Industry New Zealand and Trade New ZealandIntegration Bill

I move, That the Industry New Zealand and Trade New Zealand Integration Bill be now read a first time. After the bill has been read a first time, I intend to move that the Commerce Committee consider the bill. I also intend to move that the Commerce Committee be instructed to report to the House by Monday, 28 April 2003 rather than the default period of 6 months, as Cabinet has agreed to an establishment date of 1 July 2003.

With this legislation, the Government—

💬 Hon Tony Ryall: For 1 month?

It is National Party policy. I would have thought the member would be supporting it.

With this legislation, the Government is creating a new economic development agency. Last week it was decided that this new agency would be called New Zealand Trade and Enterprise. New Zealand will now have a one-stop shop for economic development and trade promotion. We are creating a new organisation to integrate the services currently provided by Trade New Zealand and Industry New Zealand, with the aim of making those services as seamless and responsive as possible. This Government decided early in its term of office that it had a smart and active role to take in the economy. The work we have done with Industry New Zealand and our regions; the partnership started with business, communities, and local government; with unions, industries, and Māori, are starting to make a real difference to New Zealand’s economic and social fabric.

Over the last 2 years it has become obvious, however, that integrating the services of these two entities—Industry New Zealand and Trade New Zealand—was in the best interests of industry development in New Zealand. It will make life easier for business, and from the Government’s perspective, it will make sure that economic development policy is well integrated and user-friendly. This move brings together, and builds on, Trade New Zealand’s experience both internationally and in New Zealand export sectors, as well as Industry New Zealand’s experience in working with investors, business, and the regions. Under New Zealand Trade and Enterprise, business will have a powerful partner for growth, backing its drive for growth and success.

New Zealand has always been a nation of exporters and entrepreneurial skills, and these have stood us in good stead, but we need to lift our performance yet again. The rules have changed, and we are now living in a global marketplace. New Zealand needs to connect to the world and build strong networks. The Government recognises that our businesses must be internationally competitive, whether their markets are domestic or offshore, and that internationalisation is critical to improving New Zealand’s overall economic performance. The major objective of New Zealand Trade and Enterprise is to support the development of internationally competitive New Zealand businesses. Well-designed and delivered business development services have the potential to be a major contributor to the Government’s goal of becoming a genuinely global, innovative economy. Such business development services can assist firms to leverage their innovations, skills, and talent into global markets.

Essentially, the move to integration is motivated by three drivers. First, as I have stated already, the rules have changed. Many New Zealand companies are now born into the international environment directly on their inception as new entities. Their markets, opportunities, and business models are based on export markets.

Secondly, we need more exporters as well as more exports. I do not think that many New Zealanders realise that over 50 percent of our entire export earnings come from 127 companies, so we have a very narrow base, and we have to broaden that base as quickly as we possibly can. New Zealand Trade and Enterprise will be better placed to build capability in New Zealand firms so that they can connect globally, attract investment from both inside and outside New Zealand, and adopt best practice and grow effectively. Getting more exporters to the starting line is vital for increased export growth.

Thirdly, our clients want an integrated service. We have had that clear and consistent message from both Industry New Zealand and Trade New Zealand clients. They want a single point of contact for export and business growth services. I say to Mr Ryall, who is trying to interject, that it happened to be the policy of the parties that I have represented, too. The new organisation will take the form of a Crown entity so that it can develop a strong commercial culture, and build and maintain credibility with business networks.

The board of New Zealand Trade and Enterprise will comprise seven members. The legislation allows for the use, when necessary, of special advisers to assist the board in aligning its strategy and activities with Government policy. Those special advisers are the Secretary of Foreign Affairs and Trade and the chief executive of the Ministry of Economic Development. The Minister for Trade Negotiations and myself, as the Minister for Economic Development, will together be responsible for New Zealand Trade and Enterprise. The Ministry of Economic Development and the Ministry of Foreign Affairs and Trade will be jointly responsible for monitoring and evaluating the new organisation, and will provide advice to the responsible Ministers. The vote will be under the vote of the Ministry of Economic Development.

The strategic goals of New Zealand Trade and Enterprise are to contribute to increased exports and investment in New Zealand by strengthening global linkages and targeted assistance; to enhance capabilities by providing information and facilitating access to skills, expertise, and resources; to contribute to a supportive environment for economic growth by fostering collaborative networks and partnerships by encouraging private and non-government sector economic development services, and to improve coordination of assistance.

New Zealand Trade and Enterprise has been created to give effect to Government policy. It will have to respond to the multiplicity of issues that a firm faces. It will act as a one-stop shop with a package of services. It needs to deliver a seamless service to work alongside firms, regions, and sectors. Most importantly of all, New Zealand Trade and Enterprise needs to connect with its clients. The strengths of the two former agencies, Trade New Zealand and Industry New Zealand, will be carried forward into the new organisation. New Zealand Trade and Enterprise will provide integrated services across the business life cycle—from foundation services offering advice to young companies and entrepreneurs, to enabling services for regions, through to inward investment and growth services giving customised assistance to accelerate the development of potentially high-growth businesses both at home and abroad.

I have recently returned from a visit to Australia where I met the Minister of Trade and, in particular, Queensland State development Ministers. I have to say that our cousin in Australia is extraordinarily aggressive in terms of attracting investment from both inside and outside Australia. However, that reflects only the aggressiveness of many countries now lining up for skilled immigrants, for investment in research and development, and the development of their own industrial base. New Zealand has to be very smart in order to compete in the international marketplace. This organisation will assist in that development, and the Government urges the House to give full support to the move we are making.

At the conclusion of this debate, I will move that the Commerce Committee consider the bill, and that the committee be instructed to report back to this House by 28 April 2003.

