Q+A: Shane Taurima Interviews Steven Joyce
 
Steven Joyce on the new Super Ministry he’s head of which starts on July 1:  “It’s only a restructuring of a ministry. It’s not the answer to the world’s problems, but it is important.”
 
Joyce says it’s designed to cut through interagency discussions, which there are too many of currently in government.
 
Joyce says he feels for Reserve Bank Governor Alan Bollard: “One day he’s out there, he’s sandwiched in between the period leading up to the Greek elections and then the GDP figures come out the following week”.
 
Joyce confident the Government won’t back down over asset sales.
 
The Government’s promise to get back into surplus by 2014/15 remains a “key promise”.
 
Wouldn’t directly rule in or out a pay rise for the police, but says: “The reality is you need to grow the economy to actually create more income to pay for the public services.  And in the meantime, things are going to be tight because, actually, we’re spending more than we’re earning.”
 
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Q + A
SHANE TAURIMA INTERVIEWS STEVEN JOYCE
 
GREG            Next week, on the 1st of July, a new super-ministry starts work, called the Ministry of Business, Innovation and Employment, merger of the existing Economic Development and Science and Innovation Ministries with the Department of Labour and Department of Building and Housing.  It will lead the Government’s growth agenda.  That’s coming under some pressure, with Reserve Bank Governor Dr Alan Bollard the latest to cast gloom over National’s plans.  So is it time for a rethink?  Shane Taurima is with the new Minister of Business, Steven Joyce.
 
SHANE          Good morning, Minister.  Thank you for joining us.  Lucy Lawless is clearly not happy with the Government.  She says you’re missing opportunities.  Is she right?
 
STEVEN JOYCE – Economic Development Minister
            No, I don’t think so, and with the greatest respect to Lucy, I think she’s got one view.  I think the rest of the world has other views.  And in relation to economic growth and exploring all our country’s opportunities in the world, I think we’re focused on a whole range of fronts, and that includes areas like clean tech.  It includes a range of industries, and, frankly, we have to take advantage of all our opportunities if we’re to get New Zealand growing faster.
 
SHANE          Amy Adams, the minister, of course, has been in Rio, stressing just how vital a green economy is to New Zealand.  Back home, though, you’ve been rubbishing a green growth report which is backed by, you know, fairly senior business leaders like Sir Stephen Tindall and Rob Fyfe.  Are we practising what we preach?
 
STEVEN       Well, no, I’m not rubbishing it, and, you know, you should be careful that you don’t just adopt the Labour Party spin.  What I’ve been saying—
 
SHANE          But you criticised it, though, didn’t you?
 
STEVEN       Yes, there’s elements of it that I will criticise.
           
SHANE          Is that not rubbishing?
 
STEVEN       No, it isn’t, because I didn’t rubbish the whole report.  There’s some good things in the report which you certainly want to take the opportunity to encourage, including their approach, which is say to encourage businesses to explore opportunities to get ahead through green growth.  But what I am not so fussed with is the idea that somehow there are still dirty industries in the world and then there’s some clean industries.  And then they say that the dirty industries, which just happen to be about 80% of our exports, by the way, are the ones that we shouldn’t be encouraging.  And I think you’ve got to be a little bit more nuanced than that, and, frankly, I think the debate’s moved on and it’s actually about greening growth, ie, improving our environmental outputs across a range of industries.  It’s not about just saying, ‘Oh, well, these ones are hopeless.  Let’s drop those.’
 
SHANE          But you’ve just said we’ve had to prioritise everything, not just green growth.
 
STEVEN       I think we have to— Yeah, we have to be across a range of things.  If you look at that, there’s fantastic opportunities for New Zealand over the next 30 years.  And the neatest one is the fact that Asia is growing; it’s right on our doorstep; it’s much closer than the old Europe economy.  There’s going to be hundreds and hundreds of millions of middle-class Asians who are going to want our products, are going to want our services, who are going to want our food, frankly, over the next 30 years.  We actually have massive potential.  I’d be very disappointed if we tried to ankle-tap ourselves too much on the way through by saying that we can’t do this and we can’t do that.
 
SHANE          Let’s talk about your new super-ministry because people at home – they    want to know what difference it’s going to make in their lives.  The New Zealand Manufacturers and Exporters Association boss, as an example, says it’s a great idea, but he says you can talk about growth, but that’s not enough.  He wants to know how you’re going to deliver it.
 
