GLOBAL / COUNTRY STUDY AND REPORT ON Finance Sector in New Zealand

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION UNDER THE GUIDANCE OF

Dr. B.K. NIRMAL

Submitted by
[Batch: 2010-12] MBA SEMESTER III/IV

------------------------------------------------------------------------INSTITUTE S NAME Shayona Inst. Of Business Management M.B.A PROGRAMME Affiliated to Gujarat Technology University Ahmedabad. Month, Year.

Declaration

The project report entitled Finance Sector in New Zealand has been submitted to Gujarat Technological University, Ahmedabad in partial fulfillment for the award of degree of Master of Business Administration. I the undersigned hereby declare that this report has been completed by me under the guidance of H.O.D Dr. B.K. NIRMAL (Shayona Institute of Business Management, Ahmedabad)

The report is entirely the result of our own efforts and has not been submitted either in part or whole to any other institute or university for any degree.

Name of the Student with Signature: Saurabh Solanki, Mehul Makwana, Mahesh Halba, Pritesh Vora, Lalji Vakeriya, Prakash Solanki.

Date: Place: Ahmedabad

Institutes Certificate

This isto certify thattheprojecttitled Finance Sector in New Zealandisaworkdoneby Saurabh Solanki, Mehul Makwana, Mahesh Halba, Vakeria Lalji, Pritesh Vora, Prakash Solanki studentofShayona Institute of Business Management (SIBM).Thestudentshave

successfullycompleted this project undermyguidance.

Iam surethat the experience gained duringthe project work will enable them totakesimilar challengingprojects in future.

Dr. B.K NIRMAL (Faculty Guide)

Date: Place: Ahmedabad Dr. B.K NIRMAL (HOD MBA Programme)

PREFACE

Being a Management student, it is required to understand how industrial analysis is done. Therefore, it is required to identify the industry of ones interest to conduct a thorough analysis of the selected Industry. This helps the students to develop a sense of awareness regarding the particular industry as a whole. Such analysis helps to understand the industry and is highly useful for career development.

This project report contains the information regarding Finance Sector in New Zealand the data are collected from the various sources like Secondary Data.

I have gained much practical knowledge by this training in the report presented here, sincere efforts have been made by me to mention the knowledge I attained during the training.

ACKNOWLEDGEMENT

It is almost inevitable to incur indebtedness to all who generously helped by sharing their invaluable time and rich experience with me, without which this project would have never been accomplished.

No task can be achieved alone, particularly while attempting to finish a project of such magnitude. It took many special people to facilitate it and support it. Hence, I would like to acknowledge all of their valuable support and convey my humble gratitude to them. I would like to thank H.O.D. Dr. B.K NIRMAL and all other faculties of Shayona Institute of Business Management (SIBM) for their guidance throughout the preparation of the project and for their valued suggestion. I express my sincere thanks to the management of Finance Sector in New Zealand for giving me this golden opportunity to work as a trainee in their company. The guidance and support provided by the collage have really made the training a learning experience for me. This short period was full of rich experience, which will definitely help me in my future career.

LIST OF TABLES/GRAPHS/DIAGRAMS (SEPARATE PAGE)

SR. NO. CH:-1 CH:-2 CH:-3 CH:-4 CH:-5 CH:-6 CH:-7 CH:-8 CH:-9 CH:-10 CH:-11 CH:-12

PERTICULAR DECLARATION INSTITUTE S CERTIFICATE PREFACE ACKNOWLEDGEMENT INTRODUCTION RELATION BETWEEN INDIA & NEW ZEALAND INDIA & NEW ZEALAND BUSSINESS PROBLEM FACING INDIA & NEW ZEALAND BUSSINESS STRATAGIES COST OF LIVING INCOME TAX GOVT.FINANCE FINANCIAL STATEMENT OF GOVT. IN NEW ZEALAND INFLATION G.D.P. GROWTH SWOT ANALYSIS PG.NO 2 3 4 5 7 9 12 16 18 22 24 25 26 27 28 29

