Simon Bridges – State of the Nation
Good afternoon everyone.
It’s fantastic to be here in Christchurch to speak to you about National’s vision for New Zealand, our principles and our priorities for this year and beyond.
We’re starting to see here the city you deserve with the sort of houses, restaurants, libraries, businesses and playgrounds which make it such a great place to live.
Your strength in terms of your economy, land for development, and rebuild platform have you well placed to grow without the costs and challenges facing other cities.
There’s been strong investment and leadership over the last decade that’s delivered this.
National will work to ensure the Government does not throw away the momentum or reduce the focus on Christchurch, but stays on course for this fantastic city and region.
I hope you’ve all had a good holiday.
All of last year and throughout the summer National’s been focused on the issues that matter to New Zealanders.
We’re already holding the Government to account on the real issues: higher rents, petrol and electricity prices and higher taxes, wasteful spending, the endless stream of working groups and a softening approach to crime.
As well, we are shining the light on bad policies like the ban on oil and gas exploration and restricting foreign investment.
But we’re not negative for the sake of it. We are a constructive Opposition.
We worked with the Government to improve the Child Poverty Reduction Bill, we’re working together on an Independent Climate Change Commission and we’ve gained cross-party support for Nikki Kaye’s second language in schools Bill.
We’ve got almost 50 Member’s Bills in the ballot.
We’re proud of the record we left in Government and more importantly are excited about our plans for New Zealand, should we earn the right to govern next year.
If that happens, we will hit the ground running.
So today I will broadly outline my vision, and National’s plan.
I’m positive about New Zealand’s prospects. I believe New Zealand is at its best as a confident, outward-looking nation, open to the world.
I believe in freedom and personal responsibility - in equal opportunities, not equal outcomes.
And I know that most New Zealanders work hard to make ends meet and therefore the tax they pay should be treated with respect.
Families have to live within their means, and so should the Government.
It goes without saying that a government needs to keep investing in core services like health, education, transport and Police.
We must also protect our environment.
And speaking of protection, I am unashamedly focused on protecting New Zealanders from criminals and gangs.
No question: I will always put the interests of law-abiding New Zealanders ahead of the interests of criminals.
Today I want to elaborate on some of these issues.
Let me start with the economy.
It’s New Zealand businesses and workers that grow our country’s wealth, not the government.
But government policies affect businesses for good and bad.
National, obviously, is interested in those that do good, and that help businesses grow, hire more workers and pay higher wages.
When National left government in late 2017, our economy was one of the best performing in the developed world.
Growth had averaged more than three per cent a year in the previous five years and was expected to continue at about that pace well into the 2020s.
Forecasts for large deficits caused by the Global Financial Crisis had become healthy surpluses faster than most OECD countries, while we were still investing billions in core services and rebuilding Canterbury after the earthquakes.
Now, as a result of that hard work and those tough choices, New Zealand has been succeeding and Kiwis should be getting ahead.
They should be receiving their social dividend.
But, for the first time in years our growth per person is falling behind Australia. For many New Zealanders, incomes are struggling to keep up with the rising cost of living.
This Government’s bad decisions are driving up the cost of necessities like petrol, rents and electricity and they can’t help themselves from adding new taxes.
New petrol taxes are costing households $250 a year and more costs on landlords have already driven up rents by $30 a week.
At the same time, the Government cancelled tax relief which would have given the typical working Kiwi an extra $1,000 a year.
The claim that tax relief would only benefit the wealthy just isn’t true unless you think that someone earning $50,000, or even $70,000 a year is wealthy.
I don’t think that.
National does not think that.
Average income earners are missing out. An extra $1,000 a year, on top of rising wages, would have given them fewer worries, and more choices.
Cancelling National’s tax relief and replacing it with Labour’s package has made three quarters of New Zealand families worse off.
The Government now has more money, while New Zealanders have less.
And worse is coming.
The Government will likely soon confirm a Capital Gains Tax on small businesses, farms, lifestyle blocks, family baches, rental properties and KiwiSaver accounts.
That is even though New Zealanders already pay too much tax.
Why do I say that? Because this Government is wasteful.
It’s wasting $2.8 billion on fees-free tertiary education for students already going to university, another $3 billion on a slush fund that NZ First is shamelessly using to buy votes, and almost $300 million on working groups because Labour didn't do the work in opposition.
They’ve set up more than 200 working groups, all the while talking a lot about kindness and wellbeing.
But underneath all of the working groups and political spin is a Government with no real plan for how to improve the lives of New Zealanders.
Any government can spend someone else’s money loosely. There’s no skill in that.
The skill is creating growth and prosperity, not more taxes.
if National is elected in 2020, we will:
• Repeal the Auckland Regional Fuel Tax,
• Ensure no increase in petrol taxes during our first term
• Have no new taxes in our first term
• And repeal a Capital Gains Tax.
Remember, the global economy is facing substantial headwinds and they may get worse.
