29 January 2008 Speech

Embargoed to 6pm 29/1/08

“The Strength to Care”

Address to the Orewa Rotary Club

This month we mourned the death of Sir Ed Hillary.

He was a national hero, and he is rightly claimed as an inspiration by all New Zealanders. I personally find inspiration in the way he lived his life. I find inspiration also in the commitment he made to a fairer, more caring New Zealand. I find inspiration in both his public and political commitment.

Many obituaries overlooked his staunch views. He had a fierce and proud commitment to fairness and justice. He was a prominent member of Citizens for Rowling. He might have been the first to climb Everest but his life was more about working co-operatively than it was ever about competition. He was the embodiment of a strong and caring New Zealand.

Sir Ed Hillary showed us the value of decency and unity in our common purpose. He showed us the value of working tirelessly and selflessly for all our brothers and sisters on planet earth.

His values were the highest mountain he ever stood on. He showed us the value of taking on any challenge, meeting it with grit and determination, and of pulling together to make the most of our talents.

At the state funeral for him last week, I was touched by a story told by a colleague who had travelled up the Ganges with Sir Ed in jet boats. The colleague made an error of judgment and sank one of Ed’s two jet boats. When he swam ashore, there was Sir Ed sitting on the bank and naturally there was a fair bit of trepidation about what the great man would say. But there were no recriminations. Just “these things happen”, followed by immediate plans to finish the journey in the one boat left.

Sir Ed didn't demand perfection and success − all he wanted to know was that you had done your best.

Hillary represented New Zealand’s can-do culture. We can achieve more for New Zealand by asking how we can get things done, rather than finding reasons why things can’t be done.

Sir Ed epitomised the tolerant society.

Intolerance is a problem for New Zealand. Intolerance poisons our political debate. Why does Parliament have such a bad public reputation? Because of the abuse and
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bad behaviour seen in there. People see it on television and they're unimpressed. We need to celebrate New Zealand and our achievements more, while at the same time we should criticize less those who try and fail.

We need to replace public intolerance with an inclusive, can-do attitude where everyone has a place in the sun. We need the strength to create a caring New Zealand.

Doesn't the combination of strength and caring summon everything we admired about Sir Ed Hillary?

Tonight I want to talk about what a stronger, more caring New Zealand might look like and the challenges we face getting there.

In another week, another Waitangi Day will be with us again. It is a good example of where we can do better as a country at having the strength to care.
We are yet to embrace Waitangi Day as truly a day when we celebrate New Zealand.

Every year I go to an open day at the Orongomai Marae in Upper Hutt. The focus there is never on what divides us, but on the smiles on children’s faces and on diverse communities from the local neighbourhood. This is what our national day should be like everywhere.

The air is full not with impatience and intolerance, but with the smells of food stalls representing a dozen cultures and music on the summer breeze.

We don’t have a history in New Zealand of celebrating our national day the way American’s celebrate Independence Day on the fourth of July, the French celebrate Bastille Day ten days later − or even as the Aussies celebrate Australia Day on 26 January. New Zealanders don’t feel a shared sense of ownership of the Treaty.

We won't have a true spirit of a national day until we all feel a stake in the Treaty of Waitangi.

I am worried that many New Zealanders see the Treaty as a document mainly for Maori. It isn’t − The Treaty is about much more than redressing past wrongs.
It contains important promises to Maori. Those promises have many, many times been breached in New Zealand and I am a strong advocate of redress for those wrongs.

But that is not all there is to the Treaty. Treaty rights move in both directions. The Treaty also contains some important promises to the rest of New Zealand. It doesn’t only make promises to Maori. It guarantees to Maori the possession of their lands, forests, fish and other properties for as long as they wish to retain them. And it conveys to the Crown the right to govern, “absolutely and without reservation” in the words of the Treaty itself.

It is implicit in the absolute and unreserved right to govern that our government is a government of and for all New Zealand and all New Zealanders.

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The Treaty separates the idea of ownership and the idea of government. These are different things. In Maori society in 1840, ownership of land, fisheries, forestry and cultural ‘taonga’” was exercised through the idea of chiefly authority. That right is explicitly reserved to Maori for as long as they want.

But there is a quid pro quo. And if all New Zealanders are to feel a sense of ownership of our Treaty and of our national identity, then we all need to feel a sense of ownership of the quid pro quo in the Treaty: Governing must necessarily mean the right to make rules that affect the way our resources are going to be used. And it is obvious from the historical context that everyone envisioned the rules would be made with an eye to the rights and aspirations of all New Zealanders.