I am pleased to be able to take the first call from the National Party in Opposition on this bill. Before I address the substance of the matter, I want to say to the Minister in charge of the bill that in deciding to concertina the select committee process from what might have been only a couple of months to 1 month, he has lifted the temperature considerably on this debate. Quite substantial parts of this bill warrant investigation by a committee. The Minister will find that he has a majority in the House for the bill, but what concerns me is his decision that it needs to be rushed through in 1 month. I know the Commerce Committee currently has a workload that would facilitate the passing of this bill through the committee, probably within 2 months, but, certainly, there should be sufficient public notice. What will happen now is that this bill will go before the Commerce Committee this week. The committee will place advertisements calling for submissions—which will take at least 2 weeks—and then there will be 2 weeks for it to consider the bill. Of those 2 weeks, at least 1 week will be in an adjournment, and over Easter. The select committee process is being unnecessarily concertinaed. If the Minister had not put a time limit on it, the process of the bill would have been smoother, and he would have got better deliberation within the select committee. Having just 1 month for this major change to the structure of industry support in New Zealand is not appropriate. I ask the Minister to reconsider the motion he wants to move—1 month is not enough.

I draw members’ minds back to 5 February 2001—to a new superyacht development in west Auckland. According to the Government, that development will deliver hundreds of jobs, and up to $600 million in export earnings over the coming years. The $18 million construction facility to be built on surplus defence land at Hobsonville is being set up by expatriate Kiwi Bill Lloyd, who is returning to New Zealand to expand the Canadian superyacht-building firm Sovereign Yachts. Announcing the project, Economic Development Minister Jim Anderton said the downstream benefits of the venture would flow on to the rest of New Zealand. He said the Government had not given the company any money to come to New Zealand, although his ministry had been able to clear obstacles to the use of the defence land. Further, the Prime Minister of New Zealand went on to say that this latest investment was just a flagship of the Industry New Zealand programme, and an indication of the true commitment of the Government to industry development in New Zealand.

The National Party’s concern about this bill is not only about the concertinaing of the time frame, but also about the fact that there is no regulatory impact statement attached to the bill. We have no idea what impact this legislation will have on business compliance cost or regulation, nor is there a cost-benefit analysis on the benefits of doing what we are doing. This bill has been rushed into the House. There is a 1-month submission period, no regulatory impact statement, and no cost-benefit analysis. That is concerning, because we think the whole Industry New Zealand-Trade New Zealand merger needs quite considerable analysis by a select committee. This Government has just given $1.5 million to Ross Perot. During his presidential campaign, Ross Perot used to spend $1.5 million on one 30-second advertisement, and now Industry New Zealand is giving his company, EDS, $1.5 million to set up some sort of lower-order call centre here in New Zealand. As Mr Hide says, it is Jim Anderton who is giving him that money.

We are concerned about what is going on at Industry New Zealand and Trade New Zealand. We think it is vital that, firstly, we rationalise the Government’s business assistance mechanisms. Right now, there are over 32 different Government funds and schemes to which business can apply for assistance. There are myriad different entities and organisations—Trade New Zealand, Industry New Zealand, Technology New Zealand—the list of different structures just goes on and on. It is right that we should be looking at the integration and consolidation of Government business support programmes. Indeed, the National Party talked at some length about doing that before the last election.

We are totally supportive of some of the functions that Industry New Zealand and Trade New Zealand perform. The best work they do is to provide advice and some direction to people who are interested in the start-up process, or a new investment. I am very sceptical of the grants they give out to organisations, particularly the larger organisations. The announcement made by the Government in February 2001 promised hundreds of jobs and up to $600 million in exports from Sovereign Yachts. What we know today is that redundancy notices are being issued to the workers at Sovereign Yachts. We also know that the Prime Minister, Helen Clark, is strongly supportive of the investment the Government made in Sovereign Yachts. She said it proved the sense of the Government’s business support programmes, but those programmes were just made a mockery of.

The fact is that the select committee should not be limited to 1 month to consider this bill. At a time like this, it is important that the Government’s overall economic strategy be put under the microscope. Looking at this bill, it is clear that the Government is fiddling with bureaucracy while business burns. Just in the last few days, Parliament has become aware of the significant reduction in business confidence that is happening in the New Zealand economy. The Westpac McDermott Miller consumer confidence survey, which was conducted before the war on Iraq, shows that a net 6 percent of respondents are pessimistic about New Zealand’s prospects over the next 12 months. Most respondents feel financially worse off today than they did 12 months ago, and that has nothing to do with Iraq. It is very significant that the growth we have been seeing in New Zealand has been driven by the strong recovery in rural export markets, which are facing considerable drop-offs in their income.

On Sunday night the latest Colmar Brunton poll showed that almost one-fifth of respondents believe that the economy will deteriorate in the next 12 months, and that only 27 percent believe that the economy will improve in the next 12 months. If that is coupled with the very significant reduction in the dairy payout—from $5.30 to a projected $3.60—the stronger New Zealand dollar, and the droughts in Canterbury, Marlborough, Taranaki, and the Waikato, one can see why there is considerable concern about the New Zealand economy. We are seeing no vision whatsoever from this Government about how those downward figures can be reversed. We have a Prime Minister who has described the Sovereign Yachts deal, which was basically a sweetheart arrangement, as “giving substance to our vision of New Zealand becoming innovators to the world, turning great ideas into great ventures.” Sovereign Yachts has put paid to that. Giving $1.5 million to Ross Perot is just a waste of taxpayers’ money.

