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Speech: L Smith - NZ Into The Millennium

An Address by

Hon Lockwood Smith PhD
Minister of Tourism

New Zealand’s Challenges
into the New Millennium

Millennium Hotel
Queenstown


3.45 pm
Friday 30 July 1999


Where else to be at the end of July than Queenstown?

It’s an honour to be your Minister of Tourism, and to close this important conference on the day the Tourism Board launches its global marketing strategy.

When I was first thinking of going into politics, I had this idea I might one-day wind up minister responsible for New Zealand’s most valuable industry.

I’d be the Minister of Agriculture, handing out the subsidies, setting the minimum prices and generally telling every farmer and producer board how to run their businesses.

Well, I have ended up minister responsible for New Zealand’s most valuable industry, but it’s tourism, and I have no intention of telling you how to run your businesses.

The relationship between government and business has been reversed in the last 15 years, and let’s hope it never reverses back.

As Minister of Tourism, I’m in your hands.

I can offer you my total commitment to the industry, and a determination to use my combined portfolios of tourism, trade, immigration and finance to help you achieve your goals.

I have asked the industry to establish a key, overarching goal for foreign exchange earnings, against which we can all measure our performance.

Back in 1990, it’s estimated the industry earned around $1.9 billion – in 1999 dollars – in foreign exchange.

That excludes airfares.

Next year, it’ll be $3.6 billion.

What I’m asking the industry to do, is set goals for into the future – maybe 2010 or 2020 – it’s up to you.

Your goals need to be credible, but I’d like them to be just a little bit beyond what you believe is possible right now.

I’d like them to represent a major challenge.

Let’s just say you decided you wanted to double tourism earnings by a particular year.

It’d mean your forex earnings would increase to $9 billion a year.

There’d be a total of 150,000 tourism related jobs.

And there’d be an extra $4.6 billion on our GDP.

It’d be useful for the industry to set a clear goal along those lines.

My role would be to help you achieve it.

As you know, to do just that, I’ve established three key goals as Tourism Minister.

The first is a sustainable flow of tourism earnings.

It’s about ensuring we attract tourists - and their currency - throughout the year, every year.

The core of it is the global marketing strategy, being launched today.

I don’t want to steal the Tourism Board’s thunder.

The board and its contractors deserve the kudos for bringing it together, particularly given the political point-scoring earlier in the year.

In the public mind, the strategy was somehow distorted to being all about attracting tourists to APEC, the Millennium and the America’s Cup.

It was never about those events.

The strategy recognises, though, that even New Zealand’s biggest industry doesn’t have the resources to achieve the brand awareness – let alone product purchase – that we’re looking for.

The idea is that a potential tourist sees APEC New Zealand – I hope – on TV, or reads about it in the newspaper.

Or they might see coverage of President Clinton meeting President Jiang in New Zealand at their post-APEC summit.

Later, they might see the All Blacks winning the World Cup.

And then they might see New Zealand defending the America’s Cup.

What we plan is for them to then see a TV advertisement promoting New Zealand as a holiday destination.

On the Internet, they’ll see the same message.

This’ll also be backed up by billboards, and quality public relations.

The idea is to present them with a unique and compelling proposition that will be consistent across all markets.

It will shift their perception about visiting New Zealand.

It will encourage them to come to New Zealand now, do more when they are here, and come back again and again.

We’ll be hearing more about the strategy tonight.

My second key goal is to remove barriers for tourists coming to New Zealand.

It fits in with my work as Associate Minister of Immigration and there has already been some progress in this area.

Already, 14 of our top 15 markets are visa free.

In the last year or so, we’ve also made progress by giving visa free status to Argentina, Bahrain, Brazil, Chile, Israel, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Uruguay and some passport holders in Hong Kong, China.

Some are big markets. All are potentially valuable.

We’re now down to much smaller markets.

In the next 12 months, we’ll be examining a further nine* – hardly the biggest markets, but if barriers have no justification, it offends my notion of common sense to keep them.

Together, these nine have a population bigger than the United Kingdom and Ireland combined.

The next element of work is just as important.

There are good reasons, for example, to continue to require visas for citizens from large, less-well-off economies such as China and India.

But when a wealthy Shanghai or Mumbai businessperson wants a week’s holiday with their family, we have to make it easy for them to get a New Zealand visa, or else they’ll be off somewhere else.

In expectation – now confirmed – of becoming the first non-Asian country to be an approved tourist destination for Chinese, we put extra resources into Beijing and Shanghai last year.

We’ve also opened a new office in Jakarta, and put more staffing into Washington.

There’ll be new offices in Moscow and Pretoria next year.

And, after visiting Delhi last year on a trade mission, I’ve been pushing to expand our immigration operation there.

At the same time, as far as I’m concerned, we should continue to open up our skies as much as possible.

We made good progress on that last year, particularly in Europe and the Middle East.

I’m happy to sign an Open Skies Agreement with almost anyone, and I’m determined to sort out Beyond Rights through Australia.

My third key goal is removing barriers for the industry – RMA compliance issues and so forth – and that fits in well with my work as Associate Minister of Finance.

Having been involved in the finance portfolio for more than three years, I’m well aware of the major issues facing all our businesses.

