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English Speech - Business Needs Certainty

Leader of the Opposition Hon Bill English

Address to Auckland and North Shore Businesspeople

1pm, Friday 19 October 2001

BUSINESS NEEDS CERTAINTY

The world changed on 11 September when the twin towers of the World Trade Centre collapsed.

It was an event in a place far removed from us and our daily lives, and yet now we are part of a war in a poor rugged country on the other side of the world.

It's a strange war. It's against people who believe that to die is to win. Their weapon is fear, pumped through the arteries of a modern nation, the air and mail networks. Our target is small, one man and his supporters. Their target is big, freedom and democracy.

Why are we in this war? Because of a gut instinct that if America is that vulnerable, so are we, an instinct that terror on that scale anywhere is a threat to us all.

It's the work of our leaders to cut the path through these new uncertainties. It's the work of our leaders to make new energy and direction from complacency that was punctured on September 11.

While these events have highlighted the need for security, hundreds of people are being sacked from the Airforce, and the leaders of the Army are subject to three different inquiries. The Government's defence policy has turned out to be wrong.

New Zealand has been caught flat-footed by these events. These threats to our economy and our security make this a time of great opportunity to take over the leadership of the National Party. We need to rethink the path ahead, looking forward to a strong economy and a secure community.

I didn't take up a career in politics, with all the sacrifices that entails for my family, to collect a cupboard full of silver medals. Second place isn't good enough.

I have personally answered the call and have decided I want to offer New Zealand new leadership, a new National Party and a new way forward.

National will be a broad spectrum party, acting and working in the national interest.

We are reaching out to people who used to support us and want to come back and to people who haven't voted for us before and share our aspirations for a better country.

The principles of freedom, enterprise and contribution to the community are timeless principles. New National's job is to reinterpret them again for New Zealand in the 21st century. So, we will leave Helen and Jim to rehash the arguments they lost with Richard Prebble in the 1980s.

September 11 should have pricked everyone's complacency. There is a fresh urgency to move on to new solutions if we are to create a strong economy and secure communities.

I can understand why business has had to try to do its best to work with this Government. But the time has come now for some honesty.

We have a government led not by a Blair-like New Labour, but an Old Labour fighting the battles of the past.

Let's work systematically through the list of good ideas being promoted by the Knowledge Wave people and the Competitive Auckland people:

Lower corporate taxes to attract and retain investment. Labour says no, but has found new ways of adding costs to business.

Lower personal taxes to attract talent. Labour has put personal taxes up and driven skills and talent offshore.

Reform the RMA - Labour has just rejected the improvements introduced by National to maintain standards and remove the bottlenecks and delays.

Introduce more choice and higher standards in education - Labour has crossed that one off too, handing more control to the bureaucrats in Wellington.

I believe in a New Zealand where every parent has confidence that they send their child to any school they choose and know that they will learn.

So in this respect I have a clear message for Aucklanders and particularly for business. I don't blame the nation's commercial leaders for trying hard to work with Helen Clark and her Government.

They tried to get close enough to persuade the Government to moderate its sillier ideas and to educate key members of the Cabinet about the needs of commerce. I am sure it had a beneficial effect.

But over the next 12 months there will be a choice.

I don't ask more of business leaders than they owe to themselves - minimise the damage the Government can do to their country, or support solutions to this nation's indifferent performance.

Unlike Helen Clark and Labour, there is not a single item on the Knowledge Wave or Competitive Auckland wish list which frightens myself or my colleagues.

There is a compelling consistency about their messages. They are the elements of a strategy that will give people higher incomes and confidence that this country is going somewhere:

* Get your taxation policies, both corporate and personal, right, to become a good home for capital, entrepreneurial talent and hard work. * Build on the strengths of those industries that offer the prospect of true international success. * Ensure our education system at both a compulsory and tertiary level is dynamic and excellent. * Invest in the infrastructure that is required for a competitive economy. * Incentives to get on the ladder and be rewarded for working hard and acquiring skills * Take everyone along for the ride * Above all, be practical not ideological

The frightening thing is this list really does offend Helen Clark.

But that list will feature in our policy as it is unveiled.

We understand the need for certainty for business so it can plan at a time when the world is more uncertain than ever.

But Labour is creating more uncertainty just when that is the most damaging thing to do. It doesn't know the difference between business and politics.

That's because its instinct is wrong. It does not understand business.

Look at Air New Zealand.

