Speech to the Federation of Māori Authorities Conference
E ngā mana, e ngā reo, e raurangatira mā
I acknowledge the tangata whenua of this place, those who have passed before us, and all of us who have gathered on this important annual occasion in Māoridom.
Tēnā koutou, tēnā koutou, tēnā koutou katoa.
I hail from Te Waipounamu.
The rivers I most closely identify with are the Waikouaiti River and the Manuherikia. My mountains are those which tower in the Mount Aspiring National Park, where most of my favourite tramping tracks lie.
It is a real pleasure to be here. I want to acknowledge Rotorua Mayor Steve Chadwick, Nuk Korako MP, the Chair, Traci Houpapa, I greet two other friends Sir Tipene O’Regan and Andrew Kusabs, and the other members of FoMA, many of you land owners, with huge potential to contribute even more to a thriving, sustainable, high value export economy - one that creates good jobs, and strong communities in the regions – without sacrificing the environment.
The holistic view of Māoridom is a force for good in Aotearoa – Ambitious not just for economic progress, but also for a fair sharing of the rewards, integrated with a desire to protect our rivers and biodiversity. A cultural view that some assets like land are not a commodity but are part of us, and should not be sold off to overseas investors.
My own values are very similar. I have lived my life as a lawyer, an entrepreneur, and a company director, all the time advocating for better environmental outcomes and an egalitarian society.
I understand the interconnectedness of these things, which is what I want to talk about today.
As you know, our new government NZ First, Labour and Greens took office just three weeks ago. Prime Minister Jacinda Ardern named me as Attorney-General, Minister for Economic Development, for the Environment, and for Trade and Export Growth. I’m also Associate Minister of Finance.
That sounds like a lot but there are good reasons for putting those portfolios together. I’d like to talk today in particular about the interconnectedness of three of them – Trade and Export Growth, Economic Development and the Environment - and what that means for this government’s vision for New Zealand’s economic future and the Māori economy within that.
It’s a big topic and a good place to start might be with what the PM, Deputy PM and I did last week in Viet Nam on TPP11, or the ‘Comprehensive and Progressive’ TPP as it’s now known. We went to Viet Nam very conscious of two things: first; just how much our exporters have to gain from being part of a dynamic trading region like the CPTPP; and second; that many in New Zealand and overseas are being failed by the excesses of global capitalism, with ever increasing proportions of wealth and income going to the top 1%, while the share going to those who work is ever diminishing.
We went there with a clear idea of where the original TPP12 needed to change, to make it better for New Zealanders.
Most critically for this government is we ensured that under the CPTPP you only will have a right to buy a home or farm in New Zealand if you have a right to live here. This is a fundamental principle which the three parties of government strongly support.
Under the past government the right for New Zealanders to control who owns homes in our own country was being traded away forever under the TPP-12.
For months and months the former government claimed it was impossible to achieve what we want without breaching our trade agreements. Well in three weeks we’ve proven them wholly incorrect, and we’ve done it while preserving important gains in trade for New Zealand workers and exporters.
In addition, we have made significant gains on ISDS clauses. While we didn’t get everything we wanted, it will not be possible under this for investors from overseas to take a case against the New Zealand Government for investment contract claims, foreign investment screening and certain claims in the financial services sector, that were permitted under the TPP 12. Through a side agreement ISDS will be excluded altogether between us and Australia, which is the source of 80 per cent of our overseas investment from the CPTPP countries. We are also seeking similar arrangements from the other countries before the CPTPP is signed in. In addition, we have preserved the Government’s right to maintain our public health and education systems, and to regulate for the protection the environment, social and consumer rights, as well as cast iron protection of the Treaty of Waitangi.
Pharmac’s operating model was well protected by the last government. It did though face additional process costs. Those have been suspended.
We’ve made further improvements by suspending patent extensions, which would have increased the cost of medicine to the government.
There’s still plenty of public consultation to do before we sign and ratify it – but I’m really proud of what we’ve already achieved, in just three weeks, and what it shows about this government’s progressive and inclusive trade policy for the next three years.
Just about everyone in this room understands that trade is good. We have always needed trade. We don’t produce cars, computers or consumer electronics. Nor many medicines, CT scanners and the like which we need. We pay for these imports through the exports we sell. Overseas markets provide access to more buyers, to frontier technologies and to new sources of capital. We’re able to harness economies of scale, to build a stronger incentive to innovate and improve productivity as a result. Trade helps us create a greater number of sustainable jobs in New Zealand with higher wages.
