Building sustainability into regional economic development

Speech to Local Government NZ national council meeting, Local Government Offices, Lambton Quay, Wellington.

Thank you for the opportunity to talk to the National Council of Local Government New Zealand today.

I know that many of you will have had some input into the new regional economic development policy process via Local Government New Zealand. Let me take this opportunity to thank you for your input and more broadly, to acknowledge the critical role you play in the economic development equation.

Today I want to focus on the broader intentions of the regional economic development policy and how this links to the government's economic transformation work, before looking at some of the opportunities ahead.

The Labour-led government is committed to growing globally competitive New Zealand firms of sufficient size and scale - we have to if we are to grow into an export-led and high-wage country.

To get there, we need to continue to strengthen the environment for business where our firms can develop, prosper and compete internationally. Many government initiatives have been aimed at this - from the business tax cuts and research and development tax credits, to our skills strategy, our market development support for firms and our work on infrastructure around the country, to name a few.

Export Year 07 is another important initiative aimed at building a platform for long-term exporting growth, and also aimed at getting more firms into the export mindset. Numerous regional export groups are now operating at the regional level to bring exporters together and provide resources to facilitate exporting.

It's good to see that local businesses and business organisations really starting to come to grip with the benefits of this sort of collaboration - which is also an important focus of the new regional economic development policy.

The key players in regional economies - central and local government organisations, business and industry organisations, local iwi, individual firms, researchers, tertiary and training providers do need to work together when it comes to regional economic development.

It is important for regions to develop their own regional economic strategies to sharpen the focus on activities of significant regional and national priority, scale and commercial focus.

With this in mind, two new funds are now operating under the government's regional economic development policy - the Regional Strategy Fund and the Enterprising Partnerships Fund.

The Regional Strategy Fund provides each of the 14 regions up to $750,000 over 3 years to develop regional economic development strategies that will deliver practical results in terms of the development and retention of globally competitive firms, and to implement key actions under that strategy.

The Enterprising Partnerships Fund, which replaces the previous major regional initiative scheme, will fund initiatives of real scale.

It represents an excellent opportunity for regions to demonstrate their ability to think innovatively, to ratchet up the development of key areas of economic strength, and to think about how they can support internationally competitive clusters of activity.

Local government can play a key leadership role here in making this happen and getting solid buy-in - by engaging with all the players and helping them to adopt what may be new ways of working together, while focussing on areas where a region can make the greatest impact in terms of scale, using its existing strengths and resources and seizing on emerging opportunities. Linking up with other planning in areas such as transport, energy, and digital infrastructure can also be important.

A large number of our regions are already thinking and acting for scale, and are accruing real benefits from doing so.

There are numerous examples of this: the Auckland Metro Plan, One Way Southland, the Wellington Regional Strategy, the Strategy for the Sustainable Economic Development of Northland to name a few.

Finally, I want to stress that it is also vital to focus on environmental sustainability as an important part of economic development they are becoming increasingly interdependent. If your industry sectors are not operating in a sustainable way, then you will risk turning off local and offshore customers.

Just look at people's increasing focus on foodmiles and the carbon footprint of anything anyone does or produces. New Zealand can not afford to ignore these developments.

Tackling climate change is an opportunity to protect our environment, to improve our quality of life AND to give our businesses a competitive edge.

That is why the Labour-led government is taking leadership in this area through a range of initiatives including the emissions trading scheme announced last week, significant investments in public transport, the focus on renewable energy and the development of new energy and energy efficiency strategies.

Any economic strategy - nationally, regionally, locally or otherwise - must look at addressing the climate change issue not only because it's an absolute necessity, but also because it is a huge and real economic opportunity.

Taking the lead here will also help us protect New Zealand's 'clean, green' branding in the international market place and it will ease our vulnerability as a primary producer.

I think opportunities such as these offer real potential benefits to your local and regional economies, and ultimately to the country. I'd encourage you to think about, and work with your business communities, to identify opportunities presented by growing international awareness of environmental issues that your region can take advantage of.

This is the basis upon which we can create a high quality and high wage living environment for our communities, which benefits us all - both regionally and nationally.

Thank you for your time.