It's hard to understand why the Government appointed a commercial negotiator in the first place when its job was to make a regulatory decision. It's because right from the start the Government was looking at investment in Air New Zealand.

All they had to do was give certainty and let the shareholders sort out the commercial problems.

Now, the Government is about to become, for the first time ever, the owner of a publicly listed company. We have no idea how they will manage it and nor do they.

We do know that they have attacked the salaries of the Board and the CEO. They pushed the share price down and up with careless use of confidential commercial information.

We do know they will run Air New Zealand ruthlessly for its political purposes. Their track record with TVNZ, where political correctness has wiped out $400 million of value, and with the creation of an $80 million People's Bank at NZ Post, is testament to that.

I wonder whether Dr Cullen will take a call from Richard Branson?

The Government writes the rules for aviation. It's also the owner of a small battered regional airline whose future profitability depends on high airfares.

So, will Cullen make life easy for himself and tell Branson to get lost, or hard for himself by welcoming the competition?

Certainty for the private sector is no better.

Vodafone spent over a billion dollars putting in their mobile network. Two weeks ago, the Clark Government did a special deal with one company to let them get access to the network free.

The rules have changed because of a grubby political deal. The deal was done after submissions in secret to the Select Committee.

It's like buying a car off the yard, only to find you have to share with the neighbour, who pays for the petrol but nothing else.

Another commercial mess was created by the Government's efforts to change the Commerce Act. It's a total muddle. An Australian company finds it has been tripped up because the rules aren't what the Government said they were. The upshot was to put 11 business deals worth a collective $3 billion at risk.

The Government is also in a muddle over genetic modification. The Labour-Alliance coalition depends on the Greens for confidence and supply. Last night and this morning the Greens effectively withdrew their support for the Government. Helen Clark will now be forced to extend the moratorium on genetic research.

National believes this issue is too important to families and to New Zealand's future to play politics with it. We have offered to work with the Government to sort it through, to make sure people can choose what they eat, to ensure there are reasonable controls, and to take advantage of the opportunities of biotechnology. It would help if Helen Clark told us and New Zealand what she thinks, so we know what we're dealing with. We can proceed with caution.

Every dollar of cost that government uncertainty places on business is a dollar taken away from New Zealand's ability to pay for the quality health and education services people deserve. New Zealand needs a National Party that is strong on social policy.

National will face poverty and disadvantage in an honest and practical way. Our public services and our most vulnerable people are slowly suffocating in the quicksand of bureaucratic strategies and pork barrelling spawned by the Government. More and more New Zealanders will be trapped by what George Bush called "the soft bigotry of low expectations".

To achieve good public services and welfare that works New Zealand needs a government that puts ticks, not crosses beside initiatives that will raise productivity and growth.

I have listed elements of a growth strategy. We have made a fundamentally different choice from the Government.

We focus on productivity and they believe the way forward is through savings. Last week Parliament legislated a multi-billion dollar super scheme; most of the money going into it is borrowed. It is mostly invested overseas, and in the end guarantees 10 cents in the dollar of future super costs.

How the Government behaves matters, because Dr Cullen is the single largest owner of assets in the economy and the biggest new investor each year. Yet there is no debate, let alone critical analysis of the contribution - be it positive or negative - that those investments have on economic growth.

If you asked me to have a stab at it I'd say that it was a net drag on growth. National will be taking a critical look at the Crown's investments and the contribution they are making to a strong economy and a secure community.

The Government will have to work more closely with the private sector to achieve that goal. Bringing the very best that the public sector has to offer together with the best of the private sector means the Government will be better able to meet its objectives.

The most obvious areas for investment will be infrastructure. New Zealand suffers from inadequate infrastructure on a number of fronts - most noticeably roading and in particular in Auckland.

Those bottlenecks to growth need to be removed and the Government needs to use the resources at its disposal to ensure that happens.

National is rebuilding. Our membership is growing, our appeal is broadening and our confidence is returning. Over the next few months to Christmas we plan to announce some policy, and to raise the level of political debate on the path ahead for New Zealand.

If you share my concerns about the country and my hopes for what this country can be, then I ask for your support.

You have the choice of sitting back to see if this new guy can do it for you or you can make your hopes our hopes. I am confident about my country and optimistic about its people.

I believe that together we can plot a pragmatic course during these uncertain times.

I know you are looking for specific policy so you can support us. It's time for people in business to decide whether to take Helen's anaesthetic, and sleep it off, or take action.

ENDS

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