What reports has the Minister for Economic Development received about diversification of the New Zealand economy?

Tuesday, April 12, 2016

STUART SMITH to the Minister for Economic Development: What reports has he received about diversification of the New Zealand economy?

Hon STEVEN JOYCE (Minister for Economic Development): I have seen a number of recent reports that demonstrate that diversification. Despite the downturn in the dairy industry last year, our exports in the calendar year were up $1.9 billion, to $69.3 billion.

So even with the decline in dairy exports of $3 billion, the rest of the export economy grew by $4.9 billion.

Tourism is up; in the primary industries, meat exports were worth $6.8 billion in 2015, up 15 percent in 1 year; wool exports were up 8.2 percent; fruit up 30.6 percent; and wine exports were up 13.6 percent, with further growth likely.

I am advised that just in the member’s area of Marlborough there were 2,000 hectares of new plantings last spring, with another 2,000 hectares in the next year.

High-tech manufacturing continues to grow. What was once a $100 million industry has grown to nearly $1.5 billion in exports.

Stuart Smith: How is the Government encouraging continued diversification of the New Zealand economy?

Hon STEVEN JOYCE: Encouraging businesses to innovate and create new products and services is a crucial part of diversifying our economy. That is why we have set up Callaghan Innovation, our new high-tech innovation hub.

We have established primary growth partnerships to extract more value from the primary sector, and we have brought in a new research and development grants programme to replace the failed tax credit scheme.

Our focus on encouraging research and development is bearing fruit. Last year, business spending on research and development grew by more than 15 percent, according to Statistics New Zealand.

Through New Zealand Trade and Enterprise we are working with businesses in cities and regions to make the most of exports. We have established ICT grad schools, to put more money into science, technology, engineering, and mathematics education, and we are signing free-trade agreements, like the Trans-Pacific Partnership and the Korean free-trade agreement, to give our businesses market access.

Stuart Smith: How has this diversification provided more opportunities for New Zealanders?

Hon STEVEN JOYCE: In a number of ways. New Zealand, over the last 6 years, has had the seventh-highest rate of economic growth across the OECD. Despite doom and gloom from some quarters, New Zealand now has the third-highest rate of employment in the OECD.

We have had employment growth of 10 percent over the last 6 years, and also 10 percent growth in total hours worked. This is having a positive effect on wages.

From 2003 to 2008, prior to the global financial crisis, real wage growth over that period was just 5 percent. In the last 6 years real wage growth has been 8.7 percent.