After The Earthquake – A Vision For New Zealand

Hon John Boscawen speech to the ACT Annual Conference; Barrycourt Accommodation and Conference Centre, Parnell, Auckland; Saturday, March 12 2011

Good morning, ladies and gentlemen.

Welcome to our conference, and thank you for your support.

It is an honour and a privilege to stand before you this morning as a Member of Parliament, a Minister and the Deputy Leader of ACT – something I never dreamed of when, in March 1995, I sent away for a copy of ACT’s founding document ‘Common Sense For a Change’. I signed up as a volunteer soon after - that was 16 years ago.

Without a doubt, the state of our economy is the number one issue facing New Zealanders today. And with two tragic earthquakes the situation has just become a whole lot worse - and the need for solutions and political courage even more urgent.

I want to start with National’s proposed changes to our foreshore and seabed laws, which passed their Second Reading just this week and are set to become law within days.

Few New Zealanders understand the constitutional significance of the Marine and Coastal Area (Takutai Moana) Bill, nor the massive transfer of wealth it will facilitate to a select few from other iwi and non-Maori New Zealanders.

This Bill restores nominal customary title and ownership over the entire coastline and, as Tariana Turia and Pita Sharples correctly wrote in the ‘New Zealand Herald’ this week, “The Crown will now have to prove customary rights have been extinguished, instead of iwi having to prove they remain intact.”

Customary title will have commercial benefits similar to freehold title and, while public access must be guaranteed and the land cannot be sold, a title-holder will also be able to develop a plan that regional councils must - and I repeat must - recognise and provide for. This is a major benefit far exceeding any conferred by a freehold title, and is not available to all other New Zealanders. It breaks National’s 2008 election commitment of ‘One Law for All’.

It is unsurprising that few New Zealanders understand - or have even taken an interest in - what is happening. National has repeatedly perpetuated the fiction that the test for customary title requires continuous, exclusive use and occupation of an area since 1840 - despite knowing this is patently untrue. The Bill specifically allows for others to have used and occupied an area, and for the claimant group to maintain a charade of continuous and exclusive use and occupation.

I agree with Sharples and Turia when they say: “We have achieved amazing results in a short time.”

Now to the economy.

At the turn of the last century New Zealand was regarded as having the world’s highest standard of living. By the 1950s we’d dropped to fourth. Today we rank around 25th of around 30 OECD countries. We’ve suffered a massive drop in prosperity and living standards by comparison.

Today we borrow around $300 million a week – over $1 billion monthly – and following the earthquake this will only get worse. This can’t continue. We’re living well beyond our means.

Sooner or later, the countries lending to us will demand a higher rate of return to reflect the higher risk – or will stop lending and demand repayment.

Our social welfare system traps people, stealing their self-esteem, and disincentivises them through high effective marginal tax rates. We’ve added to that by scrapping youth rates and requiring 16 and 17-year-olds to be paid the minimum wage. The unintended consequence has been to deny thousands of young people the first step on to the employment ladder and instead force them on to the Unemployment Benefit.

We lead the world with the most comprehensive Emissions Trading Scheme, despite none of our four largest trading partners having such schemes. The Government is effectively taxing all New Zealanders $500 million annually for electricity and petrol, and paying this as a massive subsidy to foresters. The Government is giving away free forests to those smart enough to know how the system works.

We also have an interest-free loan scheme that incentivises students to borrow the most they can and locks them into debt. Little wonder that outstanding debt has increased from $5 billion-$11 billion over the past six years - all funded by foreign creditors. How much longer will this continue?

And we have a Government publicly committed to paying current superannuation to those aged 65 – despite the fact that people’s life expectancy and working lives are both increasing. This says nothing of the greater health costs, as a consequence of an aging population and improving technology. Surely we owe it to those approaching retirement to give them as much notice as possible of changes that can only be required.

Is it any wonder that over the past 20 years we’ve seen a mass exodus to Australia, where opportunities and incomes are greater? Today, Australian incomes are some 35 percent higher than here.

In 2008, ACT campaigned to eliminate this gap and ‘bring our children home’. Sadly, the 2025 Taskforce that was set up at our insistence has been largely ignored by National.
To date, the Government has done little to address these issues. Government expenditure continues to rise, we continue to borrow heavily from foreign creditors, and the Government has quickly dismissed unpopular solutions.
In his State of the Nation speech to Parliament in February 2010, the Prime Minister spoke of “unlocking access to our abundant natural resources” and “unleashing the untapped economic potential of New Zealand.” Sadly, National backed away from these goals.

ACT believes we can no longer afford to leave valuable resources in the ground. We must do all we can to maximise their value for the good of all New Zealanders.
Just one example of a major natural resource crying out for development is Southland lignite.

New Zealand has literally billions and billions of dollars worth of lignite – essentially low-quality water-logged coal.

The good news is that, far from lying in national parks, this lignite lies under Southland dairy farms. Better still, those dairy farms are owned by you and me - the taxpayer - through Solid Energy.

Given the state of the New Zealand economy, the world economic recession, Pike River, and two Christchurch earthquakes, there has never been a better and more important time to develop this than now.

Solid Energy CEO Dr Don Elder told me this week that the company has the capability and know-how to commercially develop this lignite into diesel and urea for fertiliser.

He advises me that, at today’s prices, New Zealand would be better off by around $2 billion per annum from the development of this resource. That’s just the difference between the cost of importing urea against what it would cost to produce it here. That’s the profit alone - the overall addition to GDP would be even greater.

It is a national imperative to develop this resource in the fastest way possible. New Zealand stands in ‘pole position’, and we need to move now to take advantage of those investors who want to help us develop this resource - before other countries get there first.

Incredibly, late last year, the Environment Commissioner recommended that these resources not be developed due to the carbon emissions that would purportedly be released. Solid Energy refutes these claims.

The Government must move to clear all the hurdles necessary to commercialise this resource – now. The reality is we simply can’t afford not to.

Ladies and gentlemen: in 1984 ACT co-founder and then Labour Finance Minister Sir Roger Douglas and his colleagues were confronted with a closed, over-regulated and bankrupt economy.

They seized the opportunity and displayed the courage and vision to make the bold decisions necessary.

Sadly New Zealand is again in a similar position.

Not only do we need to rebuild Christchurch, we need to rebuild New Zealand. We can no longer afford to continue to tinker around the edges. We need a bold government; one that will set out the problems, articulate the solutions, and show the political courage required to implement them.

John Key has said he doesn’t want to take the “big bang” approach that Sir Roger did in the 1980s, preferring a slower and more incremental approach. The time for that has gone.

It’s time for John Key and National to show the same political courage ACT’s co-founder displayed over 20 years ago.

It’s time to reform our economy and to save, and then transform, this country.

The time to act is now.
Thank you.

ENDS

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