Continued investment in innovation is the key to New Zealand's economic future, Business Innovation and Employment Minister Steven Joyce said at a post-budget briefing for Tauranga business people today.
"Anything you want to know about New Zealand's future development, it's all about innovation, whether it's food tech, hi tech, ICT, education or tourism," said Mr Joyce.
Noting that Budget 2016 had included a $765 million innovation package commitment spread over the next four years, he said that innovation was the government's investment in NZ's economic future.
And while the big challenge for the economy was the slump in dairy exports, Mr Joyce noted that despite this, exports had continued to grow overall, with horticulture playing a major role.
Dairy exports fell by $3 billion in calendar year 2015, but total exports grew by $2 billion, he said.
"That means non-dairy exports had to grow by $5 billion, which is a lot."
While some of the growth was attributable to currency moves, most of it came from volume and value increases, said Mr Joyce.
He cited kiwifruit as a significant part of the story. But he added that tourism, international education, wine, apples, red meat, seafood, ICT, hi tech and niche manufacturing were all playing a role.
"All of those sectors have grown very significantly in the last year and have more than compensated for that drop in dairy exports. And all the signs are very positive for most of those industries."
The dairy industry was predicted to recover only slightly by 2020, but the other export sectors were really helping NZ succeed, he said.
NZ has had the seventh-fastest growing economy in the OECD for the past five years, and was doing relatively better post-GFC than countries such as Japan, Canada, Europe, the US and the UK, he said, with GDP growth of close to three percent predicted for the next three-to-four years.
"That's a tribute to NZ businesses and particularly exporters," he said.
Mr Joyce also questioned Treasury budget assumptions that migration will drop and return to a lower rate in the next three years.
"What is driving the migration is NZ's relatively strong economic performance relative to other parts of the world," he said.
"All our growth numbers are predicated on migration falling off. Assuming migration stays stronger, there will probably be a stronger growth pulse from migration."
Bay of Plenty MP Todd Muller, who introduced the briefing, noted that the BOP had again been reported as the most optimistic part of the country, with a 41 % net positive rating.
"We're a pretty optimistic area, but we can't collectively rest on our laurels."