Speech to the Southland Otago Regional Engineering Collective Summit, 18 April 2024

Hon Andrew Bayly, Minister for Small Business and Manufacturing

At the Southland Otago Regional Engineering Collective (SOREC) Summit, 18 April, Dunedin

Ngā mihi nui, Ko Andrew Bayly aho, Ko Whanganui aho

Good Afternoon and thank you for inviting me to open your summit today.

I am delighted to acknowledge the following people.

• SOREC Advisory Committee =

• Gareth Evans, CE of FARRA Engineering
• Sarah Ramsay, CE of United Machinists
• Mike Todd, GM, Todd Engineering
• Nick Wansink, GM, EB Engineering
• Mark Miller, GM of Progressive Plastics
• Joanna Schmelz, Talent & Acquisition Partner Fisher & Paykel
• Adam Liberatore, Lecturer Otago Polytechnic

• MC Mike Collins, CE Business South
• And a special thank you to Sarah Ramsay, who is not only running a business and on your Advisory Committee, but has been instrumental in helping me establish an independent manufacturing advisory group -more on that later.

• I am truly excited to be appointed New Zealand's first Minister for Manufacturing. There are many great synergies with my other portfolios of Small Business, Statistics, Commerce and Consumer Affairs, and I intent to make the most of these links.

Manufacturing

• The theme of this Summit-Future Proofing Companies in Manufacturing and Engineering-is very timely.

• Manufacturing businesses are critical to building the future of New Zealand. Nationally, you employ 10 percent of our workers, and are responsible for over half of our exports.

• In Southland, manufacturing employs 15.2 per cent of the workforce and contributes 13.4 per cent of regional GDP.
• In Otago, manufacturing employs 7.6 per cent of the workforce and contributes 5.6 per cent of regional GDP.¹

• Manufacturing businesses that succeed are outward focused, high tech, innovative, entrepreneurial, and hustling on the world stage.
• These attributes are essential for New Zealand's future economic success.
• You don't need me to tell you that our manufacturing sector has some challenges. You've been battling inflation, supply chain disruptions, skill shortages, excessive regulation, and an increasingly uncertain global trading environment for years now.
• Manufacturing in New Zealand has been declining as a proportion of GDP, shrinking in seven out of the eight previous quarters.
• In general, New Zealand manufacturers are well behind our overseas competitors in their uptake of new and advanced Industry 4.0 technologies. We need to change this. We need to make it easier for you to invest in machinery and equipment, upskill workers, and benefit from the world-leading R&D that you're so good at.

Government focus

• In her recent speech to the Auckland Chamber of Commerce, the Minister of Finance listed the five things this coalition government will focus on to drive economic growth. They are:

• building infrastructure for growth and resilience
• improving educational achievement and growing skills
• strengthening trade and investment
• promoting innovation, science, and technology, and
• better regulation.

• I know that these are top issues for you as well.
• This government is determined to turn New Zealand's economy around. I'm determined to work with you to ensure manufacturing plays a role in this transformation. As the Minister of Finance said: "Our Government needs business to be walking right alongside us on our growth mission."
• One of the first things I did as the new Minister for Manufacturing, was establish an independent manufacturing advisory group. This is an informal group of over 30 leaders from the manufacturing sector, chaired by Sarah Ramsay. The purpose is to listen to you and understand the barriers you face.
• Together we have identified a set of key priorities for the sector and Government to address in 2024. Our ambition is to boost productivity and performance by finding practical solutions to help you grow your business, attract talent, secure investment, and grow your export market.
• Thank you to those of you here today who have already participated. And thank you to Sarah for taking the lead as our excellent Chair.

• To be truly effective and make real change we need more than just words. This Government is focused on action and my plan for manufacturing is to:

1. Enable the sector to access information more simply and efficiently. To do this:

• We will work with the AMA to create a simplified, centralized digital portal for manufacturers. The portal will pool information about existing Government services in one easy place. This is all about making life simpler. The portal will enable you to spend less time on administration and free up your resources to be more productive and focus on the things that really matter.

1. Uplift the manufacturing sector and raise its profile. To do this:

• I intend improving data collection to better understand how manufacturing contributes to New Zealand's economy, creates jobs, and provides valuable exports. Currently, we simply don't have sufficient data about both the value of manufacturing and the barriers you face. Based on feedback from you about what information is most useful, I am working with Statistics New Zealand to collect a robust set of data that we can use to tell the story of manufacturing in a more compelling way. We need this data to inform common sense policy that supports growth and innovation.
• I intend to use this data so we can championthe importance of manufacturing for New Zealand's future. We need to create a pipeline of skilled workers and to do this I want manufacturing to be top of mind for New Zealand's brightest and most ambitious graduates. My intention is to shift young New Zealanders' perceptions and generate excitement about a career in manufacturing.

1. Improve knowledge sharing and seek out investment opportunities. To do this:

• I am connecting manufacturers through government and business initiatives. A prime example is my recent trip to Sydney and Wollongong in Australia with a delegation from the Heavy Engineering Research Association. This trip was an opportunity to foster trans-Tasman connections and for the Association to see how Australian businesses are using technology to increase productivity.
• I have also initiated bilateral discussions with my counterparts in Australia to explore ways to align manufacturing standards. I'd like to see regulation streamlined so that products manufactured in New Zealand can more easily be exported to Australia. This is all about supporting businesses to grow their market and cut down on unnecessary duplication in regulation.

1. Boost innovation. To do this:

• I have secured funding to triple the number of smart manufacturing assessments carried out in a year. These assessments provide companies with independent analysis on how to improve productivity.
• I am also working with Minister Collins to support the New Zealand Product Accelerator.The Accelerator connects industry with the best science and technology research to assist with product development, problem-solving, and embedding technology innovation. I intend to work with the sector to improve uptake of the Accelerator's services and advice.

• I can't achieve this on my own. I will be working closely with my colleagues in other portfolios like Trade; Tertiary Education and Skills; and Economic Development, Science, Innovation and Technology to drive forward this change.
• This Coalition Government is laser focused on growing our economy, cutting red tape, and making New Zealand a place where businesses can innovate and succeed.
• Already, we have:

• Made it easier to be an employer. We have repealed the Fair Pay Agreement legislation and introduced a Bill so businesses with 20 or more workers can use 90-day trials again.
• Begun work to get New Zealand moving. We have repealed the previous government's resource management legislation and have introduced a Fast-track Approvals Bill so that we can build the infrastructure our economy needs.
• We have committed to building 15, 4-lane Roads of National Significance.
• And we are actively looking to other countries, such as my recent visit to Australia, to grow our trade and export opportunities.

• Encouraging small businesses to adopt e-invoicing and requiring government agencies to pay within 10 working days

Concluding remarks

• Manufacturing will be key to building New Zealand's future economy.
• I am very confident that the manufacturers of Southland and Otago will work through today's challenges and succeed into the future.
• You have local manufacturers that have been in business for 100 years!² You don't achieve that without vision, hard work, and innovation.
• By focusing on future proofing, I'm sure your businesses will be thriving in another 100 years.
• Ernest Rutherford famously said last century: in New Zealand "We haven't the money, so we've got to think".
• I'm looking forward to thinking with you, and working with you, to turn our economy around.

Tēna Kotou Tēna Koutou Tēna Koutou Katoa.