Don Brash
Leader of the National Party
Address to:
The Association of New Zealand Advertisers
Auckland, 31 March 2004
Good evening to you all. I am delighted to have this opportunity to address a gathering representing the great bulk of
New Zealand advertisers - companies which tend to be among the most vigorous and entrepreneurial in our society.
I have always seen advertising as a measure of an open society. At a time when the Eastern bloc was closed and centrally
organised, advertising was missing -- and so were many of the products which consumers wanted. The West, by contrast,
was driven by competition, and that competition was driven, in a large part, by advertising.
During a gripping TV programme, we may at times lament the advertising breaks, but of course without advertising on
television, programmes would be limited, and viewers, by one means or another, would have to pay a great deal more for
the service. Equally, there are plenty of evenings in front of TV where the ads are the highlight of the evening's
viewings.
Similarly, newspapers and magazines without advertising would be many times their current price and would lack much of
the information which readers have come to expect. So, advertising, with all the colour and enrichment which it brings,
is here to stay.
As you would possibly have gathered from my Orewa speech and recent political events, I don't have much time for
political correctness. At one end of the range these are silly irritants, such as the ban on the traditional couch on
the embankment at the Basin Reserve cricket test in Wellington (because, among other things, it was said it may create a
fire risk!). Or the ban on children's lolly scrambles in some areas because someone might be injured. Or the
taxpayer-funded excursions to study hip hop overseas. Or taxpayer-funding for just about any other silliness you can
imagine, as long as it has some lofty overtones of political correctness.
At the serious end of the offending scale, we have the separatist Government policies that are troubling so many, and
the consultancy rorts which have become endemic. In other societies these would be described as extortion, backhanders,
corruption or baksheesh. Our term, sadly, has become "iwi consultation." And, wherever I go around the country I find
more and more people who are aggrieved about examples of this, which they have encountered personally, or have had
recounted by family and friends.
This has become an industry in its own right, beyond anything that was initially imagined. In fact, it is an obscene
caricature of what was originally intended in terms of fair and reasonable consultation.
National will put a stop to these excesses. Consultation is one thing; what is happening at present is unacceptable. You
will no doubt be pleased to know that I don't have much time, either, for some of the PC problems which your industry
faces.
For a start, I don't believe in taxes on some foods because some bureaucrat in some ministry may think we should
discourage people from what they want to eat in favour of more lentils and chick peas, for example. I'm on the road a
good deal these days and my diet includes a good number of Big Macs, Burger Kings, KFC chicken, and fish and chips, and
that's a choice I can make for myself.
Certainly we have a problem with child obesity, as do many affluent Western countries, but that should be addressed by
sport and exercise, parental guidance, and education. Making our streets safer, so children can walk to and from school,
and play unsupervised, as we did when we went to school, would be a help. National intends to take a tough stand on law
and order, and I will be announcing our policy on this in a couple of months.
Nor do I have much sympathy with the Nanny State's intention to clamp down on Direct To Consumer advertising of
pharmaceuticals. I see no reason at all why New Zealanders should not be told about products which may benefit their
health. They have the right to such information, in my view, and it is then a matter for patients to discuss with their
doctors if they want to do so.
If some doctors are somewhat discomforted by patients asking about these products, then so be it. Doctors should be able
to discuss all options with patients and advise them. To argue that they should remain the sole dispenser of information
about treatment does not sound to me like a coherent argument in this day and age.
The companies represented in ANZA are at the cutting end of the commercial environment in New Zealand and I would like
to take this opportunity to emphasise that National stands committed to improve the commercial and business environment
in which you operate. That will be to the benefit of all New Zealanders, not just your members. It means economic growth
and jobs and better living standards for everyone.
Unfortunately, as the New Zealand Herald business survey showed last week, 95 per cent of chief executives do not
believe we have a coherent economic policy for sustained growth.
That survey confirmed that this Labour Government is business unfriendly. It has given up on its goal of returning New
Zealand to the top half of the OECD within a decade. It has lost the battle to regain comparability with Australia,
meaning that many of our brightest and best will be lured across the Tasman.
The fact that nearly 95% of those surveyed don't think we have a growth strategy to sustain business success is truly
worrying.
