Anderton speech: Increased Growth And Innovation
Ø Increased Growth And Innovation: What Does It Mean For The
Waikato?
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Ø Hon Jim Anderton MP Wel
Energy Academy of Performing Arts Hamilton Thursday 20
February 2003 Mayor Braithwaite, Councillor Wilson, Dianne
Yates MP, guest speakers Aksel Jepson and Ben McGee, ladies
and gentlemen
The Government's Growth and Innovation
Framework was launched on 12 February 2002. It established a
growth goal of returning New Zealand’s per capita income to
the top half of the OECD rankings and maintaining that
standing. That goal is to be obtained through sustainable
development - development that meets the needs of the
present without comprising the ability of future generations
to meet their own needs.
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It means looking after
people; taking the long term view; taking account of the
social, economic, environmental and cultural effects of our
decisions; and encouraging partnerships and participation.
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The government’s key concern is to ensure that
the benefits of growth accrue to all New Zealanders, all
social groups, all ages and all regions.
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It’s an
ambitious goal - but not an impossible one
However
central government cannot achieve the goal on its own. We
cannot have a strong national economy unless we also have
strong regional economies
My aim tonight is to enlist
your region’s support for the development challenges facing
New Zealand
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Ø Slide change
Is the goal
achievable?
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Ø Our historical growth performance has
been quite poor by OECD standards - our per capita income
ranking in the OECD has dropped from 9th in 1970 to 20th
(out of 30 countries) in 2001.
Our performance positions
us between Spain and Portugal
Ranked on a comparable
index against all countries (not just the OECD) New Zealand
stands at 45th position, below Cyprus and above Slovenia
In 1970, New Zealand had roughly the same per capita income
as Australia. This graph shows that since then we have
fallen significantly behind
If we had achieved just 1%
additional annual per capita growth over that 30 year
period (corresponding to 3.1% real GDP growth), we would
have been now on a par with Australia (which ranks 12th in
the OECD)
Stronger economic growth would have increased
the incomes of all New Zealanders and allowed us to provide
the world-class government services that New Zealanders
want.
This is why the government has now set a goal for
growth.
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Ø Slide Change
Economic growth is not
an end in itself.
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Ø Economic growth itself is
certainly not the end goal. We want to achieve a better
quality of life for New Zealanders, now and in the
future.
This means returning to first-world status
across a wide-range of sectors such as health, employment,
education and safer communities - all of which have a
significant influence on an individual’s quality of life.
Strong economic growth contributes directly to material
well-being but also brings indirect benefits to New
Zealanders. Prosperity among New Zealand’s citizens not
only enables the government to provide world-class services,
it also leads to improved local government services and more
positive environmental outcomes.
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Ø Slide Change
So where would New Zealand be today if we had achieved just 1% additional annual growth over the last 30 years?
Employment - Economic growth helps maintain high employment, and the importance of having a job to an individual’s wellbeing should not be underestimated. It’s hard to say exactly what effect 1% additional growth in each of those 30 years would have done for our employment statistics.
However, as a proxy, in the years since 1999 our
economic growth has been above average and in that time we
created 123,000 new jobs and unemployment went from 6.3% to
4.9%. In the Waikato during the same period 15,600 extra
people got jobs and unemployment went from 7.8% to 5.4% - at
that’s with only 3 years of above average growth!
Incomes - Wellbeing is also about relative incomes. 1%
higher growth than actually achieved since 1970 would mean
that the average worker would now receive an additional
($175) per week.
Health - An additional 1% growth
would have allowed us to spend $3.7 billion per year more on
health than we currently do.
Education - The story is
similar for education. $4.2 billion more (about $3500 per
student) would be available per year
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Ø Roading -
throughout New Zealand, people tell me how our lack of
investment in infrastructure in the last decades is now
impacting on growth and living standards. If our GDP had
grown at the same rate as Australia we could have invested
twice a much per capita on roading over the last 30
years
To make it into the top half of the OECD we must
aim to regain our standing vis-à-vis Australia. A 4% annual
real growth in per capita income (a doubling of our current
performance) over the next ten years would get us to where
Australia is today. That is how far we have fallen behind.
But we have to do better than that in order to gain and
maintain a higher OECD ranking and the benefits for all New
Zealanders that follow on from that
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Ø Change slide
GIF So the government has taken action. We are not
interested in sliding further down the OECD ladder – the
business as usual option.
We’ve done more than just set
goals. We have studied the underlying principles of growth.
