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Helen Clark Address To Labour Party Conference

Rt Hon Helen Clark
Prime Minister


Bruce Mason Centre

2.00 pm

Saturday 1 December 2001

It is hard to believe that a year has passed since we last met as a Labour Party Conference in Wellington.

It is almost as hard to believe that two years have gone by since the last election.

So much has been packed into these last twenty four months in government.

And it needed to be. There was a lot to be done - and there still is a lot to be done.

We came into government to make a difference.

The balance in our country wasn’t right. In the tug of war between market and society, the market had won hands down.

Our society with its history of caring about its members had become a harder, meaner place, with significant numbers of excluded people.

And despite the roller coaster of change our economy had been subjected to, it was failing to maintain our living standards and failing to deliver sustainable growth.

We pledged to begin the process of change which would bring a better balance.

Our pledges were modest because we were determined not to let people down.

We knew the money was tight and that the room for manoeuvre wasn’t great.

We knew we couldn’t change the world over night, but we believed we could make a good start.

I stand before you today proud of what we have been able to achieve, but also knowing there is much more to be done.

I stand before you also believing that we have won the respect of many New Zealanders who want forthright and decent government and who deplore the bankrupt politics of personal attack and denigration.

Ours is a government of substance. And it’s a government which keeps its word.

In every one of those core pledges, we have delivered - and we will keep on delivering.

Those pledges were about the fundamentals of employment, education, health and housing, superannuation, and security.

- We have created more jobs and seen unemployment fall to a thirteen year low.
- We have cut the cost to students of tertiary education, not only by making the loans system fairer, but also by freezing fees for two years running.
- We have cut waiting times for surgery, and restored elected representation to our health boards.
- We have restored superannuitants’ standard of living and set up a ringfenced fund to safeguard New Zealand Super for future generations of retired people.
- We have restored income-related rents for state tenants, who on average pay $33 a week less rent than they did before.
- We have cracked down on burglary with rates for that crime at an eighteen year low last year.
- And we kept our word on taxes. There have been no increases in GST or company tax, and only those earning more than $60,000 a year have paid the foreshadowed extra personal income tax.

By keeping our word, we helped restore a sense of stability to New Zealand politics.

By being predictable, by doing what we said we would, we give people certainty as they plan their lives and make their own decisions.

And by taking a commonsense approach to everything we do, we give people confidence that when the unpredictable happens, this government will respond in a measured way to get the best outcome for New Zealand.

Prior to 11 September, we were well pleased with the trends in the economy.

- Economic growth in the year to June was 3.5 per cent.
- Unemployment at 5.2 per cent was at that thirteen year low.
- The current account deficit at four per cent of GDP was at an eight year low - and falling.
- The trade balance had turned positive in July for the first time in six years.
- Business and consumer confidence was reasonably steady.

Then the actions of suicidal hijackers threw the world into turmoil. The American economy, already slowing down, slowed further. Economic confidence world wide dived. We all wondered what the fallout on our small economy would be.

What we knew was that we entered this period of uncertainty in better shape than many others. As well as those favourable economic indicators, we are also enjoying low inflation, low government debt, and a strong government fiscal position. Our dollar remains exceptionally export friendly. We look set to continue to outperform our key trading partners - although the growth prospects for all nations have been clipped.

Eleven weeks after the tragedy of 11 September, we remain determinedly optimistic. Almost every nation has united behind the international effort against terrorism. This new spirit of international co-operation has had a positive spin off for New Zealand’s trade prospects. The nations represented at the World Trade Organisation’s talks in Qatar knew that launching a new trade round was essential for the international economy. And for the first time, New Zealand and its friends in the agricultural exporting nations were successful in getting the phase out of export subsidies for agriculture on the negotiating table. It is estimated that if New Zealand were to get even half of what it wants at these talks, our GDP could be boosted by four per cent. We stand to make substantial gains.

