Last term I was Labour’s Revenue and Forestry spokesman. I loved both portfolios because I truly believed that by manipulating the tax system for good, the government can significantly improve lives, change investment patterns, and promote economic growth, innovation and market engagement; and a visionary forestry policy could take a totally underutilized industry predominantly focused on commodity exports and create jobs, wealth and regional development.
I wrote a number of discussion documents and draft policy papers on a revision of the tax system and a rejuvenation of the forest industry. The papers contained ideas that were evidence-based with quantified benefits that would, I believed, take NZ from a mediocre economy to a world-leading society that valued workers’ labour, increased equity, created jobs, changed investment settings and reestablished us at the forefront of innovation and excellence.
Today, David Cunliffe released Labour’s forestry and wood-products policy. It marks a very clear departure from the National government’s ‘hands off – let the market decide’ approach.
The NZ economy is too small to allow markets, often controlled by overseas interests, to operate in isolation and self-regulation. I have argued a number of times that in a country the size of NZ’s the government has a very important role to play in driving sustainable economic growth and creating wealth.
In fact, I go further and believe that the government actually has a responsibility to constantly look at economic – and industry – settings and intervene when, for example, those in the workforce are treated unfairly, when investors and markets are being deliberately or negligently misled or manipulated, or when scarce resources are being exploited or suboptimised.
It is, therefore, the philosophical mandate and governance role of any social democratic government to ensure the negative social effects of economic growth are mitigated through sound policy, justifiable regulation and wise legislation.
As the global demand for goods and services increases, so does the competition to provide these goods and services. Not only companies, but now countries are striving to determine their competitive advantages and leverage these, in partnership with the private, and when applicable public, sector, to create sustainable wealth for their citizens and their citizens’ organisations.
Optimising international competitive advantage can manifest itself in a number of ways, but fundamentally through increased public and private partnerships in the area of economic and trade development and access to competitively priced capital. This is especially necessary and relevant in a country like New Zealand where 97% of companies employ less than 19 people, which is geographically (and culturally) isolated from key markets, and whose cost of capital is amongst the highest in the developed world.
This is what the Labour party’s forestry policy is about: using the tax system to provide incentives for those who share the vision of a country where innovation is encouraged – and rewarded; leveraging government procurement to ensure innovative solutions are commercialized and rewarded; offering the opportunity to our R&D sector to be the best they possibly can be, and using the government’s ability to fund development in a way that improves economic certainty. It’s also about understanding where our country’s competitive advantages lie and leveraging these to create domestic and international wealth.
National has forgotten about the forest industry. It barely rates a mention in any literature, is the poor cousin to farming at the Ministry of Primary Industries, and a lack of any direction has seem the commodity focus take over from a real value-add strategy.
This is a shame to those who understand just how great we could be if only we were given a little support. National really can’t see the wood for the trees; whereas Labour has seen the processing plant full of workers at the end of road in the middle of the forest in the heart of provincial and regional NZ. Thank goodness someone has their eyes open.