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Hon Jim Anderton: Sustainable business conference

Hon Jim Anderton

Sustainable business conference

Sustainable Business Network (Chair, Chris Morrison)
Distinguished guests

When it comes to talking about 'sustainability', it's a good thing that words are a renewable resource. If I had my way, we wouldn't use this jargon. Instead of talking about 'sustainable development', we would talk about the important ideas behind the concept.

The idea can be summarised this way: 'Meeting the needs of today's generation and ensuring that there is a future for our young people here in New Zealand.'

Sustainable development is about improving the environmental, social and economic conditions in which our children and their children will live. It means ensuring that all young New Zealanders: Have hope for their future Have the opportunity to make a competitive living Have the chance to enjoy New Zealand's rich natural advantages

In the early days, 'sustainable business practices' were about reducing any negative effects of business growth. Today we have moved on. Many businesses are now improving the world with their products, services and production methods. Today, we see business as a catalyst for making the world a better place to live.

In my view, business is the best medium for change we have. This has been my passion as Minister of Economic Development: to help businesses unlock their potential to improve the many communities of NZ.

The definition of sustainability includes meeting our needs today. It is not 'jam tomorrow'. Nor is it foregoing a living today in order to meet the needs the future. We only have one lifetime; we have to make the most of it. Sustainable businesses are profitable businesses. Profitability is necessary, but not sufficient for a business to be sustainable.

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None of these ideas are purely economic, or purely social or environmental. Sustainability is about achieving economic, social and environmental goal, because they are all interlinked.

Since everything is linked together, a single action can cause changes in many areas. Action aimed at improvements in one area can have unforeseen impacts elsewhere.

The coalition set out its approach to these issues this year in the government's sustainable development programme of action. I understand you have copies in your conference packs.

The programme identified ten principles. They include: - Thinking about long-term implications; - Looking for innovative 'win-win' solutions, rather than trade-offs where possible; - Working in partnership; - Respecting environmental limits; and - Respecting human rights.

All of these are common sense.

Principles are all very well, but it's action that really counts. The coalition government chose four priority areas to achieve clear, demonstrable benefits from a sustainable approach. They are: - Energy; - The quality and allocation of freshwater; - Sustainable cities; and - Investing in child and youth development. There is no question we need to lift New Zealand's economic performance. We've been falling behind the developed world for three decades. Our per capita GDP is below Cyprus and above Slovenia.

If we had grown just one per cent a year faster since 1970, what would be the difference be in our quality of living? Health: An additional 1% growth would have meant we could invest $3.7 billion a year more on health. To put this into perspective, free primary health care currently costs us one tenth of that. (To extend free primary health care to all New Zealanders would cost an additional $5-6 hundred million). Education: $4.2 billion more would be available per year. That's roughly an additional $3,500 per student.

The key to lifting our economic performance sustainably is innovation. The days are long gone when we tried to develop our economy by exporting more unprocessed extraction-commodities. The United States exported the same weight of goods in 200 as it did in 1900. The value increased many hundreds of times. The difference was the export of ideas and creativity.

I don't understand those who want to ban logos and other symbols of ideas in the name of sustainability. Branding - and the related concepts - add value to products without exhausting non-renewables. That's a good thing, isn't it? Moving away from branding would a move back to commodity-based value in the economy. That would be a move away from the weightless economy, towards extraction-based economics. I don't understand the parts of the environmental movement following this 'no logo' philosophy down a dead end.

The truth is, business can unlock enormous potential for good. Businesses can commercialise innovative technologies that have environmental benefits:

Windflow Technologies in Christchurch - producers of unique wind turbines that 'combine cost-effectiveness, simplicity and reliability' VCU Technology in Auckland - providers of sustainable organic waste solutions (composting units) in 15 sites worldwide.

These companies are examples of innovative businesses making the world a better place to live. They do so through ideas that make our way of life more sustainable.

Who knows what other innovation is ahead? We know that the pace of innovation is increasing. Some of our most successful companies in ten years time haven't been started yet.

We are surrounded by products with room for improvement in efficiency, durability and recycle ability. The Dyson vacuum cleaner. Fisher & Paykel produces new dishwashers that use of smart electronics to wash dishes better, with less water, less energy and less fuss.

Cheap electricity has been a significant factor in New Zealand's economic development. But it has also meant we have not had to design our factories, homes or appliances with much energy efficiency in mind. Recent attention to the shortage in electricity generation has raised the spectre of increasing electricity prices. In turn, it promoted the need for more efficient energy use. Suddenly there is money to be made, and jobs to be created, from using our energy resource more economically and generating energy from new resources. Resource shortages and increasing costs can be turned into an opportunity for business.

