Introducing The New Zealand Initiative

For Prosperity. For Community. For New Zealand.

2

Executive DirectorIt is an exciting time to be leading The New Zealand Initiative. As the centre of global economic gravity is shifting to the East, great opportunities are available to New Zealand. With the right set of policies, we will be able to participate in the Asia-Pacific century.

New Zealand is well placed to provide the region’s rapidly growing consumer class with the products and services they need and want: from dairy protein to cutting-edge computer software; from milled timber to consulting services; from higher education to world-class tourist experiences.

By linking this country’s fortunes to the parts of the world experiencing the fastest economic growth, we as a country can change the lives of all New Zealanders for the better by creating jobs, lifting living standards, and raising the wealth of the nation as a whole.

The rapid rise of Asia also means a competitive challenge for us. As our neighbours in the wider region are fast developing their economies, we also need to improve our own country. New Zealand is a great country but we believe it could – and should – be even better:

• Our housing market has become unaffordable after decades of undersupply. As a result, young families are struggling to get a foot on the property ladder. The high cost of housing is also a burden on the wider economy, undermining our economic attractiveness as a country.

• According to the most recent international education rankings, we can no longer claim to have a top-performing schooling system. The situation is made worse by the fact that education performance is highly dependent on the socio-economic background of students. The system is failing to deliver a decent education to all Kiwi kids.

• Having opened our economy to trade and investment in the 1980s and 1990s, we have fallen behind international best practice. While other countries have intensified their economic integration, New Zealand has not kept pace with globalisation and its increasing connectivity. To make matters worse, populist campaigns against foreign ownership of land and resources have conveyed an impression that New Zealand was no longer open for business.

These are just some of the most pressing issues that have to be solved to keep New Zealand an attractive place to live, study, work and invest.

We believe that The New Zealand Initiative has a role to play in formulating ideas for a brighter future. By rigorous research, creative thinking and international benchmarking we can develop policies that will make New Zealand a better place.

With the help of New Zealand’s foremost business leaders, we hope to take the economic opportunity that is tantalisingly within our reach, and grasp it.

Please get in touch if you would like to find out more about the work we are doing, and how, with your support, we can improve the lives of all New Zealanders.

Dr Oliver HartwichExecutive Director

The New Zealand Initiative is a unique organisation, and not just by New Zealand standards. We are a non-partisan think tank that is a membership organisation; we are an association of business leaders that is also a research institute. We believe that these are not contradictions.

What sets us apart is that while most think tanks are only loosely affiliated with their donors, we take the opposite approach.

We are proud to have some of New Zealand’s highest profile business leaders among our members. It is a very diverse membership with a wide range of interests, experiences, and ideas. We are even more privileged because our members are as passionate about good public policy as we are.

Our members recognise, that as business leaders, they have a contribution to make to society that goes beyond running profitable and enterprising companies.

They know that think tanks play a role that universities or government departments cannot. These organisations are a voice from “outside the box” that can contribute new ideas to stale debates and tired political dogma.

By supporting an organisation that stands for independence, rigour and effectiveness in the development of social and economic policy, our members improve the prosperity and potential of all New Zealanders. This makes us a research institute with the backing of a powerful network that serves as our sounding board for good policy ideas.

At The New Zealand Initiative, we have the freedom to develop ideas without any strings attached. We can be bold and creative in our thinking, and we are keen to draw on resources and ideas from our peers around the globe.

Together, we are committed to developing policies that work for all New Zealanders, and we believe that promoting such policies will benefit all of our members. After all, what is good for New Zealand is good for business, and vice versa.

Most of all, though, we believe that our goals and values are similar – if not identical – to what most New Zealanders want to see achieved: a good education system; affordable housing; an open economy; a free and democratic society; the protection of our natural resources and heritage; sound public finances; and a stable currency.

Indeed, we have already made good progress towards this goal, playing a leading role in the debate surrounding education, foreign direct investment and housing, a platform that we seek to grow with your support.

Why? Because good policy matters, especially where it delivers better public services, a vibrant economy, and a stronger, more engaged society.

These goals are not business goals. They are not left-wing or right-wing goals. These are public policy objectives that almost all New Zealanders would agree with.

3

A partnership with a future

Every good think tank needs solid foundations. These are ours:

• Credibility: Our research is based on a sound theoretical framework and is peer-reviewed on a regular basis.

• Empirical evidence: Our recommendations are supported by empirical, and often international, evidence.

• Non-partisanship: We engage with political parties from across the spectrum.

• Independence: We are an organisation that promotes good public policy, not the interests of individual businesses or industries.

• Commitment to New Zealand: Members and staff of The New Zealand Initiative share the vision to build a better New Zealand. We believe in a prosperous, free and fair society with a competitive, open and dynamic economy.

