Joyce uses jobs data to make case for oil, intensive farming

Steven Joyce

BUSINESSDESK: Economic Development Minister Steven Joyce has sought to deflect an unexpected jump in unemployment numbers to argue the case for economic growth in areas attracting strong public opposition.

Mr Joyce listed the intensification of agriculture and aquaculture, greater foreign investment, expanding oil and gas exploration and a new Auckland convention as examples of areas where it was "vital we put out the welcome mat to business".

"Those that oppose some or all of these things need to understand you can’t have more jobs without taking up these opportunities," he said, amid a flurry Opposition party criticism that the 6.8% unemployment rate recorded in the three months to June showed the government's failure of economic management.

A fall had been expected to 6.5%, after a 6.7% rate recorded in the March quarter. The labour force participation rate also fell in the June quarter, although it remains historically high at 68.4%.

Mr Joyce also said employment rose by 15,000 in the quarter and unemployment fell, once Canterbury was excluded from the figures, showing the ongoing national impact of the Christchurch earthquakes, where the long-awaited rebuild has yet to start in earnest.

His call comes as Cabinet papers released this week show he has been given broad responsibility for all environment, climate change, energy, conservation, local government and primary industries policy.

The Cabinet decision from early March shows he and Bill English have been bringing together six "informal groups of ministers" in the six areas of focus for what the government's Economic Growth Agenda, four of which are Mr Joyce's responsibility.

He leads the innovation, skilled workplaces, resources, and export markets portfolios, while Mr English oversees capital markets and infrastructure.

Mr Joyce also lauded the creation of up to 400 jobs at a "delivery centre" to be developed jointly by global computing firm IBM and Unitec, an Auckland-based technology training campus.

The centre will create opportunities for students and graduates to gain work in the latest of more than 50 such centres operating worldwide, and is based on a similar collaboration in the Victorian city of Ballarat.

The work involves business process and information technology services across business operations, including customer relationship management and remote support.

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31 Comments & Questions

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So we're to invest in the areas the country doesn't like and the benefit will be more employment?

I think that's grasping at straws Minister. To be honest, all the jobs you've listed are low-paying, low-value jobs. More croupiers and farm hands are not going to pull New Zealand out of the economic doldrums and you know it.

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NZ dairy farms have two critical shortages; reliable profitability is first and foremost. The second critical shortage is reliable competent labour, the appropriate payment for which partly depends on first having the profits.
That's why we import dairying labour and pay peanuts.
So what is the plan Steven Joyce?
Fonterra will be "induced " to add value to raw milk?
Good luck with that one.The result would likely be a lower raw milk price and a higher "added-value" dividend.
We can't have that , can we?

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Those who disagree with what Mr Joyce is saying should look at the recently released National Food Plan in Australia and when they look at it remember it is from a Labour Govt. heavily influenced by the Greens. In it you will see they welcome foreign investment in agriculture in Australia and they don't even seem to be hung up on GM crops. The reason ---they are looking 30-40 years out and see the huge growth there will be in the Asia middle and upper income groups .

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A Govt out of ideas to save the economy.

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hes one that the bible says god will destroy because they destroy the earth .i will destroy them that destroy the earth the bible says .on ya Mr Joyce your really smart arnt you not . he just thinks he is the bible says otherwise .

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Failed tax policy implimented by National is the one think that is doing the most damage. Theres not many rich people spending presently. Times are too uncertain for them to.

The net result is less tax collected, less economic activity and increased overseas debt. The banks love it.

Lower taxes for the middle class (whats left of them), because they are the spenders. The government will get it back in GST, while providing more employment through their increased spend

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That banker John Key had clear instructions from his banking bosses in the US to come over and sell us out before he even touched down in NZ.... i bet you anything when his term is over he goes back to them and gets a freakin nice kickback.!!!!

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Clearly key has a meeting in the USA that is more important than attending the funerals of two heros.

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Jamie t -- he has already visited the families of the two heroes and he is attending an event his son is participating in , in the USA.

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And when is that event his son is taking part in?

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Obviously at the same time or close to it allowing for travel.

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So key is not heading to the us to discuss the dotcom saga then?

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Interesting sense of priorities though, as he previously left heading a trade mission to the Middle East to come home for the funeral of our first soldier killed in Afghanisatn.

