20 May 2004

Small Business Thriving

Hon John Tamihere Speech to Thrive Mainland, Christchurch Convention Theatre, Thursday May 20, 4pm

When I was preparing for this speech the other day up in Wellington, I cast around among my North Island colleagues and asked if they knew any good South Island jokes, and the only response I got was "Gerry Eckhoff".

With all respect to Gerry, he no doubt serves the Mainland very well, if you happen to be among the one per cent of the population that votes ACT, but the point I am getting at is that the Cold War seems to be thawing, and no longer are the 76 per cent of us who live in the North Island getting cheap laughs at the expense of Mainlanders.

In fact, as the worst of the worst of North Islanders, an Aucklander, I am even prepared to go as far as to admit that South Island and South Islanders have a lot going for them. In fact, I can recommend to you Tamihere's Top 10 reasons why we love the South Island:

1. Shrek – I know South Islanders would be keen to get away from an image involving close associations with sheep, but who could be a better ambassador for the Mainland, and indeed our nation, than Shrek?

2. Electricity – In these times of frugality regarding energy use, we Northerners are eternally grateful for the South Island's electricity-generating capacity – not to mention your great generosity in sending it northwards so we JAFAs can keep our cellphones charged.

3. Damien O'Connor – I love Mainlanders so much, I even flat with one. Damien (or Chainsaw, as we call him) is a credit to the South Island, thanks to his unflagging efforts on behalf of West Coasters, despite their disconcerting urges to chop down anything that stands still for more than five minutes.

4. Clayton Cosgrove – I know Clayton bears an uncanny resemblance to Mike Moore, but don't let that deter you: this guy is one of the most driven, hard-hitting MPs I have ever seen when it comes to battling for his constituents.

5. The Crusaders – after last week's dismal result from the Chiefs, as New Zealanders we're all pinning our hopes on the Crusaders against the Brumbies this weekend.

6. South Island iwi – without the "top of the South" tribes, not to mention the contribution of Marlborough Mayor Tom Harrison, we might never have had the opportunity to participate in the stimulating discussion over the foreshore and seabed that has so invigorated political debate.

7. Speights – how could we have a discussion on the merits of the South Island that without mentioning that well-known South Island laxative?

8. Bluff oysters – I hear they are an aphrodisiac, which must be handy when you are trying to stay warm during those long southern winters.

9. Country music – when I was a kid there were just two kinds of music in our house: country and western. Gore has long been the home of country music, and I must pass on my condolences to the Gore Country Music Club who had their HQ detroyed in an arson attack recently. It's great to hear that the incident won't stop the Golden Guitar Awards going ahead this year.

10. Ummm … did I mention electricity?

So there you go, 10 reasons to love the South Island, just like that. So it is great to be here on the Mainland today celebrating business success and growth, and commitment to economic growth and prosperity.

For some reason, the South Island doesn't seem to be widely lauded as an economic powerhouse, but it should be. I'll bet there are lots of things you don't know about just how well a number of South Island regions are performing:

Did you know, for example, that Canterbury and Otago were among the top four regions in the country for increase in economic activity for the final quarter of 2003? The most recent National Bank survey shows that Canterbury and Otago (along with Northland and Wanganui-Manawatu) led the country in increased economic growth. This was the 10th consecutive rise in economic activity in a row for Canterbury.

As well as the stellar performance of the Otago and Canterbury regions, we're also seeing strong economic performance in other South Island regions.
According to the National Bank Regional Trends report (September 2003), the West Coast region posted a strong surge in economic activity in September, propelling year-on-year economic growth, which was 4%, above the national average for the first time in two years.

The tourism sector is also looking strong, with predicted increases in tourist numbers looking very good for the South Island. For example, by 2009 visitors to Queenstown/Central Otago are projected to increase by 37 per cent to 2.1m, which is well above the national average of 21 per cent tourism increase.

And those are just a few of the economic measures that show the South Island is firing on all cylinders. I have actually been spending quite a bit of time down here recently as part of our series of regional Small Business Days, so have been able to observe quite a bit of the action first-hand.

Unfortunately I wasn't able to get to the Invercargill and Dunedin Small Business Days – I was unavoidably detained by a hikoi – but I did get a pretty good look at some amazingly entrepreneurial businesses in the other regions, and the experience was truly inspiring.

You can get all the surveys and analysis from your bureaucrats you want, but unless you get out there and actually feel the pulse of business, it's hard to really get a good feel of just how well things are going. You find out things on the road that you definitely wouldn't find out sitting around talking to officials in Wellington.

