The Honourable Bill English, MP
Leader of the New Zealand National Party
Leader of the Opposition
Gore Rotary Club
31 January 2002

New National - ambitious for New Zealanders

Thank you for the opportunity to address you as your local MP, Leader of the National Party and an honorary member of the club. In many communities, Rotary forms part of the glue that holds people together, through its regular meetings and community activity. This kind of voluntary association is as important as economic success to the cohesion of our communities.

Over New Year I turned 40. I have the choice to be complacent or ambitious, and it's the same choice for New Zealand in election year. New Zealand has been sleeping off the 90s - there was huge political economic and social change with all the uncertainty and insecurity that comes with change. The Alliance/Labour government fitted the mood for less change, and more emphasis on security.

But they have gone further than that. The Labour regime has become adept at lowering expectations. Our expectations have been lowered across the board - in the economy, in health in education - the progress of our nation has slowed to what suits Labour and the Alliance. I am ambitious for New Zealand, and so are most New Zealanders, and National wants to rekindle a sense of national aspiration.

The Government doesn't even expect much of itself. Asked about a series of problems, Helen Clark said she gave every minister a 'big tick' for performance. Now isn't that politically correct - everyone gets a prize.

Helen Clark says herself that everything under her government should be predictable and boring. Well life isn't predictable, and boring isn't good enough for a small country on the edge of the world that has to reach further if it is to provide the living standard we will expect.

We are a unique country and a unique people. We are the only developed country so dependent on a biological production base, a producer of food and fibre. For a developed country we have an unusual ethnic mix among our people. These two factors and how we deal with them will shape the state of our nation over the next few decades.

I want to focus first on the economy. Now a Southland audience might wonder how I can argue Labour has lowered our economic expectations. Here we are enjoying the best economic conditions in 30 years. We are seeing and enjoying the benefits that strong economic growth and confidence can have for the whole community. Other similar parts of the country are doing well too. The Government doesn't control the exchange rate, and Clark and Cullen didn't milk the cows or dag the lambs. That doesn't stop them claiming credit for the prosperity we do have.

But that's the puzzle. These are the best export conditions in a generation, and we are a trading nation - we must have done well. Just a few years ago in the late 90s there was an anguished national debate about New Zealand falling behind the rest of the world. The growing gap between Australia and us was particularly hard to accept.

At that time, we left an economy that was growing at 4% and rising. Since then the economy has grown at 2½%. Labour's motto seems to be "Don't worry, be happy". There is no sign from the government that they understand this is not good performance. Each year Labour says growth will pick up next year, and each year it stays around 2½%. At that rate we will continue to fall behind Australia and the rest of the world over the next 10 years as our meat and milk prices drop, and other economies pick up again.

National's economic policy will be focused on the particular character of the New Zealand economy. For all the knocking it's had, agriculture still dominates the economy. I don't agree with Helen Clark when she talks as if agriculture is the old economy, and there is some new knowledge economy that's got nothing to do with commodities. Agriculture has shown strong growth in production and earnings in the last 5 years. Most importantly it has shown the strongest growth in productivity of any major sector.

National wants to raise expectations about economic growth in New Zealand. But we won't be knocking people who work with so-called commodities. I hear from Labour the need for more and more technology skills as if other skills were less important. Workers in any job have changed their skills and work practices over recent years - just look at the big changes in our freezing works compared to 15 years ago. They deserve credit and recognition, not to be told they aren't needed. Places like Invercargill and Gore don't need more software writers - we need more people who can service rural industries that are stronger than ever.

I have talked about food and fibre production as the base of our economy. The other pillar of the New Zealand way is the owner-operator. We are a nation of small business, more so after a clean out on the stock exchange of bigger businesses that couldn't cut it in the restructured economy. Our way of thinking about economic policy is shaped by the fact that investment, growth and employment mostly happens in small businesses.

In a small business, the owner's life savings are at risk. All of it can be lost if it doesn't rain or another bigger operator moves into town. Some make it and some don't. Being in business means taking a risk all the time and sometimes making money. These businesses take enormous commitment of time and money to get them going and keep them going. It is a way of life for a family as well as a job.

And that's why profit is so important. I know it's not politically correct, but profit is a good thing. Look around us here in Southland. What a difference it makes when businesses are making a profit. We have seen enough losses to know which one is better. So profits aren't about greed and ripping people off - they are the engine behind investment jobs and confidence. Answer this question - is our community a better place to live when profits are flowing, or when it's all losses?

With this understanding of how our economy works and how small business works, it's much easier to make polices for growth. We will be announcing policy on savings, on tax, on innovation, on ACC, workplace law, industrial relations and others through the year. All of it will aim at lifting economic performance, at creating wealth before redistributing wealth.

Compliance costs are also proving to be a huge problem for small businesses. Paul Swain said last week that he realised the government had pushed costs up, but he hoped it would change this year. This was just after 40% increase in ACC for self employed. New regulation has to do more good than harm. Businesses also need to know what the rules are, and that they're not going to change at some politician's whim.

The Labour/Alliance government is to release its innovation policy in a couple of week's time. I predict it will be a warmed-over version of the committee reports we have seen before, as appetising as yesterday's fish and chips. More committees aren't innovation, and bureaucrats aren't entrepreneurs. You can't innovate if you're too busy filling out forms and paying hidden taxes.

And look at the rush to sign up to the Kyoto Protocol, without any clear idea what the impact will be on New Zealand's economy. As I've already said, our economy is different. It's based on biology, not heavy industry. It doesn't make sense to ratify without knowing the effects on us. The fact that this is a major United Nations initiative is not a good reason, even if Labour thinks it is.

