15 March 2012
Cullen Breakfast Club

There's a story I'd like to share with you.

You may know that P.T. Barnum was the man who founded the Ringling Bros. and Barnum & Bailey Circus.

He was a showman, he was a businessman, he was a scam artist.

Early in his career, he created an exhibit called The Happy Family.

It had just one cage, and in that cage there was a lion, a tiger, a panther, and a baby lamb.

It was a huge hit.

People would line up to see it.

And as it grew more and more popular, the newspapers would ask him what his plans were for this amazing display.

He said to them: "It'll probably become a permanent feature - but only if the supply of lambs holds out."

In any sense you want to put it, literal or figurative, that's how we're running things in New Zealand.

We're going to keep on doing things the way we are ... for as long as the supply of lambs holds out.

We're going to go right on relying on property market bubbles and a small basket of primary produce exports to earn our living and we're going to go on borrowing money to pay for a standard of living we can't afford.

We owe too much. We all know that.

We earn too little. We all know that too.

Far too many of our eggs are in the one basket.

We all know that.

And anyone who tells you we can make things better here, without making big changes, is dreaming.

New Zealanders can cope with the truth.

So let's be honest with ourselves.

The honest truth is that the Christchurch recovery cheques from the insurance companies will only help us a bit.

The honest truth is that asset sales - even by the most generous measure - will hardly help us at all.

The honest truth is that a commodities boom, even if it keeps on rolling, isn't enough on its own to pay for what we need.

The honest truth is that merging and restructuring government departments will simply not cut it.

And the honest truth is that the economic plan New Zealand is following at the moment has more missing from it than it has in it.

Let's talk about what's missing. I need to use a delicate word…."Vision".

A vision is a marvellous thing, but it's a bit like Excalibur.

You have to know what you're doing with it.

It's overused, it's often misused, and for a politician, it can be one of those "kick me" signs that you tape to your back.

But the fact is:

New Zealanders want their leaders to focus on the future.

They want their leaders to have a clear idea about where we're going, and how we're going to get there, and what we're going to do to make it happen.

My vision is straightforward:

New Zealand should be a place where people know that they can get ahead, a place where the rest of the world wants to live and a place that we can all be proud of.

I’ve got a strong sense of where I want to take New Zealand to achieve that vision, and what we need to do to get there.

Let me start with an example.

The former Finnish Prime Minister, Esko Aho, largely untested, came into office in 1991.

He was almost immediately faced with a banking crisis.

Jobs were disappearing.

Its stock market was tanking.

Its future was hugely doubtful.

Aho’s message to the Finnish people was blunt and honest:

They had big problems. No-one else was going to fix them.

And most importantly: only their brains and talent were going to take them forward.

Collectively, the people of Finland took that message on board.

They moved forward.

They transformed their economy through innovation and talent.

They put at the centre of everything they did great teachers and schools and great science, research and development.

Aho made bold decisions.

He was, I need to say, voted out at the next election.

He thought it was more important to make a difference than to get re-elected.

Though our prescription might differ, we could all take a lesson from that.

I can tell you that I have no interest in being a prime minister who just cautiously tinkers.

If you can't change things for the better, you have no business being in the 9th floor of the Beehive.

Today Finland’s economy is way ahead of ours.

Twenty years ago, though, its problems were the same as ours.

Of course, twenty, and thirty, and forty years ago, we had those problems too.

We were talking about making changes even before Britain joined the common market in the early 70s.

We've talked about added value, lamb-burgers, Knowledge Waves, and NZ Inc, and yet somehow success is still just over the horizon.

People have grown tired of hearing about it. Many of them are sceptical it'll ever happen.

At a certain point, you have to stop talking about what you're going to do, and start doing it.

If Finland, Singapore and Israel can change their small economies, then we can too, in our own NZ way.

We have to bite the bullet.

Not just a bit of tinkering here and some adjusting there and leaving the rest to the market.

A completely new New Zealand. I can forgive you if you have your doubts.

You have heard it all before. But let me put this to you: Everyone in this room knows the difference between a woolly plan and a rigorously-tested and well-conceived one.

I want to arrive in government on Day One with a detailed plan that will actually achieve a shift to a new, job-rich, high-value economy.

We won’t be waiting around for officials to give us cautious ideas and suggest a few adjustments.

We will be presenting them with detailed and far-reaching policies.

