Resources
Speech to Local Government Select Committee
Local Government Act 2002 Amendment Bill
Clyde Rogers speech notes
22 July 2010
AucklandPlus Group Manager Clyde Rogers appeared in front of the Local Government and Environment Select Committee on 22 July 2010 in support of EDANZ submission.
What follows are his speech notes.
Introduction
My name is Clyde Rogers, group manager of AucklandPlus, the regional economic development agency for Auckland.
As I stand in front of you, I speak in support of the submission made by EDANZ, the Economic Development Association of NZ. EDANZ represents 13 regions and 50 economic development agencies throughout the country. Its stakeholders are an integral part of council services to their communities, receiving the majority of their funding from local government. They all have a role in facilitating economic development and increasing prosperity in regional and local communities.
The Local Government 2002 Act recognises the important role that local government plays in maintaining or improving the well-being of local communities. Today I would like to focus on the role that local government plays in promoting economic well-being.
In the next ten minutes, I am going to develop why I myself and my EDA colleagues think economic development needs to be considered as part of local government activities, and that this should be reflected in the Local Government Act 2002 Amendment Bill.
The purpose of local economic development
According to the World Bank, the purpose of local economic development is "to build up the economic capacity of a local area to improve its economic future and the quality of life for all". Economic development refers to both an outcome and a set of actions aimed at improving the economic wellbeing of residents.
Few would argue with the fact that business is the main driver of economic growth, or economic prosperity. However I strongly believe that local government has a role to play in economic development, and I am not alone in thinking this. The 2006 UK Lyons Inquiry for example is explicit about the role of local government in economic development. I quote: "Local government is an essential part of our system of government. Its place shaping role... is crucial, particularly to improve satisfaction and well-being through local choice and flexibility, and economic prosperity through close working with business". This sentiment was recently echoed by the Honourable Dr Wayne Mapp who describes economic development agencies [part of local government] as being, I quote, "the vital link between the business and research world".
Local economic development is an activity of local government in all OECD countries, and New Zealand should be no different.
Local knowledge enables local solutions
You might ask why those economic development activities cannot be carried out at a national level, enabling economies of scale and leaving local government to focus on other activities. And to this question, there is a simple answer. Local knowledge is key. It is key because it brings local solutions tailored to local issues and environments. Don't get me wrong, there is a place for national development projects and programmes. But because local development challenges and opportunities vary from place to place, there is also a need for projects at a different spatial scale, be it a neighbourhood, a city or a region. Indeed, one should not expect the same solutions to boost prosperity in Southland, the Hawkes Bay and Auckland.
Let me take a few minutes to remind you of a few success stories that are driven locally:
•· The development of a shared aquaculture research facility and a pipeline to provide access to seawater in Nelson is a step forward to growing the seafood and aquaculture industry towards the government's $1 billion target. The project is driven by a partnership between the regional EDA, private sector and university. It will result in an additional 1000 square metres of shared research and development space and education facilities. These will include wet and dry laboratories spaces, bio-security facilities, offices and an up-graded seawater reticulation system to support land-based aquaculture commercialisation activities. It also provides space for a new Diploma in Aquaculture course, hence enhancing the capability of the industry. The benefits of this particular project are listed on page 5 of the brochure I left with you. It is an impressive project.
•· Another example of a project where the local EDA has made a big difference is in Taranaki. All of New Zealand's oil and gas production (which returns $741m in GDP) is centred in this vibrant little province. Venture Taranaki, a CCO of the New Plymouth District Council, came up with an innovative way to grow the sector, its support industries and the region. Using their local knowledge and connections, Venture Taranaki kicked off the Oil and Gas Specialist Technologies Cluster, which has since led trade missions overseas to grow New Zealand's profile as an industry leader. The cluster has delivered many positive benefits for both the national oil and gas industry and the economy.
•· A project I am especially proud of is the productivity pilot project. 6 companies have recently been taken through an intensive two tiered programme at both senior and shop floor level that transferred knowledge on lean productivity practices. These companies are continuing to reap the benefits with improved profitability and productivity, increased management capability and leadership, better staff engagement and overall improved workplace culture. For example, one company has been able to increase its daily batches from 7 to 10 as a consequence of the programme. This is a leap forward in terms of productivity! We are now taking this pilot to the next stage and targeting 24 Auckland firms and helping them becoming more competitive in order to enter overseas markets by providing funding contribution to help them on their journey.
These are only a few examples. The important point is that they would not have happened without the involvement of local economic development agencies, and the benefits would have been lost.
