Reaching our potential is tied to migration, investment

It is in our national interest to encourage far more investment in new job-creating enterprises with an export focus.

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Speech Notes
prepared for delivery to New Zealand Association for Migration & Investment (NZAMI)conference

Thank you for the opportunity to attend your conference today.

Encouraging new, skilled settlers to New Zealand, and attracting investment in new employment-creating enterprises in New Zealand, are two vital ingredients in the mix of policies required to ensure New Zealand continues its six-year economic winning run against other developed nations to which we like to compare ourselves.

I can see from your programme that you have had a diverse range of speakers.

Interesting ideas have been floated on how New Zealand might do even more to advance our national interest.

It is in our national interest to encourage far more investment in new job-creating enterprises with an export focus.

It is in our national interest that New Zealand be increasingly considered as a desirable and credible destination for skilled migrants wherever they may be in the world.

My ministerial colleagues Hon. Paul Swain, Hon. Chris Carter and Hon. Damien O'Connor, have all spoken to you about different aspects of the coalition government's whole-of-government approach to encouraging investment and inward migration.

I initially received this invitation through my Progressive party colleague, Matt Robson, and would like to talk to you both in my capacity as the leader of the junior partner in the coalition government over the last six years as well as in my capacity as the minister responsible for promoting industry, regional and economic development.

MMP, the role of coalition parties in government

When New Zealanders voted a decade ago to adopt the MMP proportional representation electoral system we use today, some very dire predictions were made by some in the business community about what the change would mean for our economic and social performance.

They said that MMP would reward irresponsible minor parties promoting reckless policies in the scramble for votes and that this would in turn seriously corrode the quality of government policy-making.

They also said that MMP would deliver unstable coalitions beholden to populist parties promoting policies that would deter or destroy both potential investors', and potential new settlers', confidence in New Zealand as a place to establish and grow a business and as a place to live and raise a family.

MMP definitely got off to a very bad start and the first coalition government, even though it held a majority in Parliament, was short-lived.

The National-NZ First coalition administration formed around Christmas 1996 had dissolved by August 1998.

But things have been very different these past six years.

The Progressive party that I lead has been the junior partner in a coalition government that has itself been in a minority position in the Parliaments elected in both 1999 and 2002.

For me, a key objective over the past six years has been to not only deliver on the policy commitments my party has made, but also to deliver stability and smooth relations within the coalition government and between the coalition and other parties on an issue by issue basis.

There are sadly, in this election, still parties that pretend that New Zealand has the option of withdrawing from the global economy.

NZ First gives the clear impression that it somehow thinks that if New Zealand ignores "large Asian nations" then they might just go away!

The Greens don't worry about just giving out ill-defined anti-immigration impressions like NZ First.

The Greens opposed outright, for example, the trade access agreement that our government recently succeeded in reaching with Thailand - an agreement that opens up exciting new export opportunities for New Zealand-based exporters.

Both parties play on peoples' fears about the very competitive global economy in which New Zealand must be a participant- albeit a small one.

They don't offer solutions to how we might meet the challenges of the global market, but instead imply that they could put up the barricades and that New Zealanders would somehow be better off by shutting our collective eyes and ears to the reality of the increasingly borderless international economy.

NZ First and the Greens highlight some of the symptoms of the challenges we as a nation face - such as our persistent, 30-year run of current account deficits - but then they vote against the coalition government's annual budgets which have included significant annual investments in industry and regional development, in export promotion and investment attraction.

They latch on to news stories of New Zealand companies that decide to transfer part of their operations to cheaper locations offshore and conclude that New Zealand as a whole will never be able to compete on quality and ideas in the global economy and that we should therefore give up trying to do so.

I don't believe that New Zealand, or New Zealanders, can afford to take our eye off the competitive international market ball for even a moment.

New Zealand needs to invest more, not less, in investment promotion, in export promotion and in industry development.

In the recent Budget, the Labour Progressive government announced many new exciting programmes to extend the industry and regional economic development programmes that we have been putting in place since we were elected in 1999 and to extend the global reach of New Zealand-based goods and services providers.

