Prebble Speech To Employers Federation
SPEECH TO EMPLOYERS' FEDERATION ANNUAL CONFERENCE LEADERS
The Plaza International Wellington 11.15am Wednesday 25th August 1999
Embargoed until delivery
HON. RICHARD PREBBLE, MP LEADER OF ACT NEW ZEALAND
The Most Reliable Friend Of Business
As MP for Wellington Central can I welcome you to the electorate and say how appropriate it is that the first leaders' debate of the 1999 election is taking place in the country's most intelligent electorate.
Hopefully that's an indication to voters to make an intelligent choice - because as voters that's what we have to do.
I want to start by saying that in the last 12 months I have heard more despair about our nation's future than any time I can recall. I meet business people who tell me that New Zealand has no future. The reasons vary - we are too small, or internet commerce will wipe us out, or the line Labour is peddling - agriculture is dragging us down.
I then ask - how is your business? Answer: It's OK - could be better, but it's not me I am talking about, they explain.
Well, let me explain. The Department of Statistics does not make up its figures. The economy is growing. New jobs have increased every year. I have enormous confidence in this country's future. There is no reason why New Zealand cannot be one of the economic successes of the 21st Century.
All the politicians are talking of the knowledge revolution and just because they have made it a cliché, does not mean it's not true. It is transforming our lives and our businesses.
This city has moved into it faster than any other in New Zealand - our high education standards have given us the edge. The internet and instant communications are overcoming our traditional trade barrier - of distance.
Economically, the world is in a golden moment - the USA, one of our biggest trading partners, is in the longest economic boom ever recorded in human history. The Australian economy is growing even faster, the UK is booming and there are signs that Japan and Korea are coming out of their recession.
Here at home let's have some facts. Mr Peters wants us to forget he was our Treasurer for two of the last three years. Under him our credit rating was lowered. He blew a record surplus. He lost more than 14,000 jobs. When he became Treasurer, unemployment was below 6% and falling; within 18 months it was 7.3% and rising. Australia, even more exposed to Asia than New Zealand, rode out the Asian meltdown. Mr Peters put us right in it.
Firing Winston was Jenny's best decision. On the day Mr Peters was fired, ANZ house mortgage interest rates were 9.5%; today they are 6.5%. The economy is growing again, and all the forecasts are for more growth. What Mr Peters' 18 months proves is that government does make a difference.
In an open economy in a global market, the 'tax-spend-and-regulate' policies of Labour, the Alliance and New Zealand First do enormous damage very quickly.
ACT, as our enemies in other forums delight to point out, is the pro business party. ACT pleads guilty. ACT's eight MPs point out every day in Parliament that it's the private sector that creates jobs and wealth, not the government.
It's government's task to set the framework so that business can grow and create jobs and prosperity. Prosperity comes from an open economy, low taxes, minimum regulation and honest and stable government.
ACT in Parliament has led the fight against red tape, bureaucracy and unnecessary regulation.
The average medium-sized company, according to a survey done by the Employers' Association, fills in each year 168 different government forms. I recently met a constituent, or should I say a former constituent, who advised me that last year he moved his very successful company from Wellington Central to Bradford in the North of England.
He came to see me to tell me why. "I got yet another form asking me ridiculous questions and I decided - that's it.
"Now in England I can trade with the whole of Europe with a third of the red tape needed just to do business in Wellington."
ACT has proposed a Regulatory Review Act to examine the cost/benefit of all new laws. Over the 1990's alone some 5200 new laws and regulations affecting just business have been passed. Hong Kong has just 1000 in total.
In all presentations like this party leaders say "My party's policies are best and the other parties' policies are bad".
This year the New Zealand Manufacturers' Federation wrote to each party with a series of questions concerning parties' policies on issues of vital importance to manufacturing. Most of these issues are of vital importance to business.
The manufacturers wrote asking for the parties' policies on taxation, the Fiscal Responsibility Act, the Employment Contracts Act, ACC, Reserve Bank policy and local body rates.
I think you will agree that these are all important issues and it would take me more than my allotted time to go through ACT's policies and compare them with the choices you have this year.
Instead let me tell you that the Manufacturers' Federation took ACT's policies and the other parties' and sent them to a representative sample of manufacturers to see which political party had the best policies for promoting the growth of manufacturing, the economy and jobs.
The New Zealand Manufacturers' Federation survey was released this week and finds the ACT Party have the best policies for manufacturing. As all manufacturers are employers I think its fair to conclude that any business group who studied all the parties' policies would reach a similar conclusion.
The report said business tax was the most important issue of all and noted that "Only ACT has offered a clear table for reducing business tax."
The survey concluded that the ACT Party had the best policies for manufacturers and given the questions, I believe it's fair for me to claim that ACT has the best policies for business.
In fairness I must report that National also received a favourable, but not as favourable as ACT, rating.
The country should note that the nation's manufacturers gave an unfavourable response to the policies of Labour and the Alliance. The country's manufacturers do not welcome Dr Michael Cullen's and Mr Jim Anderton's offer to tell them where they should invest and how.
No sensible business wants government picking winners. What politicians who pick winners do not say is that you cannot pick winners without also picking losers.
Labour and the Alliance, by saying they are going to give favourable tax treatment, loans and grants to so-called knowledge-intensive industries, are also saying that if your company is not one of these industries, you not only won't qualify, but you will be paying for this government largesse.
