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Hide: ACT's 20-Point Plan To Beat Australia

ACT's 20-Point Plan To Beat Australia Rodney Hide MP Sunday, May 25 2008

Post-Budget Speech; The Rydges Hotel, Christchurch; Sunday, May 25 2008

Finance Minister Dr Michael Cullen's ninth Budget is just like his other eight. His concern is about carving up the economic cake - not baking it bigger.

His carve-up is designed to win votes. His target this time is middle-income earners with a block of cheese just before the election.

It's a bribe that's too little too late. It won't work.

John Key says he believes National can do better - but he won't say how.

We in ACT know we can do better - much better - and we know how we can do it. We have the country's two best Finance Ministers ever in the room: Sir Roger Douglas, who developed the plan, and Ruth Richardson to provide her comments on our plan.

ACT's goal for New Zealand is to beat Australia by 2020 - economically, socially, politically. That goal alone sets ACT apart.

We have set the goal and developed the plan. A 20-point plan that cherry-picks best-practice policies from around the world, and adds a few that will be international best practice once we've pioneered them.

We're offering voters the juiciest election bribe ever.

ACT promises that if you give us your Party vote, and we hold the balance of power after the election, we'll create an economy that gives the average New Zealand wage earner an EXTRA $500 A WEEK.

That sounds too good to be true, doesn't it? But that's what our combination of policies will do. That's what we need to do to bring our children home.

Why? Because we're already $450 a week behind Australia - and its new Labor Government is bringing in ACT's policies, meaning they're going to go even further ahead.

If we're going to build an economy that our kids are going to want to return to, we're going to have to grow average wages by at least $500 a week.

You don't think we can deliver it? Well, I'm telling you we can.

All it takes is a Finance Minister with the guts to do what's right for all New Zealanders. And the good news is, we've got one. One of the best the world's ever had: Sir Roger Douglas.

John Key likes to talk about Roger's ideas as 'hard right'.

If they're 'hard right', it's amazing how many left-wing governments have adopted them - from Sweden with school choice, to the UK Labour government's insistence that all new prisons be private, to Bill Clinton's successful reform of the US welfare system.

These policies aren't 'hard right'. They're dead right. Most of them are already working well in countries that are doing much better than we are. They'll give us the growth we need, so we can afford things like life-saving breast cancer drugs that countries like Greece can now afford, but we can't.

We're too poor. Why? Because of 15 years of gutless governments.

National and Labour governments that lacked Roger Douglas and Ruth Richardson's vision and courage, and put the brakes on much-needed reforms. As a result, other countries like Ireland have leapt ahead of us while we tumble deeper into the OECD basement.

If we were a state of Australia, we'd be the poorest - $100 a week poorer than Tasmania. If we were a state of the US, we'd be 51st and last - $120 a week poorer than Mississippi. Is it any wonder so many Kiwis with get-up-and-go have got up and gone?

We have a no-nonsense message for New Zealand voters: unless you stop voting for politicians who bribe you with short-term treats at the expense of policies that enrich you in the long run, you'll keep getting poorer and poorer.

There's only one way to save New Zealand. Only one way to bring our children home. And that's to make sure the ACT Party gets enough votes to hold the balance of power and demand that Sir Roger Douglas gets back his old job of Minister of Finance.

Who would you trust to manage New Zealand's $175 billion economy in a crisis?

Michael Cullen - who's squandered the best global conditions of a generation to make us poorer than Greece?

Bill English - who did nothing much the last time he was Minister of Finance, and is proudly promising to do nothing much again?

Or Sir Roger Douglas - the Finance Minister who transformed New Zealand from the East Germany of the South Pacific into one of the freest and most respected economies in the world?

In 1984, Sir Roger Douglas had the guts to do what was right for this country when it needed strong leadership. Well, we need that leadership again. And here's how we're going to provide it: ACT's pledge card.

It's a little bigger than most. That's because we're the party of substance, not spin.

ACT's plan is to get you an extra $500 a week, beat Australia, and bring our children home. It's a 20-point plan. In the left-hand column are the policies. Next to them are some of the countries where similar policies are already working well. In the next column are the benefits that those policies will bring to our people.

Then we come to the numbers. First, the percentage boost in annual growth that we expect each policy to generate. And next to that, by how many dollars we expect each policy to boost the average Kiwi's weekly pay packet.

Remember, these estimates haven't been plucked out of the air by some young whippersnapper with no experience in government - they come from the one and only Sir Roger Douglas.

