Sponsor's Message

As everyone will surely have noticed by now, the price at the pump has just leapt by a significant amount -- despite the NZ dollar being at its strongest level in over seven years.

Although we'll all be aware that it costs a few dollars more to fill up the tank, we will also discover before long that this increase permeates every aspect of our economy. The most obvious side-effect will be an increase in the price of moving goods around the country, or indeed, around the world.

NZ's exporters are already having a tough enough time in the face of a strengthening NZ dollar so the last thing they need is to have the cost of getting their products to the market hoisted as well.

While savvy businesses can pare costs of such things as electricity consumption, labour, etc -- freight costs will always be pretty much beyond their control -- and that has to be a big worry for a small, geographically remote country like New Zealand.

What's worse, an increasing number of people who are very much in a position to make informed comment, are suggesting that the planet's oil reserves are running out much faster than was previously thought. One only has to look at how our own Maui natural gas reserves have petered out well ahead of schedule to see that it is pretty easy to over-estimate the size of such resources.

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As a nation which is so very much reliant on the physical exports of primary produce, we should be worried -- very worried.

If oil prices continue to climb and if the unthinkable should happen in that the planet's reserves start to run out -- we're pretty much stuffed.

Even if we produce the best lamb, beef, apples, timber and dairy products in the world, the massive cost of delivering these goods to markets that are half a world away will price us out of the market.

What's more, thanks to GM/GE, our target markets are looking set to massively boost their own production of food and other primary produce, thus making them even less reliant on our wares.

NZ's chance to compete on quality rather than quantity is already becoming a distant light as it appears we are content to play follow-the-leader in the area of GM/GE. Surely it makes a whole lot more sense for us to remain GM/GE-free, thus retaining a unique selling feature, than to try and compete on volume and cost?

But hang on -- haven't successive governments announced their commitments to building a knowledge economy here in NZ?

Well, as we all know, talk is often cheap -- and that very much appears to be the case with government and the plight of our knowledge industries.

In order kick-start a knowledge economy here we need at least two things:

1. Access to plenty of *true* venture capital
2. Access to an affordable broadband service

Much of the money that could be going into the creation of new knowledge industries is being ploughed into the property market where it actually does nothing at all to earn export dollars or create real wealth.

And then we have the Commerce Commission's decision to burden NZ's hi-tech players with an effective DSL monopoly (albeit at the wholesale level rather than the retail level), something that will guarantee that NZ's broadband prices will remain wildly out of sync with the rest of the developed world.

We still have time to build a KBE here in NZ -- but not much.

If we wait until our traditional exporters are dropping like flies it will be too late. Although we have many very bright people here in NZ who *can* generate masses of valuable intellectual property, if we leave it too late we may find that the only export we have are the very people we need to create a KBE.

The news wires already report that a growing number of Kiwi exporters are near breaking point and the situation looks as if it will only get worse. Helen, Michael, Jim -- the time for action is NOW!

Given the huge surplus that's been accumulated through over-taxing, maybe it's time we introduced some real tax incentives for R&D so as to stimulate private-sector venture capital investment and make it easier for burgeoning KBE companies to get their offerings to market.

Ignore the Commerce Commission's about-face on local loop unbundling and put the interests of TAXPAYERS before those of Theresa and Co.

Now get to it -- actually do what you're being paid so handsomely to do.

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