AMERICAN CHAMBER OF COMMERCE IN NEW ZEALAND AGM DINNER

WELLINGTON CLUB

President Jeff Todd, Ambassador Beeman, Immediate Past President Peter Walsh, Jim Law, Directors and Members of the American Chamber of Commerce in New Zealand, ladies and gentlemen.

Thank you Jeff for your warm welcome.

Congratulations on your new appointment. As Ambassador Jo Beeman will confirm, you can only be elected to the White House if you are an American citizen by birth.

But its good to see that a New Zealander can be elected President of the American Chamber of Commerce in New Zealand. I wish you well in your term.

I trust your experience with the Chamber will add lustre to the report Im awaiting from you on retirement income planning!

Ladies and gentlemen, its good to be here tonight. Annual General Meetings of any kind are important - be they of a company, a sports club or - as in your case - of the umbrella organisation for American commerce in New Zealand.

Annual meetings are a chance to reflect on the year past, and to project and plan for the period ahead.

I want to do a little of both this evening.

Since I last spoke to this annual dinner New Zealand has had its first election under MMP.

As predicted by all knowledgeable commentators New Zealand has a Coalition Government which, after a long period of negotiations, has set about its work with energy and enthusiasm.

I make those comments because if one was to measure progress by media coverage you could be led to believe that the only issues are the price of underpants, the cost of taxis and the structure of Parliament Buildings.

Perhaps the most entertaining of all is the sight of the Labour Party, which received only 28 per cent support at the election, telling all and sundry the end is nigh and they are prepared to govern - with who and on whose authority they discretely remain silent.

We should take none of this too seriously.

What we are witnessing is disappointed MPs who, having been denied success, are still unwilling to face up to the demands and dynamics of the new political world the public voted for by referendum in 1993.

I can observe that the Coalition Government is working together on all issues in a spirit of co-operation and I have no doubt, our political opponents notwithstanding, we will comfortably complete our full term.

Theres a great American phrase - making the hard yard.

In baseball, American football, rugby or netball, its that extra bit of sustained effort that makes the difference between going backward, and moving forward, between winning and losing.

Im sure were going to hear a lot about hard yards in two years time when New Zealand defends, and I predict retains, the Americas Cup.

Successful Governments, too, know all about hard yards. About putting in the work to achieve the results we all want.

Right now, in New Zealand, we face an historic responsibility; and an opportunity, to move ahead, to make the hard yards, by securing New Zealands position for the future.

The essential tools for the job are all in place - a stable and orthodox economic policy, an open and competitive economy, and a fair and flexible labour market.

As you know this Coalition Government is committed to a low tax, high reward economy.

We have determined and announced the parameters of the Governments three year spending programme.

These fiscal disciplines are tough and transparent. They sit alongside a continued commitment to price stability, through the Reserve Bank Act, and honest public accounts, through the Fiscal Responsibility Act.

I know of no other Government in the world which has accepted such a degree of rigour and accountability on its own fiscal options.

We have done so for good reason.

The Coalition Government is serious about maintaining sustainable economic and employment growth. We are serious about lifting our national investment in health and education.

We are committed to restoring a balanced partnership between the role of the state, and the responsibilities of family and community.

To that end we will spend time during the next three years talking about how we redefine the states responsibilities to its citizens.

Indeed, the states responsibility to retired citizens, and the cost of that obligation, is already being widely debated.

Alongside that, Governments in countries like ours are all confronted with growing demands on welfare, especially for children and young people, the innocent victims of the breakdown of traditional family structures.

There are no easy answers, as the recent conference Beyond Dependency showed, but we are now at least prepared to debate different approaches and different programmes.

Much attention will be focused on this years Budget.

The accounts will, as has been the case in Budgets of recent years, produce figures that are the envy of many, especially our ability to continue to show a strong surplus and keep repaying the Government debt we inherited from an earlier era.

Producing balanced Budgets requires tight discipline and concentrated effort.

Balanced Budgets would vanish overnight if New Zealand returned to the high spending programmes advocated by other parties.

The very low quarterly inflation figure released yesterday reinforces the success of the Governments prudent approach to economic management.

A Budget is not just a collection of accounts, it is a statement of priorities.

In the Budget you will see our priorities and the Coalitions vision of a better New Zealand.

One challenge facing us all, be we politicians, business people, young or old, is the implications of an ageing population.

From early next century the increasing proportion of elderly will change the dynamics of New Zealand society.

We will move from todays position where there are four in work for every one person in retirement to where there will be only two people in work for every one person over the retirement age.

Put another way, if current policies continue, the percentage of GDP going to fund retirement income will increase from five per cent today to 10 per cent of GDP in the future.

New Zealand has talked about retirement policy for the last 25 years. Yet a sustainable consensus has eluded us.

The future level of national savings, the choices people make between spending now and saving for later, and the investment of savings arising out of any compulsory scheme should this emerge from Septembers referendum, will all influence your future business environment.

But it's more than that. It's about the type of society we want and the level of certainty we can generate to provide New Zealanders with adequate cash income in their retirement.

We are not alone in this immensely important debate. Countries around the world are also grappling with it.

It has fallen to our generation, and my Government, to do something about it here in New Zealand.

We need your active interest and participation in the debate and the September referendum.

Fortunately, we do not face these domestic issues in a vacuum.

For a trading nation like New Zealand, the success of international trade and investment linkages plays a key role in broadening our options for the future.

Our well being and living standards are best served by an international economy which is as open as possible for trade in goods, services and capital.

An open fair system of international trade enables secure markets for exporters, competitive prices for inputs, and access to the technology and human capital needed to invest successfully in new plant, equipment and ideas.

