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Brash: Meeting the Demand

Don Brash
National Party Leader

'Meeting the Demand'

An address to the annual conference of the
New Zealand Contractors Federation

Christchurch Convention Centre
5 August 2005

Ladies and Gentlemen, thank you for inviting me to address you this afternoon. I trust you’ve had a productive and enjoyable conference.

Today I want to acknowledge your hard work, and your commitment to building a better New Zealand.

I particularly want to acknowledge [your new President] and [his/her] Australian counterpart, Gary McClure.

It’s part of our proud tradition that New Zealanders are people who front up to challenges, get stuck in, and work hard.

Some people say we’ll do anything we’re asked to do – and argue about anything we’re told to do. That’s what I like about life in our country.

New Zealanders have worked damned hard for the past two decades – harder and longer than most other people in the developed world. We have hauled our country from near bankruptcy in the mid-eighties and improved our productivity growth rate to levels that, though still below the average in other developed countries, are markedly better than they were.

As a country, we made huge, painful changes, took the risks, took the knocks, and gave our country a new future. It’s now surely time you enjoyed some of the benefit of the hard work – instead of a greedy, spendthrift government that takes too much out of your pocket to bolster its army of bureaucrats and buy favour with dependent beneficiaries.

New Zealand has had six good years – but no thanks to this Labour Government

Others were responsible for making the painful changes that rebuilt our international competitiveness. World demand for our farm exports has been strong, and foreign exchange rates turned in New Zealand’s favour in the late nineties. World interest rates have been low, and we benefited from a huge inflow of people after the awful events of September 11. Our businesses and our people were ready, and able to take advantage of the situation.

But who made the biggest gains? The Clark-Cullen Government, of course. It will have collected more than $55 billion in additional tax revenues by the end of the current financial year and it has built up record surpluses.

Hard-working New Zealanders have seen no tax relief – no income tax reduction for working families, no change to our now-uncompetitive company tax.

No wonder we are seeing New Zealanders voting with their feet. No wonder we lost the population of a whole New Zealand city to Australia last year.

What a huge loss – simply because we have a business-blind government that sits on record surpluses, absolutely refuses to reduce taxation, wastes money on incredibly complex systems for managing – but not delivering – healthcare and education, and ignores the needs of our working wealth builders.

For six years, they have concentrated on redistributing the wealth of New Zealand when they should have been helping you lay the foundations for another round of wealth creation.

Let me say from the outset that it is imperative that this situation changes, and a National Government led by me will make sure it does.

National is committed to lower tax rates as part of a coordinated set of policies to build the more prosperous nation that we all deserve to be a part of.

National can make New Zealand a higher-income country, and higher incomes come from productivity growth, which in turn comes substantially from business investment. Taxing away business cashflow is inconsistent with New Zealand’s generating the business investment necessary to build a prosperous nation.

We must put an end to policies that say to business “Invest in Australia”.

So I can confirm to you today what I have been talking about for some months now – that a National Government will reduce company tax to at least the equivalent of that in Australia during its first term of office.

In other words, we will drop our present rate of 33 cents in the dollar back to not more than 30 cents. This will have the effect of making us more competitive with our biggest trading partner.

National has reminded Labour constantly of their responsibility to ensure New Zealand has top quality infrastructure, to help us achieve and sustain the best economic and social standards.

Safe, well-designed and well-maintained road and rail networks; more power generation and transmission capacity; efficient sea and air ports; competitive shipping and aviation services; high quality water supply and waste disposal systems; sophisticated telecommunications.

Everyone knows how badly we need them all – but Labour hasn’t been listening.

I’m not suggesting, of course, that all this infrastructure has to be created by the government: indeed, quite the contrary. But the government has to provide a climate where it can be created. That’s where Labour has let us all down.

For six years, we’ve had a plethora of study, planning, consultation, review, new option development, new advisory processes, more study, planning, consultation, and review.

Our pressing needs were ignored – until just a few weeks ago. Then, Helen Clark and Michael Cullen suddenly panicked. They realized they could lose this election. All of a sudden the things that were impossible or unnecessary became urgently necessary and very possible.

Labour doesn’t really understand about the need for constant commitment to policies that encourage business and workers to get on with building new products and services; creating real jobs and more wealth; and laying the foundations that give our country a safer and more secure future.

But they do understand about pork-barreling their way through an election campaign.

I have more faith in the commonsense of New Zealanders. The people know that we have been steadily rolling out key policies in areas like agriculture, biosecurity, resource management, law and order, education, welfare, race relations, employment relations, the Treaty of Waitangi, and roading.

