Foreign investment into New Zealand must have enduring benefit, says Damien O'Connor.
Times are tough across New Zealand.
The rising cost-of-living is hurting families and stifling communities, job losses are on the rise, and affordable housing and healthcare are out of reach for many.
Inflation and the Coalition Government’s reactive responses to it have strangled jobs and opportunities and continue to bite at market strength.
On top of these challenges, tariff disruption driven by Donald Trump has added a thick layer of smog to future economic planning.
Across rural New Zealand strong commodity prices are driving confidence and activity in our towns and communities. While some sectors such as seafood and wine are finding high-value markets tough because of both supply and demand disruptions, dairy, red meat and horticulture are surging ahead.
But we need a better vision and strategy for our export-focused economy.
Both our productivity and level of exports relative to economic growth lag behind many of our competitors.
Unless we up our game, the lifestyles of Kiwis will fall further behind our neighbours, and we will permanently lose more of our young people to the world.
The Government’s ambition to double the value of exports is ambitious but ambiguous.
Closing Callaghan Innovation and cutting New Zealand Trade and Enterprise, while rearranging our Crown Research Institutes is undermining the innovation needed to “double up” to drive our economy forward.
The innovative sectors are where the new areas of export growth appear, but they now will founder without support.
Back in the primary sectors where biological systems and long-term investment are needed, farmers, foresters and fishers know we can’t just double the production output. Planning and investment in infrastructure is always required to scale up.
So who, what and where are we going to find twice the value of our exports?
Decisions to drive that export growth will be made in the boardrooms of the major export enterprises and by brave entrepreneurs who want to take on the world. While we pride ourselves on an innovative No.8 wire mentality and have many smart exporters, nothing comes easy for a small country at the bottom of the Pacific Ocean.
Unless we continue to turn that challenge into an advantage.
A mild and moderate climate with new soils has allowed us, historically, to produce cheap animal protein, food and fibre for Northern Hemisphere markets.
The evolution of tourism and smart technology companies has created new export companies and revenue, but New Zealand continues to rely on its primary sectors for more than 70% of our export wealth creation
The world of food production is more competitive now. The disadvantages of distance to market and limited scale production systems mean we will have to be consistently smarter to survive.
Customers and consumers want a reason to buy something from New Zealand. With very few exceptions, if New Zealand stopped exporting to the world tomorrow few other countries would notice or care. Our battle for future prosperity will depend on our relevance to customers and consumers beyond simply a margin on a sale.
The historic cost advantage has been transformed into a reputation for reliable, safe and high-quality products. The competitive focus when subsidies ended in the 1980s has delivered highly successful primary exports. But that advantage is slipping as competitors catch up and our reputation for environmental stewardship is being undermined.
Talk of withdrawal from the Paris Agreement, removing protection for areas of significant biodiversity, underfunding the control of unwanted predators and weeds undermine that hard-won international reputation for clean green sustainability.
At present our largest export company, Fonterra, is considering selling its value-added consumer business, most likely to a foreign entity. Our largest co-operative meat company, Alliance, is likely to lose its farmer ownership and control due to unsustainable levels of debt and the continued decline in sheep numbers.
Bulk exports of sauvignon blanc wine by multinational alcohol companies and a single market focus for some seafood have left some New Zealand export sectors exposed.
The ongoing and successful pursuit of Free Trade Agreements has opened many doors for our exports. Companies take up those opportunities to maximise the return on their goods and services. But in an economy of quarterly reporting and shareholder dividends short-term thinking often overrides the long-term aspirations of governments and communities alike.
Labour supports the aspiration to double the value of our exports but also understands that a long-term vision and direction will be needed to get there.
Decisions to look up to a better future not down to a quarterly target will enable that vision. The people making these calls need to share our collective goals to grow wealth, share prosperity and build secure infrastructure.
Many companies that have endured, grown, and prospered have a shared vision and clear commitment to future generations.
Gallagher Group Limited, Hamilton Jet, Talley’s Group, Todd Corporation and HWR Group are just some examples of intergenerational and enduring companies taking New Zealand to the world.
All these companies understand the value of ownership and control to deliver benefits to their owners and our country.
As the Coalition Government steps up efforts to attract foreign investment into our country, we must ensure that the investment, ownership and control delivers the right decisions for the right reasons - being for the benefit and wellbeing of all New Zealanders now and into the future.
Ownership does matter if we are to be the authors of that destiny. Let’s not forget that.