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When it comes to sport, New Zealand tends to punch above its weight on the world stage. But, what’s our win rate on infrastructure projects? Infrastructure is the backbone of our entire economy, yet we underperform on delivering and maintaining our most essential facilities and systems.

The civil construction industry has been hammered over the past two years. How can business owners escape this trap?

Considering buying a commercial property in the next two years? By getting your ducks in a row early, you could save yourself hundreds of thousands of dollars. That was the message from the experts who spoke at a recent panel event, hosted by ANZ in Christchurch.

Our tax and industry experts have cut through the noise to focus on the most significant announcements in Budget 2025, and reveal what they mean for your business.

The 2024 financial year has been characterised by significant challenges and an economy in recession, however, businesses are beginning to see glimmers of hope on the horizon.

This year has been a tough one for many industries. The pain has been widespread, so many business leaders are reassessing their operations. They’re asking: What’s working and what needs to be improved? How can we increase productivity? Can we use AI to overcome challenges? And is it time to develop new products or services, or refine existing ones?

The recent EBOSS Builder Sentiment Report reveals a stark outlook for New Zealand's property sector. According to the report, 70% of builders anticipate a decline in building activity over the next 12 months, with 62% of respondents citing the current economic climate as a significant concern in the residential market. This widespread pessimism underscores the urgent need for targeted interventions to stabilise the industry and prevent further decline. If left unaddressed, this negative sentiment risks not only stalling the construction of much-needed residential dwellings but it could also prompt a potential exodus of skilled tradespeople seeking opportunities abroad. As one respondent in the report noted, "The lack of certainty is pushing good people out of the industry," highlighting the immediate need for solutions that can restore confidence and retain talent. Why Build to Rent? Build to Rent (BTR) offers a unique opportunity to address two pressing issues simultaneously: the shortage of affordable housing and the current lull in construction demand. The EBOSS report identifies a "softening market" as a major challenge, with the majority of builders expecting fewer new builds in the coming year. BTR developments, which involve constructing residential properties specifically for long-term rental, can provide a steady stream of quality housing for New Zealanders while keeping the construction sector active. However, the economic conditions and prevailing uncertainty have made New Zealand less attractive to institutional investors who might fund these large-scale projects. By introducing targeted incentives, such as rebates on qualifying BTR expenditures or tax breaks for large-scale residential developments, the Government could significantly improve the financial viability of these projects. This would not only attract much-needed investment but also ensure that the building sector remains engaged, even during periods of economic downturn. Preventing a talent drain The EBOSS report notes 45% of builders are considering reducing staff numbers, a move that could lead to a significant drain of expertise from the industry. If domestic opportunities continue to dwindle, there is a real danger our most qualified and experienced workers will seek employment overseas, leaving New Zealand ill-prepared to meet future demand when economic conditions eventually normalise. By incentivising BTR projects, the Government can help maintain a robust pipeline of work for builders and tradespeople. This, in turn, will keep our skilled workforce engaged and prevent a depletion of expertise that could otherwise take years to recover from. The long-term nature of BTR projects means that once established, these developments will continue to generate employment and economic activity, creating a more resilient property sector overall. The challenges facing New Zealand's property sector are significant, but they are not insurmountable. The EBOSS Builder Sentiment Report clearly illustrates the depth of concern within the industry. By taking a proactive approach and implementing targeted incentives, the Government can help steer the industry through this period of uncertainty. Incentivising Build to Rent projects represents a strategic investment in the future of both our housing market and our construction workforce. It is a solution that not only addresses immediate concerns but also lays the foundation for a more stable and prosperous property sector in the years to come.

We are living through a time of economic volatility, geopolitical tension and a mental health epidemic – all set against the gloomy backdrop of climate change. It feels like there are enough fires to fight every day without worrying about some distant future that we can’t possibly predict.

“It feels like sales are falling off a cliff” - or words to that effect – are an all-too-common occurrence in a business community battling high costs as households continue to tighten the purse strings. If you’re experiencing stagnant or declining sales, there are some practical steps you can take to help your business stay the course during tough economic times. The following tips will not only help you navigate a downturn, they’re also part of good hygiene practices you should revisit on a regular basis to improve your business’s performance and build resilience throughout your organisation.

It’s been a tough year for local food and beverage manufacturers. Shoppers have cut their retail spending to cope with a rising cost of living and higher interest rates. Per capita retail spending has been falling since January, in tandem with a weakening labour market and rising unemployment.

