How has the last year been for the NZ co-op sector and for Co-op Business NZ?
Our government has taken a very different approach from other countries, by applying an elimination strategy. Only recently, there has been a move towards accepting Covid within our community as double vaccination rates of around 85% are achieved. Lockdown measures continue to disrupt, with many businesses unable to operate, in particular tourism and hospitality.
New Zealand co-operatives span a wide range of industries; agriculture, horticulture, retail, financial services, construction, services, and health. The majority have been classified as ‘essential services’ continuing to operate in some capacity over lockdowns. However, the impacts on their businesses are varied.
Even with extremely low levels of inflation, the cost of housing and food continues to rise. We are now seeing these costs being passed onto consumers. Interest rates are at historically low levels and given the limited ability to travel, there is significant investment into property leading to a boom in construction.
With our unemployed rate being at an all-time low of 3.8%, and the increased need for both low and highly skilled employees, labour shortages have risen.
We anticipate the country slowly reopening our borders and reduced restrictions in early 2022. However, the continuing variants are creating uncertainty.
This past year has seen a significant increase in groups looking to establish co-ops as a sustainable business model. And Cooperative Business NZ released research alongside PwC on the New Zealand co-operative economy. This has enabled conversations to take place with our government officials on the importance of these businesses to the economy and the need for proactive engagement to support their continued success.
What are your hopes for the future?
The future for co-operatives in New Zealand is bright. Fonterra, our major co-operative, has presented a capital restructure which will see the business refocusing on its co-operative roots, with closer alignment to the
co-operative principles. This sets a great example. Many members are once again proud to highlight their co-op status while others are seeing the opportunity to establish businesses leveraging the model.
There is significant work required to ensure better recognition of these businesses. The messages we are presenting to government and broader stakeholders focuses on how critical these businesses are to the economy, community and environment, and how they will be part of enabling us to move New Zealand away from a debt-fuelled economy, to enable us to rebuild post-Covid and respond to climate change.
We are looking to collaborate with government on opportunities to establish co-operatives in new areas such as housing. We need better education on the model, including professional advisors gaining a broader understanding of the model, and more consideration of the UN / ILO recommendations on supportive regulation.
A key to success will be the activation of a MOU with one of our leading tertiary institutes, Massey University, to enable the roll out of education on the model.
Co-operative Business NZ also sees our membership of the ICA, working alongside their subject matter experts, and the opportunity to engage with our broader network, as a key part of enabling change.
