Celebrate (with qualifications) - Business NZ

20 December 2005

Celebrate (with qualifications) - Business NZ

The World Bank's 'doing business' ranking released today is cause for celebration says Business NZ - although the survey doesn't cover a number of key issues

Chief Executive Phil O'Reilly says New Zealand's number one ranking for doing business is an excellent outcome, and congratulations are due to successive Governments over the last 20 years.

"It's good to know that we score well on fundamental issues like starting a business, getting credit, dealing with licences, registering property, protecting investors and so on.

"However many of the issues that businesses in New Zealand face are of a different order. The World Bank survey doesn't measure some of the more complicated issues that are the subject of discussion between business and government, like for example, ease of getting resource consents, energy and roading infrastructure and investment in skills and education.

"In other areas the ranking is not appropriate for our circumstances. For example, the measure for hiring and firing workers is based on an average company size of 201 employees. The vast majority of businesses in New Zealand are very small - 96% have fewer than 20 employees. We know that what makes for ease of hiring and firing in a big company translates into an onerous burden for a company with only a few employees - so our high ranking here is not all that accurate.

"Also, on the score for the tax burden, we've done poorly compared with other developed countries that we like to compare ourselves with, and that we compete with. For the score of tax imposed as a percentage of gross profit:

Hong Kong 14% Singapore 19.5% US 21.5% Taiwan 23.6% Canada 32.5% Australia 37% New Zealand 44.2%

"So while there is much to celebrate from surveys of this kind, there is also much more to be done to improve the environment for business in New Zealand."

ENDS

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