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Partnership and economic development - Anderton

Hon. Jim Anderton
8 February 2001 Speech Notes

8:00PM Thursday, 8 February 2001

Partnership and economic development

Address to the Christchurch Business to Government Forum

Last week I was on the Chatham Islands, and I held a public meeting there.

About a hundred and fifty voters cast a ballot on the Chathams at the last election, so I pointed out to the public meeting that the Alliance got three votes there.

This information created a bit of a rumbling noise down the back, until someone called out, 'yeah Jim, but two of them have since died.'

So I had one mission – to double the Alliance vote on the Chathams. We now have a thriving branch set up there.

I feel a bit like that coming here. I probably got more votes on the Chathams than in this room. But, of course, I'm not expecting to set up a new branch of the Alliance.

I am hoping, however, that we can look at the issues facing New Zealand.

New Zealanders are the only people in the world who will secure the future for New Zealanders. The only way we can provide security and opportunity is to work together, in partnership.

We have to get started because New Zealand is slipping behind other economies that we like to compare ourselves with.

Our average income has been slipping behind the average income of other developed countries for three decades. Our overseas debt is monumental. The last time we earned more overseas than we spent was 1973.

Tonight is not the time to rehearse the arguments about what could have been done better.

But it is time to acknowledge that we do need to do better -- at the local, regional and national level.

Our economy is still largely dependent on commodities for our export income.

We sell products to the rest of world that are largely undifferentiated from the products of our competitors. Although we are good at it, the real price of those commodities is falling.

At the same time we buy complex manufactured goods that command prices set by sellers. New Zealand is the lowest exporter of high-tech products in the OECD. We import five times as much high-technology production as we export.

We have a small population and the luck to have significant natural resources. So a significant proportion of our exports will probably always come from natural resources.

But that does not mean that we cannot produce highly innovative products or services for the world market.

The point is: We need to do much more than hope the sun shines, the rain falls and the grass or trees grow.

Four per cent of our companies are exporting: That’s only 8,500 businesses out of 259,000 in the whole of New Zealand. 127 companies account for 73% of our total merchandise exports. 30 companies earn half of our foreign exchange.

This adds up to a very narrow, and shallow, export base, highly dependent on a relatively small number of large exporters.

To move forward we have to create advantages for ourselves.

We already have some important competitive advantages in the world.

New Zealanders are quick to adapt to, and to use, new technology. We have significant natural resources and an exciting natural environment.

We have a competitive cost structure. That is the upside to low income levels relative to other developed countries and the current relatively low value of our currency. Low costs help to give our manufacturers and exporters an edge.

But if we want a sustained rise in our real incomes, we need more than inherited advantages. We need to create advantages for New Zealand. Support good ideas and remove the obstacles that prevent them from flourishing.

We have to produce, retain and attract the people we need. The challenge for New Zealand is to be a country that is attractive to skilled and talented individuals. Attractive enough for them to invest their energy and resources and attractive enough to live in.

To become the best small country in the world we need a strong, diverse economy.

One where skills, talent and creativity can be developed. Where there will be rewards for success and for skills. Where those who try will be encouraged and supported and risk is accepted. Where working people can look forward to rising real incomes.

But incomes alone will never be enough. There are important quality of life issues as well.

Individuals need to feel personally secure. Secure in the knowledge that they will not be left without life’s essentials, that their personal safety and their property is secured and that there is some form of assurance about the future. That's why the Government has put so much energy into a secure Superannuation scheme.

We need a country that is confident in its own unique culture. We need to see New Zealand performers on the world’s stages. We need to be proud of what we do and the unique, distinctive way we do things.

We need a country that offers world class education and health care.

We need tertiary institutions much better equipped to meet the teaching, learning and research needs of New Zealanders.

One of the singular quality-of-life advantages New Zealand can offer is the physical beauty of our natural environment. That means using resources sustainably and protecting our unique flora and fauna. It means taking a balanced approach to development.

This government believes that – to address these issues – we need to take a partnership approach.

The Ministry of Economic Development and Industry New Zealand are the vehicles for the Government's partnership. It's their job to work with industry and with local communities to create advantages and unlock New Zealand's potential.

They won't accomplish it all on their own. They will be partners. The Government has been the missing partner in economic development in this country for nearly 25 years, and now we have a presence.

Industry New Zealand will help good ideas to get off the ground.

For example, it has an Investment Ready Scheme bringing together people with good ideas and venture capital to fund those ideas. It helps innovators get their ideas up to a level where they are ready for investment.

A team of industry specialists within Industry New Zealand is working with high growth potential companies. They identify barriers to their growth and help find ways past them.

A Regional Partnership Programme is underway to help regions realise their potential.

One of the most important goals of the Ministry of Economic Development is to provide co-ordination and leadership.

On the East Coast of the North Island we identified constraints on wood processing capacity as a key economic development issue -- not only for that region but elsewhere in New Zealand. So we are working with the forest industry on a wood processing strategy. It's looking at issues like infrastructure development such as roads and ports, supply of skilled labour, and investment promotion and marketing. We need dozens of industry initiatives like this.

Last weekend the Prime Minister and I announced a major development at the Hobsonville Air Force Base in West Auckland. $600 million of new export earnings over five years, and 350-400 highly-skilled new jobs. The project required committed work from the MED, working in partnership with the local Government and the private sector and providing co-ordination across multiple Government departments.

So the Government has some initiatives under way. I know there are other ideas about the contribution that Government can make. I want this forum to develop some of them. That's why we are here.

After I spoke to a business audience in Auckland recently, I received a letter from someone who wrote 'If only you had any idea what it was like to run a business. If you only knew what it is like to know people and their families depend on you for their livelihoods.'

Well I do know. I have been an employer and I have established and run a significant manufacturing engineering company.

One of the lessons I've learned is that we can achieve the most by working together, in partnership.

This Coalition Government is full of pragmatists. I'm one of them. If ideas work, I'll support them. If they don't work, we should throw them out and try something else.

I want to conclude by saying that there is no shortage of innovation and good ideas in New Zealand. There are many reasons why the economy has not flourished as well as it might have done. But it is indisputable that government has been a missing partner in economic development. We are now attempting to ensure that the government plays its part. It's not a matter of the government doing it all. It is a matter of working together.

That co-operative partnership will be a powerful weapon as together we build a better future for all New Zealanders.


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