21 July 2014 Good evening everyone and welcome: I am also pleased to take the opportunity to welcome the following special guests: Nelia Herskink and Joseph Thomas from Development West Coast. Scott & Robin Yates, Jeff Blackburn and John Blakey (Auckland) Christchurch City Councillors – Paul Lonsdale and Jimmy Chen New CEO of the CCC – Dr Karleen Edwards Deputy Mayor of Selwyn District Council – Sarah Walters Mayor of Waimakariri David Ayers and his wife Marilyn Chair of ECan – Dame Margaret Bazley Very warm welcome to Rex Williams (CMA Past President) and now a Commissioner of ECan – Last but certainly not least CDC CEO – Tom Hooper I would like to take the opportunity to say a special thank you to BNZ – as the sponsors of the evening, but also for the sponsorship and support here and in Auckland giving us use of the BNZ Partners buildings for our regular monthly Executive and Council meetings. For those of you not familiar with the history of the NZMEA I want to take a few moments to describe a little of our history, who its members are and what it does. August 12, 1879, (nearly 135 years ago) the Association for the Fostering and Encouragement of Native Industries and Productions was formed. A few weeks later on September 3, 1879, adopted rules and elected officers to launch the Industrial Association of Canterbury. 47 years later on November 24 1926, changed name to CMA. On 22nd December 1975 the Mancan Foundation was created. Just seven years ago on 9 August 2007 the NZEF and CMA merged to form NZMEA. The association’s aim is very simply to work to support the manufacturing industry in New Zealand. So what is manufacturing? People think of manufacturing as production of things but there is much more to it than that. Manufacturing is: Defining a need. Designing a solution to fill that need. Producing prototypes to test the design, testing it for fitness for purpose and for compliance in various world jurisdictions. Designing a strategy to attract the market and organising a distribution network to sell it. Producing the product, which these days often has a service element to it and involves co- ordinating what is often a complex supply chain of specialists that is based in different parts of the globe. Researching the market for a new opportunity. And finally repeating the process again. -2- Manufacturers, whether they are exporters or competing locally with importers, have to be operating to world’s best practice simply to survive in business in New Zealand today and when they do the jobs they create cover all the skills required to fill the roles I just described. Many of the people doing these jobs describe themselves as anything but manufacturers. They are market researchers, software writers, salesmen or industrial designers but they work in the manufacturing industry. Companies in manufacturing punch well above their weight as far as making a contribution to the economy is concerned. Manufacturing industry employees generate approximately $82K per annum in GDP per person while employees of the NZMEA members generate on average almost $280K GDP per person per annum. This compares to approx 44K per person in tourism and $49K per person in farming. This sort of divergence is typical worldwide and is the reason that most advanced economies and all developing economies promote and support the growth and development of manufacturing industry within their borders. Clearly every job generated in manufacturing is capable of adding approximately twice the GDP per job than one in the other two sectors I mentioned, and I mentioned those two sectors because they receive so much publicity and are both important to New Zealand’s economy, so we must ask why manufacturing in NZ has been struggling for so long to make the contribution to our country’s economic wellbeing that is made by the manufacturing industries in other developed countries. Last week I read with interest Bruce Wills’, the departing president of Federated Farmers,’ speech where he said that in his time as president one of the things he had learned was that they needed to have a presence in Wellington. This recognises better than anything the importance that organisation places upon the role of government in deciding what economic activity will be successful in our small economy. Too often the picture is painted that these two sectors are in competition for resources; it’s an either/or debate. We are only 4M people and we can’t afford this we must learn to work co-operatively. New Zealand needs that to happen. I realise the economic policy setting for the two sectors to be successful are very different and the job isn’t easy but we have to do something about it. Clearly if manufacturing is to be successful in NZ it needs to influence government thinking. That is a role NZMEA recognises it must engage in alongside its day job which is advocating for various firms or sectors of manufacturing in their normal engagement with the various bureaucracies that affect their routine activities. Boring stuff like resource consents, changes to machine safety laws and various technical standards, organising certificates of origin for exporters and the like. -3- This organisation has excellent executive staff ably led by John Walley our CEO who, incidentally has been with us fourteen years, that carry out these tasks and it is supported by a group of business people that altruistically give up their precious time to act as governance to guide those staff into the areas of activity that they see are most important and relevant from time to time. It often occurs to me when I look around the table at our executive and council meetings and see the people there offering each other insights and advice without any reward, other than the networking benefits that they sometimes benefit from, that these behaviours don’t fit with most economic theory about people only doing things for greed or direct personal reward. It has been a privilege to work alongside these people for the last almost two years of my presidency. Now after being gracious enough to listen to me I hope you have a better understanding of what this organisation stands for and what its aims are. It’s my pleasure now to move on to introducing our guest speaker for the evening. Listening to economists is always interesting though I must say that personally I find their explanations about the way the economy has worked in the past far more useful than when they tell us how things will work in the future. Tonight we have the pleasure of the company of Dr. Ganesh Nana, Chief economist at BERL a privately owned independent economic research consultancy. He will talk to us about how things have been going recently in the economy. Economics is about people, their jobs, incomes opportunities and futures as much as it is about numbers and statistics and I know that Ganesh feels strongly we should use robust economic analysis to ensure informed choices and policy decisions are made by governments. Let’s see what this eminent and sometimes controversial economist has to teach us. .