But New Zealand is going ahead for other reasons too. It has a lot to do with the smart active role our government has adopted. We don’t seek to return to the excesses of hands on which drove the country to financial ruin by the early eighties. But nor do we seek to continue the excesses of hands off which saw government become a mere bystander, unwilling to influence New Zealand’s destiny.

Our government has set out to define a vision and goals for New Zealand and an action plan for reaching them. Increasingly that is a shared vision. There is widespread appreciation of what we can be and a great deal of common ground on how we get there. Our government is getting on with providing the leadership and forming the partnerships which will make it happen.

Our vision is to see New Zealand back in the top half of the OECD economic indicators, as we already are on many social indicators, so that we can provide a quantity and quality of life for all our people which ranks alongside the best in the world.

By international standards we already rank highly for our levels of participation in education and employment and for the proportion of our population with access to the Internet. These are preconditions for economic success in the 21st century.

Now we have to lever off our talented population with its many great ideas to build an economy driven by talent, innovation, and entrepreneurial flair. That economy needs to deliver to all our people. Our government puts a high priority on social inclusion and participation, and on ensuring that the rising tide really does lift all boats. We seek economic growth not as an end in itself, but for the benefits it brings to all our citizens.

We have many strengths as a nation as we go forward together.

- High levels of education and skill count for a lot in today’s world.
- So does sophisticated infrastructure and a high level of interconnection.
- Our government has strong commitments to working in partnership across all sectors to meet the nation’s goals.
- We are a secure and stable place to live in, work in, and invest in - and that counts for a lot in today’s world too
- Then there are New Zealand’s lifestyle advantages.
- We have a wonderful natural environment which lends itself to outstanding recreation and leisure opportunities.
- We are culturally dynamic, drawing from the unique heritage of Maori and all who came after.
- We are a socially inclusive and tolerant society by nature.

By keeping this balance, by working together, we can create a future for New Zealand which sees us as one of the most desirable societies to live in on earth. There are big opportunities for small, smart, nimble, interconnected, and open nations like ours.

So how do we make the most of what we have going for us?

That brings me to the heart of our government’s economic programme, our strategic approach to the future and our style of working.

We are drawing together all those policies which can contribute to building the innovative economy and boosting our capacity for social investment and development.

Those policies span a continuum from investing as much as we can in education and skills; to talent recruitment through immigration; to science and research and the commercialisation of New Zealand innovation; to building a conveyor belt of programmes to support the development of more fast growing, export oriented businesses employing more people; and identifying those areas where external investment could assist our development.

In education, we are moving to lift the numbers in early childhood even further, knowing the overwhelming importance of a good start in those early years.

In schools there’s a renewed focus on the basics of literacy and numeracy, and a quantum leap in initiatives to make information and communications technology available throughout our schools. That’s being speeded up by the willingness of leading companies to partner the government and schools to bring the latest digital technology to our children. It’s heartwarming to see students in remote rural schools being able to complete computer qualifications which make them job ready, or getting specialist curriculum material through the internet.

At the tertiary level we’ve dumped the competitive model which led to the dumbing down of education. Our government wants world class research, more specialisation and more collaboration across institutions, and we will fund the system to achieve that.

In the skills area there are exciting developments. Record numbers are participating in industry training. They were up eleven per cent last year to a total of 81,000 trainees, with support from more than 22,000 employers.

For me, the most encouraging change has been the return of the humble apprenticeship in the form of the new Modern Apprenticeships Programme. In the past apprenticeships were the pathway between school and life long work opportunities. But they fell out of favour with the last government, and the opportunities available for school leavers dried up.

Our new apprenticeship programme aims at the sixteen to twenty one year olds and will have 3,000 young people signed up by the end of next year. It has strong backing from parents and from employers across many industries. It has been a joy, in particular, to meet young people who had been drifting after leaving school but are now signed up for the programme, and are getting the chance to have well paid work in the future. Our country needs skilled people and we can’t afford to waste the talent we’ve got.

