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PM Speech - Opportunities for New Zealand’s Future

Rt Hon Helen Clark
Prime Minister

Address at Waitakere Business Club Breakfast Forum

“Opportunities for New Zealand’s Future : Realising Youth Potential”

Trusts Stadium
Waitakere City
8.00 am

Wednesday 30 January 2008

Thank you to Waitakere Enterprise for the invitation to speak to you today.

I stand before you early in my ninth year as Prime Minister, proud of what has been achieved on my watch, and looking forward to the challenges which lie ahead.

In my speech today I have a major announcement to make about realising the potential of young New Zealanders to contribute to our economy and society. That’s critical for building on the considerable progress our country’s made in recent years.

Our government does take pride in :
• leading the economy through its longest run of economic growth since the Second World War,
• building an economy now a third larger than when we were elected in 1999,
• the creation of 360,000 more jobs in the economy,
• the drop in benefit numbers by almost 140,000,
• the creation of greater security in retirement through setting a higher rate of New Zealand Superannuation, and establishing the New Zealand Superannuation Fund, and Kiwi Saver.

And who wouldn’t be proud of providing the huge family tax relief available through Working for Families, or the major investments in education, health, policing, and infrastructure ?

These are but some of the many achievements which Labour in government is proud to be associated with.

Successful leadership and government is about establishing a vision for what might be, and then taking the many steps forward which will make that vision a reality.

It’s about setting in motion a programme of change which meets our people’s aspirations for a better life – and a sustainably better life at that.

It’s about saying what you’ll do and getting on with delivery of your promises, as Labour has a strong reputation for doing.

If the public don’t know what politicians stand for and what their real agenda is, then the public stands to feel deeply betrayed when the truth comes out.

That was the politics of deception of the 1980s and ‘90s – the politics New Zealand banished eight years ago.

In its place our country got a Labour-led government committed to strengthening the economy, sharing the dividend from growth across the community, and lifting our nation’s pride and confidence.

A lot’s changed for the better around New Zealand in the past eight years – and that process of change has to continue to deliver better living standards for all our people in a highly competitive world. We can’t stand still.

Without doubt our economy is now more resilient, and that’s critical when there’s global market volatility of the type experienced this year. This is not a time for gambling with our country’s future.

Growth will slow a little this year, but is still expected to stay above two per cent. That used to be as good as it got.

The economy is expected to return to its trend rate of three per cent growth next year.

At this time of international turbulence :

• employment remains very strong, with employers experiencing skills shortages,
• unemployment is forecast to stay low,
• business confidence remains reasonably positive on investment and staffing intentions,
• there is continuing strong growth in Asia which gives support to our commodity prices,
• in the global credit crunch, the structure of the New Zealand banking system has meant New Zealand has not been as exposed as some countries. Banks in New Zealand and Australia are judged to have been more conservative in their approach, although a number of non bank deposit takers have been affected, with adverse effects for people’s savings.
• the government is in a sound fiscal position which gives us room for manoeuvre if required.

Overall, while there is clearly global uncertainty, there is no sensible prediction of the “R” scenario here – that is no more than the silent prayer of the Opposition !

So, where from here in our quest to provide more opportunity, more security and to build even more pride in this unique nation which I’m proud to call home ?

For me the key concept is sustainability. What we build has to be solid and substantial – not a flash in the pan – and it has to endure.

That applies across the four pillars of sustainability – the economic and environmental, and the social and cultural – and they’re all reinforcing.

Environmental Sustainability

New Zealand is increasingly recognised for its willingness to front the environmental sustainability challenge.

This year we are the host country for World Environment Day, in partnership with the United Nations Environment Programme.

The theme is “kicking the carbon habit” – and there is a real sense of urgency about it.

Those who thought the concern about climate change was a hoax look progressively sillier as the consensus around the science and seriousness of the projections becomes rock solid.

In New Zealand, we have to act on climate change :

• because we want a world fit for our children and grandchildren to live in
• because we believe in being proactively part of the international solution – not a reluctant follower, and
• because it’s in our economic interests to do so.

I’ve said many times that we must be sustainable to be prosperous.

The world’s affluent consumers across developed and emerging markets will increasingly be making ethical choices about the goods and services they buy – and not least about their food and their travel.

Those two sectors on their own make up a substantial part of our foreign exchange earnings.

So we must be on the side of the “angels”.

The good news is that the New Zealand clean and green brand is strong, and that with government, business, and community action we can secure our future as a prosperous and sustainable nation.

This year we are giving priority to the emissions trading scheme legislation, implementation of the Energy Efficiency and Conservation Strategy, and the rewrite of the Transport Strategy, with a focus on sustainability.

Getting the environmental balance right is critical to securing the quantity and quality of life on our remote islands.

But on its own, it’s not enough.

In government we must be active on many other fronts.

Economic and Social Sustainability

The truth is that New Zealand is still paying the price of past years of economic failure and harsh social policy.

