RSA DOMINION CONFERENCE

WELLINGTON

Your Excellency The Governor-General, Dominion President David Cox, distinguished guests, members, ladies and gentlemen.

Thank you for the invitation to once again address your dominion conference.

I value the opportunity.

The Returned Services' Association stands second to none as an organisation which upholds New Zealand values, supports its members, and serves the community.

I particularly want to thank the RSA for the effort they put in to provide help and care for their members and, at the other end of the scale, the effort they have made to help the young, especially with regards to drug information through the Life Education Trust.

I was particularly pleased this year to see large attendances at ANZAC Day services and to note the number of young New Zealanders attending.

I might add that I strongly support the retention of ANZAC day in its present form.

A year ago, when I addressed this conference, I cautioned that it would be foolish for commentators to be dogmatic in advance about which parties might form a Government after the election, and that it would be equally foolish for party leaders to emphatically proclaim who they would, or would not, be prepared to work with after the election.

I also noted that while it would be the voters who determined the political hand that is dealt on election day, it would then be up to political leaders to produce the best Government they could for New Zealand, based on the choice the electorate made at the ballot box.

One year on, that prediction has proved correct.

A Coalition Government, under MMP, is here, and all future Governments under MMP will be Coalition Governments.

The Government formed out of last year's election, has committed itself, in a formal Agreement, to pursue a platform of specific undertakings.

In just over a fortnight's time, on 26 June, the results of six months of hard work by the Coalition will be unveiled in our first Budget.

A budget - be it of a household, a company or a Government - is far more than a set of financial accounts.

A budget is above all a statement of priorities.

In our case, the Coalition will be matching resources to political commitments.

Our first Budget will be about sustainable economic and employment growth, and delivering better health, education and social outcomes for New Zealand.

To build up the social capital as well as the economic capital of New Zealand.

More than a decade of reform has laid the groundwork for growth and sustainable fiscal surpluses, which have enabled the repayment of much Government debt built up a decade or so ago.

The surplus will be less this year because New Zealand currently is in a period of slower growth and that affects the amount of tax paid.

The Coalition Government is determined not to squander earlier gains through undisciplined fiscal pump priming or through an abandonment of price stability.

But we also intend, year on year, to give back to New Zealanders the gains they deserve in such areas as health, education and social spending.

It will never be enough to meet everybody's expectations.

But our Budget, and the values that drive it, are the indicators on which we as a Coalition can and should be judged.

It is to that statement, to be delivered by the Treasurer, that you should direct your attention if you want to form a valid assessment of the Coalition Government.

One responsibility of Government - Coalition or otherwise - is to invest in the future of the nation it serves.

Issues arise from time to time where a responsible Government has to stand back, stimulate debate and invest political as well as financial capital in issues of long-term significance.

That process is rarely popular or easy.

But it is essential if we are to achieve sustainable growth and security in the years ahead.

On the domestic front, the current debate about our ageing society, and the implications for retirement income and health care for the aged is just such a policy issue.

Recent advice is that based on projected demographic change alone health services provided to the over 70 year age group will increase as a share in total health expenditure from around 29 per cent in 1995/96 to around 57 per cent by 2050.

I believe that how we plan and provide for our ageing society is one of the defining issues of our time.

Developed economies around the world are fronting up to it - be it in Japan, Britain, the United States or Germany.

It is no accident that ageing populations, and their implications for public finances, health care and retirement income, are a major theme for the summit of major industrialised economies, to be held in Denver later this month.

So too must we in New Zealand pick up the challenge.

The Government is gaining more brickbats than bouquets for pushing this area forward onto the public agenda.

As Leader of the Coalition Government, I welcome the debate.

We agreed in the coalition talks to hold a referendum on compulsory superannuation.

This option has been discussed for many years but this is the first time the public will be asked for their views on it through a referendum.

Whatever the result of the referendum, it will not affect the current entitlement by those already receiving New Zealand Superannuation.

Those already retired or very close to retirement will not be affected by the proposed retirement scheme.

On the other hand the Coalition also agreed to remove the surtax on superannuation and legislation will be introduced later this year to do that.

A second area where it has fallen to this Government to seek more investment is in defence and security.

In an address last Friday to the Institute of International Affairs, I observed that by investing in our security we enhance our capability to defend the peace.

There is never an easy time, except when it is too late, to secure the funds necessary to retain a credible defence capability.

In a political or public debate, hospitals win over guns every time.