Labour, in the arrogance of power, is giving way to its ideologues. All the retrograde steps removed from earlier
employment law, and more, are back in the current Employment Relations legislation, which drives the innovation out of
employer-employee relationships and moves us closer towards an inflexible unionised labour market. Parts of it are even
being disowned by the Associate Minister of Commerce, John Tamihere.
Then we have the Holidays legislation, Health and Safety in Employment legislation, the Resource Management Act and the
Treaty of Waitangi. These are issues that businesses are identifying as having a hugely negative impact on productivity
and growth.
As I've said many times, one of the top priorities for the next National Government will be to improve New Zealand's
sustainable rate of economic growth. Stronger economic growth is absolutely critical to raising the living standards for
all of us.
Early in the Government's first term, Michael Cullen said he thought it would be clear by the middle of 2004 whether or
not the Government's policies were on the right track in terms of improving New Zealand's economic growth rate.
He confirmed that expectation just over a month ago. Well, I guess there are three months to go before we're in the
middle of 2004 - but, unless we see an enormous turnaround in Treasury forecasts, it's abundantly clear he's going to be
very disappointed.
The Government's economic policies have failed and the outlook is getting worse, not better.
A thriving and internationally competitive business sector is crucial to achieving the goal of higher living standards.
The National Party is committed to doing what it can to help the business sector grow faster. And we will start with
moving towards less regulation and less taxation.
The Labour Government continues to staunchly deny that higher taxes hinder growth, despite all the international
evidence and experience that points to the contrary. It has introduced a multitude of new taxes that have raised $3.6
billion in extra tax - an average of $2,600 for each household over the last four years.
And just this week we have had further evidence that many of our international competitors are using lower corporate tax
rates as a carrot for foreign investors, and what this means is that if we leave our rate where it is today, then we
will be left behind.
The KPMG World Tax Survey found that 8 out of 30 OECD countries reduced their corporate tax rates in the past year, and
that 21 countries have lowered their corporate tax rates since 1999.
Since Labour was elected in 1999, the average OECD corporate tax rate has fallen from 35% to just below 30%, while
Labour has stubbornly left ours at 33%. Put simply, that means we have moved from a position where we were better than
average in 1999 to a situation where we are now worse.
The KPMG report says it all: "if we want to provide incentives to business, the best way to do this is to lower our tax
costs across the board, not just for selected industries". That would mean that companies in the advertising industry
would be as entitled to tax cuts as would overseas movie companies.
National is committed to putting this right. Our present corporate tax structure almost encourages companies to invest
in Australia, but I think it is now widely accepted that if we are to boost productivity and employment then we must
encourage firms to invest here.
We are absolutely committed to reducing and flattening tax rates. Our immediate priorities upon election are cutting the
corporate tax rate to at least match the 30% rate in Australia, and providing tax relief for low and middle-income
families.
Be assured that we will cut the top personal income tax rate during our first term of government, but we must do that
gradually. We must first address priorities in education, retrain the long-term unemployed, and give our police and
security agencies more teeth and better resources.
National is also committed to returning more flexibility to New Zealand's increasingly regulated labour market.
Although the Labour Government continues to claim credit for the low unemployment rate, the reality is that New
Zealand's improved rates of employment and economic growth owe much to the increase in labour market flexibility
introduced by the previous National Government through the Employment Contracts Act of 1991.
Against the advice of expert bodies such as the OECD and our own Treasury, Labour is continuing to unwind these gains
with more union-friendly and business-costly legislation.
The result of these proposed changes will be higher unemployment, especially among vulnerable workers, reduced
flexibility in our economy to cope with unexpected shocks, and lower economic growth. The changes will make it still
more difficult for those on benefits to get into employment.
The business sector has quite rightly identified the Resource Management Act as an area of prime concern. That
cumbersome piece of legislation, with its maze of consultation obligations, is suffocating development and holding up
important projects.
Take Auckland for instance. Transport gridlock here is costing the economy more than $1 billion a year and must be
fixed, as I am sure those of you who drove here today will confirm. But, in my view, finding the $10 billion which the
AA says is needed to build new highways is ALMOST the easy bit - I said ALMOST.
No. The biggest problems are the massive regulatory snarl-ups faced by planners. Take for example the North Shore
bus-way. Approvals for that took years. If we were in Singapore, it would take one week. Imagine, then, how long it
might be before any of us has the pleasure of cruising the Eastern Corridor.
