My economic vision – the best little country in the world

Good afternoon, and thank you to Bloomberg for the opportunity to provide this annual address.

It’s an opportunity to reflect on the economy, and a chance to set out my priorities and vision for our future.

I want to start by saying how optimistic I am.

New Zealand, is bursting with opportunity and talent.

And while the current period is a tough one for many businesses, I’m confident there are better days ahead.

It’s important we don’t lose sight of our strengths. Because those strengths form the foundation of a strong recovery.

New Zealand grew faster out of the COVID recession than Australia, the US, UK and Europe.

There are currently more Kiwis in work than ever before and our economy is nearly seven percent bigger than before the pandemic.

Unemployment has been below four per cent for 24 consecutive months – only the second time in the last 30 years that’s occurred.

Wages have grown by 29 per cent since we took office, higher than inflation, and we’re training record numbers of apprentices to help plug the skills shortages many employers face.

Those low rates of unemployment alongside solid wage growth are helping to insulate New Zealanders from the roughest edges of the cost of living crisis.

The Government’s books have received the tick of approval by the international ratings agencies, as recently as last week, with Government’s net debt among the lowest levels in the world.

We’ve increased by fifty per cent the amount of our goods covered by Free Trade Agreements, and secured new deals with the UK and EU this year.

Add to this our success in reducing both child poverty and climate emissions over the last three years and you’d be forgiven for thinking everything’s rosy.

Of course it’s not.

In fact it’s very tough.

But it’s hard everywhere at the moment, and New Zealand is particularly exposed to some headwinds due to China’s downturn.

Now I could spend the rest of my time with you today dissecting the state of the economy.

But instead of looking back, I want to look forward.

I want to set out my plan for how New Zealand can seize strategic advantage globally in key areas we have existing strengths to grow our economy and jobs.

My vision is for a smart, modern and green economy that trades on our brand and natural offering as well as our leadership on climate.

One that turns our distance from markets into an advantage by doubling down on technology and the weightless economy and value add tourism.

My vision is for New Zealand to be the best and most successful little country in the world, and I believe we can be.

A couple of weeks ago, I was interviewed by the NBR – a long-standing business-focused news outlet here.

The interviewer asked me: why as Prime Minister and Labour Leader have I put such an emphasis on working closely with the business community, and does that mean I’m putting them before workers, Labour’s base supporters?

It was a good question.

In my view New Zealand succeeds when business is doing well and the reward of that success flows on to workers as well as the owners.

If we’re economically wealthy we have the resources to invest in the services that enhance our social and environmental wealth too.

I don’t see these things as separate.

Our economic, social and environmental health are interconnected.

New Zealand has a number of natural strengths.

We have incredible natural beauty and a unique cultural identity.

We are renowned for our innovation, for being smart farmers and great traders.

And we are so far ahead of most of the rest of the world when it comes to renewable energy that we’ve been singled out as a great place to invest in to make money.

There’s a huge economic opportunity in our response to climate change.

Every trade delegation and mission I’ve led in the eight months I’ve been in the job has had a climate focus.

People who buy our products increasingly do so because of our clean green credentials. But we run the risk of being left behind.

Being a fast follower in a market looking for climate leaders could see us lose our competitive advantage.

Failure to act on climate change is not only a moral failure, but economic sabotage in the new global economy.

That’s why we must make the transition to a net zero emissions economy as soon as possible - shoring up our existing clean, green and safe brand.

This is a brand we must protect, and that means taking the hard actions at home to really reduce our emissions.

The recent BlackRock announcement of their world-first $2 Billion fund to support New Zealand’s transition to greater renewable energy is proof of the investment opportunities that exist for our businesses if we’re at the front of the pack on climate.

All of these are priorities that I believe we can monetise much better than we’re currently doing.

Under my leadership, we’d do it by focusing and shaping our economic thinking and actions across five priority areas.

I’ll say up front that this isn’t some 50-point plan.

I don’t want you all to lose the will to live!

It’s a vision statement that provides a clear narrative and articulates goals that are easy to visualise and, I believe, Kiwis can get behind.

