Economic indicators

¹ Expenditure on GDP in current prices
² Expenditure on GDP in current prices per capita
³ Includes unallocated taxes on production and imports, bank service charge, and balancing items
⁴ GDP in 95/96 prices per capita

Source: Statistics New Zealand
Economic indicators Total Year end
Population 4,539,651 23-June-14
Nominal GDP (NZ$million)¹ 226,551 31-Mar-14
Nominal GDP growth (%) 2.3 31-Mar-14
Nominal GDP per capita (NZ$)² 50,466 31-Mar-14
Real GDP (NZ$million)³ 154,285 31-Mar-14
Real GDP growth (%) 3.1 31-Mar-14
Real GDP per capita (NZ$)⁴ 34,368 31-Mar-14
CPI inflation (%) 1.5 31-Mar-14
Unemployment rate (%) 6.0 31-Mar-14
Total merchandise exports (fob, actual values, NZ$million) 48,044 31-Dec-13
Total merchandise imports (cif, actual values, NZ$million) 48,360 31-Dec-13
Trade surplus / deficit (current prices, NZ$million) 3,200 31-Dec-13
Export of services (NZ$million) 16,141 31-Dec-13
Import of services (NZ$million) 15,059 31-Dec-13
Stock of New Zealand’s direct investment abroad (NZ$million) 22,513 31-Dec-13
Stock of foreign investment in New Zealand (NZ$million) 102,445 31-Dec-13

New Zealand has a reputation for creating high quality, innovative products and is active in many markets.

  • Auckland skyline - day

Ease of doing business

Extensive deregulation over several decades has reduced many regulatory burdens and created one of the world’s most efficient, competition-friendly economies.

The 2013 World Bank Doing Business report ranked New Zealand third in the world for ease of doing business and first for ease of starting a business.

The findings of this report are supported by the 2013 Index of Economic Freedom, compiled by The Heritage Foundation and The Wall Street Journal, which ranked New Zealand the fourth freest economy in the world.

Ready access to banking services

Many of the big international banks are represented in New Zealand through agents or sales offices.

The Reserve Bank of New Zealand, whose main function is to implement Government monetary policy according to annual directives, supervises New Zealand’s banking system. It also registers and supervises other banks.

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World class infrastructure

We are a strongly trade-oriented society that has developed sophisticated infrastructure and policies to support companies that do business internationally. We are well connected by efficient technology and logistics. Locally, we have fast digital and wireless networks.

Internationally, we connect to the world through efficient ports, international airports serviced by a wide range of global airline services, and high-capacity submarine fibre-optic cables.

Extensive free trade agreements

New Zealand is a strong advocate for free trade and was the first developed country to enter into a free trade agreement with the People’s Republic of China.

We also have free trade agreements with many other nations, including Singapore, Thailand, Australia, the ASEAN nations and Malaysia. Australia and New Zealand have one of the most open economic and trade relationships between any two countries, effectively giving our exporters duty-free access to 25 million people.

Favourable time zone

New Zealand is located in the Asia-Pacific and the first country in the Organisation for Economic Co-operation and Development (OECD) to wake up each day.

Our time zone is two hours ahead of the East Coast of Australia, our working day spans the afternoon on the West Coast of America and much of the Asian day and breakfast in Europe.

Stable political environment

New Zealand welcomes foreign investment and the Government is proactive in providing an environment that enables investors to relocate and / or collaborate with New Zealand companies.

We are a sovereign state with a democratic, parliamentary government. Transparency International in 2012 named New Zealand the least corrupt nation in the world (together with Denmark and Finland), while the 2012 Global Peace Index ranked New Zealand (together with Denmark) as the most peaceful country after Iceland.

Innovative products and services

New Zealand has a reputation for creating high quality, innovative products and we are active across many markets, including more traditional markets such as agriculture – where it is a world leader – to cutting edge clean technology and IT solutions needed for a sustainable and technology-rich future.

We have taken many ‘firsts’ to the world, from splitting the atom to creating the disposable syringe. Our small domestic market also makes us a great testing ground for new products and services.