4

A strong community The New Zealand Initiative is supported by some of the country’s leading business people, who head New Zealand’s most vibrant businesses. Our members come from various backgrounds and represent the New Zealand economy in all its diversity.

From agriculture to manufacturing, from consulting to banking, our far-ranging membership ensures that the Initiative takes a global view on the issues facing New Zealand. They understand that this country is not simply an isolated pair of islands in the South Pacific, but an active player in the Asia Pacific, and indeed, the global economy.

Together the members of The New Zealand Initiative form a network of high-profile individuals and firms, united by their vision of a thriving New Zealand, delivered through good public policy. Our members play a key role in determining the work we do, and evaluate our research outputs on a regular basis, but give us the arm’s length room to operate independently.

It is our individual members that fill our core idea with life: to be a public policy think tank supported by the business community.

Membership

Members’ meetings Once a quarter, our members meet for the Initiative’s regular gatherings. These events are a great opportunity to exchange experiences, ideas and observations about the state of the domestic and global economy.

We also invite prominent guest speakers from politics, academia, and the diplomatic corps to address the membership. Our meetings’ frank and thought-provoking discussions are conducted under Chatham House rules.

For the Initiative’s executive team, these regular exchanges with members are a way of keeping in touch with the concerns of the business community. They also enable the Initiative to receive feedback on research programmes and to run proposals for new projects past membership.

Acknowledging their busy schedules, our members are able to nominate delegates from their organisations if they are unable to attend the meetings themselves.

Annual retreat Each autumn, members gather for our annual retreat in Auckland. At this day-and-a-half conference, the Initiative discusses the work programme for the coming year. It is also a chance for members to meet the team of the New Zealand Initiative.

The retreat lets members engage directly with domestic and international guest speakers, leading politicians from both government and opposition, and of course, with each other.The lectures and working sessions are conducted in a collegial, relaxed atmosphere, removed from the day-to-day pressures of business. In this way, the retreat allows for in-depth discussions on the future of New Zealand and the direction of public policy.

Partners of members are invited to attend the retreat and the conference dinner.

Additional benefitsMembers of the Initiative have priority access to our highly sought after public and private events. In addition to our weekly Insights newsletter, they receive a monthly update from the Executive Director on the Initiative’s research and recent media activities. The Initiative also offers joint event hosting for international guest speakers to our members.

The economists and researchers on staff are also available free-of-charge to present the findings from our latest research projects, as well as our broader insights into the global and local economy, at members’ request. Our private and public briefings have been used by members to help shape the strategic thinking among some of the top companies and advisory firms active in New Zealand today.

Better education In an increasingly competitive world, it is well-recognised that the skills of a country’s population are one of the most important drivers of economic growth.

The foundation for those skills is laid early, which is why educational performance, even at an early stage, is a topic of great interest for students, parents, teachers, governments and the public at large.

New Zealand has traditionally had a good education system as gauged by international measures of student achievement, but that standing is starting to slip. The 15 year olds of 2012 were less adept in mathematics, reading, and science than their 2009 counterparts, and almost a quarter did not have the numeracy skills needed for entry into the workforce.

Empirical studies have shown that one of the most important determinants of education outcomes is the quality of teachers. These are the professionals who equip younger generations for the future, an important role that is often taken for granted and underappreciated in New Zealand.

Using our comparative methodology, this project seeks to lift the overall quality of New Zealand teachers by examining how the leading international education systems function, and exploring ways that their policies can be applied here.

5

Affordable housing House prices have monopolised the dinner table conversation in New Zealand like no other topic, and for good reason. Since the 1970s, house price inflation has become a fact of life, not just for those living in Auckland, but for the country as a whole.

Our series of research reports on the topic has shown how mismatched incentives at a local government level have created an anti-development bias. We also examined how overseas jurisdictions have delivered stable house prices, and made strong policy recommendations as to how to reform the market.

The success of our work can be measured in how the debate over the root cause of the affordability crisis has shifted from demand remedies to the wide acceptance that New Zealand simply does not build enough homes to house its growing population.

Our work is not done yet. We strive to create a housing market that is free to respond to the needs of the population, and we will continue to advocate for the policies that have been proven internationally to deliver long-term affordability.

Research priorities

An open economy New Zealand’s economy is small by global standards and highly dependent on international trade and capital flows. High levels of external debt are often singled out as a cause for concern.

The global financial crisis has heightened concerns about the speed with which debt inflows can dry up and reverse. It is, therefore, vital to ensure that New Zealand retains access to foreign direct capital and is attractive to foreign direct investment (FDI).

Unfortunately, the public debates on New Zealand’s economic links with the world are often driven by fear of foreigners buying up farmland, of New Zealanders becoming “tenants in their own country”, and similar populist elements.