There is no argument that the Resource Management Act is a major source of significant additional costs, substantial
delays and uncertainty. Much-needed investment in transport and energy infrastructure, and many, many other important
projects are being delayed or even worse, abandoned.
The Government's latest bid to Band-Aid the problem away is to create a fast-track process for projects that it
considers are in the "national interest". But of course, as Treasury points out, giving priority to major projects will
mean even longer delays for other works.
Make no mistake: National is committed to streamlining RMA processes so investors can proceed with projects
expeditiously, with certainty and with minimum cost.
I have already commissioned an independent study to identify ways of removing Treaty clauses from that legislation. That
fits with our focus of reducing the widespread abuse of the consultative process. There will be no more $1.3 million
bills to consult iwi. We'll also work hard to address the variable standards of implementation at local government
level.
What is of real concern is Australia's free trade agreement with the United States and our exclusion from that
agreement. Not long ago it would have been unthinkable for New Zealand to be excluded from such a deal. It is a sad
reflection on how far the relationship with our most important friends and allies has slipped that the unthinkable is
now routine.
This will likely have a detrimental impact on our economy not only in terms of losing preference to our Australian
export competitors in the US market but, probably more importantly, through the loss of foreign investment and
technology to Australia that otherwise may have come or stayed here.
It is easy to see why a foreign operation, or even a New Zealand operation for that matter, looking to export into the
US would now be more enthusiastic about setting up in Australia. A National Government will be working very hard to
ensure that New Zealand gains a free trade agreement with the United States and remains a highly competitive base for
industry.
This Labour Government has had the good fortune to be in office at a time of moderately strong economic growth, the
result of the policies put in place in the 80s and 90s, the low exchange rate between 1998 and 2001, and the net inflow
of people over the past two years.
A growing economy has emboldened the Government to load costs onto business and introduce labour market laws highly
favourable to their union supporters. These are things the Government can control, and the costs of these policies will
show up when New Zealand encounters a less favourable economic environment.
National has five key priorities, and I have talked mainly about one of them - the economy - today.
The other four are focused on what sort of nation we will have in the future, and the sort of aspirations we can offer
our children and grandchildren.
Those priorities are the urgent need to:
· Improve the performance of our educational system. · Fix our entrenched culture of welfare dependency. · Improve
security by much tougher and more effective law enforcement, and · Reverse the dangerous drift to racial separatism with
policies that focus on need, not race.
If you can recall my Orewa speech - through the haze of Labour's desperate rhetoric, mis-quotes, U-turns, and even the
flying mud (though that wasn't theirs) - you will know that I asked whether New Zealand was to be a modern democratic
society, embodying the essential notion of one rule for all, or a racially divided one with two standards of
citizenship.
Well, recently National obtained, under the Official Information Act, Treasury advice to the Minister of Finance warning
that uncertainty generated by unresolved Treaty debates could have "quite large" negative impacts on our economic
growth.
That advice was given to the Minister when the seabed and foreshore had been on the political agenda for only four
months. Six months later, the economic and social fallout has increased dramatically as the Government continues to
dither over these important issues.
The reality is that, as a community, we are a multi-ethnic, multicultural, society. We are not all the same. We all have
different preferences and interests and sympathies. But we are all still unquestionably, and proudly, New Zealanders.
Let me conclude by saying that I admire the talent on display in the advertising industry. There is no doubt that this
country is able to foot it with the best in the world in most spheres, and advertising is one of those. Your habit of
winning awards overseas is testament to that.
There can't be many industries where the boring, the mundane, the crass, and the dreary are remembered as easily - and
even as fondly - as the brilliant, the creative, the cunning, and the funny. A calling surely as strange as politics.
You play a very important part in our society. You help form opinion, you create illusions, you set trends, you put
pictures to the words, you give us incentive, you spark our ambition, you force our creativity, and you even change our
language. Probably as important, you make us laugh and you make us cry.
Thank you for the genius we see every day, even if it does keep popping up in the middle of our favourite TV programmes.
And thank you for helping to change public opinion. I can now say "bugger" in front of hundreds of people without
upsetting anyone.
Ends