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October 10th, 2000

An open letter to Ms. Helen Clark, The Prime Minister of New Zealand:

In the past ten days three situations occurred which have left me wondering what is happening in New Zealand under your governance. First, three intelligent, educated, New Zealanders, all in their 30’s approached me for jobs in my U.S.A. businesses. I then had an export opportunity squashed by the Dairy Board and finally, the NZ dollar fell below 40 cents.

As a New Zealand citizen who left God’s Zone in 1980 for academic and employment opportunities in the United States, it pains me to see what is happening to New Zealand, and its economy.

There are many things the country has no control over. Oil prices, and the weather come to mind. However many things are within your control and I feel the country is at a cross roads with the dollar falling below 40 cents to the US dollar for the first time.

New Zealand has so many positive things going for it. None of which, from my perspective have been exploited to their potential:

  1. The first major developed country to start the business day.

  2. A generally well educated, English speaking population with high levels of telecommunications and computer literacy.

  3. A beautiful country with amazing scenery, and tourism opportunities.

  4. A restrained legal system that does not encourage contingency litigation.

  5. A country with a tremendously positive image abroad, of both its people and countryside.

  6. The internet now allows trade without barriers to distance and time zones, with minimal transaction costs.

  7. Natural resources, most especially fresh water in abundance.

My investment in New Zealand is varied. I have not abandoned the country but you should understand the depth of my frustration. I am writing this letter to you of my own accord and expense. I have also tried in a small way to repay my country. I support New Zealand sport by sponsoring a full time position for a swim coach in Cromwell. I have property development in Central Otago, and investments in a number of New Zealand public companies. My companies employ a number of New Zealanders directly and indirectly.

Recently I contacted the senior executive of the marketing arm of the New Zealand Dairy Board in the US concerning investment in a cheese factory for export of specialty cheese to the US. I quickly discovered that the Dairy Board was not even interested in meeting me or in any assistance or opportunity for additional sales of specialty cheeses in the US.

The issues that need to be addressed in my mind are as follows:

  1. Should the country still use a discredited model for distribution of its primary produce – based on the mistaken belief that a quasi government agency will protect producers from under cutting each other?

  2. With a tax rate of 39% and GST of 12.5% on consumption, is there any incentive for young talented New Zealanders to hang around? Many have found they can leave the country and pay off their student loans with income from the US or UK. What incentive is there for them to return? Please refer to the full page ad in the Herald last Thursday from Richard Poole.

  3. The New Zealand Stock Exchange index is much the same as it was 13 years ago.

  4. New Zealanders have to realize there are no entitlements. You have to earn what you spend. There are consequences to spending more than you earn. New Zealanders can no longer afford to have a third of the population on some form of government hand out. New Zealanders cannot whine and complain, about what others are or are not doing, if you want change, you have to make it happen. Government action is not the only solution, but its actions do affect international opinion, shapes the New Zealand brand and reputation and as a result influences investment decisions.

The changes required are ones of attitude and perspective, not necessarily financial.

The government should be leading the way. Petty bickering and politicking do not improve relations with the international investment community. Capital is mobile. Money doesn’t have to stay in New Zealand, it can find a home in many other economies. And it is doing that right now.

I am not advocating financial incentives, nor handouts for business from the government. Neither do I endorse a totally hands off or laissez-faire approach by government. But business confidence is critical to leading consumer confidence out of the doldrums. The government impacts that confidence.

You have two choices.

  1. You can ignore these comments and write them off as the ill-informed opinion of an outsider.

  2. You can lead policy changes that make the country more accessible to investment capital and innovation and retain the countries most valuable asset – its talent.

You are losing my confidence. But then you may not care. If you do care, which choice will you make?

 


 John M Carr
 San Antonio, Texas
 john@carr.co.nz


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 Related Links
New Zealand Herald Online - Brain drain debate escalates (09.10.2000 07:30)
New Zealand Herald Online - Clark dismisses latest attack on economy (09.10.2000 16:25)
New Zealand Herald Online - US-based critic of economy has lots more to say (10.10.2000)
 

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