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Cullen Speech To Ngati Kahungunu Economic Summit

Speech To Ngati Kahungunu Economic Summit

Hon Dr Michael Cullen, Minister of Finance

Embargoed to 1200

Thursday 4 July 2002

Masterton

Karanga mai. Mihi mai. Tena koutou katoa.

It is my pleasure to be here today at this economic summit. And it is particularly gratifying to find myself described in the brochure for this event as “the most powerful man in the country”.

I need to say at the outset that being Minister of Finance does not always make you feel powerful. There are many responsibilities that come with the job. And because I have my hands on the government’s purse strings it is often my decision which good ideas get funded and which get shelved for later consideration. However, there are many things I would like to be able to do which are not so simple, such as increasing New Zealand’s economic growth. These cannot be achieved simply by snapping my fingers.

You have asked me to talk a little about my own personal background. I came to New Zealand as a boy, living with my family in Christchurch. My parents were of the hard-working, aspiring, type, and believed that there were more opportunities for their children to prosper in New Zealand than in post-war Britain.

For them, as for many parents, education was highly valued. It was the ticket to greater career options and financial security. Higher education in Britain was still largely the preserve of the elite, and so one of the major attractions of New Zealand was our egalitarian approach, our belief that every child should have the opportunity to make the best of their academic ability. So I was encouraged to work hard and to avail myself of the educational opportunities that New Zealand could offer.

I won a scholarship to Christ’s College, which as some of you will know is the premier boys’ school in Christchurch, and found myself rubbing shoulders with the sons of wealthy Canterbury businesspeople and farmers. I learned that while New Zealand did not have a class system as rigid as that of Britain, there were many young people who were, as the saying goes, born with silver spoons in their mouths.

Being born with a plastic spoon in my mouth, I soon realised that I had some very different values to those of the Canterbury elite. They lived in a world of old money, and had the promise of family connections to secure a good position for life. I was alert to the situation of ordinary working families like my own, where the threats of illness, loss of employment and reduced incomes in old age were very real. This was what pointed me towards a political career, and towards a social democratic set of political values and goals.

I moved on to Canterbury University and studied history, and then won a Commonwealth Scholarship to study for a PhD in social and economic history at Edinburgh University. After that I returned to New Zealand and taught at the University of Otago, getting involved in university administration and also being active in the Labour Party.

I entered Parliament in 1981 as the MP for St Kilda in Dunedin, and in 1984 was appointed Senior Government Whip. (For those of you who are curious, there was no leather horse-whip to go with the job, although when you have to organize a caucus of unruly Labour MPs the thought is very tempting.)

My path to becoming Finance Minister was a long one, and an unusual one. I am not an accountant or a financier, and my approach to economics has been via social history, and the impact of economic conditions on ordinary people. I held important social services portfolios in the late 1980s, as Minister of Social Welfare, Associate Minister of Health, and Associate Minister of Labour with responsibility for Accident Compensation.

In other words, I have always seen the economy as something which serves the community, and not vice versa. An economy that does not serve the community – or only serves a small part of it – is likely to be weak and carries the seeds of its own demise. What I am looking for is an economy in which everyone participates, and where the benefits flow to individuals to reward their efforts, but also to build up the health and well-being of the community.

So this is the perspective I bring to the job of Finance Minister, and this is the perspective I bring to the Kahungunu ki Wairarapa Economic Summit. The government’s economic development strategy, which is also a social development strategy, is based upon the twin principles of shared participation and shared benefit.

I want to focus on shared participation, and here I am talking about participation in employment, in education, in new technologies and in business ownership.

Under the previous government, the Mäori unemployment rate got as high as 19 percent. Now it is down to 11.9 percent. This is progress, but it is still more than twice the current non-Maori rate, which is 5.2 percent.

The Department of Work and Income has launched a Mäori employment strategy aimed at improving employment prospects for Mäori. A key focus is solutions to be provided by Mäori for Mäori, supported by capacity building initiatives. Particular emphasis is being placed on greater consultation and partnership with Mäori and improving job placement rates for Mäori clients. At the end of May, DWI had placed 11,903 Mäori into stable employment (lasting 3 months or more), compared with 7,904 for the whole previous year.

Of course, education is crucial for improving employment prospects, and it is a key area of investment for the government. We know that our future depends upon the skills of our workforce, and that we need to raise the bar when it comes to standards of educational achievement. For young Maori – and older Maori too – education is the key to becoming strong in their own culture and the key to acquiring skills that make them competitive on a global scale.

Looking primarily at post-school education, the pattern of the 1990s was for a large increase in overall participation, and in Maori participation too. The question was, does an increase in quantity mean an increase in quality too? As a government we were particularly interested in encouraging young Maori to engage with the new technologies which are increasingly important for their future.

We have made some progress, but there is more to be made.

We launched an $18 million Mäori Participation Initiative (over four years) to fund support services at public tertiary education institutions for Mäori students. This includes funding for an incentive grant for tertiary institutions to be more responsive to Mäori students, and funding for the development of a guide for tertiary providers on best practice for Mäori students.

As you may be aware, we are reforming the tertiary education sector, and one of the new requirements placed on institutions in their charters will be to demonstrate their responsiveness to their tangata whenua and to contribute to achieving the goals of the Maori Tertiary Education Strategy by increasing participation and achievement, in particular through to post-graduate study.

