Life And Times Of Bill Birch

  • Bill Birch
Treasurer

Thank you for inviting me to speak to you today. You'd proposed as a topic the Life and Times of Bill Birch.

That's a bit hard to think about at this stage and I can't imagine it would be any easier to hear about.

But it's always useful to look back from time to time.

As a young country, we seem to spend little time dwelling on the past. That is part of the great pragmatism of New Zealanders, to be able to get on with life and deal with whatever matter is at hand.

It is remiss, however, to overlook history. It provides us both with lessons, and with context. It is very hard to judge how far you've come if you don't recall where you started from.

And I thought it may be entertaining to recall what's happened in New Zealand since I first entered Parliament 27 years ago.

That was in 1972.

If you can cast back to 1972, think about it for a moment.

In 1972 there was no Canterbury Crusaders, no Super 12, no professional rugby, no Sky TV, not even any colour televisions.

Star Wars was another 5 years away.

There were no cappuccinos, no bars, no cafes. There were pubs and cafeterias.

Even then eating out was a rarity. We lived on meat and veg cooked at home.

The whole country still saw itself as living off the farm, and we largely were. City dwellers dependent on the countryside for our standard of living.

There wasn't a lot to do after 10 o'clock at night.

There was no DPB. There were no home computers let alone e-mail or internet. We still didn't have fax machines. If we wanted multiple copies - for the school newsletter or anything else - we used Gestetner machines and xerox paper.

We paid in cash, or we wrote cheques. We got money when the banks would let us. We didn't have credit cards, and money machines and eftpos were a long way off.

There was no wine industry, and no kiwifruit. Milk came in bottles. Bread was white.

Papamoa was probably just a blip and Mount Maunganui not much bigger, although the country knew about surfies.

Tauranga was just another provincial city.

The country was building up to 1974 Commonwealth Games. Ian Kirkpatrick was the All Black captain and they were off on one of those tours to the Five Nations that used to involve 25 matches, and this one had the infamous note of Keith Murdoch being sent home.

Most of those points probably paint a wonderful wistful picture of an unspoiled land of plenty.

That always seems to be the way the past is perceived.

But New Zealand wasn't completely happy.

We were a pretty controlled society.

You could only get margarine with a prescription. Needed permits to take money overseas. You had to queue to buy a new car.

And we had an unrealistic view about our place in the world.

We were like teenagers. We thought we had it all, and could keep having it all. But it wasn't quite that simple.

Other people were looking after us, and that was about to end.

The 70s

From the 1970s on, New Zealand has grown-up. We have entered the modern world. We have become a nation, and we have an identity that is our own.

But that process wasn't entirely voluntary. It started when other countries made it clear that New Zealand was not their responsibility.

The 70s still reflected our past. The major influence on our country was Britain and the Commonwealth, although we were paying more and more attention to the US.

It was hard to ignore that with Vietnam. That was the first television war and we were part of it.

The 1970s saw the end of the Holyoake era. Jack Marshall replaced him as leader of the National Party. And in 1972 Norman Kirk swept Labour into power.

That's when I entered Parliament with Jim Bolger.

1972 was also the year Britain joined what was then the EEC. That sent alarm bells ringing. We had a "special case". But that was till 1977. After that we didn't sell cheese to Europe. The butter regime got extended to 1980. What were we going to do with our economic base?

There had been some diversification. Britain took 20% of exports in 1970 as opposed to 50% in 1965. But that was of markets rather than products. And the EC overall still took nearly a third.

Suddenly we had to face the fact that we weren't part of Europe.

In the 1970s we had troops in Singapore. So did Australia and UK. But they were both out by 1976.

And New Zealand pretty clearly wasn't part of Asia.

We had to come to grips with becoming part of the Pacific. In 1971 we had joined the South Pacific Forum.

A couple of years later we did something that made us feel good about this. We sent the frigates to Mururoa. NZ and Australia took France to the International Court of Justice to try and stop the nuclear testing.

At home, becoming Polynesian didn't sit so comfortably. In the 70s Auckland became a Polynesian city. That's when some of today's rugby stars were born. But the issue of the time was overstayers.

There was also the development of Maori aspirations and politics. The 1976 land march, and Bastion Point.

And in a quieter revolution, women were leaving home and entering work. 42% of women aged 15-64 were in the workforce in 1976, up from 28% in 1951.

So in a cultural sense, the 70s were a time of huge change.

But there was another shock which was about to hit us harder.

In 1973 oil prices quadrupled in a few months. There was a huge drop in our terms of trade. Labour borrowed.

By the mid and late 70s NZ was suffering its greatest economic difficulties since the depression. There was large borrowing, inflation averaging 10%, and hitting 18% in 1976. Unemployment began to climb.

And there was a large fall in our standard of living. Real per capita income fell by 11% from 1973 - 77. People left NZ. In 1978 the population actually fell.

At the same time unions became more militant. Work stoppages in 1975 were four times the average of the 60's.

Politically, there was more upheaval. With Norman Kirk's death and the economic problems, Labour was out in 1975. The landslide to the Muldoon government reversed the number of seats National and Labour held.

And National brought in a hugely costly policy. Muldoon's super scheme gave a married family 80% of the ordinary time wage at age 60.

1976 saw the Montreal Olympic Games African Boycott because of the All Blacks going to South Africa - and they'd lost.