But even as we speed up our output of industry trainees and university and polytechnic graduates, we still have a need for skills in the economy which we can’t meet in the short term. That’s where the new immigration policy kicks in. From now on sixty per cent of our migrants will be in the skilled and business categories. We are speeding up the visa processes so that employers can recruit overseas quickly where we have skills shortages. We will leave no stone unturned to see that our economy has the people it needs to move ahead fast.

And moving the economy ahead fast, means taking it up the value chain. We are in transition from low value, commodity dependence, to extracting higher value from everything we do.

New Zealand’s primary industries have always been progressive in their adoption of new production techniques, and the processors have followed suit. Out of the New Zealand dairy industry has come a modern, unified global company, underpinned by decades of scientific research and its flow on for agribusiness, technology, and food processing. We see similar new economy trends across the primary industries. In tourism too, we aim at the top of the market where there is the greatest value for New Zealand.

In the eighties and nineties, New Zealand’s protected and subsidised industries either adapted fast or went out of business. Significant and lingering unemployment was the legacy. But slowly on the razed earth, new third tier internationally competitive industries began to grow.

Today New Zealand is earning growing export revenue from niche manufacturing, information and communications technology, film and television, leisure marine industries, aquaculture, fashion and design, wine, and other new sectors. Education has gone from being almost a zero earner of foreign exchange a decade ago to close to a billion dollar industry today - and it will grow further.

Our challenge now is to speed up the development of high growth, high value sectors which create opportunities for well paid and satisfying work for our people. Smart active government can support that development in a number of ways as we have, as we are, and as we will.

Government’s investment in science and research is critical, and has increased by twelve per cent since the last election. It’s aimed both at greenfields research, and at supporting applied research and development in the private sector. Improved tax treatment for R & D should also lead to greater private sector investment.

But having broadened the base of science and research, the next step is to capture the benefits. Too often in the past, New Zealanders with great ideas have gone off shore to develop their great ventures - and the opportunities have been lost to New Zealand. That’s why we have to support the commercialisation of innovation at home.

What’s being built is a conveyor belt of programmes and opportunities to grow new businesses and sectors.

At its beginning is business incubation - generally attached to tertiary and research institutions. The graduates with the ideas for new businesses can start up their venture in a supportive environment, with links to the staff and services of the institution and to mentoring. From no such incubators two years ago, New Zealand today boasts twelve to eighteen depending on how you count. In Auckland, incubators have sprouted from almost all the major tertiary institutions - Auckland and Massey Universities, the Auckland University of Technology, and Unitec.

New businesses need access to capital, and for young people there’s often no collateral to lend against. There was a gap in the venture capital market which the government has moved to fill. The New Zealand Venture Investment Fund has been formed with a $100 million government contribution to provide seed and start up capital for new businesses in partnership with private sector funders.

From there, a range of possibilities exist, from grants for further research and development, to the programmes of Industry New Zealand to support business growth, to the work of Trade New Zealand to assist the export ready businesses to find markets off shore.

In my view the greatest return to the New Zealand economy will come from the steps we take to unleash the potential of the innovative and entrepreneurial New Zealanders who can turn great ideas into great ventures. Government can act as a catalyst for that development by providing strategic leadership, setting the vision and the goals, and through its partnerships, facilitation, co-ordination, brokerage, and funding, making sure that it happens. Fully engaged, committed, third way government is the way of the 21st century. The indifference displayed in the nineties holds back potential and impedes sustainable high value growth.

In creating our own model of development we’ve looked at many others. But none can be simplistically applied. We can borrow the best of what has been done in Singapore and Korea, Ireland, Finland, and Silicon Valley. But then we must do what works for us.

New targeted foreign investment will be helpful where we have capability and potential and where new entrants will support the growth of even stronger clusters of activity. Greenfields investment rather than acquisition and takeovers will bring the best returns.

Key sectors stand out as attractive for that investment. The biotechnology industry is poised for take off, built on the foundation of many decades of world leading scientific and medical research. We have great strengths in information and communications technology.

The forming of the joint venture by the Swedish company Ericsson with Synergy International is bringing 200 high skilled jobs to New Zealand. That didn’t happen by accident - it happened with government funding of $1.6 million to secure the investment, knowing that our contribution would be repaid many times over by the attraction of a successful business.

