News

Grey Power: This is about your grandchildren

ACT Leader David Seymour is disappointed to read of Grey Power’s opposition to addressing the sustainability of NZ Super.

"In a press release, Grey Power president Terry King claimed that my call for a referendum process akin to the flag committee was ‘a cheap publicity stunt at the expense of retired people’," said Mr Seymour.

“Supporting a referendum on age isn’t about changing the system for current retirees. It’s about signposting a clear plan to ensure the system is sustainable as the population ages and people retire in the decades to come.

“While adjustment of the system is probably inevitable, it is important to have this discussion now so that we can avoid a sharp shock in future, and give younger generations the time to make plans around changes in legislation.

“This issue has long been a political football. It is too hot an issue for politicians to handle. My idea is to take it away from politicians of any particular party – including ACT.

“A referendum could help break the logjam of pension politics and allow the country to finally deal with a serious problem.

“I have a simple message for Grey Power: this is not about current retirees. This is about your grandchildren, and the New Zealand we leave behind for them.”

Attached is a longer newsletter from Mr Seymour on this subject.

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Newsletter - Grey Power.pdf42.55 KB

Free Press 2/03/2015

Only Businessman
Robin Grieve, an orchardist and health and safety consultant, is the only Northland by-election candidate who’s supporting himself in the private sector. “A council bureaucrat, a career politician, a district councillor, and a self-employed businessman walk into a bar…”

Breathtakingly Short-sighted
National isn’t taking advice on the tough issues.  Last Wednesday in Parliament a National back bencher was asking Hon Anne Tolley soft pedal questions so she could hold forth on the generosity of national super.  Ms Tolley was revelling until ACT Leader David Seymour asked: had she seen any Treasury reports on the scheme’s sustainability? No.  The Minister for Social Development, the biggest spender in the Government, had not read a vital Treasury report. 

The Answer
The Treasury’s Long-term Fiscal Outlook predicts the cost of NZ Super will rise from 4.4 per cent of all economic output today, to 7.9 per cent by 2060.  Small beer?  It is the compounding effect that should worry taxpayers.  The government’s on track to be indebted by 198 per cent of GDP by then.  Even the Dom Post is (reluctantly) endorsing ACT’s plan (more on this later).

Not Giving Up
Making Superannuation sustainable is too important to ignore. David Seymour has written to all parliamentary leaders asking them to support ACT’s initiative of having a public consultation and referendum on Super.  They should all be on board. Today’s swing voters may  appreciate Prime Minister John Key’s pledge to maintain the status quo, but historians will not be so kind.  Labour want to help, but dropped their policy of raising the age after losing the election.  Hon Peter Dunne wants to explore variable rates for people who take Super earlier or later.  The Maori party know, or should know, that the Maori population are younger and it is young Maori taxpayers who are in the gun if things don’t change.  The Greens are always talking about sustainability, what about fiscal sustainability? We still hope to appeal to Winston Peters’ affinity for referenda.

Credit Where It’s Due
The NBR is crediting the Taxpayers’ Union with blowing the lid off corporate welfare. Normally think-tank like organisations do lead debate on such issues, but the party of ideas raised the issue months before the T.U. We also remain the ones who can influence it in parliament.  The original and best call for ending corporate welfare is here: http://www.act.org.nz/files/AlternativeACTBudget_v3_0.pdf

Breathtaking Resignation Letter
After 13 years heading the Intergovernmental Panel on Climate Change, Rajura Pachauri has resigned saying his work was not only as a ‘mission’ but as ‘his religion, his dharma.’  We like missions and religious freedom as much as the next person, but shouldn’t the IPCC be a place of science? For the record, Free Press subscribes to Matt Riddley’s ‘luke warmer’ school of thought on climate change, which goes like this: “we started with an open mind but the hockey stick, climate-gate, and flat 21st century temperatures all made us a tad sceptical.  The problem is real but it’s the size that matters and it’s nowhere near as bad as the alarmists make out.”

