Rt Hon Winston Peters

New Zealand First Leader

Member of Parliament for Northland
28 JUNE 2015

EMBARGOED TILL 2.30pm

Speech to New Zealand First Rotorua electorate AGM, Copthorne Hotel,

Fenton Street, Rotorua

Rt Hon Winston Peters,

2.30pm, 28th June, 2015

Our Winter of Discontent

And the Worsening Crisis in Dairying

As William Shakespeare once wrote:
“Now is the winter of our discontent.”

The quote could be intended for our times.

Now why is that?

We shiver as polar blasts sweep up the country

And the price of power goes up and up

And the state of our economy goes down and down

As the government pretends we are economic rock stars

And the immigrants thunder through our open doors

Buying our houses and land

Drowning out the sounds of poverty and

Silencing the beating heart of the heartland.

Apologies to William Shakespeare. But as we know his works are timeless!

Today we need to take stock of what’s happening to our country and to put forward our solid policy ideas.

New Zealand is experiencing an economic development of enormous gravity which will go to the core of our economic and social life.

We once grew up in a country with governments that tried to provide for all the people.

Folk used to complain of course.

Governments were always criticised for something but never about their commitment to a fair go for everyone.

Many Members of Parliament in those times had served overseas in the war and what they saw increased their resolve to make New Zealand a better place.

They planned for our future with power generation schemes, increased state housing, better health, education and social services.

Prime Minister Holyoake even knew the names of the unemployed. He walked to work.

How times have changed!

This is a government of the speculators not the toilers or the needy.

This is a government that refuses to face serious problems.

Instead of working to fix things they employ more media minders and spin doctors to cover the problems with a substance that comes from a paddock and is good for the garden.

Cabinet ministers are still pretending all is well and they claimed six months ago we were living in in a rock star economy. That hoopla has all changed.

Just look at our GDP for the last measured three months to March this year released a week ago.

It shows that our economy is almost at a standstill, growing just point 0.2 per cent for the quarter. Annualised of course that puts our growth well below 1 per cent per annum.

Now one simply can’t annualise forecasts on the basis on one quarter.

But the profound and wise reaction, cynically speaking, of the Prime minister and former currency trader John Key was that economic prospects were bright and quarterly figures could “jump up and down”.

New Zealanders deserve a better reaction than that particularly from one who claims to be “aspirational”.

He and his team of ministerial “yes men and women” might be in a position to jump up and down on some sort of economic trampoline but the rest of the country is more down than up!

This bouncing team of ministers have a default position for anything and everything – privatise it!

Whether it be crime and punishment, social services, pensions, housing or transport services.

Let the market sort it out, is their pathetic response.

The reality can no longer be denied; our economic threats are multiplying.

THE DAIRYING DISASTER

Recently the EEC extended its ban on exports to Russia for a further six months. Russia responded by advising that the ban would be extended by them for 12 months.

The outcome is that Europe will be awash with primary products. European governments will support their own farmers even if they have to buy and stockpile.

As a consequence that will leave China with many other options other than New Zealand.

The dairy payout for 2015/16 was meant to be $5.20. For that to happen $US3300 per tonne for milk powder is required whereas currently the price is $US2300.

Fonterra is relying upon the surplus being temporary but production volumes around the world are rapidly climbing and Fonterra and certain industry and political optimism about what temporary means is simply not justified.

Fonterra will try and keep prices up to at least the high four dollars but mid to low four dollars is far more realistic.

In these circumstances the National government has no strategy for our biggest primary producer and is leaving everything to the free market. This is not a policy but has the hallmark of a rural tragedy. Further, this is not helped by Fonterra now competing in the retail market against its own customers buying from them at wholesale.

This reflects no understanding of the concept of added value in the first place.

In this environment the TPPA won’t help, even Minister Groser admits that. And the China Free Trade Agreement doesn’t help either.

All of the above is going to be catastrophic for the provinces.

The dairy sector is facing a major threat because of the combination of low prices and the high levels of debt held by some farmers.

Around New Zealand many farmers have undertaken expensive million dollar conversions and will be forced on their knees before foreign banks.

Dairy prices have fallen by nearly 50 per cent since the peak in February 2014 and this is causing sleepless nights for farmers with high levels of debt.

It will also be causing provincial city and town businessmen and women great anxiety as off farm expenditure rapidly declines.

As stated before, this government has no plan to deal with the looming crisis. Worse still, it doesn’t support New Zealand First’s Receivership (Agricultural Debt Mediation) Amendment Bill to provide fairer treatment to farmers facing financial crisis.

THE AUCKLAND BUBBLE

There is a city called Auckland and what is happening or not happening there poses a major economic threat to the entire country.

