• Jim Bolger
Prime Minister


Chief Executive John Blanthorne, Wellington Branch Manager Peter Smith, distinguished guests, ladies and gentlemen.

Thank you for the invitation to join you today.

It was my pleasure to open HongkongBank's new street level Mortgage Centre here in Wellington a few minutes ago.

Back in July 1984 one of my predecessors, Sir Robert Muldoon, opened your first office in New Zealand - also here in Wellington.

As an aside, I am told that opening took place the same day as one of our country's more notorious financial crises - and that no sooner had you received your foreign exchange licence on the morning of the 18th, than the Reserve Bank announced at midday that it was suspending them all.

Fortunately, I understand your licence was reinstated sometime later that afternoon.

That happened in what some still call the good old days when inflation was at 10 per cent plus and public debt kept growing as we borrowed from the world to keep the Government afloat.

All that has changed and I welcome the decision of HongkongBank to open a street level Mortgage Centre, and see it as a vote of confidence in the local, and indeed the national, economy.

New Zealand today is committed to an open competitive economy and, as the World Economic Forum's recently published Global Competitiveness Report states, New Zealand ranks second only to Luxembourg in regard to ease of entry by new banks into the domestic banking industry.

Perhaps more importantly, since HongkongBank has been here some 20 years, the same Report ranked us second only to the United Kingdom when questioning the extent to which domestic banks face competition from foreign banks.

We welcome HongkongBank's continuing involvement in the New Zealand finance sector, not just for its own sake, but because increased competition means easier access to the capital needed to make New Zealand grow.

It is estimated that New Zealand will need $75 - $100 billion in new capital over the next five years to ensure a high level of sustained economic growth.

Given the relative size of our population and economy we lack domestic resources to fully fund this requirement, hence the efficiency of our banking and finance sectors is of critical importance.

I know that HongkongBank would not be here in New Zealand, and would not have extended its operation here in Wellington, if it didn't have confidence that New Zealand is on the right track.

Later today and tomorrow at Premier House, all Ministers in Government will meet to establish the parameters of the 1998 Budget.

We will commence our deliberations confident in the knowledge that inflation is low and the economy is on track to continue its remarkable growth path.

Forecast growth up to and over four per cent certainly provides business opportunities.

Ministers gather also with the knowledge that New Zealand's remarkable progress cannot be taken for granted and must be built on.

The issue of the sale of this or that State asset may attract public comment, but it's really old hat in policy terms.

The real demanding challenge is improving the delivery of social policy, be it in education, health or welfare.

There are two options.

One is to say everything's okay and we don't need to do anything, or we say we are not doing well enough and agree to seek better answers.

I am prepared to provide leadership to those who say we need better answers. To that end I am prepared to look for new and innovative answers.

Answers which acknowledge in social policy as we have done in economic policy, that the State doesn't have a monopoly on innovative solutions.

Just as we acknowledged a few years back that the State didn't need to own phone companies, railways, banks and many other economic assets, today we must be equally open to new approaches to social policy.

The left of politics will yell blue murder - forgetting they started privatisation - but we mustn't be distracted by noisy interest groups.

Our obligations, our focus, must be on better healthcare through better integration of the public and private sectors, and better education - by doing the same.

All I ask of my critics is that they stop to think before they open their mouths to shout.

Demanding more of the same is not good enough.

I don't intend to settle for second best. I don't intend to ignore problems because it's not politically correct to talk about them.

I have a very keen interest in education and believe schools, not banks, are the most important institutions in a community.

I am pleased to say that the early advice I have received on the approach being adopted by the NZEI to this year's wage and conditions negotiations gives me hope that we are able to begin anew and stop the shouting of slogans and seriously address issues.

It's a demanding challenge, but we Kiwis are up to it.

Thank you for the invitation to be here, congratulations and good banking.