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Forestry Industry Conference - Jim Anderton Speech

Hon Jim Anderton Speech Notes

Forestry Industry Conference

Closing Address
Forestry Industries Conference

Royal Novotel Lakeside Hotel, Rotorua

4:30PM Wednesday, 13 March 2002

I’m very pleased to be here.

This is an important conference for the future of forestry and wood processing in New Zealand.

When the Labour-Alliance Coalition Government took office in November 1999 we set out to add a development dimension to economic policy.

For fifteen years before that, Governments believed that the best thing they could do was sit on the sidelines and do nothing.

It didn’t work.

Change in the New Zealand economy did not come fast enough, and for more than thirty years the average incomes of New Zealanders have been falling behind those of other developed countries.

We had the radical thought that, just maybe, if the Government could work effectively with other parts of the economy, we could make faster progress.

We were sure we could get more growth, and take advantage of opportunities that would otherwise be lost.

We thought that it would be a good idea if the Government itself worked together a bit more.

We thought that after fifteen years of not having a view or a vision, we might try having one.

It was time for action.

But we also found that after spending all that time on the sidelines, the public sector had lost much of its capability to actually do anything.

There was nothing at the end of the levers when you pulled them.

You could get elegant policy papers and erudite work on things like frangible roadside furniture.

What you couldn’t get was engagement with industries and communities.

So we created some new public sector agencies.

The Ministry of Economic Development was created out of the old Ministry of Commerce, and we built from scratch Industry New Zealand.

We announced we would work in partnership with business, communities and with local authorities.

Councils around New Zealand were already pioneering active economic development policies.

We learned lessons from them.

We also looked for a sector where we could get faster growth and better jobs.

The wood processing sector was the obvious place to start.

We knew about the so-called wall of wood – or wave of opportunity as some in the industry called it.

We knew that there were extraordinary increases in wood supply coming on-stream in Northland and the East Cape.

Forests worth hundreds of millions of dollars are locked up in those regions because there has been inadequate investment in transport to bring the wood out and to get it processed in New Zealand.

If even half the increase in wood could be processed locally, we could create very large numbers of jobs and revitalise regions.

We could have a measurable impact on GDP.

But we also knew that there wasn’t much sign of the investment actually happening.

So we took the next radical step of getting alongside the companies and asking why not?

We got some free and frank advice back.

First, New Zealand is wonderful, the trees were great and the people were very nice.

But second, the companies weren’t sure the Government even wanted them here, because the Government hardly ever talked to them.

Third, the transport infrastructure was inadequate.

Fourth, the way the RMA was implemented was putting increasing uncertainties around investment.

Fifth, the supply of skilled labour was very low.

Sixth, there were significant drug problems in the regions and the workforce.

And there was a considerable list after sixth, including energy availability, market access, biosecurity, and climate change.

When this Government came to power, the first item on the agenda was to create more jobs.

We wanted to do that, not by throwing money at problems, but by working in partnership with business, local government, iwi and unions.

We wanted to help create a shared vision of the future of business, and to ensure that every party involved could make the most effective contribution.

What we did not want to do was to force ideas on business and regions from the top down.

We were looking for partnerships where the result was greater than the sum of the parts.

We started with wood processing.

For me, it has been an excellent example of a working partnership.

Together with local government, we have addressed all the public policy issues the industry identified.

Transport: We have announced a land transport package that, for the first time ever, provides regional development funding

The money will be available to help unlock the ‘wall of wood’ in regions such as Northland and East Cape/Tairawhiti.

Unlocking that supply of wood will bring thousands of jobs to some of the most acute regions in New Zealand, and potentially lift export earnings in the wood industry to rival those of dairy.

RMA processes: We have identified ways to get quicker, more certain outcomes.

Skills training: We have worked closely with the ITO and leading companies to upgrade skill development, and we are creating a centre of excellence.

Climate change: We have had a very open dialogue as we work to implement the policy package that best suits New Zealand.

Best of all, we have established the basis for a continuing relationship for the next phase of development.

The ball is now with the industry.

Before we move on to that, let me reflect on what the Government learned from the wood processing strategy.

The main lesson has been the difficulty of getting a fragmented public sector to work together on major issues that cut across a number of departments.

We now have lots of agencies, all of which might be good at what they do separately, and all of which might serve their own Minister well.

But trying to get them all to work together has been very difficult.

Agencies are supposed to serve the people of New Zealand, and the people don’t care about organisational niceties.

They just expect that their money will be well spent, and that the Government will manage itself well.

I should say that, once we got past the shock of trying to work together, public servants have reacted very positively.

The second lesson has been the insight into the almost complete disengagement by the public sector from this industry – and from many other industries.

There were some older public servants who were used to working closely with industry, but they were few and far between.

For many, public servants, it has been a revelation.

They can talk to the private sector.

And private sector engagement can increase the quality of Government policy.

Everything we have done over the last eighteen months could and should have been done by previous Governments.

There is no rocket science here – it is pragmatic, practical, common-sense.

There remain a number of issues, however, for the forestry/wood processing industry to deal with.

These include:

Full wood utilisation- We need to ensure we use all of the tree, and maximise the value of each tree.

We need world standard mills for first stage processing.

We need linkages -. New Zealand can supply the raw material and the skilled people we need.

Others can supply finance and marketing channels.

In particular, those building new sawmills will want linkages with those doing further processing and manufacturing.

We need markets and marketing, including efforts to maximise opportunities that are expected to arise for increasing investment in processing once China has entered the WTO.

All of these issues can be resolved.

All they need they need is imagination, hard work, and the astute use of all the available technology.

We might even have an advantage from the fact that we do not at present have many world-scale mills.

When this Government first started to work with the wood industry, leading overseas companies would tell me “We love New Zealand, but…”

They are now starting to say “We love New Zealand, and …”

I’m confident we will see new investment in the developing areas of New Zealand forestry.

This investment will bring jobs and renewed hope to some of our most difficult regions.

All this will be achieved without handouts.

It is the start of a New Zealand model for development.

We cannot afford the amounts some overseas countries put into attracting investment.

We aren’t as close to markets as some other countries.

But what we can do is focus on our strengths while being much more responsive in ensuring that our policies align with the needs of business and the wider community.

I wish you all well for the future.

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