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Jim Anderton speech to Employers

Jim Anderton MP
Leader of the Alliance

Employers Federation Canterbury Conference

Centra Hotel, Cashel St, Christchurch

Embargo to: 1.30PM Tuesday, 29 June 1999


I’m delighted to have the opportunity to speak to this Employers Federation conference today.

It’s important to correct the impression of the Alliance you might have picked up if you relied on the Employers Federation to give you a fair impression of the political scene.

For a start, I want to make it clear that I’m pro-business.
Managing Director of a multi-million dollar turn-over manufacturing company;
Export sales manager UEB textiles.

I want to say at the outset that I am disappointed that over recent months the Employers Federation head office has turned itself into nothing more than a front for the National Party.

When a lobbying organisation does that, it does its members a disservice.

Let me give you some examples of the Federation’s distortion:

Earlier this month the new Treasurer, Mr English, gave a speech where he said he was investigating the idea of abolishing provisional tax.

The Employers Federation published a press release hailing this visionary and exciting policy.

Actually, the idea of abolishing provision tax is not new. The NewLabour Party came up with it in 1990, and the Alliance has had the policy ever since. Not only that, but when the Alliance raised the idea in parliament, Mr Luxton - one of the favourites of Employers Federation - said the idea was ‘loony.’

I’m yet to see the Employers Federation warmly congratulate our visionary and exciting policy. I’m yet to see them denounce Mr Luxton for calling the idea loony. They only congratulate the National Party for tax ideas. Nothing does more to discredit the Employers Federation than that sort of naked partisanship.

Out of the last twelve press releases which the Employers Federation has sent to my office, ten have been about tax and most of those attacking either Labur or the Alliance.

Now, employers have a legitimate interest in tax - just like everyone else. But where is the pressure on some of the other issues around at the moment:

Over half of all employers have decided not to join one of the new, privatised ACC providers. Where is the Federation attack on the chaos and administrative costs for business that this rushed change has caused?

At almost every business meeting I go to, business people tell me that one of the biggest problems they face is the lack of venture capital. We need access to cash to fund innovative, job-rich industries, particularly high-technology industries in regional areas. I’m yet to see the Employer’s Federation lecture me about the employment benefits of providing venture capital.

I’m sorry to say that if you are paying fees to the Employers Federation you are not getting full value for your money because the Employers Federation has a credibility problem with many of the politicians who may form the next government.

I think that you’re entitled to expect a much fairer picture from your national organisation. For example, the Chambers of Commerce represent many of the same businesses as the Federation. Yet only recently we have seen the Chamber outspoken about the need to review trade policies. It’s impossible to imagine the Employers Federation under its present leadership making comments similarly critical of National Party policy.

Having got that off my chest, I would like to address the four issues you have asked me to speak about today.

Jobs

The Alliance believes that full employment has to be the aim of economic policy.

For the Alliance employment is not just about any old job, mac job, odd job or dead-end job. It means satisfying and socially useful work at an increasing standard of well-being.

New Zealand has clearly failed to produce this for the vast majority of people. The success of the few has been at the expense of the many.

80% of families are now worse off than they were 15 years ago. The top 10% of income earners, who are predominantly male, now take home nearly 37% of all incomes. Whilst the bottom 20% only get 2.5% of total incomes.

This has happened because the distribution of work has become more unequal. A very few people (mostly middle aged pakeha men) work long hours and are paid very well for it.

At the same time, there is now more part-time, broken time and casual work. In the March quarter 1991, there were 292,000 part time workers just under 20% of all (1,464,000) employed workers. Now (March 1999) there are 420,000 part time workers over 24% of the total (1,741,000).

The economy has produced 34,625 new jobs per year over the last 8 years. That is barely enough to ensure that all those entering the workforce have a job.

Since March 1997 only 10,000 new jobs have been created. Unemployment has risen by 15,000 and would have risen more had it not been for the -10,200 net long-term outward migration in the year ended March 1999.

Growth

The reasons for the above failures are easy to find. The New Zealand economy is now far more vulnerable than it used to be. We are more dependent on commodity exports and overseas owned capital than at any time in the past fifty years.

