OPENING THE BOOKS

  • Jim Bolger
Prime Minister

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Eric Roy, Norman Elder, Ricky Bennett, Richard Logan, John Alabaster,
distinguished guests, ladies and gentlemen.

Thank you for your welcome to the sensible south.

First, can I acknowledge Ricky Bennett and his people who have pulled
things together for us today.

As an investment advisor, I think Ricky will be pleased about the things
I want to tell you.

I have just come back from Stewart Island, the first time I have been
there since I was Minister of Fisheries.

It was very interesting and I would have liked to have stayed longer.

Well, the 1996 election campaign is underway.

We have the first of the televised election leader debates behind us and
we are gearing up for four weeks on the road.

Yesterday in Masterton I spoke on the very important issue of education.

Today I want to speak to an equally significant topic that of the
economy.

By way of introduction Id like you to cast your minds back to the days
when following the election of a new Government we had what was known as the opening
of the books.

Leaders of the Opposition would ritually roam the hustings and the TV
debating studios promising to open the books.

It was a great ritual.

You may have noticed that you havent heard that line recently. There was
no mention of it on the TV3 debate last Tuesday night.

Why not? Because now we dont open the books after the campaign ends. We
open them before it starts!

National was the first Government in the world to pass a law which would
require itself to publicly state the Government's precise financial position
before it went on the hustings.

No more half-truths or hidden spending.

We did this after the fiasco of 1990 when I was told the day after the
election that the BNZ New Zealands biggest bank was about to go belly up.

Something that the Labour Government had known for months and had kept
secret.

They also kept very secret the billions of dollars of deficit in the
Government's accounts and that the Treasury forecast was that the economy was
in deep trouble.

We have changed that because we want the public and the politicians to
have the full facts before, not after, the voters make their decision.

I mention all of this because yesterday afternoon we opened the books.

We issued the 1996 Pre-Election Economic and Fiscal Update, as required
under the Fiscal Responsibility Act.

The document contained a complete and I would emphasis the word complete
statement of the Governments financial position.

Every single dollar we are committed to spend, every liability, every
contingent liability, must be contained in the document under law.

What is more, that statement must be signed off by both the Secretary of
Treasury Dr Murray Horn and the Rt Hon Bill Birch, Minister of Finance.

The information released yesterday covers not only the current year but
projections out to the year 1999/2000. And it makes very interesting reading.

You may have seen some of this in this mornings Southland Times, but it
is well worth repeating. In the opinion of Treasury :

  • after growth this year of
    2.5 per cent, the economy will expand by 3.7 per cent in 1997/98;
  • after growing 14.3 per cent
    over the last six years the economy will grow by a further total of 13.5
    per cent over the next four years;
  • our operating surplus on
    present policies will increase over the next four years to reach $6.4
    billion in 1999/2000;
  • our public debt will fall
    from 32.5 per cent of GDP last year to 23.6 per cent next year;
  • by the turn of the century
    it will be halved to just 13.3 per cent of GDP.

These figures are good news for all New Zealanders.

Consider what they mean.

In the six years since we came to office the policies of the National
Government have seen the rate of New Zealands development and growth almost treble.

In the fifteen years from 1976 to 1990 growth averaged just 1.3 per
cent. In the past four years it has averaged 3.8 per cent. Were doing three
times better than we were.

Over the decade of the 90s we will have growth of 29.8 per cent; that is
to say that we will have added growth equal to another five farming sectors to
the economy.

Export earnings have climbed from $15 billion per annum to over $20
billion.

And a huge amount of this growth will have come from products and
services that were alien to us a decade ago.

As a result of this dramatic escalation in commercial activity
Government revenues will continue to grow and we will be able to further reduce
both debt and rates of taxation.

The first of our tax cuts came into force on July 1st this year. Next
year, under a new National Government there will be additional cuts. And we
need not stop there.

