Hon Peter Dunne

MP for Ohariu

Leader of UnitedFuture

Minister of Revenue

Associate Minister of Health

Address to Tawa Rotary Club

Tawa Bowling Club, Davies St, Tawa

7pm, Tuesday, 3 March

When I last spoke to your Club nearly two years ago, I speculated about the likely outcome of the 2008 General Election, which was at that stage about eighteen months away.

I suggested then that “the next election is National's for the losing” and that “Labour's biggest problem is voter fatigue or the political clock, which is ticking more loudly as each day goes by” because “voters, it would seem, tire of the same government after three continuous terms. “

Turning to the then new leader of the National Party, John Key, I commented that “he appears to understand inherently that MMP government is about establishing durable partnerships, between like-minded parties, and then working to make those partnerships succeed.”

I concluded that from UnitedFuture’s perspective, “I have no doubt at all that we could work together effectively in a governing arrangement, were the opportunity to arise, in just the same way we have with Labour”.

And so it has proved to be.

The 2008 General Election was one more momentous step in this country’s journey of government under proportional representation.

Not only did it see a continuation of the type of government formation arrangements that the largely self-appointed media and academic political cognoscenti had been so sneering and dismissive of as impractical and unworkable in 2005, it actually saw them enhanced considerably, thereby shattering most of the commentators’ reputations and credibility.

Whereas in 2005 the two Ministers from the two parties other than the Labour/Progressive coalition has been formally described as “Ministers from parties not part of the government”, in 2008 there were five such Ministers from three parties other than National, now described as “Ministers from support parties to the government.”

What might at first appear no more than a subtle shift in wording is really far more significant, and shows the extent to which Mr Key has mastered the dynamics of government under MMP.

When I spoke to you last, I foreshadowed the possibility of UnitedFuture being prepared to work with a National-led government after the election - it was what a centre party does, I recall saying to you.

Yet, my announcement last October that UnitedFuture would support a National-led government, rather than a Labour-led one, was greeted with a fair measure of media derision and scepticism about the motivation behind it, despite the facts that the ground had been laid from the time of my last address to you, and that there had been frequent media speculation in the interim that not only was this likely to happen, but that it was appropriate that it should happen as well.

The reasons for the move were very simple.

As New Zealand’s now only genuine centre party, UnitedFuture is the one party credibly able to work with either major party in government.

Our focus has always been on achieving our policy objectives, rather than getting bogged down in the ideological battles of others.

We had no great bust-up with Labour – I was never suspended because of my conduct as a Minister.

Indeed, our relationships with Helen Clark and Michael Cullen, in particular, were extremely cordial throughout the entire six years of our partnership.

What it came to was simply recognition that, in terms of common ground, we had gone as far as we could.

Virtually every single point of our two confidence and supply agreements in 2002 and 2005 had been achieved, but we knew full well that the next steps we wanted to take in various areas such as a greater focus on public private partnerships for infrastructure developments like new highways; better utilisation of public and private sector surgical hospital capacity to curb ever increasing elective surgery waiting lists; income splitting to spread the tax burden more evenly across families; and a greater recognition of the role of the recreational sector in the management of our national game estate were all steps too far for a fourth term Labour Government, likely to be heavily reliant on the Greens.

At the same time, these were issues National was showing far more sympathy towards, so by election time last year the choice was clear – did we continue working politely with Labour but being increasingly rebuffed and frustrated, or did we take on the challenge of a new and varied government, where we were on the same wave length on major policy issues?

The decision was an obvious one.

Since the election, I have been extremely pleased at the progress we have been able to make, albeit in our diminished Parliamentary state, as a support partner of the new National-led government.

This Government already has a much more inclusive feel about it than its predecessor.

Non-National Ministers now participate regularly and fully in Cabinet committees, and not just for the items which relate to their portfolios, which was the case previously.

Last week, for example, as Minister of Revenue I participated fully in the Government’s Jobs Summit, even though the issues it covered went far beyond taxation matters.

As Associate Health Minister, I now have a full range of delegated responsibilities in the portfolio beyond the continuing work on Medicines New Zealand, the national medicines strategy I initiated during the term of the previous government to make it easier for New Zealanders to get access to the medicines they need.

