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Anderton: Dunedin Chamber of Commerce

Hon Jim Anderton


Progressive Party leader

3 November 2008 Speech


Dunedin Chamber of Commerce

Thank you for the chance to join you today.

I want to make a few comments about the election as I see it going into the last few days of campaigning. And I want to talk to you as business people about the choices facing New Zealand.

In this election, perhaps more than in any election for a long time, economic management is a critical issue.

The global economy is under massive stress.

I am not hopelessly pessimistic about that for New Zealand. There are countries starting to go to the IMF for loans, and spending hundreds of billions of dollars to bail out banks. We are in much better shape.

I believe we have one of the most strategically positive positions of any developed economy. For example, our government finances are much stronger than most - we don't have any net debt at all. We have almost the lowest unemployment rates in the developed world, even after high world fuel prices and the natural economic cycle pushed us into recession earlier in the year.

We have managed our economy prudently for the last nine years. Those surpluses the government has built up are needed now. We have built our own pool of savings, through the Superannuation Fund, and through Kiwisaver. And as we watch financial institutions crumble all over the world - isn't it lucky we have our own bank now?

When we last went through an international financial crisis combined with a drought - ten years ago - the government then responded by cutting benefits and superannuation and selling Contact Energy. All that did was deepen the recession.

Underlying our economy's strength, we have an export sector based more than any other developed country on producing and selling food. Our primary products make up two thirds of our exports. The world will keep needing food in this global downturn.

In fact, global demand for our highest value primary products is likely to surge. With our dollar falling to more competitive levels, the outlook is excellent for our primary producers. We should do better than most countries at earning our way in the world.

But success doesn't happen by accident.

It happens because we work in partnership with industry, add the strength of government where it is needed to make a difference, and sweep away barriers to success where we can.

Last week I was sent a press release from Federated Farmers. Now, it's fair to say that Federated Farmers have historically been seen as critics of Labour-led governments. So what did that media release say? It was headlined: Federated Farmers says 'good on you Mr Anderton.'

Praise from Federated Farmers for a minister of agriculture of any political stripe? That's pretty rare.

They were making a very important point (other than that they Jim Anderton's a good guy - which is a point I commend to you for further consideration). They said what Federated Farmers want is a clear understanding that politicians get the fact that New Zealand's future is in the production of food.

We do need a broadly based economy, it's true. But the Feds are right - there is no question that the best opportunities for New Zealand to build further strength in the forseeable future will come from our food exports and related industries.

That is why this year I persuaded the government to set up New Zealand Fast Forward. It is a seven hundred million dollar investment in science and innovation in the food and pastoral sectors.

It works by partnering with investment by the private sector. The money is invested and over time, with the private sector contribution, it will grow to be worth two billion dollars. It is the largest single investment in science and innovation in our history. It is designed to achieve a step-change in our economic performance, targeted at our highest-potential industries.

Our political opponents have looked at this brilliant idea and decided to abolish it. They are saying they will close down Fast Forward as a matter of high priority. That will be a dramatic step backwards in innovation for New Zealand.

But they don't just want to stop there. They are also saying they will introduce the largest increase in tax on business in New Zealand's history. When I say this, people say - oh that can't be right. It is right - and it's not just a business tax increase, it's a business tax increase targeted at the most innovative businesses in New Zealand.

Last week a very creative and successful Auckland business leader took out a full page ad in the NZ Herald to warn businesspeople about this. This advertisement said "I've voted as many times for National as for Labour. I'm a founder of five successful companies selling globally to more than 30 countries." And then he went on - the party that should get your vote is the one with the best policies for real economic growth. "Borrowing for tax cuts going into a global recession in an attempt to drive a consumer spending recovery is, frankly, placing our kids in debt without addressing the financial crisis in any meaningful way."

He goes on - removing tax credits on research and development undermines our manufacturers' and exporters' ability to compete against global competition.

You know - he's right. I challenge anyone to tell me he is not right about that.

We have to invest in development of the New Zealand economy - now, when we are in demanding global financial conditions, it is more important than ever.

This morning I am announcing my party's economic policy.

The Progressives say, when you go through a tight period you should first of all look out for the most vulnerable. Not throw them over the side first.

In addition to that, the economy needs intervention to stimulate it - and we support a house building programme to do it. We support investment in infrastructure - roads, rail, energy. Infrastructure spending stimulates the economy when it would otherwise be starved of capital.

We are saying that new infrastructure investment over 'business as usual' should be made through a New Zealand Infrastructure Development Bank.

The bank would be capitalised with Crown debt, just as any infrastructure project is currently funded. It could issue bonds. So Mum and Dad investors would be able to buy infrastructure development bonds associated with particular projects. It would even be possible to make the bonds tradeable on the NZX. So, for example, the bank might approve an investment in a new toll road. The project would be funded partly out of capital from Crown debt, and partly by issuing bonds to New Zealand investors at a set interest rate.

At other times we might have said projects like these can be funded on their own merits if they are truly bankable. But the problem is that, in today's environment, the economy is starved of capital. The whole point of bringing forward infrastructure investment is to get capital moving through the economy again as quickly as possible.

Providing some stability for investors will help retain confidence to keep investing. What are Mum and Dad investors who have been burned by Bridgecorp and the other failed finance companies going to do? Unless we can give them a government-aligned and positive opportunity, such as infrastructure bonds, some will stay out of capital markets altogether.

It's good that both National and Labour have recognised the need for more infrastructure spending at this time. But it's also essential that we attract private capital back in as well - without privatising assets.

And it's essential that decisions are transparent and there is accountability. Last time a government strongly increased infrastructure investment, in the early eighties Think Big projects, investment was not always made on transparent grounds. There seemed to be an overlap between the location of new projects and the location of marginal seats.

