Anderton Address to Levin Public Meeting
22 February 2001 Hon Jim Anderton Speech Notes
Address to Levin Public Meeting
183 Queen Street West
Embargo: 7:30PM Thursday, 22 February 2001
Tonight I want to talk about how New Zealand has arrived where it has today.
I'll outline the steps the Coalition Government is taking to move New Zealand forward.
And I want to speak about the Alliance's vision for New Zealand.
There is no question that when this Government came into office New Zealand faced considerable challenges ¡V and that we continue to have much to do.
Our problems are not new.
They began decades ago in the 1960s and seventies.
Free market policies begun in 1984 have not been successful in lifting our poor economic performance.
The primary test for economists is per capita income. It's a test that the free market experiment has failed.
Our per capita income has declined relative to other developed countries since 1984.
In fact ¡V it declined more since 1984 than it did in the 1974-84 oil crisis period.
Australia's performance has been much better ¡V for example, during the Asian crisis in 1998, Australia grew by 5%.
When I tell business-people about this, they are often astonished.
That's because the wealthy have been shielded from New Zealand's relative economic decline.
The top 10% have had huge rises in both pre-tax and after-tax incomes.
At the bottom end, there has been both a relative and an absolute fall in income.
Wealth hasn't trickled down.
Meanwhile, we have been getting deeper and deeper into debt.
We haven't paid our way in the world for 27 consecutive years. That's a world record.
We were told that the asset sales programme was supposed to pay off debt.
In fact, overall debt has soared: It now totals $105 billion, or $27,000 per person.
Compare that to Singapore, which has a $150 billion cash surplus.
These are not just numbers. The effects of poor economic performance have been harsh in many parts of New Zealand.
Unemployment remained stubbornly over 6% of the workforce through-out the nineties.
Regions slowly lost services ¡V hospitals, schools, banks, petrol stations.
With high unemployment and the loss of services, more and more people end up on social welfare benefits. That means there is less money for social services like health, education, housing and superannuation.
New Zealanders' living standards have been falling and debts climbing because we haven't changed the economy fast enough.
Only one company in 25 is exporting.
95% of those companies that do, export less than $5 million a year.
Half of our foreign exchange is earned by thirty companies.
We have the lowest proportion of high-tech exports of any developed country.
We simply have to do better. We have to broaden and deepen the export base.
It's not all doom and gloom, however.
We should also remember that New Zealand has some strengths.
We have a stable democratic government. That puts us far ahead of most parts of the world.
We have a solid infrastructure of roads, ports, water and the like.
We have a significant supply of natural resources ¡V most significantly our rainfall and sunshine.
We have a cheap cost structure ¡V that's the upside to falling incomes and the relatively low value of our dollar.
The international investment banker Merrill Lynch recently looked at the qualities that make a country a great place.
They looked at things like the supply of capital, education and the skills of the people, the health system, the availability of new technology. Is the Government free from corruption? They looked at the social structure of countries and deducted points where they found wide inequalities.
New Zealand came out ranked seventh in the world.
So New Zealand starts from a reasonable position as a desirable place to live.
The Labour-Alliance coalition Government was elected to overcome these weaknesses.
The Government is committed to transforming the economy.
We're not going back to the past. We're taking a more balanced approach, in the interests of all New Zealanders.
We're committed to keeping the promises we made before the election.
New Zealanders suffered successive governments that said one thing before the election and then did something else after it.
Those days have to end.
And we are governing co-operatively. Under this government you don't see the shambles of coalition partners squabbling in public. MPs brawling in the chambers of Parliament. Being prima donnas.
We are restoring trust in Parliament by passing an anti-defection bill. In future, MPs who want to party-hop will have to leave Parliament.
Our highest priority is to transform New Zealand's industrial base.
We need more job-rich, high-skill, high value, high-technology exporting companies.
We have to sell more products that depend on the skill and creative abilities of New Zealanders ¡V and not just on our rainfall and sunshine.
it by taking a partnership approach ¡V we're working with
innovative companies to develop ideas:
„h Hobsonville super yachts
„h Wood processing on the East Coast
„h Avocado oil
„h Meat chips
„h Safety helmets
We're investing in regions. I've been to every region in New Zealand at least once in the first twelve months of this government.
Industry New Zealand is working with each region to identify the best opportunities for economic development. The Government will work with these regions and make the partnership contribution we need to make.
The object is to create jobs ¡V good jobs based on the skills and talent of New Zealanders, not cheap jobs.
At the same time we are restoring balance in the economy ¡V and moving away from the extreme policies of the last Government.
„h Increased the minimum wage by $20 a week.
„h We increased superannuation by $20 a week.
„h Top earners are paying a fairer share.
„h We have introduced income-related rents for state houses.
These were all election commitments for the Alliance and Labour ¡V and we have kept out promises.
For the last fifteen years New Zealand experienced Government for the wealthiest five per cent or so.
Now we're making New Zealand fairer. We're governing in the interests of ALL New Zealanders.
We have set up a superannuation scheme. It ensures security for all New Zealanders when they retire.
National won't sign up to it. Can they really be trusted not to cut superannuation again, when they broke their word on super so often in the past?
If they wanted to persuade New Zealanders that they wouldn't cut super, they would sign up to this Government's scheme.
We have reduced the cost of education: The interest rate for student loans won't go up.
I would make it free.
New Zealanders don't seem to want to pay for that.
But if we want a high-income future, we need to encourage our young people to complete education to the limit of their ability.
