Economic Development New Zealand Annual Conference 2022 Speech

I am grateful to Economic Development New Zealand for inviting me here today to talk about the importance of regions and my vision for this space.

It is time we have robust conversations about the future shape of our regions, economy, society, and our country. I welcome these debates as it allows a free flow of ideas.

These conversations are well overdue. We need to have more of these conversations and when having them, remember it’s all towards forging a future with both eyes open and more joined up thinking.

For decades, there has not been enough joined up thinking by successive Governments and approaches have often been through a narrow lens.

Local perspectives and benefits of direct investment have been undervalued and underestimated, which has fuelled declining regions and urban growth problems.

As a result, our infrastructure and investment had lagged well behind what is necessary to sustain a growing and developing economy, productive workforce, and functioning society.

Our regions are an important part of New Zealand’s economy. We have started the process of rebuilding the country’s infrastructure and regions after the hardships faced through the pandemic.

We have invested more than any other recent government in building the capability, infrastructure, and economic capacity of the regions.

Our regions play a significant part of New Zealand’s future and securing our country’s prosperity. They always have.

Regions are where our economy happens. This is where the mahi and hard graft is done, where an important backbone of our economy exists. This is where our communities thrive and grow.

Regions are a pathway to economic development and competing internationally in a post-Covid world.

Ensuring that all arms of Government are co-operating and working efficiently is a central part of regional economic development.

And so first of all, let me talk just for a few minutes about the world we currently live in, and how in the midst of chaos, there are always opportunities.

Despite what we may think, we are still in the grips of a global pandemic and the resultant aftereffects – and even though we have a much better understanding of the health impacts on our communities and regions – these aftereffects on the global economy, and therefore our economy, are far and wide.

Much of the world is experiencing an energy price shock, skills shortage, and supply chain blockages, while at the same time interest rates are being lifted to battle the inflationary impacts of all this.

Europe is entering unchartered waters this winter with energy prices 10 times higher than before Russia’s war on Ukraine. Globally, diesel prices increased 74 percent in the last year.

The Chinese economy is slowing, with growth below 4 percent. They are still focused on a COVID elimination strategy that sees more than 40 cities in lockdown.

President Biden implemented a strategy of fiscal stimulus which coincided with a predictable (in hindsight anyway) shift in consumption away from services and towards goods. This, combined with the abrupt reopening of the economy after lockdowns, caught the global manufacturing sector unprepared. US inflation is at its highest in a generation, and there are fears of entrenchment.

Across the OECD, whose member countries accounts for more than 60 percent of global GDP, consumer confidence is now lower than it was when COVID-19 first struck; and we know that if consumers hold back from spending, the economy will slow.

Here at home, we of course are not immune from the impacts of all that. However - despite the chaotic and turbulent times, there are opportunities.

The current challenges present huge opportunities for our regions, innovative businesses and people to build the high wage, low emissions economy of the future.

There are opportunities to grow our technology sector with a focus on applications that help decarbonise our economic activities and develop valuable low emissions services.

Opportunities to build a high value bioeconomy, creating a raft of new products through leveraging the breadth and depth of knowledge built over generations that underpins our world leading food and fibre industries.

Opportunities for Māori to build businesses that diversify their assets and enterprise bases and leverage their unique strengths and demographic potential.

Opportunities to partner with businesses to build strong communities through education, skills training, life-long training, and through enhancing social innovation so that New Zealanders have the capabilities to live the lives they value.

And the opportunity to grow economically strong regions based on sustainable use of natural resources. Every region is different, climatically, geographically, and with different histories and specialisations, and so have different development opportunities.

The Government is determined to support New Zealand, so it can meet the challenges it faces. We want New Zealand to be match fit – an economy with higher wages, higher productivity and lower carbon and waste.

We are continuing on the path of focusing on building strong partnerships with regions so they can realise their economic potential. We know that regional economic development is important for improving economic prospects and living standards by delivering local approaches which are tailored to the particular needs of regional and rural areas.

We’ve seen the benefits of local and regional development approaches through Activate Tāmaki Makaurau and Kānoa. We also have developed an Economic Plan to lead us in the next stage of change in the midst of a post-Covid world.

Our vision is for our regions and communities, and New Zealand overall, to be stable and attractive places to live, work, and bring up a family.

I would like to take this opportunity to share with you the work that has been accomplished by Kānoa, New Zealand’s Regional Economic Development and Investment Unit.

As investment into New Zealand regions had been minimal in the past, Government’s establishing of Kānoa aims to address under-investment, boost productivity throughout our regions and lift outcomes.

This is achieved by partnering with regional groups, including communities, Māori, industry, and local government to provide capital that is not able to be easily sourced through traditional financing institutions.

The success of this strategy has been exciting – regions have seized the opportunity to get the investment and support they need to build their economies. Long overdue infrastructure is being built, new ventures launched, businesses encouraged and supported, and people trained.

Forging and growing partnerships between community and regional leaders, and Government is important to the overall success of Kānoa.

An example of a project that has a had a major impact on their community is the $112 million harbour and marine development in Ōpotiki. The township has suffered economic, and population decline for many years. A redevelopment of the harbour had been needed for a long time to make it economically viable, but the town lacked the funds for the project.

A range of investments were made into the town – including the wharf, marina, mussel processing factory. Funding was also used to renovate the town by upgrading the central business district and council buildings. The interrelated series of investments we made enabled significant aquaculture initiatives in the region. More than 200 jobs are expected to be created through this investment which has attracted people back to Ōpotiki and revived the community.

