Source: New Zealand Government
Good afternoon, I am pleased to be among so many of New Zealand’s business leaders – people who are driving innovation, creating jobs, and shaping the future of our economy.
Can I acknowledge Simon Bridges, Chief Executive of the Auckland Business Chamber and Rob Morrison, Chair of InvestNZ.
As the Minister for Trade and Investment, I want to talk about a powerful driver of economic growth: Foreign Direct Investment, and the bold new steps the Government is taking to unlock the full potential of greater investment into New Zealand.
Why Foreign Investment Matters
Trade is one of New Zealand’s great economic success stories.
It is a major engine for economic growth for this country. We are a globally significant exporter of primary produce. And we have built a comprehensive network of high-quality free trade and other agreements with countries and economic blocs.
This network of trade agreements helps make New Zealand an attractive destination for investment. Because producing goods in New Zealand provides almost unrivalled access to major overseas markets free of tariffs.
Yet while international trade is New Zealand’s strength, international investment is not.
As a percentage of GDP, New Zealand’s stock of Foreign Direct Investment, or FDI, amounts to 37% of GDP.
That compares to an OECD average of 53% of GDP.
Annual net inflows of FDI are 1.4% of GDP.
These figures put New Zealand in 27th and 31st place respectively out of 38 OECD countries.
For outwards FDI to other countries, New Zealand is 34th.
Chronically low levels of overseas investment have starved this country of capital for infrastructure and business. Quite simply, we need more capital.
Because surrounding our workers with more capital lifts productivity and wages.
Because lifting investment in small and medium businesses to expand production and adopt new technologies increases exports.
And because having multinational companies choose to put their headquarters in New Zealand, as they have in Ireland and many other small countries, increases prosperity.
New Zealand only has half the capital per hour worked as Australia and the United States, and 60 per cent less than Denmark. New Zealand’s low capital intensity helps explain why our productivity consistently lags other OECD countries.
While New Zealand has overachieved in trade, we lag other countries when it comes to investment.
History tells us this is not about size. When small countries adopt sound policies or change to more business-friendly regimes, foreign investment can pour in.
Here are three examples:
Starting in the early 1990s, Estonia lifted annual net flows of FDI from 5% of GDP to a high of 21% of GDP in 2005. Recent net FDI flows for Estonia remain high, averaging 8% of GDP over the past five years.
That compares to less than 2% for New Zealand over the same period.
Since 1993, Estonia’s stock of overseas investment relative to GDP increased about 8 times while real GDP per capita increased 11 times.
Over that same period, the Czech Republic increased its stock of FDI relative to GDP by 6 times and per capita GDP 8 times.
And between 1970 and 2023, Chile lifted its stock of FDI relative to GDP by around 16 times while per-capita GDP went up 14 times.
Of course, these countries achieved these remarkable results by moving from oppressive to business-friendly regimes. But what these examples show is that good policy is more important for investment than the size of a country or even its location.
Our Government is serious about attracting more overseas investment to New Zealand, and we are putting policies and structures in place to do this.
That’s why this Government established the first Minister for Trade and Investment.
That’s why this Government has made trade and investment one of its five pillars in our Going for Growth strategy.
That’s why this Government established InvestNZ.
Because if New Zealand is to attract more business investment from overseas, we need a clear plan and a dedicated agency to get out there and put this country on the radars of investors.
Driving more investment into New Zealand
As I said, this Government is serious about lifting investment into New Zealand and we have already made a series of changes to achieve this:
Our reforms to streamline the Active Investor Plus visa went live in April this year and have been highly successful with application rates increasing more than 10-fold.
Our changes to the Overseas Investment Act will streamline approvals for low-risk investments and introduce a single national interest test.
The Investment Boost Tax Incentive, announced in this year’s Budget, allows businesses to deduct 20% of the upfront cost of productive assets immediately. This deduction is open to any business and has already had a significant impact on investment.
And in April this year we made significant changes to Foreign Investment Fund rules so eligible investors –particularly new migrants and returning New Zealanders – will be able to use a new taxation method that taxes realised returns rather than estimated gains.
More high-growth businesses scaling globally;
More jobs and skills for New Zealanders;
More innovation commercialised; and, ultimately
A stronger, more resilient economy.
Rob Morrison as Chair, an investment banker and corporate leader with a distinguished international career in finance, governance, and sustainability
Carmel Fisher as Deputy Chair, who is a seasoned investment professional with over thirty years’ experience in New Zealand’s investment industry.
David Tapsell, a respected legal and governance professional with a career spanning law, Māori economic development, and corporate leadership.
Richard Hedley, an experienced private markets investor and non-executive director with over 25 years’ experience in global investment markets.
