• Jim Bolger
Prime Minister


Wing Commander Mathewson, Squadron Leader Lott, officers, ladies and gentlemen.

Thank you for offering me this opportunity to take a look at New Zealand's prospects in the new century - what we're doing, where I believe we are going.

I understand this dinner has become part of the focus on strategic studies by those involved in what looks to be a remarkably comprehensive six month Staff Course.

I have been considering, Wing Commander, the possibility of a truncated course along similar lines for caucus members embarking on a career in MMP politics.

I am sure you have developed some techniques the Government could use to advantage.

It's fair to say New Zealand First Whip Ron Mark has used his former military experience to good effect, but generally the Parliament has not reflected disciplinary skills to the same degree that is evident in the armed forces.

However, away from the hyped headlines we spend a good deal of our time in Government developing the policies necessary for New Zealand's success in the next century.

And I can tell you that I feel very confident about the direction New Zealand is headed, even though I know some people would insist there are a list of reasons for feeling otherwise.

I don't share their anxiety.

I have confidence in our future: our overall objective is the same one we had when the Government took office in 1990: a more competitive economy, generating greater economic growth, more opportunities and a greater sense of being in control of our lives and our country.

And despite some perceptions to the contrary the Coalition Agreement hasn't changed that broad goal.

Our coalition partner shares our determination to achieve these objectives and has added a further dimension to the policy discussion.

So when we talk about the country's prospects in the new century, I would suggest that we should begin with these questions:

Firstly: Is our economy competitive enough?

Secondly: Are our people up to the demands of a competitive economy?

Thirdly: If we are indeed competitive and if we are indeed creating wealth, then do we have the right policies to make sure everyone has the opportunity to share?

My answer to those three questions is the same for each: things are a good deal better now than they were at the start of the decade, but, as always, there is still more to be done, more challenges to meet.

However the devil, as they say, is in the detail, but before I move on to the detail, I think we need to understand that in the overall picture, New Zealand is moving in sync with global trends.

There is little question today, and I am sure officers on this course from other countries will agree, that the so-called market economy is in favour right around the world.

It has made millions more prosperous and life more fulfilling for people in diverse nations across the globe.

It has assisted in the growth of the middle class in country after country, and greatly contributed to a rising standard of living for all.

It's made successes of those economies that embrace it most fully, and in that sense, those countries have become the standard bearers of change for others that have been reluctant to grasp the nettle.

In my view, you won't see that change being reversed.

The question then becomes how fast and how fully do we take up this global trend to a market economy?

In a democracy we must proceed at a pace the majority feel generally comfortable with.

There are those who see their 'Old World' changing and it worries them.

They are uneasy either about changes they've gone through or changes that are on their way.

Understandably they point their finger at the politicians who have championed change and visit their disenchantment on them.

In some cases what they want to do is turn around and go back.

For those who cannot accept the concept of a different tomorrow, protectionism and isolationism has considerable attraction.

Our collective goal should be to persuade those people that the change is not only necessary, but beneficial.

The world is going to go on getting smarter and wealthier whether we want to go along for the ride or not.

We have to decide whether we want to keep up and be a part of the high-tech economies, or stay behind and flip hamburgers for them.

If we want to keep up with the technological and economic change, we need the right skills and we need the appropriate infrastructure.

Without both, there's less growth, and with less growth, there's less money for health services, for education, and for the improved standard of living we'd all like to enjoy.

The policy settings that make us competitive are the key to that.

When New Zealand voted for the MMP system they were voting for a new constitutional framework.

In part they were voting for a new political order; and perhaps some of the implications of that choice are a little clearer to voters now than it may have been when they voted for it.

The Coalition Government we formed is a reflection of that new political order.

I would be the first to admit that coalition politics is not without its difficulties.

And naturally, we all recognise that there have been some mistakes.

I further recognise that stability and predictability is important to provide an environment that will allow commerce and industry to flourish.

It's important to do so.

That's the basis of our economy and our society.

Let me run through a number of the issues that people in business have told us they are most concerned about.

They want us to get government spending down as a percentage of the economy.

The coalition supports that. We want people to have the opportunity to spend more of their money.

To that end we will have another tax cut starting July next year and we want to lower them still further in the future.

We intend to keep inflation down to keep industry competitive and we're continuing to work on improving the efficiency of Government services to reduce still further Government imposed costs.

We're working on initiatives in several areas: the electricity market, Resource Management Act compliance costs, Local Government efficiency, non-strategic asset sales, tariff reviews and roading costs.

Those are important infrastructure issues.

We know we can get efficiencies, and we're going to get them.

People in business want us to spell out our strategy for growth.

The Coalition has a clear one:

responsible fiscal management;
low inflation;
trade liberalisation;
reducing the cost of doing business, to lift competitiveness;
further reducing taxes and tariffs;
lifting the performance of education to produce young people with the talent to drive a high wage economy;
fostering innovation by marrying up the research and science community with the private sector; and
reducing the social and economic costs of unemployment.
Add to that issues like ACC reform and labour market flexibility, and I would put it to you that this Coalition Government is hard at work.

But let's also recognise this:

Important though they are, there is more to life than costs and balance sheets.

For a satisfying life it's essential to be wanted, to be involved, to have an opportunity to have a say.

That certainly happened in village communities and in pioneering New Zealand.

The greater centralisation of government power and authority of the last 50 plus years changed that.

The demand that Government be all powerful to do all things changed that.

The ethos of cradle to the grave Government protection, while well intentioned, inevitably led to big Central Governments.

Now, if we want to, we can change that. I believe we should.

The devolution of greater power to the people is our next great challenge.

With the deregulation of financial markets, the lowering of trade barriers, and the technology and communications explosions we are fast moving decision making away from Central Government.

