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What Really Matters

Don Brash MP
National Party Leader

14 May 2006

What Really Matters

Address to the National Party Lower North Island Regional Conference

Madam President, my parliamentary colleagues, delegates, members of this great National Party.

Thank you all for the huge contribution you made to the election outcome last year. As you know, we didn’t get quite enough votes, and weren’t quite able to form a government.

But we did vastly better than most of the pundits had expected, and got the highest share of the party vote since 1990 – 39%. Nearly double what we achieved in 2002. And it was almost enough.

We very nearly won the election, despite where we started, because we successfully outlined what a great country New Zealand could be, and we outlined a plan for getting there.

We emphasised the simple fact that, for New Zealand to succeed, New Zealanders must succeed – that ordinary Kiwis must be given the right incentives to work hard and get ahead in life without a punitive tax burden, and without the dead hand of government bureaucracy and pettiness beating them down.

And we pointed out the obvious. That unless New Zealanders get ahead; unless the country grows because of the endeavours of hard-working Kiwis, then we can’t afford all those services that a successful country considers their birthright. Services like top-quality education, top-quality healthcare, and a complete roading system, to name just three.

We pointed out we’re in a competitive world, where we compete with every other country to pay doctors, nurses, teachers, police officers, engineers, plumbers and builders. And in order to pay well, we have to earn well.

Events since the election have, if anything, underlined that our approach was right. Labour’s now telling us all that the roading programme they promised can’t be done on the funding they’ve allocated.

They’ve admitted they can’t cope with hospital waiting lists by playing a cruel game of hide and blame with patients and hospital boards; and they’ve started trying to soften us up to let more criminals out of prison because they can’t afford the prisons and can’t reduce the crime.

The evidence of Labour’s failure is all around us, and that’s without factoring in their wastefulness and poor management of government services.

But in the seven months since the election, politics has, to a degree, been a phony war. Voters had a period of being weary of politics, and that’s understandable given the long election campaign, the close result, and then the time it took before a government was formed.

The Labour Party’s also been embroiled in a huge amount of political scandal over that period.

Just last week, we saw the most serious, most damaging, most confidence-destroying leak of commercially confidential material from the Cabinet room in the history of this country.

Our concern is for the thousands of Kiwi shareholders in our largest company who’ve lost out as a result of Labour’s inept handling of this issue. The Government’s bumbling has needlessly worsened the situation for investors, and shows the Government’s complete lack of understanding about how the economy and the capital markets work.

And Helen Clark can hardly complain, because it’s she who has set the ground rules; it’s she who HAs set the appallingly low standards for this administration.

It was Helen Clark who decided to see off former Police Commissioner Doone, not by following due process, but by leaking, inaccurately as it later turned out, to a Sunday newspaper.

It’s Helen Clark who, day after day, not only watches as her Ministers refuse to give straight answers to questions but who evades giving straight answers herself in Parliament.

It was Helen Clark, staring at the prospect of electoral defeat, who said it was okay to steal half a million dollars off the taxpayers of New Zealand and spend it on her election campaign, knowing full well that in doing so she’d breach the legal spending cap - something our Electoral Act calls a corrupt practice.

It’s Helen Clark who’s headed a government that’s set a world record in prima facie cases being established that somehow just never quite get to court.

It’s Helen Clark who presides over a Government of leak and spin, of smoke and mirrors, a Government of half-truth and evasion.

All these scandals raise very important constitutional considerations, and as Her Majesty’s loyal Opposition it’s our job to prosecute them, and prosecute them vigorously. We’ve done so, and will continue to do so.

But to many New Zealanders they’re “Wellington issues”. They are peripheral to their lives.

Labour’s scandals don’t matter to people in the direct and immediate way that being chucked off a hospital waiting list matters, or paying a huge marginal tax rate matters, or seeing the Government become ever more efficient at taking their money, while at the same time becoming less efficient at spending it.

During the past few weeks, I’ve had a chance to take stock and obtain a fresh perspective. I’ve had the privilege of traveling around the world, stopping in Washington, London, Beijing and Singapore. In these cities, I met with political leaders, government officials and business people.

