23 October 2002 Speech Notes

Sustainable business in New Zealand

8:15 am
24 October 2002
NZ Sustainable Business Conference
Waipuna Hotel & Conference Centre,
58 Waipuna Road, Mt Wellington
Auckland

Recently I have been reflecting that this is the best time for a young person to be leaving school in New Zealand since the early 1970s.

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

Young people leaving school have options that kids in the late 70s, 80s and 90s never had.

Up and down New Zealand there are job vacancies.

When I was in opposition and meeting people up and down New Zealand one of the real problems facing the regions of New Zealand was a shortage 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.

Today, less than three years since this coalition government was elected, we have the lowest unemployment in 14 years, at 5.1 per cent, yet we still have too many unemployed – particularly young New Zealanders and even more particularly Maori and Pacific Island New Zealanders.

This week the Government released the DWI figures which show that the registered unemployed in some regions has declined as much as 70 per cent.

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

I heard recently that the West Coast is going to England this month in search of skilled workers. In Ashburton there are so many job vacancies that employers are looking overseas for workers. There are also jobs for two hundred freezing worker that can’t be filled – when did that last happen?

We can develop our economy into the ‘Pacific Tiger’ economy I believe we can be.

This incredible opportunity comes at the same time as the realisation that we need to ensure that our economic growth is sustainable.

There are many definitions of sustainability. The definition adopted by the Government is from the Brundtland report of 1987.

It says that sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

Sustainable development must regenerate and promote growth by maximising new opportunities and training so as to keep fueling our economy.

In other words it is not sustainable development if it only lasts a generation. It must be part of a virtuous circle that reinforces itself and gains momentum.

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, economic development and employment.

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

However real sustainable increases in productivity can only come as we improve our infrastructure, physical and human, make more sensitive use of our natural resources, and work together.

I believe the New Zealand’s secret economic weapon is our new ideas. Our ability to innovate.

This is driving our current growth and up and down New Zealand I see examples of just how creative New Zealanders are:
- Hamilton jet boats
- Bruce McLaren
- Britten Motorcycles
- Refrigerated container ships
- Tauranga Motor Mowers
- Angus Tait

There are many examples but the message is clear, New Zealanders are talented and we have more ideas and creative energy per head of population than nations much larger than ours. We can, and do punch above out weight in the international arena.

I believe that this same innovation can make us a leader in sustainable business practice. If we can apply our creativity to using our resources more carefully and implementing triple bottom line reporting we will be way ahead of other countries.

All of you are leading the way in making this happen. Your organisations are promoting best practice and encouraging a change in the mindset behind our business leaders.

One lesson of the last thirty years has been the need to work together. The retreat of Government from the market place and from the community was a bold experiment.

And it failed.

The jury is back in and it didn’t work.

The market, left to determine how our resources would be used failed to deliver all the outcomes New Zealand was promised.

After nearly 20 years of experimentation we had systemic unemployment, economic decline in nearly all our regions and industries and continuing wasteful unsustainable use of resources.

The Labour Progressive Government has positively re-entered the economic and community development arena as a partner with all the aspects of the commercial and voluntary sectors of New Zealand.

Three years ago when I first went to a region and said “I’m from the Government and I’m here to help” the audience laughed.

However I meant it. And today I am here to say the Government is prepared to work with you.

This Government is committed to sustainable development and we recognise we can’t make it happen alone.

The sustainable development vision envisages a partnership with the sectors and industries of New Zealand in order to create a path for ecologically and socially sustainable economic development.

There is evidence that businesses are already making the change to triple bottom line reporting and recognising their responsibility to implement sustainable business practices.

Succeeding in business is dependent on your relationships including with your own community.

The community provides businesses with customers, staff and suppliers.

Dealing honestly and ethically with all stakeholders, recycling waste wherever possible, providing safe working conditions, and acting as a good citizen in the local community all helps win customer loyalty and retain and attract staff.

Environmental concerns are becoming more important to many individuals, as the GE debate and demand for recycling demonstrate.

It is clear that these values are not being left at home and are being taken to work by staff, and by managers.

A report to be released next month, by the Ministry of Economic Development, on business management in New Zealand has a section on social responsibility. The report contains some heartening results.

The report looks at business practices of New Zealand companies both in terms of outcomes and practices. Most of the businesses, 82 per cent, engage in community sponsorship or donations.

Most businesses try to donate to activities related to their businesses as part of their marketing and reputation activities. The report notes that the businesses saw a ‘social good’ element as part of the objectives of their sponsorship.

Concerns about the natural environment do not come out so well. Over a third of firms surveyed believe that environmental measures are not applicable to their businesses.

This is clearly an area for education of businesses. The view that environmental management is too new, too expensive, too difficult or not relevant, ignores the current costs of environmental pollution. The fact is that pollution and waste represent additional costs, not value, for customers. For example handling, storage and disposal of packaging.

Businesses should see environmental management as an opportunity to lower their costs or improve their value – not as an annoying expense.

It is clear that too few New Zealand businesses currently see the need to adopt triple bottom line reporting as well as the range of sustainable practices that your companies promote.

But it does not need to be difficult. Being socially responsible can involve supporting local companies, paying staff fairly, paying suppliers promptly, buying recycled and recyclable products, or using energy-efficient lighting.

The role for government in supporting the adoption of sustainable business practice is still emerging. Areas we are exploring include:
- promoting good business management practice;
- increasing information and awareness of market opportunities from New Zealand’s comparative advantages in “environmentally friendly” products and services;
- local employment and economic development opportunities around strengthened markets for resource recovery, reuse and recycling; and
- using a sustainable development approach to reduce reliance on heavy handed regulation with a view to better meeting environmental and social objectives with lower compliance costs.

I suspect that changing the way businesses operate is easier in a positive growth environment than in a tough hostile market.

I think we have before us a huge opportunity.

The regions of New Zealand are all in positive growth mode, most at over four per cent.

There have been over 100,000 new jobs created in the last three years.

There are at the same time significant skills shortages.

There are now 3,000 new apprentices, and 68,000 people in industry training.

This Labour Progressive Government is committed to sustainable development and we are prepared to work with you to make New Zealand a world leader in a responsible and sustainable development.

I congratulate you all on your commitment to sustainable development.

Even your attendance here today signifies your resolve.

I want to thank you for your efforts to make business about the future and about people.

And I look forward to working more closely with you in the future.

ENDS

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