No Case for Fireplace Bans
Speaking of science. Last week we were briefed by the Parliamentary Commissioner for the environment.  She is respectable on most environmental issues. As it turns out levels of PM25, very small particles that cause the most health damage, are not problematic in Auckland. There is no health case for banning fires on a narrow isthmus where 40 per cent of PM25 is salt. It probably won’t make much difference but we’ll ask anyway: what was Auckland Council thinking?

Military training assistance to Iraq
David Seymour spoke in parliament in favour of playing our part in Iraq.  You can watch his speech here or read it here. We think of the Kiwi effort as a tiny contribution to nation building, the sort of thing the so-called progressive left used to support – and obviously will again, when they return to power. So Labour is playing this for the politics, which is shameful.

Imitating Churchill?
The PM was in full-on Churchill mode in supporting Iraqi nation building. Unfortunately he has gone all Neville Chamberlain on ensuring a viable long-term structure for NZ Super.  The NZ First Leader, with the advantage of his first name, probably wins on Churchillian style but his substance was cut-and-run Chamberlin too.  What would the WWII generation think of that?

Dom Post Love In
A sure sign of ACT’s revival is the love-hate attention paid to us by the increasingly erratic  Dominion Post. Two editorials, several letters to the editor, a cartoon, and half a dozen news stories on ACT last week alone.  Even when they agree with us the tone is teenage snark, but the times, they are-a-changing. 

The Winterless North
ACT’s good keen man in Northland is already campaigning.  At the Northland Field Days this weekend he was well received by those worried that National is forgetting Northland.  He’s giving a month of his time and needs your support for billboards, letters, and advertising.  You can donate to Robin’s campaign here: www.act.org.nz/donate

Deployment of troops to Iraq

Delivered by ACT Leader David Seymour on February 24, 2015.
Video is available here.

On Sunday night I was at a barbeque in my electorate and an 8-year-old girl asked me what the Government is doing in or about the situation in Iraq. Her mother later came up to me and she said she could not believe that such a young person would be so concerned, or even so knowledgable, about such an issue. I reflected to her that actually I was 8 in 1991, and some of the first images I recall from that time were Patriot missiles knocking down, Scud missiles, Stormin’ Norman” Schwarzkopf, Desert Storm, tanks rolling across the desert, and so on.

I raise this, for the benefit of other members, because these issues are visceral; they run deep. We are intuitively aware of them, even at a very young age. They raise dilemmas that are timeless, as we have heard from a variety of different members. I want to run through a kind of paraphrase of exactly what I told the 8-year-old girl.

The most important question is: how do we respond to bullies? There are two broad answers, both of which have been given in different ways by previous speakers. One is that you give some humanitarian aid, try to do some reconstruction, and hope that the bullies will be nice to you. The other is that you actually take aggressive action against the bullies.

As I said to her at the time, unfortunately this is a case where we are facing a genuine evil that is fluid and dynamic. It is futile to hope that they will be nice to us because it is our very liberal values that offend them. What we must do is stand up to them.

But it leads to another dilemma, which is: what can an external force intervening into what is an impossibly complex situation in the Middle East—as it has been, as we have been told, for several millennia—achieve by way of bringing about peace? I have to say that I have considerable scepticism about what intervention in such a theatre can achieve. I only wish that some of my colleagues around the House could apply the same scepticism when it comes to intervening in a domestic economy, but I digress.

Nevertheless, we have another dilemma and another consideration to consider. That is: how does a small nation, militarily, demographically, economically insignificant in the context of global affairs, ensure the best possible safety and freedom for its own citizens? Again we have a dilemma. We can either hope for a rules-based world and for the rule of law to be extended from the few fragile Western democracies—I think it was nine from the member across the House - that have been able to sustain this for a period of time, and perhaps one day that will come.

