29 September 2008

NZ third in world for economic freedom

New Zealand has once again retained its position as third in the world for economic freedom, according to the annual 'Economic Freedom of the World' report.

Following Hong Kong and Singapore, New Zealand remains ranked number three in the world for economic freedom by the Canada-based Fraser Institute, reports the National Business Review.  Zimbabwe came in last this year, sitting at the 141st spot.  The report is based on research and listing provided by independent institutions in 75 nations and territories, and uses 42 different measures to create an index based on personal choice, voluntary exchange, freedom to compete, and security of private property.

Economic freedom is assessed on the size of the government, the security of private property, access to legitimate money, freedom for international trade and regulation of business, labour and credit.

The research also shows that countries with more economic freedom have better quality of life, enjoy higher levels of prosperity, have greater individual freedom and longer life spans.

"Economic freedom is one of the key building blocks of the most prosperous nations around the world," institute Director of Trade and Globalisation Studies Fred McMahon said.

"Countries with high levels of economic freedom are those in which people enjoy high standards of living and personal freedoms. Countries at the bottom of the index face the opposite situation; their citizens are often mired in poverty, are governed by totalitarian regimes and have few if any, individual rights or freedoms," he added.

The United Kingdom was indexed at fifth on the list, followed by Chile, Canada, Australia and the United States.

Minister for Small Business Clayton Cosgrove announced this month New Zealand has remained the second best country in the world for ease of doing business and the top APEC member, according to the World Bank’s Doing Business 2009 survey.

Since the survey began, New Zealand has consistently ranked either one or two by the World Bank.  The survey takes into account how much of an effect government regulations have on businesses within 178 economies world-wide.  Mr Cosgrove said the results were testament to the Government’s attempts at keeping business processes simple and efficient.

"We have worked hard to minimise the amount of time business people spend on paperwork so they can focus on their businesses. Today’s number two ranking is an endorsement that our approach is working, and that this country is one of the most business friendly in the world," he said.

New Zealand also jumped from third first place for ease of starting a business.

"The average number of days to start a business in the OECD is 13.4 days while in New Zealand it takes approximately one hour. This is thanks to the cooperation between the Companies Office and Inland Revenue which means new businesses can be given their GST number at the same time as incorporating their company online - a major time saver for small businesses."
 
The Minister also pointed out that the tax on businesses is much less than their Australian counterparts and the OECD average; in Australia the total tax rate as a percentage of the profits is 50.3 per cent, which is 14.7 per cent higher than New Zealand businesses.

The Government is recruiting overseas entrepreneurs, investors and business owners to move to New Zealand and contribute to economic growth.  The New Zealand Business Visa category allows people such as these to apply for permanent business residence visas or temporary entry visas.  Temporary entry visas can lead to residence after several years of working in New Zealand.

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The New Zealand Visa Bureau is an independent consulting company specialising in helping people emigrate to New Zealand.

Article by Jessica Bird, New Zealand Visa Bureau.