21 March 2024
Hon. Nicola Willis
Minister of Finance
Parliament Buildings
Wellington
N.Willis@ministers.govt.nz
Tēnā koe e te Minita,
Responding to your challenge to business
I hope this letter finds you well. I read your remarks to the Auckland Chamber of Commerce on Friday with interest. In particular your challenge to business:
Our Government needs business to be walking right alongside us on our growth mission.
We want you at the table, leaning in, helping us dismantle the obstruction economy, taking risks, investing, hiring, innovating and making things happen.
Although our Government already has a big action agenda, we don’t think we have all the answers.
We know you have ideas about what would make a difference for your industry. So we want to hear from you.
We want to hear your asks of us – how can we better work with you to drive growth?
As the Chief Executive of the Restaurant Association of New Zealand, the representative body of more than 2,500 hospitality businesses across the country, I thought it wise to heed this call.
We have already achieved something together: the establishment of the first Ministerial role for hospitality, a massive signal to our sector that our contribution to the economy is not just acknowledged, but valued. Most recent figures (1 March 2024) show hospitality contributing $15.5 billion to the New Zealand economy and employing 145,000 people. However, a signal is just the start, and I am writing to take up your challenge to business.
The hospitality sector is not awash with Crown funding. In fact, the most state investment our sector has seen in recent times has been in response to COVID-19, when many of our businesses were unable to trade. This means that our sector is extremely self-reliant, we are good at doing more with less, and we look inwards for solutions to the big issues we face. This also means that when the Government chooses to make regulatory or legislative changes across key portfolios, such as immigration, workplace relations and tertiary education, our sector feels the impact of these changes almost immediately.
So, to respond directly to your request about what would make a difference for our industry, and support the growth, we have four priority areas:
1.Let’s address legacy issues faced by the industry
2.Let’s fill gaps in skills, education and training
3.Let’s make doing business less complicated and less expensive
4.Let’s encourage better partnership between industry and Government.
Your colleague, the Minister for Tourism and Hospitality Hon. Matt Doocey, is working in lock step with our industry to understand actions we can take together to improve policy settings. You will find direct actions in each of these priority areas that we have submitted to MBIE attached. This is the kind of focus we want to see from the Government.
Your address to the Chamber also called for contributions we can make:
But I’d also ask you to do this: tell me what contribution you can make. Before you describe the problem to us, think also how you’re going to help fix it.
I would like to respond to this. It is a reasonable request, and worthy of response.
Addressing legacy issues faced by the industry with industry-led, oversight
In 2022, the Restaurant Association began work on developing HospoCred, a hospitality accreditation scheme that establishes best-practice for businesses in our sector. We have invested more than $300,000 in its development, in an effort to raise standards in our industry.
We launched HospoCred in July 2022, which requires businesses to meet or surpass the minimum standards set in five areas of business: employment, workforce development; certifications, policies and business; financial management; and training and professional development. We manage the back end of HospoCred in house which allows us to know who, in our industry, is striving to surpass their expectations as employers and share their best practice forward.
HospoCred is an example of an industry-led initiative that can help to reduce the many layers of red-tape in our sector without losing the protections that both workers and our economy require. We submit that, in partnership with the Government, HospoCred can be better utilised to cut the levels of bureaucratic administration that hampers productivity in our sector, while providing more thorough and regular verification and oversight of business operations across hospitality.
Co-invest for skills that work
Restaurant Association members regularly raise issues with the quality of training provided to aspiring hospitality by training organisations domestically. Issues have included new chefs having no experience working at the pass, front of house staff not understanding the basics of good service and bar staff not understanding beginner level processes behind the bar.
We remain of the view that industry-led training that aligns with immigration and education policies is the best, and fastest, fix to this problem.
We already have a number of programmes underway – such as HospoStart and Springboard, developed in partnership with the Ministry of Social Development, and our culinary traineeship programme with NorthTec, Te Tupu Tahi, that works to ensure domestic hospitality workers are equipped with the skills they need to succeed in our industry.
However, we need confidence from the Government that you believe in the quality of our programmes. We need the Government to tell cumbersome, legacy education providers that delivering sub-optimal hospitality education is not good enough. That any state-funded education must not just meet the realities of the industry, but the skill needs of our country as a whole.
We submit that co-investment in industry-led training such as HospoStart, Springboard and Te Tupu Tahi will accelerate work to address skills gaps and worker shortages—not only in the hospitality sector, but across our economy. We have been approached by several industry bodies who have sought to replicate our training programmes for their sectors, because of the way they are designed and the results they are delivering.
Improve hospitality perception together
Despite being one of the nation’s largest and most dynamic sectors, hospitality is still plagued with perception issues that prevent New Zealanders from viewing the industry as a viable and desirable career path.
The expansion of the tourism portfolio to explicitly include the hospitality sector is an incredibly important change in direction, and is something that we have been advocating for over many years. However, we have watched past Ministers and Governments speak of our industry in generalities, painting the behaviour of some unscrupulous operators as emblematic of our entire sector.
Our members are proud of their work, and each time hospitality is held up as an example of poor employment, our progress in building a more sustainable industry takes a hit. As we take steps to ensure that the hospitality sector becomes more sustainable and can better endure future economic disruptions, we ask that the Government brings discipline to its contextualisation.
I applaud your approach to growth and I hope that other business leaders have taken the time to respond to your very direct call to business: it makes sense that industry approaches the Government armed not only with problems, but also with solutions.
I look forward to hearing from you in due course, and wish you the best of luck for the upcoming Budget 2024.
Ngā mihi nui,
Marisa Bidois
Chief Executive
Restaurant Association of New Zealand