NZ Chambers of Commerce Annual Conference

  • Max Bradford
Enterprise and Commerce


In Auckland this afternoon the two major parties launch their election campaigns.

From now on you are going to see even more centre-left smokescreens and uncosted promises as Labour continues with its deception of trying to appear business and job friendly, while also promising to hand power back to the unions.

It is a dilemma for Labour that I am confident that voters will see through.

I know the business community and your members will not be fooled.

After nine years, Labour has failed to come up with a credible plan for growth.

There isn't a single business or enterprise that will benefit from the policies Labour and the Alliance are proposing.

They are offering the people of New Zealand:

* higher taxes,

* higher business costs,

* (Both of which will be a tax in jobs),

* Jim Anderton as Deputy Prime Minister,

* a Cabinet full of retired trade union officials,

* and a return to the past and the bad old days of union domination of New Zealand workplaces,

But that's not all.

If you think New Zealand is tied up in knots with bureaucracy and red tape, you haven't seen anything yet - especially if the Alliance has a major influence.

Under a Labour-led government there will be at least 157 new ministers, ministries, quangos, offices, courts, ombudsmen and special funds that Labour has promised over the last few months to make their policies work.

And don't forget there will be higher taxes at a time when our trading partners like Australia are reducing theirs.

Labour has a plan to introduce a capital gains tax, just as Australia and the US in particular, are finding ways to reduce or eliminate theirs.

National is the only major party that recognises it is businesses that create jobs - not governments.

National realises we need to build on the policies that have seen our economy improve over the past nine years, policies that get government under control and allow businesses to get on with the job.

I'm proud of what National has done so far. We have:

* lowered your taxes, and removed the paperwork off the shoulders of a million taxpayers;

* produced the lowest inflation rates in 30 years,

* got the lowest interest rates, especially for homeowners and businesses, in 40 years;

* generated 278,000 new jobs since 1990, 180,000 of them full time, with the key input of business, especially small business.

What is more:

* we have run fiscal surpluses for six consecutive years, and lowered Government debt from 54 percent of GDP to around 25 percent;

* we have eliminated the Government's net overseas debt;

* we have put a 1,000 more teachers in our schools and paid them significantly more to recognise their importance to the future of New Zealand;

* we have put 73,000 more students into tertiary institutions;

* We've brought competition to ACC, saving businesses $200 million a year.

* Yet some people want to re-nationalise ACC and load those costs back onto employers and wage-earners.

But this is only the beginning.

We are working to get our agricultural industries and producer boards working more effectively.

We are reducing compliance costs for businesses by simplifying tax payments, although I freely admit we have some way to go to satisfy business.

But we're committed to a 25 percent reduction in the regulations strangling this country.

This month's PREFU Treasury forecast showed that with these polices the first three years of the new millennium will provide:

* an economy 10% larger than it is now;

* 115,000 new jobs;

* stable inflation - and low interest rates;

* lower public debt; and

* lower taxes, perhaps in the first instance lower taxes for business, to get the country's growth impulse going.

National is committed to continuing to build a framework in which business can prosper.

We have a vision for the country's future in our Bright Future strategy.

Unlike Labour and the Alliance, we will retain and improve the Employment Contracts Act.

We will review probationary arrangements in the ECA in consultation with employers and employees to help get more people into jobs.

And we will also overhaul the Holidays Act.

As the Simpson Grierson report released this week Shows, this legislation was designed for an era that has long past, when employment was much more structured.

We will not reduce holiday entitlements but will make them clearer and fairer so people do not have to break the bank on legal fees to understand them.

A National government will also review personal grievance arrangements under the ECA to ensure there is a better balance between process and substance in the settling of disputes.

The Government will work in partnership with the private sector to create an export-led growth strategy, but it does not believe in picking winners or losers.

The $223 million Bright Future package announced in August will spearhead our efforts to make New Zealand the best country to live and do business in.

It was developed together with over 2,000 business, educational and research leaders throughout New Zealand.

Reviews to be completed next year will help ensure our tertiary education system is world class and that better linkages are developed between it, the research and business sectors.

The Government will provide 1,500 tertiary scholarships to ensure business have the skilled people they need.

We will be asking business to pay a part in managing and funding these schemes, details of which will be announced very soon.

There will be assistance for researchers to create good ideas and entrepreneurs to turn them into exports through initiatives like the national "ideas incubator", the small business stock exchange, and the $36 million a year New Economy Research Fund.

We are reviewing the taxation arrangements for research and development, with a view to allowing full deductibility in the year of expenditure.

Developments in these announcements will be unveiled soon.

Already the Government's new BIZinfo scheme is proving hugely successful.

In the three months to the end of September, BizInfo offices around the country received more than 4000 calls on 0800 lines asking for advice.

BizInfo's Internet website providing business development information to SMEs received 1.4 million hits up to September 30.

I particularly want to commend the Chambers around New Zealand for the key role you play as one of the major providers of the Biz programme.

Business is to be congratulated for helping create nearly 300,000 jobs this decade. But the knowledge age presents new challenges you will have come to grips with.

Perhaps the time has come for Chambers of Commerce to view your role differently.

With your membership and expertise you are well placed to become a catalyst for partnership between business, the tertiary and research sectors, by building on the cluster concept.

Labour and the Alliance have belatedly started talking of the knowledge economy, but it is clear from their policies that they have little understanding of the fundamentals needed for businesses to grow in the knowledge age.

We know that higher business costs and higher taxes mean jobs are more difficult to create.

We know that higher taxes and higher costs inhibit growth.

And we know that many of Labour's and most of the Alliance's policies rely on these factors to pay for their promises.

Labour, the Alliance and the Greens seem to have forgotten - or are more likely ignoring - the simple fact that higher costs mean fewer jobs.

Labour and Alliance employment policies would increase employment costs by almost 3 per cent, losing up to 20,000 jobs a year.

They would punish businesses severely.

Personal taxes would increase by $800 million.

Reversed ACC changes would cost $200 million.

Charging employers for paid parental leave will cost another $100 million a year.

Introducing four week's annual leave will cost employers another $400 million a year.

You can also add to that the multimillion-dollar cost of increasing the minimum wage by $20 a week.

The last time Labour was in government, they destroyed 110,000 jobs and left us with double-digit inflation and unemployment to tidy up.

Every time Labour is in office it leaves a mess for someone else to clean up.

It left the foreign exchange cupboard bare in 1972 after spending up large.

In 1990, it left a huge debt for little Olivia to repay, as well as sky-high inflation and interest rates.

It has taken nearly 9 years to tidy the mess Labour left.

Now is the time to go forward.

Yet the Labour/Alliance bloc wants to take us back.

To higher taxes.

To unions in the driving seat again.

To more spending on welfare rather than work.

The choice for business this election is stark and strategic.

Going forward by building on the successful economic framework that is still envied by many abroad, or turning round and wistfully re-introducing policies of the past in the hope they will work now when they failed us then.