But the alternative is that we can think back to what the Athenians told the Milesians in the Peloponnesian War several millennia ago: it is a sad truth, which is echoed down the ages, that right and wrong, so far as the world goes, is a matter in question only between equals. It is with no great pleasure that I remind the House that the course of most global affairs is that the strong have done what they have been able, and the weak have suffered as they have had to.

So in this world it is indeed important that a small nation considers collective security and our relationship with our allies. Even if I may be sceptical about how much good can be done intervening in such a theatre, we have to take seriously the fact that so many countries, including all of our closest allies, are committed to intervening and standing up to the bullies in this theatre.

With all of that in mind, I believe that the Prime Minister’s position as stated this afternoon is the correct one. Our armed forces are first class. Their role as trainers will have the minimum perverse impact on the situation into which they go. If there is an armed force that has the sense of diplomatic intervention to actually make a peaceful difference in such a theatre, then I firmly believe it is ours. Those troops go with the blessing of this Parliament for their safety and against all of the challenges that they will face. Thank you. 

A simple question for Mr Peters: Where do you live?

"Winston Peters has set a new record, being economical with the truth only hours into his campaign," claims Northland ACT candidate Robin Grieve.
 
Mr Peters is announcing he will stand in his home electorate. The electoral law is very clear about what makes a candidate's electorate a place of residence:
 
72 Rules for determining place of residence within New Zealand
(1) Subject to the provisions of this section, the place where a person resides within New Zealand at any material time or during any material period shall be determined for the purposes of this Act by reference to the facts of the case.
(2) For the purposes of this Act, a person can reside in one place only.
(3) A person resides at the place where that person chooses to make his or her home by reason of family or personal relations, or for other domestic or personal reasons.
 
"How will Mr Peters get out of this?" asks Grieve.
 
"Clause 1 tells us we must look at the facts, so:
 
"Will he deny clause 2 and tell the people of Northland that he can be in two places at once?
 
"Will he deny clause 3 and deny he makes his home in St Mary's Bay?
 
"Or will he apologise for having mislead the public within hours of his announcement?"

 

Northland doesn't need yesterday's man

"It's great that Winston Peters is finally taking an interest in Northland. But frankly we don’t need yesterday’s ideas from yesterday’s men in our region," ACT Northland candidate Robin Grieve said today.

"Peters has been rejected by Hunua and ousted from Tauranga - why would Northland now offer him a seat? His interest in the region has only just cropped up - New Zealand First did not even bother to stand a candidate in the general election just five months ago."

Grieve, an avocado orchardist at Poroti, has lived and made a living in the Northland Region most of his adult life.

"I eat and breathe Northland, I know the region, and I know what needs to be done. We need an MP who is dedicated to unlocking the potential of the region's physical resources and supporting infrastructure investment beyond Auckland.

"The last thing we need is a career politician parachuting in and trying to run a dirty campaign to increase his own profile.

"If he's serious he should sell his home in St Mary's Bay, Auckland, and move north. I would be happy to show him around our beautiful region."

Exclusive Economic Zone and Continental Shelf Amendment Bill

Delivered by ACT Leader David Seymour on February 26, 2015.
Video is available here.

A former long-serving and very honourable member of this House has counselled me to stay for the full debate and listen to what other members have to say so that you can actually join into the debate and contribute to it, rather than showing up, reading a speech, and leaving. I am mindful that if I was to respond to everything that I have just heard properly, I would completely run out of time before I got to make any points of my own. But I have to say: what a bizarre contribution from Gareth Hughes.

He told us that this is not just a technical amendment, despite it being only 6 pages; it is actually a bending and breaking of the law. Well, let us just be clear about what this bill does. It says that Shell Todd Oil Services can continue doing what it was already able to do before new legislation and regulation was introduced. It will still have this new legislation and regulation and its full effects applied to it. However, it will be given more time so that it does not come to be in contravention of these news laws and regulations. So, if anything, what we are seeing is additional regulation of the offshore oil industry. I cannot believe that the Green Party would be against that.

