The Government has asked the Productivity Commission to hold an inquiry into the resilience of the New Zealand economy to supply chain disruptions.
Finance minister Grant Robertson says the shock to the global economy over the last three years from the COVID pandemic “has been considerable”.
“While New Zealand’s supply chains have shown resilience, there are still challenges,” he says.
“This inquiry will identify ways to enhance the resilience of New Zealand’s economy to persistent medium-term supply chain disruptions.
“The commission will engage with stakeholders to select a definition of resilience appropriate to the inquiry, identify industry level supply chain vulnerabilities, and recommend policy responses that assist in anticipating, preparing for, responding to, recovering, and learning from these supply chain disruptions.
“The commission will work closely with other agencies that have existing work programmes underway in this area including the Ministry of Foreign Affairs and Trade, and the Ministry of Transport,” Robertson adds.
Drawing on the findings of the investigation the commission will develop evidence-based recommendations which aim for the following:
- Identify possible policy responses and interventions to support resilience, productivity and wellbeing
- Identify a framework for targeting support for firm, sector, and community resilience in response to particular vulnerabilities to supply chain disruptions
- Assess whether and how current policies address vulnerabilities and dependencies in global and domestic parts of export and import supply chains
- Assess whether and how resilience objectives are integrated into existing policies and, if necessary, recommend the development of additional initiatives
Earlier this year, transport minister Michael Wood launched a NZ freight and supply chain issues paper that outlines the main issues and opportunities for the sector in the coming decades.
The paper points to a range of challenges including climate change, to adopting new technology and shifting international geopolitics. The COVID-19 pandemic has also highlighted vulnerabilities in the supply chain and it is “unlikely the system will revert to how it was before the current disruption”, it says.
Road freight body Transporting NZ was critical of the proposals in its submission on the paper and urged the Government to “stick to its knitting” and keep its hands out of New Zealand’s supply chain.
The road freight body says government has a vital role to play in New Zealand’s transport sector, especially when it comes to being a regulator and infrastructure provider, but industry needs to get on with the rest.
In a July risk outlook survey conducted by Massey University’s supply chain management school, sluggish shipping, rising costs, and overworked staff were among some of the near-term pressures facing New Zealand’s supply chain.
That was according to feedback from 140 supply chain practitioners.
Respondents pointed to the continual impact of COVID-19 (especially in China), the war in Ukraine, inflation, stagnation, and emigration as major factors impacting current supply chains.
*Click here for more information about the Productivity Commission inquiry.
