Opening Address to Ingenium Conference 2004

Hon Pete Hodgson:

Opening Address to Ingenium Conference 2004

The theme of this conference is "The Next Generation", and this is timely, given the new cycle of investment in public infrastructure by central and local government, after a period of under-investment during New Zealand's privatisation phase.

I'd like to talk to you today about the big picture of New Zealand's infrastructure; our broad policy approach to it and the money we're putting into it. I'll also cover what we're doing to encourage the next generation of engineers and scientists to take that career path that will fuel our future growth. We all know that while new investment and sound organisational structures at a national, regional and local level are essential, we can't get the infrastructure the country deserves without the having skilled engineers on the ground.

New Zealand is changing. For several years we have been coasting on the infrastructural exploits of previous generations. In previous decades, large Government departments like the Ministry of Works and Development, or New Zealand Electricity, or New Zealand Railways helped to build up our infrastructure. Many engineers were either trained by, or gained experience through these and similar organisations. However, the departments are gone or restructured and have left a hole in terms of training and, to a lesser extent, infrastructural development.

We are moving to correct past underinvestment so that our economic performance is where it should be, among the top half of OECD countries. One of the ways we're doing this is through the Growth and Innovation Framework or GIF.

The GIF strategy recognises that sustainable growth will only happen if the right infrastructure is in place. To support it the Ministry of Economic Development has just managed a package of work on the current state of our major infrastructure resources including electricity, gas, water, rail, roads, telecommunications, ports and airports. Overall, the study found that these were basically in good shape, though there are some areas of concern.

There were some areas that clearly needed reinforcing. In some cases existing infrastructure is fully stretched and new capacity must be built - [as those of you who use Auckland's motorway network during rush hour may know] - and in other cases, more maintenance is required so that what we do have continues to serve us well. On roading in particular, I recently announced $2.97 billion in spending on land transport through the Investing for Growth transport package.

It's also appropriate to mention what we're doing about the electricity network. Lessons have been learnt from the situation in the upper South Island, and these are being applied to the grid maintenance and upgrading nation wide. The Electricity Commission is doing a good job in co-ordinating planning across the sector, overseeing both gird investment and that in new generation.

As important as roads and electricity is our sewerage infrastructure. The government recently announced $11 million of new money to help small communities with high tourism flows fund the infrastructure they need.

Investment is key to providing infrastructure. However, you need an efficient infrastructure in place to decide how this is best spent. One example of this are the changes announced today to the Government transport sector under the Transport Review. I'd just like to take a minute to give you an overview of the structural changes, before getting on to what improvements this will deliver for us.

We're disestablishing Transfund and the LTSA, moving the policy functions of both to the MoT, and merging the operational functions of both into a new agency. While you may not discern much change when you go to register a vehicle or apply for a driving license, you will I hope be enthusiastic about what these changes mean to the way we go about planning, funding and delivering our transport infrastructure.

The changes are driven by this Government's vision to have an affordable, integrated, safe, responsive and sustainable transport system.

I want to pick on one particular aspect of this - integrated. These changes mean that there will no longer be a fragmented approach to transport. Policy development within the MoT will now cover the land, maritime and air sectors. This is a major shift away from each segment of the transport sector arguing its own case in isolation from the others. We're putting in place a structure that will deliver the best integrated transport solution that covers all elements of the transport mix.

There will always be projects of national interest. However, in making our transport sector responsive, it must be planned to meet regional and local needs. That's why both the MoT and the new agency will have strong local links and work closely with regional and local government.

Many of you will also be interested in the refinement of the RMA. The focus of its review is to get greater certainty and efficiency in the way it operates. This is particularly important when local authorities are considering transport and energy sector projects that may have national significance using an act that until now has offered little guidance on how to weigh up competing national benefits and local costs.

At a more local level, the RMA review is looking at improving the consent decision making process to reduce costs, provide greater clarity and certainty among applicants and to minimise the opportunity for abuse of process for vexatious reasons. This should reach the House in September.

One last part of our infrastructure I'd like to single out links nicely with our focus on training and developing the next generation of engineers and scientists.

Our telecommunications infrastructure is not only vital for conducting business, in itself it is a key driver of research and education. Like our airports and ports, it is here that New Zealand's infrastructure crosses international boundaries. The government is funding the establishment of a supper high speed internet link between our Universities, Polytechnics, Wananga and Crown Research Institutes as a prelude to wider commercial adaptation.

The link itself will run at speeds 20,000 times faster than the dial-up modem you may use at home, or 400 times faster than traditional, so called, high speed internet such as ASDL. Here is a ready example of how technology and infrastructure are enabling the new generation of New Zealanders to learn and drive our economy forward. It may be the high tech end of the scale, but it is no more important than having good transport, energy, sewerage and water infrastructure in creating a vibrant economy.

I'd now like to move on to recruitment.

A well-educated, adaptable and skilled workforce is an essential ingredient in producing a successful economy. Achieving this means being able to develop young New Zealanders; to attract overseas talent to live and work in New Zealand; and to maintain that base. I am well aware of the challenges we face in developing the necessary skills in all areas of the economy and the international nature of the market for good people.

Growing NZ talent requires focus across all levels of the education system - from early childhood right up till tertiary education and into the workforce.

