Two Trade Associations Delivering Value to Members During the Current Pandemic (Part 1)

THE ANZAC SPIRIT LIVES ON DOWN UNDER

Part one – 15 December 2020

The key leaders of Australian and NZ’s marine sectors talk to MaryAnne Edwards GMBA consultant about current issues

David Good AIMEX
David Good AIMEX

The Covid 19 pandemic has not daunted the fighting spirit of the New Zealand and Australian marine industry.  In talking to key leaders of the marine sector it is clear both countries are emerging from the pandemic strongly intact and ready for the flood gates to open.

The ANZAC values include such human qualities as courage, mateship, integrity, initiative, sacrifice, determination, ingenuity and these values are embodied within the Australian and NZ marine sectors.  It is these values that make doing business down under so attractive and has helped rank New Zealand and Australia in the top 15 of 190 Global countries for ease of doing business, in the top 5 for obtaining credit and in the top 8 for ease of starting a business. (Source World Bank  Group, Doing Business 2020)

It is well known a country’s reputation drives political, commercial and economic success. Businesses are selling their products and services to customers who may never have set foot in their country. These customers rely, in part, on the global reputation of a country to make their buying decisions. Currently both country’s reputations on the global stage are highly regarded not only for their handling of the Covid 19 pandemic but also due to the fact there is strong promotion of their marine sector capabilities by NZ Marine and the Australian International Marine Export Group.  Both organisations play a key role in the industry.  They continue to ensure global markets look their way when making buying decisions and this is currently reflected in the domestic and export success of their boat manufacturing, refit and repair sectors.

MaryAnne Edwards GMBA
MaryAnne Edwards GMBA

MaryAnne Edwards representing Global Marine Business Advisors interviewed the CEO’s of both AIMEX and NZ Marine talking about their views of the current environment in both countries

In NZ the key association for the recreational, superyacht and export sectors is NZ Marine headed up by Peter Busfield an experienced CEO who has managed the association for  many years. www,nzmarine.com

In Australia, the leading trade association for the export, superyacht and commercial sector is AIMEX and this is ably run by CEO David Good who came to the association 2.5  years ago with considerable experience in the superyacht and commercial and defence industry. www.aimex.asn.au

Currently, NZ does not have any covid in the community , no covid cases in hospitals and no deaths since May 2020. The only cases of covid reported are coming from quarantined passengers.  Australia is similar with virtually no community transmission. New cases in Australia like NZ are coming from people in quarantine from overseas.

NZ & Australian nationals are allowed back into Australia and New Zealand with both governments reporting lengthy delays in booking flights home mainly caused by the restriction on quarantine numbers. NZ reports up to a 2month wait time.  Both countries are making a concerted effort to get their citizens home for Xmas.

Peter Busfield NZ Marine
Peter Busfield NZ Marine

Australia has welcomed a number of celebrities and superyacht owners, all have been required to undertake 14 days quarantine in either a private residence under surveillance or luxury suite in an appointed quarantine hotel at the traveller’s cost.

It is confirmed a vaccine will be available in both countries in 2021 and no doubt once the vaccines are available globally this could become a requirement when entering NZ & Australia but one expects a continued cautious approach will be taken to this.

GLOBAL PERCEPTION

Australia and NZ as neighbours share the most comprehensive, effective and mutually compatible FTA and both countries are committed to the single economic market concept simplifying trade between the 2 countries making them close partners in every respect.

When asked about global perception of Australia and NZ both CEO’s had a positive response.

David Good response;  “Yes, we have been stable and reliable. Not a single lost day in most manufacturing and refit yards. Not a single vessel or crew rotation turned away since the start of the covid 19 pandemic.  This should hold us in good stead for a long time to come.”

Peter Busfield equally enthusiastic responded; “ Yes there is currently a huge demand for international companies to move their offices/operations to NZ and it is likely that when the borders open there will be a huge demand particularly from high net worth tourists who will be able to afford the long and costly airline flights.”

SUPERYACHTS WELCOMED

Superyacht Australia and NZ Marine were successful in lobbying their governments to provide exemptions for vessels looking for a safe haven during Covid 19 providing a boom for repair and refit yards.

These exemptions applied to foreign flagged vessels and yachts entering the country. Given the world class trades people and significant clusters of marine industry companies NZ and Australia have been well equipped to service all international visiting vessels.

Both governments understand the economic benefit that visiting commercial vessels and yachts bring in, especially given the utilisation of the extensive supply chains that both countries have established to service the industry.

