Hon Jim Anderton
25 October 2000 Speech Notes

Embargoed until: 8.40 PM Saturday 28 October 2000
To be checked against delivery

Address to Hi Tech Council Excellence Awards Dinner

I would like to thank the Hi Tech Council for inviting me to attend this Excellence Awards Dinner tonight to celebrate the achievement and innovation of Kiwi business.

As the Minister for Economic Development and a proud New Zealander I am vitally interested in our successes and new ideas, so I am pleased to be here.

Tonight we will see a range of excellent innovative and forward looking projects. All of these are contributing to the economic performance of New Zealand.

I have yet to meet a business leader, or a politician, or a voter who doesn't think that we should improve the way our country is performing.

The issue is how do we make this happen? How do we make the lives of our people better? How do we improve the way our economy serves our people, while rewarding those who build the businesses and use their skills and judgement to create and maintain employment?

It seems to me that the answers to these questions can be answered by the work in which many of you here tonight are involved.

Our economy is changing, rebalancing toward a new economic structure. We are moving from consumption-led growth, to an economy which is production and export based. However this new production focus will not be the same as the past. Increasingly it will be production where we create value from ideas and technology sold to a specific market, at a high price.

If we want rising incomes and more good jobs then we must produce more – far more – products and services that depend on the skill, imagination and creativity of New Zealanders, and not just on our sunshine, rainfall and clean soil.

Right now New Zealand is the lowest exporter of Hi Tech products in the OECD. We import five times as much high-technology production as we export. Even Greece, which is the next worst of all developed countries, imports a little over three times the value of its Hi Tech exports. We also have a massive overseas debt and long history of balance of payments deficits.
New Zealand needs to do much better at exporting – particularly the high-value, high-skill products that firms represented here tonight are involved in.

I am particularly pleased to be here tonight, because it is essential that if New Zealand is to succeed, then this industry has to succeed.

You can be assured that export businesses and industries that have the greatest potential to grow have a champion in this Government.

I want to commit myself to working in partnership with this industry. To ensuring that the Government plays its role in facilitating the expansion and success of the high technology sector.

New Zealand businesses owe it to themselves to grow. With a domestic market of just 3.8 million, the big opportunities lie in markets overseas. If New Zealand is to develop the jobs and rising incomes we need, then businesses based in New Zealand have to be exporting successfully.

On the plus side we have a lot going for us.

We have a stable, democratic government. That puts us far ahead of many parts of the world to begin with. We have a solid infrastructure of roads, ports, clean water. We have a competent education system. New Zealanders are quick to adapt to, and use, new technology. We have significant natural resources and an exciting natural environment.

We have a cheap cost structure. That is the upside to low income levels, and the low value of our currency. Low cost helps to give our manufacturers and exporters an edge. Eventually, however, we have to compete by providing better value, and having better ideas, not cheap labour. But we have to start from where we are.

The giant international sharebroker and investment banker Merrill Lynch recently published a study. It looked at qualities such as the supply of capital, the education and skills of the people, the availability of technology. How free from corruption are the politicians and government bureaucracy. They looked at the social structure of countries and deducted points where they found wide inequality.

They ranked New Zealand seventh in the world. Not a bad place to start. So there is a solid base to build from.

The growing global marketplace for skills and talent helps to explain why we are undergoing a debate about the 'brain drain.' If we are going to reverse it, simplistic solutions relying on a single 'silver bullet' won't work.

The challenge for New Zealand is to be a country that is attractive for skilled, talented individuals to live in. Attractive to invest their energy and resources in. Attractive for Hi Tech industry.

We need a strong, diverse economy. One where skills, talent and creativity can be developed. Where there will be rewards for success and for skills, like these awards tonight. Where those who try will be encouraged and supported. Where working people can look forward to rising real incomes.

We need a country that is confident in its own unique culture. We need to see New Zealand perform on the world’s stages. We need to be proud of what we do and the unique, distinctive way we do things.

As I was thinking about Hi Tech and coming here tonight I thought about our excellent Hi Tech achievers of the past, Richard Pearse, Ernest Rutherford, CWF Hamilton, and Nick and Tim Wood, John Britten. These awards tonight will recognise the new generation of our achievers.

