Foolish Policies Hobbling New Zealand's Future
Rt Hon Winston Peters
New Zealand First Leader
29 August 2014
North Harbour Rotary
Friday 29 August, 7.30am
North Shore Squash Club, Shea Terrace, Takapuna, Auckland
HOBBLING NEW ZEALAND’S FUTURE
What the Fonterra joint venture with China really means.
Thank you for the opportunity to speak to you today.
National has done only one job well over the past six years – deceiving and misleading people as to what is really going on in New Zealand.
As we now know from Nicky Hager’s book “Dirty Politics”, things are not what they might seem. Mr Hager has done the country a service.
The Prime Minister should stop dismissing the book, after all, the National Party and their thousands of emails wrote it.
The ‘Rock Star Economy
Earlier this week a group of economists meeting in Auckland expressed their concerns that “the New Zealand economy could hit the rocks”.
Not a New Zealand economy that is a rock star, but a New Zealand economy that could hit the rocks.
What they were reflecting on was that from 2009 going forward to 2017 there has been one growth spurt, a modest 3.3 per cent (their figure, not ours), but that even that rate for one year is unsustainable.
This came from a panel of some of New Zealand’s top economists who were anxious about our reliance on one off boosts, like the Christchurch rebuild, or how quickly it could slow down when it came to an end, a surge in met migration, and the forecast that the surge of numbers returning from across the Tasman is unlikely to continue.
Their further anxiety was that “one day interest rates will get big enough to crush the housing market”.
Now when an Australian bank chief economist, not known for doing anything other than talking up the market, says “my fear is all three of these things will happen at the same time”, it’s probably time to take serious notice.
Another Australian bank economist said that a soft landing for New Zealand’s economy was unlikely to happen.
Since 2008 the National Party, with its huge corporate backing, talks up its ability to govern.
But look beyond the facade, the media spin, the posed pictures, the sound bites, the dirty tricks and you’ll find something entirely different.
It’s in the PREFU, out from Treasury last week.
It says next year and the year after we’re going to run into heavy weather with GDP growth down to two per cent and exports declining.
What it points to are two New Zealands.
The fictional one designed to get past the 2014 election.
Then there is the real one where ordinary New Zealanders live.
In the real world what do we see?
A country that has been asset stripped to benefit the few at the expense of the many.
Take Mighty River Power. Whilst the National Party was selling 49 per cent of it, it was amassing (according to the NZ Herald August 21) a massive profit, up 84 per cent.
A country being sold off wholesale to foreigners – a million hectares has gone into full or partial foreign ownership under National.
Our biggest city - the Super City of Auckland - is increasingly dysfunctional as a result of record levels of immigration and foreigners buying houses wholesale.
And a Budget surplus of about $370 million that owes more to mathematical sleight of hand than to reality.
You may well ask yourself, how does a country with government debt going up six fold in the past five and half years, to $60 billion and worsening, and a national debt of $150 billion, with a balance of payments deficit deteriorating, and Treasury forecasting exports to decline – how does a country with all this have a budget surplus?
Don Quixote would be having a field day!
There have been Christchurch pay-out delays, cut backs in government agencies like the Police, forecasts of $5 billion more being required for Christchurch, while in this year’s budget, $500 million was cut from the Christchurch rebuild.
In short, none of this stacks up.
New Zealand has for the last 30 years, been chasing after economic moonbeams.
The Fonterra deal and what it really means for this country
In July this year, Fonterra announced that it was axing 110 jobs at its Canpac plant in Hamilton.
Two days ago Fonterra announced its new joint venture in China and Australia.
Fonterra says that its announcement two days ago was not related to the botulism scare that happened 12 months ago.
Funny that. It was exactly 12 months to the day Fonterra and the Government announced that the scare was a false alarm.
The damage that Fonterra caused to Brand New Zealand has not been quantified, estimated to be tens of millions of dollars.
Fonterra’s balance sheet may be able to carry this, but many smaller New Zealand companies were caught in the collateral damage.
And they’ve either gone to the wall, laid off staff, or are in financial trouble as a result.
Then there is the worsening issue of sovereignty and market Brand New Zealand being determined by Chinese officials as to which industrial dairy plants they will recognise.
Fonterra’s announcement two days ago was launched with the usual ballyhoo and unquestioned acclaim.
But look more closely.
Fonterra is doing the reverse of two large Chinese companies, Mengniu-Yili (building a plant at Glenavy in South Canterbury) and Yashili (building a processing plant in Pokeno).
The Chinese of course know what they are doing and for that they have my respect.
But it begs the question, why doesn’t Fonterra add value to New Zealand raw material, create jobs in New Zealand, and establish New Zealand as the world class centre for the development, production and marketing of world class Infant Formula to the world?
Why are we allowing Chinese companies to enter New Zealand, mix/blend imported milk powder from their Chinese operations with New Zealand dairy powders and trade off Brand New Zealand back in China, claiming it’s made in New Zealand and is a product of New Zealand?
Why are they using transfer pricing, and inter-company trading to undercut New Zealand owned companies who are trying to trade and use the China-New Zealand Free Trade Agreement to our advantage, and opening the doors for Chinese companies to set up in New Zealand and use the FTA to China’s advantage.
Now you didn’t read any of that in the ballyhoo, did you?
Mengniu-Yili and Yashili are funded and owned by the Chinese government.
In a few years time where dairying is concerned, it will not be in control of its own destiny.
We will be developing raw-based material, sell it as a commodity at the lowest end of its value and be letting Chinese owned and controlled companies add value and earn valuable export earnings, which New Zealand companies should be earning.
Where does NZTE, MFAT, and MPI stand while all this is going on?
Look at New Zealand First’s policies as they are a stark contrast to the irresponsibility of National.
New Zealand First’s policy platform will counter National’s folly with common sense.
Your country is being transformed before your eyes because of the loss of a sense of national interest.
No Scandinavian country would behave this way. Nor would Singapore or Switzerland.
The Fonterra example is one more portent of the sorry state of affairs developing in our country.
To be honest, it’s not entirely National’s fault because previous governments acted the same way.
However, this is just one further sell off and compromise of our national interest.
Accordingly, New Zealand First is committed to stopping the sell off, stopping high consumptive immigration policy, stopping the sale of New Zealand land and houses to off-shore ownership, and to stop the provision of employment to so many incoming, whilst 140,000 of our own can’t even find one hour of work a week.
Ladies and gentlemen, the Auckland housing market is awash with interest from off shore.
Buyers enjoying really low interest rates and tax advantages not available to New Zealanders.
New Zealand First is going to stop it.
We’re going to change the Reserve Bank so that monetary policy reflects our needs as an export dependent nation.
There is much more that could be referenced in this speech this morning.
But this speech gives you a flavour of where New Zealand First stands and it’s behind policies that reflect our party’s name.
When practical men and women once led our country, regardless of party, they practised economic nationalism and took New Zealand to being one of the top two countries in the world.
We were back then a creditor nation.
Of course, you’ll remember being told that those policies were old-fashioned and that you needed to be part of the brave new world of economic experimentation.
And as we travelled down that road the Scandinavians, the Singaporeans and the Taiwanese roared past us with policies of economic nationalism.
So your choice is clear in this election.
Settle for this being as good as it gets, or decide that we can do so much better.
And we could if we made exporting our number one priority, backed up with a savings culture and head out to finance our own future.
That’s what New Zealand First stands for because it’s common sense.