Economist: Auckland Must Export to Grow
Auckland can never be the growth engine people expect or that the country requires as long as its export economy remains as one of the lowest in New Zealand, a senior economist warns.
BERL Chief Economist Dr Ganesh Nana
says Auckland can't be a service economy to the rest of the
country.
"Auckland is a trading town and we have to
do something about this trading town to make it a better
trading town," he says. "We need to build a
business-friendly Auckland.
"Businesses need to see
public policy signals focused on what is right for business
such as a transport infrastructure, building consents,
transactional costs, et cetera. Business needs certainty to
take risks.
"To catch up with the rest of New Zealand
Auckland governance needs to put rules in place and stop
moving the goalposts."
Dr Nana made his comments at
the launch of a joint report by AUT's Institute of Public
Policy (IPP) and Business & Economic Research Ltd
(BERL).
The report entitled: The Auckland Economy:
Situation and Forecast http://www.aut.ac.nz/__data/assets/pdf_file/0005/92084/IPP-REPORT-09.pdf
looks at the challenges facing Auckland communities and businesses, and its ensuing development.
The
report forecasts a sombre export picture for manufacturing
and at best, modest employment growth.
IPP Director
David Wilson also emphasizes the need for certainty in
Auckland as a platform for business investment and
development.
"We'll be looking for a Super City mayor
who brings real civic leadership with a clear vision of the
Auckland economy. If businesses are prepared to invest for
the next ten to 15 years they need to know that the
frameworks are in place and won't keep changing."
Dr
Nana adds that Prime Minister John Key said once "if New
Zealanders want to have a first world life style we've got
to learn how to earn like a first world country".
"I
wish he would say that every time he speaks."
Dr Nana
says that Auckland entered the recession before the rest of
New Zealand started to feel the pinch.
"Auckland
started to shed jobs around 12 – 18 months earlier
than most of the country, but its prospects are marginally
better and will come out quicker, although not by much," he
says.
"But if New Zealand and Auckland are serious
about rising productivity levels we have to be prepared to
move away from a property-focused economy to a productivity
and export-focused economy and we have to invest in
it.
"If we've a country that is serious about
productivity it doesn't come cheap, we have to
spend.
"The exchange rate is another factor hampering
growth," says Dr Nana.
"Export is not going to get off
its knees until the exchange rate sorts itself out. The
market is a wonderful being but it doesn't respond
quickly."
To end, Dr Nana also cautions against the
futility of boats loaded with logs headed for overseas
manufacturers.
"It takes 25 years to grow a tree, 25
years to think about what we can do with that tree and we
cut it down and put it on a ship. I ask, is that really the
best we can do? And we call ourselves an innovative
nation."
ENDS