AREDS – a plan for a region

AREDS – a plan for a region

Last week 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 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’.

The report from the NZIER talks positively of GDP increases higher than the annual four per cent the Labour Progressive Government has targeted for sustained economic growth.

I don’t believe the economy is yet at full steam.

It is growing, and ‘like the clappers’ is as good a description as any.

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

However capacity constraints are preventing the full potential of New Zealand’s development from being realised.

We need to have strong productivity growth, year on year, for the foreseeable future if we are to reach the top half of the OECD rankings for growth and employment and to become the ‘Pacific Tiger’ economy we could be.

Currently much of our growth has been using spare capacity, such as the unemployed and under-utilised capital equipment.

The real growth in productivity can only come as we improve out infrastructure, train more New Zealanders in areas where skills are needed, and work together to develop our economy.

As minister for economic, industry and regional development I have helped form partnerships with key industry sectors and regional leaders to work with them to address bottlenecks and roadblocks to sustainable development.

As an example forestry has the potential to be New Zealand’s largest export earner.

But after years of neglect our roading infrastructure has not been adequate to allow us to process and develop the wall of wood in the regions where we have a wall of wood descending on us.

Last week I was able to release the final maps for roads and other transport networks in Northland and the East Coast. The Minister of Transport also directed Transfund to fund 100 per cent of some major roading projects in these two regions in order to allow these regional economies to take advantage of the forestry resources. These announcements were the result of two years work on how to solve the issues of infrastructural inadequacy in regions.

Another example of developmental constraints we face is the shortage of skills that is now a serious problem in all regions of New Zealand.

When I was in Opposition I made a number of speeches where I said that the major economic problem facing New Zealand was a lack of jobs.

Unemployment is a social and economic scourge, and I remain convinced that an economy can never perform to its full potential while there is a significant proportion of the workforce unable to participate and contribute.

The lack of jobs meant many young New Zealanders lost hope.

Today less than three years later although we have the lowest unemployment in 14 years, at 5.1 per cent, we still have too many unemployed – particularly young New Zealanders and even more particularly Maori and Pacific Island New Zealanders.

However the cause of our unemployment is now different.

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.

Throughout the 80s and 90s successive New Zealand Governments adopted a ‘she’ll be right’ mentality to skills and training. If we did nothing then magically the labour market would sort itself out. Predictably it didn’t.

We now face unfilled jobs and unemployment side by side and we have had to rebuild industry training.

What does impress me is the way in which industries are changing this picture and working with government, training providers and each other to re-establish training as an important component of their long term future.

I am pleased to say that today the Labour Progressive Government has partnered industry training and there are now 3,000 new apprentices in training and over 68,000 people in industry training. We aim to double that number over the next three years.

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

Most people I talk to support this objective.

Everyone agrees we need to improve our economic performance.

The issue is how do we achieve it?

We have to do more than just rely on the sun shining, the rain falling, and the grass growing.

We need to identify New Zealand’s competitive advantages.

We also have to roll up our sleeves in every industry and in every region and analyse what needs to be done and then take action. We need to work with businesses to advise and partner them to be as successful as they possibly can be.

The Auckland Regional Economic Development Strategy is the partnership that can bring about real growth in the Auckland region.

The Auckland region is the main commercial centre of New Zealand. It is home to one third of the country’s population. It generates one third of the nation’s income. Yet it is falling behind many of the cities and regions against which it competes internationally.

The region must become the engine room of the New Zealand economy. It has all the qualities needed: energy, mass, entrepreneurial activity. What is has lacked, until now, is a clear common direction

I have been heartened by the support from Auckland’s business and political leaders. Leadership is often about putting aside smaller issues and working together on the major issues for the good of all involved.

Today, to launch the implementation of the strategy, we have present seven Mayors, the CEO of the ARC, and leading business people, as well as representatives of the many communities of the Auckland region. Central Government is represented by the Prime Minister and by me.

The issue has always been getting Auckland to speak with one voice.

We don’t talk about the city of Paramatta or look at the the issues of South Sydney or North Sydney councils. We only talk about the City of Sydney even though it contains nearly 40 councils.

We all recognise that Manukau is very different from North Shore and Waitakere from Auckland and Rodney is unlike all of the others.

The Strategy we implement today demonstrates that the Auckland region now realises that despite your differences the region shares an economic base and you will hang together or hang separately.

What is remarkable is that, in developing this strategy, business, local and central government, Mâori, Pacific Peoples, and the communities of the Auckland region have partnered together, for the first time, to develop this comprehensive regional economic development strategy.

When I met with the regional strategy group in September I said that in the next three years I intend to work closely with business leaders and local authorities in this region to help address barriers to economic development.

This development strategy framework makes this possible and I commit again to working with you.

The partnership we have developed together and the strategy you have produced here today show that Auckland can move forward.

It also shows that Auckland’s leaders are committed to working together to create more jobs and build support and infrastructure to support further progress for the Auckland economy.

I look forward to working more closely with you in the coming months for the improved wellbeing of the citizens of the greater Auckland region and for all New Zealanders.