TO AUCKLAND CHAMBER OF COMMERCEPrime Minister
Michael Barnett, David Truscott, ladies and gentlemen.
Thank you for turning out in such numbers in Auckland, given that there is so much happening around New Zealand before Christmas.
I value this opportunity to share with you some of the things that I think are important from the Government's point of view and hopefully some of the things that are important to you as well.
On one of the first days that I had the opportunity as the Leader-elect for the National Party I had the flourishing company of Tony O'Reilly.
He came through my office like a whirlwind and he said with great gusto and enthusiasm that, in his opinion, New Zealand was still the best place in the world to do business.
He went on to argue that New Zealanders in his experience, and leaders in particular, didn't champion this issue enough and he said to me that he thought we needed to stand up and say why we thought we should continue to attract new business to our country and to talk about what our comparative advantages are.
Today I think it's important that you and I, as New Zealanders, acknowledge that there are significant comparative advantages that we now have - hard fought for over the last 12 years - that make us stand apart compared with many other countries.
Today I want to just talk a little bit about the politics of politics, and the politics of policy that you can expect to see next year that will allow us as New Zealanders to stand up and continue to say that New Zealand is one of the best places in the world to do business and hopefully continue to attract your confidence and the confidence of others.
I don't think that there is anyone in the political scene who wouldn't argue that 1997 has been a difficult and demanding year.
At the end of it I want to say a number of things.
It's been a year where experience has been acquired and growth has occurred.
It's been a year where Coalition Government's become a reality, not only for those in politics, but for all of us.
You, as business people, getting used to politics being managed in a different way.
The politicians in Parliament and dare I say it, the media who have been used to things being simple, suddenly having to learn that things are more complex than they appear.
It's been a year in which, as it ends, we need to acknowledge the contribution of the previous Prime Minister, the Rt Hon Jim Bolger, a person who I think has guided New Zealand through a period of extremely important economic and social reform and also the period of transition through MMP.
But it's also a year in which the National Party determined that to continue to be one of the main governing parties in New Zealand, dare I say it, the main governing party in New Zealand, we decided that for the future it was important to deal with the leadership.
As we come to the end of this year those matters are behind us and I think the politicians, particularly in the Coalition, are more able to say that we are capable of governing in your interest and in the public interest.
And as this year ends and the new year begins you can expect some new things from us.
You can expect to see a relationship that's matured and that is much more able to focus on what we have in common rather than what divides us.
You can expect to see a Coalition that's mature enough to argue, both in public and with the media that The Coalition Agreement, while still extremely important in terms of being the basis of the Government programme, is not a straight-jacket.
It does not limit our ability to govern effectively but rather is a starting point of important ideas and shared values that are the basis upon which the National and New Zealand First teams will continue to make progress.
You can expect to see some different styles of management.
If we are going to make Coalition Government work we have to be prepared to mould people into teams in a way which we haven't been used to doing in politics up until now.
But more importantly than that, if we are to continue to deliver economic reform and an efficient, effective and competitive economic environment for New Zealanders the Economic Ministers and the Social Policy Ministers working together to advance New Zealanders' interests will be a key feature of politics next year.
There are also important issues within the programme.
I know that a number of you have doubted whether Coalition Government could continue to deliver the issues that are important if we are to remain one of the competitive economies in the South Pacific and the Asian Pacific region.
I want to say to you today that I am absolutely confident that we not only can continue to deliver but indeed pick up some pace which I know that many of you have been looking for.
The other issue that I know is on your mind is whether the Government will keep its fiscal house in order.
While many of you have argued with myself and others that $5billion was $5billion too much, in your opinion, can I say to you that if we do not spend money on the social concerns of New Zealanders, you not only won't have a National/New Zealand First Government, you will have a Government that is hell bent on spending a great deal more than that to the detriment of business and New Zealanders alike.
This Coalition is committed to staying within the $5billion fiscal constraints that we have set ourselves.
We do believe that it can be managed in economic terms but also that it is crucial as we try to meet the social concerns that many New Zealanders are feeling keenly in New Zealand today.
And there are other aspects of the programme that are important.
As you are aware the ACC announcements in recent weeks do lay down a new direction for the Accident Compensation scheme.
Many of you have argued that you want increased competition visible in that Corporation's performance.
That is not possible until we deal with the issue of full funding.
Both the issues of full funding and increased competition are commitments that this Coalition has made and you will see detail in both March and May come further in terms of what can be expected, particularly in relation to accredited employers and self employed.
You will see further initiatives in the area of regulation.
My colleague John Luxton, announced yesterday what he calls his "six-pack".
