Time to cut the cord and let agriculture thrive
OPINION: Tourism Minister Kelvin Davis said last year that tourism was New Zealand’s “largest export earner”, contributing $39 billion to the economy each year and directly employing more than 200,000 people.
Obviously, Covid-19 has upended the tourism sector, so Davis was left with no choice but to announce earlier this week that he has tasked Tourism New Zealand to lead a programme that includes the Ministry of Business, Innovation and Employment, the Department of Conservation, and industry parties to “reimagine the way we govern tourism, how we market domestically and internationally, who we market to, and how we manage visitors when they arrive on our shores”.
Another major sector upended because of Covid-19 is international education. According to the Tertiary Education Commission, international education “contributes $5.1b to the economy and is the country’s fourth largest export earner” – it also supports about 50,000 jobs.
Undoubtedly, our universities and other education providers are worried the cash cow has dried up. Will we see the same number of full fee-paying international students on our campuses post-Covid-19?
* ‘Thank God for farmers’ being the economy’s backbone, says economist
* Coronavirus: Dairy exports in good shape as Canterbury economy battles virus fallout
* Coronavirus: Federated Farmers call on Government to defer a raft of environmental regulations
The New York Times reported that with travel bans and “anger rising among Chinese students and parents at the West’s permissive attitude toward public health, enrolment could plummet in the coming years”.
So, are two of our major export earners out of the game? It seems that could be the case.
Last week, Infrastructure and Regional Economic Development Minister Shane Jones said tourism and international education would no longer be major industries for New Zealand.
He’s right – it might take years for both sectors to bounce back if they bounce back. Also, let’s not forget that businesses and workers who indirectly rely on our tourism and international education sectors will also be affetced.
And just like that, it’s doom and gloom, well, for tourism and international education at least. Further, if we are to believe the recent OECD report about the effect of Covid-19 on economic activity, then New Zealand’s economy is likely to suffer more than most in the OECD.
Although, to be fair, the OECD report did not consider efforts such as the Government’s wage subsidy. So, where to from here?
Sometimes the most obvious answers are right in front of you. In New Zealand’s case, that would be our primary industries of agriculture, horticulture, forestry, and seafood.
The latest forecasts predict the primary sector’s combined export revenue will reach $46.5b for the year ending in June – that’s with Covid-19 taken into account, although that figure should still be treated with caution.
Suffice to say, we are heavily dependent upon our primary sector. In other words, from here on in, it will be the primary sector that’s putting kai on the table.
There’s also the potential to be putting actual kai on tables around the world if the chief economist of the UN Food and Agriculture Organisation is right about a possible global food shortage.
Accordingly, the Government needs to let go of its ideological biases, reset, and do all it can to encourage and grow our primary industries.
A good place to start would be to deregulate anything that hinders production for farmers, growers, foresters and fishers. For example, farmers face significant compliance costs to ensure they’re meeting requirements from the Zero Carbon Bill to freshwater management policies.
Last year, Stuff reported some farmers were choosing to exit the industry rather than pay for compliance costs. I don’t blame them for leaving – farmers have regularly faced the wrath of a holier-than-thou public who demand sustainability but are happy to fly to Bali.
Speaking of deregulation, now is a good time to have that wider conversation given the economic crisis.
With unemployment set to increase, deregulation across the board will assist low-income families because they spend a significant amount of their income on heavily regulated goods and services.
Also, more small businesses will be able to survive this crisis as the cost of compliance is higher for small-to-medium-sized businesses.
Obviously, it makes sense that any programme that removes unnecessary constraints on business can only stimulate and grow the economy – and that’s what we need for post-Covid-19.
Using the Government’s modus operandi, let’s hope it establishes yet another committee, but this time to “reimagine” business without unnecessary constraints, for the sake of us all.
Steve Elers is a senior lecturer at Massey University, who writes a weekly column for Stuff on social and cultural issues. His views are his own and do not represent Massey University.