Regional Employment Summit – Recession proofing your business

Introduction

Thank you for inviting me today.

I'd like to thank you all for coming to this Regional Summit, and contributing your time and ideas.

The Prime Ministers Summit and this Regional Job Summit are about gaining a better understanding of the effects of the downturn on the local economy and to come up with practical initiatives to help retain jobs or develop new opportunities.

Small businesses can be the quickest to react to a change in the market and adapt to meet changed conditions.  It is a strength of New Zealand businesspeople to look for opportunities in areas where previously none existed and we saw through job summit just how broad thinking New Zealanders can be.

Building Sector

The building sector is something of a weather-vane for the economy when it comes to pointing which way the economic wind is blowing.  Most businesses in New Zealand are small to medium sized and many are involved some how in the building industry.

The building and construction sector is important to the  New Zealand Economy

The building and construction sector is important to the New Zealand economy.

It employs around 7.5% of New Zealand's workforce, and contributes more than 5 per cent of GDP.   Over 60% of the growth in Maori employment over the last decade has been in construction. 

The total capital spend in the building and construction sector is more than $20 billion per annum.  It can play a pivotal part in lifting us out of the recession.

The building and construction sector is one of the industries most impacted by the current economic conditions.

The statistics from my portfolio are pretty startling.

Building consent figures show the seasonally adjusted number of new housing units authorised, excluding apartment units, fell 8.2 per cent in January 2009.

This series has been falling in recent months and is now at its lowest level since it began 17 years ago.

While the building and construction sector is one of the industries most impacted by the current economic conditions, I know that across the board businesses are experiences the effects of the downturn.

That's the bad news. I want to focus on the future, the opportunities ahead of us and the positive contribution Government can make.

The Prime Minister's Job Summit and this Regional Employment Summit are about developing new ideas so that we are ready when recovery begins.

The Prime Minister's Job Summit

The Prime Minister's Job Summit identified issues in a number of key work areas to be investigated and developed further with the aim of maintaining and generating jobs. Many were infrastructure-related, some with a building and environmental focus.

Issues I am taking an interest in include:

• the repayment times of creditors to small business. I know that managing cashflow is hard at the best of times and harder still when payment periods get pushed out past 30 days and beyond.


• Actively managing the approval and regulatory processes for major or complex projects


• Streamlining the regulatory process for major projects, and


• Reducing regulatory costs and impediments

The critical issue for the sector is how we can retain enough capacity and skills so we are positioned well for when the upswing comes.

What the Government has already achieved

I am proud of what we have achieved in our first 100 days in office, the Government took several steps to ease the sharpest impacts of the recession, to promote jobs, and to prepare our economy for future growth.

• We introduced a ReStart package to lessen the financial shock of unexpected redundancy.


• We passed legislation to introduce personal tax reductions on 1 April.


• We introduced a major bill to reform the Resource Management Act, to remove some of the barriers to new development, and to reduce costs and compliance for Kiwi businesses and families.


• We announced a package of tax changes to lighten the load on small and medium-sized businesses, to ease cash flow for all businesses and reduce compliance costs.


• We fast-tracked more than half a billion dollars of Government infrastructure projects, including new schools and new state houses.

We are developing further initiatives in our Jobs and Growth plan to protect and grow jobs through the recession, and ensure that New Zealand makes the most of the recovery that will follow.

In conclusion

It is easy to dwell on the negatives but New Zealanders have known difficult times before and we will get through this difficult time like the last - with hard work and determination.

We need to continue to invest in skills and capability and we need to lift productivity. It's important the sector retain critical mass and skills to be able to respond efficiently and quickly to the upswing in demand when it comes.

As a Government we must ensure the conditions are right for you to do business, to capitalise on opportunities when they come.

I believe the initiatives we have already put in place and the measures we intend to take in the coming months will ensure we set the economy on the road to recovery.