But trade is a means to an end, not the end. The end is a prosperous and fair economy. Free and Fair Trade agreements help but are not the whole answer.
Market access is crucial for improving New Zealand’s export performance. We do need to be able to get our products and services into the best-paying markets for our producers. So progress on the CPTPP – whose 10 other members have a combined population of 480 million people that consume nearly a third (31 per cent) of New Zealand’s overall exports is significant. It gives us preferential access, for the first time, into Japan, the world’s third-largest economy, as well as Canada, Mexico and Peru - is important and meaningful. We’re going to keep on negotiating better market access including into Europe to make sure that exporters can make the most of their output.
But expanding our exports is not primarily driven by Free Trade Agreements. We already have good agreements with Australia, China, yet exports have been dropping as a proportion of our economy. The past National government promised to grow exports from 30% to 40% of GDP, but instead after a decade in power exports went backwards, falling to 27%. In my opinion, New Zealand has a capital allocation problem. We spend too much money trading houses with each other at ever higher prices, and don’t invest enough in our productive export sectors.
The Government should ensure the correct investment signals are given to encourage productive investment in the export economy, rather than speculation in rental housing in Auckland. This has to be done inclusively and sustainably.
Fairness has a geographic as well as financial dimension. To paraphrase my colleague, the Hon. Shane Jones, we all have the right to better living standards, no matter what part of our country we live in. This is why our government has committed to a $1 billion per annum required development fund, which will make a huge difference in the regions and to our country.
And our growth, domestic and exporting, shouldn’t come at the expense of the environment. We do not have to choose between a prosperous economy and a clean environment. We can have both.
These ambitions show the key intersections between any trade & export growth, economic development and environment portfolios.
Our Government is committed to building a strong economy.
We’re fortunate to be a country with a strong natural resource base, that is an attractive place to visit and live.
However, our recent economic growth has been driven by increasing the volume of people, and the volume of low value exports.
That has put pressure on our infrastructure and our environment.
We have a chance to reshape the economy to deliver improved wellbeing.
To achieve this we need to connect our efforts across the public and private sectors, to help shape the future and ensure benefits are spread across society.
A big focus of this government will be on productive growth.
To move from volume to value we must better utilise our land, our people and our financial capital.
It means investing in infrastructure, the regions, our systems and our national brand to create a country that gives everyone the opportunity to succeed.
And, importantly, it means lifting the performance of our export sectors.
Our traditional areas of comparative advantage in agricultural based exports and our tourism remain important.
But for a more productive economy, which drives the development of new products and services to sell to the world, we’ve got to invest more of our precious investment capital into our productive sectors.
Diversifying in this way will help develop new products and services in high-value, knowledge-intensive, and low- emission activity. A range of measures are needed from making it easier to raise ordinary capital from the public, to discouraging speculation in housing and instead incentivising research and development, as well as stimulating the regions where many opportunities lie.
Staying connected in a changing world will remain important. We need to keep improving our connections, building new relationships and growing our reputation as a high quality producer of goods and services.
But most importantly we need to change investment signals so that capital is invested in the productive economy. Interconnected changes are needed in monetary policy, tax settings, and industrial policy but I don’t have time to talk about these today.
We want growth to be enduring.
As kaitiaki, we need to weave the environment into our idea of what economic growth means.
Economic growth cannot come at the cost of the quality of the environment.
Progressing to a net zero emissions economy is an opportunity to deliver on multiple objectives – productive, sustainable and inclusive growth. We have made sure that one of FTAs agreements Australia, China & CPTPP don’t prevent us from protecting the environment the way we choose.
I am absolutely committed to improving the water quality of our rivers, that is my number one priority as Environment Minister. I believe the most important river to most people is the one people live close to and use. Māori express it well in their Mihi. I believe it the birth right off every new Zealander to be able to pop down to their local river in summer and put their head under without getting crook. The Resource Management Act is still the best tool to achieve this and intend to use it, and to work with interested groups to make the improvements we need.
The benefits of growth should be shared by all New Zealanders.
Our education and skills systems need to ensure that people gain the skills to engage in meaningful work and be prepared for the future of work. While we don’t know exactly what the future will look like, we do know that technological change will continue to alter the shape of the economy and the types of jobs that will become more and less common. We need to ensure that people are supported through just transitions in their working life so that they can continue to participate in work and society – this means we must provide them with opportunities to retrain throughout their working life.
