The economic damage from the US-Iran war is causing widespread damage to businesses on both sides of the Tasman, finance professionals report.
A new survey of nearly 700 members of Chartered Accountants Australia and New Zealand (CA ANZ) says:
- 80% of respondents report costs have increased;
- 60% say they face greater planning uncertainty;
- 49% are dealing with supply chain disruption.
CA ANZ says 61% of respondents says their organisation is directly exposed to the economic fallout from the war in the Middle East.
The exposure is greater for New Zealand (68%) than Australia (55%) while another 21% of respondents say it is too early to tell.
Of the business hit by the fallout, higher energy costs are the most common (77%) then supply disruption (46%), higher production costs (40%), shipping and freight delays (40%) and exchange rate volatility (36%).
New Zealand businesses also remain more exposed to shipping disruption; 48% of Kiwi respondents reporting freight delays compared to 32% in Australia.
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ECONOMIC WORRIES
CA ANZ Chief Executive Ainslie van Onselen said the findings reflect a defining economic challenge for both countries.
“This is not a distant crisis. It is landing on Australian and New Zealand businesses right now and our members are seeing it firsthand across every sector of the economy,” she says.
“CA ANZ represents 140,000 finance professionals; what they are telling us matters, and governments need to listen.”
Chief Economist Professor Richard Holden warns the pain is unlikely to be short-lived.
“Higher energy prices don’t just hit at the bowser; they push up the cost of food, freight, manufacturing, meaning everything increases in price.
“Businesses and households are already under (economic) pressure. This makes it worse.”
Around half of respondents say they are keeping an eye on the conflict but remain uncertain about what to do next; 50% are ready to raise prices: 24% in New Zealand and 17% in Australia.
When asked about government support would matter the most, members pointed to two clear priorities: more infrastructure to strengthen supply chain resilience and direct support with energy costs.
CA ANZ Group Executive Advocacy for Public and Government Affairs, Damian Ogden says governments need to think beyond the immediate crisis.
“Governments cannot keep governing crisis to crisis.
“Fuel security, reliable energy and resilient supply chains are the foundations a modern economy runs on. It is time to strengthen them.”
TRANS-TASMAN MEETING
On April 24, the Australia New Zealand business Leadership Forum (ANZLF) met to discuss the fuel supply crisis at the same time that Australian Treasurer Dr Jim Chalmers met with NZ’s Finance Minister Nicola Willis.
The discussion convened business leaders from the energy, aviation, agriculture, transport, retail, technology, cyber security and banking sectors.
“Australia and New Zealand are working closely together to strengthen fuel security and supply chains across the Tasman because it’s in the interest of both our countries,” Chalmers says.
Willis says: “Stronger integration means greater resilience during global shocks, more trade, more investment, and more opportunities for businesses and workers in both countries.”
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