So the Treaty is about Pakeha New Zealand too. It is what gives our elected governments legitimacy and in turn bestows citizenship upon us all. All New Zealanders have rightful claim to call our ‘shaky isles’ home, thanks to the Treaty.

Those who believe they have a greater claim than other New Zealanders to these lands are themselves transgressors upon the spirit of the Treaty. The Treaty is breached by those − Maori or Pakeha − who are intolerant and who try to take for themselves rights protected for all New Zealanders.

Others who conveniently see the Treaty as a one way street are the radicals declaring some parts of the country as outside the law which all other New Zealanders must obey. People speaking in militant ways about relations between Maori and Pakeha are, I believe, themselves breaching the Treaty.

I don’t want to talk about the recent arrests or the case before the courts. But I do want to address myself to some of the public debate during that time.

Some liberal New Zealanders seem to apologise for extreme behaviour, on the grounds that the Crown has breached the Treaty in the past as well. But you can’t have it both ways. You can’t both say “honour the Treaty” and “rip it up”, both at the same time!

The Treaty was signed to prevent poisonous division between two peoples coming together in one land. It was not signed out of some idea of idealism and harmony, but because an agreement about the way ahead was better than the alternative. Those on either side who step away from the partnership principle underlying that agreement are no different from each other.

There are Maori radicals who wish the Treaty had never been signed and who want Pakeha to submit to a Maori constitution. There are also Pakeha rednecks who wish it had never been signed, and they think that if we pretend it wasn’t then we won’t have to honour any guarantees in the Treaty. Both extremes are wrong.

The Treaty was signed, for good reason, and it continues to have meaning today.

In recent years there has been the odd speech given here under a banner of “One Law for All”. They have implied that the Treaty can be set aside. But it can’t. Once it was signed, there was no turning back. A promise, once made, for better or worse, cannot be unmade except by the mutual consent of both parties. Nor does the slogan
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“One Law for All” sit well with declarations that some New Zealanders are ‘mainstream’, while others are designated as lesser citizens out on the margins.

It doesn’t sit well with leadership that attempts to set one New Zealander against another. Those who aspire to lead New Zealand can’t be taken seriously, unless they
aspire to lead for all New Zealanders. I believe what resonates with New Zealanders is a desire to move on from the politics of division, not eroding the rights of one group of New Zealanders or another. Rather, I believe most New Zealanders want acknowledgement that we all have a right to live in this land together while we uphold our responsibilities to one another.

In parliament last year Maori Party MP Hone Harawira compared New Zealand to “jingoistic, acid-drenched, hate-filled, anti-Islamic, death to anyone from the Middle East, vitriolic, poisonous claptrap”. I want to address myself to those who share his views. I want to say to them - we New Zealanders are asking you to honour the Treaty.

The principles of the Treaty do not apply in one direction alone. Partnership is not a relationship of servility, where one partner provides services for the other. Partnership is not a one-way circle of claim and response. Partnership is about respect and civility and it cuts both ways.

And those who inflame this debate by their language and actions are taking real risks, because sooner or later someone is going to take their rhetoric or actions seriously.

The real challenge for New Zealanders − Maori or Pakeha − is to create a New Zealand where no one is left behind; where everyone has an opportunity; and where everyone is included in our national successes. The real challenge is to create a New Zealand for us all.

Our Pacific, Asian and Maori populations are all growing much faster than our European population. In a few decades a majority of New Zealanders will be non-European. So New Zealand can only be successful if all our populations are successful.

It takes tolerance to unleash all of our talents and to encourage the talents and success of others.

And we can create a stronger and more caring New Zealand by doing so.
Getting all of our communities aboard the boat and rowing, not only helps each individual community. It helps row the boat faster too.

A stronger, more caring New Zealand is therefore a more equal New Zealand.
These days I get a few calls from reporters asking me if I’ve had enough of politics yet. They want to know if I’m going to keep going in parliament.

I’ll tell you about one of the challenges that keeps me interested: Equality.
Equality was one of the inspirational ideas that motivated me when I started out as a young political idealist in the era of John F Kennedy, Martin Luther King, Pope John Paul and Norman Kirk.

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If you want a stronger, more caring New Zealand, you want a more equal New Zealand. It is still a potent idea. It will motivate me for as long as I believe it is not being adequately advocated by others in politics.

I understand that there will be debate across the political divide about whether we want a more equal New Zealand − but our political debate is weakened when the idea is not robustly advocated for at all.

