O’Reilly on resources

Phil O’Reilly writes in the Herald:

As we start 2012, we have an opportunity to earn new wealth and control how it is earned and spent.

New Zealand has come out of the global economic crisis with strengthened markets for our traditional soft commodities, dairy and other foodstuffs, and with more market opportunities for sophisticated manufactured goods.

As before, our prospects depend on how well we do business and exploit those opportunities. But there are also new opportunities emerging. Because of new global economic needs and technologies, our hard commodities – minerals and petroleum – offer outstanding rewards.

And if you are going to whine about people moving to Australia, and the need for more jobs in NZ, then don’t adopt an economic policy of leave it all in the ground.

Our democratic system allows all New Zealanders to have a say over the development of our resources, most of which are owned by the Crown (that is, all of us), and we have a process by which we can tell the Crown what we want.

The process is the review of the Crown Minerals Act being undertaken on behalf of the Crown by the Ministry of Economic Development. …

We should take this opportunity seriously. We should respond not just to the questions in the review but also put forward our views on the big economic questions:

* Which resources, how much and when, should we access?

* Which offer most opportunity to grow high-tech industries with high-skill, high-paid jobs?

* What level of royalties and taxes should be paid by enterprises wishing to access our resources?

* How much transparency should we demand from those enterprises?

* How can we best use the income earned?

* How can we have world-best safety standards?

* How can we ensure the environment is left the same or better afterwards?

These are not vague, feel-good questions – they require information and specific answers. To answer, we can look at other mining countries.

The Greens answer seems to be to say no to any additional mining or drilling. I hope Labour considers a more sophisticated approach.

We shouldn’t look to third-world countries with poor environments and poor law enforcement – countries with the “resource curse”, where over-reliance on natural resources blocks the development of other industries.

We should look at first-world countries where resources play a part in balanced economic growth, creating industries and employment – such as Norway, Australia and Canada.

None of these countries has a perfect record, of course. For example, we would want to avoid poor practice in how local communities are treated. We would want to ensure all New Zealanders reap the benefit.

Norway shows us how much people can benefit from responsible resource use. Norway’s oil revenues play a major part in supporting high-quality health, education and welfare services and infrastructure.

Similarly, our own resources could do an enormous amount to pay for more generous public healthcare, better care for the aged, more teachers, better social services, improved roads, rail infrastructure and so on.

Absolutely. Closing the gap with Australia and ensuring NZers maintain a decent standard of living has no silver bullet to it. It’s doing lots of small to medium things such as improving ports profitability, and growing the minerals sector.

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