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Bradford: EMA Workshop on Buy Kiwi-Made

9 February 2006

Buy Kiwi-Made

Speech by Green MP Sue Bradford M.P

to the Employers and Manufacturers Association Workshop on Buy Kiwi-Made

Wanganui

Thank you for inviting me to speak at this forum today.

Paul has asked me to talk with two hats on today. First, the original concept of Buy Kiwi-Made as envisaged by Green Party policy, and second, as Government Spokesperson on the project, outline how it is now starting to emerge following its adoption in the Green / Labour Party Cooperation Agreement.

So why is 'Buy Kiwi-Made' something the Green Party cares about so passionately?

The philosophy of the NZ Green Party, like Green Parties all over the world, is based on four core principles - environmental sustainability, social & economic justice, non violence and participatory democracy. At least two of these principles lie at the heart of our commitment to 'buying local' which is the driver behind the new Buy Kiwi-Made programme I'm here to talk about today.

As even George W Bush acknowledges now; the oil is running out, and fuel prices are getting higher almost by the day. It is imperative that we begin here in isolated New Zealand to future-proof ourselves in every way possible against the coming oil shock, and against the impacts of other potential environmental catastrophes such as the effects of climate change.

At the same time, our commitment to social and economic justice means we want to see as many New Zealand jobs as possible kept in this country. Some may act as if the unemployment problem is solved but we know there are still many people who want to work but can't get a job. And, sadly, we accept the forecasts of rising unemployment over this year and the years ahead.

We have been disturbed, as I'm sure you have been, by the number of major local manufacturers who have announced layoffs just in the last few weeks. They blame the high New Zealand dollar as the major contributor to their decision. The Greens have also been very active over the last few months in encouraging Air New Zealand to do everything it can to keep as much as possible of its heavy engineering aircraft maintenance work in country, rather than contracting it all out overseas, probably into Asia.

The Green Party is - and always has been - committed to doing everything we can to keep jobs and business here in our own country.

We seek to encourage the production in New Zealand of durable, high value products made by well-trained, well-treated and well-paid workers.

We support the expansion of sectors which are sparing in resources but rich in employment.

We are committed to doing everything we can to decrease our dependence on increasingly costly oil and to encourage sustainable production, manufacturing and consumption patterns.

After last year's election, the Greens and Labour worked hard to develop a Cooperation Agreement through which a small number of key Green programmes and policy goals could be achieved in this term of Parliament.

Buy Kiwi-Made is one of the top two of these programmes, the other being my colleague Jeanette Fitzsimons' campaign for improved energy efficiency and a huge increase in the number of solar panels on homes and buildings.

As you are undoubtedly aware, our Co-Leader Rod Donald was the champion of the Buy Kiwi-Made part of our negotiated agreement with Labour.

For years Rod had been working on issues around trade and development, supporting above all the idea of buying locally, trading fairly and developing a sustainable New Zealand economy.

He was very excited to have achieved the Government's commitment to Buy Kiwi-Made and amidst all the other sadness of his sudden, shocking passing last November has been the knowledge that he would never get to see the outcome of his dreams and passions in this area.

In the wake of Rod's death, my Green Party caucus colleagues nominated me to carry on his work, and it's a task I've picked up with enthusiasm, but also with a huge regret that Rod's not here to do it. He has very big Kiwi-Made shoes to fill.

My own background of working for two decades in the unemployed movement makes this a natural progression as a major part of our mission in those years of the 80s and 90s was to work for full employment, and for a New Zealand in which no workers are forced to rely on the dole for their own and their family's survival.

So here I am in front of you today, delighted that the New Zealand Government is right with this Green initiative. What I will do now is switch to my new role as spokesperson for the Government on Buy Kiwi-Made.

Context

I am especially pleased to have the opportunity today to discuss with a group like this, the development of the Buy Kiwi-Made programme, and I want to again thank EMA Central and the local organisers of this workshop for the invitation.

The initial policy work has begun and officials and I have had discussions with a number of stake holder groups.

As with many things, there is more to Buy Kiwi-Made than meets the eye.

I am very much aware that if we are to develop a successful Buy Kiwi-Made programme it must have the support of key stakeholder groups. That means that we have to know what will work for you, and what you believe will work for the economy.

I see this workshop as an excellent opportunity to float some questions and issues and to hear your views. So I am not here to tell you what the programme is going look like. That isn't yet decided. I want this workshop, and sessions like it, to help to develop our thinking about the programme.

Programme Goals

The goals of the programme are set out in the co-operation agreement between the Green Party and the government. The seven goals are to:

* Create awareness of the employment, economic, environmental and social benefits of buying locally made products and services

* Build brand loyalty for New Zealand made products

* Reduce imports, especially of consumption goods

* Help to reduce New Zealand's trade deficit

* Help to increase New Zealand's manufacturing capability

* Help create employment

* Help reduce fuel consumption

Also in the co-operation agreement is a list of the main initiatives that we want to implement. These are:

* A media marketing campaign

* An investigation of ways of better distinguishing New Zealand made goods from imports

* Government leadership through public sector procurement policies and further development of the Industry Capability Network

* An audit of New Zealand imports.

So, as you can see, the political commitment is there to support a BUY KIWI-MADE programme. The question now is, what will be the design of such a programme.

As I said earlier, it will be through fora such as this and discussion with stakeholders and interest groups that will help the Government design an effective programme that will achieve the goals that we have set in the Cooperation Agreement. I have already circulated some of the questions that we are discussing and I will now comment on each of them.

