Speech Notes for NZ Chambers of Commerce Annual Conference

Taradale, 9am Sunday October 31
by Hon Max Bradford
Minister of Enterprise and Commerce

In Auckland this afternoon the two major parties launch
their election campaigns.

From now on you are going to see even more centre-left
smokescreens and uncosted promises as Labour
continues with its deception of trying to appear business
and job friendly, while also promising to hand power
back to the unions.

It is a dilemma for Labour that I am confident that voters
will see through.

I know the business community and your members will
not be fooled.

After nine years, Labour has failed to come up with a
credible plan for growth.

There isn't a single business or enterprise that will
benefit from the policies Labour and the Alliance are
proposing.

They are offering the people of New Zealand:

· higher taxes,
· higher business costs,
· (Both of which will be a tax in jobs),
· Jim Anderton as Deputy Prime Minister,
· a Cabinet full of retired trade union officials,
· and a return to the past and the bad old days of union domination of New Zealand workplaces,

But that's not all.

If you think New Zealand is tied up in knots with
bureaucracy and red tape, you haven't seen anything
yet - especially if the Alliance has a major influence.

Under a Labour-led government there will be at least
157 new ministers, ministries, quangos, offices, courts,
ombudsmen and special funds that Labour has
promised over the last few months to make their policies
work.

And don't forget there will be higher taxes at a time
when our trading partners like Australia are reducing
theirs.

Labour has a plan to introduce a capital gains tax, just
as Australia and the US in particular, are finding ways to
reduce or eliminate theirs.

National is the only major party that recognises it is
businesses that create jobs - not governments.

National realises we need to build on the policies that
have seen our economy improve over the past nine
years, policies that get government under control and
allow businesses to get on with the job.

I'm proud of what National has done so far. We have:

· lowered your taxes, and removed the paperwork off the shoulders of a million taxpayers;

· produced the lowest inflation rates in 30 years,

· got the lowest interest rates, especially for homeowners and businesses, in 40 years;

· generated 278,000 new jobs since 1990, 180,000 of them full time, with the key input of business, especially small business.

What is more:

· we have run fiscal surpluses for six consecutive years, and lowered Government debt from 54 percent of GDP to around 25 percent;

· we have eliminated the Government's net overseas debt;

· we have put a 1,000 more teachers in our schools and paid them significantly more to recognise their importance to the future of New Zealand;

· we have put 73,000 more students into tertiary institutions;

· We've brought competition to ACC, saving businesses $200 million a year.

· Yet some people want to re-nationalise ACC and load those costs back onto
employers and wage-earners.

But this is only the beginning.

We are working to get our agricultural industries and
producer boards working more effectively.

We are reducing compliance costs for businesses by
simplifying tax payments, although I freely admit we
have some way to go to satisfy business.

But we're committed to a 25 percent reduction in the
regulations strangling this country.

This month's PREFU Treasury forecast showed that
with these polices the first three years of the new
millennium will provide:

· an economy 10% larger than it is now;
· 115,000 new jobs;
· stable inflation - and low interest rates;
· lower public debt; and
· lower taxes, perhaps in the first instance lower taxes for business, to get the country's growth impulse going.

National is committed to continuing to build a framework
in which business can prosper.

We have a vision for the country's future in our Bright
Future strategy.

Unlike Labour and the Alliance, we will retain and
improve the Employment Contracts Act.

We will review probationary arrangements in the ECA in
consultation with employers and employees to help get
more people into jobs.

And we will also overhaul the Holidays Act.

As the Simpson Grierson report released this week
Shows, this legislation was designed for an era that has
long past, when employment was much more
structured.

We will not reduce holiday entitlements but will make
them clearer and fairer so people do not have to break
the bank on legal fees to understand them.

A National government will also review personal
grievance arrangements under the ECA to ensure there
is a better balance between process and substance in
the settling of disputes.

The Government will work in partnership with the private
sector to create an export-led growth strategy, but it
does not believe in picking winners or losers.

The $223 million Bright Future package announced in
August will spearhead our efforts to make New Zealand
the best country to live and do business in.

It was developed together with over 2,000 business,
educational and research leaders throughout New
Zealand.

Reviews to be completed next year will help ensure our
tertiary education system is world class and that better
linkages are developed between it, the research and
business sectors.

The Government will provide 1,500 tertiary scholarships
to ensure business have the skilled people they need.

We will be asking business to pay a part in managing
and funding these schemes, details of which will be
announced very soon.

There will be assistance for researchers to create good
ideas and entrepreneurs to turn them into exports
through initiatives like the national "ideas incubator", the
small business stock exchange, and the $36 million a
year New Economy Research Fund.

We are reviewing the taxation arrangements for
research and development, with a view to allowing full
deductibility in the year of expenditure.

Developments in these announcements will be unveiled
soon.

Already the Government's new BIZinfo scheme is
proving hugely successful.

In the three months to the end of September, BizInfo
offices around the country received more than 4000
calls on 0800 lines asking for advice.

BizInfo's Internet website providing business
development information to SMEs received 1.4 million
hits up to September 30.

I particularly want to commend the Chambers around
New Zealand for the key role you play as one of the
major providers of the Biz programme.

Business is to be congratulated for helping create
nearly 300,000 jobs this decade. But the knowledge age
presents new challenges you will have come to grips
with.

Perhaps the time has come for Chambers of Commerce
to view your role differently.

With your membership and expertise you are well
placed to become a catalyst for partnership between
business, the tertiary and research sectors, by building
on the cluster concept.

Labour and the Alliance have belatedly started talking of
the knowledge economy, but it is clear from their
policies that they have little understanding of the
fundamentals needed for businesses to grow in the
knowledge age.

We know that higher business costs and higher taxes
mean jobs are more difficult to create.

We know that higher taxes and higher costs inhibit
growth.

And we know that many of Labour's and most of the
Alliance's policies rely on these factors to pay for their
promises.

Labour, the Alliance and the Greens seem to have
forgotten - or are more likely ignoring - the simple fact
that higher costs mean fewer jobs.

Labour and Alliance employment policies would
increase employment costs by almost 3 per cent,
losing up to 20,000 jobs a year.

They would punish businesses severely.

Personal taxes would increase by $800 million.

Reversed ACC changes would cost $200 million.

Charging employers for paid parental leave will cost
another $100 million a year.

Introducing four week's annual leave will cost
employers another $400 million a year.

You can also add to that the multimillion-dollar cost
of increasing the minimum wage by $20 a week.

The last time Labour was in government, they destroyed
110,000 jobs and left us with double-digit inflation and
unemployment to tidy up.

Every time Labour is in office it leaves a mess for
someone else to clean up.

It left the foreign exchange cupboard bare in 1972 after
spending up large.

In 1990, it left a huge debt for little Olivia to repay, as
well as sky-high inflation and interest rates.

It has taken nearly 9 years to tidy the mess Labour left.

Now is the time to go forward.

Yet the Labour/Alliance bloc wants to take us back.

To higher taxes.

To unions in the driving seat again.

To more spending on welfare rather than work.

The choice for business this election is stark and
strategic.

Going forward by building on the successful economic
framework that is still envied by many abroad, or turning
round and wistfully re-introducing policies of the past in
the hope they will work now when they failed us then.

Ends.

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