Jim Anderton Speech: Papakura Business Breakfast

7:45 am Friday, 7 March 2003 Speech to Papakura business breakfast Thoroughbred Tavern, Great South Rd, Papakura

Mayor Buist Councillors Business leaders

Mayor Buist, ladies and gentlemen

The Government's Growth and Innovation Framework was launched on 12 February 2002
It established a growth goal of returning New Zealand’s per capita income to the top half of the OECD rankings and maintaining that standing
That goal is to be obtained through sustainable economic development - development that meets the needs of the present without comprising the ability of future generations to meet their own needs.
It means looking after people; taking the long term view; taking account of the social, economic, environmental and cultural effects of our decisions; and encouraging partnerships and participation.
The government’s key concern is to ensure that the benefits of growth accrue to all New Zealanders, all social groups, all ages and all regions.
It’s an ambitious goal - but not an impossible one.
However central government cannot achieve the goal on its own. We cannot have a strong national economy unless we also have strong regional economies
The additional challenge for this government is to improve social wellbeing at the same time as we lift our economic performance. We believe that can only be achieved through intelligent partnerships. Partnerships between government and industry. Partnerships in the community, because government's don't create all problems and don't solve all problems. And partnerships within the government, because coalition governments should and can be better quality governments.

My aim tonight is to enlist your region’s support for the development challenges facing New Zealand.

Is the goal achievable?

Our historical growth performance has been quite poor by OECD standards - our per capita income ranking in the OECD has dropped from 9th in 1970 to 20th (out of 30 countries) in 2001.
Our performance positions us between Spain and Portugal.
Ranked on a comparable index against all countries (not just the OECD) New Zealand stands at 45th position, below Cyprus and above Slovenia
First overhead

In 1970, New Zealand had roughly the same per capita income as Australia. This graph shows that since then we have fallen significantly behind
If we had achieved just 1% additional annual per capita growth over that 30 year period (corresponding to 3.1% real GDP growth), we would have been now on a par with Australia (which ranks 12th in the OECD)
Stronger economic growth would have increased the incomes of all New Zealanders and allowed us to provide the world-class government services that New Zealanders want.

Economic growth is not an end in itself.

Economic growth itself is certainly not an end in itself. We want to achieve a better quality of life for all New Zealanders, now and in the future.

This means returning to first-world status across a wide-range of sectors such as health, employment, education and safer communities - all of which have a significant influence on an individual’s quality of life.
Strong economic growth contributes directly to material well-being but also brings indirect benefits to New Zealanders.

Prosperity among New Zealand’s citizens not only enables the government to provide world-class services, it also leads to improved local government services and more positive environmental outcomes.

So where would New Zealand be today if we had achieved just 1% additional annual growth over the last 30 years?
Employment –

Second overhead

Economic growth helps maintain high employment, and the importance of having a job to an individual’s wellbeing should not be underestimated. It’s hard to say exactly what effect 1% additional growth in each of those 30 years would have done for our employment statistics.
However, in the years since 1999 our economic growth has been above average and in that time we created 123,000 new jobs and unemployment went from 6.3% to 4.9%.

Incomes - Wellbeing is also about relative incomes. 1% higher growth than actually achieved since 1970 would mean that the average worker would now receive an additional ($175) per week.
Health - An additional 1% growth would have allowed us to spend $3.7 billion per year more on health than we currently do.
Education - The story is similar for education. $4.2 billion more (about $3500 per student) would be available per year

Roading - throughout New Zealand, people tell me how our lack of investment in infrastructure in the last decades is now impacting on growth and living standards. If our GDP had grown at the same rate as Australia we could have invested twice a much per capita on roading than we did over the last 30 years.

To make it into the top half of the OECD we must aim to regain our standing vis-à-vis Australia. A 4% annual real growth in per capita income (a doubling of our current performance) over the next ten years would get us to where Australia is today.