I need your input on prioritising the major issues from a tourism perspective.

These are my three goals as minister.

I’m happy to modify them and build upon them based on your advice.

And I expect to be held accountable against them – I intend to deliver on them.

These goals are for the next ten years, but this speech is entitled New Zealand’s Challenges into the New Millennium.

I want to look even further ahead.

In doing so, bear in mind that looking into the future is a lot like looking through fog – visibility gets poorer with distance.

Nevertheless, I’ll give it a go.

The first thing I want to do is refute the fallacy of constant progress; the idea that history’s a one-way street of constant progress – scientific, technological, economic, social and cultural.

It’s not.

If we go back a 1000 years, archaeologists tells us that the average resident of today’s Great Britain was about the same height as British people today.

Vikings had already reached North America.

And it was pretty common knowledge that the world was round.

It was later that diets worsened so people got shorter, and technologies and knowledge were lost.

It means that, at least in a couple of respects, the last 1,000 years has seen us decline and then return to where we were.

At the end of the 20th Century, it’s difficult for us to accept that history doesn’t always go forward.

That’s because of the enormous scientific and technological progress we’ve experienced.

A hundred years ago, Richard Pearse hadn’t become the first person to fly.

Rutherford hadn’t split the atom.

Space travel was just science fiction.

Surgery was still a brutal affair despite the relatively recent invention of anaesthetic.

Now we have day surgery.

It has been a spectacular century, particularly in its second half – and most particularly in its last decade, since the death of socialism throughout the world, except for North Korea and a few fringe elements in the New Zealand Alliance.

And the reason for it is simple.

Reason.

Right through history, it has been the triumph of reason that has led to progress, and the absence of reason that has led to decline.

When we have debates in New Zealand about whether we should embrace the world or cower from it, be leaders in biotechnology or be afraid of it, we should remember that.

In just five months, the first of Generation 2000 will be born.

In 2050, they’ll be my age.

The question is whether we build an environment for them to make progress, or set them up to fail.

Remember, it isn’t certain.

When they’re 50, Generation 2000 will live in a very different New Zealand.

In 1950, life expectancy at birth was around 67 years for men and over 71 for women.

It’s now 75 and 80 respectively and by around 2050 it’ll be 81 and 85½.

It means we’ll be an older country – the median New Zealander will be nearly 46 years old compared with under 30 in the 1950s.

There’ll be more of us.

And our Maori population, and our populations of Pacific and Asian people, will also be more dominant.

Depending on what happens to the number of Asian New Zealanders, only around half of us will be European.

We’ll be a slightly bigger country, a more diverse country, and an older country.

Will we be wiser?

It will certainly be a different New Zealand that the tourism industry will be presenting to the world.

We will also undoubtedly be using different technologies.

Over the last 50 years, we’ve seen huge developments in transportation, communications and information processing technologies.

It’s estimated that 80% of the technologies we’ll use in 2030 have not yet been thought of.

It’s simply foolhardy to try to predict the specifics of technology out to 2050.

But what we can predict about technology is that it will tend to bring us closer together.

What that means is that we’ll be closer to our markets.

The services industry, obviously, will be in cyber-space.

Our goods will be able to be transported around the world quicker.

Our tourists will be able to get here from Europe, in maybe a couple of hours.

That may mean that, for a European, we may no longer be a distant holiday option, but be in direct competition with destinations much closer to home.

That’ll be a major positive for the tourism industry in 2050.

Perhaps the downside could be that, for an Aucklander or Sydney-sider, Queenstown will no longer have the advantage of proximity over destinations in Europe or elsewhere.

Whatever the foggy specifics of change over the next 50 years, it seems almost certain that the tourism industry will need an even greater global focus than it has now.

It’ll be a different New Zealand, as we’ve seen, that we’ll need to present to an even more competitive global marketplace.

Cowering from the world isn’t going to do us any good.

There’s another fairly sure bet I believe we can make about the future.

The labour market will be different, and that has implications for both the demand for recreation and how it is to be supplied.

The traditional nine-to-five job, forty hours a week, for so many weeks of the year, will largely disappear.

People will work in ways that match their activity more closely to the needs of the customer, and to their own interests and life-style preferences.

Some people mock this – I think the Labour Party refers to McJobs.

But it isn’t a new concept for many of our most dynamic industries.

It is very important for one of those - our tourism industry - that labour market flexibility continues.

Unfortunately, we’re not all going to be around in the year 2050, and that’s a shame.

New Zealand in 2050 can be a more diverse country, in a more globalised world, where technology and an even more flexible workplace give people far more choices.

And it should be a world where our tourism industry continues to be number one – at home and globally.

But it isn’t guaranteed.

The choices we make now will determine where New Zealand is in 2050, and where our tourism industry is in 2050.

But I’m confident.

I’m confident our new global marketing strategy will position us well for the first decade of the New Millennium.

I’m confident that New Zealanders and this industry will make the right decisions for the future.

Tonight, we celebrate the successes of your dynamic industry.

You've been successful because you've all taken risks and worked hard - because you've been innovative.

I want to work with you to ensure the environment is right - globally and domestically - for your industry to move to the next stage of its development.

Tourism has an extraordinary future.

I wish you all the best as I declare this conference closed.

ENDS

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