STEVEN       Well, I can agree exactly in that respect.  I don’t always agree with John Walley, so there you go.  That’s a plus.  But the reality is it’s all about momentum, and, frankly, we’re working on a range of fronts.  There’s about six key inputs into business which are crucial for businesses to be successful, grow and be competitive.  So that’s your innovation, your skills, your access to markets, your access to capital, your access to natural resources and your access to supporting infrastructure.  Now, the Government has a programme across all those six.  It’s working very hard to develop that programme.  The advantage of MBIE – look, it’s only a restructuring of a ministry.  It’s not the answer to the world’s problems, but it is important—
 
SHANE          So how is—?
 
STEVEN       No, let me just take you through it  It is important because it’s all about simplifying the government processes so we can create more momentum.  We have less interagency discussions, and, believe me, we have way too many of those in government.  Less interagency discussions, more opportunity to drive the agenda forward and tick off the things that will help our businesses become more competitive on the world stage, because that’s fundamentally what it’s about.  If you want jobs in New Zealand, and I think we can all sign up for that, then that means you must give our businesses the opportunity to be more competitive from here relative to other countries in the world.  It’s as simple as that, and it’s as challenging as that.
           
SHANE          You say it’s as simple as that, but let’s go back to my initial— my initial question.  People at home – they want to know how it’s going to make a difference in their lives.  I dare say they’ve just listened to what you’ve said and they’re still wondering actually how is it going to make a difference.
 
STEVEN       Well, at the end of the day, no public-sector agency is going to wave its magic wand and make a difference to their lives, but I’ll tell you what it’s going to do.  It’s going to create momentum on that agenda, which will allow us to grow jobs faster and higher-paying jobs, and that’s fundamentally what it’s all about.  Now, that’s all done by businesses, but the government’s role in that is actually making it easier for businesses to be more competitive, so the outcome is more jobs, stronger growth.
 
SHANE          But business doesn’t seem to be responding, though, does it?
 
STEVEN       No, I disagree entirely.  You didn’t see the GDP results from last week.  It’s only one quarter, but, again, New Zealand in that quarter—
 
SHANE          Yeah, so we had a good start to the year, but we’re back on the decline now, aren’t we?
 
STEVEN       Well, it depends on who you listen to, and I feel for Alan Bollard, for example, because one day he’s out there, he’s sandwiched in between the period leading up to the Greek elections and then the GDP figures coming out the following week.  And the reality is for all forecasters at this point in time, it’s actually very difficult to see where the world economy is going because of what’s happening around the world, particularly in Europe.  But just look at that one quarter for argument’s sake.  In Australia, New Zealand and Japan, we’re, I think, the only OECD countries above the one mark.  Certainly, if you look at Europe, it was growth of nil; the UK – -0.5; the US and Canada – 0.5; we were at 1.1.  It’s not the whole story, because it’s only one quarter, but I’ll take it, frankly.
 
SHANE          It’s not the whole story, because I’d like to put some other figures to you.
 
STEVEN       Sure.
           
SHANE          Australia’s outgrown us by five to one.  The US and Canada have outperformed two and a half to one.
 
STEVEN       No, no, no.  That’s not correct.  Just go back—
 
SHANE          They’re not good figures, though, are they, Minister?
 
STEVEN       No, come back to Australia.  I think it’s very interesting.  Where do you think the growth is in Australia right now?  Because we’re growing faster than a number of Australian states, so where do you think the growth is?
 
SHANE          But not Australia as a whole. 
 
STEVEN       No, you know why?  It’s called Western Australia.  Do you know what’s happening in Western Australia, Shane?  It’s called oil and resources and liquefied natural gas.  That’s what’s happening in Western Australia, so you can’t say to, you know— it is actually intellectually dishonest, if I may say, to say on the one hand we want jobs and growth and faster growth, but on the other hand, ‘Oh, we don’t want that.  We don’t want that.  We don’t want oil and gas.  We don’t want foreign investment.  We don’t want increasing strength of our capital markets.’  There’s a whole range of things we don’t want.  We actually have to call that sort of criticism in New Zealand because we do need the faster growth, and the only way you can get faster growth is if you increase the opportunities for New Zealand businesses to create jobs in this country and not in Western Australia.
 
SHANE          We need to move on because another big part of your economic plan is state asset sales, which is due to pass its final hurdle in Parliament in a few days.  But, of course, there’s another hurdle – public opposition.  Is there a point where you listen or when you listen to public feedback and back down on state asset sales like you did on class sizes?  Or is that simply out of the question?
 
STEVEN       No, look, the Government—
           
SHANE          Will you back down on it?
 
STEVEN       Shane, do you want to listen?
 
SHANE          Well, I do, but—
 
STEVEN       Just listen.  Let me take you through it.
 
