After the storm, how can New Zealand bounce back?

Saturday, 25 February 2023

Looking back at three days of carnage in the North Island with these incredible images from Cyclone Gabrielle.

We’ve been riding rough seas for a couple of decades now in Aotearoa – the global financial crisis, the Canterbury earthquakes, a mass shooting, a volcanic eruption, a pandemic, and a string of destructive weather events leading up to the most cataclysmic, Cyclone Gabrielle. How can we keep bouncing back? Will we? Or we are at cross roads where we must consider fundamental change?

This week, some of New Zealand’s leading decision makers, including Reserve Bank Governor Adrian Orr, as well as business people and academics, will be addressing the challenges we face at the annual University of Waikato economic forum.

Matt Bolger, pro-vice chancellor at the Waikato Management School, says there has never been a more important time for that discussion.

“We are at a pivotal point in our history, rebuilding from the largest severe weather event in living memory while navigating a volatile economic landscape, inflation and a potential recession. And all of this is happening alongside an uncertain global outlook that is constantly flexing to the impacts of the war in Ukraine and the lingering impacts of the Covid-19 pandemic.”

* Inflation may absorb impact of NZ's minimum wage, benefit rises

* Does New Zealand need new laws to protect the ‘epicentre of its democracy’?

We asked some of the leading speakers at the forum how New Zealand can navigate some of the big challenges we face.

Brad Olsen: CEO and Principal Economist - Infometrics

Our infrastructure remains in the spotlight in 2023, but despite the usual question about where to find the money for infrastructure, what we should be asking is where we find the resources – and even more critically, what we choose to prioritise.

We don’t have the resources or people to fix everything overnight, so we need to make a plan for the future, to maintain, replace, upgrade, and bolster our infrastructure. That means deliberately putting some critical needs front and centre and being bold enough to say 'not now” to other investments.

Our resilience is being tested with wild weather, and there’s still a considerable infrastructure deficit – better to make the difficult decision, before the difficult decision is made for us.

Amanda Whiting: Chief Executive IAG New Zealand

The growing impacts of natural hazards and our changing climate are big issues for New Zealand to solve. The last month has provided ample and tragic evidence of the challenges we face. As New Zealand’s largest general insurer, IAG is committed to being a part of the solution.

We all need to think differently and focus much more on reducing these impacts and building greater resilience. We must start with flooding by making better decisions about where we build, investing in protection, and where necessary, helping New Zealanders get out of harm’s way.

It is vital we include these actions in our response to the recent flooding and Cyclone Gabrielle.

Frances Valintine: CNZM, Founder and CEO of academyEX

Schools across the world are facing a relevance and context challenge, as the connection from inside the classroom to the world students live in outside continues to divide through generational interpretation of what is possible, prioritised and important.

Students who turn up to school each day were born into a world where change and adaptation has been constant. They have seen more rapid advancement, adversity and transformational change than any previous generation. Students know they can learn from anywhere, anytime, and just in time.

Schools need to better reflect the world outside the classroom, to ensure that students can align what they learn in the classroom to what they see and experience in the world around them.

Chris Meehan: CEO and Chair Winton Property Group

New Zealand is desperately short of housing, yet housing occupies only 1% of our total land mass. The artificial constraint we put on housing through excess planning regulation has caused this no-win situation. As a result, it costs about as much in paperwork to consent a housing lot as it costs to then build it.

The price of housing is a direct function of the laws of supply and demand. Rents haven’t gone down in decades because regulation constrains the supply and we have ever increasing demand.

It is a very simple government-inflicted supply/demand problem with enormous social costs to New Zealand that could be solved just as simply by the Government lifting these artificial constraints so the private sector can get on with it and build more houses.

Would any of us really mind if housing occupied 1.1% or 1.2% of our land mass?

Parekawhai McLean: Chair of Te Whakakitenga o Waikato and Chief Executive of the Criminal Cases Review Commission

As I write this, I’m sitting at Ngā Ana Wai (Eden Park) inspired by the national kapa haka showcase, Te Matatini Herenga Waka, Herenga Tangata. The festival is full of whanaungatanga, kotahitanga, mahi tahi, aroha, and mana Māori motuhake.