Skilled workforce

New Zealand is a Western nation with a motivated, creative and skilled workforce. We have leading educational institutions, and the number of people with a higher degree at post-graduate level continues to grow.

English is the main language and around 17 percent of New Zealanders speak two or more languages such as Mandarin, Hindi and Korean. We are also known for our excellent people skills, work ethic and can-do attitude.

Sustainability

We are among the leaders in the world in protecting our natural resources and biodiversity.

We lead global research efforts to mitigate greenhouse gas emissions from primary production and, under recent legislation, became the first country in the world to include agriculture in a domestic emissions trading scheme.

We recognise the importance of demonstrating sustainable credentials to people who buy and use our goods, and have strict biosecurity and traceability systems.

We produce up to 75 percent of our electricity from renewable resources such as hydro, wind and geothermal power. This is targeted to rise to 90 percent by 2025 as we further harness our existing resources and utilise emerging energy resources such as biomass and tidal power.

The legal system in New Zealand is based on the British model.

There are three branches of the legal system, each with a separate role: the legislature (ie Parliament) makes the laws; the Executive (ie the democratically elected Government) decides on policy and legislative proposals; and the independent judiciary (ie the Courts) applies the law, free from political interference.

This ‘separation of powers’ ensures that the legal system operates in a fair and transparent way.

Fund Investments

Partnerships between overseas capital and New Zealand businesses have resulted in outstanding commercial successes. With a Government that actively encourages foreign investment, world class infrastructure to support business activity, and demand for the country’s products and service, New Zealand offers attractive options for corporate, individual and fund investors.

 

NZX Stock Exchange, Wellington with sculpture in foreground.

Corporate investors

With the help of New Zealand Trade and Enterprise (NZTE), investment in high-growth New Zealand businesses is made easier and more attractive for international investors, particularly in the agriculture, natural resources and technology sectors.

There are excellent early-onboard opportunities for some of New Zealand’s newer companies to help make a real difference to the growth and strategic direction of the business. Coupled with low business costs, and a stable economy and business environment, corporate investment in New Zealand is also an attractive option for most overseas investors.

New Zealand offers the ideal location, culture and technology

 

Being an Asia Pacific country, New Zealand is a first-world investment destination with easy access to high-growth economies in the region, including Australia, China and Southeast Asia. NZTE has investment team members in these regions and New Zealand has the advantage of close time zones to make doing business even easier.

The New Zealand stock exchange operates best practice securities trading platforms for foreign investors seeking to raise locally sourced debt and capital.

Innovative and entrepreneurial culture

New Zealand entrepreneurs are known around the world for generating new ideas that challenge the expected. They have can-do attitudes and an ability to make more from less. At the forefront is a group of ambitious, high-growth and internationally focused companies. Many are investment ready and are looking for international capital to fund their growth.

Testing leading edge technology in New Zealand

With the diverse demographic mix of its population and their tendency to be early adopters, New Zealand has always been a good introductory market or testing ground for new products or services from multinational organisations and can be a service centre for high expertise support centres. Some recent examples include:

  • Hewlett-Packard’s Global Applications Services Centre. Based in Christchurch, it exemplifies New Zealand as an innovation centre for the Australia and Asia Pacific regions
  • Snapper taking world-leading technology for payments using contactless smart media to the world out of Wellington, New Zealand
  • IBM’s partnership with Auckland tertiary institution Unitec to create a 400-strong service centre.

Individual investors

New Zealand is a wonderful place to emigrate and live. As a first-world country it provides an enjoyable and affordable lifestyle with a temperate climate and vibrant culture.

Its education system is world class. On the internationally recognised Pearson index of cognitive skills and attainment, which measures education system outcomes, New Zealand ranks consistently in the top 10 in the world, with particular strength in literacy and numeracy.

The publicly funded health system is world class and private medical facilities are widely available. A unique no-fault accident compensation system operates.

New Zealand ranks highly year after year for ease of doing business. World class, globally-linked professional accounting, legal and other professional services are widely available.