Yet somehow in the tangle of the last twenty years or so, the word “equality” has become unfashionable and disappeared from the lips of many of our politicians.

There were a lot of failed ideas tried in New Zealand towards the end of last century. We were wrong to leave behind the idea of equality. In the twentieth century and earlier, equality was the foundation stone of democracy and universal suffrage − we are all equal and should all have an equal say.

Equality unlocks opportunity. Your life chances should be determined not by the house in which you are born, but by your talents and your choices.

Equality throughout the twentieth century meant that no child should go hungry, no man or woman should be destitute, no elderly person should be abandoned, alone and starving because they were too old to work. No person should go homeless because they were too sick or poor, no door to health care should be slammed shut by the inability to pay.

Back in the pioneering days of New Zealand, early settlers came here to escape deeply unequal societies. They came to own their own properties and ever since, home ownership has been the great New Zealand dream.

If you think inequality is not a problem, ask yourself what you would think of a New Zealand where ten per cent of the population owned ninety percent of our land and properties. That is the kind of world our European forefathers left behind.

It shows why housing affordability is a critical issue for New Zealand.
Someone is going to have to have the political courage to address the issue of housing affordability.

If you want to make housing more affordable, then you have to look at the issue of people buying multiple homes for capital gains. It's all tax advantaged. The government put a lot of money into IRD in last year's budget to target speculators more strongly − those who buy a house with the prospect of turning it over for a quick capital gain are buying and selling for income and they are liable to pay tax.

But there is another category of house investor − people who buy up houses, one after another, mortgage them to the hilt and then rent them out, and receive a tax break from doing so. Many professional New Zealanders, even school teachers and librarians are doing this. Competition for rental properties is fierce and the price of such houses has consequently been racing ahead of incomes, even though incomes have been rising reasonably strongly for the last eight years as well.

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That not only puts home ownership beyond the reach of many young working families, it is bad for our wider economy. When people with spare savings put their money into more houses, they are diverting their savings away from productive investment in enterprises. A stronger, more caring New Zealand is one where most
families own their own home, rather than one where a few people own most of the homes.

Sooner or later, housing is going to have to be more affordable.

A growing stock of public housing helps. Public housing provides competition for private rentals, keeps yields to manageable levels and therefore helps to keep purchase prices as well as rents realistic. Left to itself, the market will always operate where people at the margin cannot afford a home at all.

One of the biggest barriers for low income families in buying their own home is getting the deposit together. The Progressive Party proposes that families be able to capitalize family support, to create the deposit for their own home.

We would enable families to capitalize their family financial support payout (including Working for Families and In-Work Payments) for the first child for a period of six years (or more where necessary) to finance a deposit.

I know this scheme will work − it is how I bought my first home.

So housing affordability remains a top political priority for me. It must be a priority for anyone who wants a stronger and more caring New Zealand. Along with housing affordability, the key that unlocks the door to opportunity with equality is education.

It’s only through the decline of political advocacy for equality that we have ended up putting a tax on advanced education. Fees for higher tertiary education are unusual in developed countries. It’s no coincidence that innovation and economic development is faster in most other developed countries. Our standing in the first rank of economies slipped around the same time we started putting a ticket collector at the classroom door.

Over the next fifty years we will increasingly compete with the developed world to attract skilled workers and retain our own. It’s getting easier for our best and brightest to move and work anywhere in the world. New Zealand needs to keep more of them here.

Every sector of New Zealand is screaming out for skilled staff. Back in the last century the government tried to create a low-cost, low-value, low-skill economy, where skills weren't so important. Apprenticeships became a dirty word. In education the focus moved to a proliferation of low-value, high-volume courses that had very little to do with the needs of high-value, successful exporting businesses. This was the ‘market-led’ approach where the ‘invisible hand’ of the market would supposedly encourage students to study what the country needed. There was no labour shortage because there was always a large pool of unemployed. Too many people with talent were not being called on to contribute.

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The chickens finally came home to roost and worker productivity stagnated for much of the last two decades. You cannot sustainably create high value businesses and higher incomes by reducing skills and pushing incomes down!

Today, as our economy transforms to be job-rich, high value, high-income and high skill, businesses in every industry are wondering where they can get enough qualified people. There are more opportunities for young people, wages are being pushed up and our economy has been through its longest continuous period of growth in decades as a result.

But if we want to speed up our development further, and reduce the skills shortage created by reducing unemployment, the best thing we can do is remove the tax on tertiary education.