This bill does not give any sense that this Government has any idea about how it will reverse the decline in our economic fortunes. It is just fiddling with bureaucracy when there are much more important issues it could be looking at—such as those outlined in our plan for prosperity for all New Zealanders, which was released by our finance spokesman, Don Brash, and our leader, the Hon Bill English. That document sets out a plan for going forward, which is far more than this Government has ever proposed. I ask the Government to rethink its 1-month time line on this bill. It is far too important to be treated with such disdain.

United Future will support the first reading of the Industry New Zealand and Trade New Zealand Integration Bill, and its referral on to a select committee. When I looked at the title of the bill, I could not help but think of the fact that, for many years in New Zealand, we actually had a Department of Trade and Industry. That department has long since ceased to exist, and I think it is now the Ministry of Economic Development. In a way, it is interesting to see how the wheel turns, as, years later, we find that, by the integration of these two entities, we will end up with something that brings trade and industry back together, albeit under the new name of New Zealand Trade and Enterprise. I hope that the change from “industry” to “enterprise” will signal very clearly that this new Crown-owned entity will be there to foster trade opportunities for New Zealand companies in every way possible, and that, in particular, it will assist New Zealand business obtaining new overseas market and commercial opportunities.

As I have said, we will support this bill. We think it makes good sense to bring the two agencies together, and, as the Minister has said, to provide a seamless service to New Zealand businesses, leading from this country into the many different markets overseas where New Zealand enterprises find demand for their goods and services. However, we make one request of the select committee that is to consider this bill, and it has to do with the perceived culture that exists in these agencies. On the one hand, some commercial organisations say to us that Trade New Zealand sometimes acts as if it is part of the diplomatic corps, and that it seems to be very concerned with the process of diplomacy in dealing with trade opportunities. On the other hand, they say that Industry New Zealand sometimes seems to be a politically orientated organisation. In other words, there is a perception that it is like an extension of the Government, and particularly of the Progressive party and the Minister, Jim Anderton.

Although we can understand that to some extent, in our view it is terribly important that the central culture of this new organisation should be clearly focused on the task of assisting New Zealand businesses to maximise their trade and competitive opportunities. Therefore, there needs to be not just a change of name, to New Zealand Trade and Enterprise; the organisation actually has to be enterprising in the way that it seeks out business in an innovative manner, and in the way that it employs people who have business nous, and understand business, trade, and enterprise. For example, I would like to see the select committee give thought to this new Crown-owned enterprise making a habit of employing people who have actual, hands-on trade and commercial experience, so that it can succeed in its objectives for the good of New Zealand and its businesses.

New Zealand First would like a Government member to stand and explain why New Zealand First should once again support a bill that refers to Industry New Zealand and the matters relating to it. It was only in July 2000, in the middle of 2000, that New Zealand First went to the trouble of supporting the Hon Jim Anderton with his Economic Development (Industry New Zealand and Ministry of Economic Development) Bill. We steadfastly supported that Labour Government’s proposal of an Industry New Zealand body, because we are supportive of anything that will improve the welfare of New Zealand. But it is clear that, in barely 2½ years, this minority Labour Government’s policy in this area has failed. Otherwise, why would it have a bill in the House repealing an Act that it was responsible for and passed as recently as less than 3 years ago? It is not surprising that this Government does not have the support of business in New Zealand any more, and that business support for this Government is declining. The reason is that its own policies are changing within a span of less than 3 years, which is the usual term of a Government. I would like a Labour Party member to stand up and say why New Zealand First should continue to support this measure—a measure that we gave such steadfast support to less than 3 years ago.

It is interesting that the United Future member Gordon Copeland, who spoke before me, should now support this bill, because that party steadfastly opposed the previous legislation, which created Industry New Zealand. Right throughout, in every vote, United Future opposed that legislation. But today, like the lapdog political party it is, its members get up and support Labour, even though they essentially voted against the creation of Industry New Zealand less than 3 years ago. They look at me with some surprise. Obviously, they have not done their homework in this matter, and have left themselves wide open to continuing ridicule. And we will be ridiculing them time and time again in this way, I am sure, as this term progresses. Less than 3 years ago they said one thing, but today they are here in the House, saying another thing and supporting this legislation.

New Zealand First has always supported the concept of Industry New Zealand, but we are entitled to ask why we should support it. Why has there been such a failure on the part of this minority Labour Government with this Industry New Zealand body? Why should we support it today, in a new form, without any indication that it will be successful? What is there in this particular bill that will make this body more successful than the one that has failed? Obviously, it has failed; otherwise, the Government would not be back in this House, changing something that it created only a short time ago.

It has failed, despite all the promises from the Hon Jim Anderton, as set out in Hansard, Volume 585, at page 3721 onwards, dated 27 July 2000. I suspect the main reason would be that there has not been enough money. There have been lots of good ideas and lots of talk from the Hon Jim Anderton about development of New Zealand industry and trade and the like, but there has been really no support from the Prime Minister and the Minister of Finance in this area. That is why the whole idea of Industry New Zealand has collapsed in a dismal heap. Now the Government is trying to wipe it away by merging it with something else, and trying, perhaps, to get some money from that other body to make sure that the concept of Industry New Zealand will survive.

It is interesting to reflect on a recent speech made by the Hon Jim Anderton. He said on 27 July 2000—on page 3722 of Hansard—“Industry New Zealand will be a special-purpose agency with a clear mandate. It will be facilitative, it will listen, and it will deliver.” Well, it has not facilitated anything other than the failure of Sovereign Yachts. Industry New Zealand may have been spoken to, but I doubt very much whether it has listened. And it has not delivered anything. It has come to an end. This is virtually the liquidation of a failed Labour Government policy.

