Action needed to end rapid de-industrialisation of NZ, MPs told

Monday, 13 July 2026

New Zealand’s energy crisis is self-imposed through decades of political failure.

“We’ve gone from a country that attracted international business because of our energy supply, to having energy costs and availability routinely cited as a reason for closing domestic businesses,” says Alan McDonald, head of advocacy for the EMA (Employers’ and Manufacturers’ Association).

The association, which represents employers and manufacturers, has sent a pre-election manifesto to every MP calling for all parties to commit to action to halt the rapid progression of de-industrialisation across New Zealand.

“The time is right to make a clear call on retaining the critical businesses that underpin our supply chain resilience, and to ensure the policy settings are in place to support them,” McDonald said.

On that front, he said, energy is a massive priority, an issue that politicians should stop playing party politics on and come up with a “grand coalition” to set in place a long-term plan to ensure the country gets a dependable, low-priced energy system.

“We need to accelerate new supply, unlock the regulatory constraints faced by our transmission network, and further encourage electrification,” said McDonald, who is heading up the EMA’s policy push.

“We also need to ensure we have sufficient firming capacity available to back up the electricity system during dry years. It’s a tough mix to get right, but our market regulators are clearly failing,” he said.

The EMA’s policy directives document, published on Monday, sets out just how tough the last nine years have been for the businesses the country relies on to generate exports, jobs, tax revenue, and to meet domestic demand for goods and services.

Some of the pain has been the result of global forces, including US tariffs, but some has been self-inflicted.

“Since the Labour/New Zealand First coalition of 2017, New Zealand has been subject to rapid policy upheavals, an economy going backwards, Covid-19, labour shortages, international supply chain disruption, high interest rates and inflation, recession, declining productivity, low GDP, collapsing world trade rules and US tariffs,” the EMA said.

“Topping all that off is a self-induced energy supply problem, with spiking energy prices routinely cited as a major contributor to domestic business closures and de-industrialisation.”

“It’s a litany of bad news that has left businesses’ reserves of confidence and cash at a low ebb,” the document said.

Managing crisis had become “business as usual” for owners.

The energy failure, combined with rapid policy change and anti-business rhetoric, was disincentivising investment.

The EMA also urged the next government to emulate Australia’s “sovereign capability approach”, working out which industries (steel, medical supplies, etc) are essential to national resilience and self-reliance, and supporting them.

November’s election appears to be on a knife-edge. Polling suggests National has its work cut out to get enough voters to back it to lead the formation of the next government.

The EMA says there are five “key” priorities for the next government if it wants business, and the economy, to thrive.

A house divided on energy and infrastructure cannot build a country with a thriving economy, the EMA believes.

Stability and certainty

The EMA is calling for the next government to leave the current Government’s resource management, employment relations and local government reforms unchanged in order to see whether they work.

“After a decade of policy reversals by successive governments, international turmoil and Covid-induced economic shocks, it’s time for certainty and stability in our business policy settings,” it said.

Infrastructure and consenting

Main St in Woodend is congested. A bypass is needed for the area’s growing population, the EMA says.

“Leave the new RMA settings in place for an extended period to allow for implementation, and to identify any significant issues,” the EMA said.

“Stable settings … encourage the international investment the Government says we need.”

The National Infrastructure Commission finally has cross-party support for its 30-year infrastructure plan.

The country needed to “stick to the plan”, build resilience into critical infrastructure, complete the most important roading updgrades and links (including Canterbury’s Woodend bypass, the Auckland to Whangārei corridor, and northern and western links to Port of Tauranga), and finish building the fibre network.

Energy supply

Put in place a long-term energy plan that gives confidence to businesses that they will have a consistent, competitive, cost-effective energy supply, and perhaps even incentivise businesses to base their operations near growing and emerging energy generation sources.

There needed to be faster investment and enabling of green energy sources including wind, solar, hydro and geothermal, including rapidly developing the transmission network to enable more rapid connections to new energy generation sources.

Employment law and minimum wage

New Zealand still lacked an integrated workforce and skills strategy.

“Just a few years ago, only about 35% to 40% of our members identified work readiness as one of the key issues facing employers. Now that number has jumped into the sixties,” the EMA said.

“The skills and work readiness of our emerging workforce is possibly our biggest handbrake on productivity.”

It wanted reforms across education, immigration (including the creation of a Pacific “Fly-in, Fly-out” visa), and enable businesses to depreciate spending on training and skills.

It called for the minimum wage to be index-linked (recently, increases have not kept pace with inflation), however, it also called for government and councils to stop insisting on contractors paying the “living wage” to all workers.

The minimum wage is currently $23.95 per hour. The “living wage” is $29.90.

Investment and innovation

New Zealand was slow to adopt new technology, and that was holding back productivity gains.

The EMA called for depreciation rules to be simplified, the corporate tax rate to be cut, and improvements to the research and development tax credit.

It also wanted to see reforms to roadblocks to capital and funding to businesses, especially small and medium-sized ones to make it cheaper for banks to lend to them, and easier for KiwiSaver to invest in them.