Labour will spend the next two years listening, drawing up our plans. We will accept the best ideas wherever they come from.

On Day One in office we will be ready to go.

I know there is some expectation that I will bring the whole plan here today and lay it all out, but that's not the way I intend to put our policy together.

I intend to do it step by thorough step.

I'll be talking in detail about just one of those steps today.

So let's be clear: I'm not going to offer up some magic bullet.

I don't believe in them.

What I do believe in is getting your plan right, and then having the guts to follow it.

If I had to sum up what we need to do in one sentence I'd say this: we need to make a new New Zealand.

That’s what the next Labour government will be about.

That means looking at everything through a whole new lens.

Everything.

It means questioning the comfortable assumptions we make.

Let me give you a few examples.

We like to flatter ourselves that New Zealand is clean and green and pristine. But really our green credentials owe more to our small population and a strong south-westerly.

In reality we fall well behind environmental standards of many European countries.

Our environment should be seen as a driver of our economic success rather than a hindrance.

We have smart, creative people and a clean, green branding. It’s a combination that other countries would die for.

My aim is to make that branding a reality.

Let me give you another example.

We like to think that we're a great exporting nation.

But how accurate a description is that when fewer than 900 companies export more than $5 million a year?

What if we were to set a target of 2000, and then 4000 and then 10,000 companies to hit that mark?

Yes, setting the goal is the easy part.

Making it happen is where we keep coming unstuck.

It's much, much easier to just say "Oh let's dig up our precious conservation land for minerals, or turn more land into dairy farms."

It's far harder to say "let's make a Nokia, like they did in Finland."

And of course if you ask Nokia, they'll tell it's no picnic trying to stay on top once you've got there.

There is no limit to the number of times we can create a Navman, or an Orion Health, selling health software across the globe,

Or a deal like the one Auckland UniServices did a few months ago to sell their wireless power technology to Qualcomm – but kept their intellectual property in NZ.

Or the cooperative Westland Milk who told me when I met them last week that they will generate 25% of their revenues from adding value to milk and have their sights set on 45% in the coming years.

They are all examples of high value technologies developed right here by smart New Zealanders.

The only limit to how many more times we can do that is the number of skilled people we have living here working on those ideas.

But as good as New Zealand is at it, there's a ceiling to how much butter and beef and meat and milk you can make off New Zealand grass. You hit the limit a long time before you get to be as prosperous as Australia.

So we need to take a fresh look at everything we do – and we need to ask ourselves if it really works.

If ideas help to build a new New Zealand, we like them.

If they don’t, then out they go.

That starts at home with Labour policy.

For example, we campaigned last year on a bold fiscal policy, with a new capital gains tax, and a $5000 tax free zone.

Now I won’t be setting out our fiscal policy today but I can tell you how I see things.

I've always believed the best argument in favour of a capital gains tax was the economic effect it had.

A CGT is pro-growth. It helps switch investment from sectors such as housing, to the productive sector where we desperately need more capital.

Over time I can also see the revenue it raises being used to offset the tax you have to pay in other areas.

So I can see a role for CGT in transforming our economy.

On the other hand, I would want to ask whether a tax-free zone that gives everyone the same sized tax cut is going to be as much of a priority.

I believe we can look after everyone better, not by cutting taxes, but by earning more as a country and making sure that everyone gets a real chance to earn their share.

Let me be clear: these are policy matters that won't be confirmed until much nearer the election.

But I present them today as examples that inevitably arise when you ask that larger overarching question: does this help to build the new New Zealand?

We have to run a healthy, growing economy.

Any government I lead is going to be thrifty.

New Zealanders can trust Labour to manage the books.

Labour is going to have a responsible plan to create a new economy.

I want to look today at the very first, and arguably the most important part, of our plan in a bit more detail.

I want this new New Zealand to be built on our skills and talent that is finely tuned to compete with the best in the world.

I frankly doubt that the education system we have today can do what we'll be asking of it.

Education is everything. We know that.

Get that right, and everything flows from it. My own experience has taught me that.

I was hired at one time by Save the Children to work in Sri Lanka where a war was being fought between the government in the south and the Tamil Tiger rebels in the north.

I was given a job of taking exam papers across the front line from the government side to the rebel side.

It meant travelling down a single road that was mined on either side.

Eventually we got the exam papers around the various schools.