In 1970, a number of countries had US$1 billion to US$1.5 billion worth of export income. Among them were New Zealand, Chile, the Phillipines, Ireland, Taiwan and Singapore. In 1996, we had US$14 billion of exports but Chile had US$15 bil-lion of exports, the Phillipines had US$20 billion, Ireland had US$48 billion, Taiwan US$116 billion and Singapore US$125 billion. We have lost the plot in the world economy.

I am at a loss to understand why the Treasury finds it so difficult to discover why its policies have failed. They never asked me. All they have to do is check what I have been saying for fifteen years against the facts. They will find that most of what I said was right then and it’s still right now.

It is true we are no longer totally dependent on dairy products, sheep and beef and wool. Just very depedent. They are now only 39.8% of total exports. The new exports have also been commodities like forestry products (8.5%), fish (5.1%), aluminium (4.3%), fruit and nuts (4.0%), iron and steel (2.0%) and mineral fuels (2.1%). Hence at least, 65% of all exports are commodities.

This means the economy is constrained by the terms of trade.

We take the prices of our exports from world markets and the prices of our imports are set by producers in the developed world who have monopoly power. Our terms of trade have been falling for forty years.

This in turn means that an inappropriate exchange rate policy does enormous damage to out tradeables sector. The high interest rate-high exchange rate policy of the Government and the Reserve Bank for most of the last ten years has been disastrous for the productive sector of New Zealand.

Our overseas debt is now over 100% of GDP at $101 billion. In addition, we must add all the equity which foreigners own in New Zealand companies. This means we sent $6,934 million overseas in the form of interest, profits and dividends in the last year.

That $7 billion could have been used for almost anything more productive than to line the pockets of overseas creditors.

That indebtedness means we are no longer masters of our own destinies. Most of the really important investment decisions are taken overseas not in New Zealand.

It is no surprise to me to learn that most economists now believe that the last 15 years has seen a slowdown in the rate of productivity growth in New Zealand.

The facts are that we have simply not invested enough in R&D, skills training, technical research and further education to develop the new techniques that will enhance our nation's productive potential. While we have systematically destroyed the life chances of our young people other countries have seized the initiative and invested heavily in their people.

Solutions

We have to stop trying to compete with the lowest common denominator in the world economy. The fact is that we cannot compete on price with countries that use slave labour except by using slave labour ourselves. We cannot compete on price with countries that are destroying their environments and threatening the world's climates unless we do the same only faster. We cannot compete on price with countries which deny the rights of workers and ordinary citizens unless we do the same.

The Alliance, therefore, rejects this Government's approach. We should stop trying to do it on the cheap. We must instead try to do it better than anyone else.

The way to go forward is to mobilise our collective imaginations and energies. We must work cleverer not cheaper. That way we will ensure that we become more productive.

We must encourage the sustainable development of local communities and regional economies.

Moving away from our present dependence on exports of crude commodities gives us the best hope of reaching and maintaining full employment. Slowly and surely, the mobilisation of the renewable resources of the regions by New Zealanders for New Zealanders will transform the New Zealand economy.

Many ideas for new work opportunities go to waste for lack of assistance, expertise or finance. The Alliance will empower local communities to take back their own economic futures:
Housing in Northland
Venture capital for establishing new technology industries in the regions of New Zealand (Scottish Development Agency, Irish Development Agency, European development model)
Pest eradication in our forests and agricultural-horticultural areas.

At the same time, economic policy at a national level must not undermine the progress that can be made through local initiatives.

The Alliance will establish an Economic Development Fund through which it will dispense Government backed loans for employment rich, environmentally sustainable new development projects either communally or privately owned.

Community Commissioners for Jobs will be appointed and co-ordinated by Regional Development Agencies to work flexibly with local communities to find and develop employment opportunities. They will motivate, identify opportunities, provide advice and help in the development of suitable projects.

Local development projects could be proposed and developed by Jobs Commissioners, tribal groups, local authorities, industry groupings or communities.

Only projects which lead towards full employment and are sustainable will be supported.

These will include:
New technology manufacturing;
Tourism;
Added value industries associated with horticulture, agriculture, fishing, forestry;
Improved social service infrastructure - roads, public transport, schools, hospitals, housing and skills training to improve the level of technical ability in the New Zealand workforce.

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