In the right-hand column, you'll be able to make the kind of choices that Roger Douglas had to make in the '80s. You can take out a pen and vote Yes or No to each policy. We don't expect you to like them all. But any time you vote No to a policy, you'll see how much annual growth and how much weekly pay you'll be costing yourself in rejecting it.

Growth, by the way, is what allows us to pay for things like better medicines, great teachers and more roads.

You see, running a country is just like running your home. You need to make tough choices. It takes guts. We'll need a ton of that if we're going to close the average trans-Tasman income gap of $450 a week and bring our kids home.

As Kevin Rudd adopts many of ACT's policies in Australia - like $31 billion in tax cuts, and plans to trim public service fat - we have no choice but to make even more good choices than our big neighbour.

Ireland did it in the '90s, and their kids came home in droves. So can we, and so will ours.

Over 30 countries now boast a better standard of living than New Zealand's. Why? Because they've had what New Zealand needs: the right policies, and leaders with the guts to do what's right.

Only ACT's got those leaders. Now let's have a look at those policies.

1) Government waste. Cut state spending to Australian levels. Benefit: Lower inflation. Lower interest rates. And more money left with those who earned it. A growth boost of half a percent and $50 a week to the average wage earner.

2) Cut and flatten tax rates, like they have in Russia, Estonia, Slovakia, Hong Kong, Singapore, Latvia and Lithuania. Benefit: More incentive for people with initiative to create wealth and jobs. A boost to growth of three-eighths of a percent and $37.50 in wages.

3) Limit local government to core activities. Keep those rates down. Another quarter of a percent boost to growth and $25 in pay. In fact, the next six promise the same increase.

4) Reform the public service, like the new Labor government is doing in Australia. Close departments we don't need. Reduce bureaucracy and return it to a non-political role. Limit Cabinet to 12 members. Limit Parliament to 100. We'll save millions for things we really need, and we'll release public servants to do more productive jobs that really help people.

5) Red tape. Get rid of all nutty regulations. Follow Australia's lead and appoint a Minister of Regulatory Reform. This would cut firms free of red tape and allow them to focus on creating more wealth and more jobs. Pass my Regulatory Responsibility Bill. This would set a checklist for good lawmaking, requiring politicians to consider the national interest (with a small 'n'), so they can't easily pass laws for cynical political reasons.

6) Reform the Resource Management Act, so good projects start and finish sooner. A similar policy in Houston has brought huge benefits to that part of Texas.

7) Create a competitive market in education like they have in Sweden, the Netherlands, Ireland, Denmark, Australia - and like the Conservatives are promising to bring in Britain. The state funds the parents. Parents choose schools. Schools reward good teachers. And good teachers drive education - to please parents, not bureaucrats. As a result, kids learn more, faster.

8) Same in healthcare. Competitive markets are already curing more patients sooner in Switzerland, France, the Netherlands, Germany and Sweden.

9) We'd reintroduce competition to accident compensation as they have in most wealthy nations. And, of course, the competitive market was working very well here before Labour scuppered it because it didn't conform to their Marxist ideal.

10) Welfare. We'd create competitive markets for sickness, invalid and unemployment insurance. Good models for welfare reform exist in the US, thanks to the Democrats, in Switzerland, and in Australia. Our policy would see welfare recipients back at work sooner, and more generous support for those who can't work. This would boost growth by an eighth of a percent and put another $12.50 in the weekly pay packet.

11) Immigration. We want to welcome more high quality immigrants, so our industries get the skilled workers they need. Immigration has done wonders for Australia and the US, and it can do the same for New Zealand. The flow-on effects would add a quarter of a percent to our growth and $25 to the average wage.

12) Labour reform. This would add half a percent and $50. Allow freedom of contract to make it easier to trial new workers and replace poor performers. The UK, Ireland, Denmark, Japan, Switzerland and the US have similar laws. Their businesses run better with the right staff. Workers and companies earn more. And the contract protects both parties.

13) Privatisation. Sell state businesses where private firms can serve customers better. This happens in practically all countries, except Cuba, Burma and North Korea. And New Zealand under either Labour or National. Privatisation will lead to happier customers, lower prices, and more product variety and choice. Another quarter percent and $25 if we did that.

