• Jim Bolger
Prime Minister


National President Doug Matheson, Young Executive of the Year nominees, distinguished guests, ladies and gentlemen.

Thank you for your invitation to address you this evening.

The New Zealand Institute of Management plays a significant role in constantly improving the level of management skills in New Zealand.

For our economy to continue to succeed in today's tough trading conditions and for our social policy programmes to be effective, requires managers of the highest quality.

I note you have 5514 individual members and 1462 corporate members.

There have been one or two times in the past 12 months when I could have employed a few of your members.

Given that it is 12 months since the last election, it seems appropriate to look back over that interesting, if somewhat turbulent, period and then look at some of the policy issues that challenge the decision-makers.

Many in the media have been reviewing the last 12 months, especially the Coalition Government and the Coalition Agreement signed ten months ago.

The Coalition Agreement can be seen as the big management contract of the decade.

It committed two political parties - National and New Zealand First - who had campaigned on quite different policies, to work together to pursue a common set of goals and implement an agreed set of policies.

As is often the case in management, it was a matter of choosing the best option.

The option of a National - New Zealand First Government in our view was much preferred to a Labour - Alliance - New Zealand First Government.

That was true 12 months ago and is still true today.

What is often overlooked is that a centre-right Government more accurately reflects the sentiments of the voters at the last election.

When you include the eight seats that ACT have, and the one United seat, together with National and New Zealand First - the Parliament has 70 seats on the centre-right compared with only 50 on the left with Labour and the Alliance.

One of the most significant results of the Coalition Agreement was that the five MPs from the Maori electorates are voting with a centre-right Government for the first time in 60 years.

Despite the fact that some of those MPs have been at the centre of controversy over the past 12 months, I still welcome the fact they are working in a centre-right Government.

Further, can I say to voters on the Maori roll, before you rush back to vote Labour, ask what has 60 years of voting Labour achieved for Maori?

The answer is very little.

By comparison, the Coalition Government's commitment to resolve Treaty grievances opens up a new range of possibilities for Maori to move forward.

They have moved from 60 years of grievance under Labour to development and progress under present policies.

More social welfare is not the answer - Treaty settlements, economic development, better education, better healthcare is the way forward, not more welfare cheques.

In recent days the New Zealand Press Association has interviewed the Party leaders on the last 12 months.

Helen Clark believes "the coalition deal signed by National and New Zealand First was fatally flawed".

But she still shows her hurt at not being in Government by talking of the betrayal of New Zealand First going with National - apparently it wouldn't have been a betrayal for them to go with Labour.

She blames the Government, not MMP, for all the difficulties.

Alliance leader Jim Anderton also blames the Government, not MMP.

He bemoans the fact that the Coalition Government officially only has a two seat majority, but forgets the other nine MPs from ACT and United who regularly vote with the Government.

Jim Anderton predictably blames the management of the Coalition for the loss of support for MMP, which is a bit rich since he can't manage the eleven MPs in the Alliance.

Alamein Kopu has left the Alliance to become an independent and the Greens plan to leave.

Despite this he tells us that the Alliance and Labour are already in talks to form a Coalition after the next election.

Those people that are worried about New Zealand First in Government should be petrified at the thought of the Alliance group holding the balance of power.

ACT leader, Richard Prebble, while bemoaning in his comments that New Zealand First was a populist party, is a dab hand at it himself.

He even persuaded himself to oppose the demolition of old Broadcasting House to gain populist support, forgetting that earlier he had recommended the demolition of Parliament House itself, except for the facade.

His colleague, Rodney Hide, has both supported the moving of the Beehive and opposed it in the same week, depending on his judgement of which side the public supported.

Away from these sideshows, ACT have supported the Government on all major policy issues in Parliament.

I welcome that, particularly their commitment to support the Government on confidence and supply.

Mr Prebble, however, believes that a National-led minority Government would be better.

I disagree as that would lead to greater instability and of course more behind the scenes deal-making to pass legislation.

Jim Anderton has a similar theory, and advanced the scenario that if the Alliance wanted the Reserve Bank Act scrapped and Labour didn't, they would both campaign on their respective policies and let Parliament decide.

If that is how a Labour - Alliance Government would operate, then instability and chaos would reign because no investor, local or international, would know what the Government's policy was on key issues from one day to the next.

Richard Prebble believes, given the inexperience of New Zealand First MPs, that the Government will have failed within a year.

His backbench colleague, Owen Jennings, drawing on his year's experience, believes I will rip up the Coalition Agreement and hold an election early in the new year.


The Coalition Agreement will remain the framework document of the Coalition, but as has already been shown, neither Winston Peters nor I see it as a straitjacket.

Not all issues are covered, every event couldn't be foreseen and if a better way of advancing New Zealand comes forward, then we are both prepared to consider it.

I am sorry to disappoint them all, I intend to ensure that the Government goes its full term and, as in the past, I will welcome constructive support from ACT and United.

The views of the leader of our coalition partner, Winston Peters, after 12 months captured the thoughts of many when he said: "We all are capable of learning from our operations, our mistakes and improving our performance. New Zealand First is no different."

He singled out two areas - listening to the constituency and communicating.

Mr Peters confirmed the Coalition worked well, but acknowledged that he did have an inexperienced team which were put under intense media scrutiny.

Those are the many and varied views of the political scene 12 months after the last election, as seen by the other political leaders.

I told my team after the '96 election that we could lead the first Government under MMP, if we negotiated wisely.

One year on, despite some difficulties and distractions, I am very pleased that we have had the opportunity to carry forward our programme to modernise New Zealand.

On proven progress it's been a good year.

A strong economy is the key to a strong country with strong social policies, and here the message is very good.