For the same reason we have allocated millions of dollars to enable New Zealand to capitalise on the release of the Lord of the Rings trilogy. We have in this country the very latest film production technology to act as a lure for future investment. There are also significant spin offs from Lord of the Rings for our tourism, computer software, and other industries. We are not only the land of Tolken’s Middle Earth in the film, but we are also the incredibly talented, creative people who have made the Lord of the Rings.

The last two years have seen a proliferation of initiatives to speed up business formation and growth from a range of government agencies. The challenge before us now is to bring better co-ordination to what we are doing to get the best results. Setting clear targets for the kind of external investment we want will also be important.

As Prime Minister I’ve found that economic and trade policy absorbs a lot of my time. That shouldn’t be surprising. The Bill Clinton team’s response in 1992 to the question of what the key election issue was: “It’s the economy, stupid”.

But the economy takes on more importance today than ever. New Zealanders know that our economy underperformed for a long time and undermined our living standards. We’ve seen other countries, which lagged behind us, overtake us. Over many years, as a result, many of our best and brightest left. Our government has had a sense of urgency about reversing those trends and we believe they are reversing. We also believe that New Zealanders want to see our country move ahead, and that now with the leadership, the opportunity, and the backing, we are creating a new future together.

What we know is that governments can’t lead effectively by issuing high handed edicts about what has to be done. Government needs to enter partnerships with a wide range of sectors to achieve mutually agreed goals. In modern societies there are many stakeholders and power centres with which government must interact. In turn, we’ve been happy to form working relationships with local government, regions, non-governmental organizations, Maoridom, and with both business and our traditional allies in the labour movement.

We have also set out to correct injustice and give ordinary people a fairer deal. That’s been the driving force in the Labour portfolio. This government has raised minimum wages twice and is bringing in paid parental leave. We have new legislation to make our work places safer. The Employment Relations Act is working well, and accident compensation cover is being improved.

Under Steve Maharey’s leadership social welfare is being reshaped to become an enabling force and not one which traps people in dependency. The new Ministry of Social Development sets out to create opportunities for people to reach their potential by developing their skills for sustainable employment and social participation. That’s a change from the previous approach of looking for make work to keep people busy.

In health when we look behind the headlines we see a raft of strategies and initiatives to improve health status and treatment levels. Mental health services are benefiting from big investment. There are new strategies, goals, and services for primary and public health, palliative care, older people’s health, suicide prevention, Maori health, and for people with disabilities. Our approach is all about improving access and making services better and more responsive.

In state housing, as well as making the rents affordable, we’ve added hundreds of houses to the stock; tackled overcrowding; invested in a major maintenance programme, and provided an extra 155 houses for community organizations providing housing services.

The faster we can grow the economy and the nation’s wealth, the more we will be able to invest in education, health, housing, social services, and infrastructure. We came into government after years of underinvestment across the board. We’ve had to devote scarce resources for catch up spending in neglected core areas like the Children and Young Persons’ Service, the police, courts, prisons, and defence force, while also prioritising economic and social policy. Any party which promises sweeping tax cuts should be asked to spell out just which of these essentials they plan to cut out.

In politics, we have to deal with both the expected and the unexpected. Both can be challenging. We know, for example, that the issues surrounding genetic modification were complex and contentious and that in opposition we simply did not have the resources to support policy development in the area. We also knew that while the extremes of the debate were highly polarised, most people simply lacked the information to form an opinion one way or the other.

For that reason, we established the Royal Commission on Genetic Modification to gather information, analyse it, and make recommendations to government. The Royal Commission’s membership was eminent, led by the former Chief Justice, Sir Thomas Eichelbaum. Their proposals were to adopt a precautionary approach and to preserve opportunities for the future. The government agreed that New Zealand could not afford to turn its back on science, which after all has been the driver of human progress. But we have imposed a further two year constraint period on commercial release of genetically modified organisms, and imposed tough conditions on field research. Public feedback suggests that the Royal Commission and the government got it right. There is a balance to be struck which both maintains the integrity of our environment and ensures that New Zealand does not get left behind.

