What are NZ’s major challenges for 2013?
New Zealand’s challenges revolve around housing and insurance. For the former, it’s about addressing the gap between new dwellings being built and population increases. For the latter, it’s about people being able to afford to live and work in dwellings that are already built.
Housing is unique commodity, which makes this issue such challenge. Consumers generally want commodities to become cheaper. However, in housing, many consumers are owners, who want their assets to appreciate in value. Policies to increase the supply of land or housing are not always popular with the electorate, as these reduce the value of existing properties through reduced scarcity. Decreases in interest rates and the cost of building materials can help, but land policy is the number one driver in affordability.
Insurance has increased costs for businesses operating in Wellington and Christchurch, with office vacancy rates in the capital staggeringly high. This, amongst other factors, will affect the potential of these two cities in attracting new businesses and residents.
How well prepared do you think Kiwi business leaders are to face these challenges?
Business leaders can’t face the housing or insurance issues by themselves but there are creative solutions at the local level. The Christchurch City Council has assisted through various initiatives whilst in Wellington, the high vacancy rates create buyers’ market for office space.
What more could we do as country to thrive in the current global economic climate?
Invest in infrastructure, but that is catch 22 as government and businesses are trying to reduce debt. competitor to the Southern Cross internet cable would do wonders for our speed and pricing of internet and would create jobs here; Kim Dotcom spoke of being unable to host mega.co.nz in New Zealand due to costs and lack of bandwidth. M