His "six-pack" is a serious attempt to try and make the structure of government and its associated bureaucracy face up to the question when we impose regulations on you in business or on others.
As to whether or not the cost of that imposition is less than, or greater than, the benefits that the regulation is purported to deliver.
The Government took a decision in recent weeks that we will introduce a Regulatory Responsibility Bill next year.
You will see it in May and it should be seen alongside the Fiscal Responsibility Act and the Reserve Bank Act in terms of its importance in seeing that business and the business of Government are not getting in each other's road.
There are also some commitments in that regulatory review to look at some key areas of legislation and cost.
In particular the Building Act and the Human Rights Act will face early consideration as to whether the associated costs exceed, or are less than, the benefits of that those original provisions sought to achieve.
In the third area of policy importance you will see further progress on electricity reform.
The Government is determined to see that at the generator, at the transmission and at the supply levels we are extracting the maximum efficiency and performance in the interests of users and consumers.
While the electricity reform to date has been important most of the Ministers, Ministers of SOEs and the Minister of Energy, are not satisfied that New Zealand energy users are getting the full potential benefits of this reform.
While it remains contentious as to whether or not we should split up the generator the Government will decide solely on whether or not the net benefit to the economy of splitting the generator exceeds the actual cost to the company of that division.
If it proves that there is a net benefit to the economy we will proceed to split the generator.
You can expect to see final decisions on the package of measures in the energy area in mid-February.
These are all key issues and there are many others that are important to business in Auckland as well as businesses in other parts of New Zealand.
But there are some key issues that the Government has clearly in its sights that are of particular importance to Auckland.
Last week my colleague, Maurice Williamson, released the Roading Advisory Group's report on New Zealand land transport for the future.
I want to comment about the contribution that the Mayors and the Chairs of the Regional Council from the Auckland region and their respective senior officials have made to this project.
This city comes with something of a reputation of never being able to get your key leaders to agree on too many things.
I want to acknowledge that the key leaders of your cities and your regional councils have put their differences aside and in fact have led the important debate of how we can bring the road transport system in New Zealand to such a state that it is matching economic development in growth.
I am grateful to the leadership of this city in terms of its foresight and its determination.
There are short-term issues and long-term issues to do with roading which the roading reform will be able to unlock in terms of solutions.
It is still a demanding issue and I encourage any of you who have an interest in it, either as industry users or as local body decisionmakers, to take the opportunity in the next seven weeks to comment finally on the RAG report.
The Government will be taking decisions on this.
Because the Government has already taken this decision in principle, inevitably we will be moving to a more businesslike approach to land transport and its development in New Zealand.
The second issue of importance is the future of the Auckland Regional Services Trust.
I know that many of you feel we have been talking about this issue for rather a long time and seem to be struggling to come to decisions.
I'm pleased to say to you that we are in the final phase of this decisionmaking track and again in the third week of February I expect that the Minister responsible will be able to announce the final set of decisions.
Many of you have put submissions in on what you believe should be done in terms of this asset that clearly belongs to the people of Auckland.
It is very important that this decision is made well.
It is important not only for individuals but for your region collectively.
The third area of importance is the issue of the future ownership of airports.
My colleague, Tony Ryall the Minister of SOEs, has today reiterated the Minister of Finance and my own commitment that the Government does not see itself in the medium term as being a major owner of airports.
We clearly have better things to do with the capital that are of greater value to New Zealanders, but quite frankly there are others who are equally able to invest in the important infrastructural businesses and next year we will be looking to give New Zealanders a much greater opportunity to invest in these important utilities.
In the area of education and health there has also been important progress made in Auckland.
I don't have to tell you that you have been going through a period of sustained population growth.
Many of your Members of Parliament have argued very strongly that we have not been keeping up with the sort of investment that you have required until very recently.
And I am pleased to say that the announcements that were made earlier this year are now seeing a significant number of schools and classrooms added to the teaching network in this district.
They are important steps forward in terms of progress.
The health announcements today that show that we are prepared to take money from areas that have historically been over funded and bring it into regions where you have not had your share of the health dollars, we are prepared to face up to the politics of those issues and see that Auckland gets its share.
You do have senior Ministers representing you.
My good friend and colleague Bill Birch who, dare I say it, I have learnt many of my political skills and tricks from.
Also my colleagues, Maurice Williamson and Doug Graham and also Don McKinnon and Murray McCully.
These are key players in the New Zealand Cabinet.
They are people who articulate the Auckland regional view at the Cabinet table.
The Cabinet is aware that Auckland is important to New Zealand, just as the rural and provincial infrastructure and people are important to Auckland.
