Pete Hodgson MP for Dunedin North 4 October 2011

Pete Hodgson – Valedictory

I first arrived here in 1990. But before then I worked for the Labour Party. Jim Anderton, who speaks next, hired me in 1980 when I was nearly 30. I’m now 61. Politics has been my life for all that time.

Nearly all that time. For 2 or 3 years in the early eighties we lived in Britain. Anne wanted a British midwifery training. The kids went to school. I went out to fundraise as the local veterinarian.

We lived atop the Durham coal field. The veterinary practice included pit villages, and when Margaret Thatcher and Arthur Scargill engaged in mortal combat it was the little people, and of course their pets, that got it in the neck. I saw grinding poverty amongst plenty. I tried to join the British Labour Party. They said they were full.

Back home David Lange had become Prime Minister and in 1985 I was appointed the Party’s marginal seats organiser.

In the ‘87 election Labour’s vote went down but the number of Labour MPs went up. We had perfected the art of putting almost all the Party’s resources into just 15% of the seats. Voters in the other 85% were of no interest. It was a great tactical victory.

But it meant that I have voted against first past the post ever since, and will again next month. First Past the Post and its look alike, supplementary member, reduce the value of most people’s votes. Under MMP all votes are equal.

The irony was that the 1987 victory exposed our deep divide. It cast the Labour Party into the role of opposition to the Labour Government. I was assigned to David Lange’s office to do the numbers, endlessly. Then the Party itself split asunder and I had to ask every member in Sydenham to choose one path or another.

I read my 1990 maiden speech recently. It had two clear threads – an abhorrence of poverty and a commitment to sustainability.

Those two threads persist: I cannot bear the unfairness of poverty, and its sheer wastefulness. And I am still gripped by the maxim I used back then: we do not inherit the earth from our ancestors; we borrow it from our children.

Some people who were in the gallery then are back, today, supporting me still but also coming to claim me. Anne is here. She is a good part of my decision to leave politics. Anne has lived many adventures of her own meantime, but she is ready for the next phase of her life and I’ve been invited along.

Remarkably Mum and Dad are here too, down from Whangarei where I was born and raised, still supporting me. Sister Vicki and Trev are here, cousin Grant and Liz, and lots of family, are here. One of our sons Tristan is here – the other is in Australia running his adventure tourism business. Tristan’s wife Amanda is at home, looking after Cooper, their first child, our first grandchild and Mum and Dad’s first great grandchild. The wee fella turns two weeks old tomorrow.

About 15 years ago two young black men from a francophone nation in West Africa washed up on our shores at Port Chalmers as stowaways. After two days of negotiation I dug them off the ship. They had run for their lives.

It was pretty high profile at the time, national telly and all that. John Banks, the noisiest shock jock of all, more or less declared an invasion.

They lived with us for several years. Anne mothered them. They learned English, they studied, they became friends, became Kiwis then became family. Each has produced a daughter since and each daughter is a delight. One of them, Gloria, is in the gallery. She is nearly three and a half and she brought her Mum Marie-Paule with her.

I’m not sure whether I’m the first veterinarian in this House or just the first for a while. But while in opposition I was materially involved in the passage of new and badly needed animal welfare legislation. The details of how that happened no longer matter, except that I had good advice and good luck and am grateful to all who helped. It is coming up for review now, as it should.

I have just one insight to humbly offer. It is that the architecture of the legislation and the development of codes is its strength.

Issues keep changing. Today it’s the egg industry. Yesterday it was sow crates. Tomorrow it will be heli-hunting. But, through the continuous development of codes, the legislation will keep up.

The nine years in Cabinet were rippers. We racked up huge hours. I thought I was privileged. I’m sure today’s Ministers do too.

We were incredibly well led. We knew what we wanted to do. Our years in opposition had not been wasted. And we had regained unity: Helen forged it and it persists today as part of her enduring legacy.

