Revival for export crusaders

By Yoke Har Lee

When the Export Institute of New Zealand (Auckland Inc) was revived two years ago its fate seemed a bit tenuous.

However, its revival, spearheaded by Gilbert Ullrich of Ullrich Aluminium and other early supporters, has worked, with its membership now up fourfold.

Rob Fenwick, who has just been elected president of the institute, says Mr Ullrich's contribution has been to change the way the Government views exporters.

These days his views have been adopted into the mainstream and his calls for fair trade are more widely accepted.

"It used to be that if you broach the subject [challenging the free marketers], you were an idiot," said Mr Fenwick.

"To Gilbert Ullrich's credit, he is passionate about New Zealand because he wants his children to grow up here, hence he voices his views."

Eighty people now regularly turn up to Auckland chapter events to talk shop and rub shoulders.

With this level of interest it is ready to get more lobbying work done to improve the lot of its members and to attract others into exporting.

"There is no ministry supporting exporters," Mr Fenwick says. "For the commodities, there is Forestry, Fisheries and Environment.

"If you were in Christchurch or Auckland and you wanted to ask the ministry something about exports, who do you turn to? We are badly lacking direct representation."

Mr Fenwick says the user-pays system at Trade NZ puts exporters off.

However, the institute will soon get its blueprint ready, providing ideas on what the country must do to turn small manufacturers into major exporters.

"One of the major challenges is how to identify existing products already sold domestically that can be tapped for the export market."

Exports fell 1 per cent in the year ended June 1998 while imports rose 5.9 per cent, as the country continued with its importing binge.

On the export side, there is urgency to raise the base as over 70 per cent of our exports are concentrated in 120 companies, with the majority in number terms selling less than $500,000 overseas each year.

How then to raise the stakes, so that small exporters who typically sell $500,000 can start to grow that to $1 million?

That's New Zealand's biggest challenge, he says.

Another role which the institute wishes to expand is the education of exporters.

Mr Fenwick says education about the rudiments of business should be introduced well before university or polytechnic level, so that those who don't get that far still have the opportunity to gain some idea of how businesses function.

He says the Five Steps programme, announced by Enterprise and Commerce Minister Max Bradford, does nothing for the average person who is not a part of the education elite.

The reality, he says, is that all the five steps will do is to create the brainpower to feed other countries.

"The programme is laudable but it only affects a small part of the

community.

"We can build all the brain power we want, but it will mean nothing if there is no industry to employ them.

"We have to provide employment too for the lower socio-economic group - those that can only get jobs in the packaging lines or driving forklifts."

Somewhere along the road, New Zealand needs to increase the stature of the exporting business - to make it a sexy business.

He says one big task of the institute is to step up its lobbying.

"For the past two years, exporters and manufacturers have been struggling to get a voice.

"The Government's now gone down the high-tech road, wanting to be like Ireland.

"The Labour Party acknowledges now that Government has to be involved to the extent it can encourage manufacturing."

Among the things that he would like to see reinstated is the concept of development finance for businesses.

He says the Development Finance Corp (DFC) went bust not because it was financing business but because it turned into a property and construction financier.

"It was not its basic business that got the DFC into trouble. If you look around the world, every OECD country has a development bank to help establish business."

While Mr Fenwick is in favour of lower corporate taxes, he says New Zealand needs to study carefully the effects that lowering taxes would have on a delicately balanced economy.

"What is important is getting a healthy economy. With that, you can easily afford to give tax reductions.

"But if you do reduce taxes, is there any assurance that the tax savings will be going into bricks and mortars, to producing more goods and services, or will the savings simply be redistributed to existing shareholders?

"With an already reducing tax base, if you move to reduce taxes further, you are going to have to look at the other side - how you fund your other programmes.

"That's the absolute dilemma, which goes back to the fragility of our economy."