With flexible immigration policies and a wide range of visa categories in place catering for investors, entrepreneurs and business managers, it’s easy to invest as an individual in New Zealand.

New Zealand’s large number of small and medium-sized enterprises (SMEs) offer significant opportunities for investors with skills to take smaller scale, successful businesses to larger scale and into international markets.

Simple tax system

New Zealand has a competitive tax system with straightforward compliance requirements. In 2011, the corporate income tax rate was reduced from 30 percent to 28 percent.

In New Zealand there is no payroll tax, no social security tax and no capital gains tax. The country has a simple and straight-forward recoverable goods and services tax (similar to VAT), and tax-deductible business expenses (including research and development) and depreciation.

Fund investors

New Zealand provides strong investor protection and a safe, secure investment environment through robust business laws. The country ranks highly as a place to do business, and in theWorld Bank 2012 rankings, New Zealand ranked third behind Singapore and Hong Kong.

Venture capital and private equity

New Zealand’s funds market is poised for growth with an established pipeline of opportunities. Those looking to diversify a portfolio outside of the usual markets of the United States, India and China will find New Zealand provides a strong mix of stability, opportunities and returns.

New Zealand has a reputation for being a hot-bed of innovation and entrepreneurship. Private equity investments into unlisted New Zealand companies have, on average, doubled over the 18-year investment holding period for investments made by New Zealand and Australian private equity funds between 1994 and 2012.

Venture capital is a growing market in New Zealand. There are opportunities for investors who want to do things a bit differently than in traditional markets, and be more strategically involved with the firms they invest in. There is an increasing trend towards investments that link world-leading, niche speciality New Zealand companies into the networks and operations of larger global businesses.

Safety, stability, ingenuity, and proximity to Asia’s booming economies are just a few of the reasons to invest in New Zealand.

 

Auckland city, New Zealand at night.

Safe, stable and secure business environment

New Zealand is recognised globally as being a safe place to invest and do business.

It ranks first in the world for:

  1. protecting investors (World Bank Doing Business report 2014)
  2. lack of corruption (Transparency International Corruption Index 2013)
  3. starting a business (World Bank Doing Business report 2014)

Anti-corruption NGO Transparency International continued to rank New Zealand Number 1 for honesty and integrity in its public sector in 2013, the eighth year in a row the country was either first or first equal in the Corruption Perceptions index.

New Zealand has a strong banking sector that weathered the global economic crisis well. The parents of the four largest banks are Australian-owned and are all in the top 21 of the Global Finance World’s Safest Banks index.

Ease of doing business

New Zealand consistently scores well on the World Bank Doing Business rankings for the ease of doing business here. Incorporating a business in New Zealand takes just one day, while registering a property takes only two. The country has a straightforward, business-friendly taxation system that supports capital development, research and development and international investment.

Cost of doing business

New Zealand boasts comparatively low developed-country business costs. Its labour costs are extremely competitive for a first-world country with a highly skilled and educated workforce.

Simple tax system

New Zealand has a competitive and low-compliance tax system. It is third lowest in the OECD for time taken for taxpayers to comply with tax obligations (World Bank Doing Business, Paying Taxes. Note: the most recent round of data collection for the project was completed in December 2010).

New Zealand’s 2010 / 11 budget reduced its corporate income tax rate from 30 percent to 28 percent.

In New Zealand there is:

  1. no payroll tax
  2. no social security tax (voluntary KiwiSaver introduced 2007)
  3. no capital gains tax.

New Zealand has a recoverable Goods and Services (GST) tax (similar to VAT), and tax-deductible business expenses (including research and development) and depreciation.

Efficient, market-oriented economy

New Zealand has a stable and internationally competitive economy. A wide range of free trade agreements, pro-competitive regulation, an efficient tax code, an open political system and the absence in almost all sectors of import tariffs or Government subsidies, have given rise to an efficient, globally competitive economy that facilitates both domestic and foreign investment.

