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A Better Vision for New Zealand - Newman Speech

A Better Vision for New Zealand

Friday, September 21 2001
Dr Muriel Newman Speeches -- Governance & Constitution


I don't think that any of us in our wildest dreams or worst nightmares could have imagined the events of last week. The image of civilian aircraft being used as weapons to destroy icons of trade and defence, paralysing the world's leading free democracy, is something none of us will ever forget.

The destruction of the World Trade Centre in New York, my home town for three years, and the Pentagon in Washington, came at a huge human cost ' over 6000 civilian lives lost. This compares with 2400 predominantly military casualties at Pearl Harbour and 1500 during the D Day invasion. But those acts of aggression have also rocked the foundation of commerce, both within the United States and world-wide.

The US has been a major engine of economic growth over recent years. With the Asian tigers still recovering from the Asian crisis, Japan in recession, Britain and, to some extent, Europe still hurting from the affects of foot and mouth disease and the global downturn, the US has remained a beacon of wealth creation. But the threat of ongoing terrorism has struck deeply. It has profoundly injured confidence within that great nation and around the world.

The full extent of how much investor and consumer confidence has been undermined, is as yet unknown. The early affects on capital markets and consumer spending have brought about a widespread lowering of interest rates by central banks. The airline industry is in trouble. The short-term future of tourism looks bleak.

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Globalisation has ensured a terrorist attack on one nation has reverberated around the globe. We are all affected.

As British Prime Minister Tony Blair said: the terrorist attack was not just an attack on America, it was an attack on freedom, on democracy, on the values that our forefathers fought for; It was an attack on all of us.

It seems to me that at times such as this, it is wise to pause and ponder. We need to take time out from our busy lives, to think about where we are at as individuals, and where we are going as a nation. Just as the adults in our lives used to ask us when we were children "what do you want to do when you grow up?" So it is now the right time to ask ourselves "what sort of a country do we want our children to grow up in? What sort of a nation do we want to become?"

To answer that question, we need to take a step back and reflect. What is absolutely certain is that we can no longer call ourselves "Fortress New Zealand". We have moved on. Despite increasingly violent protests and demonstrations against free trade and globalisation, they are here, and they are here to stay. Those who protest against them ' and that includes Members in our own parliament ' should pack their bags and go back home.

As an island nation that depends on global trade, New Zealand must continue to strengthen its commitment to commerce. Our livelihoods depend on it. Jobs, growth and prosperity depend on our entrepreneurs. They are the people who risk their resources and capital to undertake commercial activity. They fight to eliminate waste and inefficiency, in order to maximise productivity and service. Their goal is to give consumers what they want and need.

On a daily basis, these merchants and traders conquer the challenges thrown at them by a world of more than two hundred countries: hundreds of languages, currencies, regulatory and legal regimes, and thousands of cultural peculiarities. They face seemingly impossible challenges to facilitate peaceful commercial exchanges with billions of consumers, in order to improve our everyday lives.

No government could possibly accomplish anything this remarkable. That is why, as we look to the future, we must defend the market economy at every opportunity, and protect it from the encroachment of government.

Competition and choice as forces that drive innovation, quality and service must be preserved and promoted. There needs to be a national commitment to eliminate barriers and constraints to productivity and growth ' lower taxes, less regulation, a reduction in compliance costs, a flexible labour market.

These important issues are at the heart of where we want to be as a nation. For, all of us know someone who has left New Zealand to look for better opportunity abroad. Some may be our own family members. There may even be people in this audience tonight who are toying with the idea of leaving.

The reality is that Kiwis are going overseas because New Zealand is no longer a prosperous country. Our wages are too low. We are no longer seen as a land of milk and honey, in the way that my family, living on the wrong side of the railway tracks in Britain, saw this country back in the 1950s.

Our poor economic performance over the past 40 years has caused our living standards to slide. From being on par with Ireland and Singapore in 1990 and only slightly behind Australia, we have been eclipsed by most other western countries. Australia is now 40% ahead of us.

If we continue in this way, there is nothing surer than the fact that our children will grow up in a third world nation. I suspect that none of us are happy with that thought.

We need our government to follow the lead of nations that are doing well. Last year the Chief secretary for Administration in Hong Kong was here in New Zealand, sharing her country's formula for economic success and prosperity. It included a commitment to free and open markets, a level playing field for all that do business, and low taxes ' corporate at 16% and personal tax a maximum of 15%.

A former acting Prime Minister of Russia visiting New Zealand shortly after, explained how his country was introducing a company and personal taxation rate of 12.5% in order to create incentives for investment, jobs and growth. They were committed to a rising standard of living for their citizens.

