13 November 2002 Speech Notes

Go Wairarapa Economic Summit

9:00 am
Wednesday, 13 November 2002
Wairarapa Economic Summit
Copthorne Resort, Solway Park, Masterton

I remember coming over to the Wairarapa numerous times through the nineties as a campaigning Opposition politician.

It always struck me as an indictment that there was economic decline in a region as rich in natural resources and opportunity as this.

There is little doubt that for much of the eighties and nineties the Wairarapa was not just in relative decline, but in absolute economic decline.

Between 1995 and 2000, employment in the Wairarapa actually fell.

Many of the lost jobs were in government services – including the loss of jobs in health and education.

Half the jobs in the region’s textiles and apparel manufacturing industry disappeared as tariffs were stripped away.

Not only was Wairarapa losing jobs overall, but it was doing so at a time when the national economy grew by 2.5 per cent over the same five year period.

So Wairarapa’s relative decline was even greater.

There were also new jobs created, but the majority tended to be in sectors like food and alcohol service – cafes and bars, rather than in the high-tech, high-value, high-skill export industries we need to foster.

As Wairarapa’s performance was to New Zealand, so New Zealand was to the world.

We sometimes don’t realise the extent to which New Zealand became a poorer country over the last three decades.

Of course, our living standards are higher than they were a generation ago on any measure.

But even though our absolute standard of living has risen, other countries we like to compare ourselves to have been improving their lot at a much faster rate.

Those countries can then offer more pay to skilled New Zealanders – and richer markets for our companies too, which can and do relocate.

The loss of our best and brightest in this cycle itself contributes to a widening gap between us and other developed countries.

It’s not all one-way traffic.

There are lifestyle attractions in New Zealand that can’t be equalled anywhere, and people will always want to live in New Zealand because of that.

But the slow decline of New Zealand’s economy over the course of one so-called economic miracle after another has had consequences.

It has meant that we lack the means to pay for the health care and education services we want, as well as to pay the wages we expect.

The story of Wairarapa’s economic struggle through much of the eighties and nineties is far from unique.

In fact, many regions were far worse – think of the West Coast of the South Island. The East Coast of the North Island. Northland.

New Zealanders voted in the Muldoon government, and the Rogernomic governments of the eighties and nineties.

Having voted, in effect, to be poor, New Zealand will take some time to dig its way out of the second class economy we dug for ourselves.

Fortunately, both the New Zealand economy and the economy of Wairarapa have turned the corner.

Every single region in New Zealand is now in positive growth mode.

Last month the New Zealand Herald ran a story about a New Zealand Institute of Economic Research report under the headline “Survey reveals economy at full steam.”

It started with the ‘highly technical’ description of an upturn in growth; it read “the economy is going like the clappers….”

It went on to say that our economy is running into ‘capacity constraints’ – one is ironically, a serious skills shortage.

Of course we have a long way to go.

Employment is at the highest level it has every been.

It went up in the last survey – virtually the first time it has increased since this government has been in office.

But the number of people in jobs increased too.

The main reason unemployment went up is that many people who had lost hope and left the workforce permanently are beginning to return.

We still have too many unemployed – particularly young New Zealanders and even more particularly Maori and Pacific Island New Zealanders.

Up and down New Zealand, in our regions, and throughout a range of industries we have vacant jobs but we don’t have the skilled workers to take them up.

I am pleased to say that today the Labour Progressive Coalition has brought back apprenticeships.

There are now 3,000 Modern Apprentices.

We will double that number over the next three years.

68,000 people in industry training.

We will increase that to close to 100,000.

So we are addressing the skills shortage.

I have visited all regions of New Zealand and the growth and optimism is unlike anything I have seen in the last 40 years.

The Wairarapa economy is doing much better.

And if there is one message I have for you as you look at Wairarapa’s economy at this summit, it’s this:

The Wairarapa economy should be firing.

The region has immense reservoirs of potential advantage to build on.

The Wairarapa economic development strategy identifies many of them.

