Debate on Crown Entities, Public Organisations, and State Enterprises — New Zealand Trade and Enterprise

I rise to speak on the New Zealand Trade and Enterprise financial review. This is a critical arm of our international experience, but it is also a critical arm of our economic strategy. New Zealand Trade and Enterprise is located within the Ministry of Economic Development. It is quite a complicated accountability mechanism, in that a number of Ministers have an interest in the operation of New Zealand Trade and Enterprise.

I draw attention to the fact that some points of dissatisfaction have been registered with the performance of New Zealand Trade and Enterprise. They need to be addressed. They need to be addressed in a number of ways.

In the first instance, I say that in the course of my duties as the Opposition spokesperson on foreign affairs and trade and overseas development assistance I have had the opportunity to visit a number of New Zealand Trade and Enterprise offices around the world. I have visited the one in New York, the one in Dubai, the one in Shanghai, and, most recently, the one in Brasilia. In all of those offices there are highly skilled individuals who are doing their best to promote New Zealand’s economic interests and New Zealand’s investments, where that is the appropriate form of partnership with that country, or are marketing New Zealand goods overseas.

We have very good people, but we lack a Government vision directing them where they ought to go next. In the financial review done by the Commerce Committee, that lack of vision was demonstrated in some of the dissatisfaction registered by some of the clients of New Zealand Trade and Enterprise. In fact, the chief executive himself, who is relatively new in the role, is reported to have said in the select committee that the figure of 84 percent of those who said that New Zealand Trade and Enterprise added value to their business might not accurately reflect the situation and could mask a higher level of dissatisfaction.

This is not good enough. We need to be able to maximise the opportunities that are being carved out around the world through a sequence of free-trade agreements. As those free-trade agreements are coming on stream—all of them, so far, initiated by the previous Labour Government—we need to ensure that this Government has the right vision, the right emphasis, and the right energy and get-up-and-go to make the economy grow through the use and support of very good staff in these offices around the world. They are an integral part not only of our international mission and our international footprint but of the growth of our economy.

There is a lack of integrated vision, a lack of imagination, and a lack of willingness in this Government to address the issues that are beginning to stymie our progress in picking up the free-trade agreements that are coming on stream. This needs to be addressed. It is there in the report. There is not universal satisfaction with what New Zealand Trade and Enterprise is doing. I think the blame for that lies at the feet of the Government, because I know that the people I have met in the course of my travels work hard to promote New Zealand’s interests, and they do it differently in each country.

Why was expenditure on grants significantly below budget—$46 million, compared with $62.8 million the previous year? Why has there been virtually a 50 percent drop in the expenditure on grants? Why is that money not going out the door? If it has been appropriated by the Government for grants to assist New Zealand businesses to maximise their export opportunities overseas, why is that not happening? This is not good enough. If the Government is going to appropriate that money for New Zealand Trade and Enterprise, then the money should be going out the door.

It is a pleasure to follow that contribution from Maryan Street. First of all I say that New Zealand Trade and Enterprise is a complex beast; I fully agree with that. When I first got involved with the portfolio as the Acting Minister for Economic Development, New Zealand Trade and Enterprise was described to me as being spread too far to be effective. The comment was that it was an inch deep and a mile wide.

That tallies exactly with what the performance improvement framework review determined. That work—the PIF review, as it is known—was done by Sue Suckling and Murray Horn. They identified that New Zealand Trade and Enterprise as an organisation did not seem to know its purpose. I am pleased to say that that has changed, and it is changing very dramatically.

I congratulate the new chief executive, a man called Peter Chrisp. He came from the private sector. He has fully accepted the criticisms that were levelled in the performance improvement framework review at New Zealand Trade and Enterprise, and he has now restructured the senior management leadership team completely. It is already a far more focused organisation than it was even 6 months ago.

This organisation needs to give a mechanism by which New Zealand companies can internationalise. We have good commodity traders, and they need to take every opportunity to become more sophisticated. They need to seize every opportunity to add value to whatever they produce. Although the very foundation of our nation’s economy is still the primary sector, we also have some very smart companies around the country that I get the opportunity to be introduced to. I would describe these companies as being knowledge intensive.

I went quite recently to a company in Christchurch called Stickmen Studios. That company had about 50 young computer graduates working for it in Christchurch—it had only just moved to a new building because the previous building they were in had been destroyed by the earthquake—developing computer games and immediately exporting them straight from New Zealand and into the States. It is a very inventive company.

There is the jetpack organisation in Christchurch, which has been in Time magazine. It is another example of a business that New Zealand Trade and Enterprise has to work with and give it the opportunity to become better connected with international opportunities. That is essential if this economy is to grow, and grow faster.