As concerns grow about the possibility of a widespread economic downturn, triggered by the terrorist attacks in the US, a tax cut would be a sensible move. It would stimulate our economy and help to cushion New Zealand from international pressures. It would further help to put our country back on a path that would lead to a more prosperous future for our children.

Low taxes have been a key driver of success in Ireland, taking a country that was an OECD basketcase to a leading nation.

Low taxes drove the strategy used by the Governor of Ontario, Canada, Mike Harris, as he sought to raise living standards in his state. His programme of lowering taxes and reducing the red tape and bureaucracy that overburdened small business created incentives for investment and growth. His welfare reform programme helped thousands of beneficiaries to break out of the dependency trap and get a better life.

The Governor of Wisconsin, Tommy Thompson who is now in charge of social services in President Bush's Cabinet used the same formula ' tax cuts, the slashing of business compliance costs and welfare reform ' to transform a state overburdened with a dependency culture, to one that is so vibrant and successful that it is attracting back home, those who had left.

As concerns grow about the possibility of a widespread economic downturn, triggered by the terrorist attacks in the US, a tax cut, as suggested by these case studies, would surely be a sensible move.

On the back of the recent half a percentage point drop in interest rates by the reserve Bank, a tax cut would stimulate our economy and help to cushion New Zealand from negative international pressure and affects.

It would also have the added benefit of putting our country on a track that would lead in the long term to a more prosperous future for our children.

As I wrote this speech, the Evening Post headlines read "Warplanes on the move ' US orders strike force to the Gulf". I am reminded that our children will soon be the only generation of New Zealanders in modern history who will not have the protection of an airforce with an air strike capability.

Word has it that once it was known that each of the four civilian aircraft in the US had been taken over by terrorists on kamikaze missions, the airforce would have been given orders to shoot them down. At the present time, New Zealand still has that capability. Next year we will not.

The Prime Minister has decided that our country does not need a strike airforce. The reason, she said is that New Zealand doesn't have any enemies. The events of last week have shown us all just how wrong she is. Terrorism is the enemy of all free democracies. Terrorism is everywhere and nowhere. Terrorists come in any form; their weapons are unconventional ' from civilian aircraft, to chemical and germ warfare, to nuclear bombs in suitcases.

That is why New Zealand needs a balanced defence force ' an army, navy and an airforce with a strike capability. That is why we need to strengthen our intelligence gathering, because intelligence is a nation's first defence against terrorism. That is why New Zealand needs to reconnect ourselves to ANZUS -' we are still legally a member of ANZUS, although we have not been active since the Labour Government alienated the US in 1986.

It is now time to rebuild our alliance with the United States and Australia. In order to strengthen defence capabilities in our region, we need to stand shoulder to shoulder with both Australia and the United States.

But to go back to my original challenge of how we can make NZ a really good place in which to raise our children. There is much that we can do on our own. I touched on an important initiative earlier ' effective welfare reform. If we as a nation had a goal of eliminating entrenched intergenerational welfare dependency, not only would the children in those welfare families have a better future, but all children would benefit as well. Successful welfare reform programmes in the United States in particular, have now shown that a reduction in long term welfare dependency leads to a drop in crime and violence, child abuse, teenage pregnancy and youth suicide, alcohol and drug dependency, educational failure, and family breakdown. It leads to improved health and an alleviation of poverty.

New Zealand presently has 400,000 adults dependent on welfare, with a further one child in three living in a benefit-led family. Liberating these families from the limiting and demoralising trap of welfare will create an extraordinary boost to this country. Because welfare reform empowers.

It releases that inborn human drive which we all have to improve life for ourselves our families our communities and deed our country. And it is the energy of tens of thousands of people all striving to achieve their goals and aspirations that makes a country buzz. Welfare reform would have a profound impact on the future wellbeing of our society and of our children.

All of this brings me to the conclusion. That there is a better vision for New Zealand. We can become a leading nation ' a great place to earn a living and raise a family, and a desirable place for kiwis overseas to return to. We can become a country of prosperity that encourages enterprise and endeavour, and celebrates success; a nation that upholds the rule of law, protects private property rights and promotes freedom, choice and personal responsibility.

Lifting our future prospects is entirely within our grasp. All we need is the energy commitment and the determination. It can be done.

I want to finish with this thought ' if an atrocious act of terrorism has been the catalyst that leads us and other free democracies to reach out and better ourselves, instead of being fearful, debilitated and demoralised, then that is a defeat for terrorism and a victory for freedom and democracy, and we should all be proud.

For more information visit ACT online at or contact the ACT Parliamentary Office at

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