Southern Institute of Technology Tay St campus Credit: Wikimedia Commons

Southern Institute of Technology Tay St campus Credit: Wikimedia Commons

Last week I was part of a Southland delegation in South East Asia promoting tertiary education opportunities at SIT with Mayor Tim and SIT CEO Penny Simmonds. 

SIT has a good story to tell. It is now the fifth largest technical institute in New Zealand and has more than 550 foreign students.

Education is the third largest export earner in New Zealand after primary production and tourism.

Southland has to battle hard to compete with centres like Auckland but we can compete and our friendly and hospitable community is a plus. 

Being Deputy Speaker of the Parliament certainly opens doors in a lot of Asian countries  so it is great to be of assistance to our education community in Southland. 

Business is about building networks and being genuinely interested in those you work with to build trust and a relationship.  That is what SIT does very well.

Our sheep-meat exports to China expanded in the last twelve months from under $250 million to over $550 million. Already China has moved from our fourth market to overtaking Europe as our largest market and it has taken one year to do it. There is nothing in our trading history like that.

It took our predecessors decades to build our old supply chains into the Anglo-Saxon dominated trading world of the second half of the 20th Century. We have a goal to increase the ratio of exports to GDP by around ten percentage points to 40% of GDP by 2025.

On the basis of projections of GDP growth, it requires us to grow our exports of goods and services between around 6.5 to 7.5% on average per annum for the next 12 years.

That’s tough, but we have done it before over a comparable period. In the 11 years 1990 to 2001 we averaged annual nominal export growth of 7.6% – the top end of the range we need today to meet our 2025 target.

Despite the recession from 2008 to 2013, our exports of goods has grown 4% on average. Our services exports, dominated by tourism and education, have been really badly affected by the international slow-down and high exchange rate. They have grown by just 0.6%.

Overall, if our exports of goods and services continued to grow on the historical performance of the last decade, by 2025 we would be $20 to $25 billion short of the 40% target. Alternatively expressed, we are about 75% of the way to our long-term target. We are going to have to stretch our collective work rate.

All the key international trends are moving in our direction, creating the conditions for an enhanced export performance.

Not so long ago we sold our products to the developed, and predominantly Anglo-Saxon, world. Why? Because that was where most of the people with the discretionary income to buy our high quality products lived.

It is completely different today. Today, there is an estimated 500 million middle class in the emerging economies and this is projected to multiply by a factor of six to some 3.2 billion by 2030.

In 2000, 4% of Chinese households were ‘middle income’ (defined as between US$9,000 and $34,000 per annum). This figure is expected to be 75% of households in ten years’ time. This is a massive opportunity for New Zealand.


The Government has agreed to a Supplementary Order Paper seeking to ban testing of psychoactive substances on animals. This will allow the Primary Production Select Committee to look at this issue in depth and for the public to have their say before any final decision is made.

In addition, the Animal Welfare Amendment Bill to strengthen protection of animals in New Zealand has passed its first reading unanimously in Parliament last week.

New Zealanders are passionate about animal welfare and we care deeply about how animals are treated. Sixty eight per cent of New Zealand households have at least one pet, and around half of our export earnings are animal products.

As I have said before, New Zealand has a policy of replacing, refining and reducing any testing involving animals and National has made it clear that we will set an example in this area.

As a homeowner, if you want to add another bedroom to your house or build a retaining wall, right now you might have to read the regional policy statement, the regional plan, and then your local council’s plan and figure out how they fit together.  What a nightmare.

That is one reason why the National Government is reforming the Resource Management Act.  We will insist every council simplifies the rules into one document.

By providing clear national direction on issues of importance across New Zealand, we will allow communities to focus their energy and resources more effectively.

Making councils act decisively and get on with implementing plans once they are in force will create certainty for communities and applicants about what they can and can’t do.

It’s about making the process easier and fairer, while remembering the Act’s purpose of protecting our treasured environment.

As a farmer, I have always held animal welfare in the highest regard and the same standard applies to using some animals for testing.

The issue of using animals to test psychoactive substances was not actually part of the Act before the House.  The Act does not prescribe any design or testing stage, and the ethics of any testing regime is not relevant to the purpose of the Act.

Nonetheless, the Associate Minister of Health has made it clear that no licences to test psychoactive substances are to be issued before the Expert Advisory Committee has completed its consideration of what constitutes a low risk of harm and the appropriateness of all aspects of a testing regime.