Likewise the prospect of the Kyoto Protocol has focused minds on the fuels we consume. Fuel efficiency and emission reductions are now driving industrial design. It my preference, wherever possible, that we use carrots where possible instead of sticks. That is why the Government will exempt businesses from the planned carbon charge where their competitiveness is at risk. In exchange we expect such industry to bring their emissions into line with international best practice. The Government will help with funding and advice through EECA, NZ Trade and Enterprise and the Climate Change Office. This creates a real opportunity, and incentive, to lift the game.

The government has a role in unlocking innovation in the New Zealand economy. We are immensely creative as a nation. But we need to get better at commercialising our ideas -- taking our ideas to the world successfully. NZ Trade and Enterprise was set up to do just that.

The priorities for increasing innovation in our economy are: Strengthening support for innovation - for example our links between science, technology and industry. Developing skills; and Increasing our connections to the world.

The three key sectors the government is working with are: Biotechnology; ICT Creative industries, including design, film, music and fashion.

These sectors have been chosen not only for their own potential, but for the growth in other sectors they support.

The government has to work in partnership to speed up growth in our economy.

There are many obstacles that only government can remove. Many have a sustainability dimension. Transport, communications and energy infrastructure are all examples.

Transport is the single greatest constraint of Auckland's growth, for example. The decisions government makes in resolving transport issues plays a major role in economic development as well as social and economic sustainability. Some examples: Simply building more roads may be environmentally unsustainable. Simple measures to reduce congestion can impact on other areas. London's congestion charge, for example, is reported to have increased the isolation of some poor communities. It's made it harder for them to get work and new business. It might be socially unsustainable.

Imagine the difference that can be made if we shift some of our transport off the highways onto the cyber-highways. Broadband access in rural areas is a great example of the government's work supporting sustainability and innovation. The government's Project PROBE has subsidised the extension of high-speed internet to every community. Broadband access helped a firm like the Wanganui-based accountants Peach Cornwall. They have been able to make major improvements to how they manage work between their three offices. They use broadband to electronically transfer work between offices. This reduces customer waiting times and cuts down the need for travel. As a result, staff well-being is improved, fuel use is reduced, costs are lower and the company has grown - resulting in more jobs.

On the social side industry has a role in keeping our communities prosperous, healthy and safe. It's up to industry to provide safe workplaces and to pay workers adequately to feed and house their families. To promote these goals - over the last four years - the Government has: Increased the minimum wage, Lifted standards in work place safety, Introduced paid-parental leave for families, and My Progressive Party colleague Matt Robson has successfully advocated for the introduction of four weeks annual leave.

These measures are about our social sustainability. They are essential to keeping our workforce productive and committed to staying in NZ.

Australia has offered workers four weeks leave for well over a decade and have higher minimum wages than we do. This has helped to improve productivity in Australia. It makes it easier for Australia to attract skilled workers. It no doubt helps to explain why we have lost tens of thousands of skilled workers, and consumers, to Australia. Not to mention the world cup.

The skills shortage is one of the most frequent complaints I hear about from employers. Retaining and motivating our workforce is as important to our competitiveness as attracting foreign investment.

Industry has just as much invested in the well-being of New Zealand as the Government has. Industry benefits from consumers with disposable income, skilled and motivated workers and from a workforce capable of creating intellectual property. Sustainable development is about working on these issues in partnership.

The more aware we become of the interdependence of our activities, the more responsive our planning and design becomes. The better our planning and design the faster we grow, with better use of resources and better worker productivity. All of this adds up to higher living standards and an improved quality of life for New Zealanders. The challenge is to lift the sights of our people from the concerns of tomorrow to the possibilities of a sustainable future.

You can't indefinitely sustain economic growth at the expense of people or the environment. You cannot achieve a high quality of life without an economic base. There are no third world countries with first world health and education.

The government is committed to working in partnership with industry and with communities. We need to develop social, environmental and economic policies together. Proactive, and sustainable - industry and regional development policies are new to New Zealand.

We need to be innovative in policy. We need to try things, and some won't work. But we need to take some risks if we're going to change from the performance of the last thirty or even forty years.

Trying out new ideas takes courage. But we also need more respect and admiration for those that give things a try. Triers have opened the doors to society's current standards of living. This government will continue to work with them to carry New Zealand forward.

I hope the doom-sayers are wrong when they say our economy is in trouble because the All Blacks lost last Saturday. We need to be better than that. We need as nation to apply the same passion to innovation and entrepreneurship that we apply to the All Blacks.

That is a world cup we really do need to win.


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