Stripped of his housing portfolio, Phil Twyford has to rebuild his political reputation.
Given his spectacular failure with KiwiBuild, PM Jacinda Ardern might have been pardoned for leaving Twyford to work out his redemption in his other portfolio of Transport, which has enough problems of its own to demand the full-time attention of a struggling minister.
But Ardern has entrusted the Economic Development portfolio to Twyford. This has surprised some business leaders, and dismayed others.
NZ’s economic development is suffering from sustained and deep-seated malaise. Labour productivity, or output per hours worked, is around 40% lower than the output per hours worked of international peers. In a recent report the Productivity Commission noted the only members of the 36 countries within the OECD with both a lower productivity level and weaker productivity growth than NZ are Mexico and Greece.
As economic commentator Brian Fallow pointed out, economic problems do not get more fundamental than this, if only for the obvious reason that income has to be earned before it can be spent, or taxed.
“And we are not really very good at doing that”.
NZ suffers from capital shallowness: the capital-labour ratio is low. Since the mid-1990’s it has increased at only half the pace recorded across the Tasman, which explains why Australians are richer than NZers.
The Productivity Commission and other economists have underlined how NZ has lagged in its investment in infrastructure, competition policy, fostering R&D, promoting a healthy innovation policy, and ensuring the education system is geared for the digital age..
So here is Twyford’s first challenge. Fortunately for him, his predecessor with the Economic Development portfolio, David Parker, is handing on some work aimed at spurring industry innovation and lifting productivity
Parker says the flipside of the impact of the technological revolution on the future of work is the huge potential it opens up for businesses and the development of high-skilled, higher paying jobs.
“Growing innovative industries is a key focus of the government’s broader economic strategy.”
A new direction is outlined in the document, From the Knowledge Wave to the Digital Age: Growing Innovative Industries in New Zealand, which also charts the challenges and opportunities the NZ economy is responding to. New Industry Transformation Plans – an idea borrowed from Singapore – will maximise the opportunities offered by the fourth industrial revolution and help move towards a productive, sustainable and inclusive economy.
“The agritech sector has been chosen as a key focus because it brings together two of NZ’s key competitive advantages – our expertise in agriculture and horticulture with our well-educated workforce,”
Parker insists NZ needs to move from volume to value in sectors like agriculture.
“Agritech is an excellent example of where NZ can make big strides. Strategy work is already well underway,”.
In what he says is a call to action, he has urged the agritech sector, innovators and workers to bring their ideas to help develop, in partnership with government, the draft agritech Industry Transformation Plan.
“We expect this and Plans for the other focus sectors – forestry, food and beverage and digital technology – to be implemented from 2020.”
This could be where Twyford, even with the KiwiBuild millstone round his neck, could start to put a bit of polish back on his political record.
Given it is thought 40% of today’s occupations won’t exist in 10 years’ time , AI solutions will play an increasing role in animal husbandry, and agriculture generally.
NZ earns around $37bn from primary sector exports, but with global warming the demand for foodstuffs from temperate zones could soar exponentially.
One of the biggest issues which confronts NZ is gene editing, a science which could make developing new varieties of food crops significantly quicker than traditional methods.
Scientists say new varieties of vegetables, fruit and animals can be produced in months rather than decades. Other countries are already moving ahead with gene editing, but it is opposed, curiously, by Green lobbyists and politicians—even where it might be used for disease prevention or malnutrition in poor countries.
But this is an area where Twyford – with a background in Oxfam – should have the political courage to take the lead. .
Point of Order says: Go to it, Phil.