Critical infrastructures like harbours, roads and rail are being improved, modernised, built and rebuilt, workers are being trained and redeployed in meaningful, productive jobs, businesses are being helped to grow and investment made in cutting-edge innovation and research.

Kānoa has also worked to support New Zealand workers during the pandemic through the COVID-19 Worker Redeployment initiative which created immediate short-term employment opportunities for displaced workers, while also supporting regional assets.

Kānoa is making a difference to how government interacts with regional and rural communities. It has built deep and meaningful relationships with regional businesses, local government and Māori. Its regional economic leadership and presence is helping guide other government agencies which have limited resources outside central cities.

Regional partnership is important for regional economic development. We understand the importance of giving a voice to those who understand what is needed in their community and who live and work in the region. It’s being able to give the regions a say in forging their future.

This brings me to discuss another regional success story, our support programme that was tailored for our small businesses and people in the Auckland region – Activate Tāmaki Makaurau. This programme was designed to provide essential support to Auckland-based businesses and their staff who faced the debilitating effects of the Delta outbreak and lockdowns.

This programme had to provide immediate support to at least 10,000 Auckland businesses, helping them become more robust and resilient, strengthening their decision making, and their ability to operate under COVID-19 restrictions.

This programme was co-designed to provide a mix of 1 to 1 and 1 to many business advice and assistance services, including wellbeing support for owners and their staff. Activate Tāmaki Makaurau is a regional success and highlights the significance of growing regional partnerships to forge a better future for New Zealand.

Our partners whose synergetic effort contributed to making Activate Tāmaki Makaurau the success story that it is and shows how working together and strengthening these partnerships is a pathway to regional and economic prosperity.

We must do better together to ensure New Zealand is productive, economically successful and a great place for Kiwi families to raise their children. What we need is that joined up thinking with a coherent and cohesive strategy.

We have developed an Economic plan to lead us in the next stage of change based on a simple goal: “to build a high wage, low emissions economy that provides economic security in good times and bad.”

Through this plan we are putting in place building blocks for an economy where all businesses, large and small, can thrive and pay higher wages, and where our emissions are heading to net-zero.

Our plan is directed at building New Zealand’s long-term resilience and economic security, recognising that there may be more shocks like COVID-19, increasing impacts from climate change, and a more volatile geopolitical landscape for the foreseeable future.

Our plan recognises that to have high wages we need to tackle the long-standing productivity issues that have impacted wellbeing for too long. That means unleashing the innovative potential of businesses and the creativity of our people. That means investing in skills as we move away from reliance on low-wage international workers. It means reducing New Zealand’s infrastructure deficit.

Our plan recognises that lowering emissions is the most pressing long-term challenge we face. The cost of inaction, or at least minimal action, are being felt today, not just by the people of Pakistan and other far-off places, but by the people of Nelson, Westport, or Timaru. And they are indeed cumulative. This is why transitioning to a low emissions economy is front and centre of our plan and needs to be at the core of any future Government’s economic policy.

Through the Climate Change Response Amendment Act 2019, we have established the legal framework for the development and implementation of clear and stable climate change policies. And so, we have produced New Zealand’s first Emissions Reduction Plan and National Adaptation Plan.

The work we have done on our Economic Plan during COVID means we’re able to hit the ground running. The plan is built around themes of unleashing business potential, strengthening international connections, increasing capabilities, supporting Māori and Pacific aspirations, and strengthening our foundations.

We are unleashing businesses potential through digital support, regional partnerships, R&D incentives, investing into climate change and other great initiatives that help boost New Zealand’s businesses. We have also made a significant investment into mental health resources for business and their staff. Notably we are investing close to $400 million to accelerate development and uptake of agricultural emissions reduction technology, in order to secure the future of our meat and dairy industries.

We are strengthening international connections through new trade agreements with the UK and the EU, and through increased support from NZTE. We are ready to deepen our connections with global centres of knowledge and innovation, enhance capital flow with our new investor attraction strategy and attract skills that work for New Zealand through the immigration rebalance.

We are increasing capabilities and opportunities for all New Zealanders through a raft of initiatives. For example, 200,000 New Zealanders have taken up free apprenticeships or trades since July 2020.

We are backing Māori and Pacific aspirations. Our Māori and Pacific communities contain massive potential. By realising the potential of Māori-owned land, training our rangatahi through initiatives like Mana in Mahi and the cadetship programme, we’re ensuring all parts of New Zealand’s economy have the same opportunities to grow.

We are strengthening foundations through building and investing into the infrastructure New Zealand needs for the twenty-first century with $60 billion in investment over the next five years. We are developing a National Freight and Supply Chain strategy to prepare our supply chain system for the next 30 years.

We are on a path and taking steps toward creating the sort of economy and society we all want. Our regions are becoming stronger economically, allowing businesses there to grow and helping those within that community. We are ambitious for our regions and Aotearoa New Zealand.

Working together, we can build an economy that meets the needs of all New Zealanders, where our regions are supported and are partnered up with, and we are taking the opportunities to lay the foundations to forge a future for all Kiwi’s and the next generation.

Thank you for having me here to today to speak on the importance of our regions and forging futures for New Zealand.

I wish you all the best for the remainder of the conference and I look forward to hearing about the outcomes of panel discussions and presentations on the future opportunities for regions and New Zealand.

Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.