Waikato leads economic bounce-back – ANZ data shows
After a concerted campaign by economists and journalists to outdo each other with the headlines of doom, gloom and Armageddon we get some data that reflects what we have been seeing when talking to businesses, their accountants and suppliers.
The ANZ Regional Spotlight report prepared by Dot Loves Data in partnership with ANZ, provides a comprehensive overview of Waikato’s economic trajectory, along with its key challenges and emerging opportunities.
ANZ Waikato Regional Spotlight Report | ANZ
There were several points made in the report that require amplification to our members so that they can see that our economy is not as bad as the media make out. Consider the following selected commentary from the report, about the Waikato:
“The data shows that over the past two decades, strong growth in exports, household incomes and business activity has turned the region into both a powerhouse of primary production and a centre for innovation".
Exports continue to be the backbone of the regional economy, with meat and dairy products reinforcing Waikato’s global reputation for high quality food and fibre production.
We are also seeing first-hand a steady diversification into higher value-added activities. Processed foods and niche manufacturing are beginning to play a more prominent role, signalling a shift towards more complex, higher margin production.
This transition is being driven by businesses willing to invest in technology, capability and people. This investment, which includes the types of industrial automation and robotics produced by Waikato-based RML Machinery, has the potential to make our manufacturing sector more resilient and more productive.
With exports exceeding $8.8 billion, Waikato now sits ahead of Canterbury, which recorded $8.7 billion, and behind the larger Auckland region at $11 billion. The region’s next challenge lies in building greater resilience by further expanding its value‑added sectors in line with its regional economic priorities.
Continued development of areas such as processed foods and high‑value manufacturing will help strengthen the regional economy and reduce exposure to swings in global commodity prices. Waikato’s position at the heart of New Zealand’s export economy remains secure, with its scale, production capacity and strong global demand for dairy ensuring it continues to rank among the country’s leading export regions", (Source: Stats NZ (Export)).
Not a bad report card and one that all our members should share within their teams. It will fuel their confidence and their quiet but unshakable belief in our region. Note the word region. This is not a Hamilton story, nor is it a dairy story, it is our Waikato story. The whole of the Waikato region is far greater than the sum of its parts.
Urban polluters
Under current legislation if a consent is breached and pollution occurs then the Waikato Regional Council must prosecute and fine firstly the consent holder, then the human in charge of the consent holder and also any contractors involved in the creation of the work that caused the polluting breach.
Many a civil contractor has been prosecuted and fined, as have many farmers. Has the same enthusiasm to prosecute occurred within with the leaders of our three largest urban areas?
Currently Auckland spews E. Coli on the beaches of the Hauraki Gulf, Christchurch has an ongoing issue with its waste effluent and poor old Wellington has had a running disaster with its sewage culminating in the Moa Point debacle.
Where are the prosecutions?
Is it one rule for urban councils and another for those rural?
We have a bunch of fancy new water authorities. Over the past 30 years, we as a nation have been very lax in cleaning up the urban pollution our big cities cause. With the divestment of water from beneath the council skirts our urban water bills are now going to show how badly previous councilors spent our money.
The new IAWAI directors and managers have already run up a white flag IAWAI: Partnerships key to solving ‘very significant challenges’ | Waikato Times
Make no mistake, you are being prepared for some big water bills.
The Banks are full of cash
With the big farming financial boom, most farmers have been prudent in paying down, if not fully paying off, debt. It was only a few seasons ago that banks were aggressively forcing farmers to pay off their debt. Today they are full of sunshine and roses when talking to farmers but long gone are the days when there was a scramble between neighbours to buy the farm next door.
Banks are flush with cash. Their usual trick of turbo charging the Kiwi residential market, turning us into housing speculators and sending house prices sky high has failed and house prices continue to settle or go sideways.
If you have a good export project, now might be the time to present it to your Bank. It is harder for a bank to review an export banking proposition. Many of the bank staff with that level of expertise left the banks a decade or so ago. But export is where real opportunity lies. A quick read of the ANZ report will confirm the industries they are positive about. They will want to co-invest in export.
The government sees our future in selling overseas and we are helping with connections. The NZ/India FTA has come at a great time. Several of our members have this week been in meetings with the Indian Consul General. Rob is currently in India and no doubt will have a lot to share on his return. If export is something you want to explore, give us a call.
A bouquet to the Waikato Regional Council
In an exemplary move the WRC has held their rate increase under 2%. All other Waikato councils take note, the bar has been set, you must come under that.
We are sure it wasn’t easy and if they had dropped Te Huia it would have been under 1%, but for ratepayers, the election of councilors who have the courage to reduce expenditure to less than income is proving successful.
We do say this with a caveat in that we would hope lower rates increases isn’t because they are keeping the increase artificially low. We know how that has turned out for councils who have kicked the can down the road when it comes to investing in core infrastructure. Hamilton City Council pulled out an increase of under 5% in one year then belted their ratepayers with double digit rates increases. That’s questionable politics.
What every ratepayer wants is rate increases on or under inflation.
It will take courageous local government politicians to deliver this.
Regards
Don Good