A bold long term tax strategy is a key driver to solving New Zealand’s infrastructure woes. Murray Brewer analyses Budget 2024 to see if the Government delivered the fresh thinking needed to achieve future success instead short term cost savings.

Major public sector agencies have been instrumental in driving lasting benefit through strategic procurement and broader outcomes. Think hydro dams, railways and hospitals built by the previous generation. This approach has lifted the quality and resilience of public services, the capability of a range of suppliers and also set a precedent for addressing the burgeoning issue of infrastructure technical debt.

Grant Thornton New Zealand’s latest survey of over 200 business leaders and decision makers has revealed a significant uptick in optimism for the coming year despite many toughing it out in current economic conditions.

The world of cryptocurrency saw more controversy this year with NFT markets collapsing, Sam Bankman-Fried being found guilty of a range of charges that could land him in prison for over 115 years, and Binance - the world’s largest exchange - agreeing to one of the biggest settlements in US history after violating anti-money laws and sanctions violations, by allowing terrorist groups to trade on its platform. And so cryptocurrency’s renaissance begins … Despite all the negativity, most cryptocurrency markets are up year on year in terms of price appreciation. This could be for a variety of reasons - speculation, artificial unregulated markets, or the maturity of the cryptocurrency industry increasing the confidence in the underlying asset. One element fuelling the fire of cryptocurrency markets is institutions looking to create financial products that allow traditional investors to get a piece of the virtual currency pie. Some of these include cryptocurrency spot exchange-traded funds (ETFs) or even the ability to gain crypto exposure in KiwiSaver. A cryptocurrency spot ETF is a type of investment fund designed to directly track the price of digital currencies like Bitcoin for example. It is a regulated and stock exchange-traded product, which means it is subject to oversight by regulatory authorities. In the U.S. this is the Securities and Exchange Commission (SEC), and would be the Financial Markets authority (FMA) if such a product was ever to launch on the NZX. Spot ETFs are typically structured to hold actual cryptocurrency, and investors buy and sell shares of the ETF which should mimic the spot prices of the cryptocurrency. Other opportunities already exist for New Zealand investors with the highest-performing KiwiSaver in terms of short-term (last 12 months) returns through Kouras’s Carbon Neutral Cryptocurrency Fund, with a one-year return of 66.52%. This fund invests in institutional investments that have direct bitcoin exposure. Allowing KiwiSaver investors to put up to 10% of their portfolio into this. It is definitely for those with a more aggressive growth strategy with the fund's Statement of Investment Policy and Objectives (SIPO) outlining the fund “is only appropriate for investors that have a very long investment horizon and who are willing and able to withstand significant volatility. The Fund is expected to deliver a 50% loss every 1-2 years.” While these developments demonstrate how the industry is maturing, this evolution contradicts the founding principle of cryptocurrency: decentralisation. Bitcoin and other digital currencies were never intended to become investment assets sold on a stock exchange, unlike these newer products which rely on centralised institutions controlling and holding large amounts of cryptocurrency. It’s time to start regulating the renaissance All of this points to a growing imperative for regulatory intervention. A hybrid strategy is being explored by The Reserve Bank of New Zealand (RBNZ) to impose regulations on products that inherently have a lack of regulatory oversight. It has proposed a regulatory approach for the opportunities and challenges of new forms of private money like crypto assets. Having experienced the challenges of a deregulated market during our work liquidating failed exchanges like Cryptopia and our views about stablecoins (a type of cryptocurrency), Grant Thornton New Zealand submitted an alternative approach in a submission to RBNZ. Our perspectives recognise the potential significance to private money that stablecoins could have in the current financial landscape. Having seen the wild west of cryptocurrency, we remain advocates of the potential benefits of Distributed Ledger Technology (DLT) to revolutionise the financial industry. To advance products based on this technology, there is a need for robust regulation and risk management to protect New Zealand's monetary sovereignty, and to maintain trust in the global monetary system. Given the global nature of cryptocurrency, we believe that a coordinated, international approach is necessary to effectively address these risks. On 30 June 2023, RBNZ published the outcome of its public consultation. The submissions reinforced RBNZ’s view that there are significant risks and opportunities with treating virtual assets as money. They have now decided against proposing a regulatory response at this point in time. Another reason outlined for taking a cautious approach lies in regulatory developments globally. There is likely to be real advantages to aligning crypto asset regulation throughout the world. As various overseas regimes are implemented, best practice for regulating crypto assets may become clearer. This was reflected in our submission which stated the limited adoption of these new forms of private money including cryptocurrency means it is too early to develop a robust and futureproof approach to capture all potential risks associated with a new form of private money. The UK is signalling they intend to regulate crypto activities in 2024 through formal legislation. Australia is currently running a consultation process for making crypto exchanges and digital asset platforms subject to its existing financial services laws; this will require platform operators to obtain an Australian Financial Services Licence. These developments mean the RBNZ may be forced to change tactics and follow global changes. In the meantime, we will have to see what 2024 brings in the world of cryptocurrency.

