RENEWING OUR DEMOCRACY

AOTEA CENTRE, AUCKLAND

Ladies and gentlemen, it's good to be back.

Thank you for again inviting me to deliver my annual State of the Nation address to this gathering organised by the Chamber of Commerce.

This year in reflecting on the new political world of today I have looked back to the early days of our democracy for inspiration and to the politics of participation and inclusion as signposts to the future.

Just four months ago Michael Barnett went out on something of a limb and told another audience here in the Aotea Centre I would be back, as Prime Minister, to deliver this address to you!

I'm obviously very pleased Michael Barnett was right.

I hope he won a substantial bet on his prediction.

In a very real sense, however, I believe we have all won from the outcome of the 1996 election.

It was a difficult and critical call for New Zealand at a pivotal time in our social and political history.

That call having been made, the Government I lead now carries the awesome responsibility of preparing New Zealand and New Zealanders for the new millennium.

That task requires that we must build on all that has gone before, all the gains that New Zealand worked so hard to achieve during these last years.

In looking forward we have much to be thankful for.

New Zealand has enjoyed five-and-a-half years of strong economic growth.

We have the eighth lowest level of unemployment in the OECD, lower than Australia, Germany, Canada and Britain.

More and more New Zealanders are gaining the necessary skills to play a full part in the world of the new century.

New Zealand is one of only three OECD economies which is not struggling to balance the budget - we have already achieved that and are now well advanced to further reduce and eventually eliminate Government debt.

Having achieved these goals and many more we are now in the process of renewing our democracy.

The new Government is the first Government in New Zealand's new political era.

In many ways we are heirs to the system of central government first brought together in any real sense in New Zealand by Edward Stafford when he was appointed Prime Minister in 1856.

Stafford was effectively New Zealand's first and, aged 37 years, our youngest Prime Minister.

Technically he followed the Sewell Ministry which lasted one month and the Fox Ministry which lasted 14 days.

Since then, until the present day, there have been a number of far reaching changes in New Zealand's political structures and political life.

The move to MMP, a proportional system of electing MPs, most certainly won't be the last change but it is the one we all must respond to today.

The new voting system which New Zealanders used at the polls last year gave rise to new voices, new forces.

Our Government must hear those voices. It must find a place for those forces.

New Zealand voters in an earlier referendum said in effect they believed it was no longer good enough to put government in the hands of a minority and consign the rest to the periphery of public decision-making.

New Zealanders asked for a new political order; one which took wider and more diverse considerations to its very core.

New Zealanders were seeking a form of genuine majority government.

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

It is a new creation.

It is not the old National Government with a few new members. It is not a New Zealand First Government that merely reflects one party's agenda.

It is a new phenomenon in recent New Zealand history - a genuine, publicly elected coalition that stretches far across sectoral interests to seek the genuine shared interests of our nation.

I am here today to give you two assurances.

The Government that I lead will honour both facets of the double responsibility that New Zealanders have given us.

My first assurance is this.

We will work to protect and advance every gain that New Zealand has made in recent years.

New Zealand has seen the fruits of maintaining an open, progressive and efficient economy.

We will strive to prepare for the next millennium a New Zealand where opportunities are growing and enterprise is rewarded.

So at home and internationally, we will continue to push for the policies that have and will deliver impressive new opportunities.

My second assurance is this.

We will honourably and constantly work to reflect the shared public interests that New Zealanders demand. We will be a true coalition. We will not be diverted by old political boundaries or old political battles.

I believe the people of New Zealand sought this style of government because, in essence, it is the New Zealand way.

In the 1996 election, New Zealanders did not choose chaos nor did they choose to go back to a failed past.

The parties of the centre and centre right received a strong endorsement and between them can muster 70 seats in parliament.

The far left Alliance Party's vote dropped from 18 per cent in 1993 to only 10 per cent in 1996.

The Labour Party's vote dropped from 34.7 per cent in 1993 to 28.2 per cent in 1996.

Together Labour and the Alliance can muster 50 seats in parliament.

One does not need to be a political scientist to read the political trends of the last election.

The majority of New Zealanders endorsed the general direction New Zealand has been following.