So a bank for infrastructure investment makes sense.

I think one of the differences MMP parties make is that we come up with new ideas and push them up the policy agenda.

The idea of an infrastructure bank is one idea - and we are highlighting some others.

Affordable dental care for all is one crucial issue - I think it's been overlooked in the health system and there are tens of thousands, if not hundreds of thousands, of New Zealanders who are going without adequate dental health care.

We will promote that idea in the next parliament, just as in the past I have promoted a Kiwibank and four weeks paid annual leave.

This is the difference MMP parties can make.

We've worked closely with Labour in government and for this reason a lot of people have said to us we are just like Labour - might as well join them.

But I think there is value in being outside because we can promote these new ideas - and still offer an assurance that we will be strong and reliable partners for Labour. We are different not only in some specific policies, but in some values as well.

We have put more of our capital into development of New Zealand - that is why I took the primary sector portfolios in this term, and why I took economic development before that.

Progressives are committed to developing the strength of the New Zealand economy - and I think one difference between us and Labour is that we are more concerned about developing New Zealand than about some of the ideas people have called political correctness. I don't like that phrase because it's too easy to sneer at ideas without looking at them on their merits. But it is fair to say that we would be a lot slower to introduce some social changes that I believe have been harmful to New Zealand.

For example, Progressives are strongly in favour of putting the age for lawfully buying alcohol up to twenty. Since the alcohol buying age was brought down to 18 years, and the availability and promotion of alcohol has increased, we have seen a dramatic increase in alcohol-related harm. Law and order has been a huge issue this year - but if you are truly against crime, you should be against the easy availability of alcohol. The police say that sixty percent of the people they deal with are intoxicated when they commit the offence that gets them into trouble.

Alcohol is our number one cause of crime. And it's causing mayhem elsewhere, as well. The number of injury accidents and road deaths among 15-24 year olds has sky-rocketed since we made it legal for teenagers to buy as much alcohol as they want at just about every corner store in some parts of the country.

So our concern about these issues makes us different to other parties, I believe.

But even though we are not Labour, we will work closely with them because their priorities align closely with ours.

We are making it clear that we will only be in government with Labour. All parties should make their post-election intentions clear, so that everyone knows what they are voting for.

This year there has been a pleasing improvement in the transparency of parties about their post-election intentions.

Going into this last week, the Progressives and the Greens have ruled out National, and National and Act have said they will work together - so a vote for National will be a vote to have Rodney Hide around the cabinet table, and Roger Douglas back in government. It would be back to the failed policies of the past.

National are being arrogant about their chances of winning. They talk as if they were already home. It will get worse as the week goes on. John Key has already been comparing himself to Barack Obama. That is ironic, because National's return to the backward and failed policies of the past is almost the opposite Obama's message of hope and of justice for all.

But when you look at the numbers, the election is not over by any means. Add together Labour's support, ours, and the Greens, and you can see a clear pathway back into government.

I don't think, however, NZ First will be part of the new parliament. I believe that the most recent disclosures make it less likely that they will reach the threshold of five percent of the party vote. I have been saying to Grey Power and others that there is a good reason for those last remaining NZ First voters to take a look at the Progressive Party. If they vote for NZ First, and it doesn't make it back, then their votes are effectively reallocated to everyone else.

Let me make this clear because the Herald has been a little exasperating about this even today. The Electoral Act says votes of parties that do not win electorate seats or 5% of the party vote will be 'disregarded.' What that means is that all other parties that do qualify will have their votes proportionately increased.

I can quote word for word from the Electoral Commission's NZ Electoral Compendium, "Note that the exclusion of these Party Votes results in an increase in the percentage shares of the remaining Party Votes for each of the remaining parties." (Compendium Page 151.)

So votes that go to NZ First, instead of to the Progressives, and then don't get counted, proportionately increase the National and Act share of the vote.

National and Act get a higher percentage of the vote if NZ First doesn't make it, and therefore, potentially, more seats - unless those NZ First votes are switched to non-National-supporting parties. A lot of NZ First voters don't trust National and Act not to smash into superannuation and sell assets like they did the last time there was a financial crisis. Those voters should switch back to us.

Likewise, if the Greens join Labour in government - we have shown we can work with the Greens. And I have made a lot of sustainability decisions, in fisheries and agriculture. But it won't hurt to have a few pragmatic grey hairs around the table as well.

I don't want to see our dairy sector crippled - I want to see it strengthened even further. I don't want us to stop trading with the world - I want us to sell more to the world, and base our economy on exports of high value, high skill, job rich products the world wants to buy.

I think I have shown I have a record of being practical and that would be useful to have around the Cabinet table in a Labour-Greens government.

So people who want a Labour-led government and want some practical leverage in it should be voting Progressive too.

That's our pitch going into the last week of the campaign.

We want a Government that has the strength to care for its people. We are for jobs, education, health care, dental care and a rising standard of living for all New Zealanders. There are people struggling at the moment and we need to take care of them.

We can't go back to the failed policies of the past - the high unemployment, the sale of our strategic assets and the breakdown of our communities, which New Zealand experienced in the eighties and nineties.

The international economy has turned very tough. New Zealand can't afford to face these testing times by going backwards to the hollow men, and the hidden agendas.

During the last nine years, we had the longest consecutive period of growth in forty years. We grew the economy by a third. We introduced Kiwibank and KiwiSaver, and the Fast Forward fund's investment in innovation.

Our new strength prepares us better than most countries for these testing economic times. We need a stronger New Zealand if we are to be a more caring New Zealand. And I look forward to continuing that progress in the next three years.


ENDS

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