Chapter 1:- Introduction

New Zealand's Financial System:New Zealand's financial sector consists of banks, investment trusts, insurance firms, investment firms, securities exchanges and nonbank lenders. The Reserve Bank of New Zealand regulates the financial industry. Most banks in New Zealand are owned by Australia, exposing its neighbor to New Zealand's real estate bubble and highly indebted households. New Zealand's banks rely Although lagging behind Australia, most European Union countries and the USA, New Zealand is a relatively wealthy country, with a Gross Domestic Products (GDP) per head of US$23,200 in 2004heavily on overseas funding, subjecting them to external liquidity risk. None of New Zealand's local banks have overseas branches. The global financial crisis inspired regulators to scrutinize the soundness of the domestic banking sector, leading to new regulations and a crackdown on tax evasion by foreign-owned banks. A period of recession followed the Asian economic crisis in the late 90s and two successive droughts, which caused the countrys export market to fall dramatically. However, the economy is now on an upward trend and GDP growth was 3.5 per cent in 2003 and 4.8 per cent in 2004, with an inflation rate contained within the Reserve Bank of New Zealands target range of 0 to 3 per cent (1.8 per cent in 2003 and 2.4 per cent in 2004). New Zealand has fewer extremes of wealth and poverty than many other developed countries, with a large middle class and comparatively few poor people, while incredibly wealthy people are rare enough for them to be famous (or notorious). New Zealanders are generally restrained when discussing money, much the same as the British, although the 80s saw the creation of a yappy class who did well in business and the professions, and didnt mind flaunting their wealth.

The New Zealand banking and financial sector is modern and efficient. For example, its possible to clear cheques virtually instantaneously in New Zealand something which isnt even possible in the UK or USA (although this is a deliberate policy on the part of banks in these countries). Wide use is made of electronic banking, rather than shuffling pieces of paper around the country, and New Zealanders have taken enthusiastically to the cashless economy the use of credit, debit and electronic-funds-transfer-at-point-of-sale (EFTPOS) cards is widespread, while cheques are becoming much less popular. This isnt because New Zealanders are enthusiastic about credit, but simply that its so convenient. The banking sector is dominated by a relatively small number of large institutions, although there is quite a lot of competition. When you arrive to take up residence in New Zealand, its advisable to have a bank account already in place with funds on deposit, plus some New Zealand currency for immediate use. If youre planning to invest in property or a business in New Zealand financed with funds from abroad, its important to consider both the present and possible future exchange rates (dont be too optimistic). On the other hand, if you earn your income in New Zealand dollars, this may affect your commitments abroad, particularly if the New Zealand dollar weakens. If you plan to live and work in New Zealand you should ensure that your income is (and will remain) sufficient to live on, bearing in mind the cost of living. If youre receiving a pension from abroad, you should be cautious, as you will be at the mercy of not only exchange rate fluctuations, but also the fact that pensions are usually calculated according to the cost of living in your home country and may be inadequate to support you in New Zealand.

Chapter 2:-Relation between India and New Zealand

India-New Zealand relations refer to the interaction between India and New Zealand. Both these countries were once part of the British Empire. There are approximately 105,100 people of Indian descent in New Zealand.

India-New Zealand relations were cordial but not extensive after Indian independence. More recently, New Zealand has shown interest in extending ties with India due to India's impressive GDP growth.

Indo-New Zealand relations

New Zealand

India

The countries set up a Joint Trade Committee in 1983 and have had discussions on a free trade agreement either bilaterally or through the East Asian Summit, but this has not emerged due to disagreements over agricultural subsidies. There is also some educational cooperation, with around 3000 Indian students studying in New Zealand.

Defense cooperation has been more limited, but there have been joint naval exercises, and Indian and New Zealand troops have served together in United Nations peacekeeping missions in Kosovo and Sudan.

 Commercial Relations and Trade Agreements:Trade diversification reflects an economys growing competitiveness resulting from its broadening productive base with processes getting more efficient, improving fundamentals, and its increasing willingness and capabilities to effectively integrate with the world economy. Asia and ASEAN region is Indias largest trading partner. During the period April- September 201011, Asia and ASEAN region accounted for about 58% of Indias trade (exports and imports). Europe and America, together, account for around 31% of Indias trade. Region wise share of Indias Export and Import during April September 2010-11 is shown in Chart respectively. Indias trade and the growth rate of Indias trade with major regions of the world are shown in Chart.

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 New vistas for India-New Zealand trade:-

Over the past 12 months, India has become New Zealand's seventh largest export market, with exports increasing by 40% from March 2010 to March 2011. There has also been growth in imports and two-way trade between India and New Zealand is now at NZ$1.28 billion per annum. But both the New Zealand government and our counterparts here in India believe that this relationship has much further to grow - and it is in the interest of both nations to realize this potential. There has been much talk during our visit about our recent Free Trade Agreement negotiations, which are still in discussion. A comprehensive FTA is the single-most important bilateral platform for increasing trade, allowing more open access and investment flows, and its conclusion would provide the impetus for each country to grasp mutual benefits.