The Māori economy has huge potential to lift the New Zealand economy.
Māori are facing an unprecedented opportunity for economic growth. Now estimated at around $50b, the key drivers of the Māori economy, as you are all aware - are a young and growing population that will form an increasingly significant part of the workforce; plus a growing commercial asset base from Treaty settlements, trusts and incorporations, Māori enterprises; and a burgeoning SME economy.
Your focus on kaitiakitanga and slow manaakitanga provide a platform for sustainable growth and the distribution of the benefits of this growth across New Zealand.
Use of technology to create high value land-based businesses will be important. I have been impressed with the development and growth of Māori enterprises and entrepreneurs over the last decade. Businesses such as Miraka, Kono, Atiho-Whanganui, PKW, Ngai Tahu, Moana, Plus Group with their berryfruit project and horticultural robotics business. All this reinforces the key role that Māori have in New Zealand as an exporting nation – one that cares about its land, environment and people.
Our Government wants to work with you to build this momentum and realise opportunities so you can sustain and grow your assets, provide benefits for your owners and add further value to the New Zealand economy. We want to work with you to develop both tangata and whenua.
Improving employment outcomes and wages is a major part of our overall approach to economic development. For Māori, this will include many approaches – we will lift the minimum wage. We will reduce unemployment, we will support people currently in work to move into higher-skilled, higher-paid roles. We want to grow employment across New Zealand’s regions to ensure young Māori don’t have to move away from their cultural bases. This will be a major focus of the regional economic development portfolio, together with infrastructure development through the Regional Growth Fund.
You are important participants in regional economies and give effect to your mission statement of “me uru kahikatea” (bind together like the roots of kahikatea trees). We want to support you to maintain and develop your land base, including opportunities to bring more Māori land into agricultural and forestry production.
Technology will play an important role in enhancing primary sector operations and balancing production with sustainable environmental management. We can make connections between the tech designers and the Māori Authorities and farmers who use the tech in the field. To achieve this, we want to strengthen NZ’s focus on research and development to ensure that we are making the best use of our natural resource base and our talent for innovation. It will also be important to think about the future of work in this context, as some primary sector occupations will become automated. Given the remote locations of some Māori Authorities, it will also be important to provide improved access to market through better regional infrastructure and a regional ports and transport strategy.
I need you to engage with other Māori groupings, such as the Māori Council and Iwi leaders, so that we can resolve the big issues together.
We understand that Māori organisations place importance on developing strong and long-term relationships as the basis for economic activity. These values provide a head-start for us in the international trade arena. We are keen to ensure Māori continue to participate in our national trade missions. We also want to strengthen our engagement with Māori about trade negotiations so that you have access to accurate information on various trade agreements and how you will be affected by them. But information needs to flow in both directions.
If we, as a government, are to make good decisions then we also requires access to information. Knowing the concerns and interests of New Zealanders, including tangata whenua, is about the most helpful information we can have.
We have already started engaging with New Zealanders both through the media, online and through events like these. In the first week of December, we’ll be participating in public outreach events in Dunedin, Hamilton and Tauranga. And there will be plenty more to come. Details will be made public on that in due course.
Lastly, it is a time of uncertainty in the world. Many New Zealanders feel less secure than they did in earlier decades. If their concerns are not addressed, the liberal, tolerant, outward looking settings we currently benefit from will be put at risk.
The rise of intolerance and retreat to isolationism we have seen in the USA, with Brexit, and in the rise of fringe parties on the left and right in Europe is not a recipe for peace, prosperity or happiness.
As a recent Economist magazine analysis of Europe noted, we have to avoid the tyranny of the normal. We want to govern better to encourage sustainable growth and innovation, while protecting those who lose out from technological change and the excesses of global capital. If you want to keep society open, you have to protect it.
By offering security and fairness, as well as opening up opportunities – including via trade – we minimise the risk of a populist backlash or extremism.
We have something special in New Zealand. We also have a special leader in Jacinda Ardern. In Labour we have a substantial Māori Caucus – the largest ever in the history of the New Zealand Parliament. NZ First also has strongMaori representation.
We thank you for the trust that has been put in our government by so many New Zealanders. I look forward to working closely with you over the next three years.