We have also negotiated a settlement of some $40 million over a number of years with Te Wananga o Aotearoa in response to the report of the Waitangi Tribunal on the Wananga Capitalisation claim. As you may be aware, this Wananga has programmes throughout the country and draws students and staff from a wide range of iwi. While most Maori students still choose mainstream providers, we are committed to supporting a Maori medium education option through the development of the three wananga.

In the area of Modern Apprenticeships, as at the end of March, 20 percent (159) of Modern Apprentices were Mäori. Nearly half of all Mäori Modern Apprentices are employed in the forestry industry, with significant numbers in engineering, carpentry and the wool harvesting industries. The scheme is being expanded into other areas, including agriculture, fisheries, community and social services, food and related products processing industries.

In Industry Training, trainee numbers grew from 56,000 in January 2000, to nearly 63,000 by the end of 2000, an 11 percent increase. Mäori and Pacific peoples account for nearly 25 percent (approx 15,800), with their participation rate nearly doubling over the past 5 years.

And in Training Opportunities, around 45 percent of trainees are Mäori, and 60 percent of Mäori trainees moved on to jobs or further training. Mäori training providers made up 30 percent of all providers.

These, as I say, are steps forward. We must remember that education is a long term investment, and we need to continue these efforts over the years to come.

It is also crucial for Maori to participate in the so-called knowledge wave. Our economic future requires us to produce products that can earn a premium on world markets. Prices for commodities such as wool, bulk dairy products and standard cuts of beef and lamb will never be consistently high enough for us to maintain our place in the current OECD ranking, let alone move ourselves back into the top half of the OECD.

So the current and future generations of New Zealanders have to be technologically literate. We commissioned some research to find out what areas of innovation New Zealand should focus on, and this told us that we needed to concentrate our efforts in three areas: information and communications technology, biotechnology and the creative industries.

What this means for Ngati Kahungunu is that these are the areas to be encouraging your young people to explore. There is a lot of scope here.

In the area of information and communications technology, I announced in this year’s budget a major funding programme aimed at extending broadband technology throughout New Zealand. Broadband is the nervous system of the new economy and is as important to New Zealand as the roads, power lines, railways, and telephone cables were last century. New businesses no longer need to be located in large cities, so long as they have a good product or service to sell, some computer programming skills, an understanding of how business on the internet works, and access to broadband.

Tens of millions of dollars have been set aside over two years for a major initiative in this respect. The early beneficiaries of broadband deployment will be schools, but once it is deployed local businesses and most government departments will also start to benefit.

Our objective is to ensure that the majority of schools have access to high-speed two-way internet by the end of 2003, with infrastructure being made available to more remote schools by the end of 2004. We are encouraging local communities and businesses to think imaginatively about how to make use of broadband technology to foster new business ideas.

We are also supporting Maori into careers in technology through the Tuapapa Putaiao Mäori Fellowship Scheme. $400,000 is available each year and the objectives of Tuapapa Putaiao are to increase the number of Mäori graduating with Masters and PhD degrees in science, technology and engineering disciplines and to create positive role models in science, technology and engineering for young Mäori.

Maori have been alert to the value of biotechnology for quite some time, through the recognition of the potential of traditional products such as manuka extracts. What we need to create is a generation of young Maori with the skills and respect for the natural world that will enable them to identify similar business opportunities in creating beneficial products from the natural world.

In terms of the creative industries, many opportunities are opening up. In the wake of Peter Jackson’s Lord of the Rings trilogy, and other films, New Zealand regions are being discovered by film makers as ideal locations. They are ideal not just because of the scenery, but also because we have an increasing pool of people with skills in film production and all of the support services that filming requires. The Wairarapa would seem well placed to attract some of this activity, because of its proximity to the production companies in Wellington.

Across all these areas of opportunities, an important priority for the government is to encourage business ownership amongst Maori. Not everyone is suited to owning their own business; but for a tribe like Ngati Kahungunu it is important to have individuals who are role models as entrepreneurs and business managers.

The government is working to support this goal in a number of ways:

 The Department of Work and Income is increasing Mäori take-up of self-employment assistance such as the Enterprise Allowance, Be Your Own Boss, and the Business Advice and Training Grant;

 The Mäori Business Facilitation Scheme aims to provide Mäori with the opportunity to explore their business ideas, either through supporting an existing business or through the start-up of a new business. At the end of December 2001, the service had 1,941 clients registered. This includes 212 new business clients and 91 existing business clients. A further initiative has been to provide a post start-up mentoring service to support businesses in the most vulnerable development stage; and

 Mäori Regional Tourism is being encouraged with $1 million of new money ($338,000 for 2001-02 and similar amounts for the next two years) to help strengthen existing Mäori tourism organisations at a regional level and encourage the development of new ones.

Standing back from all of this detail, my key message for Ngati Kahungunu as you debate your economic future is this: there is a close fit between your vision and that of the government, so let us work in partnership. Our vision for New Zealand is based upon strong regional economies, which draw upon a skilled workforce, utilise the best technology available and are linked to global marketplaces. These are policies we have pursued for the past three years, and I believe they are beginning to bear fruit for the nation as a whole, and for regions such as the Wairarapa.

There is still a long way to go, and success is by no means guaranteed. We all need to practice the disciplines of flexibility and perseverance. We need the wisdom and experience of the old, combined with the energy and imagination of the young.

I wish you well in mapping out your economic future.

Kia ora.


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