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Chapter:-3 India New Zealand business forum a success

More than 100 delegates from India and New Zealand, including business people, government officials and academics, gathered at the University of Waikato to discuss opportunities for the two nations to increase trade and business relations. Waikato Management School held the inaugural event to encourage growth in business opportunities with India for the Waikato region. The forums convener, Associate Professor SaidMohsin, says he has received lots of encouraging feedback following the forum. We have had lots of interest shown for further forums next year, from other Waikato businesses as well as from India. The High Commissioner of India has also expressed a desire to return. Dr.Mohsin says the forum achieved all of its objectives. Overall it was a successful platform for these key people to come together and understand the challenges and the opportunities that exist in doing business in India. Despite discussions focusing mainly on the dairy/agribusiness, IT/communications and tourism sectors, Dr.Mohsin says there is scope for so much more. India is the second fastest growing market after China and has a burgeoning middle-class with growing disposable income. India has at least another 20-30 years of solid growth ahead of it. By 2015, it is estimated that India will have the capacity to consume more than 118 million tons of milk solids. They will be looking for technical assistance in how to produce milk and its products more efficiently, so there is huge scope for our dairy sector to help. Education also has high potential, as Indias predominantly young population looks to upskill. In order to meet its higher education needs, India would need another 1000 institutions. This means they will look to well-established learning institutes like Waikato for assistance. The University is planning to continue the forum on an annual basis, with plans to be in Delhi next year, Hamilton in 2014 and in Mumbai in 2015.

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 New Zealand Trade, Exports and Imports:New Zealand is heavily dependent on free trade, specifically on agricultural products. As of 2007, exports account for roughly 24% of the countrys output. While New Zealands total exports amounted to $26.25 billion in 2009, its total imports came in at $24.29 billion. New Zealands Leading Exports Include:

Tourism destinations Meat Dairy products Fruit and vegetables Fish Machinery Wood and wood products

Tourism, which accounts for 8.9% of New Zealands total GDP through its contribution of $12.8 billion, plays a key role in New Zealand's economy. Moreover, tourism provides fulltime equivalent jobs to roughly 200,000 people, or 9.9% of the countrys total workforce. The countrys leading imports include:

Machinery and equipment Vehicles and aircraft Petroleum Electronics Textiles Plastics

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 The countries with which New Zealand trades include: Export (as of 2008)

Australia: 23.2% US: 10.1% Japan: 8.40 The People's Republic of china 5.90%

Import (As of 2008):

Australia 18.1% China 13.2 US 9.5% Japan 8.3% Singapore 4.7% Malaysia 4.4% Germany 4.3%

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Apart from being a panacea, trade poses risk for New Zealand's economy. Heavy dependence on trade leaves the country and its economy highly vulnerable to the economic performance in Asia, Europe and the US. Moreover, earnings from agricultural exports and tourism fall significantly short of the cost of imported goods such as advanced manufactured goods and fuels, resulting in the country facing net foreign debt.

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Chapter 4:- Problem facing India and New Zealand Business

India and New Zealand have begun talks on a bilateral Free Trade agreement (FTA) and five rounds of negotiations have already taken place. An FTA would offer opportunities for New Zealand businesses by improving market access and greater interaction and co-operation. Logistics:Most airfreight consignments from New Zealand to India are through Singapore. Connections are also available through Bangkok, Hong Kong, Kuala Lumpur and Dubai. The main seaport servicing western and northern India is Mumbai. Chennai is the main southern port. Tax:The Indian tax systems are quite complex. Tax structures vary from state to state and have a direct impact on the price of a product. Some states levy a tax on cross-state border transportation. Challenges :Internal logistics in India are under-developed. Indias ports, roads and rail network need massive capital investments and it continues to face power shortages. Bureaucracy, labor market rigidities and regulatory and foreign investment controls can be a challenge. Opportunities:-

There is strong interest for New Zealand to assist with improving food production and ensuring India can import safe, quality food to meet growing demand.

There is clear political requirement to improve Indias food supply chain and opportunities for New Zealand companies exist in dairy, horticulture, meat processing and cool chains.