There are trade tensions between the US and China, the impact of Brexit is looking hairier by the day, growth in China and Europe is slowing and there are clear signs that a decade of sustained economic growth may be coming to an end.
And it’s more than just global conditions we should be worried about. Domestic economic growth has slowed.
It didn’t get much attention, but at the end of last year we had our weakest quarterly growth in five years.
We also saw households close their wallets, house sales stall, and businesses and consumers deeply concerned about the Government’s lack of an economic plan.
Now is not the time to be imposing policies that hurt economic growth.
We should help our businesses and their employees weather uncertain times, not add to their costs and uncertainty with policies like a Capital Gains Tax.
Law and Order
National is tough on crime.
When we were last in government, National reduced youth crime by 31 per cent, crime overall was down 13 per cent and the number of people reoffending fell 26 per cent.
Untold people were spared the pain of becoming victims because of those statistics.
It didn’t happen by accident. We held offenders accountable and worked with those willing to improve their lives.
This Government has gone soft on crime, making it harder to send people to prison and easier for them to get out.
Its sympathy now rests with the criminals.
I can promise you that should I become Prime Minister, my priorities will be different.
Before I entered politics I was a Crown Prosecutor. I prosecuted hundreds of men and women, some of whom had done the worst things one person can do to another.
Assaults, rapes, murders.
I’m concerned the Government is slashing the prison population by a third, without any plan to lower the crime rate first.
They should be aiming for a third fewer victims but instead their focus is on offenders.
It concerns me, and it should concern you, that this Government has let a number of serious, violent offenders be housed at the same address as vulnerable children.
And it concerns me, and probably you, that this Government puts more emphasis on compassion for offenders than for victims.
We need to remain tough on people who commit crime, we need to prevent it happening in the first place and we need to reduce reoffending.
We’re already putting forward new ideas to make that happen including our medicinal cannabis bill and the appointment of Paula Bennett as our Spokesperson for Drug Reform.
Deterrence and treatment should go hand in hand. It makes sense and a National Government will make it happen.
We support increased investment in rehabilitation but we also support tough penalties for dealers and necessary powers for Police to combat drugs.
And we will keep championing the Social Investment Approach to Justice which allows us to use data and analytics to identify the best intervention points to prevent crime.
It’s about wise interventions to stop crime happening in the first place.
It isn’t going softer on criminals; it isn’t reducing sentences; and it isn’t letting people out earlier.
I am determined that under the next National Government, New Zealand will become the safest place to live in the world.
Between now and the election we will continue to put forward the ideas to make that happen.
The housing shortage remains serious. We all know it.
Under National we were in the middle of a record residential building boom, but we knew we needed to do more.
This Government claimed the answer was to build 100,000 homes.
So far they’ve built 47.
Yet they’re nearly halfway through their term. They’re now admitting they’ll fail to meet their own targets.
We know we didn’t do enough in Government, but the answer is to free up land and reduce red tape.
We know it works. It worked here in Christchurch.
So this year National will release a draft Bill that will overhaul the Resource Management Act and unlock development, while protecting our environment.
We can get that balance right.
And we know how important it is to invest in New Zealand’s infrastructure and our regions.
To unlock the potential of regional New Zealand we need world-class transport networks, including better state highways and public transport.
Our regions deserve to be able to travel where they need to go efficiently, while keeping safe. We will ensure that.
I also want to talk about education. I’m dad to three children and I come from a family of teachers – I know the concerns.
Education is the great leveller in society. I want every child to have the opportunity to succeed, no matter who they are or where they come from.
We are in a global competition and our students must be able to foot it with the best in the world.
What I see from this Government worries me.
I worry, for example, that it’s introduced 18 reviews and working groups in education alone.
It plans to take power away from parents in favour of bureaucrats. It intends on making it harder for parents to measure their children’s achievements.
I worry they are axing new school models targeted at supporting the most vulnerable.
And most of all I worry that we’re on the precipice of fundamental, irreversible change which will cause serious damage to our education system.
National has a plan.
Over the next two years you’ll see three things from National in education.
First, we’ll keep fighting the Government’s bad decisions.
That means we’ll plan to reinstate, revamp and rev up the partnership schools model so that we have schools that fit kids, because we know that kids do not always fit schools.
We will bring back accountability to parents by mandating progress reporting and we will fight the Government’s plans to entirely centralise education, disempower boards of trustees and reduce choice and the sense of community in schools.
Second, we’ll listen to you.
Over the next couple of months New Zealanders will be invited to over 30 nationwide public meetings to discuss how the Government’s changes to our education system will affect you and your children.
Third, we’ll announce a fully costed, comprehensive, and ambitious education policy.
We’ve previously indicated some areas of focus: class sizes, quality of early learning education, and using evidence to make the best investments to improve lives.
That evidence-based investment extends right across our public services.
We fundamentally altered the way government delivers services to ensure better outcomes for all New Zealanders, without spending billions of dollars more.
