Jim Anderton Speech: Opening of new planer mill at Pacific Pine Industries Limited.

Pacific Pine, Rotorua 11.00AM Thursday, 14 April 2005

SPEECH NOTES

Avon Larpenter from La Grouw Holdings Steve Dibley from PPI Distinguished guests

Can I welcome especially our overseas guests.

I’m pleased you’re here to join this celebration.

This is a day when New Zealand’s resource base and our innovative use of our resources are on display.

I want to reflect for a moment on why facilities like this – which add value to our resources – are important.

Using investment to export design-led, customer-responsive products is critical to New Zealand.

It’s only through increasing the value of the products we sell to the rest of the world that we can create jobs higher incomes and the opportunities that will provide a future for young New Zealanders.

Economists have pointed out that over the last 150 years the global economy has grown much faster than in the entire previous span of humankind.

One economist published research showing that the value of everything produced in the world grew from $695 million in 1820, to $28 trillion in 1992.

Yet in 1992, the world had no more land – and far fewer natural resources – than we enjoyed in 1820.

The lessons are 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.

The ideas we apply to our resources transform our living standards.

The better our ideas, the better our standard of living.

So the reason this facility should be celebrated is that it is an example of where New Zealand needs to head.

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

It’s the main reason we haven’t run a surplus in our accounts with the rest of the world since 1973.

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.

We need to move up the value chain.

Consider the United States exported the same weight of goods in 1900 as in 2000.

But the value increased thousands of times.

We need to be creative and innovative in transforming complex resources.

We need investment in the capital equipment required to create higher value products.

We need to be linked into global networks so that we can produce goods for which there is demand and market them effectively.

The mill we are opening today is an example of all of these fundamentals in action.

New Zealand is rich in natural resources – like sunshine and rain.

We have outstanding growing conditions for timber.

Yet these alone are not enough to do more than grow logs and send them overseas.

Log exports alone will never generate the incomes we need to enjoy the lifestyles of other developed countries.

But if we can process those logs into something desired by consumers, then we can have a product which can be sold for a premium overseas.

It takes creativity and innovation.

Fortunately, creativity and talent are abundant in New Zealand.

Maybe because we’re small and a long way from other countries, we are

used to solving problems and having the freedom to try things out.

There are many examples of New Zealand creativity that we should celebrate.

From the vision of Lord of the Rings, to the high-tech electronic gadgetry of Navman, from Fisher and Paykel’s dishwasher drawer to CWF Hamilton’s marine jet propulsion systems.

All of these are examples of uniquely New Zealand creativity.

We need to build on these examples and create far more high-value, high-skill, globally-networked job-rich companies.

In the wood industry, this company has staked its future on a similar determination to produce high-value products.

It’s making a significant investment in equipment with this new mill.

And the presence of its overseas partners shows its success in linking with global value chains to meet the markets’ demands.

I’m very confident about the wood processing industry.

When I first became minister of economic development, I asked officials for an assessment of the sectors with the highest potential for rapid growth.

I wanted to know what we needed to do to realise the potential of our most promising industries.

Wood processing was the first sector they identified.

Forestry and wood processing are New Zealand's third largest export earner.

The sector directly employs 26,000 people, and earns over four percent of our GDP with sales of more than $5 billion a year.

So I brought the industry’s leaders to Vogel House in Wellington.

We formed a wood processing sector taskforce to identify the blockages to development.

It was our aim to lift the value of the industry, and promote the use of design and innovation for the reasons I’ve outlined already.

The aim we settled on was to more than double the number of jobs in the industry and increase turnover to $20 billion a year over the next twenty years.

The government committed to playing its role as a partner to achieve this ambitious goal.

Last week the government and the industry announced a development package.

Government and the industry together are investing in initiatives in skills and training, market access and development, wood design and bio energy.

So our partnership is promising, and that’s why I am confident about the industry.

This is not an easy time to be involved in an industry that is exposed to a high exchange rate and to energy prices.

Yet those firms which take a long-term and realistic view of the industry are continuing to succeed.

If you selling premium added value products, then demand for your products will be much less affected by a high exchange rate.

Investments like this one should make us confident about the future of our economy.

These are positive times for industry, and especially one with real growth potential.

No one seriously disputes these days – not even 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.

If we want to offer young New Zealanders a future here – and I 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.

So I celebrate this mill as a step in that direction.

Congratulations to all those who have played a role in bringing it to this point.

Congratulations on your vision and confidence in the industry and in New Zealand.

We have almost unlimited potential in New Zealand.

And we carry a heavy burden to realise our potential.

We are custodians of the future.

It’s up to us to unleash opportunities for young people to flourish and inherit a prosperous and thriving country.

Every job we create, every investment we make, every partnership we promote helps us discharge our responsibility.

We are on the way to that future, I wish you all the best for this mill’s role in helping to create our future and I have much pleasure in declaring it open.

ENDS

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