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Forest Industry Engineering Association

23 July 2002

Hon Jim Anderton

Speech Notes

Forest Industry Engineering Association Annual Conference

Forest Industry Engineering Association Annual Conference

Tuesday, 23 July 2002

8.20 am

Auckland Centra Airport Hotel

When the current Coalition Government took office in November 1999, we set out to work in partnership with industry.

The wood-processing sector was one of the industries we identified early as having the potential to create jobs and opportunities for New Zealand.

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

If even half that wood could be processed locally, we could create thousands of jobs, and revitalise the regions.

But we also knew that there wasn’t much sign of the investment actually happening. So we took the step of getting alongside the companies and asking why not?

We got some free and frank advice back.

First, they said, “New Zealand is wonderful, the trees were great and the people were very nice.” That was good news, but we already knew that.

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 the list went on, including issues of energy availability, market access, biosecurity, and climate change.

Progress we have made on these issues has been an excellent example of a working partnership.

Indeed, the Wood Processing Strategy Steering Group has resulted in the most successful industry strategy to date. The goal is to double the size of the industry by 2015, making it New Zealand’s largest export earner.

The Government has listened and contributed to the debate - and we have delivered.

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

- Transport - we have a roading package especially for East Cape and Northland. This is the result of detailed work by the industry, local government and central Government

- 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 in your court. The industry itself must take the lead in developing commercial solutions.

For the future, these seem to be the issues for the industry:

- We need to ensure we use all of the tree, and maximise its value

- We need world standard mills for first stage processing, and we need very high quality plants for further processing

- New Zealand can supply the raw material and the skilled people. Others can supply finance and marketing channels. In particular, those building new sawmills will want linkages with those doing further processing and manufacturing, at the time they make investment decisions.

- The good news is that China is joining the WTO, so we can expect substantial reductions in tariffs there. That will make investment in further processing here more attractive. But there is still a lot of work to do on other issues related to market access around the world. The Government will continue to do its share.

- We can and do make excellent furniture in New Zealand, but there is also a big future in making inputs into other people’s products.

We must keep making progress on all of these opportunities step by step through innovation, hard work, and astute use of all available technologies.

The real choice for New Zealand now is between uncertainty and progress.

You’ll forgive me for touching briefly on politics, but with the election only 4 days away, I’d like to make a few points.

I have the feeling that people take stability for granted, that they do not realise that it took two leaders to deliver political stability and economic progress over the last few years.

If Labour and the Progressive Coalition do not get a majority together, we face constitutional uncertainty in the lengthy transition to a new government, political uncertainty for three years, and economic/investor uncertainty.

I do not want to take anything away from Helen Clark.

But she has not been there alone.

We have contributed the Ministry of Economic Development to work in partnership with industry.

It wasn’t there before we entered government and it wouldn’t have been created without us.

New and growing businesses develop faster and better if Government is supporting them actively: helping research markets, providing expertise to get them going, boosting their confidence that they are not alone in the universe and acting as a partner in industrial development.

Across the country, there is a different relationship between business and Government as everyone begins to realise how serious I am about economic growth.

But New Zealanders might not realise how important their vote is for a solid block of Progressive Coalition MPs until it is too late.

I wouldn’t want New Zealanders to wake up on Sunday and think “Ooops”.

I’m confident we can continue to bring new investment into the regions of New Zealand.

These investments will bring jobs and renewed hope to some of our most difficult regions.

There are 104,000 more jobs than there were 2 years ago, one new job every twelve and half minutes of the past two and a half years.

There are 12 major industry strategies under way - from wood processing to biotechnology, information communication technology and industrial design - with many more lined up.

It is a good story, and getting better by the day.

You have a choice. New Zealand has a choice.

Uncertainty or Progress?

All of the progress we are making - all of the jobs - all of the work with business - could go this weekend.

Picture this: a National - NZ First - United government supported by ACT.

Could that happen?

Almost certainly it will happen if they have the numbers.

A vote for any of them is vote to end the progress we have made.

Thank you for your industry’s contribution to that progress.

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