The 1990s have to date seen important progress, at a global and regional level, towards a more open and fair trading system.

Seven years of Uruguay Round multilateral trade negotiations led in 1993 to the adoption of new improved trade rules.

The rules of the new World Trade Organisation - or WTO - secure and improve market access for goods and services, limit agricultural export subsidies for the first time ever, and introduce better procedures for resolving trade disputes.

Last year WTO members also endorsed a work programme for a further round of trade negotiations commencing in 1999/2000.

Over the same time period APEC, the Asia Pacific Economic Cooperation process, has developed rapidly as a regional economic grouping.

Its membership of 18 dynamic and diverse economies around the Pacific Rim generates 46 per cent of the worlds trade and 54 per cent of its output.

Of New Zealands two-way trade, 70 per cent is with APEC economies, as are most of our capital, tourist and immigration flows.

In 1994 APEC adopted the ambitious goal of achieving free and open trade and investment in the region by 2010 for the developed members, and 2020 for the developing members.

In subsequent meetings, most recently in Subic Bay last November, APEC Leaders entered into political commitments to pursue on a voluntary but concerted basis, the lowering of trade barriers.

Each of us tabled an Individual Action Plan - in effect a roadmap of the areas in our economies where we intend to introduce more liberal access over time.

We have also committed ourselves to collective action in such areas as customs co-operation which will lower the costs of commerce in the Asia Pacific region.

The coming two years will be crucial in both APEC and the WTO. The vision of an open system of world trade, based on fair trade rules, now needs to be carried forward in the WTO.

We have made a good start. Now, we need to make the hard yards.

New Zealand will be playing a full part. We know we are too small to exert influence through muscle.

But we can, and will, encourage by example. Economies large or small each face similar pressures when they contemplate sweeping change.

New Zealands experience shows that fundamental reform is politically possible in a democracy; and that a sustained comprehensive approach to reform results in economic and employment growth.

The success of our policies is a continual reminder that well-designed reform actually works.

Moreover, our very smallness means we threaten no-one. So New Zealand is able, in a modest but positive way, to be a generator of ideas for progress in the gatherings of larger economies with whom we have to deal.

In 1999 New Zealand will take up the challenge of Chairing APEC.

For that year, and indeed in both 1998 and 2000, our APEC responsibilities will position us to play a leadership role in maintaining the forward movement of APEC towards its collective vision, and in work aimed at launching a new round of world trade negotiations.

I look forward immensely to that challenge. Taken together with the opening of the Americas Cup Defence, the second MMP General Election, and all the other events leading up to the new millennium, 1999 promises to be an eventful and significant year for New Zealand.

The prospect of a visit to New Zealand by President Clinton and other APEC Leaders, to attend the 1999 APEC Leaders meeting, will be a highlight of that year.

Ive got no doubt that the Presidents contribution in 1999 will underline what we already know and value; namely the key leadership role of the United States.

When I last spoke to your gathering in June 1993, I touched on another aspect of New Zealands links with the US - namely, the vexed issue of our political and security relationship.

I said then that the existing stand-off arising from New Zealands decision to introduce anti-nuclear legislation had gone on far too long - at that time, eight years.

Since then much has changed.

In 1993 I mentioned that I looked forward to the day when the New Zealand Prime Minister was again welcomed in Washington.

That day came in March 1995, and in itself signaled a significant change in approach for which I thank the leadership of President Clinton.

Again in 1993 I highlighted many of the active efforts by New Zealand to make a meaningful contribution to international crises - particularly in peacekeeping roles.

Since then New Zealand has made further contributions, most notably in Bosnia and more latterly in the Middle East with a Royal New Zealand Navy frigate participating alongside US naval vessels, in the Multi-national Interception Force.

I say again to you as I said four years ago, New Zealand has never shirked its responsibilities and is playing its role in international affairs.

There is increasing pressure to lift funding in defence, particularly in the capital area.

That extra investment may be justified, but not in isolation of other moves in our wider international defence relationships.

A shift in US attitudes toward exercising and training involving our two countries defence forces in a multi-lateral setting, would better enable New Zealand defence forces to make a continued contribution in the international arena.

No amount of extra spending can make up for the loss of practical experience of training and working with our friends and allies.

My colleagues, the Minister of Foreign Affairs, Don McKinnon and the Minister of Defence, Paul East, have recently highlighted this problem and made similar calls.

So too, interestingly enough, has General Colin Powell, the former Chairman of the US Joint Chiefs of Staff. When speaking recently in Sydney, he called for a new relationship.

If it is good enough for our navy to work alongside US forces in the Gulf to uphold UN sanctions against aggressor states, then surely the time has come for our forces to be able to train in company with the US and others in times of peace.

The US and New Zealand are good friends with much in common, be it on security issues or trade.

Which is why we take a keen interest in the shape of any new Fast Track Trade Negotiating mandate achieved this year by the Clinton Administration.

Naturally enough, US interest groups monitoring the mandate process will want to see a shared commitment to market opening measures on the part of their trading partners, small as well as large.

If and when they look to New Zealand, the story is a good one; for both economies.

The 1997 United States National Trade Estimates Report released over Easter recognises New Zealands contribution to free trade and suggests that New Zealands open trade and investment policy continues to be a bellwether for regional and global trade and investment liberalisation.

It is no surprise then that New Zealand is a good place for US firms to invest and to do business.

As the American Chamber of Commerce in New Zealand, you can play a dual role as Ambassadors here for US interests and involvement, and in sharing with your Stateside principals, the stability and sensibility of New Zealand and its market.

I welcome your presence and your support here and I extend to you my personal best wishes for a further year of good business in New Zealand.

Thank you.

Ends