August and September this year will stand for me as the most challenging of this term in government. We were bowled three balls no team could have planned for: the collapse of Air New Zealand and the asylum seekers and terrorism crises. All required decisive action and all got it.

Faced with the collapse of the national airline, the government had no choice. Air New Zealand’s commercial problems were not of our making, but they became our problem because of the strategic significance of a national airline to a geographically remote nation in whose economy exports and tourism play a vital role. The collapse of Air New Zealand’s air freight services would have had serious repercussions, and no other airline can promote our nation’s tourism the way the national carrier can.

On behalf of the people of New Zealand, the government is now assuming most of the ownership of the airline. Our mandate is to restore its commercial viability as quickly as that can be achieved in these uncertain times. Paradoxically, the terrorism crisis occurring at the same time has seen other governments around the world also rally to the defence of their national carriers. The strategic links airlines provide mean that in certain circumstances the public interest will require intervention in the market.

Prior to late August this year, the affairs of the remote nation of Afghanistan attracted little interest in New Zealand, or indeed anywhere else outside its immediate neighbourhood. Thirty and more years ago Afghanistan stood on the overland route to and from Europe travelled by many young New Zealanders and Australians. But the last twenty years saw Afghanistan in turmoil. A government backed by the Soviet Union took office, and was under constant attack by Afghani opposition forces. Eventually they won, but civil war continued. In the mid-nineties, one of those forces, the Taleban, became dominant, and its repressive rule spread over most of the country. The two decades of fighting and serious droughts created huge refugee problems. Even before 11 September, 3.6 million Afghanis were in refugee camps in Pakistan and Iran, and many more were internally displaced.

In the failed state of Afghanistan itself, Osama Bin Laden and his terrorist network established their headquarters. In both 1999 and 2000 the United Nations Security Council called on the Taleban Government to hand Bin Laden over for trial for his crimes. They refused.

Afghani refugees, numerous as they are, form only a small proportion of the world’s estimated 22.5 million refugees, asylum seekers, and internally displaced people. To that total can be added an infinite number of economic refugees, seeking a better life. Even a tiny fraction of this mass of humanity provides lucrative business opportunities for people smugglers. Their trafficking has put the borders of Europe under pressure, and especially over the past couple of years the pressure has been felt as far away from the world’s trouble spots as Australia. New Zealand receives a trickle of such people by air, but our geographical remoteness to date has prevented mass arrivals by sea.

In late August, one of many boats, with asylum seekers from Afghanistan and elsewhere, attempting the passage from Indonesia to Australia foundered. The Norwegian vessel, the Tampa, diverted from its course to rescue the passengers. At that point, the Australian Government took a stand; it would not allow the illegal migrants to land. The world watched as the Tampa had nowhere to land its human cargo.

That’s when New Zealand got involved, to break the impasse. Notwithstanding our abhorrence of people smuggling, a practical solution had to be found. We offered passage to New Zealand for up to 150 Afghani family members and unaccompanied minors, and undertook to settle permanently all those who qualified as refugees.

As New Zealanders came to know more about why Afghanis were fleeing their homeland, many became sympathetic to their plight. Our decision to admit those desperate people was the right thing to do. But we have also called on other nations to support the United Nations in its work to resettle refugees and provide better support in the world’s refugee camps so that these problems can be dealt with more effectively.

As we were grappling with these issues America experienced unprecedented terrorist attacks, directed by Osama Bin Laden’s network. The world held its breath, not knowing where the network might strike next. People stopped travelling, going out, shopping, and investing. The world economy, which depends on confidence for its health, shuddered.

The significance of the attacks cannot be underestimated. The world’s only superpower was unable to defend itself against co-ordinated attacks which came not from another state but from a multinational network.