Can I say to you today you will see your share of Ministers and your share of attention over the next two years.
But I also want to reiterate here that New Zealand, if it wishes to be a successful economy, needs to recognise that the futures of all our New Zealand people are inextricably inter-related.
That urban and rural people together need to look to see that their future is secured by good public policy that serves both groups in terms of their interest and their future.
The only cautionary note I want to make today in my comments in terms of the sort of pace in economic development and reform that you can expect to see, is the issue of the risk of domestic demand getting away on us.
Many of you are exporters and it is very important for us to recognise as a nation that the wealth we enjoy today has been mainly secured because we have been successful traders.
One of the risks that we need to be aware of is that domestic demand if it takes off in an inappropriate way particularly through wage increases that cannot be justified for productivity reasons or performance reasons, will pose risks which are serious in the medium term.
I think that all New Zealanders, those involved in the domestic economy and those involved in the international economy, need to both understand, champion and speak up about this issue.
We have been through periods in the past where we took our eye off that issue.
We cannot afford to do that at the moment, particularly when the clouds of Asia are so visible and yet not clearly understood in terms of what it may lead to in the future.
It is my opinion and certainly it is the opinion of the Ministers of the Coalition Government that the New Zealand economy is in a recovery phase.
Even this morning we have had the OECD saying that we can expect to see significant growth.
For all that, many New Zealanders would argue that it's finely balanced.
That we can't be complacent.
That we can't take our eye off the ball and we most certainly cannot ignore some of the international trends that are so visible.
However, we must not be spooked either.
The economies of Asia are much less orderly than our economy and the way we manage it in New Zealand.
The books in New Zealand are as they are because of the Fiscal Responsibility Act and so on.
The international investors do not need to doubt whether or not the public accounts actually represent the facts from their point of view.
Clearly that is not the case in Asia and we do need to speak up in terms of what is our comparative advantage in this regard as well.
Ladies and gentlemen, I love politics.
Particularly when I feel that we can make a serious and real difference.
I am determined that over the coming months you will see real progress again in our country on things that are important to you.
Those of you in business, those of you who have a community interest and those of you who are leaders.
The Coalition is determined to see that we continue to perform well so that you can rely on us.
But we also intend to flush out those other political parties who up until now have not been forced to say what they stand for, but rather are keen to say what they are against.
Thank goodness for the Fiscal Responsibility Act which does require all political parties to justify how they are going to fund those things that they are saying to New Zealanders are affordable.
I look forward with relish to next year's political environment where we will see a contest of ideas.
A contest of the ability of groups of people to perform and deliver and I hope an increased interest by New Zealanders in whether or not the political process is both valued and relevant to them.
Some weeks ago Michael Barnett sent me a card.
He was very kind to do so.
It was one of those splendid cards with a photograph on the front.
It had an eagle and underneath the eagle it had the following quote written:
"Leaders, like eagles, don't flock. You find them one at a time."
I was flattered to receive this card and I hope that my leadership of our country proves to be worthy of that confidence.
But my message to you today is that it is not always true that leadership is something that rests with one individual.
Leadership is required of all of us in New Zealand if we are to instil again the confidence that has been characteristic of the last decade and a bit.
And I want to put to you that while I, as the Leader of the National Party and the Leader of our country can see that we do our share to instil confidence, it is beholden upon each of us as New Zealanders to think about how we can lead and contribute to this increased confidence that is so very essential if we are to succeed together.
We need the confidence, for example, to consider where the next risk or opportunity lies and take the next decision to invest in that new business to create the next set of jobs for New Zealanders.
Many of you are good at it but some of you, I know, have been sitting back because you are not confident that either Government or the wider economic environment is conducive.
Leadership is required in this area.
We need to have the confidence to get like-minded people together where they can hub and share both their skills and knowledge and enthusiasm.
For we know that opportunity and enthusiasm goes together.
Auckland has demonstrated that historically and I want to encourage you again to think about what you individually in your businesses can do to generate that confidence.
But we also need the confidence to encourage New Zealanders to get into the public debate and one of those debates is to actually champion the fact that business contributes to the well being of our nation.
There are some who argue that business does quite the opposite and yet the prosperity we enjoy today is there because we have generated wealth in this country so we have something to share.
If you and I are not prepared to champion and bring confidence to this debate we cannot look our children in the face and guarantee them a prosperous future.
I encourage you to stare down those who are negative, those who hate the tall poppies, those who can't see above the horizon, and have the confidence to talk this issue up because it is very important to the future of business and to the future of New Zealand's success.