Who are the kids likely to be put off by the threat of a lifetime burden of debt?
They are likely to be kids who under-perform at secondary school because they are going to school hungry, or working at jobs after school to help the family put food on the table. If those kids go to a school where they are put alongside others whose parents don’t expect them to succeed, what will happen to them?

I know the answer to that − it was the kind of school I went to. But I found out kids will overcome those disadvantages if you give them the chance. However if you take the chance away, if you put a huge fee barrier in front of kids as well as all the other obstacles they face, then you are not only denying them a chance; you are also denying your country a chance to benefit from their contribution.

How is it we are taxing the very people who are the solution to our skills shortage?

Fees for tertiary education are a regressive tax on the poor. Today I want to propose an alternative to student debt. This is what we should say to students: If they are prepared to stay and work in New Zealand after they graduate, we will wipe out your debt.

It would work like this: After a student graduates, they could have their debt paid off by the Government by staying and working in New Zealand. If they wanted to go overseas, they could go and take their student loan with them, as they do now.

It's an idea we have tried successfully in New Zealand in the past. Teachers used to be paid to go to Teachers' College, and then they would have to work in a rural area for two years − country service, we called it. The arrangement helped ensure we had enough teachers in country schools and it made teaching a more attractive profession.

Today we have shortages of many different skills. We are short of trade skills, doctors, vets and scientists. The nature of the veterinary industry, for example, is that vets are needed in rural areas, but vets − women in particular − want to work in urban areas. Why don't we say to graduating vets, "go and serve in a country area, and for every year you serve we will wipe off some of your debt. If you stay for five years, all your student loan will be gone and you won’t have to pay a special tax as you do at the moment."

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Not something for nothing, but something in exchange for your service.

We would help to keep our best and brightest here at home. It's one of the best ways we can use some of the government's operating surplus. You can't give the entire
surplus away in tax cuts, because it's not cash − some of it, at the moment, is made up of student loan debt. The government pays out the cash for students' education, then records the payment as an asset! The accounts work as if the debt was going to be repaid − but a lot of it isn't. Total student debt in 1997 was $1.9 billion. Ten years later in 2007 it was $9.4 billion. By 2010 − in 3 years time − it will be $12 billion and by 2020 it will reach a staggering $21.5 billion.

We could do something different. We could simply reduce that so-called “asset” by writing off some of the student loan for each year students stay and work for New Zealand. It’s true that the government surplus would be lower. But there would be little inflationary impact, and none at all in the short term.

You would create a fairer and more caring country. You would create a stronger country.

This is a Progressive Party policy that we will present at the next election, and which I will personally promote.

At the moment, free education is nowhere on New Zealand’s political agenda. But it is too important to equality and opportunity to be ignored, and that's why we are taking it on.

Bit by bit, we are making New Zealand stronger and more caring. Removing the tax on free education will help, as will making housing more affordable. Just as making the government an active partner in the development of our regions, and Kiwibank, and action against suicide and drugs all helped to make New Zealand stronger and more caring.

What is really important to New Zealand?

If you read the New Zealand Herald, you would think the most important issue in the country − probably in our nation’s history − is the sum people are allowed to spend on election ads.

Let me say something briefly about the Electoral Finance Act. Just about everyone believes there should be some limit on election spending − that you should not be able to just buy an election. And it's a pretty well established convention that if you are buying an ad, you have to put your name to it. Even in the US, the 'land of the free', if you have a look at the election ads on the Internet, you will see the candidates saying 'I'm George W Bush and I have approved this message.'

Once you agree that there should be some limit to advertising spending − it is just a matter of how much. That is all the debate over the Act is. A matter of how much. But that doesn’t sound like the end of democracy to me.

The day before the last election, the Christchurch Star printed a full page ad that accused me of every political failure under the sun. It was sent to every home in my
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electorate. Of course there was no time to correct it. The name and address on the ad were lies. The substance of the advert was lies. The newspaper must have known, when they accepted the ad, that it wasn't true. But full page adverts are good for
business. No crusading journalism to reveal the identity of the fraudulent name or to debunk the claims it contained was in evidence. It was, of course, paid for by members of the Exclusive Brethren Church.

And who do you think owns the Christchurch Star? The same company that owns the New Zealand Herald, which is now crusading on this issue.

How about that. Given a chance to play fair, given a choice between the money or the bag of journalistic ethics, some media will take the money.