Almost all nations in the world condemned the attacks and pledged their support for the international effort against terrorism. New Zealand was in the mainstream. We responded to the United Nations’ call for co-operation. We pledged diplomatic, intelligence, and military support. We are putting in place all the measures the United Nations has asked for to stop financial flows to terrorist organisations. Legislation is before Parliament now, and more will come, to ensure we can ratify all United Nations conventions dealing with terrorism.

The United Nations has not questioned the United States’ right to act in self defence in Afghanistan against terrorism and those who support it - and nor has New Zealand questioned that right. None of us like the consequences of war for innocent people. Few of us believe that military action alone will rid the world of terrorism. Just as we are tough on terrorism, we also need to be tough on the causes of terrorism.

In addressing the causes, we need to focus on the crisis of underdevelopment and the unresolved conflicts which have generated so much bitterness against the Western world. Of course to acknowledge the context does not mean accepting or making any excuse for terrorist action; there can be none. But there can be no doubt that peace between Israel and the Palestinians, a commitment to development and a fairer sharing of the world’s resources, and more humanitarian support for the world’s displaced peoples are the building blocks on which a more settled world might be constructed.

Here in New Zealand we might also reflect on what enables us to maintain our relative harmony as a nation. We are after all descended from many peoples; the first people, Maori, and all who came later.

Some people in this country still curse the Treaty of Waitangi and the efforts governments make to meet their obligations under it. But perhaps in today’s troubled world there will be a growing appreciation here in New Zealand that we as a nation are working through unique processes which enable us to avoid the violence and strife which characterise so many other places.

Those processes see us make commitments to work in partnership with each other. They see our government working overtime in partnership with Maori to support economic, social, and cultural development. They see us supporting Maori doing it their way.

This year I and many other ministers have traveled extensively in Maoridom. We’ve seen what’s happening at the coal face. We’ve seen the dedication to providing quality education and health services, decent housing, and support for kaumatua, kuia, tamariki, and rangatahi. We’ve seen the economic development opportunities, and we’ve backed the new television service and fresh initiatives in te reo. As ministers we’ve sat down with thousands of Maoridom’s movers and shakers to work through how we can best support the remarkable renaissance which is going on.

Our futures are intertwined. As Maori do well, New Zealand does well. We can take pride in each other’s achievements because both produce the best for New Zealand.

In November I led a delegation of government officials, business and education leaders, and Maori to Latin America. The Maori delegation were the most amazing ambassadors for our country. They built links with indigenous peoples in Latin America. They were evidence of what is truly unique about New Zealand. The hongi with the Brazilian President made front page news, and the cartoons, in that country. And when as a group we sang Pokarekare ana at the end of each function, every New Zealander in the room had a tear in their eye. There is something very special about our country and we must treasure and nurture it.

I also want to acknowledge the peoples of the many ethnic communities which make up our nation. In the post 11 September environment it is more important than ever that we uphold our standards of tolerance and respect for people of all backgrounds, religions and creeds. Let New Zealand be a model of how people from many cultures can live together. I acknowledge in particular our bonds with the peoples of the Pacific, and the capacity building initiatives which are succeeding in their communities in New Zealand.

In concluding today I have thanks to offer to many people who have contributed to the success of our government.

I want to thank Jim Anderton and his team for the contribution they have made. It hasn’t always been easy. MMP contributes to the representation of small parties in Parliament, but does not make it easy for them in government.

I also thank Jeanette Fitzsimons and her team for the support they have given us. We are different parties and we don’t see eye to eye on every issue, but we have been able to work in good faith with each other.

I thank my ministerial and parliamentary colleagues for their unstinting support, solidarity, and sheer hard work for this government. I thank in particular our deputy leader Michael Cullen for his capacity to grasp and define the most complex issues, carry an exceptionally heavy ministerial workload, be Leader of the House, and be almost always good humoured!

And last but not least, I thank the New Zealand Labour Party and our voters for their continuing confidence in our ability to do a good job for New Zealand. With your support, we will continue to deliver on our pledges, and build the strong, fair, and balanced nation which we joined the Labour Party to advance.


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