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The Association of NZ Advertisers - Brash Speech

Don Brash
Leader of the National Party

Address to:
The Association of New Zealand Advertisers

Auckland, 31 March 2004

Good evening to you all. I am delighted to have this opportunity to address a gathering representing the great bulk of New Zealand advertisers - companies which tend to be among the most vigorous and entrepreneurial in our society.

I have always seen advertising as a measure of an open society. At a time when the Eastern bloc was closed and centrally organised, advertising was missing -- and so were many of the products which consumers wanted. The West, by contrast, was driven by competition, and that competition was driven, in a large part, by advertising.

During a gripping TV programme, we may at times lament the advertising breaks, but of course without advertising on television, programmes would be limited, and viewers, by one means or another, would have to pay a great deal more for the service. Equally, there are plenty of evenings in front of TV where the ads are the highlight of the evening's viewings.

Similarly, newspapers and magazines without advertising would be many times their current price and would lack much of the information which readers have come to expect. So, advertising, with all the colour and enrichment which it brings, is here to stay.

As you would possibly have gathered from my Orewa speech and recent political events, I don't have much time for political correctness. At one end of the range these are silly irritants, such as the ban on the traditional couch on the embankment at the Basin Reserve cricket test in Wellington (because, among other things, it was said it may create a fire risk!). Or the ban on children's lolly scrambles in some areas because someone might be injured. Or the taxpayer-funded excursions to study hip hop overseas. Or taxpayer-funding for just about any other silliness you can imagine, as long as it has some lofty overtones of political correctness.

At the serious end of the offending scale, we have the separatist Government policies that are troubling so many, and the consultancy rorts which have become endemic. In other societies these would be described as extortion, backhanders, corruption or baksheesh. Our term, sadly, has become "iwi consultation." And, wherever I go around the country I find more and more people who are aggrieved about examples of this, which they have encountered personally, or have had recounted by family and friends.

This has become an industry in its own right, beyond anything that was initially imagined. In fact, it is an obscene caricature of what was originally intended in terms of fair and reasonable consultation.

National will put a stop to these excesses. Consultation is one thing; what is happening at present is unacceptable. You will no doubt be pleased to know that I don't have much time, either, for some of the PC problems which your industry faces.

For a start, I don't believe in taxes on some foods because some bureaucrat in some ministry may think we should discourage people from what they want to eat in favour of more lentils and chick peas, for example. I'm on the road a good deal these days and my diet includes a good number of Big Macs, Burger Kings, KFC chicken, and fish and chips, and that's a choice I can make for myself.

Certainly we have a problem with child obesity, as do many affluent Western countries, but that should be addressed by sport and exercise, parental guidance, and education. Making our streets safer, so children can walk to and from school, and play unsupervised, as we did when we went to school, would be a help. National intends to take a tough stand on law and order, and I will be announcing our policy on this in a couple of months.

Nor do I have much sympathy with the Nanny State's intention to clamp down on Direct To Consumer advertising of pharmaceuticals. I see no reason at all why New Zealanders should not be told about products which may benefit their health. They have the right to such information, in my view, and it is then a matter for patients to discuss with their doctors if they want to do so.

If some doctors are somewhat discomforted by patients asking about these products, then so be it. Doctors should be able to discuss all options with patients and advise them. To argue that they should remain the sole dispenser of information about treatment does not sound to me like a coherent argument in this day and age.

The companies represented in ANZA are at the cutting end of the commercial environment in New Zealand and I would like to take this opportunity to emphasise that National stands committed to improve the commercial and business environment in which you operate. That will be to the benefit of all New Zealanders, not just your members. It means economic growth and jobs and better living standards for everyone.

Unfortunately, as the New Zealand Herald business survey showed last week, 95 per cent of chief executives do not believe we have a coherent economic policy for sustained growth.

That survey confirmed that this Labour Government is business unfriendly. It has given up on its goal of returning New Zealand to the top half of the OECD within a decade. It has lost the battle to regain comparability with Australia, meaning that many of our brightest and best will be lured across the Tasman.

The fact that nearly 95% of those surveyed don't think we have a growth strategy to sustain business success is truly worrying.