And that is good news for all New Zealanders. Because people are going
to have more money to spend and to invest. As the Economic and Fiscal Update
predicted:

With lower interest rates and the return to policy certainty, business
investment will pick up, boosted by previously deferred plans coming on stream.

The National Banks latest economic confidence survey says that business
confidence is now back in the black.

It is even more so after yesterdays announcements.

And the good news does not end there.

On the 27th of this month a fortnight from now we will complete the sale
of the forestry rights and in doing so eliminate our entire net foreign
currency debt!

All of this is being achieved without disregarding, or in anyway
postponing, our heavy social obligations.

On the contrary, we have made significant new investments in health and
education.

To date an extra $1 billion in health and an extra $1.5 billion in
education - and, at the same time, bedding-down a far fairer and more
sustainable social welfare system.

Yesterday's Pre-Election Economic and Fiscal Update has predicted an
additional spending of $596 million on health, $787 million on social welfare
and approx $779 million on education between 1995/96 and 1999/2000.

Under a National Government we can afford to do that because we are
rapidly repaying debt, so the cost of debt servicing is projected to fall by a
massive $1.8 billion over the next four years.

In our view it's better to spend money on social policies rather than
interest rates.

We will also spend an additional $110 million on the environment and
protecting endangered species over the next three years.

We are able to invest on this scale because we have found an economic
model that works.

Not just for one year or two years, but year on year.

Gone are the days of boom and bust.

If you don't believe me then listen to others.

Each year the European-based World Economic Forum issues a medical
check-up on the health and fitness of the worlds leading economies.

This year it rated New Zealand third in the world for economic
competitiveness ahead of the USA (which came fourth) and Australia (which came
12th).

This is tremendous news because it is these nations with whom we both
trade and compete. I'm told that the Forum goes further and predicts that:

the fastest growing nations in the world in the next five to ten years
will be Singapore, New Zealand, Thailand, Hong Kong and Malaysia, in that
order.

But there is a caveat. The predictions are based upon current policies
and conditions. As are the Treasury predictions.

A change of government with a radical change of policy - which all other
parties promise - would throw the predictions, and the performance, out the
window.

And with it would go that most valuable of all commodities for a small
nation such as ours international investor confidence.

And out the window would go the jobs such investments create, as you
well know in Southland.

The world is coming to recognise that there is a New Zealand way of
managing an economy.

It is based on five fundamentals that can not must not be tampered with,
regardless of the temptations to do so in the interests of short-term political
expediency.

First, we have an open, accessible economy; ensuring that the finest
goods and services that the world has to offer are allowed to flow freely
across our borders.

This will give our people choice, encourage innovation, spur
competition, set good example and engage our nation at the cutting-edge of
global trade.

Next, we maintain stable prices.

We must never forget the horrors of the rampant inflation that eroded
our savings, stole away the return on our investments and inhibited growth -
while rewarding nobody but the speculator and the rip-off merchant.

So let me restate that National strongly supports the Reserve Bank Act
and the low inflation target.

We are also committed to maintaining the flexible modern labour market
brought in by the Employment Contracts Act - something else which our left-wing
opponents would dearly love to destroy.

Since the Act was passed in 1991 time lost through work stoppages has
fallen sharply. Consider what has happened in the meat industry.

I recall Ocean Beach and others very well.

From 1986 to 1989 there were close to 240,000 working days lost
annually.

From 1991 to 1995 after the Act was passed the average yearly number of
working days lost was 5,434.

Theyd fallen to less than 2.5 per cent of the previous figure!

And our opposition says bring back union control - they must be mad!

While work stoppages have gone down employment has gone up.

In the past four years we have created 209,000 new jobs and cut the
unemployment figure to 6.1 per cent.

Less than one per cent above what you find in the United States; the
worlds strongest economy.

The fourth fundamental is what the economists call responsible fiscal
management, although it could be more simply described as a little
self-discipline.

Net public debt in New Zealand, as a percentage of GDP, rose from single
figures in the 1960s to a high of 52 per cent in 1991/92.