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A rising awareness of environmental issues and an active green building movement are creating opportunities in green technologies and building products.

The aviation sector offers particularly promising opportunities for New Zealand in infrastructure, training, maintenance and repair, software and institution building.

In Indias rapidly growing information and communications technology (ICT) sector, theres significant potential for cooperative relationships focusing on New Zealand software innovation and Indian market reach.

Market demand for New Zealand timber is increasing rapidly for use in construction, interiors, furniture and packaging. The long-term prospects for New Zealand radiate pine are excellent.

Demand for overseas tertiary education in India is rapidly increasing. The high quality and lower fee structure of New Zealands education system appeal to Indian students. Cultural and Business tips:-

New Zealanders need a visa to visit India. Dress should be modest and conservative. For men in winter, a suit and tie; for summer, lightweight trousers and a short sleeve shirt. Women are advised to dress conservatively.

There are many national and regional public holidays in India. You need to check dates before planning a market visit.

Indians are generally very religious. Many are vegetarians on religious or caste grounds. Alcohol is also forbidden in some parts of India.

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Chapter: - 5 Strategies

What we do? :As the Governments international business development agency, NZTEs role is to make a difference for New Zealand by helping businesses grow bigger, better, faster in international markets. We are committed to unleashing the international potential of New Zealand businesses. While New Zealands economy has a strong commodity base, there is significant potential for growth on the added-value side of the equation and many companies are moving up the value chain. This means that our strategic focus is on targeted services for a designated range of internationalizing companies, providing the right service, at the right time and the right place; targeted services for groups of related companies, where conditions warrant; and targeted activity in key markets, as outlined by the NZ Inc. Country Strategies. Our first focus is one-on-one services for an active portfolio of 500 customers, which, in the main, are businesses with some experience and scale in exporting. We offer an intense account management model to ensure we provide a customized set of services to support their key goals globally. We also work with a further group of approximately 1500 businesses, focusing largely on specific opportunities where we can add value to their efforts. Increasingly, some groups of New Zealand companies are beginning to understand the benefits of collaborating to reach scale. They realize that increasing the credibility and profile of New Zealand as a whole in the market creates the conditions for individual company prosperity. Therefore, our second focus is on developing a portfolio of multi-customer projects in areas where New Zealand can demonstrate competitive advantage. These are driven by global demand and customers who are willing to work together.

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 We work with Businesses:NZTEs customers are New Zealands internationalizing businesses. We work with approximately 1500 - 2000 businesses at any one time and focus intensively on an active portfolio of 500 that have the scale, commitment and drive to succeed internationally.

Our services are designed to support businesses to grow and succeed internationally and are focused primarily on refining strategy, improving performance, building global networks, and in-market support for business development. We align our service with different stages of a business lifecycle from starting and growing a business, through to exporting and operating internationally. Some services are provided directly by NZTE staff in New Zealand and around the world, while others are provided through external organizations such as Regional Business Partners and expert advisors which are funded by NZTE. We work globally :Through our network of international offices, we help businesses grow by building alliances and developing strategic commercial relationships overseas. These alliances can provide access to international distribution networks; new markets, skills and technology; and investment capital. NZTE people are based in 36 international locations and provide hands-on assistance to New Zealand exporters. Our unique blend of government and business skills enables us to open doors to influential contacts in the public and private sectors. We promote New Zealand and its refreshing new perspective on business to potential customers and investors through relationship building and international communications and marketing. We provide buyers, importers and distributors in international markets with information about what New Zealand businesses have to offer, to help source quality New Zealand products and services or identify investment opportunities.

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 We work with NZ Inc.:NZTE works with partners across New Zealands economic development landscape. Collaborating with key partners in a structured way ensures we maximize wider NZ Inc. resources. It also drives better understanding of respective goals, sharpens our focus, ensures we communicate effectively and we avoid duplication. Collaboration with our NZ Inc. partners, both within government and in the business community, is central to NZTEs purpose and beliefs. We like to think of it as working for a cause New Zealand - not an institution. The agencies we work with most closely are the Ministry of Business, Innovation and Employment (MBIE), the Ministry of Foreign Affairs and Trade (MFAT), the Ministry of Primary Industries (MPI), Education New Zealand, New Zealand Export Credit Office, and soon the Advanced Technology Institute. We have been working to identify the areas of collaboration with each of these agencies and agree joint work programmers. We Support Investment:NZTE promotes international investment in New Zealand and we help investors identify New Zealand-based opportunities and gain access to government and private sector contacts. We connect international buyers and investors to industries in which New Zealand has a long-term sustainable advantage and to businesses with high-growth potential, in particular value-added food and beverages and knowledge-intensive manufacturing and services such as marine, aviation, health IT; and to businesses with high-growth potential.

