New Zealand
Older News Briefs

Stuff has been looking back on New Zealand's economic performance in 2002 and Garry Sheeran topped off an interesting article with an economic summary of the year:

• Household spending: Up 3.7%
• Wage growth: 3.5%
• Job growth: 2.5%
• Unemployment rate: 5.3%
• Retail spending: Up 8.2% (end Oct)
• Economic growth: 4.2% (2002 est)
• Inflation: 2.6%
• Official interest rate: 5.75%
• 90 day bill rate: 5.9% (average)
• Migration gain: 38,180 in Nov year (4880 in Nov 2001 year)
• House prices: Up 10.7% in Nov year
• House sales: Up 25% in Nov year
• Building consents: Up 25% in Nov year
• Residential investment: Up 19.1%
• Small business growth: 4.5% in 2002
• Export growth: 7.6%

Here's hoping for more of the same next year and, if you are hoping to emigrate to New Zealand in 2003, we hope you will feature as one of the people in next year's migration gain.

Immigration Minister Lianne Dalziel has made a statement responding to yesterday's court challenge to the tightening in immigration rules. She said that decisions on any applications which may be affected by the rule changes will be delayed until March 31 or until a ruling from the High Court. Ms Dalziel stated that it was the Government's intention to vigorously defend the immigration changes against the legal challenge.

A very positive survey of businesses by the Auckland Chamber of Commerce has led The New Zealand Herald Newspaper to report that Auckland business is "fizzing with confidence." The America's Cup and an influx of migrants and language students has kept the Auckland economy bubbling along nicely.

The Auckland Chamber of Commerce surveyed its members last week and found that 58 percent expected their own business to make higher profits in the next six months. 33 percent expect things to stay the same and only 8 percent expected their business profits to deteriorate. As a result, most businesses planned to hire more staff and increase investment in equipment in 2003.

There was a rise in the number of firms having difficulty recruiting staff. 44 percent said it was getting harder to find skilled staff, up from 39 percent in the previous quarter and 33 percent last year. The problem was at its worst in tourism where almost 80 percent of businesses had difficulty finding the right people to fill vacancies. The wholesale-distribution, information technology, telecommunications and professional services sectors were also finding recruitment difficult.

The Association for Migration and Investment has filed High Court proceedings against the retrospective immigration rule changes introduced by the government last month. Nobody from the government will comment on the legal challenge until the High Court has ruled on the matter.

While many of the immigration rule-changes are not in dispute, this is the first time that new rules have ever been applied to people whose applications are already in the Immigration Service's hands. The Association for Migration and Investment estimates that as many as 20,000 applicants may be affected by the changes. The immigration service estimates nearer 6,000 applicants will be affected.

The Association is also concerned that the new rules restrict job search visas to applicants whose skills are on the frequently changing Skills Shortage List.

Most farmers now expect prospects for the rural sector to improve or stay the same in the coming year, and a lesser number are bracing for a decrease in their income. These are the key results of the latest AC Nielsen/Rabobank survey.

The improved outlook runs across all farming sectors but is most pronounced among cropping and dairy farmers. Over sixty percent of dairy farmers surveyed are expecting things to improve or stay the same over the next year - more than twice the number of the previous survey in October.

"With world dairy trade prices increasing, dairy farmers are starting to appreciate some benefits of the market outlook" said Bryan Inch of Rabobank.

Another driver of confidence is the interest rate outlook. Seventy percent of farmers now expect interest rates to decrease or stay the same.

"There are a number of external issues that may be impacting on farmer investment intentions at present," said Mr Inch. "On the one hand, we have seen the dollar rise, particularly against the US and Australian currencies. And on the other, there are global supply and demand factors positively impacting on New Zealand's commodity returns."

Figures from Statistics New Zealand show that visitor arrivals here have topped two million for the first time ever.

In the year ended November 2002, there were 2.019 million visitor arrivals, up 106,000 on the previous November year. Korea (up 25,200), the United Kingdom (up 23,500), China (up 22,100), Japan (up 15,800) and the United States (up 13,500) were the main contributors to the increase.

Just over two hundred thousand of the visitors classed themselves as visiting for business purposes.

Latest treasury figures indicate that the New Zealand economy will have grown by 4% pa to March 2003, and growth will continue at over 3%. The government is expected to have large surpluses. The finance minister, Michael Cullen has indicated these will be spent on tax-cuts for low- and middle-income New Zealanders but the company tax rate of 33% will remain unchanged, as will the top tax rate of 39%. The government also intends to use part of the surpluses to reduce debt.

The opposition finance spokesman, Don Brash, said that exporters were suffering from lower commodity prices and a rising exchange-rate, and the Government was intent on slowing immigration.

The National Bank's December survey of business confidence shows a net 8% of New Zealand businesses expect the general economic condition to worsen over the next year. Despite this, a net 24% expect conditions for their own businesses to improve.

Businesses are concerned that their costs will go up owing to possible Government action on local government, health and safety, land transport management, four weeks annual leave and marine reserves. Some are also unhappy that the government has ratified the Kyoto Protocol to cut greenhouse gas emission, believing it will worsen New Zealand's competitive position. The financial troubles of Air New Zealand, following its disastrous purchase of Ansett Australia, are also a major concern to exporters and the tourist industry.

Despite these concerns, the survey found that employers in every sector, except agriculture, are intending to hire more workers in 2003.

The $NZ has continued rising against other currencies.

According to the Bank of NZ, strong domestic growth, attractive interest rates and a low current-account deficit should see the rise continuing. In the last year, the $NZ has risen by almost 25% against the $US.

The ANZ Bank reports that export prices remain at levels exceeding anything in the 1990s or second half of the 1980s and the prospects remain very solid.

The government has been threatened with legal action over changes to New Zealand immigration policy. Tougher English language standards have been imposed - not just on future applications but on those already being processed.

The Government has said it will reply to the threat of legal action in the next few days.

The latest TMP Job Index Survey shows employment optimism has risen significantly. 42% of employers have indicated that they are expecting to increase staffing levels over the next six months. Only 7% anticipate a reduction in current staffing levels.

The "hot" industries are Information Technology, Professional Services and Legal.

The Government has lifted the required English level for "general skills" immigration from 5 to 6.5 in the IELTS test.

The move will cut the number of immigrants from China and other Asian countries by about nine thousand, in favour of people from countries where English is widely spoken.

New Zealand First leader, Winston Peters, described the changes as "meaningless," saying the Government had not dealt with the "widespread fraud and forgery" in English-language tests.

The Government said it did not intend to cut the overall number of migrants, set at about 50,000 a year. The current 30 points needed to qualify for immigration is expected to drop in December, opening the door again for trades-people who were unable to get 30 points.

Jobs ads continue at record-breaking levels, with well over 30,000 positions advertised last month. This ensures a healthy labour-market for job-seekers, although unemployment also moved up slightly owing to increased numbers of immigration arrivals.

New Zealand's population grew by around 62 thousand to 3.95 million between September 2001 and September 2002. The population is currently growing by about 1 person every 7 minutes, assisted by immigration.