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At the end of the day i guess the stats are going to trend in the direction we are lead. At the moment if youre not 'in' with the govt youre not getting a look in.
While its tempting to acknowledge the earthquakes as requiring some sort of focused response we have never had so much cronyism and statism in all our history.
Unfortunately these policies will not spread the love or the money.

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No NZ soldiers want John Key at the funeral after he cut the defense budget. Go to your son's game Key

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Bring back Helen Clark!

She knew how to create economic growth and jobs. In her time in power, NZ enjoyed budget surpluses.

Now we have nothing but bad news from this National government.

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NZ is in the midst of a global recession since 2008 in case yoiu haven't noticed - duuuh! Under National givt NZ is doing a helluva lot better than most other Western world countries. By comparison, when Helen "Social engineering" Clark was in power, the 9 years were arguably some of the best for world growth, there was a global liquidity bubble etc but all the surpluses were frittered away under Labour so that National was given a hospital pass when the economy turned bad. I have asked many Labour supporters over the last few years to name me JUST ONE genuine ECONOMIC POLICY (Not social engineering) that Labour/Clark introduced in their 9 years of dismal government. So far no-one has been able to give me an answer. New Zealand is now paying the price for 9 wasted years under the stewarship of career politicians, academics, "self-serving unionists and a gaggle of gays" (quote: Labour MP Damien O'Connor). Unfortunately, those people who are complaining about mining, oil drilling, asset re-allocation etc are the same people who bleat on about low standard of living, cost of housing etc. Suggest you do Economics 101 before making ill-informed comments!

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NZ Superannuation Fund, Kiwibank and Kiwisaver to name 3 initiatives by Helen Clark's government.

Contrast that with that dumb accountant Muldoon scrapping NZ Super in 1976. NZ could have $100 billion in that account now but for the dumb economic policies of successive National Party/National Governments.

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I agree with you, however there is little/no evidence that compulsory superannuation schemes improve private and national savings. Look at Australia, for example, and how Kiwisaver has changed NZ's saving habits. People largely save in one area and dissave in another.

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But look what compulsory superannuation in Australia (as part of total wage packets) provides in terms of retirement (and redundancy) incomes.

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None of those NZ Superannuation Fund, Kiwibank and Kiwisaver were economic growth initiatives i.e. to grow the NZ economy. Kiwisaver and NZ Super are in fact still a bone of contention, depending on which side of the fence you're on, but I am pleased to see how well Kiwbank is doing. Kiwibank was in fact Winston Peter's initiative that was part of the agreement with Labour at the time. One of Winston's bribes!

Still waiting for examples of genuine economic growth initiatives. Anti-smacking bill and working for families don't count!

Reality is that Labour's very passive economic approach actually held back the economy during 9 years when the rest of the world was cranking. The window of economic opportunity was wasted by a government hell-bent on social policy.

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You want an example: research and development incentives for business.

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Is there any evidence that they actually worked or were in fact directed to the right areas? Token gestures that never got any traction. Personally I'm not in favour of those incentives. I have been heavily involved in business start-ups, venture capital etc for years and my experience is that most businesses that rely on those incentives generally don't get traction. Its a bit like handing out research money to academics who come back 3 years later telling you something that most of already know as patently obvious! The hard nosed entrepreneurs of this world who succeed on a global stage generally don't rely on R & D incentives! Take genuine success stories like Pumpkin Patch, Tait Electronics, Icebreaker, 42 Below Vodka, Fisher & Paykel, etc etc. I don't think they relied on R & D incentives! The idea of incentives for R & D is very much "Nanny State" academic (institutionalised) thinking that generally comes from people who haven't had a helluva lot to do with real business.

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R & D requires capex, which can only come from profits, new capital investment or borrowings. Many of the examples you quote, and many others (especially high tech businesses) would not have afforded (and therefore would not have achieved) the product development that has led to their export successes without the assistance they received in R & D incentives.

Our exporting businesses have to compete in international markets where competitors receive far more R & D assistance from their governments.

Why would you want to penalise them on the basis of idealogical purity?

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The government should talk amongst itself before making these kind of announcements.

John Key is on record as not being too fazed by the new stats and putting them down to the Christchurch earthquake.

Stephen Joyce, however, reads something entirely different into them, citing the need to explore for oil etc.

Both on the same day.

