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Jim Anderton NZ Plastics Speech

Jim Anderton NZ Plastics Speech

Plastics New Zealand chairperson, Graeme Allan Delegates, guests, sponsors, ladies and gentlemen
Yesterday at about five o’clock in the morning, I was sitting at Parliament, finishing work for the day -- with a Bill aimed at teenage drinking. I was thinking that I would have to be back at Parliament in an hour or two to go on Morning Report and then work on a couple of minor issues – like energy, and the budget.

And it’s at times like that you wonder why anyone would be a politician.

The reason it’s a good job is that it’s a privilege to work with New Zealand’s innovative industries and work on ways to make our whole country stronger.

It’s not that long ago that orthodoxy said there was no role for government in working with industry.

I was never one to share that orthodoxy.

It’s fair to say I copped my share of criticism over the years for taking the view that the government has a role, working in partnership with industry.

Today I want to take some time to talk about why partnerships are important for New Zealand.

Then I want to turn to some of the particular issues that I believe the Government can work on in partnership with the plastic industry.

A generation ago we used to think we enjoyed prosperity as of right.

That was my experience as a young New Zealander.

It was the experience of many others.

But for at least three decades, we have been slipping behind other countries we like to compare ourselves to.

When you think of countries like Spain, Portugal, Cyprus and Slovenia, there are not many people who would consider those countries to be rich.

Yet New Zealand today ranks among them in comparable, per capita wealth.

In 1970, New Zealand had roughly the same per capita income as Australia.

Australia is not doing too badly today – it’s ranked about 12th in the OECD, just behind where we were in 1970.
To have kept up with Australia since 1970, we would have had to have grown by just one per cent a year more than we did. That would have meant real GDP growth of about 3.1% -- hardly a startling rate.

I asked the Ministry of Economic Development to do some figures for me on how different things could have been if we had achieved the same growth rate as Australia’s.

It would have meant extra incomes for the average worker of $175 a week.

What would that mean for most families?

It would mean, for health, another $3.7 billion a year.

What would that do for waiting lists? For kids with glue ear? For people who can’t afford to pay for their prescription?

It would mean another $4.2 billion for education or $3500 per student each year.

That’s the end of the student debt problem.

The total student debt is not much more than $4 billion – so we could pay that off in one year.

How many of our best and brightest would be heading overseas permanently, to escape a lifetime of debt?

If our GDP had grown at the same rate as Australia’s, we could have invested twice as much per capita on roads over the last thirty years.

I find those figures staggering.

They’re worth bearing in mind the next time next time you hear someone calling for us to go back to the policies of the past.

If we want first-world status in health, education and our quality of life, we need to do much better.

We need to do better if we want our kids to have a future here.

In 1970, New Zealand and Taiwan each exported about a billion dollars a year of mainly commodity products.

Rice from Taiwan, and meat, wool and dairy – mainly – from New Zealand.

Today, we have grown that export base thirty-fold.

But Taiwan, exports $125 billion a year - 125 times more than more.

Who won that race?

When we lost the America’s Cup, we got a new leader and a report detailing the systemic failures in the campaign.

When we lost the Rugby World Cup, we sacked the coach, and finally put a few Crusaders in the All Blacks.

In 1999, I believe New Zealanders chose to do the same for the New Zealand economy.

We’ve set out to transform the economy.

The government is working in partnership with creative and talented businesses and industries to create jobs and lift our prosperity.

We’re working with individual companies, clusters and sectors that can grow their exports quickly.

We’ve tripled government's investment in industry training, funded business incubators to support entrepreneurs and provided early stage financial assistance for business projects.

It’s beginning to work.

GDP last year grew 4.4 per cent and unemployment is the lowest it has been in 15 years.

Is that enough? No.

I’m ambitious for New Zealand, probably as ambitious for New Zealand as anyone.

I want us to be a country where we can afford health care for everyone, educational standards and a quality of life as good as anywhere.

But we need to create an economy capable of delivering it.

We can’t do it with a hands-off attitude, standing on the sidelines, hoping things will come right.

You can’t create it by becoming a low-cost, low-value, low-skill and low-rewards economy, either.

We are the lowest exporter of complex manufactured products in the world.

We import five times as much as we export.

The next lowest in the OECD is Greece – and it imports three times as much.

We need to export more – far more – products based on the unique skills and creativity of New Zealanders.

Your theme at this conference is ‘design for growth.’

I want to congratulate you on the choice of theme.

Two thirds of New Zealand companies that are successfully exporting consider design to be an essential contributor to their success.

Traditionally in New Zealand we relegated the role of design, partly because we have relied heavily on commodity products.

This is changing.

There are a growing number of New Zealand companies that are combining high investment in research and development with a strong focus on design to create brilliant products that the world wants.

Fisher and Paykel with both healthcare and whiteware products are the most well-known example.

Formay Furniture's success with the life chair is another.

In plastics, Palmerston North company Click Clack exports innovative food storage containers to more than 50 countries.

I'm sure you know of others.

There are also an increasing number of small companies that very few have heard about.

Obo goal keeping, also in Palmerston North, has a huge share of the global market in hockey goal keeping protective gear, all based on great design and smart marketing.

Auckland based Queensbury and Company produce high quality custom made photo-albums that they sell into the United States.