SHANE          Let’s be specific, though.  Will you back down? 
 
STEVEN       No, I don’t believe the Government’s going to back down on that at all, and the reason for it is this— well, firstly, there’s a couple of things.  Firstly, we did take it to the country, and I think what the country said at the last election was some aspects of, say, for example, mixed ownership was of concern to them, but they understood the role of the government in actually bringing the books back into surplus and creating opportunities for New Zealand going forward  And you can’t buy a quarter of the package, which was my point in relation to economic growth.  You can’t say, ‘I want the jobs, but I don’t want this, this and this,’ because, actually, you do have to provide those opportunities.  Now, if you go to the mixed-ownership model, one of the most important things about it, which I believe so far, you know, hasn’t been talked about enough is the strengthening of the capital markets by getting those shareholdings listed on the capital markets in New Zealand.  Now, the New Zealand capital markets actually historically, certainly over the last 10 years, have performed very poorly relative to the rest of the world, and that’s because there’s been some breaches of faith historically.  Go back to 1987 – that’s been very difficult for New Zealanders to have confidence in their capital markets since then.  We need to grow our capital markets because that’s how our companies get the opportunity for more capital, to grow further, to add more jobs.  So I’m hopeful that the mixed-ownership model with the opportunity to list those companies, which would be strong companies in the New Zealand environment, that’s an opportunity to actually strengthen the capital markets and get more Kiwis interested—
 
SHANE          You mentioned surplus, and that was another commitment that you made at the last election – to take us back to surplus in 2014/15.
 
STEVEN       That’s correct.
           
SHANE          But Alan Bollard now says your growth isn’t good enough to keep that core promise.
 
STEVEN       Well—
 
SHANE          Does that hurt you?  It’s got to hurt.
 
STEVEN       No, I don’t think at all, because, actually, we remain—
 
SHANE          But that was a key promise. 
 
STEVEN       And it remains a key promise.  I mean, just because one forecast— even the Reserve Bank comes out one week and says they’re worried about it doesn’t mean that the government doesn’t stay focused on its agenda.  Otherwise you—
 
SHANE          But the Prime Minister says he’s not confident.
 
STEVEN       Well, no, the Prime Minister said that he is confident on the current setting to get us to 14/15, but we’ve all said all the way through, in fact, that if the bottom fell out of Europe, well, then that would be a different story, because then it could perhaps become destructive to do it  But just remember this: the world is becoming more allergic to sovereign debt than it has in the past, and it’s happening on a, you know— Every few months they downgrade more banks, downgrade more sovereign economies, and that’s because debt, as I say, it’s something that’s a bit more allergic than it was five years ago.  Now, the Government is focused on getting back into surplus to make sure that we keep our sovereign debt down – what we owe the rest of the world.  And since we’ve come into office, how much we owe the rest of the world has dropped from 85% of GDP to now nearly 70% of GDP.
           
SHANE          We have to wrap up, but before we go—
 
STEVEN       So that’s good progress, and we’re going to continue to focus on that, but the vagaries of—
 
SHANE          We take your point, but before we go, because there’s growing concern— Just before we go, there’s growing concern amongst our police over their pay, and I want to know whether they’re going to get—
 
STEVEN       You’re getting a little beyond my portfolios at this point, but, again—
 
SHANE          But you are Associate Finance Minister. 
 
STEVEN       That’s true, but let me take you through this.  Again, New Zealand has to cut its cloth to actually meet what it actually affords to buy in the world.  So you have your Lucy Lawlesses on saying we need to stop—
 
SHANE          Let’s talk about the police—
 
STEVEN       No, no—
           
SHANE          The police—
 
STEVEN       No, let me finish.
 
SHANE          You haven’t even mentioned the police yet—
 
STEVEN       No, let me tell you—
 
SHANE          Let’s get your answer on the police. 
 
STEVEN       No, let me take you through it, because there’s no answer that’s independent of these other answers.  Because the reality is you need to grow the economy to actually create more income to pay for the public services.  And in the meantime, things are going to be tight because, actually, we’re spending more than we’re earning.  We have for some time.
 
SHANE          So no increase?
 
STEVEN       We have to actually balance it.  I’m not saying about no increase with the police.  What I’m saying is that every government agency, every public service is dependent on how strongly we grow the economy forward, and that means taking advantage of all the opportunities we have, and, frankly, that includes intensification of agriculture, it includes oil and gas, it includes clean tech and high-tech industries, and that’s what we’re focused on.
           
SHANE          And we have to leave it there.  Minister, thank you very much for your time.
 
ENDS

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