And these meetings have left me more convinced than ever that, on the key themes of the last election campaign, our approach was right for New Zealand - and it’s now more important than ever for me as Leader of the Opposition to campaign aggressively for that approach.

When you see first hand what’s happening overseas; when you hear from leading figures in the major countries of the world what issues they are grappling with, and what developments are occurring or are in the pipeline; when you experience the energy and dynamism of countries as diverse in political systems as China and the United States, or as different in sheer size as China and Singapore, you can sense our place in the world is fading.

We’re getting left behind because we no longer emphasise the core values and attitudes that once determined the Kiwi character: once deeply held convictions about the importance of personal responsibility, self-reliance and independence.
Those convictions in turn formed a Kiwi character that was resourceful and achievement-oriented, and that thrived on competition.

But our welfare system, some aspects of our education system, our cringing political correctness, and our tax system are all doing terrible damage to these core Kiwi values.

We’re increasingly out of step with the most dynamic countries, and as a result we’re making absolutely no progress in narrowing the gap between our living standards and those in our more dynamic neighbours.

As I’ve noted previously, the gap between average after-tax incomes in Australia and those in New Zealand – already 20% in 1999 – had widened to 33% last year!

And now the Australian Budget this week has thrown another challenge to the New Zealand Government – as it has done in the previous two years.

By once again cutting tax rates and pushing out the threshold of tax brackets, the Australians are continuing their all-out assault on a skilled New Zealand workforce. One commentator has suggested that everybody earning less than $180,000 a year will pay less tax in Australia than they do in New Zealand.

Labour has failed to meet that challenge in each of the past two years, and they will fail it again. That is why we’re losing over 600 Kiwis every week, leaving to build their future in Australia.

Indeed, the net flow of New Zealanders has more than doubled in the last two years: in the year to January 2004, a net 10,000 Kiwis moved to Australia. In the year to January 2005, it was 16,000. And in the year to January 2006, 21,000!

We shouldn’t underestimate just how much that leaves the future of this country in the balance.

It’s tragic that policy in New Zealand is ensnared in the strange ideological obsessions of the Labour Party - ideological obsessions that are utterly obsolete internationally.

Elsewhere, governments are searching for ways to expand the choices and the options their citizens have, and to provide them with better incentives to get ahead in life.

In New Zealand, Labour is largely prescriptive, with an over-bearing nanny state cutting back options and imposing perverse incentives on working people.

A fortnight ago, at the Northern Regional Conference, I spoke about tax, and the need for providing the right incentives.

I pointed out, and I confirm again today, that National is strongly supportive of providing extra encouragement to people bringing up families, and our fair tax plan at the last election illustrated that.

For most families, the combination of our Working for Families extension and tax cuts gave greater support than does Labour’s Working for Families package.

The problem with loading Working for Families on top of an unchanged tax structure is this:
• It involves unnecessary administration costs in paying high taxes and then applying for refunds.
• It generates effective tax rates that are far too high, and
• It overlooks the need for tax relief for people without dependent children.

National proposed a fairer overall package, and much lower effective tax rates for most families.

National would’ve substantially dropped the marginal tax rate - the tax rate people face when doing some overtime, or when they receive a wage increase. For somebody on the average wage, their marginal tax rate would’ve fallen from Labour’s 33% to only 19% under National.

Somebody on the average wage receiving Working for Families now has a tax rate on extra work of no less than 53%.

So, in attempting to ease the pressure on lower to middle income families, Labour’s inflicted a demoralising and self-defeating tax rate on middle-income families.

So much for the incentive to get ahead from your own efforts.

National’s tax package would have moved New Zealand marginal and average tax rates decisively below Australia’s, thereby making a substantial contribution to retaining our skilled workforce in this country.

National’s package met the challenge of Australian tax rate reductions. Labour’s non-package does not.

Labour’s approach is not a recipe for a stronger and more prosperous New Zealand. It’s a recipe for New Zealand incomes continuing to lag behind the rest of the world, and for more Kiwis deciding their aspirations are better met elsewhere.

