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Abderton Speech: Grey Power Annual Conference

11 April 2002 Speech Notes

Grey Power Annual Conference

Address to Party Leaders Forum

Grey Power Annual Conference

College House, Canterbury University


Thank you for inviting me to speak with you today.

I want to start out by saying there are many things happening that New Zealanders can be very positive about.

For years I came along to Grey Power meetings, and listened to the concerns of senior New Zealanders about the direction of government.

Those concerns were expressed about superannuation, health, housing, jobs and the sale of public assets to name just a few.

This government has changed direction in all of those areas.

We are making genuine progress for New Zealand.


It is a simple fact that New Zealand's population is ageing.

Now 12 percent of New Zealanders are aged 65 or over.

Within 50 years, that ratio will have risen to 25 percent.

Not only will the proportion of retired people to workers increase but, as life expectancies continue to grow, the average period spent in retirement will also increase.

The cost of providing New Zealand Superannuation will make a much bigger claim on the public purse in the future than it does now.

The Alliance stood at the last election for taxpayer funding of superannuation at a base rate of 65% of the average, ordinary time, after-tax wage.

I believe this has always been Grey Power policy as well.

If superannuation is to be universally available at that rate, then there are only three ways to provide for it.

We can put something aside today, increases taxes over time to provide for the growing number of retired New Zealanders, or we can cut other services such as health, education and police.

The Alliance has always argued that we should run a pay as you go scheme - where the costs of superannuation today are funded from taxes today.

But I’m the first to agree that we couldn’t claim a mandate for that policy.

The super fund partially pre-funds some of the future costs of superannuation.

It maintains some pay-as-you-go element for the future, and allows us to continue to meet demands for other essential social services today.

Everyone who is against this fund will inevitably argue for cuts to superannuation in the future.

There are many arguments around that the money going into the super fund could be used for other purposes.

The National party is apparently going to spend the money on cutting the highest rate of personal tax.

It is also going to spend the money again on buying a fleet of space age air force fighter jets.

It has also variously announced that it would spend the fund on building a road between Hamilton and Auckland, and on a lap-top computer for every school child, and fixing the health system.

National has been cynical in promising to spend the super fund in so many different ways.

But it highlights an important point.

There will always be pressure to cut superannuation unless it is locked up in a secure fund.

This will be a major issue for New Zealanders to consider when it comes to voting at this year’s election: Which parties will pledge not to dismantle the fund and splurge the future retirement funds of New Zealanders?

Splurging the Super contributions would be inflationary.

It would lead to higher interest rates.

And it will lead to more imports, increasing the current account deficit - which would mean more overseas ownership of New Zealand.

It’s true that the Alliance had some reservations about the Labour party’s superannuation fund proposal in the form it existed before the election.

For example, the proposal then was to fund the super contributions out of the first seven cents in the dollar of personal taxation.

We didn’t agree with that.

Superannuation should be funded from the full range of government revenue, including GST, company tax, and court fines.

Not just from personal taxes.

If it is tied to personal taxes, then you very quickly end up with people expecting a retirement income in proportion to the amount they paid in.

So the most affluent New Zealanders would get a much higher superannuation than, say, married women, who spend a long time out of the workforce bringing up children.

I believe the secure superannuation scheme we have developed is a very good one.

It takes a little something of the best from all proposals:

- It locks into law the base rate of superannuation: sixty-five per cent of average ordinary time earnings for a married retired couple.

- It pre-funds a proportion of future costs, on a fair basis;

- It continues a significant pay-as-you-go component, so that no generation has to pay twice for superannuation;

- It maintains a voluntary second-tier system.

No one expects that New Zealand Super is ever going to provide a lavish retirement income, and so those who are able to save something for their retirement are encouraged to do so out of their current earnings.

Overall, the superannuation policy this Government has put in place fulfils a long-standing commitment to a publicly funded universal superannuation scheme.

I want to turn to some of the other achievements of this Government.


I know that whenever I have come to Grey Power meetings in the past I have talked about jobs.

I have talked about the social, economic and human waste of mass unemployment.

And the achievement of this Government that I take the most personal pride in is that unemployment is now lower than it has been for thirteen years.

We set up the Jobs Machine - the Ministry of Economic Development and Industry New Zealand.

They are helping to create more jobs, and good jobs.

More jobs mean that more money gets spent in the local community, and that in turn helps to create the base for a stronger community.

Matt Robson is the Minister of Corrections - he’s in charge of prisons.

