Estimates Debate — Vote Economic, Industry and Regional Development (continued)

It is a lengthy, expensive, and time-consuming process for middle-sized, and even smaller, New Zealand businesses to develop overseas export markets. The Minister in charge of this vote, Trevor Mallard, will well remember a meeting that he and I attended earlier this year in Lower Hutt with a surprisingly large group of manufacturers who are really grappling with this very issue. They have a desire—and we as a nation need to back them strongly—to export more products into overseas markets. But they are faced with a huge marketing task that can take a long period of time—sometimes amounting to years—and most of them do not have the capacity to actually fund that sort of campaign in distant markets, such as Europe, Asia, and so on. At that meeting I strongly advised that the Government should do more to assist those kinds of businesses.

So I begin today by strongly endorsing the Government’s decision to invest more money into the area of market development assistance through the Market Development Assistance scheme. The increased investment amounts to an extra $19.8 million in the 2006-07 year and increases of $14.8 million for each of the following 3 years.

The development of new export markets for the New Zealand economy is now an urgent necessity. By comparison with other small nations of our kind, such as Ireland and Singapore, we are both a long, long way further from our markets and also, I think, significantly off the pace in terms of actual uptake in getting into new export markets, particularly in manufacturing, technology, and so on. It is more difficult for us because of our geographical isolation. In fact, New Zealand is the most physically distant developed country in the world, relative to major export markets in Europe, USA, and Asia.

The type of assistance offered through this vote is well designed, with a matching of the market development expenditure of companies or, indeed, a cluster of companies—something I specifically recommended to that group of manufacturers in Lower Hutt earlier this year—working through a joint export development project. The grant is for up to $100,000 per year for a minimum of 5 years on a matching basis. In other words, if the company or group of companies put up a hundred grand, that figure would be matched by the Government. I encourage New Zealand firms to avail themselves of the opportunity this new vote presents to them, and to get out and develop new international markets for New Zealand exports.

Our nation is running a large balance of payments deficit, and our trade and future economic success will continue to rely, as it has done in the past, on a vibrant, marketing-orientated export sector. I note that this theme has been taken up in recent days by the New Zealand Institute, which has come out with a new study, and also by the Canterbury Manufacturers Association, amongst others. The New Zealand Institute report is well worth reading. It is the first of what will be a group of five reports, with four still to come. I therefore call on the Minister and the Government to continue to give assistance and support to exporters through a consistent, well-thought-out plan as we move towards Export Year 2007.

In drawing attention to the fact that next year is Export Year for our country, I want to mention that there was a debate at the Commerce Committee on this vote about which is better: tax incentives for business to get into exports or Government grants. It was an inconclusive debate, although the Minister said we should be having it. Because I belong to a dynamic centre party I want to say that the answer, in my view, is a bit of both. A matching dollar for dollar grant system is a good idea, but there must also be a place for direct tax incentives. I am hopeful we may see some of those incentives in the business tax package that we have announced for the very near future, pursuant to the supply and confidence agreement between the Labour-led Government and United Future.

I hope we will continue to develop more innovative means of giving assistance to New Zealand companies that want to get involved in export markets, and I think that that matter should remain very near the top of the Government’s economic development transformation agenda for the foreseeable future. Thank you.

I am pleased to rise in this debate. I thought we might have some discussion on the State-owned enterprises issue, because it is one of the matters that are the subject of this estimates debate.

I begin by saying that one of the issues, of course, when we are talking about the finance area, is that there are some very clear policy differences between the National Party and the Labour Party.

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the member, but this is not the actual State-owned enterprises debate. That is the next one.

Vote agreed to.

Vote State-Owned Enterprises