We’ve concluded that New Zealand’s next phase of development
must by characterised by innovation.
The Growth and Innovation Framework is this Government’s plan to use innovation to achieve the growth we want.
In New Zealand, we haven’t got heaps of money to throw at problems, but we do have the confidence and freedom to try things out.
We must build on this strength and become a
nation known internationally for our innovation, our
creativity, our skills and our lifestyle. GIF is not solely
about achieving a level of per capita growth, its about
achieving the best we can as a nation.
The government is
committed to working with all parts of the economy to make
this happen. But, ultimately, achieving the growth target
will require dedication and passion at the local level, as
well as nationally.
Change slide GIF provides a framework for New Zealand’s
economic development and also a guide for the focus of
economic development strategies at a regional level.
Only if we achieve alignment between national and regional
approaches to economic development, will New Zealand achieve
the sustainable development outcomes we all want
Here
in the Waikato you are currently in a consultation process
to expand your mostly Hamilton-focussed economic development
strategy so that it encompasses the broader Waikato
region.
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Ø The good news is that your economic
strategy shares many aims in common with the
GIF:
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Ø Both GIF and Waikato have a focus on the
biotechnology sector - identified as one of New Zealand’s
key growth sectors over the coming decade
The
development of an Innovation Park as the region’s Major
Regional Initiative displays clear links with GIF’s focus on
innovation
Both GIF and the Waikato strategy state that
economic development cannot exist in isolation from social
and environmental factors, but should meet the objectives
of:
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Ø making the region a desired location for
business investment achieving maximum employment opportunity
improving the quality of life for residents
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In many respects the ideas behind GIF aren’t new –
and innovation is already an integral part of the way in
which some firms do business in the Waikato.
Advanced
Animal Technologies (AAT) is a good example. AAT have
developed a product that controls the release of drugs in
large animals. AAT do their own research and development
but also harness the wealth of expertise in the region by
contracting work out to educational and research
institutions
The commercialisation of innovation
associated with R&D is seen in companies such as PavTech, a
leading provider of technology solutions to the
manufacturing sector. But you have the potential to do much
more. Waikato is the home of numerous research institutions
including Landcare Research, AgResearch, the Dairying
Research Corporation and the Ruakura Research Centre.
Waikato contains up to 25% of the country’s top scientists
and researchers. The trick is turning all this brain power
into products - to commercialise these ideas ourselves so
that the benefits accrue to the regions, and to New Zealand
as a whole
And the government is committed to helping with the commercialisation ideas - especially from Crown-owned research centres like CRIs and Universities. Change slide But the path to economic growth in New Zealand (as in the Waikato) is not without its challenges.
Skill shortages are affecting many parts of New Zealand and
in Waikato it is particularly evident in the trades and the
metal industries. This demands both local and national
attention
Gaining buy-in for sustainable regional
economic development is also critical. I understand that
this is proving a challenge here in the Waikato. It’s
important that those who are leading regional development
are able to share their enthusiasm and get all the major
players in the region behind them.
You must ensure too
that the districts outside of Hamilton get to experience the
benefits for themselves of implementing the Waikato
strategy, and that all Waikato’s population - Maori, urban,
rural, Pacific - share in the benefits of economic
growth.
These are issues that we can work together to
manage.
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The government has set
out a framework and established a series of programmes to
assist regional development.
However, we expect
individual regions to make their own development aspirations
a reality.
In the same way, individual businesses have
to seek their own productivity improvements through research
and development, attracting and retaining people with the
right talents and skills and managing the business in a way
that creates success .
And, if you’re doing your best
and you need a little Government support to deliver even
more growth, you can rely on me as Minister of Economic
Development to do all I can to deliver that assistance to
you.
Ultimately, I believe, your success and New
Zealand’s success will depend on all of us working in
partnership.
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Change slide
Only if our regions are strong, vibrant and growing can our national economy be strong
But, New Zealand is capable of being more than just the sum of its parts. With well-aligned national and regional strategies, we can not only fulfil, but also extend, each others’ potential.
We must aim high
As I demonstrated at the start of this speech, an additional 1% in the long run can bring considerable benefits for us all. Achieving the government’s desire for 4% per annum growth (or more) will make a truly huge difference to the quality of life of all New Zealanders.
By working together we can deliver sustainable development outcomes for all New Zealanders and hand to our children a New Zealand that is: a land where diversity is valued and reflected in our national identity; a great place to live, learn, work and do business; a birthplace of world-changing people and ideas; and a place where people invest in the future.
Thank you