It was no mistake that our Government managed to increase the number of elective surgeries, reduce hospital waiting lists, get more Kiwis off the dole and into work, and helped tens of thousands of solo mums get the support they needed.
This right through the GFC and rebuilding cities after the Christchurch and Kaikoura earthquakes.
I want to continue this important work.
So it makes no sense that there are now 11,000 more people on jobseeker benefits in the last year, despite unemployment being so low and businesses crying out for more workers.
That’s not good enough.
New Zealanders expect their government to deliver world class public services. They want a Government focussed on the best outcomes for them. That will be our focus.
New Zealanders have always trusted National with managing the economy.
They know we’ll be careful with your money.
But I want you to know you can trust us to care for the environment as well.
That’s why this year the first of our many policy discussion documents released will be on the environment.
We know how important it is to Kiwis.
We’ve committed to working with the Government on a bipartisan Climate Commission to ensure policy decisions are enduring and comprehensive.
We’ll focus on cleaner water, protecting our fisheries, on our native species and iconic places, among other areas.
Economic growth and improving the environment can and must go hand in hand.
Sound environmental policies don’t mean we have to sacrifice our economy, and vice versa.
It requires us to be more innovative, more imaginative and more inventive.
National will be.
I am going to finish by circling back to the economy and the cost of living.
You hear a lot about the economy from National because we know a strong economy is how Kiwis get ahead.
We can’t get more kids into better schools, cheaper doctors’ visits, more elective surgeries and better protection of the conservation estate without a strong economy.
It’s also the foundation for improving living standards, creating jobs, raising incomes and protecting the environment.
As I said earlier, New Zealanders who work hard and contribute shouldn’t be taxed more than an effective and efficient government actually needs.
The Michael Cullen-led Tax Working Group will shortly report back. Its focus is taking more money off you.
Take a look at your next payslip. See how much tax you already pay.
Yet the Working Group – yes, another one – will likely tell most New Zealanders that they aren’t paying enough tax, that they are far too rich, and that a suite of new taxes, levies and charges should be applied.
This includes a Capital Gains Tax, which National will repeal.
But today I want to talk more specifically about income tax.
By 2022, New Zealanders on the average wage are expected to move into the top tax bracket.
That’s not fair, and it’s not right.
New Zealanders should not pay more tax every year even when their income isn’t keeping up with the rising cost of living.
In real terms people’s pay is going down even when living costs are going up.
And remember, this is on top of a Government which is also imposing a raft of new taxes and clearly sees the wallets of ordinary Kiwis as theirs to raid.
Over the next four years, New Zealanders will be paying almost $10,000 more per household in tax than they would have been under National.
The Government is taking more than it needs, only to waste billions.
So, in our first term, we will ensure New Zealanders keep more of what they earn to stay on top of rising costs such as higher prices for necessities like petrol, rent and electricity.
As well as cancelling the new taxes this Government has piled on, we won’t allow future governments to use inflation as an annual tax increase by stealth.
We will amend the Income Tax Act to make sure income taxes are adjusted every three years in line with the cost of living.
Within a year after every election, Treasury will advise the Government on how much the tax thresholds should be adjusted to account for inflation.
That means income tax thresholds will increase every three years to stay in line with the cost of living.
The first change will be in 2021 and relate to the tax years of 2018, 2019 and 2020.
We will include a veto clause so the Government of the day can withhold the threshold changes in the rare circumstances that there is good reason to do so.
But it will have to explain that decision to New Zealanders.
What do these changes mean for you?
Well, assuming inflation of two per cent, someone on the average wage would be $430 a year better off after the first adjustment. After the second they’d be $900 a year better off and after the third $1,400.
A family with two earners - for example, one earning $80,000 and the other $40,000 - would be $600 better off a year after the first adjustment, about $1,300 after the second and $1,900 by the third.
That’s more of their own money in their own bank accounts.
The first adjustment would
prevent Kiwis from paying an extra $650m a year in tax based
on today’s estimates.
We can afford that by managing the books prudently and spending wisely.
We will also do more and I’ll continue talking about our plans between now and next year’s election.
When Labour and NZ First took power, they inherited a booming economy with growing surpluses, strong wage growth, reducing inequalities and more kids succeeding in education than ever before.
New Zealanders were coming home.
And yet we’ve just ended the first full year of this Government with weaker GDP, wages struggling to keep up with the rising cost of living and New Zealand families finding it hard to get ahead.
There is a lot of cost, uncertainty and risk.
And worryingly, there is no sense that the Government knows what to do. They certainly don’t have a plan.
I don’t want New Zealand to again become a place of lost opportunities where tens of thousands of Kiwis feel they need to live overseas, away from the country and people they love.
Over the coming year my team and I will let you know exactly what a National Government would do to boost the prosperity and security of New Zealanders in a challenging world.
You will see our plan. Today, I have outlined how tax indexation is part of it, because we know Kiwis should keep more of what they earn to stay on top of the rising cost of living.
Going into the next election, New Zealanders deserve a clear choice. National will provide it.