John Tamihere Speech: Hollywood goes to Waitakere

Speech to Waitakere Small Business Day

Speech to Waitakere Small Business Day, Lincoln Green Hotel, Henderson, Thursday March 11, 5.45pm

First I'd like to extend a warm welcome to you all, and say it is great to be here as a Westie on my home turf of West Auckland.

Small-medium enterprises - those with less than 20 employees - dominate the Waitakere business community, and as a combined force you are the heart of Waitakere's economy.

Waitakere is a really exciting, inspiring place to live and to do business. And one of the most exciting industries in Waitakere that I would like to celebrate today is the film industry.

You're probably suffering Hollywood fatigue by now in the wake of the Lord of the Rings' incredible haul of Oscars, but the contribution of the film industry to Waitakere's economic success, and its potential for the future, is still very exciting.

We've heard a lot about Wellington (aka Wellywood) being overrun by Hobbits as a central focus for the creation of the Lord of the Rings films, and the filming of The Last Samurai in Taranaki, but Waitakere has a film industry to rival those perhaps better-known film locations. And behind the glitz and glamour of the film and showbiz world, there are very real economic benefits to be gained from Hollywood coming to Waitakere.

The film industry in Waitakere has developed over the last 20 years, but has really taken off in the last decade off the back of Xena and Hercules, and developments such as the council's purchase of the Henderson Valley Studio and the relocation of South Pacific Pictures to Waitakere City from the North Shore a few years ago.

Film locations in Waitakere include black sand and surf beaches, harbours, subtropical forests, vineyards, farms and orchards. Waitakere has become a backdrop for feature films, television series, fashion shoots, TV ads and music videos. And helping to bring Waitakere to a screen near you is the fact that Waitakere is a recognised leader in film-friendly regulations. Enterprise Waitakere provides a "one-stop shop" filming application service for filming in public space in Waitakere, including parks, roads, beaches and bush. As with small business in general, the ethos is: why make anything more difficult than it has to be?

The success stories coming out of the film industry in Waitakere include: - Xena and Hercules - in addition to the direct financial benefits, more than 800 supplier relationships were established, most involving small businesses - The filming of Power Rangers by Studio West in Waitakere, and the toy merchandising associated with it (also produced by Studio West). Power Rangers are the largest-selling toy in the United States, with one in five households having a Power Rangers toy. - The Lion, the Witch and the Wardrobe, now being set up to be 100 per cent filmed in Waitakere. The annual financial benefits of this film are forecast to be three or four times as much as that generated by Xena and Hercules.

We have seen how much global publicity the film industry can generate for New Zealand through our recent Oscar triumphs, but the benefits here at home for small businesses and communities are also huge. The flow-on effects of filming in Waitakere will be felt throughout a variety of local industries - from accommodation and restaurants to electricians and plumbers.

But the film industry isn't the only sector where Waitakere has huge potential for success. The organics industry, too, offers much opportunity for Waitakere. About 18 months ago a joint Waitakere/Rodney organics industry cluster comprising 85 small businesses was formed to provide greater strength in numbers and planning for the industry in this area, and early indications are that the organics industry has already grown by 20 per cent in the last 18 months.

Among the organics industry's many success stories in Waitakere, one that really stands out is organic food and drink company Phoenix Organics, named Supreme Winner in last year's BNZ Waitakere Eco-city Business Awards.

Phoenix Organics started out from humble beginnings brewing ginger beer out of a back room in a small flat 17 years ago, growing to become a modern, innovative company operating out of a purpose-built factory in Henderson. As someone who brewed rather more intoxicating but less financially successful beverages in my student flatting days, I am personally in awe of Phoenix's success.

Phoenix has achieved the number one spot in supplying the café market, distributes its products nationwide and is building a lucrative export trade - and through its growth has never lost sight of its commitment to eco-principles and environmental management. So I'd just like to say to Phoenix, and other great Westie companies like it, good on ya. We need to celebrate and applaud businesses like yours more often than we do, and acknowledge the contribution they make to our economy and our community.

Celebrating small business is a big part of the Small Business Day series - it is something I think we don't do often enough. I want to see us celebrate and recognise the achievements of our businesses as widely as we celebrate our sporting heroes. And there is much to celebrate in Waitakere.

One of the facts of life as Statistics Minister is that you have access to more statistics than you know what to do with, so I'll just unload a few on you regarding Waitakere.

Waitakere is an ethnically diverse community, with about 40 per cent of its population identifying as non-European, and it is a youthful community, with a third of its residents under the age of 20 - so your continued success in small business is vital for the continued wellbeing of our growing, dynamic community for the future.

Over the last decade or so, Waitakere, along with the other cities in the Auckland area, has recorded above average population increases, with Waitakere's population growing by 8.5 per cent from 1996-2001. In the next 20 years Waitakere's population is predicted to increase by another 35 per cent, and is expected to include a greater proportion of young and ethnically diverse people - demographic trends that bring both challenges and opportunities for you in business.

Waitakere is home to more than 11,000 businesses, employing the equivalent of nearly 43,000 fulltime employees. If you average that out, it works out to four employees per business, placing most Waitakere businesses firmly in the category of "small business".

Waitakere's economic growth rate has edged up to more than two per cent on the back of strengthening population growth and a more active real estate market. In particular manufacturing (boat-building, wood and paper) and service industries (film and television, business and property, education, health and personal services) have been the drivers of Waitakere's economic performance.