In 1978 we extended our Economic fishing zone to 200 miles.

And in 1979 the Second Oil Shock hit.

I browsed through Keith Sinclair's History of NZ to remind myself about the decade. His book was written in 1980, 19 years ago.

What struck me is that he pointed out then that hospital care absorbed about 70% of govt expenditure on health, which was far higher than most countries, "yet still there are complaints about delays in getting treatments". "Large numbers of people have taken out insurance policies which pay for treatment in private hospitals."

He also said that "as long ago as 1962" political scientists were claiming that NZ had been an equal society but that equality was being eroded away.

"But the span of incomes is low. Very few people earn the highest and lowest incomes."

It's worth remembering that these big issues have always been the big issues. Just like the perennial concern about "the youth of today". At one stage that was us.

Politically the decade ended with the 1978 election. National kept a large parliamentary majority, but because Bruce Beetham and Social Credit got 16% of the vote.

In 1978 I entered cabinet. I was Minister of Energy, Minister of Regional Development, and Minister of National Development.

The 1980s

When we think of the 80s we seem to do so in isolation. But in the context of what had gone before it makes a lot more sense. Just as this decade does when you look at the last two.

New Zealand was feeling exposed and shell-shocked. Through the 70s and the start of the 80s the Government tried to give the public the security we had had from the UK in the past.

For people who claimed to be self-sufficient, New Zealanders like a high degree of security.

The problem is, that costs a hell of a lot. And too much security is also stifling.

Why try when someone else is looking after you. Why develop? Why take any risks?

The real problem, however, is that it prevents you facing reality, and the reality is we had to stand on our own feet, we had to pay our way in the world.

1981 saw the Springbok tour and protests. It also saw National under Muldoon gain a third term.

Think Big was underway. That was an attempt to stand on our feet, be more self-sufficient in energy, and reduce exposure to oil prices.

It was predicated on the assumption - on the advice of everyone at the time - that oil was going to cost $50 US a barrel. That didn't happen.

We had wage and price controls. There were some movements to reform, but they didn't go far enough to meet a society that was feeling stifled.

The 1984 election unplugged some of that.

Douglas floated the dollar, scrapped subsidies, corporatism, and brought in GST. They were positive things, but a lot of the country got into the speculator culture.

Lange got the country behind the anti-nuclear banner again.

1987 saw another Labour win - the start of privatisation. And the sharemarket crash. We got the Reserve Bank Act, but confidence had gone and the government was falling apart. We saw three Prime Minister's before the election.

Yet again, we had a government which tried to insulate NZ from the real world - to deal with short term problems by spending money.

90s

So in 1990 Jim Bolger's National Government swept in.

I probably don't need to remind you of recent history.

But it's worth reminding you of our motivation.

What this period has marked is a determination by the Government for NZ to earn its way in the world, and to compete.

We've recognised we can't protect ourselves from the rest of the world, we have to take it on. That's where our opportunities are.

Politics is as much about drawing lessons from the past as it is about having beliefs about how to achieve a better future.

New Zealand has made huge progress this decade, achieving what a very short time ago may have seemed impossible: paying our way in the world, being competitive, creating real jobs and providing real opportunities for people.

Look at what the Budget showed:

The $71 billion economy of 1991 will become a $100 billion economy this year.

284,000 new jobs have been created since the end of 1991.

After 17 years of deficits, we've had six consecutive surpluses to end the decade.

Debt has been cut from 52% of GDP to 22.6% today.

Health spending is up by 50%.

Education is up by a quarter.

And we're now leaving $3 billion of taxes and targeted assistance in peoples' pockets.

And over the next three years it shows

- growth continuing at 3% or more
- 100,000 more jobs.
- export growth averaging 4.8%
- rebuilding surpluses.
- debt coming down to 20% of GDP

And it shows we can, under this Government, continue to get taxes down.

Perhaps as a country, and as a Government, we haven't claimed as much credit as we should for these achievements - New Zealanders prefer humility to any sign of arrogance.

But the country does deserve credit for what has been achieved, and it's what we consistently get overseas.

At a cultural level, we have faced up to our history, and major Maori grievances have been settled. We feel more comfortable that we're part of the Pacific Rim.

Our young people are better educated and have much wider options.

We have more people in work, and people have higher incomes. The cost of consumer items is hugely less. $1000 video recorders of the 80s are $300 today. People don't go to Hong Kong or Singapore for shopping.

Cars are much cheaper. Housing, with low interest rates, is as affordable as it has been for decades.

There's a growing realisation now that money should go to need. You don't talk of middle class capture, or churning, but there's an appreciation it's silly for the government to take money off people to spend it for them.

And people actually want lower taxes.

Throughout the world over the last 27 years there has been a move to fewer barriers and greater freedom.

We've seen the growth of Asia, the end of the Cold War, the democratisation of Europe. Trade barriers are slowly coming down.

New Zealand has been moving forward with these trends. That's the only way to move. The alternative is going backwards.

The period I've been involved in has been about New Zealand finding its feet and the making of modern NZ.

The country we have now is rather more like the NZ of myth.

It's place where people get things done for themselves, and where the country is self-reliant.

There is concern for the other person, but not the stifling reliance on the government.

It's more realistic, it's healthier, it's different. We're not a perfect country yet.

But if you think about it, we're a damn sight better placed than in 1972.