Reinventing Paradise

Rod Oram’s presentation by video to Sustainable Dunedin’s RMA Meeting

Thursday, March 21th, 2013

Why we need a strong RMA… …and LGA, EEZ Act and other laws

Kiwiki on Facebook / Twitter @RodOramNZ

Rod.Oram@NZ2050.com / +64 21 444 839

Agenda

•  Slowth •  Strategy

•  Challenges •  Hope

Most of our export markets are holding up

…but we’re recovering slowly

…we suffer from slowth •  We’re still recovering slowly …

…helped by rebuild of Christchurch

•  Growth could peak at 2.8 % in 2014-15 …dominated by Christchurch

•  But will then sink back to its

long-run slow growth average of less than 2%

•  Why can’t we grow faster,

longer by earning a bigger living in the world economy?

Our economy is constrained •  Despite slow growth, the economy

is constrained by e.g. •  Skills and capital shortages •  Weak business investment •  Limited government investment

•  As a result “potential GDP” (the rate at which the economy can grow without causing inflation) is low

•  Solution: business strategies and investment that build capacity, value, wages…

•  …to grow the economy and living standards faster

We’re growing our exports slowly •  Government programmes and investments are not shifting the needle… •  …e.g. composition, volume and rate of growth of exports are unchanged

What we owe the world •  …likewise our net international liabilities keep getting bigger…. •  …2011 an aberration driven by inflow of earthquake reinsurance payouts •  We are one of the most indebted of developed countries •  We need to earn a bigger living in the world economy… •  …Treasury forecasts no change in our performance

Agenda

•  Slowth •  Strategy

•  Challenges •  Hope

Government Strategy Mk III •  “Business Growth

Agenda” •  6 ingredients of

business growth

Some simple maths •  We need to double the size of the economy in 15 years in real terms •  To maintain its role, the primary sector needs to more than double •  Government wants primary sector to double…grow, say, 10% a year

•  The primary sector can: •  Grow volume a bit…but real physical constraints in New Zealand •  Grow productivity a bit…but historic rate of NZ agricultural productivity

increases about 2% a year •  Benefit a bit from higher world prices…but commodity prices moderated

overseas competition and politics •  Earn a bit of a premium for NZ quality and brand…but it would need to

break free from retailers’ stranglehold •  Stave off overseas competition a bit…but the competition gets ever

better on cost, volume and quality

•  Government’s primary sector strategy: incremental growth of current model •  …but the primary sector’s current commodity model fails on simple maths

Agenda

•  Slowth •  Strategy

•  Challenges •  Hope

Value Creation & Capture

•  1 Fonterra plant in NZ makes infant formula for Pfizer

•  8% Pfizer’s Chinese market share for infant formula

•  US$12bn Nestlé paid for Pfizer’s infant formula brands

= 3 x Fonterra’s net asset value

Urban New Zealand •  As a nation, we largely define ourselves by our rural and wild parts

•  …and we believe rural business underpins the national economy

•  Yet, we’re one of the most urbanised populations in the world •  …87% of us live in towns and cities •  …most people earn livings far removed from the rural economy

•  Our urban places are in trouble…. •  …their built environments are increasingly unsustainable •  …their economies anemic, inward looking

•  Christchurch pre-earthquake had a lot of marginal businesses, buildings •  Auckland mainly serves only its own population •  Wellington’s tourism & events strategy earns little; public sector shrinking •  Dunedin is slipping away •  …and every smaller town has its own story to tell, positives & negatives

•  Challenge: •  Reinvent, reinvigorate our urban communities and economies

Yes…

•  Radical? •  No

•  Zero energy? •  No

•  Growth? •  No

•  Sustainable? •  No

•  21st Century city? •  No

…but

Cities vs. Government •  What our cities want

•  Compact form

•  Public transport

•  Quality urban design

•  Wide choices in housing

•  Power to decide, act

•  Enough investment

•  New economy

•  Sustainability

•  Local democracy

•  What it says we will get

•  Urban sprawl

•  Roads

•  Some urban guidelines

•  Narrow choice in housing

•  Strong central oversight

•  Limited investment

•  Old economy

•  Economy-Environment “balance”

•  Central intervention

Highly centralised spending •  Wellington rules…local initiative suffers •  National has brought a lot of control back to the centre

Affordable housing…for Germans and Swiss

A challenging view on housing •  Why German and Switzerland have stable house prices….

•  …because local governments have financial freedom •  By Oliver Hartwich, executive director, NZ Initiative…

•  …when he was at Policy Exchange in UK •  Details - http://bit.ly/13VFRyG

Our future…and the ultimate challenge

•  NZ Land: 270,000 sq km •  Australia’s 28x NZ

•  NZ Oceans: 5.8m sq km •  5th largest in the world •  Australia’s 1.4x NZ’s

•  Huge responsibility: •  …to nurture •  …to use responsibly •  …to sustain us •  …we get $184bn of ecosystem

services for free

•  We need new values, systems, learning, collaboration: •  …to be sustainable •  …to offer hope to the world

Agenda

•  Slowth •  Strategy

•  Challenges •  Hope

NZ Vision 2050 •  …by a group of young leaders…

•  …under the NZ Business Council for Sustainable Development…

•  …which morphed into Business NZ’s Sustainable Business Council

•  Download at: •  http://www.sbc.org.nz/

projects/vision2050

•  Vision 2050 Global report at: •  http://www.wbcsd.org/

vision2050.aspx

Paradox

Abundance Scarcity

Poverty

Cows Scientists

Poverty

Simplicity Complexity

Poverty

LGA, RMA, EEZ Society

Poverty

Sustainability

Weak Strong

Re-invention

Scarcity Abundance

Wealth

Lacto-pharmaceuticals Milk powder

Wealth

Sustainability

Strong Weak

Wealth

Complexity Simplicity

Wealth

Society.....................LGA, RMA, EEZ

“You’ll have no future…

…if you don’t make one for yourself”

…Johnny Rotten:

“You’ll have no future…

…if you don’t make one for yourself”

…Johnny Rotten: