Slides from a

2. 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
Rod.Oram@NZ2050.com / +64 21 444 839

3. Agenda
• Slowth
• Strategy
• Challenges
• Hope

4. Most of our export markets are holding up

5. …but we’re recovering slowly

6. …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?

7. 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

8. 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

9. 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

10. Agenda
• Slowth
• Strategy
• Challenges
• Hope

11. Government
Strategy Mk III
• “Business Growth
Agenda”
• 6 ingredients of
business growth

12. 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

13. Agenda
• Slowth
• Strategy
• Challenges
• Hope

14. 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

15. 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

17. Yes…
…but
• Radical?
• No
• Zero energy?
• No
• Growth?
• No
• Sustainable?
• No
• 21st Century
city?
• No

18. 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

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

20. Affordable housing…for Germans and Swiss

21. 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

22. 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

23. Agenda
• Slowth
• Strategy
• Challenges
• Hope

24. 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

26. Paradox
Abundance Scarcity

27. Poverty
Cows Scientists

28. Poverty
Simplicity Complexity

29. Poverty
LGA, RMA, EEZ Society

30. Poverty
Sustainability
Weak Strong

31. Re-invention
Scarcity Abundance

32. Wealth
Lacto-pharmaceuticals
Milk powder

33. Wealth
Sustainability
Strong Weak

34. Wealth
Complexity Simplicity

35. Wealth
Society.....................LGA, RMA, EEZ

36. …Johnny Rotten:
“You’ll have no future…
…if you don’t make one
for yourself”

37. …Johnny Rotten:
“You’ll have no future…
…if you don’t make one
for yourself”