I am appalled at Labour's decision to actively campaign against the country's primary industries. Here's an example from a recent press release on commerce, where Michael Cullen blames agriculture for our indifferent economic performance - it has "taken our standard of living down", he says, and "we need to break New Zealand's over-reliance" on agriculture.
To listen to Michael Cullen you would be forgiven for thinking that the country's farmers are somehow responsible for the nation's poor performance. Winston Peters' reckless spend-up apparently had nothing to do with it.
Unfortunately National has been also engaging in this sort of tripe and anti farmer bashing. How else do you explain our Treasurer's recent reported comment that "what's in our heads matters more than what's in our paddocks".
Of course what's in our heads is important - no-one disputes it. But why belittle the paddock? It's still the source of our wealth. Both National and Labour know that farming is going through a knowledge revolution - why else do they think we have a debate about genetically modified food?
Here in Wellington Central where I imagine I have no farmers in the audience, I remind you that farming earned over half of our export dollars last year. It is absurd for the other parties to suggest that knowledge industries cannot grow unless farming is somehow constrained.
ACT says that we actually need both knowledge industries and farming. The problem that you as employers face with red tape, government compliance costs, local body regulations and rates also face the farmers. The ACT Party therefore carries the same message of less government and regulation in the city and countryside.
Let me mention three policy areas where ACT holds a different view from the other parties.
ACT says the Waitangi Treaty process has gone off the rails. When the Tribunal says that the electromagnetic spectrum is a Maori taonga and Maori must be given a portion, the Treaty process has become a grievance industry. It's affecting business. Mobile calls are expensive because there is not enough spectrum.
A business in Kelburn wanting a driveway had to get an expert to say no Maori spiritual values were involved - another cost.
ACT says yes, there are some genuine grievances but let's have a timetable, a cut off date for new claims, and all claims must be full, fair and final.
Only ACT is raising the issue that welfare is out of control. One adult in three - or one voter in three - is on state assistance. It affects business because it's the reason New Zealand has the highest taxes in the Pacific Rim.
The answer is to require those who can work to work, and to help them to become work-ready. It will cost more to require teenage mothers to finish their schooling, but over time it will save money. Social welfare has become a hammock, a way of life - we must restore it to its original purpose, to be a safety net that bounces people back into society.
In election year all the parties discover law and order. Crime is now a huge cost to business. You are more likely to be burgled in New Zealand than in the United States. You will be most likely burgled by a criminal that Parliament let out of jail early.
The police estimate that 50,000 of the 80,000 burglaries last year were done by just 200 professional burglars. Those professional burglars get arrested repeatedly and sent to jail repeatedly - but under a law passed by Labour and National, they get out after only a third of their sentence.
My Truth in Sentencing Bill, will require offenders to serve at least 80% of their sentence and that will make your businesses safer, because - except for the Wanganui jail where the prisoners have been breaking out each night, doing burglaries and returning - it's a little hard to do a burglary while in prison.
You should also examine the policies of the Opposition.
Labour would have you believe that they have no policy, just a harmless credit card. There are two policies, not on the credit card, that will ruin business - Labour's industrial relations policy and Labour's plan to nationalise ACC without compensation.
Labour's industrial relations policy will destroy the Employment Contracts Act. That Act has been a great success. In 1990 New Zealand, proportionally, had the worst strike record in the OECD; last year we had one of the best.
Labour, with its trade union allies, have proposed three subtle changes.
First, only trade unions will be able to negotiate a collective contract.
Second, only union members will be covered by the collective contract - and you will have to join the union to join the contract.
And third, it will be legal to strike to get a multi-employer agreement.
These three changes will restore a system of national agreements and compulsory unionism by the back door.
Let me illustrate. Let's say Ansett pilots are striking over a new roster - the country won't be totally grounded because Air New Zealand is still flying.
However under Labour's proposals, the country's pilots will have one multi-employer agreement. Air New Zealand pilots will be going out on strike over an Ansett roster, and the country will be totally grounded.
Moreover small business will be forced to use the national agreement or be boycotted. And Labour will remove the ban on strikes by essential services.
The footnote says dependent contractors will be covered by union agreements. No more owner drivers. No more independent contractors.
The present law does need amending - it is ludicrous that the Employment Tribunal awards thousands of dollars to bogus, wrongful dismissal cases. And the Holidays Act needs reform. But we do not need a return to compulsory unionism.
Labour's proposals for ACC reform are radical socialism.
95% of all business have taken the opportunity to contract for ACC cover with the private sector, often at significant savings. Labour's policy is to re nationalise ACC with no compensation. The cost will be hundreds of millions that employers will pay.
But it's worse. Labour will reintroduce lump sums - not $10,000 but $100,000. Parliament stopped lump sums because it's contrary to public morality that injured drink drivers get lump sum compensation, and it leads to fraud.
It gets worse. Labour says it will extend ACC to sickness. An open ended sickness scheme will lead to abuse and a cost blow-out. Many firms today report a medical miracle - 90% of workers are sick for the exact number of sickness leave days available.
My mother was a registered nurse. She had five sons and was hard to fool. On those days when I had a test for which I had not studied and I felt ill, my mother would say, as she cheerfully sent me to school,
"Remember Richard, 90% of the world's work is done by those who do not feel particularly well".
Labour's proposal will ruin business.
I have not even mentioned the Alliance - because you have not yet had lunch.
The choices at this year's election are greater and more serious than any election I can remember.
I urge you to
give ACT one of your votes - as the most reliable friend
of business that you have.