Plenty of ways to add value: Joyce

Stephen Joyce. Photo / Christine Cornege

Minister says Chinese among those looking to develop processing of primary products in this country.

Chinese wood processing companies are kicking the tyres on potential investments in New Zealand, lured by the appeal of cheap power, Economic Development Minister Steven Joyce says.

Speaking to the Herald about economic development prospects that he believes will drive growth and job creation, Joyce said there were significant opportunities in forestry and wood processing.

While the opportunities to add value to the logs produced here rather than simply exporting unprocessed timber had been talked about for years, Joyce said Chinese interest in the industry made the prospect more likely.

The topic had been discussed during the recent visit by senior Chinese politician Liu Yandong.

"Their view is they have to do something about their electricity consumption so they're looking to offshore effectively some of the processing cost of some of their industries. So they're looking and saying well, maybe we should invest.

"New Zealand has renewable energy, maybe we should invest there. If it's competitive it also reduces the amount of stuff we're bringing into China."

However, Joyce said such investment was more a "prospect".

"I don't think it's a slam dunk. I think there's others that are more likely." The more likely opportunities for significant growth and new jobs were in high-value foods and further intensification of agriculture, both of which would require investment from sources such as the $600 million in public and private funding of the Primary Growth Partnership and the $400 million in proceeds from the Government's asset sales programme, which it has earmarked for spending on irrigation projects.

Joyce also sees considerable potential for growth in the recovering wine and aquaculture industries.

"There's plenty of opportunities, but there's also plenty of opportunities to halt opportunities."

The Government was forced into an embarrassing backdown over its proposals to prospect for minerals in schedule four land in 2011 in the face of strong public opposition, but Joyce believes New Zealanders now "are pretty awake and pretty realistic" about economic development opportunities. That, he says, could prove an increasing problem for Labour and the Greens. "For a start the Labour Party is now scared of its shadow when it comes to oil and gas - it doesn't know what to say. A year ago they were bashing the hell out of us for it. The Labour Party is embarrassed by the Greens always turning stuff down."

Joyce says polls suggest public attitudes to development opportunities have moved so far in the past two years that a Labour and Greens coalition that continues to oppose them as strongly as they have will find itself offside with a significant proportion of voters at the next election.

"The punters will turn around in 2014 and say, we're not that interested because you guys are actually anti-jobs."