And we shouldn't be driving them overseas with a life-time debt burden.
We are governing in the interests of all New Zealanders.
That is why we have changed the industrial laws.
It's time there was balance, so that everyone can get a fair go.
The old Employment Contracts Act was not compatible with a modern, high-wage economy. It was all about driving down wages.
When we passed the Employment Relations Act, National and Act predicted we would have thousands out of work, and the economy would grind to a halt.
What actually happened?
We have the lowest unemployment level since June 1988.
The regions of New Zealand are growing very strongly.
There is renewed interest in New Zealand. I keep meeting kiwis who are returning home to rebuild New Zealand.
I am proud of the contribution my Alliance colleagues are making to this Government.
Think about what would happen if we weren't there.
First, the Government wouldn't exist at all. We would have a National-Act Government headed by Mrs Shipley and Mr Prebble.
Imagine what that would be like.
We wouldn't be discussing setting up a bank ¡V we would be discussing their intention to sell NZ Post.
We wouldn't have increased super ¡V it would have been cut again.
We wouldn't have increased the minimum wage ¡V Act wants to get rid of it altogether.
That would be life under National and Act.
The Alliance set out in this government to restore the public's faith that MMP could produce strong governments that work in the interests of all New Zealanders.
And we are working to improve Security and Opportunity for all New Zealanders.
Nowhere has that been better seen in recent days than in the decision to allow NZ Post to establish a kiwi bank.
This is a defining moment for New Zealand.
There is a simple reason why National and Act are so enraged about the bank.
This is about the kind of New Zealand we are going to live in.
For Jenny Shipley and Richard Prebble, it was a New Zealand where everything was sold. The Government had no role. They told New Zealanders that we weren't capable of doing things for ourselves.
In the past, governments focused on cutting costs. They wouldn't take any part in building New Zealand's future.
The kiwi bank symbolises the future.
Why shouldn't New Zealanders own a bank and run it?
Are National and Act really saying that they have left this country in such a mess that we're not even capable of running a bank?
The Act party says it wants to sell the bank.
National's leader Jenny Shipley says she wants to sell it.
But National's finance spokesperson Bill English says there hasn't been a decision on that.
I have a question for Mrs Shipley.
If she is going to sell the bank, how could she do that without selling NZ Post?
The bank will be a fully-owned subsidiary of NZ Post, with it's own board. How could the Government order NZ Post to sell its banking arm?
If a National-Act Government sold New Zealand Post, that would be a tragedy.
This bank is a defining moment because it is about the approach we are taking to our whole economy.
We are builders, not destroyers.
If New Zealand wants a country where we try to do things, where we give things a go, then New Zealand needs to get behind this bank.
Opponents of the bank want to go back to the New Zealand of the eighties where we sit on our hands and hope that things will come right if everything is sold.
They should get real. New Zealanders can do anything we want to do.
This bank is about New Zealanders owning New Zealand assets.
We should have some control over our own social and economic destiny.
We should keep in New Zealand some of the profits that are made in New Zealand.
This bank is going to offer convenient, low cost banking.
I am amazed at the political opposition to that.
If a successful business like NZ Post can offer better service at lower cost ¡V we should be encouraging them.
Instead we have a world class prima donna act from the Opposition.
You would think he world was ending.
Look at the facts.
The bank will charge fees that are up to 30% cheaper than the average of existing banks.
It will have more branches than any existing bank.
The Opposition keep claiming that the bank will not be financially successful. They are doing their best to sabotage it.
But they are wrong. This bank will succeed.
It's business case has been put together by a very talented team. Banking experts. The people who made NZ Post a leading company offering the lowest priced letters in the world.
It shows that ¡V even on very conservative estimates ¡V the bank will make a profit after three years.
In a decade it will develop into an asset worth $500 million.
If we don't do it, then we will be making NZ Post a less valuable asset: Its traditional sources of income are declining. It needs new sources of revenue.
It will have a competitive position in the market ¡V it will be kiwi owned, and it will offer lower fees and more branches.
NZ Post is a trusted and successful business.
In the thirteen years since it was established as an SOE, it has returned $468 million to the government in dividends. They are now asking for a small fraction of that back to invest in the future.
It has a significant advantage in the market.
It already profitably operates an extensive branch network. It doesn't have to pay for those branches all over again ¡V it only needs to cover the marginal cost of the banking operation.
And the other reason it can be so much cheaper is that it will use the very latest technology.
The overseas banks are all stuck with old-style computer systems that are very expensive and difficult to update to new technology.
The new bank is going to enter the market with state of the art software that is much cheaper and more flexible.
The bank will offer all the main personal banking services ¡V eft-pos, cheque books, mortgages, as well as phone and internet banking.
It's going to have a focus on family banking.
It'll provide free accounts for kids to get them back into the habit of saving.
Post Shops will open on the weekend.
The focus of this bank will be on personal service. The other banks sometimes seem to ignore their personal customers. They're more interested in their big corporate clients.
The bank has been an important policy for the Alliance because we are committed to a vision of New Zealand where we can build for the future.
Our vision is one where the whole community has a role in building for the future, through well-run public enterprises and ensuring where the returns go to the whole community.
Zealand in our vision is a New Zealand that is attractive to
„h Full employment
„h Support for our distinctive New Zealand culture.
„h Ensuring that anyone who needs it has access to the necessities of life. To health and education.
„h It's a New Zealand where we value and protect our natural heritage.
That is a New Zealand of Security and Opportunity.
That is the New Zealand which the Alliance, in Government, is working to create.