New Zealand Can Do Better - Deborah Coddington
New Zealand Can Do Better
Thursday 20 Nov 2003 Deborah Coddington Speeches -- Economy
Address to the Importers - Institute Annual Conference, Heritage Hotel, Auckland, 20 November 2003
"For one brief moment in time, at the end of the 1980s, the world looked to New Zealand as an example of greater economic freedom. Since then we've gone to sleep and allowed our country to wallow in complacency."
Daniel took that quote from my maiden speech to Parliament, delivered in August last year.
Before I went to Parliament, however, I fought for freedom, and I will continue fighting for freedom long after I cease to be an ACT Member of Parliament.
Indeed, in 1995 I addressed your conference when I was a broadcaster for Radio Liberty. That speech, `My Personal Path the Freedom', was published in a book collection of my writing, "Liberty Belle".
But I decided to go to Parliament because, as a journalist, I felt it was time to stop carping from the sidelines, criticising politicians on the pages of magazines, and step into the fray myself and try to make a difference.
My principal passion is education. Or, as Tony Blair calls it, education, education, education. If we are serious about returning this country to the top half of the OECD we have to put an end to endless talk about the knowledge economy and instead do something about teaching children to read, write and add up.
Name one child who has been taught to read as a result of the Ministry of Education's platitudes about `whole language', `literacy initiatives', `facilitating best practice', or `policy directions'.
I bet most people in this room can read a newspaper, write a letter to the editor, or multiply seven by nine in their heads.
But we're dinosaurs. We were taught to read by sounding out the words. We learned our times-tables by rote. We had spelling notebooks and got a whack across the calves with a ruler when we got the spelling of `parallel' wrong.
Today the Government can't even get parallel importing right.
Whatever was so bad about Janet and John anyway - unless it's because in today's PC climate, such blatant middle-class, European, heterosexuality is clearly going to hurt the feelings of those who may be gay, poor and of another ethnic origin.
Clearly, everything's gone too whanau.
A friend recently took up a new job at the Department of Statistics, designing questions for the census. She was told she had to pitch all questions at the level of a 12-year-old.
My point, ladies and gentlemen, is that education in this country, as prescribed by the bureaucrats, is going to hell in a handcart and if we're going to save the next generations from lifetimes of state dependency we need to start by devolving control and funding from Wellington bureaucracy out to parents and schools, and giving parents choice.
But as well as education, I'm also ACT's economic development spokesman - that includes transport, associate finance, and business development.
It's important to remember that New Zealand is a nation of small to medium-sized businesses. Some 80 percent employ fewer than five people. And all of these people - employers and employees - are consumers.
And consumers, especially those on low incomes, are the ultimate beneficiaries of free trade. Tariffs on clothes and shoes hit low-income families the hardest. These tariffs are, in some instances, the equivalent of a tax of up to 19 percent. And this on top of GST of 12.5 percent. In other words, instead of paying $100 for a pair of shoes, they're paying at least $130 and contributing nearly half as much as what they pay for the shoes to Michael Cullen's surplus.
The argument by protectionists, that the tariff serves the worthy cause of keeping New Zealanders in employment doesn't stack up.
If the shopper isn't spending this extra $20 per shoes on protecting a job in the clothing industry, they wouldn't just shove that $20 under the mattress. It would be spent somewhere else - taking the kids to McDonalds, to the movies, buying some books, for instance. So instead of the government deciding which jobs are important, the consumer, using her own money, decides.
And the consumer is much more attuned to rewarding worthy industries than the Minister of Economic Development, Jim Anderton, whose Alliance party claimed `credit' for stopping tariff reductions in the Labour Government's first term.
Governments think they can pick winners. Sometimes they can; more often they get it wrong. The best they can do is pick industries that are flavour of the month, for instance, the glamour film industry.
But consumers can fine-tune their selection. For instance, if I pay to see `Scarfies', and don't think it's any good, I'll not only warn others off seeing it, but I'll be more cautious about the next Film Commission funded film I choose to see.
To its credit, the Government has decided to resume tariff reduction, though it has put off the phase-out until mid-2006, after the next general election.
Free trade tests the mettle of governments, especially a government that derives much of its financial and voter support from the trade unions. The benefits of zero tariffs are spread throughout the community, while job losses blamed on tariff cuts and free trade, such as in the motor vehicle assembly business, make great emotional television.
