Rt Hon Jenny Shipley
Leader of the Opposition

Rediscovering the Kiwi Entrepreneurial Spirit

Avonhead Rotary Club, Christchurch 6pm Monday 13 November, 2000

The role of an opposition is not simply to oppose the government of the day. It is to make clear our views, illustrate the points of difference and provide a coherent vision of the world and a positive programme for the future.

That is why over the next 12 months I will be delivering a series of major speeches on matters which National believes are fundamental truths, of fundamental importance. We cannot afford to ignore them.

One of those fundamental truths is that you cannot lift those at the bottom if you do not lift those at the top. Unleashing an environment where entrepreneurs are valued and can flourish will provide that lift for us all.

To do so we must rediscover our entrepreneurial spirit. If we fail, we'll see the dumbing down of New Zealand. And we'll fail as a nation.

New Zealand is in the developed world today because of our Kiwi entrepreneurs. They are people who do the unpredictable, who strike out along unexpected paths, who challenge conventional wisdom, who dare to dream and who are capable of turning dreams into reality.

The climate faced by entrepreneurs in this country affects every New Zealander. It is important to every parent. And it is important to every child.

How well our entrepreneurs fare will determine the living standards enjoyed by your children in ten and 20 years from now. Right now, under the current Government, the entrepreneurial spirit has faded dramatically.

The entrepreneurial attitude doesn't just happen. It can be cultivated, created, nurtured by actions and policies that inspire, that acknowledge the risk-takers.

Smart economies seek these people and companies out. They know that when entrepreneurs prosper, the country will prosper.

Entrepreneurs and investors know when they are not valued. They simply find other places to do business.

Singapore and Ireland are but two prime examples of countries with the right approach. The economic climate and the cultural climate support their entrepreneurs - and the country is stronger for it.

It is clear from New Zealand's experience in the last 12 months that where obstacles are placed in the path of the entrepreneur, everybody is poorer.

Yet in other countries of similar size in similar times it is possible to succeed. Today, Ireland is growing at 8.5% and Singapore at 7.5%. When people - local or foreign investors - feel their efforts will be rewarded, the results surely follow.

In the 1990s Kiwis benefited from such an environment. Unemployment fell from 12% to 6%. Ireland has seen unemployment fall from 17% to 3.5%. But if we get it wrong the trends reverse, jobs are lost and people pay.

National is looking at how we can get New Zealand back on the right track. The examples to draw from are diverse.

It's no accident that the IT revolution happened in America. It has a more favourable climate than most other countries for innovation and business enterprise. It's all part of the American dream - the idea that lack of inherited wealth need not stop anybody from achieving prosperity through determination and hard work.

Many entrepreneurs fail in America. But there is no disgrace in an honest failure. It is said that the number one hero in America is the entrepreneur who succeeds. The number two hero is the entrepreneur who fails. But at least he tried - heroically.

This attitude helps explain the wealth of Americans and the unrivalled strength of the US economy.

We find the same attitude in Asia, especially in Hong Kong. In the course of a single generation this tiny territory worked itself up from extreme poverty to unimagined affluence. Average wages in Hong Kong are now higher than in New Zealand.

What is the explanation? It cannot be natural resources, because Hong Kong has none. It cannot be big government, because Hong Kong has none.

It can only be a climate very favourable to business enterprise - a lot of economic freedom and public attitudes that support the entrepreneur.

When the people of that territory were asked in a recent survey to name a Hong Kong person 'outstanding for creativity', it was a business leader who topped the poll. Hong Kong people know that the entrepreneur is a creator.

It's hard to imagine a New Zealand entrepreneur topping an opinion poll here. In recent years the entrepreneur has too often been under siege.

* From the security of academia, many of our intellectuals criticise our business people as greedy or selfish.

* Our media often fail to appreciate the values of the entrepreneur.

* And many members of the current Government are deeply hostile to the very actions of the entrepreneur that spread income and wealth through our community.

I believe that behind much of the criticism is simple envy. Labour is deluding the country in the mistaken belief that if you bring the top down you help those who are most in need. This attitude has not and will not create one new job or add value to a single new product. It will simply continue to make us poorer.

As Kiwis we cannot and will not have the living standards which New Zealanders want without entrepreneurs. We cannot have safer communities without entrepreneurs. We cannot have world-class standards in health and education without entrepreneurs. We cannot give our old people dignity in retirement without entrepreneurs. And we cannot maintain the beauty of our natural environment without entrepreneurs.

Entrepreneurs are not mere technocrats, with narrow interests. An entrepreneur can be a person talented in the arts. Or a person who has worked out a means of using our unique culture to bring more tourists here.

