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“Looking Out For Wellington”

“LOOKING OUT FOR WELLINGTON”

SPEECH BY WELLINGTON REGIONAL CHAMBER OF COMMERCE CEO PHILIP LEWIN

TO WELLINGTON ROTARY CLUB, 5 MAY 2003

Mr President, Ladies and Gentlemen:

“Looking out for Wellington”. Doesn’t that sound a rather portentous title for a speech? Perhaps I’d better explain myself.

I spent the first part of my career as a foreign affairs officer in different parts of the world. The sixteen years I worked in Foreign Affairs and Trade really brought home to me the vital importance of New Zealand’s external linkages.

As a consequence, I believe that notwithstanding the critical significance of areas like education and skills training, transport infrastructure, and employment and social policies, together with prudent monetary and fiscal management, the biggest thing we can do to make New Zealand a wealthier place is to do even better in our economic dealings with the rest of the world.

Trade is not the sole panacea – but given our geographic location and small population, trade and investment broadly defined will continue to be the most important source of wealth creation for our economy.

So “Looking out for Wellington” isn’t just a self-promoting claim of “local hero” status for the Wellington Regional Chamber of Commerce. Instead, it’s about how we Wellingtonians – internationally well-traveled and experienced, used to dealing with all sorts of different cultures, at home in the world in our cappuchino economy, can continue to lead New Zealand’s connectedness with the rest of the globe.

Most of us here will regularly attend and participate in various economic briefings, breakfasts, seminars and so on. We’ve just about had an unending national conversation on the subject of “Whither New Zealand?” over pretty much the last 20 years. Over this time, we have heard from a steady succession of overseas and homegrown experts – the Knowledge Wave talkfests have been only the latest in a number of similar projects. One thinks back to the Porter Study in 1990 “Securing New Zealand’s Comparative Advantage” which was sponsored by none other than Mike Moore, and launched at Mike’s now long-forgotten Waipuna Seminar.

Whether you like or loathe what the ‘80s economic reforms brought our country (and I pretty much like them, with only one or two obvious reservations) you can’t deny that this “quiet revolution”, to use Colin James’s phrase, has made us all think and talk a lot more among ourselves about New Zealand’s key sources of social cohesion and economic well being.

Throughout the 90s we had first “Ruthenasia”, but also positives such as the Fiscal Responsibility Act; then a period of historically very high economic growth in the middle of the decade, and then finally a reversion to harder line economic dogma as the Asian economic crisis bit deeply.

The policy flavours of the day here in New Zealand have until recently had an alarming tendency to change rapidly.

I am not purporting to argue that our current Government has succeeded in striking anything like the optimal balance between Government and the marketplace. But I would assert that most New Zealanders and their political representatives now realize that dogma and ideology, whether of the left or the right, has a very limited role to play in securing our future prosperity. There does seem to be more of a role for principled commonsense.

Some of you have heard me say before that Chambers of Commerce are nowadays located on the extreme centre of the political spectrum. What does this mean? Isn’t the middle of the road where you are most likely to be run over? Or to mix the metaphor, if you sit on the fence, don’t you get splinters in your bum?

Well, the answer to both the above homely propositions is “yes”. But we don’t see ourselves as simply passive and inert in the face of the oncoming political heavy traffic. As organizations, the Wellington and indeed New Zealand Chambers of Commerce are entirely non-partisan. We don’t endorse or support any particular political parties or politicians. We have long held the view that to do so would in all probability lead to co-option by one, and total disregard from all the others.

But being non-partisan is not at all the same thing as being apolitical. We are in no sense apolitical. Instead we take advantage of our Wellington location to access the whole spectrum of political movers and shakers, not only in Parliament and central government, but also at the local body level. And given the worldwide chamber network, New Zealand Chambers have the ability – or least, the potential - to project themselves effectively in many places around the globe.

Some-one quite famous once said that “philosophers interpret the world – the point is to change it”. Some one else – it was at last week’s AGM dinner of the Upper Hutt Chamber, in fact - asked me without preamble how much “power” the Wellington Regional Chamber of Commerce had.

Well, I can’t really laying claims on behalf of New Zealand Chambers of Commerce to any world-shattering powers. But even so, there are few things that can do more than a good idea whose time has come. So my answer to my questioner at the Wallaceville Motor Inn was that we have no power – but hopefully some influence.

Back in February, New Zealand Chambers of Commerce and Industry launched our economic strategy blueprint, “Achieving Faster Growth for New Zealand”. I’ve brought some copies with me in case anyone would like one. We’ve been gratified by the generally positive reactions to this work from opinion-formers, decision-makers and businesses small, medium and large.

We’re following this up with five more specific papers, which we’ll be launching via our Chamber network throughout the country.

We put out the first of these in Dunedin last month. Its focus is on enhancing New Zealand’s system for commercialising innovation, to achieve greater productivity. Otago’s impressive science and knowledge-based businesses provided us with an excellent backdrop for this policy area.