Now of course I can’t tell you at this stage precisely what tax reductions National will propose for the next election – there’s too much water to go under the bridge to make that feasible. But you can be absolutely sure that lower taxes, and much improved work incentives for all Kiwis, will be central to our policy at the next election, and indeed in subsequent elections. Under National, you will pay lower taxes!

I want to comment now on another of the major issues from the last election campaign – crime and policing.

This is another area of crisis and failure.

In recent years, we have seen significant – and in many cases, justified – public anxiety at the levels of violent crime and drug use. Public confidence in the police and prison system has taken a series of hits.

Today I want to address three particular issues in the law and order sphere – police, prisons and victims.

One of the fundamental and legitimate purposes of government – of the state - is to keep its citizens safe.

Unfortunately, it is clear that Labour’s current policy settings are not working. Despite a slow but steady decrease in overall crime figures – for which the police are certainly to be applauded - New Zealand today is not a safer or better place to live.

Last year, violent crime went up by 7%. Within that figure, grievous assaults were up 13%, homicides up 27%, intimidation and threats up 11%, robberies up 12% and serious assaults up 7%.

Overall, violent crime has increased 16% since 2000. That is not a record to be proud of.

In addition to the harm caused to the victims, these crimes against the person erode everyone’s sense of security and quality of life.

It is clear from these figures that this Government is failing to deliver safer communities.

Labour was slow to appreciate the scale and danger of the P epidemic.

Labour insists that Police focus on revenue-gathering traffic enforcement activities.

Despite the rising violent crime rate, Labour refuses to acknowledge that New Zealand is becoming a less safe place to live.

Labour is also running into massive problems in relation to their belated recognition of the need for increased police numbers.

Police are certainly recruiting more staff – but more are leaving. A recent Police Human Resources Scorecard reveals that in the year to April, the Police gained 509 sworn staff but lost 379 – a net increase of only 130.

Incredibly, Police Minister Annette King says the Police don’t know why staff are leaving in such numbers – because they don’t ask them!

The Police Association estimates that 2,500 additional police recruits will be required to meet the target of an extra 1,000 police on duty over the next two and a half years.

We need those extra police.

We have one of the lowest numbers of police per head of population in the world. Our ratio of 18 police per 10,000 population compares unfavourably with 22 in New South Wales and 25 in the United Kingdom.

Labour is not going to deliver, and that is not a good result for New Zealanders.

Instead, they seem more interested in throwing open the prison doors after Corrections Minister Damien O’Connor visited Finland.

On his return, Mr O’Connor stated that around 30 per cent of inmates currently in jail, including those serving a six-month sentence or less, pose no risk to society and should be released.

Let me give you some real life examples of people whom Damien O’Connor considers no risk to society, based on his six-month sentence criterion:

• A taxi driver who was sentenced to six months jail for an indecent assault on a passenger.
• A woman who stole more than $11,000 from a sick woman in her care and received a six-month sentence.
• A man convicted of 72 charges of fraud and three of theft, who got six months in jail.
• A man convicted of his sixth drink driving offence plus assault - five months prison.
• Another man netted three months in jail after being convicted on six charges of theft, assaulting police, resisting police and possession of cannabis.

These people are a threat to society, a threat to property, a threat to police and a threat to our sense of community safety.

The public overwhelmingly supports a more transparent sentencing policy – one where the sentence means what it says.

For too long, we have put up with a parole system that allows the seemingly erratic judgments of the Parole Board to override the judgment of those who have sentenced criminals to jail.

It is clear to me that we need a closer, more honest relationship between the time sentenced and the time served.

This is a significant issue. New Zealand’s imprisonment rate of 189 per 10,000 people is the second highest in the developed world, behind only the United States. We should take no pride in that.

Without any change in policy or legislation, the prison population is forecast to rise by 17% over the next five years.

Clearly there are a number of broader issues to be addressed if we want to bring the incarceration rate down. As a party, we have already done a great deal of work about how to address the causes of crime, how to better prevent crime, and how to deal with crime more efficiently when it has occurred.

That said, there is still an obligation to properly house criminals who – in the opinion of the courts – should be in prison.

That responsibility lies with the Department of Corrections and their Minister, and they are failing disastrously.