Labour, in the arrogance of power, is giving way to its ideologues. All the retrograde steps removed from earlier employment law, and more, are back in the current Employment Relations legislation, which drives the innovation out of employer-employee relationships and moves us closer towards an inflexible unionised labour market. Parts of it are even being disowned by the Associate Minister of Commerce, John Tamihere.

Then we have the Holidays legislation, Health and Safety in Employment legislation, the Resource Management Act and the Treaty of Waitangi. These are issues that businesses are identifying as having a hugely negative impact on productivity and growth.

As I've said many times, one of the top priorities for the next National Government will be to improve New Zealand's sustainable rate of economic growth. Stronger economic growth is absolutely critical to raising the living standards for all of us.

Early in the Government's first term, Michael Cullen said he thought it would be clear by the middle of 2004 whether or not the Government's policies were on the right track in terms of improving New Zealand's economic growth rate.

He confirmed that expectation just over a month ago. Well, I guess there are three months to go before we're in the middle of 2004 - but, unless we see an enormous turnaround in Treasury forecasts, it's abundantly clear he's going to be very disappointed.

The Government's economic policies have failed and the outlook is getting worse, not better.

A thriving and internationally competitive business sector is crucial to achieving the goal of higher living standards. The National Party is committed to doing what it can to help the business sector grow faster. And we will start with moving towards less regulation and less taxation.

The Labour Government continues to staunchly deny that higher taxes hinder growth, despite all the international evidence and experience that points to the contrary. It has introduced a multitude of new taxes that have raised $3.6 billion in extra tax ­-­ ­­­a­n average of $2,600 for each household over the last four years.

And just this week we have had further evidence that many of our international competitors are using lower corporate tax rates as a carrot for foreign investors, and what this means is that if we leave our rate where it is today, then we will be left behind.

The KPMG World Tax Survey found that 8 out of 30 OECD countries reduced their corporate tax rates in the past year, and that 21 countries have lowered their corporate tax rates since 1999.

Since Labour was elected in 1999, the average OECD corporate tax rate has fallen from 35% to just below 30%, while Labour has stubbornly left ours at 33%. Put simply, that means we have moved from a position where we were better than average in 1999 to a situation where we are now worse.

The KPMG report says it all: "if we want to provide incentives to business, the best way to do this is to lower our tax costs across the board, not just for selected industries". That would mean that companies in the advertising industry would be as entitled to tax cuts as would overseas movie companies.

National is committed to putting this right. Our present corporate tax structure almost encourages companies to invest in Australia, but I think it is now widely accepted that if we are to boost productivity and employment then we must encourage firms to invest here.

We are absolutely committed to reducing and flattening tax rates. Our immediate priorities upon election are cutting the corporate tax rate to at least match the 30% rate in Australia, and providing tax relief for low and middle-income families.

Be assured that we will cut the top personal income tax rate during our first term of government, but we must do that gradually. We must first address priorities in education, retrain the long-term unemployed, and give our police and security agencies more teeth and better resources.

National is also committed to returning more flexibility to New Zealand's increasingly regulated labour market.

Although the Labour Government continues to claim credit for the low unemployment rate, the reality is that New Zealand's improved rates of employment and economic growth owe much to the increase in labour market flexibility introduced by the previous National Government through the Employment Contracts Act of 1991.

Against the advice of expert bodies such as the OECD and our own Treasury, Labour is continuing to unwind these gains with more union-friendly and business-costly legislation.

The result of these proposed changes will be higher unemployment, especially among vulnerable workers, reduced flexibility in our economy to cope with unexpected shocks, and lower economic growth. The changes will make it still more difficult for those on benefits to get into employment.

The business sector has quite rightly identified the Resource Management Act as an area of prime concern. That cumbersome piece of legislation, with its maze of consultation obligations, is suffocating development and holding up important projects.

Take Auckland for instance. Transport gridlock here is costing the economy more than $1 billion a year and must be fixed, as I am sure those of you who drove here today will confirm. But, in my view, finding the $10 billion which the AA says is needed to build new highways is ALMOST the easy bit - I said ALMOST.

No. The biggest problems are the massive regulatory snarl-ups faced by planners. Take for example the North Shore bus-way. Approvals for that took years. If we were in Singapore, it would take one week. Imagine, then, how long it might be before any of us has the pleasure of cruising the Eastern Corridor.