The Act we are repealing provided for the board of Industry New Zealand to establish advisory committees. It set out various provisions for select strategies and recommendations, and it set out Industry New Zealand’s amended functions, allowing for advisory groups to work on strategies for a particular region. It had all the hallmarks of that old-fashioned and very good idea of the time—but which is now past its time—of regional development. Clearly, Labour is saying that it was unable to get the regions to come to the party. It was unable to support the regions, it was unable to get new ideas under way, so it is quietly trying to sweep Industry New Zealand away under the carpet, and hoping that no one from the regions ever mentions that body to it again.

What do the Gisbornes of this world have to say? I would like the member for Gisborne to stand up and tell me what the consequence of Industry New Zealand being merged will be. I am sure this idea was sold to the member for Gisborne a long time ago—at least, less than 3 years ago. What do the member for Whanganui and the members for all those other smaller seats have to say, including the member for Masterton? I expect the member for Masterton will get up and tell us why the Industry New Zealand Act, which was going to foster regional development, should now be got rid of by the Hon. Jim Anderton—a Minister who only a little while ago was saying what a wonderful idea it was, and how much it was going to deliver to the people of New Zealand.

Why is the Government cutting down the time of the bill at the select committee to 1 month? Obviously, it is because it does not want the people of New Zealand to come to the committee and say: “You guys failed again. That’s why we don’t support you any more. That’s why we don’t support this minority Labour Government any more.” The minority Labour Government members cannot stand to take the medicine of being told that their policies are failing, so they want to concertina the bill’s time at the select committee down to 1 month. Bills often spend 6 months, or even 12 months, at a select committee. We will achieve nothing in 1 month. There will be barely time for submitters to respond to the notice in the papers about the select committee hearings before those hearings will be over. That is why the Labour Party Government—

💬 Hon Brian Donnelly: They may as well have done it in urgency.

As my honourable friend says, the Government might as well have done it in urgency, because the select committee process is an utter sham. As I said before, Industry New Zealand was a body that was going to listen. It was going to deliver. Well, it has not been heard, and it is now being shut up. It is shutting up shop well and truly. It is a failure on the part of this minority Labour Government. It admits that, so early in this term of its administration. No wonder industry does not want it in office any more!

However, New Zealand First is always willing to try something. We always live in hope, but we will be opposing the bill’s time at the select committee being reduced to 1 month. We want it to have its proper time there. At the end of the day, we will still support the bill going to the select committee, because we need the people of New Zealand to come and tell the Labour Party representatives on it that they do not support them, and to ask United Future why it changed its mind. After all, United Future opposed the previous legislation all the way through; now that party comes to the House and supports this bill. The public should be able to ask United Future what was not good about that legislation a little while ago, and why it thinks this bill is good today. As I said at the beginning, I look forward to a Labour Party member explaining why the Hon Jim Anderton has to admit total defeat with this legislation, and why we cannot have more time in the select committee to discuss the matter.

I am pleased to have the opportunity to speak to the Industry New Zealand and Trade New Zealand Integration Bill. It is designed to allow two fine, well-performing organisations to merge in order to allow a more efficient use of resources, and to provide a better service to those using those organisations. Under this Government, the stories from the regions are ones of growth and progress, and this merger will provide businesses with a one-stop shop for seeking advice and information on developing their enterprises. This bill will be good for industry and trade in New Zealand, and I recommend it to the House.

I listened with great interest to Mr Dail Jones of New Zealand First. I think he gave an excellent speech. He made some very good points, and I would like to elaborate on some of them. But he was totally inconsistent and irrational in his analysis, because he absolutely rubbished the organisation, then said how happy New Zealand First was to support Industry New Zealand. In my mind those two positions are quite incongruous, but be that as it may.

What I can tell the House is that ACT New Zealand is certainly opposed to the melding of Industry New Zealand and Trade New Zealand. We actually believe that Industry New Zealand is really a political creation of Jim Anderton. It is that old Alliance party policy—I think that even Labour may have abandoned it now—of Government programming regional development. We, of course, heard Jim Anderton for many months claiming that he was responsible for turning round the Southland economy. He claimed that Invercargill, which had been in a state of malaise for some 20 years, was now booming because of his delicate hand of intervention. I think all of us knew that that was absolute baloney. The only reason that Southland had a turn-round of fortunes was the dairy industry. When the dairy price rocketed to the high of $5.70 a kilogram, all those Northlanders from up the Waikato and around Matamata were buying properties down in Southland, doing conversions, and milking up to 1,200 cows. All that investment was flowing into the rural economy, and, indeed, that is why this Government has had such a dream run. It has nothing to do with its policies; the Government is busy messing up the fundamentals. It has been all about good export prices, a relatively low dollar, and good climatic conditions. What we know is that those three stars have now moved out of alignment. The dollar is going up, the dairy price has gone down to—$4.70 now? Do I hear lower?

💬 Hon Brian Donnelly: $3.60 and falling.

It is $3.60 and falling, unless one is a supplier to Tatua, of course. So the price has gone from $5.70 down to $3.60, and falling. All of a sudden, Southland does not look so wonderful, and when has Jim Anderton taken responsibility for that? We do not see him. That is the nonsense of the Government’s policies in regional development.

We have, of course, had generations of this. Successive socialist Governments have tried to set up regional development plans. I remember the early days of the Forest Service. It would go and burn off tracts of native bush—napalm them, actually—so that it could plant pine trees in the name of regional development. Many of those trees are actually ready for harvest now, but the foresters tell me that they would never bother cutting the trees down, because the cost of harvesting and transport to the mill or port makes it economically unviable. Indeed, on the East Coast, up past Tolaga Bay, it is highly questionable whether cutting down some of those forests is actually viable. All of them were planted by the State, by the taxpayer, in the name of regional development. It is an absolute myth.

