New Zealand plans to ease regulations to attract foreign investment, Prime Minister Christopher Luxon announced on Thursday, as his centre-right government seeks to stimulate economic growth and create jobs.
The country’s economy entered a recession in Q3, with a sharper-than-expected decline in activity, potentially paving the way for additional interest rate cuts by the central bank.
In his annual state of the nation address, Luxon unveiled plans to establish Invest New Zealand, a division of the government’s international economic development agency, to serve as a one-stop hub for foreign investors.
“Modelled off the success of Ireland and Singapore, Invest New Zealand will roll out the welcome mat – streamlining the investment process and providing tailored support to foreign investors,” Luxon commented, adding that the initiative would help boost capital investment in sectors such as banking, fintech, transport, energy, and manufacturing.
“I want a country with more start-ups, more IPOs, more investment, higher incomes, and whole ecosystems of growth and innovation. I want the best ideas and the best investments from offshore making a difference here at home,” he said.
New Zealand’s central bank has reduced the official cash rate by 125 basis points since August, as inflation slowed but economic activity shrank. In November, the central bank indicated it expects to lower the rate by an additional 50 basis points at its meeting next month.
At the same time, the number of people leaving New Zealand reached record levels in the year leading up to November 2024, South China Morning Post reports.
Statistics New Zealand data released on Thursday revealed that 127,800 people left the country in the year to November, marking a 28% increase compared to the previous 12 months. This figure is provisionally the highest annual number of departures ever recorded.
The data also showed that over 50% of those leaving were New Zealand citizens.
Senior economist at Westpac, Michael Gordon noted that many people move to New Zealand for job opportunities, but when these opportunities diminish, they tend to leave.
“It’s about work opportunities, especially here [New Zealand] versus Australia. Australia’s economy is still running reasonably strongly. There are more opportunities over there now so we are seeing quite high outflows of Kiwis,” he said.
However, the outflow of people continues to be offset by inward migration.
Statistics New Zealand reported that net migration, the number of people moving to New Zealand permanently minus those leaving, stood at 30,600 in the year to November 2024. This is a significant drop from the peak of 135,700 recorded in the year ending October 2023.