Foreign investment essential for New Zealand

08 April 2016

A report for ExportNZ.

Foreign investment is needed to grow New Zealand exports and jobs, according to a new report.

Foreign Direct Investment in New Zealand, commissioned by ExportNZ and authored by economic consultancy NZIER, says foreign investment is essential to help New Zealand businesses maintain and improve their international competitiveness. The report says more, not less, foreign investment is needed for economic growth, regional development and job opportunities.

ExportNZ Executive Director Catherine Beard said more foreign direct investment (FDI) was required to support distribution channels into new markets to enable New Zealand businesses to remain connected to international supply chains.

Catherine Beard said foreign investment was also important for job growth.

“Today one in five New Zealanders works in a firm that is part-funded by FDI.  New Zealand firms part-funded by foreign investment tend to grow faster and pay higher wages than firms with no foreign investment.”

NZIER Deputy Chief Executive John Ballingall said foreign investment helped unlock business opportunities and encouraged productivity improvements. 

“Maintaining an open foreign investment regime is crucial for New Zealand in a global marketplace that competes aggressively for funds. 

“By being connected and integrated with other economies through FDI flows and sending positive signals that New Zealand is open for business under a sensible investment regime, we can reduce the risk premium associated with investing in New Zealand.”

The report shows that most foreign investment in New Zealand comes from long-term trading partners.  Currently 52 percent comes from Australia, 8 percent from the US, 5 percent from the UK, and 0.7 percent from China.

The report includes case studies of two New Zealand businesses that have been able to grow profits and jobs through business development funded by foreign investment.