Jim Anderton Speech At Aquaculture Forum - Michael Fowler Centre, Wellington

SPEECH NOTES Acknowledgements: Chair John Glaister Ministerial colleague Hon. David Benson-Pope Distinguished guests

I think it was someone in aquaculture who first suggested that farmed fish have a memory span of three seconds. And it was a politician who heard this fact and wished, “If only more of them could register to vote.”

The main reason you are here is to flesh out some ideas for the future development of the aquaculture industry. I am not going to pre-empt those discussions by substituting my advice for a topic where there is far more expertise in this room than I have. But I can give you an idea of the urgent priorities for the future development of the New Zealand economy. And I can express my confidence in the industry and the government’s commitment to working in partnership with it to secure its growth.

These are positive times for any industry, and especially one with real growth potential. No one seriously disputes these days – not even this Labour-Progressive coalition government’s opponents – that New Zealand has enjoyed five years of very strong economic performance. Our growth has outstripped the average of developed countries. Our unemployment levels have dropped to the lowest in the developed world and the lowest since we started compiling the Household Labour Force Survey two decades ago. Incomes are up, profits are up and our business environment is as competitive as anywhere in the world.

Of course the performance of our economy is welcome news for everyone in business. It’s particularly pleasing for an industry, like aquaculture, setting out with ambitious plans for expansion and investment.

But I want to caution that our economic performance is only at the threshold of the level we need to achieve.

Our overall incomes and material standard of living are a long way behind those of other advanced countries. If we want to offer young New Zealanders a future here – and I certainly do – we need urgent improvement in our national incomes and overall wealth. We are only going to lift our incomes substantially over the long term by selling far more high value products to the world.

The challenge to New Zealand industry is urgent and clear. We will not get very far by selling more of the same.

A few years ago an economist published a book about the world’s economic growth from 1820 to 1992. He pointed out that in 1992, the world had no more land – and far fewer natural resources – than it enjoyed in 1820. Yet the value of everything produced had grown from $695 million in 1820, to $28 trillion in 1992.

The lesson is obvious: It’s not the natural resources we have which make us more prosperous and improve our lifestyles. The crucial difference is made by what we do with the things we have. Much of that improvement was the result of the introduction of a better business environment – recognition of the role of property rights and a skilled workforce, for example. But it was also the result of the application of technology and the increasing sophistication of production.

What it tells us is that it’s the ideas we apply to our resources that transform our living standards, not the resources themselves. The better our ideas, the better our standard of living.

New Zealand has a higher dependence on commodities than almost any other developed country.

It’s the main reason we haven’t run a surplus in our accounts with the rest of the world since 1973. We are relying too heavily on ‘trading’, rather than ‘marketing’. We need to change our focus from a production and trading oriented frame of mind to a consumer demand driven mentality.

It’s not enough just to try to increase our export volumes. Especially in the fishing industry, we need to move up the value chain. Consider that the United States exported the same weight of goods in 1900 as in 2000. But the value increased thousands of times.

New Zealand is moving in the right direction – many of our food industries are looking to value-added products. Around half of New Zealand’s food exports are considered to be value-added today. But we are still a long way behind the developments in world trade.

All New Zealand sectors, including aquaculture, must look at the global strategic environment and global influences.

We must become market-driven.

We need to sell higher value products that rely on the creativity and talent of New Zealanders.

Innovative products that harness individual creativity demand a premium in world markets. Of course innovation can be introduced in a variety of ways. It can be the science that underpins primary production – which is particularly important to the aquaculture industry. There can be a premium for innovation in marketing the product, in distribution or packaging. One way or another, innovation drives economic growth.

(Example: Wilderness Foods Pet Food – this is a good story)

New Zealand will never sell enough commodities to lift our standard of living compared to other developed countries. We need to add value to our resources, and generate globally competitive niche products We need to invest in research and development and in our use of technology. We need to better use our research to make innovative products for which international demand exists or can be created. So I will be looking to this forum to produce ideas about how the public sector can work better with the industry to harness innovation in aquaculture.

For its part, the coalition government is a committed partner. There are four factors that the government is working on as a priority to develop our economy: We need to lift the level of innovation in New Zealand exporting. We need to improve out international linkages. We need to lift the level of skills in our economy. And we need to work as a matter of priority with those sectors with the potential for rapid growth.

The aquaculture industry has an important potential economic impact and the government is committed to its success. If I’ve learned anything about the ingredients of success, I have seen the importance of the government being prepared to play its part. Governments don’t make industry successful. But there is more we can contribute than standing on the sidelines wishing you luck. We’ve proved the potential of partnerships in other industries. Since 2001 the government has built partnerships with other industries. They include textiles and apparel; wood processing; information and communication technology; biotechnology; design; and screen production.

In the wood-processing sector, for example, we are beginning to unlock enormous potential from our plantation forests. By working in partnership, Government and industry determined the top priorities for development. They included skills and training, roads, trade access, and the development of markets for further processed timber. We are working to introduce new investment in processing in New Zealand, and connecting processors with global value chains.

As with wood processing, the coalition government is ready to work in partnership with aquaculture.

Most of you will be aware that the Food and Beverage Taskforce has recently started work. It marks the beginning of a government and industry-led initiative to capitalise on one of the country's fastest-growing sectors. Industry taskforces assess the priority for development and help government clear away barriers to success.

The Taskforce consists of sector leaders and the government is willing to engage on the whole range of issues of interest to the sector. Aquaculture certainly fits within the ambit of the Food and Beverage Taskforce, and the information gained via the Aquaculture Sector Development Strategy could feed into the wider food and beverage engagement process.

The United Nations Food and Agriculture Organisation predicts that aquaculture will represent close to 50% of global seafood by 2020. This is a fast-growing sector with huge potential. Its growth is linked to the need for sustainable fisheries.

At the same time, the advances of science are driving the growth of the industry.

We can look across the Tasman to see Australia has already cashed in. It has developed innovative, high-value aquaculture products that rely on post and pre-harvest technology.

New Zealand has many issues to resolve in this sector, but also many opportunities.

We need to work in partnership to develop strategies to take advantage of our opportunities and build on our strengths.

New Zealand has a legacy of great ideas and passionate entrepreneurs. Our challenge now is to harness that energy and commercialise our creativity in all our industry sectors. The greatest failure is to believe any sector is somehow exempt from the urgency of what we have to do.

We mustn’t be intimated by the challenge. It’s time to roll up our sleeves. We can be inspired and excited by the creativity available to us. We have almost unlimited potential, and we have a young population desperate for us to harness that potential for our country’s future.

I passionately believe in the potential of New Zealand and of our industry. I’m committed to breaking down barriers to its success and building on our advantages. And I wish you well in identifying priorities for development in your discussions today. ENDS

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