Nor is there any understanding of how we should be investing in New Zealand, how we should be backing ourselves. The biggest investment decision in New Zealand for the next 20 years is already turning out to be wrong. Last year Parliament passed the law for the Cullen fund. This law takes $2 billion of tax each year and puts it in an investment fund. This fund is then invested mostly overseas as required by the legislation. In 30 years time, if it earns 9% each year for 30 years, it will pay back about 10c in the dollar of the cost of national super in 30 years time. So far the fund has lost money.

National opposes the Cullen fund. I believe we should back New Zealand, and those billions are better invested in fulfilling our ambitions for our nation, rather than growing the US or the British economy. Either the Government invests that money, or business and families do. Either we trust ourselves, or we trust the Government to know what's best. Either we back New Zealand or we settle down and hope someone else will earn a living for us - it's your choice.

It turns out that the Government doesn't have enough money to put into the Cullen fund without pushing up public debt - it's like saving by increasing the mortgage.

Economic policy matters but a strong economy isn't the only ambition New Zealanders have. They want, and I want, to see a world-class health system and education that's gives our children and young adults a sense of the inspiration for learning and the excitement of the opportunities that it brings.

Our expectations have been lowered in health. It's now normal to see nurses threatening to shut down a public hospital for two weeks, for cancer patients to go to Australia for their treatment. It's now normal for hospitals to run on debt - as if the bills will never have to be paid. What if the Gore Health Trust ran like this? It couldn't survive. The public health system is storing up huge problems and it is a shambles. Forget higher expectations - the first job will be a bail-out, so we avoid all the suffering and uncertainty that would go with a major restructuring.

As for the future of the public health service, I want to see it develop more along the lines of the Trust here in Gore - longer-term funding, a mix of public and private health professionals, and innovative changes that suit the local community. It's not always easy, but it does work.

In education, Labour is slowly choking the progressive schools with bureaucracy. The most important activity in education is teaching and learning. We want for our children the inspiration of learning, and usually that comes from the hard work and professionalism of the teacher. Our teachers are telling us that it's getting harder and harder and harder as they are required to spend more time doing paperwork. We want to lift standards and we will be looking for the support of teachers and parents who share our ambition.

We are ambitious for every New Zealander, not just the fortunate or the bright. Every child deserves the chance to be lifted to a good standard - not levelled down to the mediocre. Labour believes that any problem is best dealt with by throwing other people's money at it. All the research in education tells us that money is only part of the answer - leadership, motivated teachers and parents are more important.

Education is part of developing the capacity our people. A strong economy and a dynamic education system will help build a better New Zealand.

We should also be more ambitious about some of our long-running and more difficult issues. I was shocked to see a prominent political commentator following the lead of historian James Belich and saying that "we aren't a nation", that New Zealanders are a "lost tribe of Britain [which] has not forged an identity" and that "we do not know who we are."

These comments are made the context of Waitangi Day, and the tension that goes with it.

I think it's wrong. We are not a nation drifting along without knowing who we are. Ordinary people know they are New Zealanders; they have strong instincts about what that means and actually quite like it.

We do have some internal issues around the Treaty of Waitangi and the progress of Maori. These are difficult issues, but I believe we are enough of a nation to deal with them where we can, and live in mutual respect for the differences that remain.

It's an irony that a great Labour leader, Norman Kirk went to Waitangi in 1974 and was welcomed as a hero and left as a visionary when he said the Treaty made ours "a lucky country" because we came to nationhood with no heavy legacy of bitterness to pay off. Helen Clark is going virtually under guard, changing all the arrangements to make sure there is no confrontation.

In Parliament it's worse. If we raise an issue about accountability for Maori ministers or money spent on Closing the Gaps, we are branded as racist, not by journalists or backbenchers, but by the Prime Minister of New Zealand.

National is the party of the nation - we seek represent the national interest, the hopes of every New Zealander, not just some sectional groups. I will work for a united New Zealand, and that's why I went to Ratana last week, the first National party leader to do so.

Helen Clark has to get used to the idea that open and honest discussion about how we live together will be difficult. It won't all be nice and intelligent. Maori and Pakeha have prejudices and strong views, people will blame each other. But it's a discussion we must have. Labour's political correctness is making it worse not better.

Throwing more money at Government programmes is not the way ahead. I am meeting more Maori who can see that enterprise, self-reliance and a strong community are the way ahead.

Helen Clark lacks the confidence in ordinary New Zealanders to be able deal with these issues. Labour thinks it's as simple as handing out more cash and keeping the Maori vote. They have failed to lead or inspire public debate about how we fix the problems and move on. National wants to lift the debate and lift our expectations beyond this negative politically correct attitude to such an important issue for New Zealand.

We will be looking to get Treaty settlements dealt with, so Maori and Pakeha can move ahead. We will take a hard look at the Closing the Gaps programmes to see whether they are closing any gaps, and to make sure they are fair to everyone in need.

Perhaps Colin James' most telling comment is that it will be the next generation that sorts all this out. There I agree with him. Clark and her generation in Labour just can't do the job.

National is well organised for election year. We have a united caucus and policy ready to go, outlining our plans to raise expectations again. Labour has won the minds of enough New Zealanders, but not their hearts. I look forward to the chance, as your local MP, to return again next year as Prime Minister with the support of all those New Zealanders who are ambitious for their nation.

ENDS

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