Dialogue: Real wealth created through industry, not selling assets

The different makeup of rich lists in New Zealand and Australia mirrors the far-reaching decline of our productive sector, writes GILBERT ULLRICH*.

In the past decade, there has been much focus in New Zealand on the few individuals who have managed to secure sometimes excessively large profits from the so-called free market.

While these people have been widely acknowledged, and frequently applauded, a good deal of their success was generated through manipulating the financial or import-led trading sectors.

A comparison with Australia's list of wealthy individuals and families shows a far larger number there come from that country's still-growing manufacturing, industrial or construction industries.

In other words, those Australians produce something.

Numerous of our so-called business leaders have now left, realising their assets through buying and selling a large part of the New Zealand productive sector.

This realisation of the assets has also contributed to the migration of the country's skill base overseas. We now have one of the highest rates of emigration of skilled people per head of population.

This has left us in an era of high, if not enormous, overseas currency deficit, culminating in an excessively low exchange rate.

One question often arises: have we taken account of those unique New Zealanders who have assisted in our development? Many of these people are this country's unsung heroes, but because of our egalitarian distaste for the boss class they have no national hall of fame such as that which exists for our sportspeople.

We must face up to the reality that, along with responsible unions, creative and hard-working entrepreneurs created the wealth that we at one point enjoyed.

They were personalities and families such as James Wattie and Butland in food processing; the Fletchers and Stevensons in construction and building materials; Fisher and Paykel in appliances and healthcare; Angus Tait and the Stewarts in electronics and electrical products; the Hamiltons and Todds in the marine and auto industries.

These are just a few of the efficient Kiwi battlers who have helped to transform our productive landscape, and whose technology and initiatives still lead our high-value export earnings.

It is regrettable that our primary agriculture producers - although they fill 60 per cent of our export containers - are responsible for only 15 per cent of GDP, and employ only 13 per cent of our workforce.

Much of our history is written by academics who pay little attention to the wealth and job creators. Our present generation does not seem to have much interest in a career in today's manufacturing and productive sectors.

What examples are they given?

Their most recent role models are those people who have grown rich deconstructing a productive sector rather than the other way round.

Some of our politicians of the past decade, who have administered this period of decline, have generally tended to belittle industry management, unions and families' efforts.

One can but hope that at some point many of these same politicians will be put through the same scrutiny that recently befell some of our civil servants, who were left looking like possums facing oncoming car headlights.

Another lesson to be learned from our history is that while we have come to readily accept laissez-faire capitalism, most of those New Zealand companies that have been bought and sold by our so-called entrepreneurs now have their profits and dividends paid overseas.

Often thanks to the state of our currency, these people find our corporations are of low cost and risk, so a less competitive market is emerging as larger overseas corporations buy out what little is left of our local productive sector.

We are faced with the situation where laissez-faire capitalism has given us not more but less local competition.

It will be a sad day when our youth are faced with the option of leaving the country to further themselves, or asking if people want fries with their order.

That day may already be here.

* Gilbert Ullrich is managing director of Ullrich Aluminium Industries.

Herald features

Our turn

The jobs challenge

Common core values

href="http://www.nzherald.co.nz/storydisplay.cfm?reportID=57032">Catching the knowledge wave | Official site