Further papers will follow throughout the year, on:

trade (surprise, surprise!) the vital importance of further prizing open markets overseas for New Zealand’s exports of goods and services;

education and skills training (including the positive role that immigration has to play);

ensuring the Auckland economy is fit for strong growth without constraining the rest of us;

and keeping the rate of growth in public expenditure well below that of the economy in general.

We now seem to have an overall consensus among business groups about the need for New Zealand to keep its economic growth rates above 4% in order to get back into the top half of the OECD; and about the broad policy mix that will be required to achieve this.

This said, there is a significant difference between “consensus” and “unanimity”. Much as we benefit from regular and high-quality interactions with other business groups, Chambers have not suddenly gone public on growth as bit players in anyone else’s production. Having thought carefully about the issues for ourselves, we are speaking with our own voice on behalf of the 20, 000 businesses we represent nationwide.

The unique perspective which the thirty New Zealand Chambers bring to bear is that of business in local and regional communities. We place a premium on practical business capability enhancement and constructive advocacy on behalf of our members.

The need for sustained economic growth throughout New Zealand is now well and truly up in lights. This is good and where it should be. So now the case for growth has been accepted and picked up almost across the whole political spectrum, the focus must be on practical policy measures which are going to ensure this growth outcome.

Here in Wellington, we continue to urge that all proposals placed before Cabinet should contain an analysis as to whether they are consistent with the 4% growth target. Measuring all new policy proposals against the growth test will ensure we have a fighting chance of getting living standards up into the top half of the OECD.

Unfortunately, raising the language bar on skilled immigrants and removing the criterion of “economic efficiency” from the Land Transport Management legislation currently before the House - just to cite a couple of recent policy shifts - won’t help to get us there any faster.

New Zealand’s history indicates that we have always done best when we pulled together as a team. It’s true whether you think of the All Blacks or indeed the Hurricanes (I wrote these words last week!), who will doubtless contribute several of their number to our World Cup squad - or indeed Team New Zealand itself.

So what if we have now lost the world’s premier yachting prize? This was always going to happen sooner or later. Surely the only thing that matters going forward is that like the trail-blazing Aussies in 1983 we took on the world and won it, not once but twice. Now let’s find other mountains to climb.

New Zealand as a nation and as a national economy, right throughout its economic history, has been built on the basis of strong communities and an implicit public and private sector partnership. I am not talking at all about some 21st century equivalent of a socialistic backwater. Rather I mean that for most of our national development New Zealanders have looked to governments as necessary enablers – if you will, more as a key ingredient in solutions than the source of problems.

So a big part of my offering to you Rotary folks today is when we’re looking out for Wellington on behalf of our whole community, let us regard the fact that Wellington is our capital city and seat of government as an opportunity that we must maximize. I am not for saying that the smaller government is, the better. Instead I believe that the better government is the relatively smaller it will eventually become, as the wider economy grows around it.

In the area I worked on in the public service, that of international trade negotiations, governments are the only admissible vehicles through which we can get a better deal for all Kiwi exporters, whether they are giants like Fonterra or one person consulting operations. But most New Zealanders still only have a hazy idea what trade policy is. For most people acronyms like WTO, MFN and long words such as “multilateral” are an instant turnoff. And yet the work done in international trade policy negotiations by our hard pressed officials, here and offshore, is akin to what a commercial lawyer does for his clients as they build a new enterprise on new premises, and start a new sales operation.

If you’ve got problems with the RMA, in terms of excessively protracted delays and unreasonable restrictions in getting projects going, then there’s your direct parallel with the current state of international trade rules, as they affect New Zealand dairy exporters (just to take the most obvious example). The choice is essentially just the same. We can either spend ages working our way around the excessive requirements of the RMA or we can seek to upgrade its provisions in a meaningful way and make life a lot easier and more straightforward for wealth creators. The same goes for global trade rules.

Although I am not sure the Government’s current draft legislation is going to do it for us, I would nevertheless hasten to add that getting a more user-friendly RMA will be a hell of a lot easier than getting the New Zealand dairy farmer a fairer crack at the fortress markets of the Northern Hemisphere!

So my parting message could be almost Bhuddist or Hindu in its simplicity. All life forces are inter-related; and “no sound is dissonant which tells of life”. What we do to promote an environment that is conducive to business vitality here on Lambton Quay is of a piece with what New Zealand, in partnership with other liberal and like-minded economies, must do to promote a more level international playing field.

In the matter of looking out for Wellington and New Zealand, the questions are “if not now, then when?”; and “if not us, then who?” Whether in terms of Government, academia, the businesses themselves and business organizations such as our own, Wellington will need to continue to furnish most of the intellectual leadership for this task. So as New Zealand picks its way precariously through the increasingly complex world we now live in, I believe that it is Wellington – our city and region - that must be to the fore.

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