Issues for discussion in workshop

1. What is likely to be the most practical way of defining "New Zealand made" for the purposes of this programme?

This may appear to be a strange question. Everyone knows what Kiwi-Made is! However it is not as simple as that. And the more that you delve into it the more complicated it becomes.

The options appear to be:

* A change of tariff classification and 50% area content

* A change in tariff classification by itself

* The definition contained in the Fair Trading Act

The first is that used by the similar programme that operates in Australia. Australia changed the definition in their equivalent of the Fair Trading Act to make it consistent with this definition, since having two different definitions simultaneously in use is not practical. A 50% local content rule would require an administrative and regulatory structure to "police" its application.

The second method of a change of tariff classification may be easier to apply. However, it may have the disadvantage that consumers will not always readily accept that its application is fair, where for example, final products are made up of entirely imported components. The well-known example is imported orange juice concentrate, reconstituted and packaged, changes its tariff classification but not its "essential character".

In the New Zealand context, the phrase "place of origin" is not defined in legislation. The Misleading and Deceptive Conduct provision in Section 3(j) of the Fair Trading Act prohibits the making of a false or misleading representation concerning the place of origin of goods when goods or services are being sold or offered for sale. Section 9 prohibits misleading and deceptive conduct generally, and may also be breached by the misleading use of words that imply New Zealand made. A number of legal cases have further defined how the "essential quality" of where a product originated is defined.

New Zealand requires compulsory country of origin labelling of clothing and footwear.

2. What relationship might there be between Buy Kiwi-Made and the Business New Zealand- owned Buy New Zealand Made campaign?

This is a subject of discussion between officials, the Green Party and Business New Zealand. I have already been briefed by Business New Zealand and the Buy New Zealand Made campaign. I would be interested in any views that you have of what this relationship should be.

3. Should companies or their representative bodies contribute to the campaign? In principle, would those present be willing to participate in and contribute to a Buy Kiwi-Made Programme?

What support is the programme likely to attract from business? The Business New Zealand Buy New Zealand Made campaign has been the recipient of relatively small amounts of government funding in the early 1990s but not in the past decade. It is currently funded entirely by its members. If the programme were to be entirely funded by government, New Zealand may run into trade policy issues, in that the programme could be interpreted as a non-tariff barrier to trade and fall foul of WTO rules.

4. What about the Australian equivalent?

The Buy Australian programme is run by a limited liability company originally set up by the government to administer the campaign. The Australian government contributes some funding ($2m currently). The Australian programme has a fee schedule based on total annual budgeted sales turnover on the range of products that qualify for use of the logo. Fees range from $200 up to $20,000 annually.

5. Who should have the responsibility of running the programme?

This will be in large part a function of the decisions about what the programme itself will be. For example, the cooperation agreement lists four "main initiatives" of which a media marketing campaign is one. It also includes "Government leadership through public sector procurement policies....", and an "audit of New Zealand imports." The development of any media campaign would most likely require input from a range of marketing professionals if it is to be successful.

6. What sort of institutional arrangements will be needed to run this programme?

That will of course depend on the elements of the programme as they are put into place. If it was decided that companies or services had to qualify in some way, there would need to be an organisational structure in place to implement that. The more complex the programme, the more significant the institutional structure would need to be. The Buy New Zealand Made programme does not have complex administrative structures because "enforcement" is via the Fair Trading Act.

7. Should Buy Kiwi-Made include services as well as goods?

I have already received correspondent on this from a major New Zealand-owned hotel chain. On the one hand it might make sense to include services, such as tourism in the programme, to help promote domestic tourism. On the other hand, this would probably take the programme into the complex area of company ownership. Although the service is provided in New Zealand, the provider may be a foreign-owned company, e.g. a bank. Or should only New Zealand-owned service companies qualify?

8. Who do you think should be the audience for such a programme? What would be the likely key messages of such a programme?

A media campaign would first need to identify the target audience. Possible audiences are:

Producers and sellers of goods, including retailers such as supermarkets. The message could be that they adopt the programme and align their own marketing to it.

Consumers might be the second target group. The message could be that they make sure to buy New Zealand-made products where possible.

Previous research suggests that the key message in both cases will need to focus on specific benefits to individuals. We are told lofty and complex goals are a hard sell in advertising. However an advertising campaign completely devoid of these "public" and "planet" good notions could lose the spirit of the campaign.

9. What is the relationship to other New Zealand branding exercises funded by government?

A number of other branding initiatives are already in place, funded wholly or partly by government. Work is being done to understand how BUY KIWI-MADE will fit with them. "Pure NZ" is a tourism marketing campaign and directly mainly at off-shore markets. It is owned and operated by the NZ Tourism Board. "Brand NZ" is also directly mainly at off-shore markets and is used and licensed by New Zealand Trade and Enterprise (NZTE). Both use the fern motif on their copy. This is also quite widely used by other organisations to identify with New Zealand.

10. How will the Green Party, officials and the government ensure that the views of industry and sector groups are fully taken into account in the development of the programme?

Preliminary and very constructive discussions have already taken place with Business New Zealand, the Retailers' Association, the Canterbury Manufacturers, unions and other groups. It is intended to maintain a good working relationship with representative bodies throughout the development of the programme. Consideration is being given to the development of a stakeholder group or reference group of experts to provide a sounding board for testing ideas and options.

I hope in raising and commenting on these questions, I will provide some good discussion today that will inform the final shape of the Buy Kiwi Made programme.

Thanks again for inviting me today, I look forward to the rest of the Forum.

ENDS

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