One thing that has really struck me is how each region has its own distinct business culture. Up in Auckland, for example, we're more brash and in your face about telling the government what we want. Down south I notice that business is conducted in a more genteel manner – I don't doubt that there is an iron fist in the velvet glove, but people down south have a really different way of communicating.

I think the regions that left the most indelible impression on me would have to be Timaru, Taranaki and the Wanganui/Manawatu region. Timaru in particular left me completely gobsmacked by the wonderful energy and diversification going on in its business community.

While the Small Business Day roadshow wrapped up in Nelson last week, it definitely isn't the end of the road for what that initiative is doing for small business. The Small Business Advisory Group which I recruited from the business sector last year is now working on a report-back from the Small Business Days, and all the valuable feedback we received from the thousands of Kiwi businesspeople who attended will go into shaping future Government policy on what more we can do to create a business-friendly environment.

Actually it's probably a good time for me to sing out to Denise L'Estrange Corbet, one of the people on the Small Business Advisory Group, who is one of the speakers here today – you've probably spotted her already because she tends to have some pretty amazing outfits that kind of stand out among your average business conference attendee's attire.

Another thing that has really staggered me during the Small Business Days is the sheer resilience of a lot of New Zealand businesspeople. They take some really big risks and suffer some really heavy hits, but they just keep coming back at you, getting up off the canvas and giving it another go – and eventually they succeed.

I believe that we need to give these people more credit than they are currently getting. We need to honour and applaud our businesses heroes as often as we celebrate our sports heroes.

That was probably the biggest revelation for me in attending the Small Business Days – not only are the superb efforts of our small businesses not fully acknowledged by the general public, they are not fully appreciated even by those who own and run the businesses.

People in small businesses don't often see themselves as being worthy of a pat on the back, so as much as getting communities to recognise the efforts of businesses, we need to get businesspeople to pat themselves on the back, too. Because if we don't foster a greater sense of self-belief in our businesspeople, then they are not going to have the self-confidence they need to push their businesses as far as they can.

Attitude is a huge factor in how well a business succeeds – and I think many of the presentations here today illustrate that very clearly. While New Zealand businesspeople display a remarkable stoicism in doing the hard yakka and surviving the tough times, we need to move people out of survival mode, and translate that stoicism into optimism – for their businesses and for themselves.

For example, that ability to just hunker down and struggle through adverse circumstances serves businesses well in getting through those times, but it can also have a downside. Sometimes businesspeople have a tendency, when they find themselves in a hole, to just keep on digging.

For example, many businesspeople have a real aversion to seeking outside help, even when they really do need that help. A lot of the support we can offer small businesses gives them the opportunity to gain from outside help – for example through business mentoring, or the new subsidy on payroll agents for a firm's first five employees. Often once businesses do accept that sort of external advice, they realise that different skills and perspectives were just what their business needed.

Most communities have some awareness of the contribution the really big employers, like freezing works or forestry, make in their towns, in terms of being a major employer and source of income. But there is far less recognition of the contribution made by all the small businesses operating in any Kiwi community.

The "little guys", the businesses that employ 20 or fewer staff, make up 97 per cent of this country's businesses – if they don't succeed, we can forget about succeeding as a local community, a local or national economy, or as a nation. So good on ya to all those businesspeople who are out there doing the hard yards and coming up with the truly inspiring innovative ideas that are fuelling economic growth and prosperity that benefits all New Zealanders.

Because what is good for small business is good for New Zealand, as a government we obviously want to create an environment in which doing business is easy. The Budget out next week delivers some fantastic new initiatives to make doing business easier.

- Promoting Youth Enterprise. This joint initiative between the Ministries of Youth Affairs and Economic development will explore how we can support young people in business and increase the number of young business leaders, which may lead to the establishment of a Young Entrepeneurs Network.
- Enhancing SMEs' ability to conduct their interactions with the government electronically. Working with the State Services Commission's e-government unit, this initiative will make SMEs' transactions with the Government (like tax payments, statistical returns and so on) easier, faster and cheaper.
- Unlocking Maori assets to support business development. This project, with Te Puni Kokiri, will work on how Maori can best utilise their assets to develop businesses and businesses skills among their people. There is huge latent potential in this area, and I believe this initiative will see it realised.

And those are just some of the budget announcements in my patch as Minister for Small Business – you'll see plenty more business-friendly initiatives and funding announced in the next week by Finance Minister Michael Cullen and other ministers in business and economic portfolios.

As long as you don't have unrealistic expectations of corporate tax cuts – and I can assure you that's not going to happen - I think you will have to agree when you see all the details next week that Budget 2004 is a great budget for business.

ENDS

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