He Pānui – Te Tui – Hōtoke 2015 | KPMG | NZ

He Pānui – Te Tui – Hōtoke 2015

He Pānui – Te Tui – Hōtoke 2015

Whakarongo ake au ki te tangi ā te manu Tui, tui, tuituia Tuia i runga, tuia i raro, tuia i roto, tuia i waho Tuia te here tangata Ka rongo te pō! Ka rongo te ao! Tui, tuituia Tuia te muka tangata i takea mai i Hawaiki-nui, Hawaiki-roa, Hawaiki-pāmamao Te hono i wairua Ki te whai ao Ki te ao marama Tihei mauri ora!

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E TE IWI TĒNĀ KOUTOU KATOA

As we ponder the current status of our country, it’s hard not to think about the opportunity for Māori to change the game, not only for them but for the benefit of the country. The reality is that the world is heading to where Māori already are and so the time is right for us to secure this advantage.
 
But to capitalise on this unprecedented rate of change, we are now forced to consider the broader context in which we operate. Global megatrends are major forces shaping the future of the world and are expected to have relevance for at least the next 20 years. In this, our inaugural issue of Te Tui – our quarterly newsletter – we summarise one of these megatrends, demographics, and what we should think about as we enact our dreams. We’ll look at what KPMG is doing as our contribution to effecting change on the ground and what could be done to help grow the engine of the New Zealand economy, the SME sector.

EFFECTING CHANGE ON THE GROUND

Corporate social responsibility and corporate citizenship are gaining higher profiles in the business community. The motivations vary from recognition that it is simply the right thing to do through to highly personal reasons of business leaders on their own journey wanting to “give back”.
 
While the terminology is different, many Māori collective entities have been practicing this concept for as long as they have been able to. For years, as long as financial performance has allowed (and sometimes when it hasn’t!), they have invested funds in programmes that have non-commercial benefits. It’s fair to say that here in Aotearoa, Māori have led in this area and it’s one we are really pleased to follow. Our commitment to fuelling New Zealand’s prosperity extends beyond our clients and into the communities in which we serve and it’s been our privilege to work alongside such passionate community leaders on those things that truly matter at the heart of our society.
 
Nationally we have focused our support on disadvantaged youth through projects focusing on education and leadership. One of the initiatives that we have been involved with, alongside other partners including Te Tumu Paeroa, has been the Mt Albert Grammar School farm redevelopment. With a looming skills shortage in the primary sector, this provides an opportunity for rangatahi to have access to a world-class education and experience a cutting-edge agricultural facility, ironically in the city.

 
The cornerstone of our community involvement is our partnership programme between our offices and local low decile schools. These partnerships take many different forms and includes Board roles, fundraising and donations, Christmas gifts, help at sports days, school camps and excursions, donations of IT and office equipment, volunteering at breakfast clubs, mentoring and scholarships. It’s an absolute privilege to be allowed to be part of the extended whanau of these schools. 

Our partner schools are:

  • Te Kura Kaupapa Māori o Te Whakapumau o Te Reo Tuturu ki Waitaha in Christchurch  
  • Merivale School in Tauranga
  • Rhodes Street School in Hamilton
  • Edmund Hillary School in Auckland
  • Pomare Primary, Avalon Intermediate, Taita College,
  • St Michaels Primary and Taita Central School (as part of a Hutt Valley council initiative) in Wellington.

MEGATRENDS

Global Megatrend #1 - Demographics

Projections to 2030 estimate that:

  • The number of people aged 65 and over will double to 1.1 billion by 2030, mostly in developing nations. 
  • Age expectancy will increase so people living longer will lead to disproportionate healthcare spend on the elderly.
  • Many people will continue working beyond the traditional retirement age as today’s jobs are less physical than they were in the previous century.
  • Falling birth rates means that the aged will represent a higher proportion of the population. The following shows the decline in the number of births per 1000.
  • The increasing youth population face low educational attainment levels and thus limited employment opportunities. This will be exacerbated by an ageing population staying in their jobs longer.
  • Technology will replace many of today’s physical jobs and the use of robotics is poised to have a huge impact on manufacturing and other physical jobs such as fruit picking.
  • Proportionately, there will be a lower number of productive citizens who are not only contributing to the country through taxes but who may also be supporting the elderly and a younger generation struggling to find work.