But latterly the argument against tariffs has changed its nature. It's a bit like the way old socialists have slid into the environmental movement: it sounds much more acceptable to pronounce that you're caring for the environment than stating that you are opposed to property rights. In much the same way, old-fashioned protectionism aimed at preserving the jobs of union members has become a nebulous slogan: "fair trade not free trade".
What does this mean? Think anti-globalisation - or, as the Economist put it, "Clueless in Seattle". What is even more puzzling is the way governments around the world, with a few notable exceptions, have pandered to the bogus fears of the rioters (who are not above using the greatest tool for globalisation - the Internet - to mobilise their protest movement).
Arguments against free trade are, in fact, discrimination against foreign products. And while consumers are free to buy New Zealand made if they choose, they should not be prevented, by government interference, from choosing their products according to price.
My oldest daughter was born in 1975 and my youngest in 1985. At the beginning of the school year, when Briar needed replacement shoes, schoolbag, tennis racquet, togs and towel - all the items that children lose, break or grow out of - it was always a struggle. Ten years later though, Imogen was outfitted not only much more cheaply, but also there was this amazing choice. Gone were the regimental leather schoolbags and in came a variety of colourful satchels, cheap and cheerful with wise words on them like `little people are precious'.
I bet when most Mums shop for essentials, they choose on price, rather than country of origin. They should, at any rate, have that choice.
Yet political leaders still don't accept that free trade is beneficial. Rod Donald, co-leader of the Green Party in 2000 said "We are importing more and more products we should be making ourselves, thanks to the government opening up our borders to unfair competition, causing jobs to disappear as well as increasing the trade deficit. You couldn't operate your home or business like this without going broke."
Well let's use the home analogy: we don't try and grow all our food in our back yard, milk a cow, have chooks, sheep and beef, make our cars and so on. We participate in the market - trading our labour for income to buy what we want. Sure, we might run a trade deficit when we buy a house or invest in tertiary education; open a new business - we spend more than we earn, in other words. But we don't all go broke.
The idea that exports are `good' and imports `bad' is clearly nonsense. The South Island and the North Island of New Zealand clearly trade with each other every day. Restricting imports and subsidising exports to `win' the balance of payments results in an impoverished nation. And after all, our exports are someone else's imports. At what stage on their journey do they cease being `good' and become `bad'?
Then there's the so-called `moral' argument, famously advanced by John Pilger, that free trade exploits low-wage workers in places like Vietnam and Thailand. There's no argument that they are low paid compared with unskilled workers in rich countries. But their wages are higher than they would otherwise earn, and the only alternatives - prostitution, living off rubbish dumps or in extreme poverty - are surely not an acceptable alternative. The best way for these countries to become high-wage is for more and more foreign investment to flow in, increasing the market for labour, and driving up wages.
But I often wonder whether the anti-globalisation chatterers are really anti-American ideologues. They argue that globalisation - especially in ownership of the media - is a threat to national identity, or our culture. This attitude doesn't stand up to serious scrutiny.
I have worked for much of my career as a feature writer at magazines published by an Australian company, ACP, owned by an Australian, Kerry Packer. The success of North & South, however, is that it is totally focused on New Zealand issues. There is absolutely nothing Australian about it. If there was, the readership would be considerably smaller and the advertising would follow suit. Kerry Packer would not have a clue what goes into North & South magazine. I doubt he cares.
Other magazines in New Zealand, and newspapers, are owned by multinationals - Rupert Murdoch, Tony O'Reilly, and there are a few successful independents. Television and radio media are owned by the government, by Sky, CanWest and various New Zealand companies.
New Zealand is a small country with very few wealthy people. If you earn over $39,000 you're considered rich enough to be in the top tax bracket. There are very few people with money to invest in newspaper, book and magazine publishing so New Zealand depends on foreign investment. If we restrict that, we are denying shareholders their right to sell at the best price; employees the right to compete on an international scale for higher wages; consumers the chance to `trust' a company financially and commit to a 12 or 24-month magazine subscription.
Does this come at the expense of national identity? I'm not convinced, especially if we define media as that which influences the way we live and the way we think about ourselves. So I include not just newspapers, magazines and television but also radio, films, documentaries, books and music - and of course, the Internet.
Natural cultures are stronger than people seem to think. I prefer to think of globalisation as cross-fertilisation. In New Zealand I can watch French films, eat Japanese sushi, read my favourite magazine Atlantic Monthly published in the US, wear Levis jeans which were not originally American but invented by a German immigrant to the US who combined denim cloth woven in France with Genes, a style of trousers worn by Genoese sailors.
