Speech: Rt Hon Winston Peters Mp
Leader Of New Zealand First

(Extracts from an Address by Rt Hon Winston Peters to the Distilled Spirits Association, The Auckland Club, Shortland Street, AUCKLAND)

THEME: From One Extreme to the Other – Where Exactly is it
Getting Us?

It is the norm in meetings like this one for politicians to be invited to speak on subjects of their choice which, more often that not, leaves the captured audience wondering why they came.

That is because far too many political speeches today are constructed around criticisms of the former government, defence of the present one, and an absence of focus as to where all that has left us and where we should be going in the future. To avoid that today I want to make some introductory remarks and then deal with the first seven issues rising from the floor so at least seven people, and hopefully many more if this is a representative group, will leave this function knowing that at least their concerns got a hearing.

New Zealand is a country with enormous prospects for economic and social improvement, with more potential for delivering wealth and happiness, to the greatest proportion of the population, than any other country. And barring the obvious impediments to that prospect - the Government, the Opposition and economic experts - it is a vision that is realisable within our lifetimes.

No country in recent history has been run so comprehensively by amateur economists than New Zealand. We have gone from one extreme in the last 25 years to the other. Since the fall out of Britain’s entry into the EEC, and since 1976 to be precise, what has happened to New Zealand is all our own handiwork, and depending on how you see it, our success or our failure. The year 1976 is important because our terms of trade with the rest of the world have improved slightly since that year and no outside interests can be blamed.

The third National Government, 1975 – 1984, introduced a range of policies and think big schemes which have been judged a failure. Since 1984 we have been beneficiaries of a fifteen year experiment which, according to modern conventional thought, has seen New Zealand do everything right.

Former state owned industries have been privatised and operate in an environment without regulation. The Governor of the Reserve Bank operates in glorified independence. The welfare state has been significantly pulled down and we are one of the most economically free countries in the world.

Meanwhile economic growth against the rest of the developed world has flagged, and our productivity and living standards are almost static.

Today New Zealand is a mystery to those former cheerleaders from abroad who don’t quite understand why things have not been much better. We have been through the short-term, to the medium-term, and now the long-term and their only apparent explanation is that we didn’t reform enough, believe in reform enough or downsize the government enough.

The “fundamentals”, much beloved of commentators, must therefore be wrong and the sooner we admit that, and agree on a set of fundamentals that will work, then the sooner we can establish a successful economy again.

We will not do that by attacking business profits or making the business of doing business more and more difficult. The idea that inflation, or more particularly low inflation, is the only measurement of an economy’s success has long been discredited in this country. Hiking up interest rates to dampen demand should likewise be discredited. It is about as outmoded as old fashioned unionism.

It gives you some indication of this nation’s priorities when the needs of small business in particular are ignored whilst same sex marriages, legalising prostitution and “closing the gaps”, whatever that means, are now Parliament’s priorities.

There are two reasons why people are leaving this country and they are both symbolic and real – lower wages with higher taxation, and creeping separatism, which makes New Zealanders wonder exactly where all this is leading to.

It is an irony isn’t it that certain Maori tribes are claiming mineral and energy resources in this country from a Party that they elected to Government in 1999 but which same Party, in the Petroleum Act 1937, nationalised those resources against the interests of all New Zealand landowners – European and Maori.

Meanwhile a whole province has been closed down to satisfy the Greens and our commercial fishing fleets are required to comply with government imposed conditions unknown to their international competitors.

But other examples are legion and I want to give you one today which illustrates the madness of the last 15 years.

Let me give you a specific example of how the application of resource law can harm the economy.

The process of removing an ailing but famous pine tree on One Tree Hill has begun, with Auckland City Council beginning the consent process necessary to replace the tree.

The Parks and Recreation Committee has endorsed the lodging of the consent application for removal of the lone tree. It will consider the draft resource consent for replacing the tree at a later meeting.

Two consents are required – one for the removal of the current tree and the second for any replacement – and are being lodged separately!

Put aside the asinine behaviour of not lodging and hearing both applications at the same time. Instead, focus on the wasted time, the duplication of work, the salaries and allowances to be paid!

It gets worse.

The first application is being lodged on a non notified basis, so that the tree can be removed only when its state meets the tight criteria for removal of a sick tree in the District Plan.

Specialists are currently monitoring the tree’s health and stability, which will determine when the tree has reached the point where it will become unsafe and at that time it will be removed in a controlled manner.

The Committee said replacing the tree would be a more complex issue, requiring widespread consultation and a notified resource consent.

The Auckland City Council has begun consulting with regional iwi, the New Zealand Historic Places Trust, Cornwall Park Trust and others about the replacement of the pine tree.

This demonstrable nonsense is what every enterprise today faces in their operations as well.

When we take these manifold impediments to domestic growth, we have an environment which is increasingly unattractive to overseas investment (when it fits not just their interests but ours), which in turn exacerbates the problem the country now faces: retarded growth with rising inflation.

For our part we are working on business policies which fit our long-term ownership and development needs. Three issues critical in that process are company taxation reform, long-term savings and an investment environment in which investors operate in a climate that recognises certain protections and abandons the law of the jungle.

The recent Fletcher insider trading cases are not unique in this country and have a corrosive effect on the confidence of long-term investors.

In addition to focusing on export sympathetic policies we intend to promote and support a reduction, first in company taxation to be later followed by reductions in personal taxation. If New Zealand wants to retain the businesses it already has and build new ones it must now, for the first time in a long, long time, understand how historically dependent upon exporting our economy is.

If we are to beat our overseas competitors then we must focus on company taxation reductions, reduced initially to 30% then a further reduction to 27%, and combine with those measures direct tax write-offs for research and development, an export sympathetic package, all based on actual results so that private business is rewarded for making the right risk judgements.

Such a package, in our view, is the essential pre-requisite to meeting overseas competition for our businesses.

Incidentally company taxation to June 2000 was $4.158 billion. Reduce company taxation down to 30% and, on the face of it, the company tax take is $3.780 billion or at 27% is $3.402 billion – reductions respectively of $378 million and $756 million.

But much of that taxation reduction will be re-invested and spent and generate further taxation so that the loss to the Treasury initially is much less and, in the long-term, would result in Treasury gains.

That briefly is an overview of where New Zealand First stands as we prepare our policies for the next election.

And on that score we intend to focus on the 5 things that really matter to humanity – wealth and employment, health, education, personal security and, upon those four, expand the happiness of our population. We do not intend to waste our time on esoteric political correctness and separatism. We intend to promote one country where people stay here and come here because they are and want to be New Zealanders.

And now to the first seven issues that you may wish to discuss.

ENDS

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