The region is just an hour from the capital and possesses world class land, air and water.

The climate is temperate. Land is plentiful. There is a reasonable base of infrastructure.

Perhaps more importantly there are increasing numbers of flourishing innovative enterprises being created that can only be created here.

Martinborough Pinot Noir can only be created in Martinborough.

There are forestry resources here that present major opportunities for processing wood.

When it comes to economic development, there is no point in Ministers turning up from Wellington to tell you what you should do.

You need to work out your priorities yourselves.

I acknowledge that Wairarapa has been a leader in developing economic development partnerships.

The Government is ready to play its role in that partnership.

The topic you’ve asked me to address is ‘the importance of regional economic growth for New Zealand.’

The answer is concise: You can’t have a strong national economy unless you have strong regions.

I paid a visit to Moerewa in the Far North not long after becoming a Minister.

And I was impressed when they told me, ‘Minister we would like you to help, but we are going to make a future for this town whether you help us or not.’

Today Moerewa has turned around.

And the good news for all of New Zealand is that the better Moerewa does, the less the rest of New Zealand has to find a way to support the social fall-out from high unemployment.

We don’t have to pay the costs in health, education, and crime.

Not far from here, in Dannevirke, the news media noticed a sharp drop off in the crime rate.

So a reporter rang up the local police and asked why crime was down.

He said it was hardly surprising that the crime rate had halved, because unemployment had halved.

The Government has set an economic objective of returning New Zealand ‘s per capita income to the top half of OECD rankings.

The issue is how do we achieve it?

We need to harness New Zealand innovation.

We need to identify New Zealand’s competitive advantages and build on them.

What continues to impress me is the seemingly endless supply of new ideas that New Zealanders have.

Last year the international Global Entrepreneurship Monitor said New Zealanders were the second most entrepreneurial people in the world.

Our pioneering spirit and our ability to innovate make New Zealand a world leader.

We have a proud legacy of innovative products and ideas.
- Refrigerated ships
- The welfare state
- Universal franchise
- Sir Ernest Rutherford
- Peter Fraser and the establishment of the UN
- Sir Edmund Hillary
- Sir Alan McDiarmid
- A&G Price
- Bruce McLaren
- Weta workshops
- America’s cup design

We have had to develop a culture of coming up with our own creative solutions.

New Zealand's isolation and our small size has meant we can't just throw money at problems.

But we can have the confidence and freedom to try things out.

These factors together - our geographical isolation and small size - and our confident resourcefulness, have combined to create an attitude of thinking about problems differently.

Possibly one of the most attractive things about New Zealand is that we give things a go.

It's the attitude which has led in turn to brilliant scientific and engineering achievement.

As a small country, far from most other developed countries, our major advantage in the world is our creativity.

It’s not enough any longer to hope that the sun shines, the rain falls and the grass grows.

We need to produce more goods and services that the rest of the world wants to buy, and which are based on uniquely New Zealand creativity and talent.

It’s those products that command a premium in markets through out the world.

They give us an edge that other countries can’t easily emulate.

It’s important for all of us, because we will only be able to afford the standard of living we want if many more of our innovators are commercially successful.

The revenue they bring into the country provides the jobs and pays for our essential social services.

So we need to create a culture that celebrates success.

New Zealand needs to show the same passion for innovation that we show for sporting success.

We need to celebrate businesses that develop new ideas and turn them into world class successes.

The challenge is that when New Zealanders travel in future, we don’t want the world to say ‘ah New Zealand – you have a lot of sheep.’

I want them to say, “New Zealand is the world leader in innovation – You have great ideas’.

If we can achieve this then our future will be a lot more secure.

We will be able to sell even more of our products, enter useful partnerships with overseas companies and attract investment and skills much more easily then we can today.

I think the starting point is we have to ask what we can do in all our endeavours to make what we do better.

I welcome the ideas that are going to be discussed at this summit as a step towards realising that vision here in the Wairarapa, and I wish you luck in your work.

ENDS

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