Here comes the new year, and it would be lovely to think 2024 will be smooth sailing compared to the past three years. Unfortunately, that’s almost certainly not going to be the case. Instead, volatility will continue to reign as the pace of change only speeds up. Reflecting on 2023, most would agree it was a tough year, and those challenges are not going to disappear over the Christmas holidays. Businesses will continue to face cost pressures, high interest rates and staff issues in 2024. The world has fundamentally changed since the pandemic; buying patterns, financing, and technology have all been transformed. As a business decision-maker, not only do you need to get your head around our new economy, you need to do it while also tackling whatever new hurdles are thrown in your path. How can you help your business survive and thrive in 2024? The answer is simple: you must be ruthless. Start by building resilience When the economic landscape is in permacrisis, it’s essential to make your business as resilient as possible. To make sure you can ride the wave in 2024, you need to ensure your cashflow is reliable and predictable, and you must manage your costs. Look ruthlessly at your spending and outgoings to find efficiencies, while tightening your terms, invoicing and debt management processes to improve cashflow. The key is knowing what your cashflow is. Let go of underperforming products and services Cost-benefit analysis is valuable here as you decide what to let go. Crunch the numbers and identify parts of the business that aren’t providing strong and reliable profits, both historically and into the future. Ask yourself tough questions about those underperforming strands: ‘Why am I continuing to sell this product or service? Is it dying and do I just need to cut it out? Am I continuing to serve legacy customers because it’s in my comfort zone or I feel an allegiance to the past? Will I get a better return by investing the same amount of time and energy on something else?’ Cut out your D clients The Pareto principle, aka the 80-20 rule, says that 80% of your profits will come from 20% of your clients. Most businesses find this principle applies. This is an old exercise but an effective one: look at your client list and grade each one from A to D. Your A clients are the most profitable ones who are the best to deal with, and your D clients are the lowest-value, most headache-inducing to work with. It’s time to cut out your D clients and focus your energy on keeping, growing, and finding new A grade clients. Jettison outdated stock After the inventory rollercoaster of 2020 and 2021, some businesses are still sitting on outdated stock. Sell it if you can, provided you don’t cannibalise your own clients. In other words, don’t sell a cheap old item to a client who might otherwise buy a profitable new item. Instead, try to sell it to a market you’re not involved with. One of my clients was able to shift a huge amount of product to a dollar store, preventing the business from undermining itself. Otherwise, look for a way to give the stock away, or even better - recycle it if you can. Take legacy technology off life support Legacy technology is a drag on any business. We see it in government departments and large businesses, where slow, patchwork systems take hours to complete tasks that could happen almost instantly with up-to-date tech. Getting rid of desktops and landlines, and moving to the cloud, makes your business more resilient and cuts ongoing maintenance costs. Get the experts in to help your business transition to the cloud in a way that will work for your organisation – you should be able to find some significant efficiencies. Embrace AI The point of making all these cuts and cost savings is not only to boost your profitability and resilience. It will also free up funds so your business can be ready for the future, because any company not embracing AI will be left behind. As the pace of change increases, firms that embrace change, and have the knowledge and information to handle it, will accelerate their growth. Firms that keep doing what they’ve always done will start to fall behind. Eventually the gap between non-adopters and their AI-savvy competitors will become too wide to bridge, and the non-adopters will drop away. There will be some high-profile receiverships, but in general these failures won’t happen with a big bang. It will be death by a thousand cuts as small operators decide they’re too tired to keep fighting fires, decline to renew their leases, and let their companies wither away. Open that window of opportunity Skills shortages are already on the horizon for many industries, including accounting where the number of graduates is down by 40%. Overall university enrolment in New Zealand fell in 2022, in line with Australia and the USA which have also seen lower post-pandemic enrolment levels. When there are too few people to do the work, technology is filling the gap. We’ve seen this in our own horticulture industry, for example, where automation is being developed to pick fruit so we don’t need to rely on itinerant workers. And automation is much easier to apply to repetitive data-driven tasks – it will take over many of the drudgework elements of traditional roles undertaken by accountants, lawyers, managers or human resources. With the dreariest parts of the job outsourced, your business will be more efficient, and you and your team can concentrate on the kind of problem solving that needs a human brain - unlock that potential! Find accelerator opportunities The opportunities for innovative accelerators will be massive. Right now, as we head into 2024, we have a window of opportunity. This is the time to make change and prepare for a fast-changing future. By being ruthless now, you can set up your business to seize these opportunities when they appear. You can redivert resources to allow you to invest in technology so you’re better prepared for change and more resilient to challenges. The choice is stark when considering the outcomes. If you do nothing, your business will suffer and potentially dwindle away. But by changing the way you operate, you can become one of the accelerators, dominating in your niche and leaving your competitors behind. There is no middle ground.

