Lifting business investment key for growth   14 Oct 2015

Hon Steven Joyce

Minister for Economic Development

14 October 2015 Media Statement

Lifting business investment key for growth

Attracting high-quality business investment into all parts of New Zealand is the key focus for the update of the Building Investment workstream of the Business Growth Agenda released by Economic Development Minister Steven Joyce today.

The Investment Chapter aims to ensure that New Zealand has the right conditions to support and encourage more business investment, and builds on recent work to ensure New Zealand has robust financial markets regulation to support domestic capital growth.

“In recent years we have done much to help build thriving, confident, financial markets to provide strong capital flows to our growing businesses and support investor confidence,” says Mr Joyce.

“This revised chapter sets out the Government’s commitment to significantly lift the rate of business investment as a percentage of GDP to accelerate growth throughout New Zealand, and provides the context of the Government’s priorities for investment overall.”

New actions in the Building Investment chapter include developing and implementing a New Zealand Investment Attraction Strategy, attracting high-quality foreign direct investment in areas of competitiveness for New Zealand, attracting more research and development by multinational companies, and expanding our pool of smart capital by attracting individual investors and entrepreneurs to reside in New Zealand. The final Investment Attraction Strategy has also been released today.

“The priorities of the chapter help to build the right conditions for higher levels of business investment,” says Mr Joyce. “While domestic investors are a very important source of capital, domestically sourced investment alone will not be enough. As well as increasing overall investment levels, high-quality international investment can enhance access to export markets and global supply chains which are becoming increasingly complex.”

Attracting foreign investment is one of five priorities laid out in the Building Investment update. The key areas are:

• Support and attract investment into all parts of New Zealand, with an underlying strategy to drive diversification
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• Implement, embed and evaluate recent regulatory reforms to financial market regulation to ensure they allow financial markets to thrive
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• Rebuild the Government’s balance sheet to reduce the risks of future adverse events, and optimise the allocation of Crown capital
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• Modernise the IRD’s systems to preserve our broad-based tax base, reduce compliance costs, and smooth tax collection impacts on business cash flows
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• Improve the financial capability of New Zealanders and encourage personal savings and investment

The Building Investment update contains eight new projects that government agencies will work on over the next year, alongside 23 other projects already under way. A total of 36 projects have been completed in the investmentworkstream since the BGA began in 2012, including financial markets reforms, the Government Share Offer programme, and developing equity crowd-funding as a new source of capital.

“The Government remains committed to achieving the goal of lifting exports to 40% of GDP by 2025, and the investment programme is critical for achieving this,” Mr Joyce says.

“If we are to achieve this ambitious goal, we estimate that New Zealand businesses will need access to $160 billion to $200 billion of new capital in the next decade.

“Attracting high-quality business investment into all parts of New Zealand is critical to strengthening economic growth and lifting productivity, and is an essential ingredient for building an innovative and internationally connected economy.”

Mr Joyce also released today an International Investment for Growth report, which highlights the opportunities that FDI and ODI provide for New Zealand, and the rationale for attracting international investment.

The Building Investment Chapter, the International Investment for Growth Report, and the Investment Attraction Strategy can be found here: HERE

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