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Clayton Cosgrove: Robustly Ravaged in Godzone….

Embargoed Until
9.00 pm, Wednesday 21 June 2000

Robustly Ravaged in Godzone….

Clayton Cosgrove
Member of Parliament for Waimakariri

Address to the Lions Club of Rangiora
Rangiora Returned Servicemen’s Association
82 Victoria Street

9.00 pm, Wednesday 21 June 2000

Good evening. Thank you for your kind invitation to be with you all this evening.

Tonight I would like to respond to the request to take a big picture look at where I think we are politically and economically in New Zealand.

You will have to bear in mind that from a new backbencher what you will get is more of a worm’s eye view than that of the eagles circling gracefully high in the rarefied air of power.

With that point in mind I would like to also eventually talk nonetheless about confidence and some of the confidence tricks that are being played with public opinion at present.

You may well have found the first Budget from the new coalition Government something of a damp squib in terms of surprises.

Some have described it, probably with no kind intention at all in their hearts, as a band-aid budget.

Well, to an extent they are right.

There is quite a bit of patching up to be done to the body of New Zealand society before we can even start to think about any major changes in course.

That’s why I called tonight’s speech ‘Robustly Ravaged in Godzone.’

It sums up the situation that we inherited when we became the Government last year.

It was quite a unique situation.

I’m fairly confident that my read of the situation will probably buy me a stay in the dog box from some of my colleagues but never mind.

For perhaps the first time in post-war New Zealand the old habit of outgoing Governments leaving the new inmates with an empty cupboard and a pile of pressing IOU’s did not take place.

We inherited a base for a robust economy with a good head of steam and a promising set of fundamentals powering it along.

In fact if you had just looked at the figures and ignored the plight of significant sectors of our society things looked wonderful.

What we inherited was a combination of a robust economy and a ravaged society.
The books looked good, if you did not look at the fine print too hard, and if you were willing to accept that a huge social deficit was a fair price for a good balance sheet.

Despite the recent media feeding frenzy over faltering confidence figures the economy is still in good shape and the only change after the Budget is that some of the huge amount of deferred maintenance on our society has now got underway.

I think it is just common sense to make an effort to put money into areas of social need with a broad attitude that rather than just spending this is investment.

It is simply a social investment to put more money into areas like health, education and initiatives aimed at encouraging economic regional job growth.

On the topic of spending it is worth pointing out that in the 1999/2000 financial year government expenditure is tipped to fall from 34.6 per cent of GDP to 32.9 per cent over the next three years.

In other words we will be spending less of a proportion of total GDP not more.

Now I’m not sure how people translate that trend into a big spending Government, but that’s politics, a bit like journalism where the cynics say never let the facts get in the way of a good story.

There was also the strange sight in the Budget of a Government sticking to the promises that they made on the election trail.

Again not a sight that has been seen much in recent history, but again a deed that had to be done if we are start to restore faith in the very idea that politics can show some degree of integrity and consistency.

As a politician not all the letters I get are fan mail.

The letter I am tempted to have framed is from a person in business who concedes that yes she did vote for us, but that she did not for a moment think we would honour our promises.

She would like us to stop honouring those promises.

So what about all the recent doses of doom that have hogged the headlines of late?

Well again I think a little common sense of the sort you’re more likely to find in the country than amongst city slickers might not go amiss.

If you look at confidence polls over the years you will find that generally those that gauge mood, rather than reality, take a dive during the winter months.

Put simply, it’s hard to be too optimistic when you’re freezing your butt off.

Tonight I thought I might also serve up to you some of the real figures that I think indicate where Canterbury is economically and where we are heading.

One of the problems with the present economic picture for the current generation of pundits and pronouncers is that it includes a critter many of them have never in their expresso-fuelled lives laid eyes on.

This critter is a healthy and skittish rural sector finally getting the dual benefits of both a good season and a world that actually wants to buy our products.