They know we take a risk in releasing policy early. They see Labour reacting - and trying to neutralize the appeal of our new policies with half-hearted efforts of their own.

Now we have Helen Clark promising a deadline on the filing of Treaty claims; Trevor Mallard culling some race-based spending and low-grade tertiary study courses, and promising to waive interest on student loans; George Hawkins putting some more police out to chase speedsters.

All of a sudden, Pete Hodgson is promising to accelerate motorway development all over the country.

New Zealanders know that Labour said no action was necessary on these issues - before we proved they were wrong, or perhaps just started closing the gap in the polls.

Everyone knows Labour’s counter-offers are half-hearted and half-baked – and in the case of their hastily whipped up student loan policy, downright dangerous.

They also know that today National is committed and well-equipped to do the job that’s needed – and do it properly.

We are determined to deliver a lower-tax, higher-growth economy that will build a New Zealand where there is real opportunity, room for aspiration, reward for effort, more individual security and less State-directed dependency.

Our kind of New Zealand will have a top quality standard of living. To get it, we need top quality infrastructure.

We should have been well on our way to having it by now – but the opportunity to start the work in the most favorable possible conditions has been wasted over the past six years, like so many other things.

However, we have a growth plan that’s ready to run – and no ideological hang-ups to hold us back.

Unlike Labour and its allies, we will not impose a carbon tax that will add cost, and slow growth and development.

We will not penalise businesses and workers who generate our growth and wealth for the sake of a system that favours the competing businesses and workers of some of the world’s worst offenders when it comes to emitting greenhouse gases.

It doesn’t make sense to do so when you realise that we contribute less than 0.5% of the greenhouse gas emissions generated by all the world’s developed economies, and our scope for reducing agricultural emissions is so limited.

No one else is being asked to hobble their economy to uphold Kyoto – and we don’t intend to be the world’s first in that contest.

Kyoto is just one of the points of difference between Labour and National as New Zealanders face the challenge of rebuilding and sustaining the strength of our economy.

Another is our approach to infrastructure investment, and the urgency with which we want to tackle the current deficiencies, especially in our roading infrastructure.

There are three substantial legislative roadblocks to accelerating investment in our roading infrastructure.

The first is the Land Transport Management Act, which places quite tight restrictions on private sector participation in investment in roading.

Under a new National Government, the limits placed on private sector participation in roading by the Land Transport Management Act will go.

So will the onerous obligation for Transit New Zealand to consult with iwi.

Within a year of being elected, we will have a new land transport management structure. It will be capable of carrying out more sophisticated analysis, with wider funding options, and an ability to move projects from the drawing board to construction in no more than 12 months.

Unlike Labour, we are not going to tinker with the Resource Management Act. We are going to change it substantially.

This Act imposes huge costs, delays the solution of our roading and energy crises, hinders investment in major industries like forestry, and creates time-consuming difficulties, costs, and uncertainties for farmers, small business operators and home-owners.

It’s fine in principle – but far too complex, costly and long-winded in practice.

Within three months of forming a government, we will introduce our first phase changes to provide greater certainty, consistency, and speed in decision-making. They include:

- A requirement for councils to automatically grant resource consents for applications that comply with national standards.

- The ability for applicants to refuse further information requests from councils and have their proposals accepted or rejected on the information provided.

- A requirement for objectors to show they have a genuine interest in or will be directly affected by a resource consent.

- Repealing the provision that enables council notification decisions to be appealed to the Environment Court.

- Enabling applicants to seek direct referral to the Environmental Court for major consents that are likely to be appealed regardless of council decisions.

- Enabling the Environment Court and councils to reject vexatious and frivolous objectors.

- Making a late consent a free consent, whereby if the council fails to process a consent within 20 working days it cannot charge processing fees.

We intend to have this first phase of process changes passed into law within nine months of forming a government.

The second phase, which concerns the increased use of economic instruments within the RMA processes relating to resource allocation and infrastructure provision, will be developed on a slower track to enable greater community input and attention to detail.

We will also be changing Labour’s new Building Act.

This Act required Transit to withdraw an existing building consent for one short extension to State Highway 20 in Auckland and apply for 39 separate new consents. That is going to change, and very quickly.

So is the amount of funding devoted to road construction. At the moment, roughly half of the money raised from the petrol excise tax goes into roading, with the other half going to fund other government operations. We have already announced that, under a National Government, we will gradually – gradually because we recognise that the road construction industry could not effectively use an extra $600 million immediately – increase funding on road construction until investment in roading at least equals the amount raised from the petrol excise tax.