Prison construction is behind schedule and the budget has blown out by nearly $500 million.

I am sure the public is not reassured that during this period of budget blowouts and waste the Department of Corrections has successfully managed to spend $31 million on consultants (including a number of former staff) and $11 million on landscaping for the new prisons.

I am deeply concerned that Labour plans to solve this gross mismanagement by the Department of Corrections by letting people out of jail who should be there.

Indiscriminate decarceration, solely because of departmental and Ministerial incompetence, should not be an option.

My fear is that the cost blowouts are behind Damien O’Connor’s plan to release a third of prisoners – plans that emerged after he spent just two hours in a Finnish prison! It must have truly been a “Road to Helsinki” conversion.

But it is still wrong.

Finally, we need to remember the victims of crime.

Too often in the debate about law and order we focus on the offenders. We look at what they did, why they did it and what can be done to punish and rehabilitate them.

That often means we overlook the victim. We often overlook the pain and distress they have been caused.

We often overlook the long lasting effects of crime – the physical pain, the hardship, the loss of security, the fear, the distrust and the changes in behaviour it can cause.

The situation has improved over the past decade, but we are still a long way from a victim-centred system. We still seem more ready to offer the offender support – rather than the victim.

This is highlighted by the way that the Victims’ Rights Act and the reparations regime are working – or rather, the way they’re not working.

The sad fact is the actual victims of crime are seeing virtually none of the reparations owed.

National has obtained figures showing that in 2004/05, 97% of reparations owed were overdue or being drip-fed to the victim and that is outrageous.

The victims are hit twice – once at the hands of the criminals and then again when the legal reparation is not paid. This causes considerable hardship and distress.

Conversely, offenders are avoiding part of their sentence with impunity.

It is particularly galling when you contrast this systemic breach of obligations with the relative ease and speed prisoners were paid compensation for alleged breaches of their rights.

This is not the system that we want.

National supports a justice system that provides more support for victims.

National advocates a range of policies to address the causes of crime, including welfare dependency and truancy.

National supports a range of effective early interventions for young people at risk of a life of crime.

National believes the police should be properly resourced and supported with the tools to do the job properly, including increased use of DNA testing and more powers to combat the P epidemic and criminal gangs.

National knows there has to be a rigorous prison building programme that sticks to budgets and meets projected needs.

National proposes a focus on improving prisoner rehabilitation, including more drug and alcohol rehabilitation programmes and a functioning work scheme.

It’s in everybody’s interests to do the best we can to help prisoners change – in the end they almost all come back into society at some stage.

We want this society to feel safer and to be safer for all New Zealanders.

The most basic responsibility of government – every government – is to keep the public safe.

Law-abiding people have a right to expect that they will be kept safe from those who prey on them, their families, and the wider community.

But at present the public do not, and cannot, have that expectation.

Many of the problems we see in respect of policing and sentencing, and in the Corrections Department, are symptoms of a wider problem.

These problems are manifestations of Labour’s whole approach to policy issues.

The past six years have squandered the opportunity to put in place the ingredients for sustaining growth.

You can’t escape the conclusion that Helen Clark’s Labour Government is trying more and more convoluted ways of making the money go round, without having any idea about how to make the cake grow.

You can’t escape the conclusion that Helen Clark has no understanding of what drives people to better themselves and to achieve more, and therefore she can’t create an environment that encourages people to do that, to the benefit of us all.

The reality is that only National understands it is the actions of individuals that cause the economy to grow.

Only National understands that only by providing the right incentives will you encourage people to stay living in New Zealand, work hard and get ahead.

Only National understands that unless people are given the right incentives to work hard and earn more, we’ll never be able to keep paying for quality health care, education and vital infrastructure.

And only National can fix these things.

You in this hall know that, and I know that. That’s what motivates us.

Our challenge, and my challenge in particular, is to re-dedicate ourselves to ensuring sufficient New Zealanders understand that, so we can together bring this sorry Labour Government, this tired Labour Government, this outdated Labour Government, this Government that is trying in vain to swim against the international tide, to an early end – to the benefit of all New Zealanders.


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