Rod Oram - Sustainable Dunedin March 2013


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Rod Oram - Sustainable Dunedin March 2013

  1. 1. Rod Oram’s presentation by video to Sustainable Dunedin’s RMA Meeting Thursday, March 21th, 2013 Reinventing Paradise Why we need a strong RMA……and LGA, EEZ Act and other laws Kiwiki on Facebook / Twitter @RodOramNZ / +64 21 444 839
  2. 2. Agenda •  Slowth •  Strategy •  Challenges •  Hope
  3. 3. Most of our export markets are holding up
  4. 4. …but we’re recovering slowly
  5. 5. …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?
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. Agenda •  Slowth •  Strategy •  Challenges •  Hope
  10. 10. GovernmentStrategy Mk III•  “Business Growth Agenda” •  6 ingredients of business growth
  11. 11. 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
  12. 12. Agenda •  Slowth •  Strategy •  Challenges •  Hope
  13. 13. 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
  14. 14. 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
  15. 15. Yes… …but•  Radical? •  No•  Zero energy? •  No•  Growth? •  No•  Sustainable? •  No•  21st Century city? •  No
  16. 16. Cities vs. Government•  What our cities want •  What it says we will get•  Compact form •  Urban sprawl•  Public transport •  Roads•  Quality urban design •  Some urban guidelines•  Wide choices in housing •  Narrow choice in housing•  Power to decide, act •  Strong central oversight•  Enough investment •  Limited investment•  New economy •  Old economy•  Sustainability •  Economy-Environment “balance”•  Local democracy •  Central intervention
  17. 17. Highly centralised spending•  Wellington rules…local initiative suffers•  National has brought a lot of control back to the centre
  18. 18. Affordable housing…for Germans and Swiss
  19. 19. 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 -
  20. 20. 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
  21. 21. Agenda •  Slowth •  Strategy •  Challenges •  Hope
  22. 22. 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: • projects/vision2050•  Vision 2050 Global report at: • vision2050.aspx
  23. 23. ParadoxAbundance Scarcity
  24. 24. PovertyCows Scientists
  25. 25. PovertySimplicity Complexity
  26. 26. PovertyLGA, RMA, EEZ Society
  27. 27. Poverty SustainabilityWeak Strong
  28. 28. Re-inventionScarcity Abundance
  29. 29. WealthLacto-pharmaceuticals Milk powder
  30. 30. Wealth Sustainability Strong Weak
  31. 31. WealthComplexity Simplicity
  32. 32. WealthSociety.....................LGA, RMA, EEZ
  33. 33. …Johnny Rotten: “You’ll have no future… …if you don’t make one for yourself”
  34. 34. …Johnny Rotten: “You’ll have no future… …if you don’t make one for yourself”