My five economic priorities are:

1. To be the best little trading country in the world
2. To become globally recognised as being world leaders in sustainable agriculture and agricultural technology
3. To be a powerhouse of renewable energy, building on the confidence international investors have put in us to innovate our way to 100% renewable – and to lead the world, selling our expertise and technology to others
4. To drive our emerging sectors like the creative and digital sectors to grow export value across science, space, gaming and information technology, and,
5. To build out the premium health and wellbeing tourism and education experience we offer to international travellers and students

These priorities are underpinned by well-paying jobs by a highly skilled workforce and practical education, first-class infrastructure, and solid government finances.

I’m excited about our trade opportunities.

We’ve built real momentum on trade this past term, concluding seven new or upgraded Free Trade Agreements.

I’d bet that New Zealand’s Trade Minister has clocked up the highest number of air miles of any trade minister in the world.

Free trade agreements now cover almost three quarters of New Zealand’s exports.

A key focus next term will be to expand those opportunities further.

India is the world’s most populous nation and presents a huge opportunity for us.

If re-elected I am committing to leading a trade delegation there within 100 days of taking office to further explore how we can strengthen the economic connections between our countries.

I’ve also committed to leading trade delegations each year to maximise the value of existing agreements.

We need to be in-market, face to face and using the full leveraging power of NZ Inc to advance our national interests.

It’s something I’m more than happy to lead.

The second goal of turning New Zealand into a Centre of Excellence for sustainable agriculture and agricultural technology focuses on leveraging our existing strengths in this space.

I want our primary sector to stay at the head of the pack in a rapidly changing world.

Global consumers are demanding greater environmental standards from how we farm and grow the goods we sell to them.

That means actions on climate change are no longer a nice to have but an essential part of our plan to be an agricultural leader.

Investment in new technologies will be key to helping us achieve that.

Our ambition is to grow the agritech sector to $8 billion by 2030.

If re-elected Labour will inject $100 million into the Venture Capital Fund to support this objective.

This fund will invest in agritech businesses, including through their joint investment fund with Finistere Ventures developed through the Agritech ITP.

Every agriculture sector in the world is in a race to prove their environmental credentials.

We have a head start, but we need to take the next steps now in order not to squander our advantage.

To do that we will accelerate the research, development, and commercialisation of tools and technology to help reduce agricultural emissions through the Centre for Climate Action on Agricultural Emissions.

These technology investments will be for on-farm productivity and profitability on top of the benefits they’ll provide the sector and economy as a whole.

My third priority is for New Zealand to be a world leader in renewable energy and climate science.

We have the potential to harness the energy we have in the environment around us and geothermal below our feet to build a sustainable and secure economy that powers itself.

This transition has already begun.

Just last month, we fast-tracked nine solar power projects, which could generate two and half times the output of the 432-megawatt Clyde Dam – and three wind-farm projects, which would generate about as much electricity as the Dam.

And thanks to our clear direction on increasing renewable energy and phasing out fossil fuels BlackRock has established $2 Billion investment fund in New Zealand.

That’s a world-first fund and we need to seize that opportunity with both hands.

Being a world-leader means others will turn to us – wanting to pay for our expertise and technology. This is about using our natural advantages to boost our economic opportunities.

My fourth priority of harnessing New Zealand’s digital and scientific expertise is about turning our isolation and distance into an advantage.

As a small island nation, a long way from traditional markets, a strong digital economy allows us to leverage what Kiwis have to offer - no matter our geographic location, the time or place.

I believe we can really drive export value across science, space, gaming, information technology and biotech.

These are the jobs of the future.

Jobs that our kids are already training for at home and at school with the technologies they are so effortlessly able to figure out and use.

A strong focus on improving the maths and science curriculums will feed directly into helping young Kiwis jump into well-paying digital, computing and science jobs right here in New Zealand.

Our recent investments in the gaming sector highlight the potential that’s in play.

More and more businesses are going digital, and the rise of AI technology will be the next frontier for many firms.

We can and should be at the forefront of ethical and appropriate uses of these technologies.

And New Zealand can be at the forefront in scientific research on areas most important to our economy. Our future scientists will help us fix the biggest problems we face as a country.

In the most recent Budget, we set aside money to grow the number of scientists in New Zealand, including PhDs, and invested in three new research hubs focussed on technology and innovation, climate change and disaster resilience and health and pandemic readiness.

And my final priority is high-value tourism.

New Zealand will always be a beautiful place that people want to explore and visit.

But a strategy based on volume alone puts at risk the attractiveness of our offering.

And climate change puts at risk many of the wonders visitors come to enjoy.

Many people around the world consider New Zealand a leading example of a compassionate and caring nation, and this put us top of their list to visit.

The Government is already working with the industry through the Tourism Industry Transformation Plan to build a more sustainable and higher value tourism industry that doesn’t overstep its social licence.

You will see common strands across these priorities.

A focus on climate leadership to improve our product offering and ensure our long-term economic sustainability.

A focus on technology to enhance existing areas of expertise and leadership.

And a determination not to reinvent the wheel or start from scratch, but instead turbo charging and enhancing areas where we have an existing competitive advantage.

These priorities are underpinned by ongoing investment in skills and infrastructure and a focus on growing high paying jobs and balancing the books.

I think it would be fair to say I am the first Prime Minister in a while that has had such a strong focus on skills.

There’s been a revolution in trades training under this Government.

We’ve delivered a huge boost in apprentice numbers and I think trades are finally getting the value and recognition they deserve.

Creating hope and opportunities for our young is the best thing we can do to ensure they steer clear of a life of crime.

I hope you will have seen from me a commitment to invest in the long-term infrastructure needs of our country.

I haven’t shied away from backing the long-term projects that will unlock the greatest gains for our economy.

The Government has made record investments in our roads, schools and hospitals.

But New Zealand has under invested in infrastructure for 30 or 40 years, so we've got to really ramp up our efforts, and we are.

That’s why I’m committed to affordable water reform, light rail, and a second harbour crossing in Auckland.

These are projects that will ultimately make us richer and we need to steer past the short termism that has held us back on infrastructure for too long.

Of course these investments require the Government make sure it's doing a good job of economic stewardship.

Our prudent approach to managing the books will continue to be a priority.

We have recently shaved back Government spending in light of tax receipts coming in lower than Treasury forecast. That’s the right thing to do.

We’ve also been clear that we intend to return to surplus and adhere to our key economic rules now that the COVID emergency has passed.

And finally, we need to ensure workers share in the rewards of a strong economy.

Too many feel they are struggling to get ahead right now, that needs to change.

In a somewhat unusual reversal of positions, it’s actually the Labour Party promising to be the more fiscally prudent this election.

I don’t see now as the time for big and unaffordable tax cuts, which will add to inflation. It’s also not right to be selling more than $5 billion of Kiwi assets off every year to do this.

Getting back into surplus, getting debt down while making investments that both offer cost of living relief today while building a better future is a smarter proposition to my mind.

To finish.

A government I lead will continue to invest in world-class public services and infrastructure.

We’ll drive greater economic engagement, more collaboration of technology and expertise, and deeper relationships.

We’ll continue to work in partnership with business and I can assure you business will have a seat at the table in a Government I lead.

We’ll support burgeoning industries like the space and gaming industries, which are our revenue earners of the future.

And importantly we won’t turn our back on the climate crisis, or kick it to touch, but instead seize the economic opportunities inherent in it.

We’ll welcome global capital as a driver of prosperity but not at th expense of losing control of our assets.

And we’ll celebrate success and profit as a healthy and natural driver of human behaviour and innovation.

As Prime Minister, I want the economic pie to be bigger and will put enormous effort into making that happen.

But I want those spoils to be shared fairly with all who contribute to them.

We can be a global leader in the areas that matter most to us.

Together we can achieve that goal of being the best little country in the world.

If we pull together, back ourselves to succeed and not buy in to the people who talk our country down, we’ll do more than survive.

We’ll thrive.

Thank you.

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