Westpac New Zealand acting CEO Simon Power believes addressing educational standards and the economic under-performance of Māori and Pasifika people should be urgent priorities for New Zealand.
“Education is the engine room of the economy. Having a skilled an engaged population contributing to economic output as well as their own capability and capacity to change and adapt to different work environments — I just think is critical,” he says. “Any suggestion that we are falling behind in those areas should be right at the top of the list of things to be considered, simply because you don’t have a well mapped out future without education standards being where they need to be.”
Power says he worries that about future generations of New Zealanders being able to compete not just domestically but internationally. “We need to back ourselves for that.”
Power says it is not just at a university level but in the trades as well. “How we are thinking about those more hands-on contributions to productivity and keeping the economy running is such a critical thing to think about.
He says if the education system isn’t providing that opportunity to get ahead and earn more, then other parts of economy waiting on that participation slows, whether it is housing or whether it is increased economic activity or other variables. “Just having that intellectual and skill-based tool kit to contribute as well as to get ahead for your own wellbeing and benefit, I just think is so important.”
On October 16, Westpac will host an Apec event aimed at bringing together key thought leaders from New Zealand and the region to share pathways for inclusive prosperity and discuss how indigenous groups, government and businesses can work together to develop and nurture underrepresented parts of the economy.
Power said in the midst of the Delta outbreak it was important to think about not just about how Covid was creating an economic divide but a societal divide.
“You need to have a lens of thinking about not just economic disparity potentially increasing off the back of Covid, but also how much thinking is going on about it creating more of a societal divide as well.
“I’m not in the business of creating social policy but I would have thought that would need to be a focus which is why I indicated it.”
Power said all eyes were on the Delta outbreak at the moment which has proved hard to get under control in Australia.
“Vaccination rates fundamentally are the key to protecting individual’s health but also the economy. I can’t urge people strongly enough to get vaccinated.”
Power described the current outbreak as a set-back for New Zealand’s economy with the bank’s economists expecting GDP to fall in the September quarter before jumping back sharply in the December quarter.
“That is assuming the lockdown restrictions ease. The thing about Delta though is it could be a disruptive force over the next six months.”
He said businesses, including Westpac, would need to be adaptable and resilient.
“The way we are thinking about it is the Government has managed the recent outbreak ably. There is debate about how quickly the vaccines have rolled out. Our view would be the Government has got the big calls right at the right times.
“Yes, it is a worrying time for customers and those in sectors of the economy that are getting a double hit, particularly in Auckland. But our observation would be most of our customers have been much better prepared for this lockdown than last year.”
Westpac has had roughly 350 staff a day in its corporate sites during Level 3. The bank is also working with its vaccination partner Vitality Works to get clinics scheduled for Wellington and Christchurch to speed up their workers, and possibly their families, getting the jab. The Auckland clinic will get under way at Level 2.
Says Power: “We are doing everything we can as a responsible corporate to be helpful.”
Outside of the immediate lockdown issues, Westpac is also feeling the pressure from labour and talent shortages which are widespread across the business sector.
“This is very tricky. The opportunities to get talent in are very limited and particularly in very technical, technology, risk that kind of institutional end of the bank as well where you might normally attract offshore talent back. That has certainly had a noticeable impact on demand for those sorts of services in the domestic economy.”
Its customers were also expressing concern about their ability to access both talent and labour, he said.
Power said once Delta was under control again he believed the Government would turn its mind to addressing labour supply issues.
“I know from experience that is not easy in Government — I think they have got the big calls right at the right times — the next step will be the subtlety of working out the public policy position on a range of issues including labour across the broader economy.
“The economic response as opposed to the health response.”
Simon Power's top three issues
• Covid managment and vaccine roll out
• Labour and talent shortages
• Clear economic plan beyond Covid including productivity.