It is these same values that will give us the resilience to rebuild whare, businesses, and whole communities impacted on by Cyclone Gabrielle. Knowing who we are allows us to progress social and economic agendas.

We also know that we can achieve more by working in partnership, through sharing decision making powers, ideas, resources, and solutions. For Waikato-Tainui, the Ruakura Superhub is evidence of what is possible. Let’s take this same approach and apply it across the motu. Paimaarire.

Charles Finny: Saunders Unsworth and former diplomat

Navigating the China relationship at a time of increased competition and tension between major powers is one of the great challenges for New Zealand diplomacy. It is less of a challenge for business but there are risks that all businesses should be reviewing regularly.

The Chinese economy will probably not grow as quickly as many have been used to, imbalances in the economy need to be addressed, China’s population is beginning a substantial fall, and Chinese political and security competition can flow into the economic arena. China is our major export market and is likely to be for many years.

Fortunately, New Zealand has an excellent and growing network of free trade agreements buffering impacts should short term problems emerge in China.

Malcolm Johns: Climate Leaders Coalition

We know the world our next generations live in will be different to that of our past generations. We will need new and different critical infrastructure that underpins our future resilience and adaptation to that reality.

Our current frameworks are unlikely to deliver this change, they are too slow, too costly and favour process over delivering real outcomes of national interest.

We need to embrace new thinking and new frameworks to plan, consent and fund the transition and adaptation of our critical infrastructure. The ambition of this generation to genuinely tackle this will determine the benefits available to future generations!

Christina Leung: Principal Economist NZIER

The Covid-19 pandemic and natural disasters over the past few years have highlighted the need for policymakers to have flexible settings to enable businesses and households to readily adapt to the fast-changing circumstances.

For example, the lockdowns during Covid-19 accelerated digitalisation, which allowed businesses to reach new markets through new channels. Reducing red tape would support businesses to pivot to new opportunities, which would help with the recovery.

The NZIER Quarterly Survey of Business Opinion shows that uncertainty impacts negatively on business confidence, as it makes it harder for businesses to plan ahead. Policy makers can also help with the recovery by making clear its policy intentions, to make it easier for businesses to commit to investment and spending.

Adrian Littlewood: Business Leader, former CEP of Auckland International Airport

Investing well in infrastructure is generally accepted as critical to lift the prosperity of a country. Investing in ‘hard’ infrastructure is genuinely hard and will dominate the focus of all politicians and business leaders over coming years.

However, we can’t overlook the need to invest in the soft infrastructure that runs and grows our country – the skills, the practice and the relationships both in and between government and business.

New Zealand’s response to Covid-19 exposed the strengths but also the holes in how we respond to national crises, and we owe it to our kids and grandkids to make sure we invest in the capability we need as a country and use it fully to meet the next crisis when it comes.

Tania Tapsell: Mayor – Rotorua Lakes District Council

We’ll fix our big challenges by keeping a local voice in decision-making. If you want to make something work, ask the people who will be on the ground doing it.

To ensure solutions are successful they need to suit each of New Zealand’s unique communities. Because, let's face it, what works for Auckland and Wellington won’t work for communities like Rotorua or Queenstown.

Councils play a crucial role in local leadership to plan for and deliver infrastructure for their neighbourhoods. As we build our way out of the housing and environmental crisis this voice will become even more important.

Paul Conway: Chief Economist, Reserve Bank of New Zealand

After decades of low inflation prior to the pandemic, many New Zealanders are now having their first experience of rapidly-increasing prices. We need to get inflation back down to lift our prosperity.

The Monetary Policy Committee at the Reserve Bank have been increasing interest rates to slow spending and bring down inflation. While this is critical work, it is only part of the solution to reducing inflation.

Better productivity would also help lower inflation by clearing supply bottlenecks. And it would lift incomes. This is about businesses investing in capital and adopting technology, driving inflation lower at minimal economic cost without the need for ongoing interest rate increases.

Al Gillespie: Professor of Law, the University of Waikato

As the international climate deteriorates, most countries, friends and not-friends alike, are increasing their military spend and collaboratively developing the next generation of weapons.