How do we know that entrepreneurs add value to the community? Because they must pass a stiff test; they will only succeed if people buy their product, for themselves or for their families. The goods and services of the entrepreneur must be cheaper than those offered by their competitors, or of higher quality, or in some other way preferable. They must have some unique value not available in other products.

Lasting entrepreneurial success can only come about through satisfying an unmet need. It is the innovator or entrepreneur who has the wit to recognise opportunities and unlock the potential benefits - for themselves and for the rest of us.

Entrepreneurs don't capture all the gains for themselves in the course of creating the new value. They share it with the community in the very course of creating it. It was through unshackling the entrepreneur that over a quarter of a million new jobs were created under the last National government, and economic growth returned to New Zealand. That growth lifted all Kiwis' incomes and closed gaps in education and employment.

It was through unshackling the entrepreneur that National was able to increase spending in real terms on health and education while giving two rounds of income tax cuts.

We reduced tariffs, opened up coastal shipping to competition and removed the government monopoly on workplace accident insurance. Business, workers and communities benefited.

When National left office, business profits were being earned in a competitive environment. We were growing at 4.6%.

It was a world away from New Zealand's pre-1984 economy. At that time, competition hardly existed in many industries. It's a world we should not consider going back to.

But the Labour-led government has big hang-ups about competition.

They want to bring back the days when competition was strictly rationed and bureaucrats in Wellington knew best. Plainly this is a government that has no empathy for business.

Jim Anderton berates the Business Roundtable. Michael Cullen alternates between roundly abusing business people and sudden, panicked attempts to cuddle up to them. I am uncertain whether it is the Dr Jekyll or the Mr Hyde side of the finance minister that our business community shrink from with greater aversion.

Labour has abandoned National's third round of personal income tax cuts, and imposed a new envy tax in the form of the 39 cent top rate. To gain any revenue at all from this tax, the Government is imposing complicated new anti-avoidance rules. Complying with fringe benefit tax is already proving a nightmare for many employers.

It's absurd to imagine that Jim Anderton's business initiatives can somehow compensate for the damage created elsewhere by government policy. The money his schemes hand out to business will come from the pockets of successful competing business.

National believes sound business policies are not about giving taxpayers' money to a few businesses. We believe good government is about creating a sound economic environment in which businesses can stand on their own feet, create profits, pay tax, re-invest and create new jobs.

That environment must include the ability to do business in a timely fashion. It must also be geared to produce the types of graduates and technicians that existing and future businesses will need.

That's really the choice facing us. It will increasingly be a choice about whether New Zealand with a strong National-led Government stays within the group of developed nations, or with Labour slides towards third-world status. It's that important. It's the choice we'll be facing at the next election.

I believe we can and must succeed.

We are a nation of small businesses - from our farming communities to the many small enterprises in our cities. Many of these businesses are family operations.

It is these ordinary New Zealanders in business who are the soul of our community.

Each and every one of them has a vision of what they want to do with their business - a dream of how it might be expanded or improved. Too many these days struggle just to survive.

Many work long hours. Some of our small business people lie awake at night wondering how they will meet the next rent payment. Some dread their next visit to the bank manager. Some bring home a bundle of paperwork in the evenings and at the weekend, to keep their business afloat. All want the pride of standing on their own feet. All want to be contributors.

It is these people that the Government is failing so badly. In the process they fail us all. Again I remind you of my firm view that you can't lift those at the bottom without lifting those at the top. If we don't understand this we will fail those who most urgently need and deserve our support. Gaps will not close.

And it is these people who concerns the National Party will address.

National is planning a package of measures that will let Kiwis get ahead again.

National in office managed to close many of the gaps that cause concern. More Maori and Pacific Islanders were attending pre-school, in jobs or study. These things matter.

I'll outline all our plans further down the track. They include economic, environmental, social and international initiatives.

But the one focus I want to give you today is education.

To unleash the entrepreneurs of tomorrow we must revolutionise the education system today.

Education will be at the bedrock of National's policies in 2002. We believe we can and must make a real difference. We're developing the policies to do just that.

Along with Nick Smith and Maurice Williamson, I am working on a sea-change in the way we approach education. Its features will include:

* Virtual learning
* Mentors
* Choice
* Competition
* Excellence
 Standards

Critics of economic freedom and entrepreneurship typically misunderstand the entire nature of an economy. They often talk as though it were some object, or mechanism.

But an economy is not a thing. It is an organism, that must be able to breathe and grow.

The only way to ensure that is to get the entrepreneurial approach into our schools, universities and polytechs.

By liberating New Zealanders, we create an environment in which creativity and innovation can flourish.

By nurturing entrepreneurship, we not only advance an economic goal.

We nurture the whole human adventure.

We nurture the human spirit.

By lifting our sights, we lift all people. Gaps will genuinely close, and Kiwis will again get ahead.

ENDS

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