One of the areas where National and UnitedFuture do have common ground is more effective use of private surgical hospital capacity to reduce public hospital elective surgery waiting lists.

Over the last decade, public health expenditure has grown to record levels, yet, the goodwill and professionalism of medical and nursing staff notwithstanding, there has not been a commensurate increase in service delivery to the public.

The most obvious example of this is the growth in waiting lists for elective surgery, fuelled in part by the fact that many previously specialised procedures have now become more routine and readily available, with a consequent increase in both public demand and expectation.

Against this, the Ministry of Health’s ‘sort-of’ commitment that people should not have to wait more than six months for treatment looks pretty inadequate.

What it means in practice is that if people are not able to be treated within that time frame, their case is reassessed, which is often code for being “bumped off” the waiting list and forced to start all over again.

But this is not a problem peculiar to New Zealand – it is happening right across the world as medical science continues to improve and make procedures which were at the top end of medicine less than a generation ago more straightforward.

Not only will that pressure continue to intensify, but also the capacity of governments, especially in a time of global economic meltdown, to meet those pressures through more and more funding is likely to reduce sharply.

It is little wonder, therefore, that governments around the world, from the left to the right, are facing up to the reality that the private sector needs to be more involved in hospital care in some shape or another.

This involvement takes many forms, and I am not saying tonight that any one model is an automatic fit for New Zealand, although I am saying we need to look at what is going on in countries like Britain, Spain, Holland and Australia, and be open to ideas that actually work.

This is a challenge both National and UnitedFuture have agreed on in our confidence and supply agreement, and I am looking forward to working alongside the Minister of Health to develop a model that draws from the world’s best practice, and is appropriate for New Zealand’s circumstances, for the benefit of patients presently suffering from the delays they are being forced to endure.

This is not an especially ideological issue.

Rather, it is simple pragmatism – if there is surplus capacity in one part of the system, and long waiting lists in the other, there has to be a logical way of utilising both parts effectively to bridge the gap.

I have no patience for ideology that stands in the way of solutions that are blindingly obvious.

Similarly, I have no particular hang-up with private organisations being contracted to manage public prisons, if they can do a better job.

It is not about privatisation – the assets still remain in Crown ownership – but its simply a recognition that some things may be done better by the private sector, and given the shambles within the Corrections system at present, I would be surprised if there were still too many people prepared to die in a ditch for the view that the State is always best manager in these matters.

Yet that was the block we faced with the previous government.

Too much ideology standing in the way of too many practical outcomes.

And if ever we were in an age where we need to be adaptable and focused on results, it is today with all the challenges we face with the global economic crisis.

We need to apply pragmatic solutions to problems across the board, and not be held back by rigid, hide-bound ideologies.

There was this unshakeable ideologically obstinate view that only the state should have a role in providing health, education and corrections services, even if it was struggling to satisfactorily provide those services, and that any significant increase in private sector participation was in effect a form of privatisation that diminished the core responsibilities of the state to its citizens, and that was unacceptable.

It is a peculiarly short-sighted and narrow view, out of step with even what other social democratic parties are doing in countries our Labour Party has traditionally looked to for guidance.

In a small country like ours we cannot afford the luxury of parallel systems that leave everyone equally disadvantaged and under-serviced.

This is not a call for the wholesale privatisation of government services, or for the slashing of the public service, because I do not agree with either of those.

All I am suggesting is that it be acknowledged that in certain areas there is a role for the private sector to work alongside a public provider, rather than in direct opposition to it.

And then there is the ongoing issue of Transmission Gully.

I am sick and tired of the delays, and some of the local political sniping, surrounding bringing this vital project to fruition.

I want all our Mayors, Councils and MPs working together, instead of continuing to see this issue of how best we develop Wellington’s roading infrastructure from their own narrow municipal or partisan interests.

The plain facts are these – whatever study is done on Wellington’s northern access and egress, Transmission Gully emerges as not only the overwhelmingly preferred public option, but also the only one capable of being constructed within a reasonable time frame.

The so-called Coastal Highway is simply never going to happen.

Aside from the practical and aesthetic constraints cantilevering a highway out over Cook Strait impose, no matter how the Resource Management Act may be reformed, there is the inescapable issue of the community disruption the likely route will cause, not to mention the prospect of Treaty claims, and the fact that most of the land required has now been sold for residential housing.