Broken families and shattered lives were the product of long term, intergenerational high unemployment and deprivation. We see the results in family, youth, and other violence in the community. While crime rates overall go down, violent offending goes up. Today’s young violent criminals are the children of the “Mother of All Budgets” in 1991.

A magic wand can’t wave that away – but by giving everyone a chance to succeed and supporting the economy’s potential to grow, we can over time make a big difference.

On the economic front, we’ve taken big and bold action and there’s more to come.

We anticipate more growth and investment from last year’s major business tax package, not least from the stimulus to business R & D.

A high value economy is driven by innovation. Government plans to be unveiled this year will see our commitment to innovation stepped up significantly.

There’s huge investment going into public infrastructure across energy and transport – into power transmission and generation, and into roading, rail, and public transport overall.

Here in Auckland the openings of new transport initiatives are coming thick and fast – with next weekend seeing the celebration of the completion of the North Shore busway.

And watch for an important announcement soon about progress on the Waterview Connection – a critical part of the Western Ring Route.

Infrastructure in the 21st century includes broadband – and the faster and cheaper it is, the better for our economic development.

We’ve brought in blockbuster legislation to encourage telco competition.

We’re close to finalising Telecom’s undertakings on operational separation and commitments on infrastructure investment.

But more needs to be done on broadband.

We are encouraging private sector initiative – and looking at how government should best exercise its leadership role. We are updating the New Zealand Digital Strategy with stakeholder input. More policy announcements will be made this year.

An outward looking economy like ours needs good market access – which is why so much of our government’s time is spent on trade policy.

The biggest gains come from successful WTO rounds. The Uruguay Round delivered big gains for New Zealand, and the Doha one has the potential to do more. But progress is slow.

So we are making our luck negotiating with others – especially in Asia and the Gulf.

I hope soon to be able to report progress with China – the most ambitious negotiation we’ve been engaged in to date.

21st century infrastructure, telecommunications, innovation, a favourable business tax regime and investment, opening up markets, and a commitment to sustainability are all part of our package of change which is strengthening the economy and underpinning higher living standards.

But there’s another critical ingredient – the direct contribution of our people through their knowledge and skills.

And realising the full potential of our people is not only good for the economy – it’s transformational for our society too.

More educational success equates to greater well being at every level.

Less failure in education can contribute to even lower benefit numbers and lower crime rates.

Investment in education is an indispensable part of building a sustainable New Zealand – and Labour’s record in education is strong.

Some highlights :

• We’ve extended the principle of free education to the early childhood years – with around 85 per cent of our three and four year old children covered by the 20 Hours Free policy.
• And 95 per cent of our children now participate in early childhood education.
• We’ve provided more than 5,000 extra teachers above those needed for roll growth, and this year we take big steps towards the 1:15 teacher-pupil ratio for new entrants.
• We’ve supported our tertiary students with interest free loans and by capping fees – and we will make more announcements about student support in the course of this year.
• We’ve doubled the numbers in industry training, and our Modern Apprentices Scheme for young people has been a runaway success.
• By September last year, almost 14,500 had enrolled as Modern Apprentices, well ahead of the target of 14,000 by the end of 2008. Close to 4,000 had completed their qualification by last September.

Realising Youth Potential

All this bodes well for New Zealand, but it’s time to do more to realise the full potential of our young people.

We need to identify obstacles to their development earlier.

We need to lift the participation and achievement levels of our teenagers in education and training.

Currently around 71 per cent stay at school until their seventeenth birthday – but that means 29 per cent don’t.

Around sixty per cent of our students leave school with at least an NCEA Level Two qualification – but forty per cent don’t.

Around half our current workforce does not have the education and skills needed to function fully in a knowledge economy.

In a time of near full employment, those without qualifications can still find work. But a low skills base stops us growing the value of the economy and lifting our living standards to their full potential.

The announcements I am making today are about the next steps the Labour Government will take to realise the potential of our young people.

We are building on the already massive extra investment in education and training at all levels since 1999.

Early Intervention

• Next week the Minister of Health and I will be launching the new B4 School Health Checks – aimed at all four to five year olds. This is a big programme based on the simple philosophy that healthy children are the most likely to succeed at school. This programme has been trialled with positive results. It will be implemented over the next two years, and its full annual funding will run at around $9 million.

• These pre-school checks will also aim to identify early the estimated five per cent of children who have conduct disorder and/or severe antisocial behaviour.

The truth is that these children without early intervention can go on to cause considerable distress to society. Among them will be some of the next generation of violent criminals if we don’t act.

But early intervention can be highly effective in boosting both their life chances, and saving the rest of us a lot of misery from crime in the future – and the cost of their imprisonment.

Lifting the age of participation in school or other forms of education to 18

The government acknowledges the importance of lifting the level of both participation and achievement in education and training.

The policy I am announcing today is for all young people to be in school or some other form of education or of training until they reach the age of eighteen.

