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Brash - Address to the Asia Forum

7pm 2 December 2003
Dr Don Brash MP
National Party Leader
2 December 2003

Address to the Asia Forum, Wellington

Mr Chairman, ladies and gentlemen,

I accepted an invitation to speak to this dinner some weeks ago, but I am particularly pleased to have the opportunity to speak on the relationship between New Zealand and Asia as seen through National Party eyes this evening in view of the events of last week.

And the media interpretation of those events.

Last week, the Asia 2000 Foundation sponsored the Seriously Asia Forum, and there has been quite a lot of media comment on the fact that Opposition political parties, and I in particular, were notable for our absence. It has been suggested that this shows that the National Party is half-hearted in its commitment to the development of the relationship between New Zealand and Asia.

Indeed, an editorial in the New Zealand Herald observed that "what appeared to be lacking (at the forum) was any sign that Opposition parties shared (the Government's) enthusiasm for re-engagement (with Asia)." The Herald went on to suggest that "cross-party agreement on a broad strategy that articulated the country's commitment to a future in Asia would give some certainty to that long-haul approach to engagement."

So let me make the National Party's view, and my personal view, very clear: the National Party strongly supports the development of a closer relationship between New Zealand and the countries of Asia, and indeed has supported the development of that relationship for many years. Any suggestion to the contrary reflects either Labour Government propaganda or ignorance.

This is not to suggest that we want to turn our back on traditional friends and allies. On the contrary, the National Party is very critical of the fact that, under Labour, our relationship with countries such as Australia, the United Kingdom and the United States has become strained. We need to work hard to rebuild those relationships.

But at the same time we need to work on developing relationships with the countries in the Asian region, and I am strongly committed to that objective.

I was invited by the organisers of the Seriously Asia Forum to the Forum last Tuesday evening, but unfortunately had to decline that invitation because I had a prior speaking engagement. But my place was taken by Pansy Wong, the National Party spokesperson for the newly created portfolio of Asian Relationships. She also attended much of the Forum the following day, when I was committed to chairing an all-day meeting of the National Party Caucus.

But let's set the record straight. The Asia 2000 Foundation owes its present reputation exclusively to National Party initiative. It was established by the National Government in 1994, particularly through the efforts of Don McKinnon and Philip Burdon, and was subsequently chaired by Philip Burdon from 1996 to 2001. To now suggest a lack of commitment to Asia on the part of the National Party is highly offensive given our demonstrated and longstanding commitment.

The National Party has long recognised that Asia is of fundamental importance to our future as a country.

And speaking personally, I am very unlikely to forget that. My own father was decorated in 1962 primarily for his work on improving New Zealanders' awareness of Asia, where my parents lived for several years and visited scores of times.

I myself am married to a Singaporean Chinese and, while I have never lived in Asia, I have visited very many times, first at the age of 19, and in recent years two or three times a year. While I was Governor of the Reserve Bank, I hosted several conferences for Asian central bankers here in New Zealand, and attended umpteen meetings and conferences of central bankers in Asia.

So I have not the slightest doubt about the importance of Asia to New Zealand's future. In terms of the raw numbers, it is worth recalling that 10 of New Zealand's largest 20 export markets are in Asia. Asians make up 24% of our incoming tourists, and almost 90% of those coming here for education. Asia is a significant source of investment capital. Sir Dryden Spring, currently chairman of the Asia 2000 Foundation, estimates that the Asian region underpins one job in five in the New Zealand economy.

And of course, we have had substantial immigration from Asia in recent years, to the point where one New Zealander in 15 is of Asian ethnicity, about the same number of Asians in New Zealand as there are Pacific Islanders. Not everybody has welcomed these immigrants. And there can be little doubt that some immigrants have arrived in New Zealand ill-equipped for life in this country. But overwhelmingly, immigrants from Asia have made a hugely positive contribution to their new home - often bringing skills, often bringing capital, and almost always bringing attitudes to family life, education, hard work, and saving which we native New Zealanders could emulate to advantage.

I well recall being told by a manager of HSBC once that, in New Zealand, most of their borrowers are Kiwis, and most of their depositors Asian New Zealanders.

Or take a glance at the page of photographs which the New Zealand Herald publishes each year, showing the duxes at New Zealand high schools - typically, something close to 40% of those shown are Asian.

Or look at the results from this year's scholarship (NZEST) exams, where just over 40% of the top 60 students in the country have Asian heritage. These young people are enriching our country with their hard work and their talent. Just as a look at any youth orchestra around the country shows how New Zealanders of Asian heritage are enriching our culture.

So let there be no doubt: National understands the importance of New Zealand's relationship with the countries of Asia, and remains committed to the further development of that relationship, as we have been for many years.

But let me make two further points.

First, let's not get carried away with the idea that the Labour Government is strongly committed to developing that relationship. Only a year ago, the Labour Government drastically tightened the English language test applying to business and professional migrants, thereby closing the door to many Asian migrants. This year, they passed legislation to nullify some 20,000 applications from mainly Asian migrants who had applied to move to New Zealand, in good faith, under the previous rules.