Something else is an enduring legacy of that government. Each year we paid down the government’s debt till there wasn’t any left, and each year unemployment fell until it was the lowest in the western world, except some months when South Korea was lower.

So when the global economic crisis came we had no public debt and the shortest dole queue in the world. Not a bad starting point for a new government.

Even more so when one recalls the endless pressure to cut taxes that we were under during that time. For nine years this chamber rang with the baying of the tax cutters. When we finally did cut taxes in late 2008 it was the beginning of a vital economic stimulus that, had we listened in earlier years, we would not have been as able to afford.

All in all I held 14 portfolios and several associateships as well. I don’t know of anyone else to have held as many, but then again I haven’t particularly looked.

Of course there is no time to dwell on them, or even list them. Statistics was tiny; health was not. Science was exciting; commerce was less so. Transport is full of characters but fisheries even more so. I inherited a mess from Max Bradford in energy; and, being the last to touch science, tertiary education and economic development on this side, I hope no-one across the way thinks they inherited a mess from me.

In all of those portfolios a lot got done. I was an activist Minister. I was and am a restless person. The government was a restless government. We were criticised sometimes for having too many strategies to implement. I say better too many than too few.

Valedictories are supposed to be about the past, but my head lives mostly in the future. So let me give one portfolio, climate change, a bit more attention, because the world’s response has barely begun. There are 3 key problems. The first is the global addiction to cheap oil. It is an astonishing fuel but they are not making it any more. The second is that climate change is the only area of politics where, when the proof of the need to act finally arrives, the ability to act will have long since gone. The third is that we do not have governance structures that are equal to the task. Disturbingly we may even have discovered the limits of nation state democracies as an idea.

In New Zealand we have an opportunity and obligation to contribute to agricultural greenhouse gas mitigation because we can, and because success increases agricultural productivity. I commend the current government’s commitment to continuing and expanding that science and I wish all involved success and patience in equal measure.

Of course one way to reduce CO2 emissions is to run out of cheap oil. Inevitably we will. That requires a public policy response. Sure, the market will play its part – when a tank of petrol costs $300 not $100, behaviour will change.

But the market alone cannot deliver. Governments need to help. Most governments have started. We have stopped. Fuel efficiency standards scrapped, the biofuels sales obligation scrapped, curtailed sustainability measures in general – indeed the very word has been scrubbed off documents in a frenzied cleansing of the lexicon. This is unfortunate expensive behaviour. I spoke with a New Zealand biofuels company recently which is pulling out of here and investing instead in Thailand and the US. We need to be smarter than that.

Which leads me to sustainable development in general. I view it as a uniting idea, capable of creating wealth, creating ecological room, creating economic diversification and resonating strongly with the Kiwi ethos.

Certainly cows and tourism, alone, are not a future, precisely because those activities are not scaleable. There are now three dairy cows for every one that existed when I was in rural practice. If three cows are not a limit, four will be, or eight or some such number. Tourism is similarly not scaleable in New Zealand; the Galapagos effect will see to that at some point.

I define sustainability very simply. If we can’t do it forever then sooner than later we can’t do it at all.

Mining national parks is a case in point. So is an energy strategy based on offshore oil and gas production. So is getting rid of public debt by selling public assets. These are all things that can be done but once. They are unsustainable by definition.

Sustainable development is very strongly associated with technology. But also with design, with intellectual property, and sometimes with new business models.

Whether it is applied to a further advance in some primary product, or whether it is headed in the direction of clean energy, or the creative sector, or weightless exports or whatever, sustainable development demands high skills.

So it is a hi-tech, hi-skill future.

Here is another observation. There is a strong association between private sector R & D investment, and exporting. An association is not a cause, and not all exporters research. But nearly all research intensive companies export. Look more closely and those same companies are likely to be developing sustainably. And usually very quickly.

So, policies such as cancelling the R & D tax credit make no sense to me. The government said they couldn’t afford it. Fair enough. But the very next year they lowered company tax from 30c to 28c, which cost even more.