That is how far we have fallen behind.
But we have to do better than that in order to gain and maintain a higher OECD ranking and the benefits for all New Zealanders that follow on from that

GIF So the government has taken action. We are not interested in sliding further down the OECD ladder – the business as usual option.
We’ve done more than just set goals. We have studied the underlying principles of growth. We’ve concluded that New Zealand’s next phase of development must by characterised by innovation.
The Growth and Innovation Framework is this Government’s plan to use innovation to achieve the growth we want.
In New Zealand, we haven’t got heaps of money to throw at problems, but we do have the confidence and freedom to try things out.
We must build on this strength and become a nation known internationally for our innovation, our creativity, our skills and our lifestyle. GIF is not solely about achieving a level of per capita growth, its about achieving the best we can as a nation.
The government is committed to working with all parts of the economy to make this happen. But, ultimately, achieving the growth target will require dedication and passion at the local level, as well as nationally.

GIF provides a framework for New Zealand’s economic development and also a guide for the focus of economic development strategies at a regional level.
Only if we achieve alignment between national and regional approaches to economic development, will New Zealand achieve the sustainable development outcomes we all want
Here in Papakura you are engaged in the Auckland Regional Economic Development Strategy that was launched in October 2002.

I would like to commend your Council for its engagement in AREDs. This engagement is at all levels. At the financial level through providing funding. At the political level through representation on the Establishment Group And, at the operational level through your Economic Development Manager’s membership of the ARED officials group.

Engagement is recognition that the success of Papakura is linked to the success of Greater Auckland, and that ensuring that success requires increased regional collaboration.

AREDs is a collaborative regional strategy. The interests of the four big cities will not predominate. Implementation will require a mix of projects and initiatives that are tailored to the needs of each member of the partnership. The GIF strategy I have outlined earlier and the AREDs strategy have much in common. They both recognise that economic development cannot be pursued in isolation from social and environmental factors. Both recognise the need to focus externally, to go out and actively seek export markets. Both recognise the importance of encouraging greater innovation and building an entrepreneurial culture And both recognise the vital importance of developing a skilled labour force. The ideas behind GIF aren’t new – and innovation is already an integral part of the way in which some firms do business in Papakura.
Aera Footwear is a good example. Aera began as an importer of shoes but soon realised there was more money in exporting. They quickly adapted its operations, transforming from an importer to a design and marketing company which now exports skateboard shoes to 18 countries.
The commercialisation of innovation is seen in companies such as Safer-T-Sleep, who produce a unique baby safety product to prevent injuries and deaths during sleep.

The path to economic growth in New Zealand (as in Papakura) is not without its challenges.

Skill shortages are affecting many parts of New Zealand including Papakura.

I understand you have a problem with a relatrively high percentage of unskilled workers, and there are concerns about the literacy and numeracy rates amongst these workers.

I am aware you share Auckland’s infrastructure concerns, particularly with respect to roading.
Gaining buy-in for sustainable regional economic development is also critical. It’s important that those who are leading regional development are able to share their enthusiasm and get all the major players in the region behind them.
These are issues that we can work together to manage.

The government has set out a framework and established a series of programmes to assist regional development.
However, we expect individual regions to make their own development aspirations a reality.
In the same way, individual businesses have to seek their own productivity improvements through research and development, attracting and retaining people with the right talents and skills and managing the business in a way that creates success.
And, if you’re doing your best and you need a little Government support to deliver even more growth, you can rely on me as Minister of Economic Development to do all I can to deliver that assistance to you.
Ultimately, I believe, your success and New Zealand’s success will depend on all of us working in partnership.

Only if our regions are strong, vibrant and growing can our national economy be strong
But, New Zealand is capable of being more than just the sum of its parts. With well-aligned national and regional strategies, we can not only fulfil, but also extend, each others’ potential.

We must aim high.

As I demonstrated at the start of this speech, an additional 1% in the long run can bring considerable benefits for us all.

Achieving the government’s desire for 4% per annum growth (or more) will make a truly huge difference to the quality of life of all New Zealanders.
By working together we can deliver sustainable development outcomes for all New Zealanders and hand to our children a New Zealand that is:

a land where diversity is valued and reflected in our
national identity; a great place to live, learn, work and do business; a birthplace of world-changing people and ideas; and a place where people invest in the future.

Thank you

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