An irresponsible Government, one which does not believe in investing for the future, would be tempted to take the easy way out.

The easy way would be to subscribe to the view that, with no immediate territorial threat, we need no military capability.

I - and the Government I lead - do not share that view.

The protection of the nation, its sovereignty and the national interest, is a fundamental responsibility of Government.

Most New Zealanders, I believe, would acknowledge that responsibility.

I discount the view that New Zealanders do not care about defence.

The extent of public debate on the subject, if anything, points to a healthy and informed public interest in the role of the New Zealand defence forces.

There is probably more consensus on this subject than most commentators have acknowledged.

Should we be able to protect and enforce our sovereignty over New Zealand's huge Exclusive Economic Zone, in order to conserve fisheries resources and stop illegal fishing? I believe so.

Should New Zealand be able to effectively deliver disaster aid and reconstruction assistance to the vulnerable Island economies of the Pacific region? I believe so.

Should New Zealand be prepared to play a role in United Nations and multilateral operations to make and keep the peace, protect innocent citizens, and rebuild economies and communities shattered by war?

If New Zealand has a role and a responsibility in this area, do we believe that the young men and women we send should be well trained and equipped to do their job effectively and safely? I believe so, and as veterans I am sure you support that as well.

If we are a trading nation, should we be helping to support the stability and security of the Asia Pacific region which provides 70 percent of our exports and imports? I believe so.

And so do most New Zealanders.

Polling carried out for the Ministry of Defence on a nationally representative sample, over a period of three years, indicates that over 70 per cent of New Zealanders believe it is either fairly or very important for this country to have strong and effective armed forces.

Support for New Zealand's active role in United Nations international peacekeeping remains high - at 78 per cent.

Ninety per cent of those surveyed thought the security of Australia was very or fairly important to New Zealand, and 83 per cent thought the same for the South Pacific region.

Nor is this support confined to older New Zealanders.

The proportion of those surveyed aged under 30 years who felt that a strong and effective defence force is important has risen from 56 per cent in April 1996 to 71 per cent this year.

My Government's broad intention is to ensure that the equipment decisions which will be taken over the next years will enable the effective capability of the New Zealand Defence Force to be maintained.

It is no secret that much of the front line equipment of the New Zealand Defence Force is coming to the end of its operational life.

In meeting those needs, we will balance defence investment on the one hand against the pressing domestic and social spending priorities of Government on the other.

Members of the RSA will need no reminding that prosperity at home and peace and stability abroad are linked, and that neither can be taken for granted.

Peace pays dividends but requires a solid investment of time, capital, capability and resolve.

In the last fortnight we have seen those elements at work in the historic signing, by NATO and Russia, of a new Founding Act.

Former adversaries have put aside their historic antagonism.

NATO's expansion eastward, and Russia's decision not to target its nuclear weapons on members of the Alliance, are a celebration of what would have been unthinkable only ten years ago.

A recent visitor to New Zealand - Chancellor Kohl - has shown by example that the goal of European integration is to prevent negative rivalry and to build peaceful cooperation and interdependence between the nation states of Europe.

The same factors are relevant in our approach to the Asia Pacific region.

Our region is enjoying a period of unprecedented stability and growth.

Yet there remain areas and issues which have the potential to undermine stability.

New Zealand needs to - and will - play its part in building up the new regional defence and security dialogue represented by the ASEAN Regional Forum.

And we shall remain at the leading edge of the Asia Pacific Economic Cooperation Dialogue (APEC) which is building interdependence and dismantling barriers to contact between the people and economies of the Asia Pacific.

Our diplomacy abroad, our domestic policies at home, and the capability and professionalism of our defence forces, all serve to keep us constructively engaged in our region.

And all these elements need to support each other if New Zealand is to play its part in ensuring stability, prosperity and the rule of law in the region and world from which we derive our national income.

The facts are that with a growing economy our core national defence responsibilities can and will be achieved without sacrificing the Coalition Government's commitment to lifting investment in health, social and educational outcomes.

Mr President.

The RSA, I know, has a strong record in supporting the maintenance of a strong and fair social security system at home, and a strong and responsible defence and security policy for New Zealand abroad.

We may differ from time to time on how we each see those objectives being achieved, but I want to reaffirm today, that fairness and security - at home and abroad - continue to lie at the heart of the Coalition's approach to Government.

Your members, who have offered much in defending New Zealand's past, and building New Zealand's future, would have it no other way.

And neither would the Government I am privileged to lead.

Thank you.

Ends.