Impact

The effect of these demographic movements will impact our way of life. 

  • Governments will face significant pressure for financial resources given competing demands.
  • Citizens may be required to partially or even fully fund their own retirement as governments face up to the cost of funding superannuation.
  • Private health insurance may become more commonplace as the public health system struggles to cope with the ageing population.
  • Families may struggle to look after both their elderly matua and out of work tamariki (and possibly mokopuna).

Opportunity

There are opportunities to capitalise on these shifts.

  • The modern industries such as ICT fields including gaming, robotics and app development provide potential pathways for young people to engage in an innovative, higher-income occupation in an export based industry.
  • With a total market place of 1 billion aged over 65, businesses such as aged care, niche packaged food and a range of service based businesses targeted at this population will create employment opportunities in an area where Māori are known to provide high standards and level of care in domestic environments.
  • Involvement in infrastructure investments necessary to create a high value economy within which it’s youth can participate and contribute.

The key questions worth considering are:

  1. How can our traditional practices better influence global aged care provision?
  2. What are we doing to encourage our people to save for their own retirements so they are not left short if the government cannot provide?
  3. What innovative initiatives need to be in place, (including outside of the school system) to achieve educational engagement, and therefore attainment that is necessary to prepare youth for tomorrow’s job?
  4. What niche businesses may be considered to serve the international aging population, given the market size of 1 billion people?

“Our biggest issues facing governments in the first half of the 21st century is intergenerational aging. Its management will require continuous monitoring and policy adjustment. Its impact will place an enormous pressure on the pursuit of economic productivity. Its neglect will destine a nation’s economic growth to years of duress”. Mick Allworth, KPMG Partner

If we are to turn this around, we require:

  • Investment in world-class infrastructure.
  • Education focused on preparing our children and youth for tomorrow’s jobs and markets.
  • Continuous innovation must be part of the national DNA. 

What part can Māori play in creating the conditions for this turn around?

Fuelling the engine room – NZ SMEs

The term “Māori economy” almost naturally leads to a discussion on treaty settlements. However given that settlement assets represent less than 10% of the estimated asset base of almost $43b it is clear that there is massive potential in the Māori SME space. 

With 99% of New Zealand’s 450,000 businesses being privately owned and employing less than 20 people, it is clear to see where the engine room of the economy lies. It’s something we have been aware of for a long time and our Private Enterprise service is solely focused on these privately owned businesses. 

As we look to provide our tamariki with a variety of options for their future, it’s important that we have highly successful and highly visible private Māori businesses, doing well on the international stage. Key to this is growing the number of enterprises where innovation and competitiveness lies at the very core of how they think and what they do. The work recently done by KPMG’s Simon Hunter examined the Enterprise DNA traitscommon across leading businesses and provides some interesting insights on what we might want to focus on as we grow Māori owned businesses fit for the international stage. 

The people running these businesses will not only create employment and growth opportunities for their communities, but will ultimately inspire the next wave of Māori entrepreneurs. KPMG’s Chairman, Ross Buckley is on the Young Enterprise Scheme (YES) Supporters Council. YES is a programme aimed at planting the seed of entrepreneurship at a young age (secondary school), and we would welcome the opportunity to work with the Māori business, tribal and education leaders to increase the involvement of Rangatahi in the programme. 

If we continue to help businesses grow, then we will in turn help our whanau, communities and the country prosper as a whole. If we can turn just a fraction of those small and medium sized businesses into large businesses competing on an international scale, then our people and the motu will be all the better for it.

© 2017 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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