To give you just a sample of some of the Budget 2005 initiatives in my portfolio areas, in May I announced:

· Our government is investing $9.9 million over four years to develop the biz.org site into a world class business portal. We want the Biz portal to be the first place that businesses and their advisors go to access the services and information they need to become successful businesses in New Zealand;

· Funding security for Film NZ;

· $5.4 million to promote contemporary music exports;

· A $21.9 million investment in the Forest Industry Development Agenda;

· I also announced an investment of $2.26 million to help promote excellence in wood design in the construction sector ;

· A multi million dollar investment over the next three years for international market access for New Zealand exporters.

This is just a small sample of the whole work programme we have undertaken in the past six years to really propel the transformation of the base of our economy.

A great deal of our work programme has focused on sectors such as biotechnology, the creative Industries, ICT, Food & Beverages, Design and the Film/Screen Production sectors that have been identified as having great potential for growth themselves but also for offering the type of growth that will flow through to the benefit of other sectors of the economy.

The Regional Partnership Programme provides guidance and grants to help regions identify and develop sustainable growth strategies implement them.

Major Regional Initiatives ranging from food processing in Hawke's Bay to an Aviation Heritage Centre in Marlborough, a Wine Research Centre in Marlborough, a Seafood Centre of Excellent in Nelson to the Taranaki Centre of Applied Engineering, the Waikato Innovation Park, the pre and post production film facility in Wellington, the Wood Processing Centre of Excellence in Rotorua and the Eastern Bay of Plenty's maintenance engineering training centre and so on and on.

It is no accident that New Zealand has the second lowest unemployment rate in the developed world and that unemployment is at its lowest level in a generation.

260,000 net new jobs have been added to our economy since we were elected.

Strong, growing regional economies are essential to attract the investment New Zealand needs to continually improve the quality of our education and health services - to reach the top half of the OECD group of wealthy nations.

No nation can have First World health or education systems without a First World economy.

This framework didn't exist six years ago

The Labour-Progressive government has had to put in place almost from scratch the framework that is now propelling the transformation of our economy.

It was this government that established the Ministry of Economic, Industry and Regional Development, the one-stop shop for export promotion called New Zealand Trade and Enterprise and its Investment New Zealand arm.

It is hard to believe now, but the hard reality is that this framework didn't exist six years ago.

Every company that is registered in New Zealand for tax purposes is able to take advantage of the services provided by NZTE.

The NZTE Website (www.nzte.govt.nz) lists the services provided.

The work programme for Business Development includes business mentoring services, enterprise training services, the development of business incubators and business clusters.

NZTE administers a Growth Services Fund, Enterprise Development Grants and, through our Enterprise Networks programme, qualifying groups of businesses can receive assistance to build business capability and undertake international market development work.

Export services provided by NZTE include international consultancy services for New Zealand-based exporters, market intelligence provided on the website www.MarketNewZealand.com which connects international buyers directly with New Zealand exporters.

A lot of my work involves meeting with overseas investors, and potential investors in New Zealand. Investment New Zealand, which is part of NZTE, aims to assist firms to relocate their businesses to New Zealand and establish greenfield operations here.

There is no question that skilled new settlers and net new investment are critical ingredients to New Zealand's ultimate success in its quest to have living standards that are the very best in the developed world.

Over the past six years, the present government has worked night and day on promoting the capabilities of our firms, our industry sectors and our regions to better exploit the opportunities of an increasingly borderless world. There is always more work to be done.

New Zealand has historically addressed skill shortages via immigration and foreign capital investment and they have always played a major part in our national economic development.

There are population projections suggesting the working-age population in Europe could fall by 65 million during the next 20 years so that just means international demographic developments are going to make the international demand for skills rise in coming years.

So I thank you for your work highlighting the economic and social role of migration and investment to our nation's future and thank you for inviting me to be here with you today.

What I am absolutely certain of is that New Zealand can't afford to waste any time at all with either a return to the "do-nothing" approach to government policy-making that was tried and failed in the 1990s or to the "close your eyes to the world" approach to trade, investment and migration that is proposed by some opposition parties.

That is a conviction with which, I am sure, all here today will b e in absolute agreement.

ENDS

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