James Shaw's Commencement Debate Speech
Commencement Debate Speech
James Shaw – 9th February 2016
E te Māngai o te Whare, tēnā koe.
(Mr Speaker, greetings to you.)
Ki a koutou ōku hoa Pāremata, huri noa i te Whare, ngā mihi o te tau hou ki a koutou katoa.
(To all of you my Parliamentary friends, across the House, happy New Year.)
Today, I want to talk about leadership and I want to start by talking about a subject that many National MPs will become very familiar with next year.
I want to talk about retirement.
One of the big challenges the Government has promised they’re not going to fix is superannuation.
Most of the people in this room know the numbers.
In the next few decades our population will age and retire. Our tax revenues will go down because there will be fewer people working. Our healthcare costs will go up.
And our superannuation commitments will double to $25 billion a year by 2028.
We know that the Prime Minister is very relaxed about all of this.
Nowadays he’s so relaxed I wonder if he’s got a special dispensation from the Associate Health Minister.
Former Finance Minister Michael Cullen was not so relaxed.
That’s why he set up the Superannuation Fund — to meet the cost of retirement for the current generation of New Zealanders.
Almost the first thing that this Government did when they took power was to suspend contributions to this fund.
The Finance Minister, Bill English, said at the time that this was a prudent, sensible thing to do in the face of the Global Financial Crisis.
And we all know about the Finance Minister’s values and his background. That he comes from a farming family.
That he learned his frugal values as a young man growing up in the vast, desolate landscapes and the cruel, frozen winters of the New Zealand Treasury.
It’s a shame he didn’t learn back then that the bottom of a crash, when assets are undervalued, is the best time a fund like the Super Fund can possibly invest.
The Super Fund has estimated that his decision to suspend payments to the Fund has already cost New Zealanders $18 billion.
Mister Speaker, this is one of the most expensive blunders anyone in the history of New Zealand has ever made.
This is the Party that congratulates itself for being good at business. Good at managing the economy. Sensible. Prudent.
So what did they do instead, these sensible, prudent people? What did he do instead of paying into the Super Fund — a fund to provide for all New Zealanders?
They gave us the great tax switch which has cost billions of dollars.
And they’re still making the same mistake.
They’re putting aside funds to deliver more tax cuts next year because it's an election year.
The extent of National’s economic vision is to stay in power.
This economic mismanagement also extends to housing.
National knew years ago that there was a looming housing crisis, but for a small group of property investors this crisis is a boom.
Their properties are earning hundreds-of-thousands of dollars a year through the mere fact of their existence.
But now, many New Zealanders are locked out of the housing market.
This isn’t just a problem for people who can’t afford a decent house.
It’s also, as the Reserve Bank has been pointing out again and again, a serious risk to stability.
It’s a risk to the whole economy, to the wellbeing of the country and everyone in it.
And over the years National has pretended they have solutions.
They insist it’s a supply side problem but then they confuse their loathing of the Resource Management Act with an actual solution.
They insist it’s not a demand side problem, but then implement demand-side policies copied from this side of the House, albeit in such a watered down way they make no difference.
By choosing not to fix the crisis, they’ve allowed those with large property portfolios to profit while burdening the rest of us with spiralling house prices and an unstable economy.
It’s a bait and switch this Government loves to play.
They’re playing it right now with the TPPA.
The story the Government tells us about the TPPA is that the deal is good for New Zealand.
We can all relax. It’s all upside and no downside.
But everyone in this room knows that trade negotiations don’t work like that. It’s a compromise.
There are gains and losses. Winners and losers.
National didn’t get the deal it wanted on dairy access to the US. They said they’d walk away if they didn’t get it. They didn’t get it and they didn’t walk. They caved.
But I see from the US elimination schedule that New Zealand did win a tariff reduction on boneless meat products. And so Tim Groser is off to Washington.
What this Government needs to do is acknowledge the reality.
Stop telling us that it’s good for all New Zealanders and start being honest about who gains and who loses.