Then, of course, we have had the Government supporting the plastics factory on the West Coast, and all the shams associated with that. We saw Sovereign Yachts—Jim Anderton again. His great launch of Industry New Zealand was with Sovereign Yachts, but a fiasco has been associated with that.

So we are philosophically opposed to Industry New Zealand. It is not the role of the State to try to be the benevolent helper of industry and commerce. It is that old great lie. There are three great lies, and one of them is: “I’m from the Government. I’m here to help you.” Whenever people hear that, they should run a mile. Whenever a bureaucrat says: “I’m from the Government. I’m here to help you.”, trouble is on the way. There is nothing surer.

When we look at the explanatory note of the bill, we see that two Crown entities are going to be dissolved, and a new one established, which “would allow the new organisation to develop a strong commercial culture”. Do we want a body of State, a bureaucratic monolith, behaving commercially? ACT says no. That has never worked in the past. All it does is take taxes off business and struggling New Zealanders—so they are paying more tax than they should be—in the belief that, somehow, a bureaucratic monolith set up by the Government will be of help. All the evidence shows that it does not help. Actually, it is a hindrance. Even Tradenz has often been more of a hindrance than a help. Such organisations cannot act commercially. They are, essentially, a body of State. They cannot second-guess the market. I know from personal experience of some horrendous stories of so-called help from Tradenz that has actually messed up the marketplace for commercial ventures, and the thought of putting those two together—Industry New Zealand and Trade New Zealand—in one bureaucratic monolith is, I and ACT New Zealand believe, a recipe for disaster.

So we will not be supporting this bill. We do not believe that it should even be referred to a select committee. In a way, it is almost an admission of failure. It is really saying that these two organisations have not worked, and that therefore they have to be somehow stitched together to make them viable.

I think that Mr Jones in his speech put an alternative reflection on it. He suggested that this bill is really a way of trying to cover up the nonsenses that we have seen in recent years with Industry New Zealand, by tucking it under the umbrella of Trade New Zealand to try to sanitise it. That is the impression I got from Mr Jones’ speech, and that could well be the case, because I think the Government must be embarrassed by the performance of Industry New Zealand—absolutely embarrassed. We have all heard some of the stories of businesses being offered huge blocks of money from Trade New Zealand. It is the old story of trying to bribe people with their own money. In other words, the Government takes taxes off business, takes taxes off people, then employs bureaucrats in Wellington to fly around the country, stay in flash hotels, and go out to businesses and say: “Boy, have I got a deal for you! I will give you a bundle of money if you take this grant from Trade New Zealand.” It would be far better not to take the tax off the business in the first place.

I believe that strong, independent business is the creator of wealth, not the Government trying to act commercially—and that is exactly what this bill states. It mentions the development of “a strong commercial culture”. Well, the thought of a big, Government, bureaucratic monolith trying to develop a strong commercial culture is a contradiction in terms. So ACT will be opposing this bill strenuously.

It gives me pleasure to stand in support of the Industry New Zealand and Trade New Zealand Integration Bill.

As we now know, this bill merges Trade New Zealand and Industry New Zealand. As Gordon Copeland said, if we stick around long enough, everything goes full circle in this place. The new organisation sounds suspiciously like the old Department of Trade and Industry. Members will recall that the Department of Trade and Industry was restructured out of existence as successive Governments took a corporate path.

I personally have serious doubts that Crown entities perform any better than old Government departments. At least old Government departments had Ministers, and Ministers could be held directly accountable for the actions of those departments and could not hide behind private sector directors appointed, at some considerable cost, to govern those entities.

I have to say that the new name, New Zealand Trade and Enterprise, does not inspire confidence. I am not suggesting that we call this bill the “Department of Trade and Industry Resurrection Bill”, but I do think that the name “New Zealand Trade and Enterprise” is rather a mouthful. It reflects the turf wars that are still going on between the Trade New Zealand people and the Industry New Zealand people behind their flash logos. Why do we not call the merged organisation “Enterprise New Zealand”? That name is sharper and more focused, and it would embrace all the economic activity that the organisation is set up to support, whether it is goods or services, export or domestic.

But perhaps the failure to produce a decent name is symptomatic of the farce that this bill clearly is, because the merger is already under way. I have a letter, dated 18 March, that tells me that the establishment board already exists, and that the new chief executive officer starts work on 7 April—even before the absolutely unacceptable report-back date that we have been given for this bill. Indeed, the chief executive of Industry New Zealand leaves this Thursday, so I guess we have no choice but to pass this piece of legislation. Clearly, Industry New Zealand is about to go out of existence, and, what is more, that has been planned since November last year. Clearly, the Government is covering its embarrassment by giving the select committee only 1 month to consider this bill because on 1 July its new, exciting flagship, New Zealand Trade and Enterprise, is going to be up and running. That date is the start-up date, so this legislation should have been introduced months ago. To do our job properly, Parliament should be assessing the performance of both Industry New Zealand and Trade New Zealand, so that we can assess whether those two bodies have done a good job and whether the outcome of merging them would be any better.

We have very serious concerns about many of Industry New Zealand’s funding decisions. Other members have already highlighted the Sovereign Yachts fiasco. A more recent decision, of course, was to give $1.5 million to EDS. If I recall correctly, EDS made a profit of over $1 billion last year. Why should this Government and New Zealand taxpayers be indulging in corporate welfare just because a foreign multinational organisation claims it will produce some jobs? We know where jobs come from. They come from community economic development and from small businesses. That is where Industry New Zealand should be putting its focus, and that is where Trade New Zealand should have been, as well.

