Economic Development challenges

Thank you for the opportunity to meet with you today and to speak to you on central government and local government partnerships.

I am told that about the time you are tired of saying a particular phrase, usually the fifteenth time, people are just starting to hear it.

One crucial economic development message I am sure that all of you are all aware of is finally being repeated in our media. That is unless all the regions and communities of New Zealand are performing to the best of their ability, New Zealand as a whole will not be achieving its full potential.

This is why local Government is an essential partner for New Zealand’s future economic and social development.

Local authorities are as crucial to communities as communities are to local government.

And local government in particular has a significant ability to assist business and regional development including:

·providing regional leadership for economic development priorities
·funding and supporting economic development agencies;
·developing best practice resource management planning;
·ensuring certification and resource management compliance are provided as efficiently as possible;
·working with iwi and other communities to support economic development;
·ensuring that the public infrastructure necessary for business investment is in place;
·becoming involved in measures to address skill shortages; and
·working with central government on industry and regional strategic plans.

The challenge we all face is to work smarter at a regional level to move forward on practical measures that will help businesses to invest and grow.

Find out from business what is most likely to improve their productivity, and work on those issues wherever you can.

This doesn't mean compromising environmental or social outcomes, but it may mean achieving those outcomes in different ways.

Those of us in central or local government have an opportunity to be innovative and to improve our productivity in the same manner as the business community, and we should relish the challenge.

New Zealand is at a crossroads.

The work we do today will create the New Zealand of the future.

We can take advantage of the growth in our regions, the favourable trade conditions we have been enjoying and the innovation of New Zealanders in all of our towns and communities.

Or we could try and avoid making hard decisions.

We could, as some previous central and local governments did, stand back and not get involved, let businesses fail unnecessarily and jobs with them.

This is exactly what central government did in the 90s in failing to respond to the need for necessary infrastructure in our regions with significant forestry resources. The results are causing problems for Northland, the East Coast, the central North Island and other regions where there are significant forests today.

I don’t believe there is a real choice.

We need to continue working together in partnership to address roadblocks to further economic development.

I continue to be impressed with the work of the Economic Development Agencies around New Zealand. It was these agencies which in the dark ages of the 80s and 90s continued to work with communities and assist businesses even though there was little recognition or support for their work.

EDA’s have an important role and often broker the relationship between local businesses and local government and which are at their most effective when they understand the broader objectives for local and regional development.

During this symposium there will be discussion on the review of the Regional Partnership Programme.

We want to have a look at what’s working well and what is not. Where we can make improvements now and where we need more time to see whether or not changes are needed. You may also want to comment on the links with the new local government legislation.

While the most recent regional growth figures show a slight decline in economic activity in some regions the annual figures still paint a very positive picture with almost all regions with significant growth year on year.

The answer is to ensure that we are doing all we can to grow our businesses, industries and regional communities.

And this will require a clear focus and commitment to making a difference.

It seems to me that the regions of New Zealand are in great heart. But the current rate of progress is not enough. Looking ahead, the quality of growth and who gets to participate in the benefits of economic development is critical.

I want to issue a challenge to the Mayors, councillors, officials, and economic development advisers assembled here.

It is a challenge about making the most of our opportunity to create a stronger future for our people and our regions.

The challenge is to decide what more we can do to ensure that Maori and Pacific kids become the entrepreneurial powerhouse of the New Zealand economy in 2050.

Included in the challenge is how you can achieve that while retaining the essence of their own culture.

I say this not from any sense of political correctness or paternalism or even altruism, but from New Zealand’s self-interest.

Skilled workers are already a scarce resource, but it’s a kindergarten picnic compared to what it is going to be like in 20 years time.

Over the next 20 years 70 million workers are going to leave the OECD workforce.

They will be replaced by only 5 million entrants to the workforce, from the OECD nations themselves.

The average age of the workforce will continue to climb.

The maths are compelling. There will be a serious worldwide shortage of skilled workers.

People who speak English are likely to have an advantage in OECD countries and New Zealand’s young people, well educated, hard working and innovative will be highly sought after.

With an ageing population young workers are going to be able to choose where they live, where they work, and probably how much they should be paid.

If we want to keep our economy moving and not lose the best and the brightest of our young talent we need to start creating opportunities now.

One important issue in the equation is that in 50 years time up to 35 percent of New Zealand’s population could have Maori or Pacific island origins. Current birth rate trends already ensure this is what will happen.

In short, without Maori and Pacific peoples participation there will be no satisfactory New Zealand economic development.

It means though, that as we look to the future and create training and job opportunities, we need to be very aware that our Maori and pacific Island youth are an important part of our future.

I know a number of you already have a variety of programmes aimed at assisting Maori and Pacific youth and adults in business. There are also central Government agencies who are operating schemes.

So I’ve asked my officials to begin a stocktake of initiatives that aim to lift Maori and Pacific youth participation in entrepreneurship and skills training.

They will survey the work, not just of government agencies but also the work being done by the Economic Development Agencies, Mayors for Jobs and the like. The survey will cover skills initiatives too – given that only 19 per cent of Maori and 15 per cent of Pacific people have tertiary qualifications compared to 31 per cent of European New Zealanders.

Those are mainly long term goals of course. We also need to get more successful Pacific and Maori businesses up and running now, so that kids have role models to follow.

I’d like you to look at your business assistance processes – are these removing barriers to Maori and Pacific people getting the help from you that they need?

Are your training courses appropriate to Maori and Pacific needs? Are you offering the sort of help they need in a format to which they will readily respond - for example mentoring rather than straight advisory services.

I’d also like you to think of new initiatives. One thing I was recently discussing with some regional agency Pacific advisers was a pre-incubator course for potential business start-ups.

However, if you talked to WINZ and worked closely with the Pacific and Maori people who have been given an Enterprise Allowance to set up their own business, you could quickly work out which of them was likely to make a go of their business idea. These potential business leaders could go on to incubators or other support programmes for establishing their business. Others could be assisted into a non-business owning future.

But I’m sure that you will all have you own ideas about what central government and your own organisations could do differently.

Whatever steps we take in the next few years we need to ensure they create the best opportunities for the future.

Your experience and insights are of great value and I invite you to make a contribution during this symposium, and afterwards, to what we can do to make the most of our current development successes.

You will find me, as Minister of Economic, Industry and Regional Development and my agencies, open to any suggestions and keen to give any sensible idea a fair hearing.

I value the support of local mayors, councillors, iwi leaders and EDANZ members.

The key message I want to leave you with today is that I am from the Government and I am here to help! - to work with you.

We owe our communities and all New Zealanders the commitment to lead our nation’s economic, industry and regional development.

We also need to ensure we are honouring our fellow New Zealanders by working co-operatively together, as that is what they will want.

I look forward to hearing the results of this symposium and to my continued involvement with all of you.
Thank you.