Because, as usual with this National Government, most of the gains, most of the profits, are privatised and most of the costs are socialised.
Exporters get lower tariffs, which is a good thing. Taxpayers pay more for our health care, which is not.
We’ve been hearing for years that this is a great deal. We can see it now. It’s just not that great.
I already know what the Government’s answer to that is.
They’ll say that this deal is good for exporters, and that means it’s good for all of us.
But that’s not entirely true. The stuff we export is mostly raw commodities and milk powder — industries which, right now, come with a huge environmental cost.
And they don’t pay for it.
The rest of us do, with beaches and rivers we can’t swim in. The loss of native species. Clean up costs paid for with tax money.
And we’re not even that much of a trading nation. Compared with other countries our size, our exports per capita are low.
What we are, really, under National, is a gigantic property market. With the most unaffordable houses in the world.
Our economy is based on sourcing overseas debt to buy and sell our own properties back and forth to each other at ever inflating prices.
Or we sell them to investors from countries that are awash with cheap credit and hot money, which few Kiwis can compete with.
We have $821 billion dollars invested in the housing market while our exports bring in less than a tenth of that in revenue every year.
And under National, that ratio is getting worse.
The more National talks about openness and free trade and congratulates New Zealand on being a trading nation the more insular our economy becomes.
Yes, we’re the most remote developed country in the world.
Yes, we should be a trading nation – one that sells high value exports to the world.
Not a giant property bubble that ships mostly milk and logs.
But the way we get there is to fix the internal imbalances in the New Zealand economy.
Fix the tax system, which is broken by design.
Fix our environmental laws so that polluters pay the real cost of their damage to the environment.
Shift the incentives towards business that creates high value products and jobs instead of property speculation.
Create an economy and a trading system that is designed around the well-being of the people and the environment.
The second thing I want to say about the TPPA is that this Government is hugely committed to it. It’s been a focus of our diplomatic service for many years.
In a list of this Government’s great achievements it ranks somewhere between playing golf with Obama and the panda that we still don’t have.
What do we get out of the TPPA in economic terms? No one can say for sure, yet. Some studies estimate that it’ll cost thousands of jobs in return for a tiny increase in exports.
MFAT are far more optimistic. They predict an extra 0.9 percent of GDP growth by 2030. And that’s a couple of billion dollars a year.
Over time that adds up to real money, right? And that’s why the Government is so committed to this trade deal.
Something we know the Government is not committed to, is addressing climate change.
Because they think that’s going to happen way off in the distant future. If at all.
It’s like the Super Fund or the housing market. Someone else’s problem.
But climate change has been happening for many years.
The world is already warmer. New Zealand’s weather has already altered. We’re now living in the climate changed future National thinks will never happen.
And that has actual economic costs that are going up year by year.
In 2013 and 2014 the combined costs of droughts, floods and insurance pay-outs was between $1.2 billion and $2 billion per year —1 percent of GDP.
That cost to the economy has increased a hundred-fold since the early 1990s.
It’s still going up, in line with the level of greenhouse gasses in our atmosphere, and the same rise in costs from droughts and storms and floods and fires is happening all over the world.
So the gains which National hopes to win from the TPPA in fifteen years are already being wiped out by the economic damage of climate change. Today.
By the time we get to 2030 any wins from the TPPA are going to be rounding errors compared to the costs of adapting to climate change.
And yet National is doing nothing about it.
We’re not transitioning to a low carbon economy. Our emissions are still soaring.
We could be world leaders, in the new, high-value, clean-tech, low-carbon economy.
Instead, these guys treat our atmosphere – the air that we breathe – like an open sewer in which they dump two hundred and twenty thousand tonnes of gaseous waste every day.
Much of it sourced from this very room.
We’re still mining coal. We’re still desperately trying to get multinationals to drill for oil in our seabed even though there is no future for oil.
In December, I attended the historic COP21 accords in Paris as part of the New Zealand delegation.