He has more money to spend on building prisons than I have for fixing the economy, which tells you something about our priorities as a nation.

But I believe that we would have to spend far less on building prisons if we could make the economy stronger.

Because if we halved unemployment, we would halve the crime rate.

We would ease pressure on all social services - welfare, housing, the health system, even education.

The best performing regions are Southland, Nelson-Marlborough and the West Coast of the South Island.

That in itself tells you something - Southland and the West Coast have some of the lowest unemployment in New Zealand.

When we came into government, those two regions were struggling.

We used to be told that they had no future, and people would be best to leave them.

Now they are booming.

The Opposition says our economic development policies have had no impact.

Perhaps they just think we got lucky with the economy - that in almost a decade in government they never got as lucky as this Government.

Well perhaps they are right - but its like the great golfer Gary Player once said: “the more I practice the luckier I get.”


One of the most important things about reducing unemployment is that it reduces poverty and hardship.

There is one other crucial area where we have delivered on a pledge that makes a major difference to poverty:

We said one of the most important things we could do to reduce poverty would be to bring in income related rentals for state houses.

And we have delivered.

For many retired New Zealanders, the costs of housing are the single greatest cause of hardship.

Because once you are retired you have very few options.

And my Cabinet colleague Sandra Lee as Local Government Minister is making even more progress.

She wants local authorities which sell houses to put any revenue from the sale of houses back into housing.

Governments can’t stop councils from selling housing altogether.

But we can say that many council houses were bought with low interest rate loan assistance from the government.

And they have been paid off many times over.

And therefore councils can be required to recognize and to meet their social responsibilities.

That would put a spoke in the plans of Auckland’s mayor John banks, whose determination to sell council housing is causing a great deal of anguish and threatens real hardship for some of the most vulnerable people in Auckland.

Kiwi bank

Housing is not the only publicly-owned asset that has been on the auction block for many years.

I know that Grey Power has been among the staunchest campaigners against the fire sale of New Zealand’s publicly owned strategic assets.

This Government has put a stop to asset sales.

We brought Air New Zealand back into the public fold.

And all over New Zealand last week, this week, next week, and for many weeks to come after that: branches of the publicly-owned kiwi bank are opening.

I know that retired New Zealanders suffered some of the greatest hardship from the mass branch closures that overseas-owned banks inflicted on many communities.

Retired people need local services even more than most others.

And the establishment of the kiwi bank will return those services to communities where they are needed.

Maybe it’s just a coincidence, but I’ve noticed that all the overseas-owned banks are now scrambling to reduce their charges, and branch closures seemed to have stopped.


Grey Power has always taken a close interest in the health system.

This government has a three-year funding package of almost three billion dollars in new money over three years.

I know that there are considerable problems in the health sector, and a lot more to do.

But the truth is that it has been run down over twenty-five years.

We cannot fix twenty-five years of neglect in three years.

Our new primary health care strategy puts an emphasis on making sure that the lowest income New Zealanders have free access to the doctor.

Next year, if we are back in the government, the emphasis will be on delivering free doctors visits for school age children.

After that our priority will be free doctors visits for the elderly.

And eventually we will be close to free primary health care for all New Zealanders.

I believe that is a goal that it is worth staying in government to achieve.


There are hundreds of thousands of New Zealanders who welcome our achievements in Government.

But many have told us that they couldn’t support the Alliance as it currently presents itself to New Zealanders.

We will all stand at our posts as Alliance MPs until the next election, because that is the commitment we gave.

But we cannot stand under the Alliance banner as it is currently configured at the next election.

We will stand with a new progressive movement.

If there is one message that a new movement will stand for, it is this:

That each person is valuable and unique.

That each of you can make a contribution that is unique.

If you don't do it, no one will.

Every single person has a leadership role to play, and it is our role to stand as partners alongside individuals realising their dreams and their potential.

I believe that this Government is delivering progress for New Zealanders.

It is delivering for retired New Zealanders, and for your families.

It is delivering the progress that we said it would.

I am committed to remaining as a constructive, co-operative and common sense partner in a progressive centre-left government with the Labour Party.

To being a voice for full employment, innovation and strong local communities in partnership with industry.

To using the fruits of economic growth to make social services stronger and to lift incomes.

And to secure communities and protection of our natural environment.

And I’m committed to continuing to implement progressive policies that all New Zealanders can be proud of.

This Government has proven that a fresh direction that takes people into account can be achieved without compromising the economic development of our nation.

That is the challenge that I give you my commitment to meet.


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