We are concerned that the merged body will be even more fixated on exporting rather than import substitution. In our view, trying to fly on one wing is a failed strategy. Export-led growth is in fact delivering trade dependence, and we have only to look at the figures for the year to December to see that that is the case. New Zealand’s trade deficit for the last calendar year was $1.33 billion. The year before, we had a trade surplus, but for only 1 year out of the last 8 have we had a trade surplus. Is someone trying to tell me that Trade New Zealand has been doing a good job when it has produced the goods in only 1 out of the last 8 years?

Let us look just at the relationship with Australia, our cousins across the water. Here we are celebrating 20 years of closer economic relations. Well, for 18 of those 20 years the relationship has gone Australia’s way, because it has had the trade surplus. For the year to December, our deficit with Australia was—all on our own, one country—$1.13 billion. That has a lot to do with the fact that we do not make the most of the opportunities that present themselves to us, and one of those is the Industrial Supplies Office, a tiny little unit in the current Industry New Zealand set-up. We could have learnt a lot from the industrial supplies offices in Australia. They are much more proactive, as Mr Anderton was indicating before. They are not happy about the new structure, because the office in New Zealand will now be part of an export-oriented agency, not just an import-substitution organisation assisting Government departments in New Zealand. The Industrial Supplies Office will be part of this new monolith seeking markets in Australia. Under closer economic relations, the industrial supplies offices over there are meant to work together with us, but they are hardly likely to share information with our office now that we are in competition with them. What steps are being taken to resolve this issue and others? That is one of the key questions this Government has to answer.

Our biggest concern, however, is the absence of any commitment to sustainability. I note with interest that the new chief executive, Tim Gibson, is a cheese maker. I hope he stays true to his profession—“good things take time.”—because that means taking a long-term view, rather than lunging at quick fixes—that is, having a focus on sustainability rather than short-run profits. I hope he brings a new culture to the new organisation, because when Industry New Zealand was established, the Labour Government fobbed the Greens off when we called for a triple bottom line criterion to be applied both to Industry New Zealand’s activities and its funding. The Government failed to deliver on that occasion, and I have no more confidence that it will deliver now. The policy statement it put together then was conceptually flawed, as it built on an Act of Parliament that set in statute the purpose of “sustainable economic development”.

That is a concept that has no international use or currency, according to New Zealand’s own Parliamentary Commissioner for the Environment. He told the Commerce Committee exactly that on 19 June 2000. I hope he will be back to try to give the committee some advice on this bill, and I hope that this time the committee will listen, because Industry New Zealand has failed to live up to any reasonable expectations of ecological sustainability. There was no clear objective, anywhere in its activities, to reduce the overall environmental impacts of industry, to live within natural income rather than depleting natural capital, or to achieve greater output while reducing resource throughput. There is no explicit direction to shift industries, including agriculture, to cleaner production methods; to shift from more toxic to less toxic production methods and products; to address waste management in a meaningful way, with a goal of zero waste; or to achieve best practice in terms of the sustainable management of natural resources, including water. There is no reference to renewable resources or renewable energies, or any requirement to seek to enhance the ecological systems on which much production and all life depend. In other words, it does not meet our expectations because it does not achieve what it ought to set out, which is sustainable development—development that fits triple bottom line criteria of not only meeting economic goals but also meeting environmental and social goals.

I do not believe that this new agency will achieve that. I do not believe that it will involve the community, as in the voluntary and non-profit sector, in achieving those goals, either. I look forward to trying to scrutinise this body at the select committee, albeit that we are given only 1 month to do that job—and that, I think, is an indictment on this Government. The Government has taken since November last year to bring this bill to Parliament, and now it is giving us only 1 month to check whether it is, indeed, the one-stop shop that Mr Anderton talked about. Quite frankly, it is not. He has got it wrong in the first place, because it does not include tourism. I am glad it does not, but the relationship between Tourism New Zealand and this new enterprise agency is one area we need to look at. Every overseas visitor to New Zealand becomes an export market when he or she returns home, and that is a connection we should be making—as well as the other points I have made.

I am pleased to rise in support of this bill.

It is always disappointing when the senior Government Whip takes a call, then does not make a contribution. I must say it is rather sad. I am not quite sure where he got the precedent from, but it is a pity that—

💬 David Benson-Pope: You have a meeting, too.

Mr Brownlee will be going to that. What worries me with this bill—and it has worried a number of previous speakers—is that here we are, fiddling while Rome burns, and although we might want to discuss the issue of the integration of Industry New Zealand and Trade New Zealand, I would have thought that the Government would want to spend more time on issues of the economy and what is happening to New Zealand. This bill will not help the New Zealand economy, which is now in a slow-down. This bill, which is bringing two Government departments together, will not change the confidence of New Zealand and New Zealand businesses, and that is a real worry to us. We should all be concerned about that.

I wish that the Minister, when he made his address, had told us how this bill will change the latest Colmar Brunton poll, which showed that 18 percent of respondents believe that the economy will deteriorate in 12 months. I wonder why the Minister, when he was making his introductory remarks on this bill, did not bother to tell the House how the bill will make a difference to the confidence of New Zealand. I wonder why he did not tell us why the Westpac McDermott Miller Consumer Confidence Index is showing that a net 6 percent of respondents are now pessimistic and expect New Zealand to get into bad economic times. I wonder why the Minister did not bother to address that aspect and tell us how this bill will make a difference to the New Zealand economy.

I wonder why the Minister, when he was telling us about the Industry New Zealand and Trade New Zealand Integration Bill, did not talk about the dairy industry and the fact that prices in New Zealand are down—

💬 Brian Connell: Through the floor.