But we would be blind if we thought that was the only lesson of the election.

New Zealanders sought a level of cooperation and maturity that they believed had been lacking in recent politics.

They did not return an array of parties to advance the politics of bickering and partisanship.

They sought, dare I say it, the politics of inclusion.

That was my vision several years ago now and it remains my vision today.

Our task, as we face the second element in those assurances I give you today, is to find real ways to express that call for a shared purpose.

As we set about the task, we can look to the past for the lessons it teaches us, and to the future for the demands that the new century will place on us.

Our greatest moments as a nation, our greatest achievements, have not been factional.

Our greatest advances have come during those times when we have put aside the politics of privileged sectors or the competing demands of partisan groups.

I think of achievements such as Maori representation.

Last century, while most colonies ignored or repressed their indigenous peoples, a few progressive voices in New Zealand argued that Maori must be brought into the governance of the new colony.

Against powerful odds, those people were listened to, and we are a better nation for it.

Today there are more Maori in the new parliament than ever before.

Today for the first time in 60 years all the MPs elected from the five Maori seats are working in a centre right government.

I am confident, the recent debate about Maori television notwithstanding, that we can make further impressive progress on issues of crucial importance to Maori over the next three years.

I think of the vote for women.

It is staggering to see how vociferously - and how recently in the scheme of things - that some people opposed women's franchise.

New Zealand has held its head high all this century because the voices of reason and progress prevailed.

I think of our social progress and the successive steps New Zealand Governments took to enshrine a vision that we still live by - that our humanity and our civilisation can only be measured by our determination to see that all citizens have equal opportunities to share in the country's progress.

We have achieved that goal fitfully and incompletely, but it has become a principle that is shared by all fair New Zealanders and endorsed by Governments of all persuasions.

Though we have a long way to go and much to achieve, we have a record in this area, too, that has been the envy of the world.

I think of the bravery and loyalty with which generations of New Zealanders have committed themselves to fight in wars of freedom and principle and, most recently, to keep the peace in conflict-torn areas such as Bosnia.

We have demanded a right to play our part in the international arena.

And our motives have matured as our nation has grown.

Today the Empire no longer beckons - it no longer exists.

Instead, we have built up our own expertise and formed our own agendas whether it be to promote the cause of nuclear disarmament or our most recent international commitment towards eliminating the scourge of landmines.

These threads of cooperation run through New Zealand's history.

And these are the strands that we must take up as New Zealand's first Coalition Government of the MMP era.

Consider again the example of Prime Minister Edward Stafford who dominated politics during the middle of last century before politics became stratified into political parties as we know them today.

He was indeed the country's first statesman.

The lessons he gives us could scarcely be more pertinent for the late 20th century - he insisted, above all else, that our only future lies in pursuing our shared interests as a nation.

In his time of provincial governments, racial war and the privileged interests of the gentry, that was a radical idea.

From the day he formed his first Government, he said, "I determined to be a New Zealander."

Hardly anybody else even used the term New Zealander then.

His aim was "to fuse north and south, east and west, whatever the colour of the skin, into one homogeneous people."

He had a vision of a nation in which old rancours were put aside as provinces and people came together "to coalesce into a strong and united nation."

Maybe we speak in different terms today.

We seek biculturalism and multiculturalism rather than homogeneity as the way to harmony.

But can we dare to be as radical as Stafford was?

Can we envisage a New Zealand in which all people have a genuine chance to have their voices heard?

That was the idea New Zealanders had in mind when they chose a new voting system.

And that was the idea we sought to express as we formed the Coalition Government.

To be faithful to that impulse we have to look anew at the role of Government in our economy and in our society.

We have reformed much of the Government's role in the economy, to the extent that we can truly say "the Government" is no longer the problem that it once was.

The dead hand of Government as a huge spender of the nation's resources and a stifler of innovation has in large measure been removed.

What remains is a valid and hugely important role for Government in promoting opportunity and fairness.

There are some things only a Government can do.

Thus our commitment to resolving Treaty of Waitangi grievances - it is fair to do so, and it extends opportunity to groups of people who for too long have been shut out of New Zealand's prosperity.