There are many others.

We can be positive about the success of these companies and inspired by them.

I’ve just returned from Europe where I took a sustained look at economic development policies.

I believe that New Zealand is poised to make real gains in the international marketplace, if we can apply our creativity and innovation, and our practical approach to solving problems.

Many countries are accustomed to very large scale manufacturing projects and huge, dominant companies.

They’re not used to seeking or creating niches for themselves.

That provides an opportunity for New Zealand manufacturers because it’s an area in which we enjoy a competitive advantage.

We can exploit the opportunities available in a number of ways – innovation in production processes as well as in product design.

‘Sustainable design’ is an important area for New Zealand.

I know the plastics industry has recently launched a Sustainability Initiative.

The development of eco-friendly materials that can be broken down at the end of their lifecycle is an important area for New Zealand.

It’s an important consideration for exporters, in terms of complying with new regulations in global markets.

There are immense opportunities available if we can develop products at the leading edge of lifecycle issues.

It’s an R&D issue, and research and development is vital to growing our entire manufacturing sector.

Specifically, we need to overcome the barriers to research and development in the plastics industry and in others.

Industry New Zealand has a presence at this conference, and its services are available to assist businesses to find their way around the variety of schemes that exist to provide some R&D support.

Industry New Zealand is being merged with Trade New Zealand to create a one-stop shop for Industry assistance.

It will be able to assist our fastest growing companies as well as collaboration that produces technology transfers and investment flows into New Zealand.

I picked up a good idea in Denmark that I would like to see trialled here as way to boost research and devlopment.

The Danish Institute of Technology has a relationship with thousands of small businesses, providing research and development on a project basis.

Entrepreneurs and developers take their projects along to the Institute and work with it to research their products and materials.

The small businesses contribute too – the average they pay, however is only $3000.

The ability to invest in research and development is crucial to progress and I would like to see our science and tertiary institutions develop a more pragmatic relationship with businesses.

I think this sort of approach could be especially applicable in the plastics industry.

It’s an example of the achievements possible through partnership between government and industry.

The general skills shortage is a related area.

It’s ironic that three years ago, when I became Minister of Economic Development, people used to ask ‘where are the jobs?’

Now, when I go around New Zealand, they ask me ‘where are the skills?’

The shortages that the plastics industry is experiencing are also being felt in other important industries.

The government is rapidly increasing the number of young people in skills training.

I stood on an election platform last year of increasing the number of young people in skills training to 100,000 by 2005 – up from 68,000 last year.

In fact we are going to have more than 100,000 in industry training next year.

The Modern Apprenticeships scheme is being doubled in size.

Yet there is much more to do.

It is worth recording that industry has a role to play as well.

I’m sure you are fully aware as individual businesses people of the difficulties cause by failing to plan for skills shortages.

We need to be prepared to look at all of the obstacles to overcoming the shortages.

Only yesterday the Independent Business Weekly reported that, “business grumbles about a tight labour market causing hiring problems are not showing up in accelerated wage growth.”

The Independent is not exactly known for being the newspaper of international socialism.

Nor is the BNZ branding itself as the People’s Bank these days.

Yet the BNZ economist says in the Independent, “If employers are going to combat labour shortages, they are going to have to pay higher wages and salaries.”

Of course, that point takes us back to the fundamental of economic development – you can’t easily pay higher wages if you are trying to compete on price against the lowest cost producers from around the world.

If New Zealand businesses want to compete, and if we want to be able to pay enough to attract skilled staff – then we need to compete on our talent, creativity and innovation.

In the case of the plastics industry you have a fantastic role model to attract young people to the industry in New Zealand’s greatest living scientist, Alan MacDiarmid.

Alan won the Nobel Prize for his work with plastics – specifically, electricity-conducting polymers.

His achievement in winning our first Nobel Prize since Rutherford indicates that we are indeed capable of producing world-class science and innovation.

Development of new materials, such as these conductive plastics, lead to new possibilities for product designs.

Applications range from cars, boats, packaging through to potential computer display technologies.

The plastics industry offers some very exciting opportunities for New Zealand.

Worldwide, plastic technology is advancing very quickly and continuing to develop and produce many new applications.

There are amazing new product possibilities that a few years ago weren't even thought possible.

The pace of development is only going to quicken, and we need to be at the very forefront of significant parts of it.

Our prosperity in the future depends crucially on it.

There is no such thing as standing still.

Either we move forward quickly, or we get left in the dust.

The path to economic growth in New Zealand is not without its challenges.

We need to move ahead on many fronts at once.

There are constraints on our infrastructure – our roads, and rail, for example.

The energy sector is an obvious example of the flawed or run-down state of much of our economic infrastructure.

It’s not going to be fixed overnight, but the government is working on as much as we can.

There will be changes in the energy sector, and they will be sooner rather than later because none of us are prepared to endure another winter of telling industry, ‘sorry there just isn’t enough power for your needs, once again.’

Few of the issues we are confronted with will be solved by the government alone. They will be resolved through industry working in partnership with central and local government, constructively and with the aim of maximising New Zealand’s potential.

The government, for its part, is prepared to play our role.

I wish you all the best for your conference and for the growth and prosperity of the plastics industry.

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