New Cabinet well-designed to face triple challenge in lifting economic performance

IPENZ considers the new Cabinet is well-designed for tackling the triple challenge for economic performance by improving infrastructure, creating a supportive regulatory environment and developing new export industries.

“The appointment of the Minister of Finance, Bill English, as the Infrastructure Minister sends a very strong signal that additional expenditure will be focussed on what will be most effective for economic growth, and will still be fiscally prudent,” say Dr Andrew Cleland, IPENZ, Chief Executive. “He will be supported by Steven Joyce as Minister of Transport and ICT ranked at 17 and Gerry Brownlee at number 3, as Minister of Energy.”

IPENZ believes the new Government’s plan to increase infrastructure investment will face some significant challenges in light of the current international credit squeeze and the local government sector who will want to minimise increases in rates in their 10 year plans.

“However infrastructure is sufficient for economic growth but not enough in itself - it is only one leg of the three legged stool needed for economic growth,” says Dr Cleland. “The second is an improved regulatory system and with Nick Smith, ranked No. 6, as the Minister for the Environment has declaring his enthusiasm for regulatory reform along with the appointment of Simon Power, at No.4– Minister of Commerce - infrastructure investment can only be enabled with an efficient regulatory system.”

“The third leg of the stool is investment in capital and skills with a focus on sectors of the economy that can make the greatest contribution to lifting NZ’s productivity and economic growth – namely knowledge based industries and the construction sector. This has proved a very difficult challenge for the previous government and will be faced by Gerry Brownlee, as Minister for Economic Development, and by Dr Wayne Mapp, ranked No.13, as Minister of Research Science and Technology,” he says.

“No country has got rich by farm-based products alone, we desperately need a diversified economic development sector. Productivity in our manufacturing sector is low by international standards. Getting our R & D aligned with market opportunities, so precious capital is not wasted will be vitally important.”

“IPENZ is pleased that taking a three-pronged approach to improved economic performance has been placed in the hands of the new front bench. Collectively they face a challenge that is far greater than the previous government has had to deal with over the last nine years.”

ENDS

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