New Zealand remains an attractive destination for global investors looking for a safe place for funds and a desirable lifestyle for their families, Nikko Asset Management head of bonds and currency Fergus McDonald says.
To prove his point, he provided the Otago Daily Times with a list of some of the more attractive aspects of the New Zealand economy as the All Blacks prepare to take on the Wallabies under the roof at Forsyth Barr Stadium tonight.
At the top of his list was GDP growth, the gold standard of economic growth, he said.
``Australia has not beaten our annual growth rate since we shot to 3.4% at the end of 2014.
``Admittedly, there were a couple of drawn quarters at the start of last year and our rate has since slowed to 2.5%. but Australia's 1.7% growth in the March quarter was its slowest rate since third-quarter 2009.''
Unemployment: New Zealand's unemployment fell to 4.8% in the June quarter, the lowest since December 2008. In Australia, unemployment in the same period remained steady at 5.6%, Mr McDonald said.
New Zealand Reserve Bank's current assistant governor, John McDermott, likes to describe inflation as a ``thief in your wallet'', in which case Australia had been living up to its penal roots with a second-quarter annual figure of 1.9% compared New Zealand's 1.7%.
The Budget: The Government's accounts were in the black, with a small surplus recorded this year and widening surpluses forecast in the years ahead, he said.
The talk among political parties was how best to spend, save or invest it. Australia, on the other hand, was battling to save a credit rating downgrade and, with favourable economic conditions, was not projected to return to a balanced budget before 2020-21.
Ease of doing business: In June, the World Bank ranked 190 countries on their ease of doing business. A high place meant the regulatory environment was more conducive to the starting and operating of a local business. New Zealand came first overall, thanks to top scores in areas such as starting a business, dealing with construction permits, registering a property, getting credit and protecting minority investors, he said. Australia was 15th.
Corruption: Transparency International had calculated a Corruption Perceptions Index each year since 1995, and in the latest result, New Zealand came first equal alongside Denmark for lack of corruption. Transparency International said this year's results ``highlight the connection between corruption and inequality, which feed off each other to create a vicious circle between corruption, unequal distribution of power in society, and unequal distribution of wealth''. Australia was 13th .
Competitiveness: In this year's Global Competitiveness Index put together by the World Economic Forum, New Zealand came 13th out of 138 countries, on the strength of its financial market development and institutions. Australia was 22nd.
Consumer confidence: In the latest ANZ-Roy Morgan Consumer Confidence survey, conducted on both sides of the Tasman, Kiwis recorded an average score of almost 126 so far this year versus 114 for the Aussies. A score over 100 meant optimists outnumbered pessimists.
Ninety-day rate: New Zealand's 90-day bank bill rate averaged 1.96% during July, while Australia's was 1.69%. That indicated interest rate levels in both countries and were at levels supporting economic growth, Mr McDonald said.
Equities: A simple analysis of the listed equity (share) markets suggested New Zealand companies were performing better than their Australian counterparts. The S&P NZX50 Gross Index return on common equity was 12.42% compared with 10.14% on the S&P ASX200.
Return on capital on the NZX is 7.94% compared to 3.87% on the ASX (as at August 4).
``The outperformance of NZ businesses may have something to do with New Zealand businesses having less competition than Australia, allowing firms to operate with wider profit margins.''
Quality of living: Auckland was third and Wellington 15th in Mercer's 2017 Quality of Living Ranking, which scored the world's best and worst cities after taking into account factors including the economic and political environment, infrastructure, public transport, health, recreation and housing. Sydney came 10th and Melbourne 16th .
Happiness: The World Happiness Report 2017, which ranked 155 countries by their happiness levels, placed New Zealand eighth, one ahead of Australia, apparently thanks to Kiwis' greater generosity.
Rain: One thing New Zealand consistently got more of was rain, meaning more green grass and less desert, he said.
More than 9000mm fell in Milford Sound last year - the most since 1929, the year of the Great Crash. Hopefully not an omen for global equity markets.
Tourism growth: Kiwis welcomed 3.6 million international visitors in the year to July - up 10.2%, year on year. Australia, meanwhile, let in 8.5 million in the year to June - giving a slightly lower annual growth of 8.9%. Per capita, New Zealand had double the ratio of tourists, at 0.76 versus 0.35.
Population growth: New Zealand's population growth in the year to June was 2.1% compared to Australia's 1.6% during 2016.
``Strong population growth tends to increase a country's economic growth rate and opportunities but often depresses per capital growth levels. This has been New Zealand's recent experience.''
Australia had attracted a strong level of migrants over many years, but the tables had turned with better employment prospects in New Zealand. On that last measure it was worth noting a major contributor to the current population growth was more people leaving Australia for the greener but damper shores of New Zealand.
``I note also that in Australian statistics for animal related deaths, there's no mention of wallabies being a danger to anybody. On this alone, a series victory to the All Blacks seems a near certainty,'' Mr McDonald said.