Waitakere, even more than New Zealand as a whole, is currently enjoying low unemployment. Unemployment in the Auckland region for December last year was just 3.9 per cent, and the number of people receiving an unemployment benefit in Waitakere fell by five per cent over 2002.

Record lows in unemployment have obvious benefit for our communities, though of course may present challenges to you as businesspeople and employers if skills shortages begin to have an impact on your ability to hire and retain the people with the skills and abilities you need.

However collaborative initiatives such as the Waitakere Employment and Skills Project will help identify skills shortages and harness labour market supply to meet the skills demands of local businesses.

The problem is partly one of being a victim of your own success, and the strong performance of Auckland as a whole has introduced some pressures along with the good news.

According to the National Bank Regional Trends Report in September last year, nearly all the economic indicators for the Auckland region improved:

- Employment in Auckland increased at a rate three times higher than that for the nation overall

- Auckland topped the consumer confidence survey, with household sentiment rising to a seven-year high

- New dwelling approvals grew twice as fast as the national increase

- Auckland's economic activity recorded its strongest quarterly increase in more than three years

We need to ensure that the flow-on benefits of that growth are realised to their full potential in Waitakere, and that is an issue for local government as much as central government. The Economic Development Strategy developed by Waitakere City Council and Enterprise Waitakere makes economic vitality a primary objective for Waitakere, and one that I would thoroughly endorse. I'd also like to congratulate Enterprise Waitakere for the very good work it is doing to support business, including business start-up and support, professional development, business mentoring, marketing and funding support.

While there are plenty of good things to report regarding business success and growth in Waitakere, I think we should acknowledge that in some areas Waitakere has not progressed as well as other cities on the Auckland isthmus. However Waitakere is a young city with latent potential and it is ready to go. We just need to ensure we do everything we can to ensure that potential is fulfilled.

This is the fifth of a series of 24 Small Business Days around the country, and the response and feedback so far has been very encouraging. While it has been very useful to hear about specific issues of most relevant to particular areas, I am also developing a clearer picture of the issues and concerns that small businesses have in common around the country, and I will be reporting back to my colleagues in Government about what specific action and policy should flow on as a result of what you are telling us.

So I would really like to hear from you today about what drives you as people involved in small business, what works for you, and what you see as obstacles to your success. This isn't about you just listening to me telling you what the Government is going to do for you - or to you - whether you like it or not. The Small Business Days are an opportunity for us to hear directly from you about what you want as small businesses, and I am here to hear what you have to say.

Another tool that will help us to hear more clearly and directly the needs of small business is the Small Business Advisory Group that I set up last year. The nine people on the group come from a diverse range of sectors and regions, but the main thing they have in common is a wealth of talent and experience in running small businesses. They know the challenges and difficulties of setting up and running small businesses, and they know the disappointments as well as the successes small business can bring. In short, they are champions of small business.

I'm finding out exactly what I hoped of the group - they're giving me very direct, very straight-up advice on what small business would like us to be doing on their behalf. Already the advisory group has made a number of recommendations, and right now we're working on those recommendations.

Clearly one of the issues that concerns small business is the compliance burden they face. However I would like to point out that New Zealand does pretty well on business compliance compared to other nations. The World Bank has just released its Doing Business 2004 report, which reports on the ease (or difficulty) of starting a business, hiring and firing staff, enforcing contracts, getting credit and closing a business in more than 130 countries. The report shows that New Zealand is the least regulated country in the world, and one of the easiest places to start a business.

Judged across five criteria, New Zealand was judged to be the least regulated country, followed by Australia, Canada, Sweden, the United Kingdom and Singapore. According to the report, it costs just US$28 to register a company in New Zealand and it takes just three days. By comparison it cost US$402 and two days in Australia, US$264 and 18 days in the United Kingdom, and a massive US$3228 and 20 days in Switzerland.

But while compliance costs are relatively low in New Zealand, it is my job as Minister for Small Business to see that we are constantly vigilant against the encroachment of unnecessary or excessive compliance costs, and I can assure you I will continue to be diligent in stamping out unnecessary additions to the compliance burden, wherever I see them. Naturally people involved in running small businesses want to spend less time dealing with red tape, and more time getting on with business, and I support that view 100 per cent.

We have introduced a raft of measures to provide practical assistance in easing the compliance burden on small business. For example, we have just set up the Employment Agreement Builder, an on-line tool that lets employers easily set up employment contracts that comply with all legal and regulatory requirements. It's simple: using the template, employers can just tick which clauses they want to include, and delete those they don't.

Another very pragmatic initiative we have just announced is a 6.7 per cent discount for self-employed people who choose to pay tax in their first year of businesses. That initiative has been welcomed by small businesses around the country as a valuable means of assistance in that crucial and vulnerable start-up phase.

However we must ensure that we don't become so focused on the compliance cost issues to the extent that we neglect the really important debate we need to have about the real factors driving this country's economic success.

We must not focus all our energy on compliance costs, rather than focus on how we achieve greater growth, wealth, productivity and savings to secure economic growth that is truly sustainable.

I'd like to hear more of your ideas on how we can make it easier for you to get on with doing business - or any other issues which relate to the prosperity of Waitakere. For example I know that the future of Whenuapai is an issue that will play a major role in the future of Waitakere over the next 20 years. So I would now like to thank you again for taking part in Waitakere Small Business Day and welcome your questions, suggestions and comments.

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