He then complained that the Government frequently bends the rule of law, for example, to help people doing oil exploration who find themselves to be under threat from protest. What exactly does he want us to do? Does he really believe that anybody he happens to disagree with does not deserve the protection of the rule of law and actually should be forced to live in a world of anarchy?

And then for the ultimate oddity he said he is lodging a protest vote. He wants to see this go to the select committee, but he is not actually going to vote for it to do so. As Ōtara Millionaires Club used to sing: “How bizarre.”

Then we had Eugenie Sage from the Green Party say that we are not thinking about community. This really goes to the heart of what this debate is about. Actually approximately $1.3 billion to $1.4 billion each and every year, about 0.5 per cent of the country’s GDP — yes, that does have an effect on the community, and we are going to hear about this more and more.

Although this is a small technical bill, it brings into stark relief the way that the extractive industry and regulation are very tightly linked. If we look around the world, we can see just how much of a contribution economically the extractive industries make. This is particularly important at a time when regional New Zealand—places like the Northland area, for example—is facing declining and ageing populations and serious problems funding its local governments, and yet it has large potential to create jobs and become wealthier to extractive industries.

You can see this all over the world. In Alberta, for example, the province of Canada that has the most extractive industries, you have a median family income of $94,000. In Newfoundland and Labrador, from whence people commute by aeroplane to work in those industries, it is $70,000. It is very clear.

In Western Australia it is $68k. In Tasmania it is $48k. Again, the contrast that you get from having extractive industries and what that can do for regions—particularly regions that are facing economic challenge and that do not feel like a rock star economy—is very, very large.

Have a look, for example, a little bit closer to home. The average incomes in Taranaki are $74k for a household and in Northland they are $60,000. This is the economic difference that it makes.

[Hon Simon Bridges]: So why do the Greens oppose it?

[David Seymour]: Because they do not think that making money is actually beneficial for the community, Mr Bridges. That is the problem. And perhaps another prejudice that we should raise here is that there tends to be a belief in some quarters that the extractive industries are not sexy and cool and sophisticated, and did we not see that come out with the member Gareth Hughes waxing liberal about what we could be doing with the so-called smart economy while, as someone who has had one or two things to do with a few people who work in this industry, I can tell you that the extractive industries—oil and gas for instance—are enormously sophisticated, high-productivity industries working with large amounts of capital, and that might explain why the average wage for a New Zealander is $50,000 and the average wage for someone in the mineral industry is $105,000.

The Act Party wholeheartedly supports this bill. Thank you.

On petrol pricing and calls for enquiries

Labour MP Stuart Nash recently called for a parliamentary enquiry into petrol prices. National MPs in the finance and expenditure select committee voted against such an enquiry.  They were right to do so.

Inquiries can be expensive and often politically motivated.  Inquiries should only be initiated on solid evidence, not on a politician’s hunch. Too often they are motivated by opportunistic grandstanding.

For a start you need some evidence that there is a problem. The evidence offered was weak, citing MBIE weekly oil price monitoring data – namely the time series data on the “importer margin”.

What is the “importer margin”?  Most people will assume it somehow represents profit margins.

But it does not.  It represents the amount available to retailers to cover domestic transportation, distribution and retailing costs, and profit margins. If all those elements other than profit margins had been stable, which of course they have not, then there may be an issue to consider a little further.

So, the data simply does not connect with the issue that is claimed to be a problem. No wonder the FEC rejected the idea of an inquiry.

More broadly, the last inquiry into the industry in 2008 found the New Zealand domestic petrol market is fundamentally competitive and that retail petrol prices are not fast to rise and slow to fall.  Subsequent NZIER studies in 2011 and 2013 also found no asymmetry in adjustment of prices in New Zealand petrol prices.

Here are some points to consider on this, and other, inquiries.