Through the floor—worse than in Australia. We have gone from, I think, $5.30 a kilo last season to less than $3.60. In fact, it is still going down. How come the Minister did not bother to tell us about that? What will this Government do about those economic indicators, I wonder. He did not mention anything about how this bill will help the economy, and nobody in this House, certainly on this side, believes that it actually will. Not one of the speeches I have heard, including those from United Future, has actually said that this bill will make the economy better.

We would have thought that the Government would want to concentrate on the economy, but no, not this Minister. He is more worried about playing with the bureaucracy. I wonder why he did not mention the droughts and the impacts they will have? What about the energy crisis? Surely the Minister would have wanted to address that when he was telling us how this bill will make the country go better. Not on your nelly! There was not one word about the energy crisis. I would have thought that the Minister, given that he is a long-serving member of this House, would tell us how this bill will fix the energy crisis. But no, there was not a sausage, not one word, on it. That is the problem with this Government. So many bad things are happening around the country, and the whole issue of the economy is an example. Everybody in this House knows that the economy is on its way down. We all know that during the last 3 years, when we had a real cakewalk, the Government has been lucky. We know that the economy is going down the tubes, and what does this Minister do? He brings in a bill that amalgamates a couple of departments.

Well, that sure as heck is not going to fix anything, and it is a real problem that we have. This bill will not address the problem with the economy. What is more, I have to wonder what the bill actually will do. The Minister has talked about his work with regard to regional development. Indeed, in his speech he has told us that things are going well as far as regional development is concerned. Actually, it is an abject failure. I would love the Minister to stand here and rattle off the names of the people and the businesses that have actually benefited from his policies with regard to regional development because, boy, are they hard to find! They are hard to find because he has got the whole policy set wrong.

What happens is that people come to him and say: “Got a great idea. Need some support. Need your help, Jim.” Then Mr Anderton says: “Yep, that sounds all right.” He puts their names in a hat, gives it a shake around, and draws one out, or a couple, or two or three, by whatever criteria, and gives them a few dollars to get started. Those people get on their way. When they have been going for 12 months and things are looking pretty good, they may find, however, that they need a bit more help because often these things do not happen in just 2 minutes. They may take 4 or 5 years to get on their way and get going. So those people come back to him the next year, and say: “Look we’re ready to do the next step. We need a hand here. Can you give us a bit more help?” Not this Minister, not his department, and not his regional development policies. They do not make things work, at all. In fact, they say to those people: “No, sorry. We gave you some last year. There are others who need help now. You’ll have to be on your own.” The point is, why did he ever start?

💬 Hon Annette King: Keep writing your speech.

No, this is just a little side issue. If this Minister is not going to see a project through, he should not start it. All he is doing is building up people’s hopes and aspirations, then we find that they are dashed. I have come across so many projects, so many people who have started off with good ideas and who have had some help from this Minister and this Government—the “Helen Clark, minority, supported by Jim Anderton—”

💬 Jill Pettis: And socialist.

—the “Socialist, Helen Clark – led, Jim Anderton – supported Minority Government”—only to find those hopes dashed. Even people in Meremere cannot get any assistance. Jim Anderton has failed. Indeed, he will come down to the House at some stage—no doubt he is listening on his crystal set to this speech—and he will come bowling in here, and say: “That member should talk to the leaders of Northland. They will tell the member what a good job I am doing. They will tell him how regional development is helping Northland.” I can tell the House that they would not say that now. They were supportive at the beginning, and I must say that it looked good. When Jim Anderton made the announcements, I said to him: “Good on you. If you’re going to help Northland, I’m right behind you. I’ll help you, even though I’m in Opposition. If you have got a good idea, we will use it in Northland.” Well, sadly, I have been misled, and the people of Northland have been misled. The leaders, the mayors, and the regional council chairmen have all been misled. They have now got to the stage where they are so cynical that they do not want a bar of what he is doing. I have to say that it is a great shame that the Minister has not gone about and done the job that he said he would.

I want to mention, briefly, an organisation I went and saw the other day, and I suggest to my colleague Brian Connell and others that they also go and look at it. I am talking about the Methodist Employment Generation Fund. I tell members that those people are doing what Jim Anderton should be doing. That organisation is picking up people who need a bit of a hand, and it stays with them until it gets them on their feet. It is there for 2, 3, or 4 years if people need it to be—and boy, is it making things work! We do not need to develop anything new. Quite honestly, what we need is already here. We need to take a leaf out of that organisation’s book. If we did, we would have some proper regional development. If members want to know about it, they should come and get the address from me. I will happily give members the names of those people, and they can go and have a look.

Finally, there is one more thing I want to say. Yet again I am appalled by the way this Government rams legislation through select committees. I sit on the Business Committee. In fact, I should be there right now, talking about the issues of the House. Most members of the Business Committee know that the Government constantly passes resolutions stating that a bill is to come back to the House in 6 weeks, 2 months, or whatever, and that, after a certain length of time, there is a request for an extension because the select committee could not get the bill through on time. I say to the House that I bet that the Commerce Committee does not have a bolter’s hope of getting this bill back in a month’s time. I say to members that they should not support the motion stating that the bill be reported back in a month’s time. Members should not do that, because this bill will end up like every other bill that this Government says should have a short life at a select committee—that is, the Business Committee will be addressing the question of an extension of time. It is not right and proper that a select committee should be expected to deal with an issue in a month. I know that there might be a whole lot of budgetary factors and so on around this matter, but the Government should have planned its legislative programme a lot better. It is not right to ask this House to support something that will not work, and we will vote against that aspect.