The New Zealand economy returned to strong growth in the June quarter which showed growth of 1.2 per cent - the highest quarterly growth figure since September 1994.

A measure of the strength of the new economy is that the 1.2 per cent growth for the June quarter was higher than the average annual growth rate between 1975 - 1990, during the Muldoon, Lange, Palmer and Moore Administrations.

And in the six years to June 1997 the New Zealand economy grew on average at slightly over three per cent per annum.

By comparison the United States' average growth in the same period was only 2.7 per cent per annum.

Another measure of the scale of New Zealand's improvement, and why we mustn't be distracted by critics, is that New Zealand has grown more in the last four and a half years than we achieved in the previous fifteen and a half years.

Our growth is an excellent and enviable rate for a developed economy over a full business cycle.

As the Reserve Bank Governor Don Brash said in Auckland recently, a successful economy must show the stamina of the marathon runner.

The occasional sprint may look good but it is the long distance haul that counts.

And that is what we are achieving.

To maintain the forward momentum the Government must look at all its own activities to ensure value for money from every dollar it spends and every asset it owns.

Improving the efficiency of public spending improves the efficiency of the whole economy.

As you know, I have signalled a review of whether we should retain some nominated assets in the State's hands.

The work is being done on that now, but I can see few reasons why the State should retain ownership of a commercial property company, shares in airports or the ownership of television stations.

There are better ways to spend taxpayers' money than investing in the technology for digital television.

I would rather spend that money on technology for schools or hospitals.

My message is that we mustn't be frightened of change.

To modernise and build a better country we need to make change our friend.

We are now working to modernise our education and health systems that require change.

Schools are the most important institution in any community.

Our direct resourcing option is to give school communities a more direct say in how education dollars are spent.

I am sick and tired of bullying tactics by teacher union leaders that prevent communities having a real say in the education of our children.

I cannot understand why the teacher union leadership doesn't come into the modern world and welcome more community involvement in how we organise our schools and how we spend money in educating our children.

To achieve excellence in education requires three ingredients: appropriate resources, quality teachers and enthusiastic community involvement.

Government policy aims to achieve all three.

The big resource and management debate of the moment is health.

In truth it has been the big debate since I entered Parliament.

The campaign of 1975 was dominated by two social issues - superannuation and the December 1974 Labour White Paper on Health.

There was also a huge debate on health when Labour leader Helen Clark was Minister of Health before the 1990 election.

The reasons the debate has gone on for so long are many.

One is the sheer complexity of healthcare which increases daily.

Then there has been a general unwillingness of professional health organisations to be seen alongside politicians taking a public leadership role to set out why we have to modernise the delivery of healthcare, and why large old hospitals in certain locations will not be needed in their present form to deliver care.

Those health professionals who have grasped the mettle will bring to their communities viable modern health services on which those communities can rely, after years of uncertainty.

Thirdly, we have allowed an artificial barrier between so-called public and private healthcare to exist.

The facts are most people receive their healthcare from private practitioners and providers called GPs, specialists, midwives, chemists, Plunket and so on.

These services are subsidised by the taxpayer.

Fourthly, health stories make good copy for Opposition parties and the media - emotions are easy to play on.

Finally, Governments haven't been clear enough early enough, on what would be provided and where in a modern health system.

We are fortunate that the present Minister of Health, Bill English - whose wife is a doctor - is prepared to front the public and in a very commonsense way set out the options in an understandable manner.

I fully support him in that.

The sooner uncertainty is removed the better.

We should welcome the fact that modern healthcare means we need far fewer hospital beds and smaller hospitals.

That day surgery can replace days or weeks in hospital.

That modern drugs can allow people to live in the community rather than in hospitals or institutions.

Modern healthcare is expensive, so the community should demand there is no waste in the public or private systems, and that old hospital facilities that are not needed are closed down.

Modern management practices should be the norm.

I am pleased to report that away from the headlines considerable progress is being made.

Communities are coming together and working with local doctors and other health professionals, with representatives from CHE's and the now single funding agency, to determine what is appropriate for their community and how the public and private sectors might work together.

In a number of smaller rural communities such proposals are either in place or well advanced.

Others, like the Wairau Hospital in Blenheim will soon put forward an integrated healthcare proposal to service the Marlborough community.

The plan proposes setting up a non-profit making trust which would manage all the primary and secondary health revenue streams and service delivery.

The plan would lead to significant service delivery changes whilst retaining the current level of service, even though there would be fewer beds and fewer staff.

Last week I opened the $25 million SuperClinic in Manukau City.

It is a totally new and totally modern way to meet some of the health needs of a modern city.

I think it fair to say there is emerging broad agreement on the configuration and service delivery for rural hospitals, depending on distance from larger centres.

The large metropolitan-based hospitals will change to effectively meet all the demands placed on them.

Perhaps the most difficult group to define size and service for is provincial city hospitals.

But if we stop shouting and start talking we would quickly determine what is appropriate in all circumstances.

Clinical safety will be a key determinant as to whether some services can remain or not.

The necessary changes are not cheap - some $630 million has been allocated for capital upgrade and rebuilds over the next three years.

Whatever mistakes have been made reforming the health system over the past 25 years can't be changed, but we can learn from them just as we have in economic policy.

Our economic policy is in tune with a modern society open to world competition.

We must achieve the same in key social areas like education and health.

My ambition is to help build a country that will be seen as a model for the 21st century.

A country that knows there is no free lunch in the world and no free services at home, it is only a question of who pays for them and how.

Building a modern New Zealand will require all the management skills of the members of the Institute of Management and all the skills of talented young New Zealanders like your 1997 Young Executive of the year.

Thank you.