In this day and age, boosting teenage participation in formal education is much more complex than simply lifting the school leaving age. Yet the work of the Secondary Futures project strongly suggests that we can design and resource our schools so that they are able to retain a higher proportion of students.

Already there are exciting initiatives in our schools which aim to engage young people’s interest in education and skills training for longer.

But the schools and the formal education system cannot be expected to achieve the higher levels of participation sought on their own.

Partnerships are needed with employers, tertiary educators, and private training providers and communities, to ensure that a range of options to meet student needs is available.

The Gateway programme being rolled out across all high schools is an example of the flexibility we have been building into the school curriculum. It works because employers and schools work together in the best interests of young people.

Gateway provides senior school students with opportunities to learn in the workplaces as well as the school room. It gives students a better understanding of the connections between the skills required in a workplace and the education they get in school.

This year we are piloting an extension of that programme. In ten secondary schools, students can enrol in Youth Apprenticeship programmes. This takes the Gateway concept a step further, giving structure to a course of study which could lead a student into a Modern Apprenticeship.

These Youth Apprenticeships will also offer the young people involved the prospect of paid employment in work placements during school breaks and the ability to earn credits towards their apprenticeship while still at school.

As part of our policy to have all young people engaged in education or other structured learning until the age of eighteen, we will ensure that the Youth Apprenticeship Scheme is rolled out across all secondary schools by the end of 2011. It is designed to be available from Year 9, as even at that point some students are not relating well to more conventional curricula.

The government is charging the Ministry of Education with responsibility for the plan of action which will implement the new policy overall, with the objective of achieving the new goal for participation in education until the age of eighteen within the next Parliamentary term.

A detailed timetable will be developed with clear milestones after consultation with stakeholders

That plan will address :
• the need to invest in professional development to ensure that secondary teachers have the skills they need to engage with and provide this sort of advice and teaching to their students
• raising the expectations of achievement throughout the community, and especially supporting the Maori Learning as Maori and the Pasifika Education plans to improve engagement and achievement in both these communities where levels are particularly low
• broadening the range of enrolment options in senior secondary school
• providing clear pathways and quality careers advice within schools to ensure that young people know the sorts of options open to them and that the training programmes they are enrolled in fit well with what they want to do in life
• establishing clear links with iwi, business, and industry to open up relevant opportunities for young people to learn.
• how to ensure that achievement levels are increased along with the variety of programmes
• what legislative changes if any will be necessary
• how progress will be monitored and reported

The full year costs of providing for education in school or in other forms of structured learning until the age of eighteen is estimated to be around $170 million.

Young people are unlikely to achieve well in the workplaces of the future if they do not achieve at least a Level 2 qualification. Reducing the proportion of young people who reach eighteen years of age without achieving that, will be a key objective.

Upskilling the existing workforce

Eighty per cent of the people who are going to be in the workforce in 2020 are already in work, so it’s important to be addressing the skills levels of the existing workforce as well of those still to join it.

To that end the Minister for Tertiary Education is making an important announcement today about the establishment of a Unified Skills Strategy. All the players - government, Business New Zealand, and the Council of Trade Unions - have committed to working together to implement a skills strategy across the economy.

This strategy will focus on the retention of skills in the workplace, and on better ways of measuring and valuing skills, and identifying the demands for skills and how to increase supply. While the strategy will apply across the entire workforce, there is a particular strand of work in the programme which ensures that young people who are already in work are a primary target.

In today’s speech, I’ve focused on education and skills, and other key inputs into building economic, social, and environmental sustainability.

There are many other policies for change I’ll be highlighting in the coming months – from a programme of personal tax cuts to relieve pressure on household budgets, to new initiatives in health, for affordable housing, and for victims’ rights.

I’ll also be promoting:

• how our independent and principled foreign policy contributes to international peace, development, and the sustainability of life on our planet
• the role of our creative people in expressing what is unique and special about New Zealand
• the role of historical Treaty settlements, engagement with Maori, and inclusion of all ethnicities and faiths in building a cohesive New Zealand
• our pride in the success of New Zealanders in all fields, from business and community, to education, public service, sports, and the arts.

All these elements contribute to us being a successful and sustainable nation.

One thing I can assure you of above all : with Labour you know where you stand.

Our mission in government, our agenda, and our policies are all transparent.

There are no hidden agendas.

We go into this election year with both experienced leadership and new blood in our Cabinet and on the way into Parliament.

Yes, we start from behind, but we also start with a reputation for tackling the hard issues and getting results.

We get these results by working co-operatively with other parties in a complex multi-party environment.

Under proportional representation Italy has had sixty governments since the end of World War Two. In New Zealand the Fifth Labour Government is in its ninth year.

We provide stable and strong government.

We work for all, not the few.

We are in this to serve the public.

In this country the people choose.

There is no natural party of government, and no right to rule.

Winning elections is about being believable, having a strong record, and presenting the most compelling and forward looking vision for our country. And that’s what I’m focused on this year as we work to build the best possible future for New Zealand.


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