The Initiative is reviewing New Zealand’s place in the global economy, and how open it is compared to similarly sized countries. We will also determine what measures need to be taken in order to ensure that New Zealand remains an attractive investment destination.

Our research considers the costs and benefits of overseas ownership in general and to New Zealand in particular. This includes researching employment and prosperity effects of FDI in New Zealand.

To prosper in a globalised world, New Zealand needs to reassess its overseas ownership regime. Our research provides a basis for such a review.

6

The New Zealand Initiative holds a full calendar of events throughout the year to promote debate, disseminate ideas, and connect with interested parties and supporters.

Our events include policy discussion forums, conferences, and debates. We also organise outreach activities with secondary schools, universities and young professionals.

Initiative@homeInitiative@home is a series of events hosted at the Initiative’s office in Wellington. Initiative staff and visiting lecturers present the results of their latest research findings to a small and often highly knowledgeable audience.

Recent events were held to launch the latest research reports on education and housing. We have also played host to experts such as professors Sinclair Davidson and Justus Haucap, who respectively explored the merits of the mixed ownership model and the consequences of bad policy.

Apart from stimulating talks, Initiative@home events are a fantastic place for professional networking and informal conversations with policy analysts, business people, politicians, and other engaged parties.

Events

Next Generation Debates The Next Generation Debates competition is a national university debating tournament, sponsored by the Friedlander Foundation. The goal of the series is to encourage young people to become more involved in the policy issues facing New Zealand today.

Preliminary debates are hosted by secondary schools in Wellington and Auckland. The semi-final and grand-final debates are staged at evening events for young professionals and students. The final debates are followed by an expert panel discussion and lively Q&A sessions. The series has become one of the fixtures in New Zealand’s debating calendar and is a great way of exposing the next generation to the work of The New Zealand Initiative.

PartnershipsThe New Zealand Initiative also partners with other organisations and peak bodies where our strategic objectives align. For example, we produced a paper and co-hosted an event with Local Government New Zealand, which featured Finance Minister Bill English and Swiss Ambassador Dr Marion Weichelt Krupski as part of a public discussion panel on the important of councils in the policy landscape.

The Miro SummitThe Miro Summit is a bi-annual conference for emerging business leaders. Named after the miro trees, it offers the perfect symbolism for such an event of prospective CEOs – miro trees grow fast and tall; the adult plants protect the young ones; and they blossom in Auckland around September – just where and when we hold the Initiative’s Miro Summit.

Over a day and a half, delegates at the Miro Summit hear from public policy and business experts, international guest speakers, and members of parliament about topical economic developments and business specific issues.

Examples of speakers at the Miro Summit include John Crawford of Treasury, Ross Young from Google, Alex Turnbull from Fonterra and various members of parliament.

The conference provides for ample networking opportunities and introduces the likely next generation of top New Zealand business people to The New Zealand Initiative.

Policy Forums The Initiative occasionally hosts larger events with prominent international speakers. Past lecturers include former IMF Director Vito Tanzi, international finance expert Satyajit Das, China expert John Lee, and British regulations expert Richard Hooper CBE.

Policy Forums are held in Auckland and Wellington and are often presented in cooperation with member firms. They are open to the public and generate considerable media interest.

The goal of The New Zealand Initiative is to change the course of public debates and inject new ideas into the political discourse. An effective communications strategy is vital, and media activities are an essential part of our work.

We aim to inform policymakers and opinion leaders, the business community, academic experts, and indeed the public at large. We believe that good policy concerns everybody and that this country needs open debates to shape its future.

The Initiative’s researchers regularly write for national and international publications and newspapers to promote the findings in our research, and produce weekly columns for the NBR, the Business Spectator and Stuff.co.nz.

We also have an established presence in print, online and on radio and television, where we regularly provide expert

commentary and insight into the major policy and economic issues of the day.

The New Zealand Initiative also interacts directly with a nearly 4,000 strong audience on a weekly basis through our Insights newsletter. Published at noon on a Friday, it provides comment pieces on domestic and global policy issues and the state of the world. It is a serious newsletter fitting of a think tank, yet light-hearted enough for an enjoyable Friday afternoon read.

Our reach also extends across new media platforms, where we engage in a policy-focused discussion with our followers on Facebook, Twitter and YouTube.

And, of course, there is our website, which showcases all our research output, tracks our activity in the media space, and incorporates the work of our predecessor organisations The New Zealand Institute and the Business Roundtable.

7

Our reach and influence

Level 12, Bayleys Building36 Brandon Street

PO Box 10147Wellington 6143

New Zealand

+64 4 499 0790info@nzinitiative.org.nz,www.nzinitiative.org.nz

For Prosperity. For Community. For New Zealand.

All publications are available for

download at www.nzinitiative.org.nz