All the wittering and procrastinating from the Opposition that has gone on this afternoon is doing nothing to foster growth, industry, and innovation in this country. The most important thing we can do for business is to get this bill passed. Therefore, I am pleased to support its passage through the House, and I think we should get on with voting.

I start my contribution to this debate by saying that National approves of the idea of bringing Trade New Zealand and Industry New Zealand together as one entity. We support it because of the significant benefits that should flow through shrinkage of bureaucracy. Ideally, we should get economies of scale, bringing about significant resource savings in time and in money. The problem, though, is that this is not enough. I accept that it is a step in the right direction, but in terms of helping business in New Zealand, it is not helpful. In fact, it is about as helpful as the Greens’ economic policy.

Why will this bill not make a difference? The answer is very simple. It does not address the issues. It is quite plain that if Jim Anderton stopped talking to journos, seeking interviews, and talking himself up, he would start listening to business owners, just as my party has been doing. Talking and listening is what National members have done, and this is what we have heard: all the businesses we have talked to say that they have been shackled and hobbled by rising compliance costs and anti-business legislation. How can we compete nationally and internationally while this Government is jacking up fixed costs at every turn? If Jim Anderton were serious about regional development he would do something about compliance costs. I dare say that he could also help by resigning.

The costs of doing business in this country are rising steadily, and no one in the Government seems to understand just what damage that is doing to us. We will not attract investment. In fact, we will scare it away. In the last year alone, medium-sized businesses in this country saw their compliance costs go up by $43,000. That is a helluva lot of money. For the benefit of members opposite, I want to explain a simple concept. A rough expense-to-income ratio in business is 1:7, which essentially means that for every dollar a business spends, it has to make $7 just to stand still. It is a simple concept. If members work it through, that means that a medium-sized business in this country has to turn over approximately $300,000 just to stay in the same position. I understand, of course, that that ratio fluctuates a little bit depending on the debt-to-equity ratios, but no one can deny that it is an astounding figure. But what I truly find amazing is that Jim Anderton does not seem to give a damn. We have all heard him blathering about Sovereign Yachts, and how well business in this country is doing, but he never seems to grasp the real issues. Talk is cheap, but when the rubber hits the road he and his Government are found wanting. As Mr Carter pointed out, the Government is tweaking the bureaucracy of Trade New Zealand and Industry New Zealand while business confidence is plummeting—that was well put by my colleague. I would add the fact that it was Nero who fiddled while Rome burned.

This Government claims that it cares about regional development, yet when we talk to regional businesses they say that the thing holding them back, more than anything else in this country, is the Resource Management Act. Across the nation, across businesses, costs have skyrocketed under that Act. That type of foolishness, which the Ministry of Economic Development should be addressing, is exactly why the Industry New Zealand and Trade New Zealand Integration Bill will not make any real difference. What is the Government’s response to businesses concerned about the Resource Management Act? Its response is to make it more bureaucratic and costly. These sorts of things are being put forward in the bill being legislated today. Labour has rejected direct referral to the Environment Court for major projects, rejected landowners’ rights to be consulted over wāhi tapu and significant natural areas, and introduced legal aid for objecting. I could go on, but I think that the House is getting my drift. Until we have someone with a bit of business acumen in the driving seat, we will not see any changes, and our economy, now that the golden weather has passed, will just get sicker. The Industry New Zealand and Trade New Zealand Integration Bill does not address the core problems. If we want to increase foreign investment and stronger local companies, we have to work for it. The new structure will be better than the old, I grant, but it needs to be staffed by people who know how to turn a buck and understand the way business works. We cannot simply rely on company structures, and I see that as a fundamental flaw in this bill.

This Government has maintained its silence on key topics plaguing business. It has ignored questions such as why our businesses cannot have certainty over the supply of electricity. Incidentally, that is a question that my colleague Gerry Brownlee had blocked by this Government when he tried to bring an inquiry into the electricity disasters facing this country. That is a topic our industries want to see addressed. They cannot afford to be sidelined simply because this Government finds it embarrassing. That is the distinction between governance and politics. Even the Government’s union buddies are telling the Government to lift its act around electricity because it is doing this country immense damage. The other factors that are threatening business—which Jim Anderton’s trade organisations have maintained a blissful silence over—include the Employment Relations Act, the Holidays Act, and the Health and Safety in Employment Amendment Act. Those were disasters for business and they have scared the hell out of investors. Yet neither of those organisations has uttered a word of warning, and this bill will not do anything to change that.

The Government shows no sign of holding back on its anti-business assault. Jim Anderton is to business, in my view, what George Bush is to Iraq—a relentless and implacable foe. Every time National members and our colleagues in ACT pointed out the dangers of the Local Government Bill, for example, we were howled down as scaremongering. We now know that Jim Anderton’s own officials at the Ministry of Economic Development warned him. I quote to the House an article in the National Business Review: “‘At their worst, these proposals have the potential to give wider powers for local government without any constraints because of the weakness of the accountability framework and the inability of the community to clearly signal their preferences,’ a paper from the Ministry of Economic Development warned ministers in April. ‘The result is potentially higher taxes and other charges for the community, including business; a broadening of the scope of local government activity into areas where there are only tenuous links to overall community outcomes, and therefore significant potential for economic costs and no improvement in regulatory management.’” Even the Ministry of Economic Development saw this as a problem, yet Jim Anderton chose to just ignore it. Business must feel free of arbitrary Government interference driven by political considerations. This Government’s view of business, as a giant pocket in which we can continually trawl, must stop. Businesses cannot afford it, and they are deeply concerned. They have no confidence in what the Government is proposing under its economic platform. This bill confronts none of those issues, yet it is exactly the time to do so. We have reached the crisis point. We have frittered away incredible opportunities over the last 2 years, and now it is time to act.