Peter Busfield responded; “We successfully negotiated with the NZ Government to provide border entry exemptions for visiting cruising and superyachts and commercial vessels that have prebooked in refit or repairs of at least $50,000 in value. This process is working and has seen over 30 yachts/vessels gain entry approval since August this year. This has sustained many marine businesses that otherwise would have closed their doors. In addition, 200 or more foreign flagged yachts/vessels yachts that are already in NZ that were meant to depart by May 2020 have been granted an exemption to stay in NZ until May 2021. Many of these yachts have had new maintenance/refits undertaken whilst ‘stranded’ in NZ – some of which are superyachts and owners and crew have been happy to stay put in NZ as we are being seen as a safe haven from Covid 19.”

David Good, responded; “ We have spent many hours lobbying both state and federal governments on behalf of the industry which has resulted in 32 vessels coming into Australia. Crew and owners arriving on the vessel can apply to have time in transit count towards quarantine and a decision is made by each state health authority. Their decision is based on a risk assessment of covid rates at previous ports, time since these ports and likelihood of undetected transmission onboard the vessel. PCR tests at previous ports assists in a more educated risk assessment. 27 of the last 33 vessels arriving into Australia have had time in transit recognised towards quarantine time.”

There has been no cases of Covid19 arriving into Australia via a Superyacht to date.
Superyacht Australia has also been processing applications for these vessels providing a very critical service for members.

SURGE IN BOAT SALES AND CHARTERING

Boat builders, members of both organisations, have also seen a surge in orders and have never been busier with many consumers now seeing boating as a safe, healthy and exciting alternative to international travel.  Key boat builders like Riviera and Maritimo in Australia and over 100 trailer power boat manufacturers and yacht builders in NZ have significant export orders as well as a strong increase in sales from local buyers.    The domestic charter market in Australia has also enjoyed greater interest as HNWI are unable to travel internationally and are looking for luxury family holidays.  In Australia the superyacht fleet has dramatically increased over the past 12 months with an estimated 70 Australian owned superyachts now based in Australia.

Peter Busfield responded; “We always said that international travel was our major competitor to recreational boating, we were right, as 2020 will go down as a year of two halves -no sales in lock down and record sales when out of lock down. Most boat builders /manufacturers have presold 6 months out to mid-2021.  New Zealander’s are not wanting to leave NZ, why would they? We are covid free and if you return to NZ after going overseas you wait for a 2 month booking to go into Government 14 day isolation on return to NZ.”

David Good responded; “We have undertaken several marketing campaigns targeted at high end cruise industry customers promoting the unique, luxury and bespoke opportunity of chartering a superyacht in Australia.  It has been important to market this product in a way these cruise enthusiasts understand. We have encouraged members to market a charter at an all-inclusive price experience similar to what clients are used to when booking a high end cruise.”

It would appear this is good advice as in speaking with several HNWI they also confirm the concept of APA is not their preferred way to book holidays and an all-inclusive, no misunderstanding price point is more desirable.

GOVERNMENT SUPPORT

The NZ and Australian governments have responded positively to support businesses through these trying times with economic packages designed to allow businesses to keep their staff employed and the economy moving.

The governments’ response in both countries was quick and effective. This support ranged from wage subsidies for employees to allow businesses to retain staff, to cash flow boosts, deferral of mortgages, interest free loans and solid support for exporters by way of marketing cost reimbursements.  To take advantage of the wage subsidy initiative companies had to show a 30% decline in revenue which for most during the height of the pandemic was not difficult.

Government does not directly fund NZ Marine or AIMEX.  They are both in the main funded by membership subscription and events.

Peter Busfield responded;  “In NZ the government however does provide support for the NZ Marine and Composites Industry Training Organization for setting and arranging apprenticeship training and on a case by case basis occasional support for specific export events. The NZ government is very financially committed to the Americas Cup which highlights NZ as a superyacht and tourism destination and showcases the NZ Marine sector and its facilities.

David Good responded; “In Australia the federal and state governments provide support for specific events and initiatives with contested funding limits.  The Government also offers an export market development grant which provides a reimbursement mechanism for companies who spend dollars marketing their business internationally.  There are criteria for this and not everyone complies, but for those who do it provides a positive financial injection.  The Queensland state government stands out with its marine industry strategy providing strong support for the marine industry in their state. This strategy and the financial support behind it provides comfort to private investors which is currently reflected in the heavy investment many Qld companies are making in their boat building and refit facilities.”

The issue now of course is the transition away from government handouts to managing within the current trading environment.  The economic incentives were a bonus for ensuring the continued operation of the marine sector but in some industries it has been difficult getting everyone back to normal wages and work hours particularly tourism and hospitality.  In both countries there is a reliance on young international travellers who were able to  come and go regularly providing a much needed source of casual labour.  With borders locked down and no back packers coming into either country particularly in Australia there is a dearth of casual labour.

Part 2 >