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Shipley Speech to New Zealand Marine Export Group

Rt Hon Jenny Shipley Speech to New Zealand Marine Export Group (MAREX) Auckland Thursday 9 August

As an aquarian I love all things to do with water. I am something of a sailor, albeit a novice. But I am also a politician committed to the future growth of New Zealand. I genuinely believe that industries such as the marine export industry have an enormous contribution to make to expanding New Zealand's economic growth and delivering very significant returns to those involved in your industry, and to the country as a whole.

But many of you as business leaders also know you need a Government that can create conditions where productivity gains and profits can be made. Labour is unwilling to progress growth promoting policies.

The marine export industry has been picked out by competitive Auckland as one of the major areas of expansion and growth in terms of potential new jobs, new wealth and new opportunity.

Many of you in this room know that is possible because you already have a record of success. In 1994 your industry had total exports of $84 million. By 2001, that had grown to $270 million - an increase of 220% in 7 years. That growth occurred under National policies. New Zealand is now the seventh largest producer of superyachts. And of just super-sailboats, New Zealand is second largest.

That is a record of success that New Zealand needs to emulate on a number of broad fronts over the next decade.

As marine exporters you must demand of any would-be government, policies that advance:

Your inability to attract and retain talented people with the right set of skills for your industry.

A corporate tax rate that makes New Zealand increasingly competitive, not uncompetitive, and a top personal tax rate that attracts rather than exports New Zealanders.

A stable exchange rate. I know you are an exporting industry, but you also import many of the inputs into your production process. The New Zealand dollar at current levels must be hurting profitability.

This evening I want to confine my brief comments to the wider environment that you depend on in order to succeed.

None of us can wish our way wealthy. We only get there by doing work. That is true for individuals, businesses and our country.

Last week Auckland was somewhat preoccupied with the conference on the "Knowledge Wave".

Sexy words.

This week many people are reflecting on whether they have any meaning in terms of the future of New Zealand.

The challenge we face is extremely obvious.

While there is no crisis in New Zealand, there is something of a sinking feeling. The question remains: are we prepared to do anything about it? Or is it inevitable that New Zealand may be the first developed country in the world to slip out of the OECD group?

Perish the thought.

Being a member of the OECD offers New Zealand a valuable opportunity to measure our own performance against others. It also enables us to consider what we might do in learning from the experience of others that will improve our prospects for the future, but at the same time coming up with a unique New Zealand remedy, rather than some imported version.

It was massively disappointing to hear the Prime Minister who, in one breath, commits her Government and New Zealand to returning to the top half of the OECD, then roundly condemns the OECD as being simply being a hot-bed of Rogernomic and Ruth Richardson thinking.

Apart from the huge credibility gap, one is left to reflect, who is it that is out of step?

Only Helen Clark and Michael Cullen could be sufficiently arrogant to assume that they can return New Zealand to the top half of the OECD while pursuing a policy platform that is completely contrary to all that we heard at the conference and to conventional OECD wisdom.

The real challenge facing New Zealand today is whether or not we seriously can commit ourselves to a high growth path.

Many analysts, including many distinguished New Zealanders and visitors last week, confirmed that New Zealand's macro-economic settings achieve a tick on almost any international measure.

While much of the micro-economic policy reform that was done in the 80s and 90s still stands us in good stead, a number of areas were marked out for urgent attention by people like Sally Shelton-Colby from the OECD, Michael Porter from Harvard in America and others. In the list described as stifling growth were:

The increase in the top marginal tax rate which is acting as an impediment to retaining and attracting skilled people. This point was mentioned many times by speakers such as Sally Shelton-Colby from the OECD.

The high rate of corporate tax. Reserve Bank Governor Don Brash said he was disturbed that New Zealand now has the highest corporate tax rate in the Asian region.

We need better evaluation of all areas of public expenditure, in particular health and education, to make sure we are getting maximum benefit for dollars spent.

A number of speakers said we need to do better at developing our human capital.

Michael Porter said New Zealand lacks a vision and a plan. He went on to say there are a number of policy areas that are inconsistent with an innovation driven economy, such as the People's Bank and the re-regulating of the labour market.

There was also a genuine recognition that significant work is required in order to bring people who are currently outside the real economy into it, and in order to achieve growth rates at higher than 2% and closer to the 6% nominal growth required to genuinely lift New Zealanders standard of living and disposable take home pay.