  • Inquiries should be initiated on solid theoretical and empirical evidence, and not on a politician’s hunch after looking at a graph of aggregate data that does not even mean what the label suggests.
  • New Zealand politicians have a track record of calling for populist inquiries (e.g. milk and supermarkets) that find nothing.
  • In 2008, the AA called for an inquiry into fuel prices. The MED inquiry found that the domestic petrol market is fundamentally competitive and that retail petrol prices are not fast to rise and slow to fall.
  • Inquiries/investigations are not costless. Indeed, they can be very expensive. For example, the 2009 Commerce Commission electricity investigation cost millions ($3.5m).
  • The Commerce Commission can initiate a part 2 investigation or part 4 inquiry, if it thinks one is required.
  • The illegal exercise of market power is very difficult to detect using empirical data and the results are very easy to dispute. For example, the ‘Wolak’ electricity price investigation was widely criticized and theoretically it was never going to be able to say whether firms were illegally exercising market power.
  • An asymmetry in adjustment of prices is often used as evidence of anticompetitive behaviour. But NZIER studies in 2011 and 2013 found no asymmetry in adjustment of prices in New Zealand petrol prices.
  • Even if an asymmetry in adjustment of prices was found it is not in itself evidence of market power – this price pattern (called ‘Rockets and feathers’ - prices often rise like rockets but fall like feathers) has been found across many industries – even extremely competitive ones. There are a number of economic theories to explain this.
  • The “importer margin” data from MBIE obviously does not give a useful perspective on petrol company margins, in so much as these margins might reflect a public policy concern. Apart from not representing just the profit margin, the MBIE’s retail price data also doesn’t include supermarket fuel and loyalty card discounts, regional discounts (which can be 20 to 30c under the average national price) and other costs such as credit card interchange fees, distribution costs, advertising and rental costs. Exchange rate hedging adds yet another level of complexity to assessing the margins in this extremely complex industry.

In short, the evidentiary hurdle for an inquiry was not only not met, it didn’t even get off the ground.

Seymour to party leaders: Let’s cooperate on NZ Super

ACT Leader David Seymour has called for meetings to discuss the possibility of a referendum to determine the future structure of New Zealand Super.

“Today I wrote to each parliamentary political leader to request a meeting which would form the first step towards a more sustainable superannuation system,” said Mr Seymour.

“Most of these leaders are represented on the cross party group for the flag referendum, a largely symbolic issue. I hope they will see the value of using a similar process for a far more substantial issue.

“Superannuation is one of the government’s main expenditures making long term fiscal arrangements unsustainable, and the one that is most easily rectified.

“If the government doesn’t act, The Treasury forecasts that net government debt will reach 198 per cent of GDP by 2060, when current tertiary students are set to retire[1]. For context, Greece has net government debt of 176 per cent of GDP.

“A consultation and referendum process could address many aspects of NZ Super, from the age of entitlement, to the level of entitlement, to arrangements for those who wish to retire at different ages.

“The government must be proactive on this issue. History will judge us all the better for having taken action and given the public a say now, rather than forcing future generations to deal with a huge fiscal headache.”

Free Press 23/2/2015

Conference Success
ACT’s conference was attended by 230 people. Usually drawing a crowd is hardest after an election.  This crowd was larger than last year’s. ACT Leader David Seymour’s speech has been widely reported as a new beginning for a new party.  The tone of the conference and reporting of it heralds a new zeitgeist for ACT.  Read David’s speech here: http://www.act.org.nz/posts/speech-our-classical-liberal-tribe

Become a Member
Many conference attendees joined ACT to get the attendance discount, but there is a much better reason to join ACT.  Membership lists are secret but your number adds moral weight to our party.  If you like what we’re doing, please add your weight today.  www.act.org.nz/join

Let’s End the Mexican Stand Off
Treasury predicts that government debt will reach 200 per cent of GDP by 2060 on historical patterns (Greece is currently at 176 per cent).  Much of this will be due to pension costs, and yet the political class is ducking the issue.  Prime Minister John Key has not only refused to move, he has made a virtue of his inertia.  For Labour, the superannuation entitlement age has become a victim of Andrew Little’s scorched-earth policy on policies.  The others are silent.  ACT’s policy is to raise the age to 67 over the next decade.  We also advocate indexing the payment to inflation rather than wage growth, but we know that one party will not get its way on such a large issue.