It is hardly surprising therefore that the 2006 study concluded that the Coastal Highway option, even if approved at that point, would take at least 20 years from then to develop.

Put bluntly, it should be forgotten once and for all, because it will never happen, and the quixotic and sadly deluded few who continue to advocate for it should be ignored.

Transmission Gully, on the other hand, is ready to go.

The geotechnical work has been completed, a preferred route and design have been identified, and a number of the required consents are already in place.

Funding remains the major outstanding issue.

Tolls and the funding already set aside by the Government account for just over half the total cost, but a very large gap still remains.

There are options for bridging this gap, ranging from a combination of regional petrol taxes and local authority contributions, to various forms of public private partnerships, or to full government funding of the shortfall.

I am working with the Minister of Transport, the chair of the Greater Wellington Regional Council, local MPs, and the New Zealand Transport Agency to resolve this issue.

What we need to focus on is not the hoary old chestnut of whether Transmission Gully should go ahead, but the best and most innovative method of funding it so that the long overdue project can get underway.

Our confidence and supply agreement with National makes specific reference to Transmission Gully, so I expect to see this matter brought to fruition during this term of Parliament.

Another issue that has long been close to UnitedFuture’s heart is income splitting for tax purposes for parents with dependent children, and it is an issue many people both continue to quiz me about, and say that this was the main reason why they may have caste a vote for UnitedFuture.

During the last term of Parliament under the Labour-led government, as Minister of Revenue I issued a government discussion paper proposing the introduction of a voluntary income splitting system for couples with dependent children up to the age of 18.

That proposal received over 200 submissions, of which more than 90% were in support, and I am now ready to take the issue further.

So, as part of our confidence and supply agreement with National, I will be introducing legislation next year to introduce a voluntary income splitting system for couples with dependent children up to the age of 18, to be effective from 1 April 2011.

However, despite the co-operative and pragmatic way in which the new Government has been operating to date, there will inevitably differences between the parties in the future that will need to be handled with a large dose of the deftness the Government has already demonstrated elsewhere.

One potential area of disharmony is constitutional reform.

As a strong advocate for New Zealand undergoing a comprehensive constitutional review and reform process, which faces up to and resolves the hard questions of whether or when we become a republic; whether we adopt a written constitution and where the Treaty of Waitangi fits in that context; and the future of our electoral system, I am very sceptical that the constitutional review agreed between National and the Maori Party will in fact be that bold.

I think its objectives will be far more limited, and are really about getting both parties off their respective high horses on the future of the Maori seats in Parliament than setting our country’s constitutional tone for the 21st century and beyond.

On the face of it, their two positions are incompatible: National wants to finally abolish the seats by 2014, but the Maori Party wants to entrench them in perpetuity.

A constitutional review which produces a face-saving formula that allows National to back off its 2014 promise, in return for the Maori Party taking an entrenchment “but not yet” approach, while professing to still respect each other in the morning, would be convenient from each of their partisan points of view, but would sell New Zealand short in terms of its long-term impact.

Constitutional reform involves all New Zealanders – Maori and Pakeha – and is a real opportunity to determine the future identity of our country and how we achieve that.

In that sense, it goes far beyond the hitherto sacred cow of just its impact on tangata whenua. Maori representation in Parliament and their traditional relationship with the British Crown are certainly considerations which cannot be ignored – but they are not exclusive, and letting them become so, albeit by default, simply ensures constitutional stagnation.

Yet that is the path down which I fear we may be heading, and why I believe an independent process is required to ensure the promised constitutional review is meaningful, not cynical.

I believe that not only are all New Zealanders ready for this discussion, they also want the chance to participate fully in this , and do not want to see it stifled by backroom deals.

Overall, the 2008 General Election represented a further maturing in the process of government under MMP.

I am pleased to have been at the forefront of that process over the years – from the development of the notion of confidence and supply arrangements while formally remaining outside the government in 2002; to enhanced confidence and supply arrangements with a Ministerial post outside the government in 2005; to being a support partner as a Minister to the government in 2008.

The most exciting aspect is that we are developing a uniquely New Zealand system of government under proportional representation, which will endure and develop further in the years to come, whatever the particular fate might be of MMP.

Against that backdrop, it is an exciting time to be involved in government.

Ends

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