We talk about adding value to products in New Zealand. It is people that add value because they have the education, training and the best environment to foster innovation.

At the primary school level adding value means continuing to focus on literacy and numeracy, but also acknowledging that other skills are needed for a modern economy. For example - embedding ICT into learning processes.

At the secondary school level this might mean that students have the information they need to make decisions on their future study and work. Students need to know about what a future workforce might look like rather than how it looks now.

IPENZ's Futureintech programme, funded by the government, is a good start for encouraging school students to consider a career in the engineering, technology and scientific fields. Through New Zealand Trade and Enterprise, IPENZ now has a $6 million contract to raise the profile of science and engineering careers through the Futureintech initiative. I am pleased to hear that Ingenium is in the process of becoming a partner in this initiative.

Initiatives such as this are vital if we are going to guide our young people into career paths, not only so that they provide a sufficient talent pool in specific areas that we need, but so that the yong people themselves have a rewarding career. It is essential to provide guidance at this level so that our young people can make informed choices that benefit them and the wider New Zealand economy.

At the tertiary level adding value can mean linking through to employers, both to learn where skills gaps are appearing and to ensure that the most up-to-date industry practise is reflected in what students are learning. Adding value could also mean increasing the number of post-graduate students, and ensuring that research informs the development of services and industries.

But one of your principal concerns is with the number of school leavers entering the engineering, technology and scientific vocations.

Tertiary Education Commission figures show that between 1997 and 2003, more students have entering engineering, science and technology degree courses. However, you can't, as they say, ever have enough good people. We should take pride in the fact that our graduates are in demand internationally and value the experience and skills they pick up overseas and repatriate to New Zealand.

The Growth and Innovation Framework strategy I mentioned at the beginning of my speech includes links with expatriate kiwis and other skilled workers with a view to attracting them back to our country. New Zealand engineering operations have often attracted workers from overseas, both ex-pat Kiwis and foreigners, and this will continue to be the case in future.

The structure of degrees is also changing to make them more valuable to employers. Many now combine science and business qualifications.

The government runs many schemes under my Research, Science and Technology portfolio.

A key criteria in applying for funding from the Foundation for Research Science and Technology is the benefit in terms of the development of human capital.

For example, the Royal Society of New Zealand runs the Teacher Fellows Scheme - which allows teachers to spend up to a year out of the classroom and in a firm or research institute, investigating how science, maths and technology is applied in the real world.

Of course this is a great opportunity for the teachers themselves - they learn new skills and can apply their experience to teaching so that they can better prepare their students for working life.

It is often teachers that fire the imagination of our young people and develop their interest in careers in science, engineering and technology. They can pass on practical knowledge of what working in these fields mean. Such a path to encouraging our young people into the sector can be greatly reinforced through your involvement with local teacher fellowships schemes.

Another scheme within my Research, Science and technology portfolio is the Technology for Industry Fellowships, or TIF. This places students or experienced researchers in companies to undertake R projects. The scheme is beneficial for both parties. As well as the potential to develop improved products or processes, firms' science and technological capabilities are enhanced while researchers benefit by being exposed to an industrial environment.

The scheme sits under the Technology New Zealand umbrella, which promotes the development and adoption of advanced technologies by business. Again I would encourage you to look at how you can become involved with the TechNZ programme and specifically with TIF.

However, it is not always people with degrees that we need in the workforce. The Industry Training system supports and subsidises business investment in workforce training to meet self-identified needs. This includes a significant boosting of the funding of Modern Apprenticeships to encourage more young people into work-based skills development.

Many larger organisations and state-owned enterprises are also recognising their role in terms of supporting new people into our various industries.

For electricity line companies, I am aware that New Zealand is effectively training workers in live-line techniques, only to lose many of these people overseas. A difficulty for line companies is that they must recognise the value of these workers, and offer attractive incentives while operating within increasing constraints in terms of income generating activity.

Facing skills shortages is a key part of the delivering on the $2.97 billion land transport through the Investing for Growth transport package and I know that the Ministry of Economic Development has identified the problems a shortage of experienced road workers and engineers, particularly in delivering the Auckland Roads Package. It is clear that government, through the education sector has a role to play in providing the necessary courses to equip people with the necessary skills, but the in turn, industry must play it part in encouraging our young people into these career paths.

This is only a short overview of the many government initiatives, and the spending that goes with them, to equip our young people with the skills work in science, technology and engineering so that we can provide the infrastructure New Zealand needs.

For all our initiatives and cash, government cannot do this alone. I am very encouraged by schemes such as Futureintech and I urge you all to work in partnership with us to guide our young people into careers in the sector. You can also shape the quality of students coming out of the system by working directly with the educators and students alike to ensure that what they are taught and the opportunities they have to gain hands on experience are as relevant as possible to their future careers. Together, we can make this work.

In closing, I hope I've given you a flavour for this government's and my own commitment to our national infrastructure and to making the necessary investment in our young people so that they can make the most of the opportunities the sector has to offer. [I'd also like to take this opportunity to say something that, I fear, you don't hear often enough. I know most people take our infrastructure for granted, only noticing it when it goes wrong. Well, I'd like to thank you for the work you do and give you the recognition you deserve in providing the infrastructure on which our prosperity is built.]

ENDS