The Value Added of local economic development activities
To me, the important question is not whether local government should be involved in economic development activities, but how to select projects in a fiscally responsible manner. The question, in the jargon, is: what is the rationale for intervention, what is the market failure[1]? A recent OECD publication on the role of economic development agencies co-authored by Greg Clark, now a regular advisor to both central and local government in NZ, has dedicated an entire chapter on the value-add of development agencies. This is indeed an essential matter, and one very relevant today in the light of the purpose of this bill. Local government is required to carry out activities in a fiscally responsible manner.
Impacts of economic development activities are best gauged on a project by project basis. The projects I mentioned to you earlier all have brought substantial benefits to the local area and the nation as a whole. I would like to reiterate the fact that local government can reasonably act in ways that stimulate economic development.
However, sound and critical analysis of the value of intervention should ensure that public funds are wisely utilised, maximise benefits to business and avoid substituting private sector intervention. Feasibility is not sufficient justification for government action however. As NZ Treasury advocates, one also needs a robust programme of sanity and value testing. In particular, it should be possible to articulate a clear rationale for the intervention.
Economic well-being
While a strong focus of economic development agencies is to improve the capability and productivity of businesses and industries in our regions and districts, we also recognise that economic well-being goes beyond this. Local government's operations impact on economic well-being regardless of whether they carry an economic development function - for example, by investing in infrastructure, and through consenting processes and procurement practices.
Economic development activities remain a small part of what council do - in the case of ARC, it represents 3% of its total 2009/10 budget for example. In Wellington City Council, it is 8%. But those activities deliver tangible economic benefits to local communities.
Conclusion
Local government has an obligation to their rate payers and residents. This obligation is to promote their well-beings. I agree with the purpose of the bill: local government needs to carry its business in a transparent, accountable and fiscally responsible manner. However, it is my view, and that of my colleagues in the EDAs around the country, that this bill takes a narrow view of what consist of council activities. Not withstanding those activities that councils are legally obliged to carry out, for example through the Resources Management Act, other activities provide a net benefit to local communities. Economic development activities are part of those activities.
EDANZ in its submission has recommended that economic development be considered as a key part of council activities, that economic development be included as a core activity of council. We have also recognised, in section 2.3 of our submission, that "there may be potential dangers inherent in circumscribing some services to the exclusion of others." Therefore as a conclusion, and after further reflection, we would like to recommend to this committee that core services be left unspecified in the amendment bill.
ENDS
For further information please contact:
Clyde Rogers, AucklandPlus Group Manager, 09 366 2070 ext. 7070
Samantha Seath, EDANZ Executive Director, 04 978 1292
[1] Market failure is just a convenient label to indicate that markets have not resolved the problem identified. All markets operate in a social context however (eg respect for property rights) which is why it is possible that well conceived interventions can resolve these failures.
Government Announces R,S & T budget
The Prime Minister today announced the research and science component of next weeks budget.
Most Government agencies will see no additional funding in the foreseeable future, but behind Health and Education, Science will get the biggest increase in operating spending in the 2010 Budget. So the main part of the Budget package is a boost in support for business R&D.
Speech by Minister of Research, Science and Technology; Associate Minister of Economic Development, at launch of 'Connecting across the economy'
"The Economic Development Agencies are an important part of New Zealand's support for innovation and economic growth. This publication, "Connecting Across the Economy", that we are launching today is an excellent summary of how New Zealand is working together to help our companies compete in the global marketplace.
Telling these stories is vital if we are to improve our economic performance. The public needs to know just how outstanding many of our businesses are. Businesses themselves need to get a better understanding of the support that is available to help them grow. This publication will give new insights into the tools that businesses can use.As you know, this Government is committed to growing our economy. We see this as the essential first step towards building the sort of nation that we want for ourselves and our children.
Economic growth is easy to talk about. It is harder to achieve.
Today I want to highlight three of the major strategies that this Government is implementing to suit the actions to the words".
Rugby World Cup Update
Rugby World Cup 2011 - and beyond
Following on from the EDANZ board RWC planning sessions, here's an update on our thinking about ways in which EDAs can plan for the RWC2011.
The aim is to ensure local business are equipped and informed about ways to maximise commercial return from the event.
The RWC represents unprecedented economic opportunities for New Zealand and for EDAs to leverage corporate, business and international hosting programmes that will create a catalyst for lasting, positive change across their regions.