When we look at New Zealand Trade and Enterprise now we see that it is far more focused than it was. It employs about 700 people, and 60 percent of those are offshore. Miss Street spoke about the ability and enthusiasm of the people she had the opportunity to meet in cities like New York, Shanghai, etc. She has obviously spent a lot of time outside of New Zealand. She has had the opportunity now to see how dedicated those people are, but unless they are well led, from the chief executive down, then we will not be getting the best value from the organisation, or bang for bucks, if you like. That is why I congratulate the new team at New Zealand Trade and Enterprise. My impression is that they are substantially better led and focused than they ever have been. We have developed with them an intervention logic, the very reason for their existence, and the very rationale for them joining with companies and working with them.

I will briefly talk about two other initiatives where I have had the opportunity to see New Zealand Trade and Enterprise’s role within New Zealand companies: Better by Design and the Lean Business programme. Effectively, what New Zealand Trade and Enterprise does with companies is go into these companies and work with them using the Toyota model, basically—that is, trying to drive out inefficiencies and increase their productivity. Villa Maria Estate wines is just one company that has been involved in both those products of New Zealand Trade and Enterprise. When I visited it quite recently it told me that it has lifted production by about 20 percent. If we get that amount of performance improvement out of companies here in New Zealand, for them to then connect with international markets, that will help grow the economy.

I am happy to take a call in this part of the debate on New Zealand Trade and Enterprise because, as with Mrs Street, I believe that it is a very important organisation with very hard-working people doing a very important job on behalf of New Zealand. But that is where my agreement with her finishes. I found her intervention to be far too pessimistic not only about the challenges we face and how we are moving through them but about the feeling among those who work for New Zealand Trade and Enterprise. Those I have met have a great amount of pride in the job they are doing—a very good job—on behalf of this country.

Also, she was far too pessimistic in her view of what the clients of New Zealand Trade and Enterprise thinks of its work. We see that 84 percent of those who have had assistance from New Zealand Trade and Enterprise say they have had value added to their business. Eighty-four percent say they have had value added to their business. Mrs Street said they were not universally satisfied. Well, I am yet to meet anybody who is universally satisfied, with the exception of the people of Iraq I read about in the newspaper some years ago, who were asked to vote in an election. They were universally satisfied with the then president, Saddam Hussein. He got 107 percent of the vote.

With the exception of that situation, it is not unusual for New Zealanders to have differences of opinion, but 84 percent of businesses helped said value was added to their companies by New Zealand Trade and Enterprise. I say good on New Zealand Trade and Enterprise and the hard-working people there who are doing a very important job.

So why do I think they are a very important group of New Zealanders who are doing a fantastic job for us overseas? Well, the work they do fits very closely with the Government’s economic agenda and with our economic plan that has been rolled out over the last 2 years: to back New Zealanders and to invest in the local economy so that our economy can grow, so that more people can be employed, and so that we have a better standard of living and can afford more and better services for New Zealanders. We get to do that by exporting more to other parts of the world.

Since we have come to Government we have had a number of trade agreements that have been negotiated where the negotiations have been concluded or have entered into force, which New Zealand Trade and Enterprise then had to do something about. I will not go through all of them, because I have only 5 minutes and the list is an extremely long list of achievements by this Government, but I will pick one that I think holds great opportunity for us: the entering into force of the free-trade agreement with China.

Why is China important to us? Well, that is very straightforward. In the 2 years since we have been in Government and this agreement has entered into force, our trade with China has grown in value from $8.5 billion to $11.1 billion. Do members know what that means? That means that very many more New Zealand businesses are producing goods and exporting them to China. Their trade has grown. But, more important, it means that many companies that were not exporting before have now been helped out by New Zealand Trade and Enterprise.

The challenge that we set for New Zealand Trade and Enterprise—and this Government backs it fully—is to help New Zealand businesses to get into some of these new markets and to take advantage of the great opportunity there so that we can sell more of our produce, bring those funds back to New Zealand, and employ more New Zealanders. Some wonderful work has been done.

Finally, the job of New Zealand Trade and Enterprise overseas is to leverage the very good work that this Government and our Minister of Trade are doing when it comes to free-trade agreements. Last year I had a chance to visit Shanghai for the World Expo 2010, and I went to the New Zealand Trade and Enterprise office. Millions and millions of people, particularly from China but also from around the world, visited the New Zealand pavilion at the expo. But, more important for tourism purposes, thousands of businesses visited New Zealand Trade and Enterprise, which leveraged the opportunity the Government had provided for New Zealand businesses to meet it in order to talk about New Zealand and some of our advantages, and to do more business and more trade. That was very important work.

One of the great things New Zealand Trade and Enterprise will be doing this year—and the Government is backing it fully in this—is leveraging the 85,000 visitors who will come to New Zealand for the Rugby World Cup. In my electorate of Rotorua I have had a number of meetings with New Zealand Trade and Enterprise and the businesses it has been working with and supporting. I tell the Committee that the feeling of satisfaction with New Zealand Trade and Enterprise in Rotorua is greater than 84 percent, in as far as this report we have been given. I thank the staff of New Zealand Trade and Enterprise, and ask them to keep doing that great job on our behalf. Thank you.

Report noted.

Foundation for Research, Science and Technology