Second, it is important that all New Zealanders understand that there is a huge difference between the way the Labour Government views the world and the way in which some of the dynamic countries of Asia view the world. The difference is well illustrated by comparing the speech which the Prime Minister gave at the Seriously Asia Forum and the speech which the Deputy Prime Minister of Singapore gave to the same Forum.

Helen Clark's speech talked about the need for a ministerial taskforce to foster better relations between New Zealand and Asia, and about reinforcing the capacity of the Ministry of Foreign Affairs and Trade. All centralised, government-focused, stuff. It reeked of mediocrity, lack of imagination and low aspirations.

Our most important relationships with Asia are commercial and cultural - they are people-to-people relationships, not government-to-government ones, as useful as those can be. Yet the Prime Minister's vision did not extend much beyond forming a committee.

The speech by "BG" Lee, Singapore's Deputy Prime Minister, talked about how Singapore intends to take advantage of the opportunities offered by Asian economic growth. Let me quote a few sentences from his speech:

"In Singapore, we have decided that we must keep our taxes low to attract new investments, and minimize wage and labour rigidities so that companies can expand and contract flexibly as business conditions change.

"Singapore is also promoting innovation, creativity, and entrepreneurship. This means deregulating and liberalizing the economy. It means emphasising private enterprise as an engine of growth.

"The most fundamental and difficult change needed is in the mindsets of our people. Singaporeans must accept change as a way of life, and continue learning new skills throughout their careers. They must become more self-reliant, depending less on the state and more on themselves. They must spark fresh ideas, seize new opportunities, take risks, and enjoy the rewards of success.

"These structural changes are not painless. Lower taxes mean smaller social safety nets; more flexible wage structures mean less certainty for workers. The reality of globalisation and global competition forces countries to rethink their social compacts and the protection that the state can offer citizens. But if we hold back from restructuring because we fear the adjustment pains, our economy will become uncompetitive, and ultimately we will undermine the livelihood and welfare of our people. So in Singapore we have decided to go for growth, by plugging into the many opportunities in Asia and in the global economy. This way we will maximise the resources we have to deal with the social consequences of globalisation."

And all this from the Deputy Prime Minister of a country which 40 years ago had a standard of living only 25% of New Zealand's, but which now enjoys a standard of living substantially higher than that in New Zealand.

It is a country where many New Zealanders now work, earning incomes well above what they can earn in New Zealand, and paying tax rates that resident New Zealanders can only dream of. If we have another 40 years of mediocrity, our situation will indeed be dire. But it doesn't have to be that way.

At least in Singapore the government realises that people don't get well-paid jobs, good healthcare, and decent housing by the government's imposing additional costs on the business sector and perpetuating the myth that prosperity comes from more taxation and bigger government hand-outs.

No, the Singapore Government plans to lower the company tax rate to 20% next year, with the top personal tax rate also at 20% from next year. Their GST will go up from 3% to 5% to help offset the revenue loss. "BG" Lee explained to Fran O'Sullivan of the New Zealand Herald that his Government had "felt it was important to have a signal right across the board to encourage enterprise. We wanted to tax consumption but not wealth creation."

Anything more different from the approach of the New Zealand Labour Government would be hard to imagine. Helen Clark's Government pays lip-service to the importance of growth, but increases taxes, loads compliance costs onto the business sector, ratifies the Kyoto Protocol before most of the countries of the region (including Singapore), fails to fix the problems of the Resource Management Act, tinkers with road congestion - and never gives speeches praising deregulation, the virtues of lower taxation, the need to take risks and be rewarded for success, and the desirability of being less dependent on the state.

I have no doubt that, when he was here, Helen Clark and "BG" Lee were polite to each other. I am even prepared to concede that the Prime Minister is sincere in her desire to improve New Zealand's relationship with Asia. But she simply does not understand what is happening in Asia, and how quickly, on our present course, more of Asia will leave us in the dust.

The National Party favours a strong relationship with the countries of the Asian region, and understands the values which will be important if that relationship is to be of mutual benefit. That is one of the reasons why I appointed Pansy Wong to the newly-created role of spokesperson on Asian Relationships. She was, incidentally, the first Asian Member of the New Zealand Parliament.

We have much higher aspirations for our country than this Government does. If we keep forming committees of bureaucrats, New Zealand will be looking for foreign aid from Asia in another 40 years time, if not much earlier.

We face a difficult task in explaining to the electorate that we are getting incrementally poorer relative to our immediate neighbours in the region. We are up against a government that will not release the vitality and energy of our people, but will instead paper over the cracks, ignoring the cruel nexus of welfare dependency, educational failure and rising crime that threatens a significant minority of New Zealanders.

But there is much to be proud of in New Zealand, as well as much that can be improved. I can promise you that the next National government will be much closer in spirit to the vitality of the Singaporean model, than to the complacency of the current government in New Zealand.


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