For us, it is not only the feasibility of our 1.5% of GDP spend, but also that we are increasingly being left out of the arrangements which reinforce alliances and provide pathways to technology.

The AUKUS defence alliance is only one example of which we are absent. This is tied to the largest question of all, whether New Zealand wishes to relegate itself to becoming a non-aligned regional police officer, or carry its fair share of weight in being part of an inter-linked modern military deterrent.

Ben Guerin: CO-Founder, Topham Guerin

Whether we’re dealing with climate change, the housing crisis or a labour market under pressure, NZ’s challenges can’t be solved with quick fixes. We need thoughtfulness, compromise and cooperation from across society – values rarely seen on Twitter or the Stuff.co.nz comment section!

Social media gets a bad rep, but all it does is reflect the best and worst of human behaviour right back at us. Sure, politicians should avoid chasing easy engagement from being provocative. But as citizens, we also need to step up and take responsibility for the state of our democracy. Attacking journalists and insulting politicians on social media makes things worse, not better.

Rachel Simpson: Manager, Education, Skills and Education – BusinessNZ

People bringing international skills contribute to our economy and communities. The current workforce situation is dire. Skill shortages are our biggest constraint to economic growth.

Recent emergencies including Covid-19, flooding and Cyclone Gabrielle have further magnified the labour shortage problem - we need many more international skills to help with the task of rebuilding and make sure firms can get through the challenges ahead and keep New Zealanders in work.

We need attractive, simple, easy-to-understand and permissive immigration policy to let in more international skills and support economic growth and the wellbeing of the workforce.

Anne Tolley: Commissioner, Tauranga City Council

The New Zealand Public Service is world best when it comes to probity and transparency, but when it comes to achieving results, we too often fall short.

The relationship between Local and Central Government is fraught with conflict and frustration. Infrastructure and urban development focuses on controlling the planning processes by legislation (RMA will now be 3 Acts, add in 2 Climate Change Acts, the Local Government Act and 3 Waters Acts), and budgets, timeframes, and strategies are all designed independently.

Yet when it comes to a crisis, we manage to pull everything together and achieve great infrastructure and community confidence.

Sir Maarten Wevers: Former New Zealand diplomat and senior public servant

New Zealand’s public sector is generally well-regarded internationally, but is it still world class? My own view is that it would be a stretch to claim that title. True, we have been seen as a leader in transparency, economic regulation, state-owned enterprises, and international trade reform. The Treaty of Waitangi claims settlement process sets a noteworthy benchmark internationally.

But our public sector is a sprawling puzzle of enterprises; policy, service delivery and regulatory organisations; and entities with power over the lives of New Zealanders. Measuring performance in service to New Zealanders, and improvements in efficiency, is challenging and not always easy to track improvements.

The contributions of decision makers, policy advisers, and service delivers, all need to be assessed when ranking its effectiveness.

Susan Hassall: Headmaster Hamilton Boys High

The importance of education in supporting the future economic wellbeing of New Zealand is significant. What it will come down to is our ability to ensure all students are able to succeed. We need to make students future ready by bringing those that are failing through into a sense of success.

This gap will only be reduced by working to lift the failures tail, helping to move everyone up in the rising-tide of better outcomes. Our mainstream education system is not broken, but it is flawed.

We can’t, and shouldn’t, change the system, but we must work closely as a country to ensure it is remediated.

Jason Mika: Associate Professor of Māori Business – University of Waikato Management School

Solving the country’s economic and social challenges will require everyone’s involvement. People need to be supported to bring and give their best through showing aroha, manaakitanga, and kaitiakitanga.

It’s about equity, ensuring people have the capacity and opportunity to contribute in a way that is relevant to them, so everyone, Māori, Pākehā and the Crown, are part of the solution.

We have seen success when Māori have had a say over their whenua, taonga and heritage. Te Urewera is an example of Māori governance, philosophy and values influencing what is done and how, for the better.

Research shows that when indigenous people have self-determination there are better economic and social outcomes for all. This is the way forward and we must embrace it.