First, the Auckland housing bubble is not just an Auckland issue but is one on which the Reserve Bank and Treasury are at cross purposes and equally confused. The Reserve Bank says that the Auckland housing crisis is a great risk to our financial stability. In contrast, Treasury believes that the main trading banks could withstand a 50 per cent house price fall in Auckland and 13 per cent unemployment without breaching capital requirements.

Fuelled by offshore speculation and mass immigration of now 48,000 a year going to Auckland, the Auckland house bubble cannot go on.

Immigration levels have reached over 114,000 extra people a year.

Sure some people are leaving but the net population gain through migration is nearly 60,000.

That’s more than a thousand a week.

NEW ZEALAND’S EXCHANGE RATE

To add to our economic problems, we still do not have a competitive exchange rate.

The New Zealand dollar is still overvalued jeopardising our exporting and manufacturing sectors.

It is a fact that we have the most volatile currency in the world.

THE WIDER PICTURE

Internationally there are a lot of dark clouds on the economic front.

So whistling in the dark and hoping for the best as the Government is doing is not running the country - it is just going through the motions.

And this failure is not confined to the economy. In the areas of:

• Employment

• Housing affordability

• Poverty – particularly affecting children in low income families.

• And growing inequality.

We see a similar story – a government that makes noises but takes no useful action.

There have been only two things driving what economic growth we have at the moment. One, is the Christchurch Rebuild and the second is mass immigration driving consumption.

Neither of those elements is going to last. In fact there is already a slowdown in Christchurch.

UNEMPLOYMENT

The figures trotted out are always doubtful because if someone works for only one hour a week they are counted as being employed.

Throughout New Zealand there is work to be done – leaders in all regions know that including here in Rotorua where the unemployment figures – such as they are – are second only to Northland.

New Zealand First has had a plan for twenty years to provide useful work - it’s called a Community Wage.

It is based on a combination of the unemployment benefit and the minimum wage and amounts to a subsidy for paid work in any region.

A whole change in approach is needed to adapt the traditional idea of employment.

In many cases there might not be full time jobs available but we are sure local community leaders could each name projects that would be started if the money was made available.

Our approach means that an individual or a group of people could be working for a number of employers doing specific jobs.

As long as the conditions of work are fair to both parties it could help resolve a growing problem.

Many people who have never worked or have been unemployed a long time are not used to working and lack life skills.

It is time to help them up from the social scrapheap they have been dumped on, using a mixture of carrot and stick and our Community Wage policy.

They would learn what it is like to do a day’s work and hopefully also acquire the dignity that comes with a job.

It might mean going on the end of a shovel on a community project, planting trees, or helping clean up polluted waterways.

Many homes – both state houses and privately owned - need work done to them.

Many of these rundown and uninsulated houses are in areas of high unemployment.

Why not use the Community Wage to give people jobs to install insulation, improve drainage, paint, replace rotten wall boards and work on other problems?

Use the services of qualified tradespeople from local firms and recently retired building professionals to supervise the work and provide any expertise required.

Many children from cold, damp housing areas suffer serious winter illnesses.

In one case in Auckland the death of a little girl was directly linked to the state of the house she lived in.

We know Rotorua has serious housing issues and they need to be fixed now!

When we go around the regions we hear a constant theme of neglect and that the government is so obsessed with Auckland it doesn’t listen to them.

THE LOOMING CRISIS IN EMPLOYMENT IN FIRST WORLD ECONOMIES

The rapid growth of automation and robotics at this present time means that we are facing an imminent crisis in employment opportunities. Our governments should be looking at every way possible to plan and implement policies to provide employment not withstanding these developments. This crisis will emerge over the next five years and we must prepare for it.

CONCLUSION

New Zealand First has been listening.

Heartland New Zealand produces most of the export wealth yet sees little in return by way of improved social services.

There is an increasing number of cutbacks in government services as local offices are closed.

There is an arrogance and a mistaken belief in the Capital that only Auckland really matters.

Regional MPs who are supposed to look after their electorates are all fire and brimstone back in their electorates but in Parliament they are cacophony of “yes” people.

If you go on voting for someone because they used to represent you, without doing a reality check as to what they are doing, or not doing now to improve things, then the outcome will be very grim.

No political party can serve the foreign owned banks, currency speculators, the foreign-owned sharemarket, the foreign-owned insurance industry, and at the same time serve you and the provinces.

New Zealand First is committed to serving the interests of the people this Government overlooks and ignores – ordinary New Zealanders.

We have experience and we have policies to lift our country back up where it belongs.

Hang in there … after winters of discontent spring will come with the promise of new governance, new life and a better future.

ENDS

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