I stopped to talk at one place to community leaders about why exam papers - of all things - were so important to them.

I asked them: why hadn’t we brought them medicine, or food, that were critically in short supply?

I still remember their answer.

They told me that all those other supplies would help with the needs of today, but only an education offered opportunity to those children.

Education could break the cycle of deprivation they were in.

If you're prepared to invest in the future, your fate can change.

Now, what happens if we put this in the New Zealand context?

The first thing we can say is this: we have some very high-achieving children and some high-achieving schools.

The best and the brightest do very well and I am proud of them.

But I'm not just interested in the bunch that leads the marathon into the stadium.

Some of them are outstanding and the very best of them finish their race in world record time.

They’re an inspiration for the others.

But if you track back along the rest of the field, it doesn’t look so world class.

Many of them are coming in hours later.

Many of them are giving up before the finish.

And too many of them aren't even turning up at the starting line.

We have a long tail of failure.

We have to fix it.

It’s important to acknowledge that some of the fixes need to happen outside the school gate, in homes where children grow up in poor or dysfunctional families.

I’ve spent my life fighting for children in this situation. I want them to succeed.

That’s why my goals for education are ambitious.

I won’t be satisfied until every child in New Zealand is getting an excellent education, and until every child in New Zealand is being equipped to flourish.

There is so much more we can do than we're doing right now.

Instead of the distraction over national standards, we need to focus on how we get the highest quality teachers in the world and the best performing students.
Not just a better system, the best.
I want the best educational achievement in the world.
What do we have to fix, then?

Study after study shows that the most important ingredient is the quality of teachers.

We need to value teachers.

We need every teacher in our classroom to be a good one.

The vast majority are. But the truth is some are not.

We will work with teachers to develop their professional skills, but ultimately we can’t afford to have bad teachers in our classrooms.

As a parent, I want to put badly run schools on notice.

I expect excellence from every school.

We need to spend more on early childhood education.

Experts agree a dollar spent on a child before five will save $11 spent on crime and welfare later.

We need to make the most of our great early interventions, such as reading recovery programmes.

We know they do a great job of picking up the kids who fall behind.

They've been copied all over the world, and yet they're not available in every school in New Zealand.

We know that once kids miss that early start their chances of catching up are slim. We cannot miss that golden opportunity.

We know that if we reach into schools and give 16 year olds a track into other training before they drop out, we give them a chance of an entirely different life.

That opportunity should be available to every student.

If we're going to have those 10,000 high value export companies,

If we're going to have those high value export industries developing,

Then we have to do a much better job of education than we are right now.

Our children need to be equipped to do the job we're going to be asking them to do.

And they need to be getting the right signals.

Right now, they're following the money, and that means we're turning out an army of accountants.

Engineers and scientists, not so much.

How many Nokias are you going to make with just an army of accountants?

I'm focusing today on education, because it's fundamental to remaking the country.

It's just one of many things we'll have to overhaul and I'll be talking about all of them over the weeks and months ahead.

But I've chosen to start with education because it's such a good example of something we imagine we're doing right, but where we need to excel and lead the world.

People worry about the direction of the country because of the number of people on welfare.

The fact is there are 83,000 young people not in training or work.

I want to fix that and the place to start is in education.

That’s where the opportunities are being missed.

Everything else is bottom of the cliff stuff.

Every child should get the opportunity to be taught by great teachers, in great schools, no matter who they are, or where they live.

That’s fair.

We all have an instinctive sense in New Zealand that everyone deserves a go, and that everyone needs to pull their weight and contribute.

Labour believes that. It always has.

Don't let anyone tell you different.

We say two things:

Number one: our community must take care of the needy. They deserve a share of the pie.

And if people fall on hard times, we will help.

But equally importantly, number two: everyone who can help to make that pie needs to be involved, and fairly rewarded for doing it.

Rights and responsibilities, that’s the social contract that binds our society.

The government’s part is to ensure that this transition happens – through up-skilling, education and a nudge behind those not meeting their side of the contract.

It’s something I will talk about more as part of a series of speeches in the coming weeks and months as we set out our plans to make a new New Zealand.

The new New Zealand that we want to build won't just be doing more and earning more, it'll be making sure that people get to earn a fair share in the work they do.

This new New Zealand will be the kind of place the rest of world would like to live.

It will be clean,
it will be green,
it will be clever …
and it will be a place that's good for lambs.

ends

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