New Zealand signed a commitment to limit global warming to less than two degrees. It was an historic event.
But unlike the TPPA, the Paris Agreement is non-binding.
Apparently it’s more important to safeguard the rights and profits of big multi-national companies than it is to safeguard the air of the planet we live on.
And the day after the Paris Agreement was passed, our Prime Minister announced that nothing would change. It would be business as usual.
We’ll keep on polluting and keep on drilling.
What should he do? What would a real government do? What does the next government have to do?
Lead. Actually lead.
We have regions that depend on fossil fuels for their local economy. The National Government should be starting the conversation with those regions now about how to lead the transition to a stronger, more resilient economy.
The longer they delay the harder it's going to be. The greater the damage to businesses and communities and families and lives.
We need to stop developing farm-land in drought prone areas. We need to stop property developments in flood basins. These are huge challenges with huge costs.
It has to happen. The only question is whether we start now, while it’s cheaper and easier, or later with more cost and more pain.
By choosing to do nothing this Government has chosen the high cost, high pain option.
The Growth Mirage
So we have big problems in the future. But we have economic growth now, right?
That’s what we hear from the Prime Minister and the Finance Minister and the Economic Development Minister.
That last year we had one of the highest rates of growth in the OECD. They mentioned it a few times, every minute.
The Honourable Steven Joyce is in charge of growth. He’s personally committed to growing the economy by repeatedly restructuring his own Ministry to boost GDP.
By the year 2025, one in three working New Zealanders will be management consultants in MBIE.
To be honest that last statistic isn’t true. It’s the least frightening statistic I’ll give today and it’s the only one I made up.
National is very proud of its management of the economy and it’s delivery of economic growth.
But they shouldn’t be.
Because when you look at what’s creating that growth, it pretty much comes down to our record high levels of immigration, which is also driving the Auckland housing crisis.
If we look at GDP growth over the last seven years of this National Government and take out population growth, and the Christchurch rebuild, then the growth vanishes.
It’s close to zero. Seven years and the real economy has gone nowhere.
All this Government’s talk about growing the economy, focusing on the economy.
The Business Growth Agenda. All those hand-outs and bail-outs. All those sweetheart deals.
South Canterbury Finance. The Saudi eco-farm. Warner Brothers. Rio Tinto. Sky City. Serco.
I tried to list them all but I ran out of room on my whiteboard.
Take away the effect of immigration and the Christchurch rebuild all that adds up close to zero.
National has delivered nothing. And time is running out.
The superannuation shortfall is getting larger. Our climate is getting warmer.
This Government is into its eighth year. They’ve collected five hundred and ten billion dollars in tax. They’ve spent five hundred and fifty-five billion.
And they have nothing to show for it. No real economic development. No ideas. And nothing to say except that everything is always Labour’s fault.
Next year, their own nine long years in government are going to be up.
And the next government, a progressive government, is going to accept responsibility and show leadership.
We’ll address the problems this Government ignores. We’ll fix what they’ve broken and we’ll provide leadership for a smarter, fairer, cleaner, future.
Mr Speaker, I started out today talking about retirement.
I’ve only been in Parliament 18 months or so. So hopefully, my own retirement is still some way off.
In those 18 months, I’ve noticed that it’s very easy to fool yourself that all the talking and shouting and meetings and press releases and speeches make a difference in the real world.
I once worked on a microfinance project in the Andes. It was high desert country and one of the farmers I worked with said to me one day, “Don’t try and cross the desert by walking in circles.”
I think that’s the mistake this Government has made. They’re lost in the desert of the real.
They’re leading us in circles and telling us how far we’ve come.
When I do retire and I look back on my time here serving as a Green MP, I know that we won’t have achieved everything I want us to.
Because politics is hard. And change is hard.
But I do want to say that we tried. That we confronted the greatest challenges of our time and we tried to solve them.
That we were brave enough to lead, not just follow the focus groups.
Because it’s better to try, and if we fail, to learn from our mistakes and to try again, than to do nothing.
Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.