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 We work with industry:While NZTEs focus is on individual businesses, we also work with industry sectors where New Zealand has a long-term competitive advantage in world markets, such as agribusiness and highvalue food and beverage. NZTEs high impact programmers are designed to increase the speed and scale of internationalization for our customers. Generally these programmers offer multi-customer opportunities; foster or engage coalitions of the willing and/or groups with a common interest; are anchored around the NZTE customer portfolio; have a multi-year outlook with significant NZTE financial commitment; and focus on driving towards NZTEs goal of doubling our customers growth. Use of information:NZTE will treat commercially sensitive material supplied with care, discretion, and appropriate regard. It should be noted, however, that NZTE is bound by the Official Information Act and may be required to provide information about its activities to Ministers, parliamentary committees, individual members of Parliament, and the Controller and Auditor-General or his agents.

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Chapter 6:-Cost of Living

What is the cost of living in New Zealand? Its useful to try to estimate how far your dollars will stretch and how much money you will have left (if any) after paying your bills.

Item Housing Transport (including a car) Food Utilities and furniture Other goods Health Leisure Clothes Total

Amount ($) 125 50 100 40 25 25 50 40 455

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The inflation rate in New Zealand is low (around 2.4 per cent in 2004) and the government is committed to maintaining it at around this rate (or lower). Prices of many imported goods have fallen in real terms in recent years, particularly cars and electrical appliances. In general, New Zealanders enjoy a high standard of living, although salaries are lower than in Australia, North America and many European countries. Its difficult to estimate an average cost of living in New Zealand, as it depends on where you live as well as your lifestyle. If you live in Auckland, drive a BMW and dine in expensive restaurants, your cost of living will be much higher than if you live in a rural part of the South Island, drive a small Japanese car and live on lamb and kiwi fruit. You can live relatively inexpensively by buying New Zealand produce when possible and avoiding expensive imported goods, which are more expensive not only because of the distance they have to travel, but also because theyre considered fashionable. The following list provides a rough idea of the weekly cost of living for two people in New Zealand. Note that it doesnt include luxury items such as alcohol, and if you live in Auckland the cost of living is around 20 to 30 per cent more.

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Chapter 7:- Income Tax

An Introduction to New Zealand's Income Tax:Generally speaking, income tax in New Zealand is below average for a developed country. During the 90s most people saw their income tax reduced, but in the 21st century income taxes have increased. Most New Zealanders are resigned to paying taxes (tax evasion isnt a national sport as it is in some countries) and in any case the country has a system of pay-as-you-earn (PAYE) that ensures that tax is deducted at source from employees salaries. The tax system in New Zealand isnt particularly complicated. Its designed so that most people can prepare and file their own tax returns, although if your tax situation is complicated you may need to seek advice from an accountant. Tax Code:Every taxpayer in New Zealand is required to complete a Tax Code Declaration (form IR 330) when they start employment and if there are any changes in their employment circumstances, e.g. if their working hours are reduced. You should be given the form by your employer, who also sends the completed form to the IRD. The tax code for most employees is M. Its importan t that you complete the form correctly as the amount of tax you pay is based on the information provided.

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Chapter:-8 Government Finances

Overview of the government's finances including financial reporting for the government as a whole, the government's revenue and expenditure, its assets and liabilities and its fiscal strategy. Advising the government on its finances is a core role of the Treasury. The Treasury is responsible for establishing and maintaining controls to ensure that all government financial transactions are within statutory authority, and that use of public money is properly recorded. The Treasury also prepares forecasts, including economic and fiscal updates as part of the Budget process. Governments finances take into account all of the issues any business does, including revenue and expenditure, and assets and liabilities. And like any business, the government must also prepare financial statements at regular intervals (see month end and yearend financial statements). These statements are prepared by the Treasury and cover all government entities, including Ministers of the Crown, Offices of Parliament, departments, crown entities, stateowned enterprises, the Reserve Bank of New Zealand and the Public Trust office. A full list of government reporting entities can be found in the Forecast Financial Statements chapter in the 2012 Budget and Economic and Fiscal Update in the section titled Government Reporting Entity as at 8 May 2012. Statements are prepared in accordance with the New Zealand equivalents to International Financial Reporting Standards.