We must pay more attention to those firms that owe their existence, not to local domestic demand, but to some technology or some clever entrepreneur or both. Their sand pit is global not local. They usually export, they usually grow quickly, they usually pay high wages. They are the game changers. Not all firms are equal.

But sustainable development does not address the rich-poor gap. It is growing inexorably around the developed world, for many reasons. One is the tension between global salaries and local wages. More than one labour market is at play.

I think our approach to poverty has just started to change. It has always been a social justice issue – poverty is unfair on the poor. I think it is now being viewed also as an issue of social dysfunction – poverty is bad for everyone. There are strong links between the rich-poor gap and many social ills – teenage pregnancy, obesity, violence – you name it. Research, including New Zealand research, is beginning to unravel the detail.

Addressing poverty matters. I think we have underused the minimum wage as a tool. We were the first nation in the world to regulate a minimum wage, back in 1894. Since then it has variously risen above two-thirds the average wage and fallen below the depths of irrelevancy. Currently it is a bit below half the average wage.

If we are to reap the benefits of a relatively flexible labour market, we should also provide a bunch of civilised minima that endure. In New Zealand the debate is usually framed around the idea that raising the minimum wage will throw the low paid out of work altogether. Many crocodile tears are shed at that altar.

But research suggests the opposite – that raising the minimum wage can stimulate local economies and reduce unemployment, though only slightly. The current chair of the Council of Economic Advisors to the US Presidency, Professor Alan Krueger, is one such researcher. He is a mainstream empirical researcher, dealing in the practical, not the theoretical.

I appreciate this House is some distance away from doing for the low paid what we have already done for superannuitants - establishing an agreed floor But I will leave folk with the idea anyway.

The time has come to say thank you. To Alicia, Michael, Ellie, David, Karen, Pene, Eric, to Margaret, Les, Fiona, Don and to Natalie. What a wonderful mix of talent and commitment.

When we left government in ’08 Keith Mason, my SPS for most of those years, drew up a list of over 80 people who had worked in my office. Many are here. Thank you all of you.

And if I think of the very many chief executives and senior officials with whom I’ve worked the numbers just become much, much bigger. So I shall just say that amongst them are some of the finest New Zealanders I have met. For all that the public service has driven me to distraction and despair, the public service has also filled me with uncomplicated respect.

Thanks to those who work in this complex. Or who arrive at midnight to clean it. People who do their job well, then somehow manage a little more than that. You’re great.

Thanks to my colleagues from across the political divide for your comradeship and engagement and wit in the non-adversarial parts of this job, be that around the select committee table or around the world.

Over recent months many people in Dunedin have stopped to thank me for my efforts on their behalf over the years. All of them have it the wrong way around. Representing Dunedin North has been a privilege, pure and simple. It is an astonishing electorate on more ways than can be described.

The Dunedin North Labour Party is one of the best organisations in the land It has hundreds of clever, argumentative, wonderful people. It has depth, it has breadth and it has fun. It is also a magnet for talent. I hope you see what I mean should David Clark take his seat in the chamber in a few weeks.

Here’s a story to finish with – Long ago I was attacking a piece of rough ground next door with a big self-propelling rotary hoe. Instead of selecting reverse gear, I dropped it into top. It went over the bank and down about 3 or 4 metres to the stream bed. I went with it.

I don’t know how, but I got to the stream bed first. I am sure of this because I very clearly remember the rotary hoe arriving soon after. Remarkably I was not badly hurt. I reached up, turned the machine off and collected my wits.

On the opposite bank a fine old bloke, Jimmy Hannah, appeared above me. He had a way with words:

‘Are you OK Pete?’ ‘Yeah, I think so’ ‘Good oh. I was just saying to her indoors “By jeez, I hope that’s not a by-election”.

Mr Speaker that event did not end my political career, but this event does.

It has been a hell of a ride.

Thanks for having me. I’ll see you around!

Authorised by Pete Hodgson, MP, Parliament Buildings, Wellington

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