Roman Travers: Is mining the best way to boost New Zealand's economy?

Productivity is at all all-time low in New Zealand. Possibly not the most uplifting thing you’ve heard this morning, but sadly, it’s true. 

 In the year ending March 2023, New Zealand saw a drop in labour productivity by 0.9%, marking one of the biggest falls in recent years.  

As a nation, we’ve struggled for decades to improve our productivity levels, despite politicians of all shapes and colours promising solutions. 

One of our leading economists, Doctor Eric Crampton, describes productivity nicely. He says the economy as being a bit like a commercial kitchen. 

If you take the same set of workers, equipment, and ingredients, and reconfigure the kitchen so that everything runs more smoothly and more patrons can be served, that's a productivity increase. 

Coming up with new and tastier recipes using the same amount of ingredients and effort - that's also a productivity increase. 

For economists, productivity isn't about making everyone work harder. 

It's instead about finding better ways of doing things, better processes, and discovering new products and services that provide more value for the same amount of time, effort, and materials. 

So… because we appear to be consistently useless in the productivity kitchen, once again, we’re talking about get rich quick schemes for New Zealand. 

And at the coalface of all the desperation to do better, to make more money and to get New Zealand back in the black - is mining.  

So what’s mining worth to New Zealand? Mining makes a significant contribution to the New Zealand economy, particularly in the regional areas where mining takes place. 

7,000 people are employed in the extractives sector and the economic contribution is $2.61 billion to GDP annually. 

It’s fair to say that mining products make a major contribution to New Zealand and its economy. But how does that compare to tourism? Mining is all about taking, exploiting the land and digging your way to the bottom of a limited commodity. 

Before COVID-19, tourism was New Zealand's largest export industry and delivered $40.9 billion to the country. 40.9 billion - compared to mining with 2.61. 

Tourism made a significant positive impact on many of our regional economies supporting employment by directly employing 8.4 percent of the New Zealand workforce. Mining employs about 7000 people. 

It’s pretty obvious that those numbers could well and truly be increased for mining if we completely lost our collective marbles and allowed more of the massive overseas owned companies to come here and ‘dig baby dig’ or 'drill baby drill' - or to expand on what they’re already doing.

What’s more obvious to me though, is the yet to be realised ability to increase tourism numbers, to get more people interested in coming to New Zealand with their strong currencies, deep pockets, and desire to buy what we have on offer.  

We have to remember that one of the key reasons why tourists want to come here, is that we haven’t yet completely destroyed the ecological aspects that make this great nation so unique and desirable. 

News travels fast - and if we expand upon the very businesses that have left parts of the world looking like a post-apocalyptic movie set, then we effectively kill the kiwi that consistently lays the very large golden eggs.  

Do we want to be compared to the Pilbara Region of Western Australia?  

It’s time we thought about the longevity of tourism and the very limited lifespan of mining, so that we can collectively orchestrate the best path forward economically. For all New Zealanders, not just those who scratch the backs of politicians, with the questionable expectations that follow. 

Tourism is the closest we’ll ever get to making New Zealand rich with the ‘take nothing but photos, le

Episode Transcript

Speaker 1 (00:06):
You're listening to the Sunday Session podcast with Francesca Rudkin
from News talks'b.

Speaker 2 (00:12):
Productivity is at an all time low in New Zealand.
Possibly not the most uplifting thing you've heard this morning,
but sadly it's true. In the year ending March twenty
twenty three, New Zealand saw a drop in labour productivity
by zero point nine percent, marking one of the biggest
falls in recent years. As a nation, we're struggled for
decades to improve our productivity levels, despite politicians of all

(00:33):
shapes and colors promising solutions. One of our leading economists,
doctor Eric Crampton, describes productivity nicely. He says, the economy
is a bit like a commercial kitchen. If you take
the same set of workers, equipment and ingredients and reconfigure
the kitchen so that everything runs more smoothly and more
patrons can be served, that's a productivity increase. Coming up

(00:56):
with new and tastier recipes using the same amount of
ingredients and effort, that's also a productivity increase. For economists,
productivity isn't about making everyone work harder. It's instead about
finding better ways of doing things better processes and discovering
new products and services that provide more value for the
same amount of time, effort and materials. So because we

(01:20):
appear to be consistently useless in the productivity kitchen, once
again we're talking about get rich schemes for New Zealand,
and that the coal face of all that is desperation
to do better, to make more money and get to
New New Zealand back into the black. It's mining, right,
So what's mining worth to New Zealand. Mining makes a

(01:40):
significant contribution to the New Zealand economy, particularly in the
regional areas where mining takes place. Seven thousand people, give
or take, are employed in the extractive sector and the
economic contribution is two point sixty one billion dollars to
GDP annually. It's fair to say that mining products make
a major contribution to New Zealand and its economy. But

(02:01):
how does that compare to tourism. Mining is all about take,
exploiting the land and digging your way to the bottom
of a very limited commodity. Before COVID nineteen, tourism was
New Zealand's biggest export industry and delivered forty point nine
billion dollars to the country forty point nine, compared to
mining with two point sixty one. Tourism made a significant

(02:24):
positive impact on many of our regional economies, supporting unemployment
by directly employing eight point four percent of New Zealand's
workforce mining employees about seven thousand. It's pretty obvious that
those numbers could well and truly be increased for mining
if we completely lost our collective marbles and allowed more
of the massive overseas owned companies to come here and

(02:47):
dig baby dig, or drill baby drill, or to expand
what they're already doing. What's more obvious to me, though,
is the yet to be realized ability to increase tourism
numbers to get more people interested in coming to New
Zealand with their strong currencies, deep pockets, and the desire
to buy what we have to offer. We have to
remember that one of the key reasons why tourists want

(03:10):
to come here is that we haven't completely destroyed the
ecological aspects that make this great nation so unique and desirable.
News travels fast, and if we expand upon the very
business that has left parts of the world looking like
a post apocalyptic movie set, then we effectively kill the
Kiwi that consistently lays the very large golden eggs. Do

(03:31):
we want to be compared to the Pilboro region of
Western Australia. It's time we thought about the longevity of
tourism and the very limited life span of mining, so
that we can collectively orchestrate the best path forward economically
for all New Zealanders, not just those who scratch the
backs of politicians with questionable expectations that follow. Tourism is

(03:53):
the closest we'll ever get to make a New Zealand
rich with the take nothing but photos, leave nothing but
footprints ethos. There's no way the same can be said
about mining. No matter how the industry tries to dress
up the concept. Still get in high heels, given a
coat of makeup or a design address, it's still ugly.
Any increase in mining is quite literally a race to

(04:15):
the bottom.

Speaker 1 (04:16):
For more from the Sunday session with Francesca Rudkin, listen
live to News Talks a B from nine am Sunday,
or follow the podcast on iHeartRadio.