Power and influence can flow back to individuals and the communities in which they gather - their towns, cities and regions, corporations, trade and voluntary associations, and their social organisations including their churches.

To be successful our civic institutions need to be strong and healthy so that they can help build the 'social capital' of society.

Many of the factors which contribute towards the building of a strong sense of identity and belonging are within our influence.

At a local level future successful communities will:

demonstrate a sense of leadership, a spirit of co-operation and participation and respect for cultural diversity;

build social cohesion by providing opportunities for citizens to participate in meaningful activity, reducing the feeling of alienation and isolation;

promote the essentials of family well-being; a sense of belonging, caring and stability, a healthy start in life, and security in later years;

provide a diversity of services and activities which enhance the quality of family life, build self-reliance and reduce dependency;

encourage knowledge and skills, the dissemination of civic information, and provide employment opportunities.
We have grown up to believe that health, education and social welfare are only Central Government responsibilities.

Then when Central Government makes decisions based on that responsibility, local communities claim they are being ignored.

There is a better way.

That is for local communities to be more involved, they then understand the social and economic issues much better and can contribute to more informed decision making.

That's why I strongly support the direct resourcing of schools so that the local community not Wellington has a much greater say.

It seems logical to have small hospitals run by community trusts.

The aim is not to save money but to achieve better results by having those directly affected more involved.

It makes commonsense.

Economic restructuring is only one part of our modern history.

Of equal importance has been defining our place in the world.

Here at a military establishment you will know that better than most.

This by no means suggests we turn our backs on our old network of foreign relations, but does suggest our way of doing business will be more multi-faceted.

The influence of globalisation has substantially changed our international trading profile.

New Zealand's international relations will, increasingly, be focussed on partners in our region.

This means our attitude to cultural values and ideals will equally become more diverse.

Change also means our defence relationships become more complex.

Our closest and most important defence partner is Australia.

We continue an excellent defence relationship with the United Kingdom.

Since the mid-eighties our defence relationship with the USA has gone from excellent, to bad, to very much better, on the way back to excellent.

We accept that New Zealand was ahead of anti-nuclear opinion in the eighties, but welcome the growing strength of disarmament and arms control policies. I welcome the decision of United States President Bill Clinton to send the Comprehensive Test Ban Treaty to the Senate for ratification.

Something unthinkable as recently as 10 years ago.

Our defence and security relationship with our Asian neighbours is growing as our total involvement with the region grows.

To be credible we need a well equipped, highly professional force.

We already have the professionalism and we are working through the options for new capital acquisitions for the next two decades.

Decisions will be announced soon.

Our influence on world decision-making, as one of a wide number of small nations with common interests, will be dependent on the intellectual integrity of our views.

We can achieve nothing by threats but much by careful persuasion.

In the future, if we prepare well, our voice will have a good deal more impact on issues like conservation and environment, intellectual property and communications, than our relative size and geographical position would indicate.

Tomorrow's world is coming, of course, whether we prepare ourselves for it or not.

The factors that will shape our identity will be:

our capacity to develop a common sense of purpose - here the resolution of Treaty claims is important;
our economic performance;
our capacity to broaden our perspective and our horizons; and
important to all this is the cohesive power of a common sense of identity.
We should not forget we are a relatively young nation and identity is a sense of self that forms gradually.

I believe we still have an incomplete picture of what it means to be a New Zealander, but there are core values that most of us have in common.

New Zealanders already have a strong sense of social justice and that will always influence the way we operate in the market economy.

We have the will to work together with a common sense of purpose.

What we now need is to harness that sense of purpose to unleash the enormous potential our country has, and especially the opportunities our young people have ahead of them.

I say that, because although the last few years have seen enormous progress we have as yet only prepared the platform from which to build a better tomorrow.

To those who say stop we have gone far enough, I say that would be like telling John Hart and the All Blacks that as you have won 18 out of the last 19 Rugby Tests you have a winning formula - don't change it - don't add to it.

The day they do that is the day they will start losing.

And so it is with New Zealand.

We have received the plaudits of world commentators for our economic reforms, but to keep in front and achieve greater success we must continually seek bold and innovative ways to do things better.

We also must work from a sustainable set of principles.

Let me give you an example.

We have over recent weeks been conducting a postal referendum on retirement income, the results of which will be known tomorrow night.

Every survey says the proposal to have a compulsory based retirement savings scheme will be thrown out.

There will be an overwhelming NO vote.

That will put that option off the table but it won't change the ageing of New Zealand society or New Zealand's demographic profile.

It means we will have to determine another way to meet in a sustainable way the retirement needs of New Zealanders.

In seeking that solution we need to look at all transfer or benefit entitlements from a common base.

We should have as a first principle that we should only take away part of a person's earnings through taxation to give to another when there is an agreed need.

This is something that everyone of us needs to understand as we move the superannuation debate forward.

The goal of Government in the first decade of the 21st century, must be to continue to successfully manage economic issues, define our national identity in a way we are comfortable with and most importantly build up the social capital of New Zealand by trusting and encouraging the community to take greater responsibility.

I have total confidence that we can be a society that is innovative and forward-looking, one that is not only a consumer of technology but also a contributor to the scientific and technological civilisation of the future.

I am sure we can be a mature, liberal and tolerant society in which New Zealanders, whatever their race or background can feel they belong to one nation.

We are on the way to becoming a secure and prosperous nation with faith and confidence in itself.

We must become a nation that values and recognises excellence.

In many ways the end of this century has seen us demonstrate the boldness necessary for success.

The early years of the new century should see us reach a new maturity and all the benefits that brings.

For that to happen we should adopt as our national motto, the title of a book I read in my youth, 'Boldness be my Friend'.

Thank you.