But there are other issues of confidence that are crucial if we are to do well.
I think you and I as New Zealanders have almost cracked how we need to run a successful economy.
To be honest there is not that much public policy debate around this question.
And yet there is still a serious malaise as to whether or not we have the confidence to address the other side of the equation.
Some argue that you do that by simply throwing more money collected from the middle class who often are prepared to part with it to appease a guilty conscience.
I want to say to you that simply spending in the social policy area won't necessarily make New Zealand a better place than it is today.
Six of the seven years in which I have been a Minister responsible for key social policy areas we have spent more and more of New Zealanders' hard earned cash.
I put to you, have we convinced New Zealanders that they are more and more able to cope with the social issues that still concern them?
It seems to me that if we are to have confidence in our future we need to grasp the social policy debate with both hands.
And there are some elements that are unavoidable.
They are not just spending or reprioritisation questions.
They include the contentious issues of:
What is the role of Government and what is the role of the New Zealand family?
What is the balance between Human Rights and the questions of personal responsibility and individual responsibility?
Where does the question of privacy rest against the issue of the public interest and the public good and have we got that line right?
Are we comfortable with the arguments of universal provision of health services, for example, against the merits of targeting?
Many people say they want more health services.
Few are prepared to say they want increased taxes to fund them.
Some are prepared to say they want reprioritisation in Government spending.
But, ladies and gentlemen, reprioritisation means you have to be prepared to ask the hard questions of whether or not, for example, universal provision is either credible or realistic given the scale of the problems that are there and the need for us to create a low tax environment so that we reward people who strive and that we overall can prosper.
These are dilemmas that are not just my responsibility as a politician.
They are the responsibility of each of us as we sit around the dining tables and the clubs and service industries and the church groups that we belong to.
And there are other issues as well.
There are four more that I want to leave with you.
1. The issue of whether or not we can advance the question of how to ration an increasing health vote against the more rapidly increasing technology in drugs and treatment that's available.
How do we balance those two demands in a way that actually satisfies both the demand on the public purse and New Zealanders' expectations?
2. How do we deal with the issue of fatherlessness?
An issue that makes many women and men feel very uncomfortable.
This is not an issue for adults.
It's an issue about our children and young people.
It's not a judgmental, social policy issue of married or not married, or whether or not you are able to continue to live with a partner.
It's actually a challenge to each of us to stand in the shoes of our young people and ask the question of whether or not they have role models, male and female, that make them balanced young New Zealanders equipped to face the future.
Many social science researchers now tell us that the issue of fatherlessness is one of the most serious and crucial questions facing western society.
I wonder if we are brave enough to move away from being judgmental, and be able to be insightful and courageous enough to talk about this question in a meaningful way so that the next generation of young New Zealanders may have the benefit of this debate.
3. There is the vexed question of whether or not cultural assimilation or cultural diversity should be the future face of New Zealand as we know it or would want to know it.
4. And the question of whether or not we, as a nation, wish to be spiritually rich or spiritually neutral.
Many of these issues have not been fashionable in terms of being placed on the political agenda in the last two decades.
And yet as I reflect on my last ten years in politics I want to repeat again that we have been ambitious, effective and indeed successful in the areas of economic reform and progress.
Many are watching us.
Many other countries are thinking about these issues themselves.
For me the question of whether the colour and texture that makes New Zealand what it is today will be enhanced rests on whether or not we have the confidence to face the social policy questions that I have put to you.
There is an eagle within each of us.
I want to leave with you the challenge today to think about what leadership you can offer in your respective businesses, in your families and in your communities.
I give you my commitment as the Prime Minister of this country to do the best that I can to make a difference.
I am very confident that the relationships within the Coalition will allow us to do this effectively next year.
We are very focused on what is needed in terms of good government and you do have the personal commitment of Ministers in both sides of the Coalition to seek to be effective on your behalf.
But I want to also say to you that it will take more than that and as we move toward the turn of the century it strikes me that we have a unique opportunity to ask that question about who we really want to be, as a nation, going into next century.
I believe that the centre-right of the political spectrum has the best mix of ideas.
I would certainly argue that we have the best group of people and I have a real personal determination to see that we make a success of this.
Eagle or not, it is a challenge that I accept with great privilege and great pleasure.
I hope I have provoked you today because that's what's politics is about as well.
You should ask a lot of us, but I should ask something of you as well and I have meant to do that today.
I conclude by wishing you and your families and very happy Christmas and may all the joys and blessing that the Christmas season can bring, be yours as people of Auckland as I would wish it for the people of New Zealand as well.
Thank you very much.