There are other areas where the Government must play a leading role.

Thus our commitment to education, because it is the only path that guarantees opportunities for individuals.

Here we seek the active co-operation of those representing teachers, not obstruction as planned by the PPTA.

The PPTA must understand that bulk funding as presently administered will continue to be an option for all schools that wish to take it up.

The challenge in education is to make it relevant for the next century.

To retain and improve our understanding of who we are as a people while at the same time acquiring the skills needed to enable us to compete in an open world economy.

These are the issues I commend to the teacher unions and ask for their co-operation.

Our determination to protect and improve the living standards of all New Zealanders may be self-evident, but it must be continually reshaped and redefined.

We will be constantly seeking new and better ways to deliver social policy because no one can be totally satisfied with progress to date.

The task today is not to dispense welfare and social services as a paternalistic charity.

It is to see how we can help people to help themselves.

To spend wisely and reinforce the concept of personal and family responsibility.

It is to put New Zealanders in the driving seat to achieve better results.

To allow all New Zealanders to restore control over their lives.

The Coalition Agreement reached between National and New Zealand First laid down a framework for the immediate ways in which we seek those goals.

My Ministers are now in the process of giving substance to that agreement as we prepare the first Budget of the new Government.

New Zealanders would be mistaken, however, if they believed the Coalition Agreement was the last or only word to be said.

It was both a bottom line for the shared goals we seek and a first stab at the priorities that we seek - as we can afford them.

Much attention has naturally been focussed on the spending commitments of the Coalition Government.

I can but repeat again that all the proposals we have agreed on will be funded within the cap of $1.2 billion in additional spending in 1997-98 and corresponding figures in subsequent years.

This amount of additional spending was made possible by the decision of the Government to delay for 12 months the second tranche of the tax cuts.

That new spending level assumes the continuation of strong, sustainable growth and low inflation.

The spending, as stated, has been traded off against the tax cuts we were to implement this year.

The decision has not added to the demands on the public purse, but shifted the priority for this year.

We made this decision because in the coalition negotiations it was agreed that those shared values I talked about are best expressed, at this stage, through advancing the common good rather than individual gain.

That is another route to well-being, an immediate priority which the Coalition has identified.

But it does not alter the overall commitments which we are agreed on.

To run a disciplined approach to keep Government costs down.

We remain committed to a taxation regime based on low rates and a wide, fair net.

The reduction of taxation levels remains one of our key objectives.

We remain committed to prudent spending levels.

Our fiscal policy will strike a balance between spending on priority areas, tax reduction and the repayment of debt.

Where the Government can assist in opening up opportunities, we will do it.

Where we should get out of the way and let New Zealanders get on with the job, we will do that too.

Let me remind you how we expressed our commitment in the Coalition Agreement.

It is by:

Providing sound, stable government on an agreed basis. Implementing orthodox economic principles in line with, or better than, the best international practice for a forward looking, successful democracy.

Ensuring there is an economic climate that is conducive to sustainable development and growth. To achieve more employment opportunities, high quality education and social services, through a strong commitment to low inflation, prudent and conservative fiscal management and, over time, lower taxes and reduced public debt.

Maintaining an open, internationally competitive economy. Supporting a strong export sector, particularly by managing cost structures downwards and continuing deregulation and policies to stimulate private sector and individual performance.

Planning for the country's future, not only by ensuring that a strong economy is central to the coalition policies, but also by placing emphasis on intergenerational fairness and increasing the national savings rate by the most effective means possible.
With regards to the last point we will later this year, by referendum, decide as a people whether we support the introduction of compulsory superannuation - to ensure we make proper provision to cater for the fact that there will be a very significant increase in the number of people in retirement compared to those in work early in the next century.

It is a very big question which all New Zealanders will need to pay careful attention to.

Let me conclude by saying we have truly embarked on a new political order.

We are renewing our democracy.

We are preparing New Zealand for the excitement and challenge of the 21st century.

I have given you my assurances that we will continue to navigate with good sense, wise counsel and sound New Zealand values.

Thank you for your attention.

Ends