Some of the ideas that came out of the "Knowledge Wave" conference are fantastic to say the least.

They are recipes that can contribute to the smart and fast element that seems to be a characteristic of most of the economies that are really performing well but what is more, that are providing a positive experience for those who live within them, that is quite new and very real compared with the experiences they had in previous times when low growth had been their reality.

I believe this debate has been one of the most defining things in New Zealand politics in the last four or five years.

Labour wish to take us to heaven but don't wish to die in the process - quite literally. They disgrace us all by ruling out programmes that would contribute to growth and are happy to just watch New Zealand decline.

I challenge the Prime Minister to acknowledge that polling alone in order to determine policy will never get New Zealand's growth rate from 2% to 6%.

The Prime Minister's determination to set an economic strategy based on public polling data rather than on the advice received by people like Michael Porter or Rick Christie who were commissioned specifically by a conference she co-chaired to come up with strategies for New Zealand to take us into the future is duplistic and unworthy.

The last ten days have exposed the difference between the Prime Minister's story and the total lack of substance in the Government's programme.

The Prime Minister's credibility has seriously been tested when she continually rules out key elements that will be required if New Zealand's economy is to lift to growth rates above that which are currently experienced. The truth is, the promises made to lift those who are at the bottom and the middle can not be delivered on unless commitments are made to significantly improve growth rates.

Something this Government is clearly unwilling to do.

This has provided National with a critical opportunity. This is the first time since I have been Leader that we can show New Zealand a glimpse of a new National and what we can offer, unencumbered with coalition agreements and with our eyes on the future.

Three weeks ago at our National Conference I committed our Party to a high growth strategy. That is part of our vision.

We do that because we know from our own experience that growth rates of 3%, while meritorious and when tested across the 90s delivering a growth rate and disposable income equal to that of other OECD countries, are not good enough and are not catching us up to our OECD standing that we have been used to historically.

National is committed to putting a programme together that will produce the conditions for growth that will genuinely see businesses regain their confidence and see foreign investors come to New Zealand with their human capital and financial capital. But more importantly, New Zealanders through experience will have opportunities to work to increase their disposable income. In doing so, the tax-take will expand and offer our country opportunities to lower tax rates so families have more choices and businesses become more competitive. It will also allow increased social spending on areas that really matter to us, like a world class education system and a world class health system.

In short, going for growth offers New Zealand our best future and National is going to deliver that.

New Zealanders can now clearly see there are major points of difference between Labour and National.

We, as the National Party, have been through a defining few weeks in more ways than one.

Not only have we foreshadowed a serious commitment in policy direction and the outcomes we will deliver for New Zealanders, we have also taken some major steps in our Party.

The election of our new President, Michelle Boag, completed a transition from one generation to another in terms of National's leadership.

Every political party, particularly the major ones, approximately once a decade has to go through this process.

I am delighted with the changes in our Party, in our President and in our Regional Chairs, many of whom are new, highly skilled and very attuned to modern politics and its demands.

I am also proud of our Caucus team, having listened, studied and considered our options, they are absolutely committed and well on the way to putting a policy programme together which will unfold later this year and early next year that will capture the imaginations of New Zealanders and genuinely give them confidence that our country's prospects in the future will improve.

So watch this space!

The test we have imposed on ourselves is to have New Zealanders consider whether or not they as a family will feel better off, that their choices will be greater, that the rewards are clear to them, that excellence is cherished, that grievances that have held New Zealand back are settled so that we can look to the future with great confidence and with a sense of prosperity and security.

And to achieve that we will need lead industries and industry leaders. Unquestionably the marine industry is part of this.

While we must play to our strengths in niche areas in New Zealand we also must expand into areas of new opportunities that are genuinely international.

The marine industry is clearly one of those areas and we look forward to creating conditions that will improve your competitiveness and give you the opportunity to improve your productivity and of course, profitability.

In the end partnerships and success mean that governments, businesses and individuals need to talk openly and frankly with each other as to what conditions are required to allow them to be both motivated and inspired but also valued and rewarded.

National is the only party in New Zealand politics that we genuinely believe can do that.

I am personally committed to doing so and look forward to working with you.

ENDS

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