Why innovation matters for our future welfare…

Food & Beverages, in 2012 was a US$21 billion export earner for New Zealand, and made up 10% of New Zealand’s GDP and nearly half of our export earnings. This might sound impressive, but when you look at the table below and realise that the Netherlands, with only one eighth of our land area, out performs us by three to one. Central Government has an aspiration to double export earnings from agribusiness by 2025. The key to this target is to do so in both a sustainable and environmentally acceptable way. The Netherlands data tells us this is possible. At Plant and Food Research Institute, of which I am a Director, our challenge is to champion innovative research to meet this target.

SOURCE: Plant and Food Research Institute

With an expected 9 billion people in the world by 2050, there will be 70% more food required. It is estimated that 70% of fresh water is used for food production, and fresh water is a competitive advantage that New Zealand has over most of the world. This is a huge opportunity for New Zealand. We have the ability to feed about 40 million people, and we are only scratching at the surface in terms of technological and scientific advancement. Currently 25% of the world’s food is lost in the supply chain, primarily from pest and disease. Our Crown Research Institutes are currently looking for ways to meet these challenges, and the future is both exciting and challenging.

It is also important to realise that only 4% of New Zealand’s resources are above the low-tide mark (the offshore Exclusive Economic Zone is 4,000,000 km2, compared with just 263,000 km2 of our above water land area), and this is an area where the Bay of Plenty can hugely contribute. That is why I am so passionate about supporting the work of Professor Chris Battershill at our very own Coastal Marine Research Institute, and why we need to increase the funding there to take advantage of the huge regional potential that exists just off our coastline in our “bay of plenty.” We need to play to our strengths by building long term partnerships between business, local government and central government, and recognise that with large post grievance Maori settlements, iwi should be included as equal as both contributing and receptive partners.

If you have a view on these or any other local government issues, I invite you to email me at andrew@vond.co.nz , or visit www.vond.co.nz

CEO Salary packages have become excessive…

Reading Tuesday’s Bay of Plenty Times, I was shocked to see the level of pay to both Mark Cairns at the Port of Tauranga ($1,464,000), and Vince Hawksworth at Trustpower ($1,359,999). In my opinion these levels are obscene, and reflect poorly on the governance by the Board of Directors concerned. Don’t get me wrong, because I greatly respect the leadership that both Mark and Vince have shown for their respective companies.

The Board of Directors approve the Chief Executive’s salary… but a salary (albeit it including performance bonuses) that is over $1,000,000 in New Zealand, is excessive. I am not against competitive salary rewards, but… Directors will argue that you have to pay these amounts if you want to get top CEO’s. This just isn’t true. We are a small country, filled with innovative and talented leaders, and there is plenty of competitive tension for these top jobs. Unfortunately, we have bred a culture of corporate greed that the average Kiwi just can’t relate to.

Let’s look at Port of Tauranga. This is truly a great company. It has a great strategic vision, and appears incredibly well run. It has grown huge shareholder wealth consistently over the past 20 years, and because of its location is likely to become one of no more than two major hubs for NZ Inc’s future export trade. This is likely to see Port of Tauranga’s net income rise substantially (probably double digit growth annually over the next ten years). The question is “how much of this growth can be attributed to the leadership of the CEO?” Certainly it won’t happen if the strategy isn’t executed effectively, but the strategy to get the Port positioned to take advantage of future port reform has had a long gestation period, and shouldn’t just be credited to the 2015 Management team. This has been a long term strategy that appears to be playing out nicely. So the question is, why should the CEO’s salary package be overly linked to this growth. Will the Directors justify a $3,000,000 salary (in say 5 years time) based on the achievement of this strategy. I hope not. Yes, incentivise performance, but please (Directors) be realistic so that average Kiwis aren’t aggrieved by these outrageous CEO salaries.

If you have a view on these or any other local government issues, I invite you to email me at andrew@vond.co.nz , or visit www.vond.co.nz

What a great place we live in…

It is so easy to be critical, but let’s not forget that we live in the best city, in the best country in the world! Yes I know that our Green cousins criticise government agencies for promoting New Zealand as “100% Pure”, but that is exactly how we are viewed from abroad, and visitors to our country do not go away disappointed. Let’s celebrate what we have – yes it can still be improved, but we are a long way ahead of most places in the world. New Zealand is paradise, and Tauranga is a most special place within that paradise.

Again I should record my appreciation of what we are achieving in the Western Bay. I am looking for much more effectiveness and efficiency in our City, District and Regional Councils, but I do acknowledge the fact that the Bay of Plenty has the highest GDP growth of all regions in the past 12 months. The fact is that we currently still sit below the New Zealand average in GDP per Capita, and Tauranga (with its high retirement population) underperforms the rest of the Bay, so there is no room for complacency.

We have to be ambitious, and this takes vision. Our sub-regional development agency, Priority One appears to have that vision; and it seems to be catching. We have the biggest, and most efficient port in New Zealand; we finally have a signed MOU between Waikato University, BOP Regional Council, Tauranga City and TECT (Tauranga Energy Consumers Trust) to build a bricks and mortar downtown university – a game changer for us all. The Marine Precinct is slowly moving forward, but what we need now is to capitalise on the 2015 Budget initiative of $25m over three years to support the establishment of new privately led regional research institutes, by advocating to fund Chris Battershill’s fledgling Coastal Science Environmental Research Institute into a world’s best Marine Research Institute. The current work that Chris is doing needs funding to ensure that the Bay of Plenty becomes just that. The potential for marine based pharmaceutical discovery is huge, and Professor Battershill is extremely well placed to capitalise on this Budget initiative.

Come on Western Bay – let’s step up and accept the challenge. Good just isn’t enough, we have to always aspire to be the best. We have the climate and the environment, and now we need the vision and the passion to succeed.

If you have a view on these or any other local government issues, I invite you to email me at andrew@vond.co.nz , or visit www.vond.co.nz