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Chapter 9:- Financial Statements of the Government of New Zealand

The Most Recent Financial Statements available on the Treasury website are the Financial Statements of the Government of New Zealand for the Seven Months Ended 31 January 2013 published on 8 March 2013. Purpose of the Financial Statements:The Financial Statements of the Government provide a record of the government's financial performance and of its financial position. They provide a comparison with the fiscal forecasts in the Economic and Fiscal Updates and with the financial statements of the previous year. The financial statements also provide a snapshot of the progress the government has made in implementing its fiscal strategy, as set out in the Long-term Fiscal Objectives and Short-term Fiscal Intentions section of the Fiscal Strategy Report 2012. Financial statements are prepared for the government as a whole as specified in the Public Sector Finance Act 1989. Parliamentary and state sector entities and organizations for which statements are prepared include: Ministers, Departments, Offices of Parliament, State-owned enterprises, Crown Entities, the Reserve Bank of New Zealand and New Zealand Superannuation Fund. A full list of government reporting entities can be found in the Additional Financial Information section of the most recent year-end financial statements, in the section titled Government Reporting Entity as at 30 June 2012. Revenue:Compared to forecast, core Crown tax revenue was$0.3 billion (0.6%) higher than expected (figure 6).The key driver of the difference was higher than expected business profits, largely due to growth in funds under management in PIE funds. Most other tax types were very close to forecast, GST had the next largest variance, $0.1 billion (or 0.5%) lower than forecast.

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Chapter:-10 Inflation

The inflation rate in New Zealand was recorded at 0.90 percent in the fourth quarter of 2012.

Inflation Rate in New Zealand is reported by the Statistics New Zealand. Historically, from 1918 until 2012, New Zealand Inflation Rate averaged 4.90 Percent reaching an all time high of 44 Percent in September of 1918 and a record low of -15.30 Percent in March of 1923. In New Zealand, the inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods. This page includes a chart with historical data for New Zealand Inflation Rate.

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Chapter 11:- G.D.P Growth

Following the 1998 "Asian crisis" New Zealand's Gross Domestic Product ("GDP") recovered strongly. Annual GDP growth from 2001 through to 2004 (on average) exceeded that of its major trading partners, partly as a result of strong net inward migration and associated population growth.

The recent global recession, and the associated financial crisis in many countries, had a significant adverse effect on global economic activity. Most of New Zealand's trading partners experienced contractions in GDP between 2008 and 2009. Of the countries shown in the charts, Australia was the only economy not to experience negative GDP growth on an annual basis. The contractions experienced by the US, UK and Japan over this period were more severe than that experienced by New Zealand.

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Chapter 12:-SWOT Analysis

Strengths: Low population (not that many mouths to feed) We grow a lot of food. NZ exports more food than we import. Abundant fresh water Geographically isolated Decent soil Stable democratic political system Minor but good quality reserves of oil and natural gas Good cool temperate to warm temperate climate Approximately 60% of electricity generated from renewable. Weakness: Highly geographically dispersed population in both rural and suburban areas limiting the feasibility of public transport. Geographically isolated meaning at the end of the global supply chain. Very little manufacturing exists We import significant amounts of staple foods such as grains and pulses. Traditional grain growing areas are being converted to dairy We rely on significant amounts of imported synthetic fertilizers High rate of car ownership Foreign ownership of banks and most industry Tiny economy - super vulnerable to sudden changes

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 Health and medical supplies almost entirely imported - including contraceptives (it's a subset of the more general point about the lack of local manufacturing) Domestic transport 99% dependent on fossil fuels

Opportunities: Dependence on pastoral agriculture means there is a clear slate with which we can redesign agriculture to incorporate appropriate water management andpolycultutral farming strategies. I.e. re-localization of food production. Thus reducing impact on natural systems through agriculture rather than increasing impacts Abundant opportunity through medium to micro hydro, wind and tidal systems to decentralize the electricity grid and further increase renewable generation. Spread out nature of suburban sprawl leaves opportunity to incorporate local food production into medium density population areas through the use of current wasteland, road verges, parks and backyards. Threats: Existing lineal/industrial paradigm Liquid energy shortfalls impacting on transport. Law and order' and overregulation response from government on growing crisis, thereby restricting local initiatives to build on alternatives.

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