The exposure gained will be enormous and offers fantastic opportunities for regional businesses to:
- Identify catalysts for growth
- Develop and extend links with prospective international partners
- Showcase their businesses to overseas companies
- Capitalise on potential long-standing benefits.
Rugby World Cup Media Pack
"2011 will be a milestone year for New Zealand, as we host one of the world's biggest sports events, the Rugby World Cup.
For six weeks New Zealand will be in the international spotlight, with over 60,000 visitors expected to come to our country, and billions more watching the event on television and online.
It will be an unprecedented opportunity to raise our international profile, boost our economy and make lasting gains in trade and tourism."
On the 9th of September 2009 (09/09/09) a number of Initiatives were announced by the Government.
New EDANZ Website Launched!
EDANZ is proud to announce the launch of our new website!
We have pulled together the best from the old EDANZ site and the Proving It site to bring you what we hope will be a place full of helpful information for those working in or interested in the field of economic development.
We welcome you to contact us with any feedback you may have.
Exemption Notice
EDANZ and the Securities Act (Venture Capital Schemes) Exemption Notice 2008
EDANZ holds a Securities Act (Venture Capital Schemes) Exemption Notice 2008 that effectively lowers the cost of raising capital for SME's, enabling companies meeting certain criteria not to issue a prospectus.
Investors and businesses must be registered. There is no cost to being a registered investor, nor is there any obligation to invest. There is a cost to companies that are accepted.
General Links
Australia New Zealand Regional Science Association International Inc (ANZRSAI Inc)
Business Information New Zealand Government Site
Department of Labour (DoL)
EMA - Employers & Manufacturers Association
Foundation for Research, Science and Technology (FORST)
GETS (Government Electronic Tendering System)
International Network for SMEs
LMDA (Labour Market Development Activities)
Local Government New Zealand (LGNZ)
Ministry of Economic Development
Ministry of Foreign Affairs and Trade (MFAT)
Ministry of Pacific Island Affairs (MPIA)
New Zealand Trade and Enterprise (NZTE)
Ministry of Research, Science and Technology (MORST)
Ministry of Social Development (MSD)
New Zealand Association for Migration & Investment
New Zealand Business Council for Sustainable Development
New Zealand Business Excellence Foundation
New Zealand Chamber of Commerce
New Zealand Immigration Service (NZIS)
New Zealand Venture Capital Association
Te Puni Kokiri (TPK)
2009 EDANZ Briefing Paper Available Now!
Partnership for Development
Executive Summary:
EDANZ (the Economic Development Agencies of New Zealand) welcomes the opportunity to present this briefing paper. It provides an introduction to EDANZ and its nationwide network of regional and local economic development agencies (EDAs). The paper outlines the excellent work already being done by EDAs on a daily basis around the country and proposes further areas where EDANZ and its members can add real value to the New Zealand economy and the Government's economic programme.
Economic recovery and progress is the biggest challenge facing all New Zealanders. Economic development is a critical focus for central and local government.
EDANZ and its network of agencies are determined to make a contribution through a new level of partnership and collaboration. We are willing to engage directly about how to further contribute to economic growth. It is our strong belief that by leading the development of regional networks and partnerships we can bring a more collaborative regional approach to economic development, job retention and job growth.
Many EDAs already deliver central government contracts "on the ground' and EDANZ already has a strong track record of connectivity with local and central government agencies including New Zealand Trade and Enterprise (NZTE), the Ministry of Economic Development (MED), the Department of Labour (DoL), the Foundation for Research, Science and Technology (FRST), the Tertiary Education Commission (TEC) and the Ministry of Social Development (MSD). We also enjoy strong partnerships with the Chambers of Commerce and private companies such as Deloitte.
Over the next 18 months, EDANZ and our EDAs intend to focus on six priority areas:
- Improving the Digital Environment
- Rugby World Cup Legacy Project
- Research and Development (TechNZ)
- Productivity and Innovation
- Leadership Development and Skills
- Local Infrastructure.
Beyond these specific priorities, our overarching aim in 2009 is to create a genuine "Partnership for Development" with central and local government. This partnership will see EDANZ and our network of EDAs adding value to national strategies and helping boost economic development by directly delivering assistance around the country.
Because of its unique national coverage, EDANZ can play a pivotal role in facilitating stronger linkages and partnerships to assist process. These connections in turn will help provide an environment for business that supports productivity growth and builds the capability of firms, sectors and regions. It is our intention to be a partner in New Zealand's economic recovery and future prosperity.
View the Full 2009 EDANZ Briefing Paper (PDF - 1MB)