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Address to first Textiles NZ annual meeting

Tue, 15 June 2004

Hon Jim Anderton: Address to first Textiles New Zealand annual meeting

The Labour Progressive government's work with the textiles sector is part of a $500 million budget investment package aimed at unleashing the talent and creativity of New Zealanders.



I want to start off by telling you the story of a mother who finds a letter from her daughter on the kitchen table.

"Dear Mum, It is with great regret and sorrow that I'm telling you that I eloped with my new boyfriend. He is so nice, with all his piercings and tattoos and his big motorcycle.

But it's not only that mum, I'm pregnant and Ahmed said we will be very happy in his caravan. He wants to have many more children with me and that's one of my dreams.

I've learned to try new things, like marijuana. Don't worry Mum, I'm 15 years old now and I know how to take care of myself. Some day I'll come and visit you so you can meet your grandchildren. Love, your daughter. PS: Mum, it's not true. I'm next door. I just wanted to show you that there are worse things in life than the school report that's in my desk drawer. Call me when it's safe to come home."

There have been times when Ministers have come to speak to the textiles industry feeling like the fifteen year old in that story. "Here's the report, it's not much good, but cheer up because things could be worse." It's one of the pleasures of my job that we can do better than that.

When I came to the launch of Textiles NZ last December I said a partnership between government and the industry had begun with the tariff freeze.

The government would work in partnership with the industry to unlock its strength.

We can't pretend we can push back the tide; but we do need and have a responsibility to prepare for change.

I need to emphasise the need to prepare for change.

I'm sure most people here understand the position we are in.

But there are many who do not understand that the job we are doing is to ensure the successful transition and transformation of this industry.

Decisions for good or ill have already been made in other countries as well as in New Zealand and we need to adapt to them or be crushed.

Tariff cuts are not cost-free and this industry knows that as well as any.

The people who suffer the most when the industry is under pressure are its most vulnerable workers.

The point of a partnership between government and industry is to maximise opportunities for those workers.

Fortunately, I believe there is real strength in the industry on which to build.

In the last five years, the TCFC sector's exports have more than doubled, from $208 million to $439 million.

Textiles New Zealand is aiming to facilitate industry development so that the sector will be generating annual exports of $1 billion by 2008 with an annual growth rate of 12.63%.

Innovation is leading to success across the industry.

There are many well known stories of boutique New Zealand brands succeeding internationally in the TCF sector.

Their success is welcome and something we are all proud of.

But it is far from the only model.

There are also high-tech New Zealand firms succeeding with a blend of technology and marketing - Icebreaker and Snowy Peak are examples I have frequently mentioned.

The success of others in the industry arises from smart distribution, stock management, and retailing excellence.

There will be many more examples in the future.

Some experts believe some of our biggest firms in ten years haven't been started yet.

Imagine the potential for New Zealand industry of fabrics developed from the pioneering work of New Zealand Nobel Prize-winning chemist Alan MacDiarmid in electricity-conducting plastics.

Imagine computer screens made of fabric!

There are many more examples, including the far-sighted research work being completed for example by Canesis.

It's almost impossible to predict how far technology could transform the TCF industry.

When the Labour Progressive government began working in partnership with the TCFC sector, Textiles NZ came forward with a proposal to genuinely lift the prospects of the industry.

It requires investment in skills development and in R&D.

It requires commitment from the industry to the Textiles NZ Business Plan.

In this year's budget, the coalition government delivered on our end of the deal.

I was pleased to be able to announce new funding of $2.3 million for initiatives to build skills and assist in the TCFC industry's transition and transformation.

The funding came after Textiles NZ approached the Ministry of Economic development about research and development funding.

Most research and development funding was being provided through Technology NZ's Technology for Business Growth fund.

But some of Textiles New Zealand's R&D objectives were unable to obtain industry investment because they were at too early a stage for commercialisation.

The coalition government has been able to work through these issues.

The funding the government has been able to announce is not ongoing.

It is seed funding.

By late 2006 to mid-2007, the government expects the industry itself to be recognising value and supporting its own development activities.

The effect of this funding for Textiles New Zealand's work will be to help to transform the industry into a globally competitive, high value sector.

If you want this or any government to commit to working with the industry, then you need to keep up the pressure for it.

I often hear industry leaders telling the government that tax cuts will fix everything.

I'm not necessarily opposed to a corporate tax cut when fiscal conditions allow, but we should be clear about priorities.

I wonder how TCFC manufacturers would survive across the board tariff cuts.

That is what some business and political groups mean when they call for all taxes and regulation to be cut tomorrow.

If it obliterates a few industries - they don't care about the reality that the social and economic adjustment costs would do more damage than the gains they anticipate from "efficiency gains" to consumers.

If you don't want that to happen, then you need to use your voice.

I can't pick up a paper without reading a condemnation of the sort of industry development I've talked about today.

Some opposition spokespeople call this kind of investment and support "corporate welfare".

Presumably, they will take it away.

If you want that to happen, then simply say nothing, and sooner or later it will go away.

The Labour Progressive government's work with the TCFC sector is part of a $500 million budget investment package aimed at unleashing the talent and creativity of New Zealanders.

You haven't heard too much about the industry development side of the 2004 budget.

Most of the media attention given to the recent budget highlighted the welfare aspects of it.

I fully support those social aspects designed to protect the financial needs of our nation's children, but we also of course have an absolute commitment to the economic development and transformation of our economy so that we can sustain ongoing social investment in our people in the years' to come.

I am proud of the coalition government's commitment to promoting the growth of New Zealand's industry base and encouraging innovation and opportunity for New Zealanders.

As an aside, I am sure that the increased support for families will help to reduce some wage pressure for employers in the coming two years which will assist companies in some of our regions who tell me they are having difficulty attracting and holding skilled workers.

Budget 2004 also of course invested in skills development, export markets, increasing R&D and attracting quality offshore investment

The budget is both good for families and good for the economy.

It maintains a strong fiscal position which is very responsible and forward-looking given that we all know that in a very few short years the demographic profile of our nation's population will start to significantly age.

It is a budget for growth and opportunity.

It's a budget for getting New Zealanders into work and making work pay.

The social advances this government has committed itself to could not have been achieved, of course, without economic success.

I recognise the central role of industry in our economy's success.

That's why I'm committed to working in partnership with New Zealand's industries to unleash their potential.

The TCFC sector has come a long way in mapping out a plan for unleashing its potential.

We need to finish the job. I look forward to moving ahead with you.


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