14) Infrastructure. We need to build better networks, like roads, water and electricity. We'd follow the lead of countries like Australia, Norway, the US, Singapore and France and replace user charges with tolls that reward off-peak use. The smoothing of demand would reduce bottlenecks and we wouldn't have to shell out big money for more capacity. A boost of a quarter of a percent growth and $25 each.

15) Policy that would add an eighth of a percent and $12.50, is to cut the remaining tariffs on imports, giving us free trade like Hong Kong and Singapore. As a result, imports would be cheaper, and exporters who can't compete will switch to fields where they can. We'd also strengthen our bonds with the US to expose more Kiwis to US entrepreneurial skills. A US Free Trade Agreement like the Australians, Chileans, Canadians and Mexicans have would boost New Zealand coffers by around a billion dollars a year.

16) An eighth of a percent and $12.50 to free up more land for housing, so as to reduce the price of sections. This happened in Houston in the US. If applied here, it would help more people achieve the Kiwi dream of owning their own home.

17) Strengthen law and order policies. Bring back private prisons - now best practice policy in places like the UK, the US and Australia. The British Labour government insists that all new prison be private. Here, of course, Labour closed our only private prison, even though they acknowledged that it was more secure, more humane, and cheaper to run. We'd let private firms come in and free up police, so they could adopt the 'zero tolerance' model that made New York a safer city than Auckland. By getting tough with young taggers, they make it less likely that they'll go on to worse crime, and people feel safer. To make sure justice is not only served, but served quickly, we'd speed up the court system. Night courts currently work in New York, California, Singapore and Canada. All told, the benefits of these improvements to law and order would grow our economy by an eighth of a percent, and weekly pay by $12.50.

18) Climate change. I'm an environmental scientist and economist and I've been studying this issue for thirty years. And I can assure you the science is far from settled. We've been sold a pup, and the bad news for our economy is, it's a Great Dane. We need to adopt saner policies in this area before New Zealand goes out of business. A low carbon tax would be a lot more affordable than carbon trading. Why hurt Kiwi families more than they're hurting now, when countries that do 75% of the emitting aren't taking the lead? The US, British Columbia and Australia are all doing a better job than us in this area, and we should follow them. If we did, it would add three-eighths of a percent to growth and $37.50 to the average wage.

19) Strengthen our constitutional framework to make democracy more democratic. Adopt a Taxpayer Bill of Rights, like they have in Hong Kong and twenty US states, most notably Colorado. This would cap state spending and keep taxes low. As mentioned earlier, we'd pass my Regulatory Responsibility Bill, so it's hard for bad governments to make bad, self-serving laws, like the Electoral Finance Act. This would be a world first. We should return to the Privy Council. We're mad if we don't. Why wouldn't we want free access to the best judicial minds from a population of 58 million? And we should hold a referendum on MMP. It's long overdue. The effects of these constitutional reforms would add an eighth of a percent and $12.50 to our growth and wage totals

20) Appoint mentors to families at risk. If we really want to reduce family violence and have fewer damaged children turning into violent criminals, we've got to teach these people parenting and life skills. Mentoring would do it. Similar programmes are working in Sweden, Norway, Denmark and Philadelphia in the US. Thriving families are much less of a drain on taxpayers, and we estimate this policy would add an eighth of a percent to growth and $12.50 to the average wage.

So that's our plan. As I said, you don't have to tick all the boxes. But if you do, the New Zealand economy would grow by AN EXTRA five percent a year and the average wage earner would earn another $500 a week. And only an ACT Finance Minister would do it.

We have a message for former ACT supporters who are hoping that John Key will represent your interests. He won't. Don Brash might have. But John Key won't. He was right when he made that stumble and said "The Labour government I lead." Because with National's present policies, that's the kind of government he will be leading. It's time to come home to the party that really does represent your interests.

And to true blue National Party supporters, I say this: If you really want a strong National government, Party Vote ACT.

There's only one way the next government is going to deliver the benefits on this pledge card. And that's if ACT holds the balance of power.

John Key is prepared to keep all of Labour's bad policies to win over Labour voters. He'll even keep Winston Peters as Foreign Minister.

That approach won't help New Zealand beat Australia. It won't get you an extra $500 a week. And it won't bring our children home.

Strange but true: the best way to get a strong National government is not to vote National at all. It's to Party Vote ACT - and make ACT the kingmaker.

That way, anyone who wants to be prime minister will have to make Roger Douglas Minister of Finance. You'll be surprised how quickly they'll agree!

New Zealand, we're going to bring our children home. Have the guts to do what's right: Party Vote ACT.


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