Fiscal discipline has enabled net foreign currency debt to be eliminated
and will also result in net public debt being cut in half from $28.6 billion in
1995/96 to $14.4 billion in 1999/20000.

By then, on current policies, net public debt will be down to a modest
13.3 per cent of GDP.

Finally you have our commitment to a low-rate, broad-based tax system.

The tax cuts for next year will go ahead and no new taxes like death
duties will be reintroduced.

With budget surpluses predicted to reach, on current policies, $6.4
billion by 1999/2000 - no new taxes are needed.

Rather we will be able to spend more in the key areas of health and
education.

What this all says is that with a strong economy we will be able to
enjoy a first-class quality of life, provide world-class social services, and
meet our commitment to the disadvantaged in society.

We mustn't throw it all away.

Before closing, I would like to deal briefly with another subject a
little symposium on the spectacular possibilities of MMP.

Under MMP, parties will put out a list of candidates ranked in the order
in which they will stand for election.

The more party votes a party gets, the further down the cut-off point
moves - determining who gets into Parliament, and who does not.

Thus, if you are deciding which party you are going to vote for, the
list is a pretty fair place to start.

If you take a look at the National Party list youll see a group of
seasoned performers.

People like Don McKinnon, Bill Birch, Jenny Shipley, Paul East, Doug
Graham, Lockwood Smith, Simon Upton, Wyatt Creech and Doug Kidd.

The strength of these veterans is reinforced with up-and-comers like
your own Bill English and Eric Roy and some exciting new faces for tomorrow.

We will have all the talent we need to put together a great Cabinet
after election day - especially when compared with the alternative.

The alternative is a composite Cabinet formed by Labour, New Zealand
First and the Alliance.

If National is not in Government then there is no other possibility than
what we call the three-headed, left-wing monster.

At present all of those parties rank roughly equal depending upon whose
polls you read.

Thus, in a coalition Cabinet, we can expect to see them providing a
roughly equal number of Cabinet members let's say six each.

It is fair to assume that each would nominate the top six on their respective
lists.

On that basis the likely new Cabinet line-up, assuming it is
approximately the same size as at present, would look like this (based on
current polls and parties own list rankings):

(1) Helen Clark, Prime Minister
(2) Winston Peters, Deputy PM
(3) Jim Anderton, Minister of Finance

Now theres an interesting little troika if ever I saw one. But it gets
better. The other fifteen members would be:

(4) Michael Cullen
(5) Tau Henare
(6) Sandra Lee
(7) Dover Samuels
(8) Ann Batten
(9) Jeanette Fitzsimons
(10) Lianne Dalziel
(11) Peter McCardle
(12) John Wright
(13) Mark Gosche
(14) Jenny Bloxham
(15) Frank Grover
(16) Annette King
(17) Brian Donnelly
(18) Pam Corkery

What do you mean youve never heard of most of them? - neither has
anybody else!

What does it matter that half of them have not yet stepped onto the
floor of the House?

Let alone done a single days work in the Beehive, or seen the Cabinet
room.

That will count for nothing.

If National does not form the next Government, then they will.

Samuels, Batten, Fitzsimons, Wright, Gosche, Bloxham, Grover and
Donnelly whoever they are along with the loquacious Ms. Corkery, will be
running the country.

Which means that New Zealand is now facing a very stark choice indeed.

It is rather like going to South Africa to play the Springboks all over
again and not knowing who the players are.

That is the nature of the decision the nation must confront on October
12th.

It was with that thought in mind that we produced our campaign slogan
First Tick National.

That slogan is in recognition of the fact that for the all important
party vote, the first vote on the ballot paper, New Zealand is, to all intents
and purposes, a single constituency.

It was for that reason, and to symbolically demonstrate that fact, that
I have this week campaigned from Kaitaia in the far north to Stewart Island in
the far south.

At each stop on the way I have advised people if they want stable
forward-looking political leadership then for your sake, for Southland's sake
and for the nation's sake: First Tick National.