Hon Bill English
Treasurer
MP for Clutha-Southland
Speech to South Africa NZ Business Council,
Auckland, 7.00am, 19 November 1999
Embargoed until delivery

There are three issues that the election will boil down to.

The economy, jobs and stability.

The economy is going very well. This week the Reserve Bank raised interest rates. That just goes to show how independent the Bank is to raise interest rates 10 days out from an election. What that tells us is that if the Governor of the Bank thinks the economy is growing at 4% a year, then we can believe him.

What was important about the Bank’s statement was to get across to people that the economy is going somewhere and we have a sense of direction.

What’s driving the recovery?

It is you.

The economy is nothing more than the decisions that businesses, families and other organisations make.

Business is not about greed and exploitation. People who function that way do not usually succeed.

It’s about a deeply-held commitment to a service or product they produce. I was recently talking to a woman who runs a teddy-bear business. I would never have thought there was an export business opportunity making teddy bears. But there is. Two million people in the US collect teddy bears and they like us. She has found a niche market and she is thriving.

Her story is typical of many I hear. There are small businesses. They are the backbone of our economy. The people running them have put their life savings on the line, mortgaged their houses, out of a belief in what they are doing.

They are taking the risks and yes, they are looking for some return.

That’s why taxes matter.

What we are proposing is not just about putting cash in people’s pockets. That’s important because a little bit does count. Everybody earning more than $200 a week will pay less tax under a National Government. Even getting $10 a week extra is the difference between having some choices and having no choices. But the extra cash is only half the story.

The other half of the story is what it tells us about what the Government values. One of the reasons National supports lower taxes is simply that it expresses the Government’s view that yours is the effort that matters. The prospect for better reward for effort is something that matters.

This election is about that attitude as much as anything else. The choices are stark. The Labour-Alliance-Green bloc wants to put your taxes up. National and Act want to cut your taxes.

There are some other issues about taxes that are important.

A lot of people come to me asking what I am doing about New Zealanders and NZ businesses going overseas. First of all New Zealanders are simply doing what they’ve always done. There is a definite pattern with Australia that when they are doing well we go there, and when we are doing well it reverses. We are already seeing those migration outflows fall. But the real issue is, what signal are we sending to our smart young people if we tell them that if they do well and earn the sort of incomes they want to, we’re just going to tax them more. It sounds to them like a good reason to leave the country.

The tax environment is also important because of the signal it sends people who are thinking about the future and in particular thinking about the investment decisions they make. Labour is proposing a review of the tax system. If the prospect of Dr Cullen and Jim Anderton reviewing taxes isn’t a recipe for uncertainty then I don’t know what is. Investors aren’t just making decisions for next year. They are making decisions for three, four years and further out. They need some confidence that the business environment will be stable and predictable.

The final reason why tax matters in the business world is this. There’s a real temptation in Government to give out bits of money. Fashions change. High tech is the flavour of the moment, with exporting and software. But lowering business tax benefits everyone from Fletcher Challenge to the local hairdresser.

That’s why we prefer lower business tax right across the board rather than a few incentives for the selected ones. A few grants are not going to change the face of the economy.

Which brings me to the second issue that this election is about. Jobs.

In the end, what the economy is about is jobs. This year we are picking up speed. There have been 25,000 new jobs created in the past year. According to the Reserve Bank there will be another 13,000 new jobs by next March, 40,000 the year after that and a further 44,000 the year after that. These are net new jobs after we’ve taken off the ones that have been lost.

We are going to have the Bendon stories. Of course we lose jobs in some places.

But what gives those people hope is the prospect of the new job and I know for certain that those jobs won’t be created by politicians sitting around in Wellington talking about it and inventing subsidies.

Those jobs will be created by small businesses feeling confident about the future and deciding to take on another person. For an average small business, the decision to take on one more person is a huge risk. If they start feeling nervous about the risks around employing another person, about having to lose all the benefits of the ACC changes, then they may well decide not to take that risk. The saddest thing is that it’s probably the people we want to help the most who will miss out on that new job.

I believe a Government should do everything it can to make it easier for that next job to be created – whether it’s with Fletcher Challenge or the hairdresser.

The final issue is stability.

This will be a big issue for the final week of the campaign.

Constitutionally I have been part of six Governments in six years and for most of that time we have had a majority of one. The point of the story is that we have learned a great deal about how to run a stable Government.

Sure, it hasn’t always been smooth sailing. But the fact is National has a track record of being able to work with the disparate elements MMP produces and which it will continue to produce. I’ve just won a bet with someone I made this time last year that we would govern to the end of the term. Not many people would have made that bet because a year ago we all thought we’d be having an election in March or April.

National has one factor working for us which is quite unique. The Prime Minister.

I have sat at the Cabinet table and watched the PM sack Winston Peters when it could have cost her her job doing it. I have never seen such a clear articulation of political leadership when it matters. Jenny Shipley put the need for political stability and direction ahead of the security of her own job. MMP is about compromise but it is also about courage.

The Prime Minister is the only political leader who has the demonstrated capacity to stand up for stable Government.

If people want more of what we’ve seen over the last three years, only worse, then a vote for the combined opposition will deliver that. A coalition of Labour, the Alliance, and the Greens, perhaps supported by Winston on the cross-benches is not going to be stable. One thing the left does really well is scrap amongst themselves. When they have the spoils of power to argue over they fight a lot harder.

Stability and direction is what NZ needs right now. The prospects for this country are so good and I don’t want to see us waste the chance we’ve got. The chance to build on the sense of confidence that’s emerging is an opportunity we cannot afford to miss.

We have the choice of choking that growth off slowly. A change in government won’t spell doom and gloom overnight, but it will in the medium to long term.

Or we can build on where we are now, on the foundations of stable Government, a well run economy, and lower taxes.

These are the kinds of benefits we are going to need to keep people in New Zealand because if we have one goal I believe it should be to make NZ a place where our children want to stay and build their future.

So if you want a growing economy, if you want jobs, if you want stable government….

Vote for me, vote for Jenny, vote for National.

Ends

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