We need to make sure that our achievers are encouraged and have to a chance to grow.
Success by more of our companies and individuals creates even greater growth.

On Wednesday I opened the new offices of Allied Telesyn in Christchurch, a high tech international company undertaking research and development and capitalising on the skills and innovation of Kiwi software engineers.

This research facility will work for its international company and hire over 250 skilled technical New Zealand staff in the next two years. They are going to develop and market new and innovative products and around them they will create more jobs. The expansion of their plant alone will put $10 million into the local economy.

New Zealanders are coming back to work for them in droves, responding to jobs advertised by Allied Telesyn on the internet.

The future of New Zealand lies in the hands of New Zealanders. If we need to, we can put together international partnerships, attract foreign investment, and work with technology from overseas, but Kiwis are our major asset and that is where our future lies.

Achievement synses – Bruce McLaren – Italian car fan – In awe of Bruce McLaren. – Didn't even know he was a New Zealander.

The Labour/Alliance Government is committed to innovation, not just in industries such as Hi Tech but also in government itself. Next month there will be the Government e-commerce summit led by my colleague the Minister of Information Technology Paul Swain. At that summit he will release the Government's e-commerce blueprint.

Government is also working on e-commerce within government, called e-government. The idea is that all New Zealanders will be able to gain access to government information and services, and participate in our democracy using the internet, telephones and other technologies.

It could mean things like: paying tax on line; registering your car; changing your address details with health providers, schools, or the motor vehicle registration centre; or, if you are so inclined, reading government reports on areas in which you are interested.

Research and development issues are also areas where the government is changing to meet the needs of the modern economy.

I understand the Hi Tech Council is writing to Government on the taxation of research and development.

Currently the Labour Alliance Government is preparing a discussion paper for wider consultation which proposes that the tax laws conform with Generally Accepted Accounting Practice in terms of what qualifies as research and development expenditure.

We want to make changes that will assist business and encourage growth, and not hold back innovative companies, or the research and development so necessary for us to make progress as a nation.

Our paper is a discussion paper, and the ideas and feedback from the Hi Tech Council will be looked at and examined as part of this process.

Already this Labour/Alliance Government has shown our commitment to R&D by increasing government spending on research and development by ten per cent in our first budget. Of the $43 million extra, almost half goes direct to the private sector.

Finally you will have all seen the outcomes of the latest step in creating partnership with business to make our economy work better - the Business Forum held on Tuesday. We had around 100 business leaders and eleven government ministers for a free and frank exchange of views. Some of you here were at that meeting.

The positive response from business people who attended this forum will help the process of building a more innovative and knowledge-driven economy.

We discussed research and development, education, taxation, investment, exporting, immigration and Hi Tech new directions.

What personally impressed me was the constructive ideas and debate that the Forum created.

I started tonight by saying that I have yet to meet a business leader, or a politician, or a voter who doesn't think that we should improve the way our country is performing.

The Forum showed that there is tremendous goodwill and a strong resolve from business to improving that performance, both economically and socially. And a strong desire to work with Government to make this happen.

These excellence awards show some of the examples of people doing the work that will make these improvements.

We can be a lot smarter and we can make sure that good ideas for business get off the ground.

We can get better value out of our research and development spending.

We can keep on raising education standards and give our talented young people work that will keep them here.

This is a long term job. We need more than just nine months or even three years to achieve it all. The economy has not run down slowly, we have had balance of payments deficits since the 1970s. And in any case we have to run to catch up with the most able countries in the world and then run faster to stay with them.

We need far more scientists, engineers and designers. We need far more Hi Tech development linked specifically to commercial opportunities, like much of what we will see tonight. We need tertiary institutions much better equipped to meet the teaching, learning and research needs of New Zealanders. But these things take time.

There is no shortage of innovation and good ideas in New Zealand. We are now attempting to ensure that the government plays its part. We will assist where we can, as actively as we need to, to create the environment. It's not a matter of the government doing it all. It's a matter of working together. I look forward to that partnership with you.

/ends

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