Post-election 2023, can we expect to see our newly formed Government acting on their campaign cries of supporting a “health system that’s in crisis”? Or is it time for the industry to more actively participate in its own rescue? Either way, the time for action was yesterday – today, we are at risk of the state of our healthcare system being treated as business as usual. So, apart from healthcare professionals working in a perpetual crisis that’s stymying innovation, as well as the time and energy they need to truly transform the sector – what else is holding the primary healthcare sector back from change? A recent report issued in August 2023, Lifeline for Health, Meeting New Zealand’s need for General Practitioners, by Emeritus Professor Des Gorman and Dr Murray Horn, suggests the solution lies in transforming funding models. The authors’ comments about primary care being funded on an activity-based model resonated the greatest with me. The cries for additional funding across the healthcare system have been heard loud and clear, with more than enough evidence to justify this. However, if more money is tagged to more activity, how does a healthcare system already stretched from a human resource point of view improve outcomes – or the wellbeing of our healthcare professionals - by engaging in more activity? The report suggests behaviours and outcomes barely differ between a capitated funding system versus a fee-for-service model that previously existed in New Zealand, thereby challenging future health ministers to be bold and innovative. The report’s authors recommend, ‘the “health system” must focus more on outcomes and value.’ They also acknowledge this would mean a reduced rate of investment in hospitals and hospital care, while focussing more funding on primary care. This makes perfect sense - investment in prevention and early detection of major illness will require less hospital funding for a healthy, well-looked after nation. Prevention is less expensive than the cure. And, General Practitioners can take heart, as the report reiterates the importance of the role of good primary care in a well-functioning health system, re-affirming their role as ‘specialists’. The sector needs to support and financially incentivise specialist GPs to be the architects of their future and lead an innovative, sustained transformation. They need to be empowered to focus their expertise and efforts on improving health outcomes in the long term, rather than being underpinned by a ‘fee for service’ system that leads to more activity, stretched resources and poorer health outcomes for Kiwis. A quick look back at history History tells us drastic overhauls of public systems are achievable. In the 1990’s our accident compensation system was facing a crisis. The looming tail of investment required to fund both current claims in any one year, plus the ongoing funding required for historical claims was becoming unsustainable. The system was in dire need of transformation and many thought it could not be done. Despite the stop-start process of privatisation - and unravelling of privatisation - and a blowout in debt in the next decade, strident efforts to manage claims better on a fully funded model, coupled with the prudent investment of funds, ACC turned its fortunes around to become one of the largest investment funds in the country. No system supporting health will be completely perfect, but as with ACC, if hard calls are made, it can be turned around to deliver better outcomes. Time to be bold, not just tinker around the edges To date successive governments haven’t attempted to offer truly revolutionary solutions such as social insurance models which could be the way out of the current dilemma. Social insurance schemes such as those established in Switzerland, France, and the Netherlands, focus on funding for the long term. The fear in New Zealand in the past when these schemes have been suggested, is that it is a move to privatising the health system. However, the reality is, the majority of primary healthcare services here in New Zealand are already delivered by private providers. This leaves the current financial risks associated with funding primary care sitting with the private sector, which will only encourage primary providers to vote with their feet; and when the financial viability of their business is declining, difficult decisions will be made that will impact many communities. In the meantime, let’s harvest the low hanging fruit The new Government’s promises to establish a third medical school, increase medical placements at Otago University, establish satellite training centres in regional areas, and training alliances to deliver more doctors to rural parts of the country are all welcome. Those promises need to be followed up with a more structured process for managing the careers of those trainees to ensure that they do stay in New Zealand. We need to incentivise over 50% of current trainees to commit to working in general practice in the longer term, if the current primary care workforce is to be maintained, let alone grow to accommodate future population growth. If the new Government follows through on its partial student loan repayment and bonding plans for midwives and nurses, it is at least starting to show a commitment to help build up the primary care workforce.