State-owned enterprises are structured as corporations and compete on an equal footing with private sector counterparts. A free and independent media ensures transparency in the corporate and Government decision-making processes.

New Zealand boasts sound macroeconomic foundations, including:

  1. a relatively strong fiscal position and a commitment to reduce net public debt to less than 20 percent of GDP by the early 2020s. Read the Government’s Budget Policy Statement 2014.
  2. legislative requirements to maintain public debt at prudent levels
  3. being among the top 20 rated sovereigns in the world: Standard & Poors gives New Zealand an AA+ local currency rating, an AA foreign currency rating and an AAA T&C assessment
  4. maintaining a low-inflation environment for more than two decades; independent monetary policy and a focus on price stability; a long-standing floating exchange rate and no exchange controls or restrictions on repatriation of funds.

Negotiations are under way with India, Korea, Russia, Belarus and Kazakhstan, and New Zealand is a key driver behind the Trans Pacific Partnership.
New Zealand passport holders face fewer visa and other travel formalities than many other nationalities.

Innovative and entrepreneurial culture

New Zealand has produced entrepreneurs with the aptitude to generate new ideas that challenge the expected, having a can-do attitude and an ability to make more from less.

At the forefront is a group of ambitious, high-growth and internationally focused companies. The country’s top 100 high technology companies contributed $8 billion to the economy last year, with over $5 billion of exports in what is a very subdued international market.

There exists in New Zealand a collaborative research and development environment backed by a Government that actively supports science and innovation as one of the core pillars of its formal Business Growth Agenda. New Zealanders are accustomed to and are embracing the country’s fast-growing cultural diversity.

Flexible immigration policies

New Zealand has flexible immigration policies with a range of visa categories in place catering for investors, entrepreneurs and business managers, and active Government support for investment.

Abundant resources

New Zealand has abundant water and arable land, and a temperate climate that supports sustainable food production. There is a stable supply of gas and electricity with up to 75 percent of all electricity generated from renewable hydro, geothermal and wind energy. This is supplemented by natural gas produced from local oil and gas fields, which is both exported and refined in-country to meet some domestic transport needs.

Exploration is encouraged in a transparent and pro-investment climate.

Transport and freight

New Zealand has world-class infrastructure across transport, logistics and telecommunications. Most major international airlines serve international airports in seven urban centres across New Zealand.

Over 30 global and regional shipping lines serve privately-run, deep-water ports at internationally competitive stevedoring costs.

The country also has an extensive road and rail transport system and efficient inter-island links.

The Maori economy

Assets owned by Maori are approaching $40 billion in value, and are growing as a new era of tribal cohesion, created in part by new leadership and by redress for historic injustices, is harnessed for economic potential.

Maori iwi (tribal) investors are characterised by long term horizons, social and cultural as well as economic purpose, and concern for the environmental and future consequences of economic activity.

Joint venture developments of natural resources between iwi and private sector investors are increasingly commonplace.

Banking

The Reserve Bank of New Zealand supervises New Zealand’s banking system; its main function being to implement Government monetary policy and to maintain financial stability. It also registers and supervises other banks.

The Bank’s monetary policy, defined by the Policy Target Agreement with the Government, is to maintain inflation at between 1 – 3 percent on average over the medium term.

New Zealand has an open door policy on bank registration. There are several major trading banks and numerous other banking institutions. Many big international banks are represented in New Zealand through agents or sales offices.

Sophisticated telecommunications

New Zealand’s telecommunications infrastructure includes international broadband submarine cable systems and competitive onshore mobile networks.

The Southern Cross cable alone delivers 240 Gbit/s of fully-protected bandwidth to the United States mainland, Hawaii, Australia and Fiji. As demand increases capacity can be doubled to 480Gbit/s.

The New Zealand Government has initiated a $1.5 billion programme partnering with the private sector to deliver fibre broadband capacity to New Zealand businesses, health institutions, schools and homes.

4G mobile networks are operating in New Zealand’s main centres, with the extension of coverage to the provincial areas to begin in 2015.