New Zealand has a policy of replacing, refining and reducing any testing involving animals and National has made it clear that we will set an example in this area.

The Government inserted Clause 12 of the Psychoactive Substances Act 2013 ruling out any animal testing where an alternative exists.

There is a lot of work to do before any testing regime is finalised and the Government looks forward to working with interested parties, including the concerned public, to finalise these matters.

The news about Tiwai last week was a great relief.

Although it was essentially a commercial negotiation between two external companies, I was able to act as a trusted conduit between the parties to put Southland’s case and it ended up being a happy situation for Southland.
A lot of ill-informed commentators fixated on the Government’s $30 million contribution. In the context of the deal – Tiwai’s 650 on-site workforce, 2,400 other workers affected by any potential closure, and the $1.6 billion annual contribution to Southland’s economy – it was a no-brainer because that was what it took to seal the deal.
A lot of people have also been talking about the need for more jobs and industry to offset any future closure of the smelter. While that has been put off in the short term, it is important to understand Government’s role.
A Government should not be relied upon to create jobs. To bolster our economy and growth, we need the private sector to be creating jobs in the tradeables sector.
Whether they are high-earning export roles, or an entry level company, it is the job of entrepreneurs. Government’s role is to put in place the right conditions for economic growth, so companies can feel comfortable about expanding, growing, or just starting out in the business world.
Local government also has a role, through having plans for economic growth and development that encourage businesses and don’t stifle their creativity.
Southland trades heavily on the Burt Munro “can do” innovative legacy. What we need now is the companies who can continue this legacy.
We have the tools here. Venture Southland’s enterprise unit, led by Steve Canny, has access to Government help through the Regional Business Partner Network, capability development, and research and development funding.
Southlanders are renowned for building solid, dependable businesses with expertise and innovation at their core.
While none of these will grow as large as the smelter, expanding our business base down here through giving you the right tools and conditions to develop and grow will mean we can offset any future setbacks (even though I am supremely confident the world aluminium market will recover).
Government’s role is to give a hand-up for business to thrive. It’s individuals and our Burt Munro “can do” attitude, coupled with these right economic strategies, that will win the day.

Due to the large amount of spam that seems to be getting through, your comments might take a little longer to appear from now on, but will be done as quickly as possible.

Economic growth is now the highest in five years and is forecast to continue.

Wages are growing, cost of living increases are modest, and interest rates are at 50-year lows.

In fact, the latest cost of living data shows consumer prices rose by just 0.7% in the year to June. This was the lowest annual increase for nearly 14 years and the fourth annual increase below 1%. Household income has risen 20% in the past four years and is expected to rise by almost 20% in the next four years.

Business confidence is the highest it has been for over 14 years. The manufacturing sector is growing – 9.2% since 2009 and a significant turnaround from 2008, when manufacturing shrank by 12% in a year.

The Government is playing its part with a strong plan for the economy. We have stuck to that plan and it’s working.

Turning forestry waste into biofuel could be a reality sooner thanks to a new Government project.

The 14-month project will study the feasibility of making biofuel from the waste product of forestry harvesting and processing. Material including sawdust, bark and harvest residue currently has little or no value, but could be commercially converted into biofuels.

If this waste material can be used as the source of commercial biofuel production, we will be able to maximise the return from every harvested tree in New Zealand.

It would also mean improved economic resilience for forestry, and increased employment and regional prosperity in regions that rely on forestry operations and processing.

The $13.5 million ‘Stump to Pump’ project has been approved for funding through the Primary Growth Partnership managed by the Ministry for Primary Industries.

The Psychoactive Substances Bill came into force last week.  A range of effective prohibitions and penalties for breaches of the law came into effect as well. These include; no sales from dairies or any sort of grocery store,  petrol stations, anywhere alcohol is sold; no sales to under 18 year olds; no advertising; and strict labelling requirements.

This is the first part of a two-stage process to stop the damage these drugs are causing.

Part two is the development of Psychoactive Substances Regulations, expected towards the end of this year.

The Regulations will require products to have a low risk of harm as determined by an independent expert panel.  The total cost of bringing a product to the market is likely to be several million dollars.

These are key parts in stopping the damage being caused by these substances.

Contact Me

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You can contact me either by email me here, phone my electorate office on 218 7749, or call in to 97 Dee Street Invercargill (opposite Waxy O'Shea's).

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Authorised by Eric Roy, 97 Dee St, Invercargill

July 2018
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