There is no argument that the Resource Management Act is a major source of significant additional costs, substantial delays and uncertainty. Much-needed investment in transport and energy infrastructure, and many, many other important projects are being delayed or even worse, abandoned.

The Government's latest bid to Band-Aid the problem away is to create a fast-track process for projects that it considers are in the "national interest". But of course, as Treasury points out, giving priority to major projects will mean even longer delays for other works.

Make no mistake: National is committed to streamlining RMA processes so investors can proceed with projects expeditiously, with certainty and with minimum cost.

I have already commissioned an independent study to identify ways of removing Treaty clauses from that legislation. That fits with our focus of reducing the widespread abuse of the consultative process. There will be no more $1.3 million bills to consult iwi. We'll also work hard to address the variable standards of implementation at local government level.

What is of real concern is Australia's free trade agreement with the United States and our exclusion from that agreement. Not long ago it would have been unthinkable for New Zealand to be excluded from such a deal. It is a sad reflection on how far the relationship with our most important friends and allies has slipped that the unthinkable is now routine.

This will likely have a detrimental impact on our economy not only in terms of losing preference to our Australian export competitors in the US market but, probably more importantly, through the loss of foreign investment and technology to Australia that otherwise may have come or stayed here.

It is easy to see why a foreign operation, or even a New Zealand operation for that matter, looking to export into the US would now be more enthusiastic about setting up in Australia. A National Government will be working very hard to ensure that New Zealand gains a free trade agreement with the United States and remains a highly competitive base for industry.

This Labour Government has had the good fortune to be in office at a time of moderately strong economic growth, the result of the policies put in place in the 80s and 90s, the low exchange rate between 1998 and 2001, and the net inflow of people over the past two years.

A growing economy has emboldened the Government to load costs onto business and introduce labour market laws highly favourable to their union supporters. These are things the Government can control, and the costs of these policies will show up when New Zealand encounters a less favourable economic environment.

National has five key priorities, and I have talked mainly about one of them ­­­­­- the economy ­- today.

The other four are focused on what sort of nation we will have in the future, and the sort of aspirations we can offer our children and grandchildren.

Those priorities are the urgent need to:

· Improve the performance of our educational system. · Fix our entrenched culture of welfare dependency. · Improve security by much tougher and more effective law enforcement, and · Reverse the dangerous drift to racial separatism with policies that focus on need, not race.

If you can recall my Orewa speech ­­- through the haze of Labour's desperate rhetoric, mis-quotes, U-turns, and even the flying mud (though that wasn't theirs) ­­- you will know that I asked whether New Zealand was to be a modern democratic society, embodying the essential notion of one rule for all, or a racially divided one with two standards of citizenship.

Well, recently National obtained, under the Official Information Act, Treasury advice to the Minister of Finance warning that uncertainty generated by unresolved Treaty debates could have "quite large" negative impacts on our economic growth.

That advice was given to the Minister when the seabed and foreshore had been on the political agenda for only four months. Six months later, the economic and social fallout has increased dramatically as the Government continues to dither over these important issues.

The reality is that, as a community, we are a multi-ethnic, multicultural, society. We are not all the same. We all have different preferences and interests and sympathies. But we are all still unquestionably, and proudly, New Zealanders.

Let me conclude by saying that I admire the talent on display in the advertising industry. There is no doubt that this country is able to foot it with the best in the world in most spheres, and advertising is one of those. Your habit of winning awards overseas is testament to that.

There can't be many industries where the boring, the mundane, the crass, and the dreary are remembered as easily ­- and even as fondly ­­- as the brilliant, the creative, the cunning, and the funny. A calling surely as strange as politics.

You play a very important part in our society. You help form opinion, you create illusions, you set trends, you put pictures to the words, you give us incentive, you spark our ambition, you force our creativity, and you even change our language. Probably as important, you make us laugh and you make us cry.

Thank you for the genius we see every day, even if it does keep popping up in the middle of our favourite TV programmes.

And thank you for helping to change public opinion. I can now say "bugger" in front of hundreds of people without upsetting anyone.


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