand the regulatory environment and get the advice they need on everything employment-related."

To reflect the EMA's ongoing relationship with the Chinese business community and ensure it is focused on what they need to know, the EMA has also formed a Chinese Advisory Board.

Chinese Advisory Board members so far include:

• Bryan Tang - Infrastructure, Funding and Agreement Specialist, Auckland Council
• Christina Yu – General Manager, Chinese NZ Herald
• Frank Cui – Managing Director, SureCapital Group
• John Hong – Chief Executive, One Belt One Road NZ Council
• Sir Bob Harvey – former Waitakere Mayor and Waterfront Auckland Chairman
• A representative to be confirmed - China NZ Chamber of Commerce

Chinese businesses that have already signed up as members to the EMA were there to celebrate the opening, and others who sign up by June 30 will also be reflected as founding members on a plaque within the Chinese Business Centre.

Founding member businesses of the Chinese Business Centre so far include:

• China Construction Bank
• Chinese NZ Herald
• KVB Global Markets Ltd
• New Zealand Tea Culture Centre
• Seastar Logistics Ltd
• Sound Yueen & Co
• Virginia International Education
• Welling International

The opening of the Centre coincided with the EMA hosting delegates from Auckland, Los Angeles and Guangzhou at a farewell lunch of the Tripartite Economic Alliance Summit, as pictured below.

Above: Delegates from the Tripartite Economic Alliance Summit were hosted by EMA for lunch last month. Pictured with Brett O'Riley [EMA, second left] are (left), Jeff Gorrell [Deputy Mayor City of LA], Bill Cashmore [Auckland Deputy Mayor], Katelyn Choe [Consul General, US Consulate in Auckland] and Zhou Wei [Vice Consul General at Consulate General of China in Auckland]

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