It’s a mystery to many city slickers but it is one of the reasons that in Canterbury we now have unemployment down to the lowest levels in two years.

Our regional unemployment rate fell to 5.9 per cent in the quarter to March, down from 6.7 in the December quarter.

The national average in the same quarter was 6.4 per cent.

The Canterbury Development Corporation who supplied these figures put that fall down to a combination of a good farming production season, and a buoyant tourism industry.

You can also see evidence of the strength in our export activity in the March overseas cargo figures for Canterbury.

There was a total of 154,209 tonnes of cargo conveyed abroad by both sea and air.

Worth about $316.4 million the figure was above the $276.4 million recorded in March last year.

Allowing for the fact that Statistics New Zealand have changed the way they form their overseas cargo sets in recent years that still gives us an annualised average growth figure for overseas cargo out of Canterbury of 9.7 per cent compared to the previous 12 months.

When you start pulling figures like these together, figures based on real life stuff like jobs and the amount of items we are putting on boats and planes to go to overseas markets I find it hard to be too pessimistic.

For the last decade virtually every time the pundits decide we are having an economic recovery it has been a domestic demand driven event.

Much as we all love tax cuts the effect each time was to boost consumer spending and power another influx of imported goods into the country adding more fuel to the balance of payments fire.

What we are witnessing at present is perhaps a fundamental shift in our economy away from a domestically driven series of often credit driven boomlets into a production driven return to basic economic health.

That may be the big picture but the big question it poses is, of course, the old one of what’s in it for me?

Well again drawing on the Canterbury Development Corporation figures even the slump in the Kiwi dollar bodes well for us in the short term.

The latest Canterbury Development Corporation Canterbury Economic Monitor quotes Pete Townsend, CEO of the Canterbury Employers’ Chamber of Commerce as saying that the lower dollar will impact favourably on four key sectors, farming, tourism, manufacturing and education.

A lower dollar will mean higher prices for exporters, a chance for local goods to better compete with imports, and a better deal for overseas tourists and students.

Again for Canterbury where we have this funny old-fashioned tendency to actually make and grow things we are heading into another period of great potential.

It is worth noting that although it is easy for us here to feel left out of the national picture what goes on here is watched with great interest by seasoned economists and politicians throughout New Zealand.

Because we have such a strong export focus we tend to regularly lead trends either up or down in the national economy.

We are if you like the indicator light on the dashboard of the national economy.

At the moment that light is still showing that underneath the bonnet the engines are running strongly.

I am mindful that I also promised to try and provide a bit of a broad brush look at where I think New Zealand is at in political terms.

Well, despite the headlines some of the more adventurously minded MPs get, for ideas like some pot in every pot and of course, stopping the under-25 car stickers because they allegedly discriminate against sensitive young folk, I think overall we have just shifted back to the centre.

The wild and woolly ideas that get the headlines also have a tendency to die in the spotlight of the public’s profound common sense.

What lost the last election for the previous Government was the fact that they were seen to have lost their connection with the core Kiwi values of common sense and fair play.

Having tasted of the fruits of the free market they didn’t quite go as far as the cargo cult party of ACT that has turned markets into a religion but they were seen to be heading that way.

So the voters sent them to the sin bin for a protracted cup of tea and a wee lie down.
The spin doctors and salespeople of the last Government used to lament the fact that for some strange reason they had been unable to sell their ideas to the public.

If you prodded them with a stick they would admit they thought the public had failed to understand their wisdom.

I have a different take on that view.

I believe that the average Kiwi understands very well what is going on in most areas of their lives.
We are a hard people to fool.

If there is a gap between rhetoric and reality it does not take too long before your average Kiwi will spot it.

Like my predecessor, Mike Moore, I believe that the future of politics in this country lies smack dab in the centre of the political spectrum without the extremes of either left or right.

That’s my political and emotional home and it is where I intend to stay.

Thank you.


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