I can listen to music on the radio as diverse as Kiri Te Kanawa, a Maori, singing a Puccini aria, to Cesaria Evore from the Cape Verde Islands. Yet when I packed go and study at Cambridge University earlier this year I took with me New Zealand contemporary music, so in moments of late night homesickness, I could walk through Cambridge's quintessential English streets and listen through earphones to Crowded House, Bic Runga, Split Enz, and others singing about Dominion Road, slow boats made of china on mantelpieces, rain falling from concrete-coloured skies, and taking weather with you. These are words the English don't understand but they connected me to my family and my city.
My father was born in London to Cockney Jews, and my mother is of Irish descent, but I am a New Zealander. I am different from English or Americans. I am not `similar' to an Australian. I am not a British colonial. I can embrace some foreign cultures and reject others. I would rather be exposed to this choice than have my government use legislation to halt global media giants at the New Zealand border, like they used to do just 20 years ago.
In any event that would now be a useless exercise. Think of the Internet - we look at web pages every day in our research and reading but are mostly unaware of their ownership. Neither do we care. I don't feel my national identity is threatened every time I tap a word into Google, or use Microsoft Word.
As Nobel prize winner, Indian economist Amartya Sen said: "the culturally fearful often take a very fragile view of each culture and tend to underestimate our ability to learn from elsewhere without being overwhelmed by that experience."
And do American so-called media tycoons who invest see our uniquely Kiwi characteristics as a threat to their perceived desire to `Americanise' the world, as someone like Naomi Klein would have us believe in her emotional book, `No Logo'? Evidence points to the opposite. I proudly remind you of one of the greatest recent successes distributed by US global media giant AOL Time Warner - a movie based on a British book, with British cast, shot by a New Zealand director in the New Zealand landscape: "The Lord of the Rings".
Anyway, what do we mean by our derogatory descriptions of `American' or `British' global giants? What are the national identities of those countries, if not a diverse mix of cultures, ethnicities, religions and lifestyles? In other words, millions of people who think of themselves are just that - individuals - not as some sort of stereotype of what their country's `national identity' is supposed to be.
We define ourselves, I think, not allow ourselves to be defined by others, least of all by our elected politicians who foist these regulations and tariffs upon us. It is highly ironic that those in the West boast about being modern and multicultural, tolerant and non-racist, yet seem to think that developing nations should not be allowed to be `tainted' by influences from other cultures. Is this not simply another strain of anti-western, anti-liberal democracy rearing its ugly head again?
Do we have a right to force people in developing countries (and soon we may include New Zealand in that category) to lead an authentic, monocultural, unspoiled life in isolated poverty?
A self-confident culture is robust and resistant to being overwhelmed by the homogeneity of a larger, richer, more powerful nation. We should welcome their advances, not hunker down under our blankets of inferiority complex, congratulating ourselves we don't need global interference thankyou very much, then stupidly letting the world leave us to our irrelevance.
And I would just add this: If New Zealand were once more that little country which, for one brief moment in time the rest of the world looked to as an example of economic freedom in the making, we could be justifiably proud of a lot more than our beautiful landscapes, relatively easy way of life, excellent sportsmen and outstanding scientists. We can take on the world and win when it comes to motor sport racing, discovering DNA, making movies, and writing books but that is not enough.
The economy is pretty good right now and despite the All Blacks' disaster, most of us are feeling positive. But if this is as good as it gets, then I'm afraid we've lost our sense of adventure. We've lost the plot. 400,000 able-bodied people living on welfare? Wages across the Tasman 40 percent higher? Taxes going up every month with nothing to show for it but increased traffic congestion, more compliance costs, and a government passing laws forcing Aunty Flo to put a microchip in her bichon frise puppies; Uncle George to be supervised if he does alterations to the garage that cost more than $10,000; and Margaret Wilson hell-bent on bringing back compulsory unionism and slavery clauses in the Employment Relations Act?
This is not as good as it gets. We live in a breathtakingly beautiful country but to stand tall in the world we need to overcome our natural disadvantages and stand out. We need to make other countries look at us again. They have done so before when we revolutionised the economy; they could again. With only four million people I believe we can be a very prosperous, happy and truly liberated country.
But like a winning America's Cup skipper we must fix our eyes on the goal, hold fast to our course, and never, ever look back.
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