We can do better than that. New Zealand and New Zealanders have so much to celebrate. When New Zealanders go overseas and come back here, they see what we really have. I was in Mexico last year where I saw miles of shanty towns in a country where twenty-five million people live in an absolute poverty. In many countries there are millions of people living in unimaginable hovels, in lands of plenty.

In New Zealand we too often insist on seeing the cup half-empty. Political debate is characterised by vitriolic intolerance instead of balance and objectivity. Good news is boring. Bad news makes good headlines.

In the last eight years our economy has enjoyed a stirring recovery. We have enjoyed an uninterrupted eight years of growth. The term of this government has been the longest continuous cycle of expansion in the lives of most adults in New Zealand today. The economy is over a quarter larger than it was in 1999. We have grown faster than the average of developed countries, faster than the UK, or the EU or the US, and as fast as Australia.

Unemployment is down to record levels. There have never been as many New Zealanders in work.

Government finances are strong. We are enjoying structural surpluses and − taking into account the NZ Superannuation Fund − we no longer carry any net government debt at all.

I am not a Pollyanna. There are imbalances in the economy we still need to address. For example, our current account deficit, at nine percent of GDP, is far too high. We haven’t had a current account surplus since 1973. Let me re-state that in simpler language: We haven’t earned more than we have spent overseas since 1973.

You will find I have a long record of expressing alarm about the consequences for New Zealand of an economy where we never get round to paying our way.

Our household debt levels have got very high, which exposes us to more risk than I think we care to admit. Our fundamental problem is our incomes are lagging far too far behind those of countries we like to compare ourselves with.

We don’t export enough high value, high skill products. We don’t own enough sophisticated, internationally-connected businesses.
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There is no point now lamenting once more the mistakes that were made and the failed policies of the past, in the eighties and nineties when whole regions of New Zealand were devastated.

The point is, those miserable years left us a long way behind other countries. There is a lot of catching up to do. The process of turning around New Zealand’s economy has produced some substantial improvements in the state of our economy and in household incomes. And with that improvement, pressure has built for tax cuts.

There have been significant improvements in take home pay under this government, and none more so than for New Zealanders who needed help the most.

Nothing did more to lift household incomes than hundreds of thousands of new jobs. No sum of tax cuts, and no programme of social services can make as much difference to incomes and to the strength of our communities as putting hundreds of thousands of people into jobs.

In addition, Working for Families lifted more children out of poverty than any single programme since the Great Depression − something over seventy thousand children, by one estimate.

Working for Families means that if you are a two-child family on the average wage, you currently pay virtually no income tax at all. A family like that in New Zealand has the lowest tax rate in the OECD.

So when I hear a call for tax cuts, I know it’s not those families people are talking about.

Business tax was last year cut more than at any time in the last twenty years.
The corporate rate was cut. New tax deductions for research and development and for market development were introduced, along with changes that better supported businesses expanding internationally.

I strongly supported those policies because I support a business tax package that most supports investment and growth. In fact, a reduction in the business tax rate was part of the Progressive’s policy platform at the last election.

The earners who have missed out to date have been those on middle incomes. There is a good case for adjustments to thresholds at which different tax rates cut in. If you don’t keep pushing up the tax rate thresholds, then you end up with virtually a flat tax scale. With the top rate cutting in at $60,000, for example, there are school teachers paying the same rate of tax as the CEO of Telecom. That is not fair.

So I would like to see the largest tax cuts going to middle income earners who have missed out so far.

New Zealanders have a lot to celebrate. We have created a country built on the idea that every person is unique and worthwhile. It's been created because we have been gifted a legacy from our forefathers like Ed Hillary − New Zealanders who had the strength to care.

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And we need to continue to be strong enough to be caring. We have new opportunities to work with a can-do attitude on issues that continue to haunt us.

Yes we can make education more accessible. Yes we can make housing more affordable. Yes we can create a more equal New Zealand. We can create a more caring New Zealand. We can create a New Zealand that works for all of us. Yes we can be a decent country, united by common purpose. When Ed Hillary stood on the mountain top he showed us that.

Yes we can work for our fellow men, women and children. Yes we can, with grit and determination and by pulling together, make the most of our talents. Yes we can achieve more by asking, first, how will we get things done?

Yes we can be a more tolerant country if we ask only of everyone that we each give of our best. We can say ‘Yes’ to a stronger New Zealand. ‘Yes’ to a caring New Zealand.

‘Yes’ to a New Zealand that has the strength to care.

ENDS

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