Fri 28 May 2004 Issue 105 - Business Update

Fri 28 May 2004 Issue 105

RMA – WHAT IS ‘ENVIRONMENT’?

Govt wants to improve the RMA to get better consent decision-making, to get the right balance between national and local interests (local bodies currently have no guidance on how to deal with projects that have national impact) and to better allocate natural resources (currently it’s a ‘first in first served’ basis, not helpful for deciding competing claims for e.g. water rights).

Business NZ’s suggestions will include tradeable rights for natural resources and getting a better definition of ‘environment’ – the RMA has a definition that includes: ecosystems and their constituent parts, including people and communities, all natural and physical resources, amenity values, social, economic, aesthetic, and cultural conditions - this wide definition lets local authorities venture far beyond their core business.

An improved definition of ‘environment’ should also give guidance to local authorities dealing with consents of national significance.

Employed should pay the money back.

The Retailers Federation said further submissions should be called for before the Bill proceeds. And the Association of Colleges of Education wondered why the Bill is necessary: “No-one has suggested that bad faith is rampant in the employment marketplace”.

SPIKE IN SICKIES

The Confederation of British Industry (CBI) has done a survey of sick leave in the UK following a recent surge in sick-leave absences – CBI estimates up to 15% are not genuine. A spike in sick days is expected to coincide with next month’s Euro 2004 soccer tournament. Here in NZ there’s also been a spike in sick leave, caused by the new Holidays Act which says a doctor’s certificate is only needed after 3 days’ absence and which pays penal rates for sick leave on a penal rate day.

KYOTO IS IDEOLOGY Kyoto-ism is another ideology - like communism - says Russia’s top economic adviser Andrei Illarionov. He says the protocol would harm the growth prospects of member nations and would not achieve climate change goals. Conflicting comment from Russia continues to throw doubt on the fate of the protocol. Without Russia, the protocol does not have the numbers to come into force. NZ is still officially signed up to it. Contact pwhitehouse@businessnz.org.nz.

CHURNING BUDGET Yesterday’s Budget gave little evidence of investment to grow our international competitiveness. Help for the export sector has largely taken the form of funding for bureaucracy, while the strategy for low and middle-income families amounts to churning other people’s taxes. A more sustainable approach would be to improve the business environment to produce more good jobs.

That means an environment that’s internationally competitive - if it’s not, it will just leak jobs to other countries. An internationally competitive economy requires good infrastructure, a flexible labour market and competitive tax rates – these weren’t addressed yesterday. A business summary is on: http://www.businessnz.org.nz/doc/727/Budget2004businesssummary

LOOK AFTER CREDITORS

Planned changes to insolvency law aren’t all that helpful for creditors, says Business NZ. The discussion paper proposes increased mandatory reporting requirements for liquidators and administrators, and extending the priority for wages and salaries over other unsecured creditors.

The discussion document also seeks feedback on compulsory licensing for insolvency practitioners. But measuring competence in insolvency practitioners is not straightforward and more reporting requirements would mean additional costs and no direct benefits for creditors, while giving priority to wages and salaries would simply push other business creditors further down the queue. Contact pcrawford@businessnz.org.nz

MORE COMPLAINTS IN SELECT COMMITTEE

‘Contracting out’ provisions were top of mind for organisations addressing the Employment Relations Law Reform Bill in select committee yesterday. NZ Pavement & Bitumen Contractors said there’s now such a shortage of staff in the industry that it’s employers, not employees, who need extra negotiating help. The Human Resources Institute said the Bill gives employees the right to cherry pick, and employees taking redundancy but later re-

COMPANIES OFFICE IMPROVEMENTS

The Companies Office is removing its $15 fee for filing annual returns online and reducing the fee for accessing documents from $2 to $1. Other changes coming include a simpler name reservation service and more frequent updates on share and shareholder information. More information is on www.companies.govt.nz.

The price index for residential buildings rose 1.9% in the quarter and 8.8% on an annual basis, following a 4.2% increase in the previous year. Subcontractors’ charges and costs for materials and labour were the main drivers. The Labour Cost Index recorded a 0.9% increase in carpenters’ and joiners’ pay in the March quarter. Overall building pay rates grew 0.6% in the March quarter and 2.6% in the year to March 2004.

GROWTH STATS

The plant, machinery and equipment index fell 0.5% in the March quarter and 3.1% in the year to March 2004, largely because of the rise in the exchange rate and the continuing fall in computer and computer equipment prices (-3.8% in the March quarter and - 13.1% in the year ended March 2004).

APRIL GROWTH IN EXPORTS

Provisional exports were estimated to be 8.6% higher in April than April 2003, the biggest monthly increase since Aug 2001. Further detail on exports comes out on 8 June.

IMMIGRATION SLOWING RAPIDLY, CHINESE STUDENTS GOING HOME

Provisional imports in April 2004 were 13% higher than in 2003, led by higher imports of petroleum and petroleum products (+85%) and capital machinery (+32%). The number of short-term overseas visitor arrivals in April was 23% higher than in April 2003, partly due a post-SARS bounce-back in visitors from Asia and discounted airfares from Australia.

Imports of other intermediate goods increased by 18% while imports of consumer goods were much weaker, increasing by 9% in April. The value of motor vehicle imports declined slightly in April.

Overseas trips by NZers in April were 37% higher than in April 2003, with strong growth in trips to Asia (+83%), the US (+43%), Europe (+39%) and Australia (+34%). The TWI (measured using Reserve Bank weights) fell by 3.0% from March but was still 6.9% higher than in April 2003.

Permanent and long-term migration has slowed rapidly, with a net loss of 100 recorded in April compared with a net gain of 2,200 in April 2002. Net annual migration was 25,700 in the 12 months ended April, well down on the 42,000 recorded in the year to April 2003.

PRICES REFLECT LOWER ELECTRICITY COSTS, RISING DOLLAR

The Producers Price Index shows outputs falling 0.1% in the March 2004 quarter and increasing by just 0.9% for the year to March 2004. Inputs fell 0.5% in the quarter and 0.6% in the March 2004 year.

Some of the increase in departures appears to be due to longer-term students returning to Asia on completion of their studies. Departures to Asia grew 30% in the year ended April 2004, with an 89% increase in departures to China. The main reason for the fall in prices in the March quarter was lower electricity generation costs. The 11% appreciation in the NZ$ against the US$ between the Dec and March quarters also contributed to the fall in both output and input prices. There was also an 8% increase in long-term departures for Australia in the last 12 months. Price increases in the non-tradeable goods and services sector rose by just 0.1% in the March quarter and by 2.2% in the year to March while prices in the tradeable goods sector declined by 1.2% over the 12- month period.

WHAT’S NEW on www.businessnz.org.nz

Spend now pay later’ Budget Budget 2004 business summary Manufacturing expansion slows in April ANZ-Business NZ PMI for April 2004 Unbundling decision good for investment

CONSTRUCTION PRICES UP, PLANT & MACHINERY PRICES DOWN

Business planning forecast June quarter The Capital Goods Price Index 0.9% in the March quarter and 2.5% from March 2003.

ENDS

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