Mary MacLeod, a seasoned financial services executive with over two decades of international experience in investment banking and corporate strategy.
Ross George, a private equity leader with more than three decades’ experience supporting New Zealand businesses and institutional investors.
Private infrastructure;
Renewable Energy;
Data Infrastructure;
Digitisation and Artificial Intelligence;
Technology, which includes AgTech, MedTech, SpaceTech and FinTech; and
Advanced manufacturing and processing facilities.
Innovative food production;
Wood processing; and
Tourism.
Introducing Invest New Zealand
Our next step to drive more investment into New Zealand is to establish InvestNZ.
InvestNZ marks a step-change in how we attract and facilitate foreign investment to this country.
When we came into government, we moved quickly to design InvestNZ. We announced it in January this year. We passed legislation in June. InvestNZ began operations four days later on 1 July.
Its purpose is simple: get more investment into New Zealand. We will measure the success of InvestNZ by its ability to increase investment into New Zealand:
InvestNZ is not a government department, purposely. It is a Crown entity, and will employ a small group of highly skilled specialists with the international connections to get the attention of institutional investors and high net worth individuals overseas.
Their job will be to get out there, find global opportunities, build relationships with international investors, and ultimately see those efforts crystallise in the form of new investment into New Zealand.
InvestNZ is not an investment subsidy scheme. It will promote New Zealand to investors, then onboard those investors into New Zealand with tailored local support to help investors navigate regulations and make new connections here.
InvestNZ is based on successful models overseas, particularly the IDA, Ireland’s highly successful FDI agency.
Board announcement
I am pleased to announce the appointment of the inaugural board for InvestNZ.
The new board marks a shift from the establishment board to a permanent governance structure. Permanent board members are:
I am absolutely delighted that this high-powered group of individuals has agreed to join the board of InvestNZ. I am confident they will deliver the leadership needed to get results for New Zealand.
I also welcome the board’s announcement yesterday that they have appointed InvestNZ’s first Chief Executive, Robert Wall. Robert is an accomplished leader in investment and an outstanding appointment.
He has more than 20 years of experience in infrastructure and private markets. He was Senior Principal of Infrastructure at the Canada Pension Plan Investment Board, a Partner at Hermes Infrastructure, and most recently the Head of Sustainable Private Infrastructure at Lazard Asset Management.
I want to take this opportunity to thank the establishment board members Charles Finny and Catherine Savage for their service during the early stages of InvestNZ.
I also want to thank the members of the wider Ministerial Reference Group – Justin Murray, Jonty Edgar, and Matt Whineray, alongside Rob and Catherine, for their advice. Their deep expertise in global investment and governance was invaluable. Their engagement provided a solid foundation to establish InvestNZ and shape the direction of this new entity.
Can I also acknowledge the tireless efforts of officials in New Zealand Trade and Enterprise.
Further details on InvestNZ
I want to talk about how InvestNZ will work in practice, and why we have decided to take a different approach.
If we’re going to get more investment, we need a clear plan that targets efforts in certain areas.
In its first Statement of Intent, the InvestNZ Board has identified six target areas with the strong potential for growth:
In scale terms, InvestNZ will target investments in the range of $100M to $1 billion.
However, where opportunities for smaller-scale investments in the range of, say, $20 million which can be quickly realised and scaled then I anticipate InvestNZ will grab those opportunities.
InvestNZ will also act as a bridge for local investors, connecting domestic capital with high-value investment opportunities through the AIP scheme.
Finally, InvestNZ will advise the government on policy and regulatory settings to support New Zealand as a globally competitive place to invest. InvestNZ will become a knowledge hub, using its front-line experience working with actual and potential investors into New Zealand to help inform future policy changes to further lift investment.
I believe InvestNZ is a step-change for investment into New Zealand.
Launch of new prospectuses
Today, I am launching three new prospectuses by InvestNZ.
The prospectuses cover:
The purpose of these prospectuses is to draw investors’ attention to opportunities in areas where New Zealand has a competitive edge and a compelling growth story.
In each of these areas, New Zealand is an established leader and has the opportunity to shift from volume to value and adopt new technologies.
Conclusion
To conclude, for years investment into New Zealand has been harder than it should be. We’ve heard the feedback, and we get it.
New Zealanders have paid the price for limiting overseas investment.
InvestNZ is now five months into its mission to deliver a world-class experience for investors who want to invest in Kiwi businesses.
This dedicated agency sends a signal that New Zealand is open for business and we are committed to competing globally for new business in this country.
InvestNZ is a partnership between government and investors. Government cannot do this alone. Together, we can build a better investment ecosystem – one that showcases the best New Zealand can offer to the world.
I look forward to working with you as New Zealand takes our investment story to the world.
Thank you.