When senior (cabinet) politicians start making such different (and, arguably, glib) announcements, you have to assume they aren't based on discussion around the Cabinet Table, so I wouldn't be looking for serious economic policies to create jobs and fix the country anytime soon.

No wonder Key doesn't want to raise the retirement age - if 65 to 67 year olds weren't able to retire, the unemployment stats would become worse; likewise the effect of those leaving the country for greener pastures are also hidden from view.

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I just want to check that I've got this right.

We are meant to be trying to match Australia but our Finance Minister praises our progress when Australian industry transfers work here because of our cheaper wages.

We are renowned for our unspoiled beauty but our job development programme is to place this beauty at risk by allowing its economic development with safeguards well below the standards of other developed Western countries.

Is there an underlying agenda here to get us all to immigrate?

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oops - I meant emmigrate.

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Ross13, Pragmatist, Alan Wilkinson and anyone else who thinks business is heading the right way at present - please help me with the following dilemmas:

Why is it that so many larger corporates are increasing their profits when so many SMEs are struggling simply to break even?

Why is it that these same corporates can continue to increase their prices while they insist contracting SMEs reduce their prices "to reflect the current economic environment"?

Why is it that these same corporates are using SMEs to fund their cashflows by not paying bills to them for 100 days plus?

Why is it that directors' fees for these same corporates are being increased in "these times of economic constraint" when "everyone must tighten their belts"?

Why is it that being of a particular active idealogical position is more important in getting business than providing a good service/product at a good price with good backup?

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Agree totally with some of your comments. Although NZ directors fees are generally low by world standards there have been some cases e.g. Greg Muir, being paid ridiculous amounts.The regulations surrounding directors responsibilities have tightened massively to the point where I think we won't see anywhere near the same number of examples of overpaid directors not doing what they paid to do. The penalties for negligence etc are now quite rigorous and tghey are enforced!

There are also a helluva lot of great SMEs doing very well and just getting on with things quietly.And there are also many SMEs, a lot still operating as if they are still in 2006, failing to pay their bills! So, its very dangerous to generalise. It cuts both ways. FACT - the global economy has changed. FACT - there is significantly reduced market liquidity and people do have to tighten their belts, which means that some businesses that have always been marginal either have to adapt or fail. FACT - It is not just big corporates increasing their prices - its just that they get noticed a bit more when they do. My local hairdresser just increased their rates by a sneaky 20% by getting rid of their 5 for 1 loyalty card, and the coffee shop has just increased coffee prices by 50 cents. You'll find out that there are many little increases happening with SMEs as well! There are also still MANY NZ businesses offering substandard service and expecting that people will still continue to deal with them!

Anyway, you do raise some good points. Enjoyable and healthy debate!

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1. Most corporates pay for their directors' liability insurance. But under any circumstances, what justification is there for substantial increases in directors' fees, or senior management salaries, when the same companies are insisting on wage restraints by their workers?
2. SOME SMEs are doing OK - I don't know any that are currently doing "great". SOME are certainly "still operating as if they are still in 2006" and certainly SOME are "offering substandard service and expecting that people will still continue to deal with them". But most SMEs in NZ lie somewhere in between these two extremes, and they ARE struggling - and they are businesses we need to turn the economy around.
3. SMEs' cashflow is much more critical than corporates. When corporates (and the government) use SMEs as a source of financing by not paying until 100 days+, they are killing the foundation of our economy.
4. Now is the time for real competition to emerge in our economy with consumers exercising their discretionary choice. You can easily do that with your hairdresser and coffee shop, although both businesses may not have had the same choice with many of their cost increases.
5. In the end result, I feel the distinction comes down to those who are only having to tighten their belt a notch, or even not at all, in the current economic times, versus those who have had to put several new notches in their belt and struggle to cover their costs. Those not struggling still expect life to continue pretty much as normal, demanding profits and dividends to be the same. They expect restraint from others, not themselves. At the other end, restraint is a necessity, not a choice. At this end are plenty of good redundant managers and skilled staff exhausting their life savings.
6. A classic public example this week with the ANZAC memorial park announcement at a cost of $75m or more. No-one disrespects ANZAC or those who have sacrificed their lives for their country. But when we're cutting back government expenditure and demanding savings and restraint everywhere, why are we spending on non-productive new initiatives, regardless of their high moral value?

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Key couldn't stay for the funerals because he's got an important appointment; a job interview.

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