That move will direct $1.8 billion more into roading over the next six years than Labour had committed as of last month, and $3.5 billion extra over nine years.

Under Labour, there is not the slightest prospect of Auckland’s roading needs being met in anything like a timely manner.

Sure, they have recently – interestingly enough just before the election – announced a $500 million package for roads in Wellington and Auckland, and $150 million for Tauranga – but that is not enough.

Moreover, we know, because the Auckland Chamber of Commerce has recently told us, that the extra $1.6 billion which Labour announced for Auckland’s roads in December 2003 has so far had no measurable impact on accelerating road construction in Auckland.

A National Government will substantially accelerate road construction. We have already made a commitment to finish the Auckland Corridor Network – originally planned some 40 years ago – within 10 years of forming a government, as well as to complete the Waikato Expressway as far as Cambridge, four-lane State Highway 2 from its junction with State Highway 1 just south of the Bombay Hills to its junction with State Highway 27, and deal with the pressing problems in the western Bay of Plenty and around Wellington.

And just in case anybody thinks that roading problems are uniquely an Auckland, or an urban, issue, it is worth reminding ourselves that, when the Allen Consulting Group did an analysis of New Zealand’s roading problems for the Automobile Association last year, they discovered that the biggest pay-off to improved investment in the roading network was in a package of rural passing lanes!

National is not opposed to using private capital to improve our roading network.

Tolls and the private sector are a part of the answer to the problem, and we estimate this will more than double the amount actually available for the construction of new roads over the next decade.

Labour is ideologically opposed to public-private roading projects and toll roads. There has been plenty of puffery about the new ability for the private sector to become involved in BOOT projects – where the private sector builds, owns, operates and finally transfers a road back to the government or a local authority partner – but not one BOOT project is actually up and running.

National will promote public-private projects as a serious way of moving roading projects forward where appropriate.

We are confident that these initiatives – change to the RMA, the Building Act and the Land Transport Management Act, additional public sector funding and the potential to use tolls and private sector capital – will address the very real roading problems that are holding back economic growth and imposing a savage human cost in the form of road accidents which are markedly more frequent, and more fatal, than in similar countries.

The story of neglect is the same in the energy sector.

We were accused of scare-mongering when we warned about critically low lake levels, the run-down of the Maui gas field, the shortage of alternative generating capacity, and the straining national grid last winter.

Labour is still kicking for touch on these crucial energy issues.

But our plans to change the RMA and the Building Act, our intention to scrap Labour’s carbon tax, and our commitment to a lower-tax, higher growth economy provide new incentives to developments that will stop New Zealand browning-out in future periods of peak demand.

We’ll also consult the electricity industry to ensure we have a regulatory framework which will ensure that we have future generating capacity being installed in a timely fashion, and a Resource Management policy statement to guide the consent process for generation projects.

And we’ll work with oil and gas explorers to address barriers to investment in that sector.

Finally, I want to talk about employment law.

National is very concerned at the effect on business of Labour’s Employment Relations Law Reform Act, which undermines the rights of both workers and employers.

We predicted that the effects of this law would be dire, and already this year we have seen a surge in industrial action in the workplace.

This law was all about protecting and growing the power of unions. National will not let unions regain the stranglehold they once held over the economy.

The next National Government will repeal this law. We will bring in a new Act incorporating the best of the Employment Contracts Act 1991 and the Employment Relations Act 2000. Its changes will include:

- Giving employers and employees the same rights in employment agreements.

- Removing union monopoly bargaining rights over collective agreements.

- Establishing a 90-day probation period for new workers to reduce barriers to employment.

We will also overhaul the Holidays Act, which has added enormous costs for employers, especially for businesses operating on a 24-hour, seven-day-per-week basis, and we will reduce OSH compliance costs while ensuring workplace safety is not compromised.

In this package of policies you see the fundamental difference between the two major parties contesting this election.

National is concerned with the needs of the people who generate New Zealand’s wealth - hard-working, tax-paying New Zealanders and their families.

Labour is concerned with the needs of people who benefit when Labour captures the wealth, ignores the people who created it, and redistributes it to their supporters and dependents.

My task is to see that New Zealanders see the difference for what it is – and understand why National’s lower-tax, higher growth strategy is best for everyone.

My party’s objective is to ensure that New Zealanders enjoy a proper reward for their efforts, and that all New Zealanders enjoy the real security your effort creates and appreciate fully what it takes to achieve a world’s best living standard.


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