Let’s Have a Referendum
New Zealand is having a referendum on changing its flag.  If the flag is important, then long term fiscal sustainability must be very important. What’s interesting is that the flag process is perfect for superannuation reform.  It involves appointing a non-political group of New Zealanders to consult the public and generate options, which are then put to a vote.  The preferred option from the first vote then runs off against the status quo in a second public vote, perhaps run in conjunction with the next election.

Challenging the Leaders
David Seymour is writing to all parliamentary leaders asking them to support this initiative.  Watch this space.

The Party of Selflessness
David Farrar’s speech was a conference highlight.  He made a particularly interesting observation about ACT’s selflessness.  Every other party tries to deliver goodies to their voters.  ACT’s Partnership School policy, he says, primarily benefits people in South Auckland where ACT’s support is weaker than elsewhere.  It may be that Mr Farrar’s polling has failed to pick up ACT’s South Auckland support, and that he underestimates our supporters’ sophistication – everybody benefits from living in an educated society.  However, we take his point.  Superannuation reform is about taking steps today that will pay off starting in a decade.  ACT is a party that does what is right, and people support us for precisely that reason.

ImmiGREAT
Last Monday we attended a citizenship ceremony at the Auckland Town Hall.  431 people from 57 different countries gave the most sincere vote of confidence in New Zealand.  A highlight was when all 57 countries were read out to polite claps and cheers.  When Australia was read out there was an awkward silence before the hall erupted from giggling into laughter and finally applause.  Who says immigrants are not embracing the Kiwi way of life?

And Greater…
The winner of our conference's speech competition, chosen by audience vote, was a young man who explained the economic benefits of immigration.  His point is backed up by this tweet: 
https://twitter.com/armughanaa/status/568619930683203584?refsrc=email&s=11
While we generally regard Twitter as a dubious place to gather information, this really gained our attention. If even half of these are true it speaks volumes for the connection between immigration and innovation.  Let’s hope many of those 431 new citizens become standout innovators too.

Confidence over Competence
Our view of Twitter is formed by people such as New Zealand First Deputy Leader Tracey Martin.  In her own way she is an inspiration, never letting her competence hold back her confidence.  Her criticism of Partnership Schools makes the Greens’ look thoughtful.  We couldn’t help but notice that, nevertheless, she is now calling for school choice!
https://twitter.com/traceymartinmp/status/568946596433367040?refsrc=email&s=11

Green Dilemma
We are told by lines companies that electricity volumes have levelled off or fallen for the past four years.  A first since World War II. It is due to smarter appliances, insulation, light bulbs and, we suspect, lower gas prices from the shale ga
s revolution.  Lines companies are fixed cost businesses. As volumes fall, lines companies need to charge more per kWh to maintain their revenues. But then home generation becomes more attractive, accelerating the lines companies’ demise.  They are up against it. Is it right for a government to pick winners in such unpredictable markets?  Is it green?  More generally, nobody likes chicken little when the world keeps getting better.

Little Mystery
We have been open to the narrative that, in Andrew Little, Labour finally have a leader who can take it to John Key.  Last week’s events put that in serious doubt.  Little was shamed into paying a $950 bill to an NBR journalist who worked on his leadership campaign after the NBR reported it and Steven Joyce raised it in parliament.  It raises so many questions: Why didn’t Mr Workers' Rights pay his employee?  Why did Little have to hire an NBR journalist, like ACT hiring John Minto? Why didn’t he pay it before it got into the NBR? Why didn’t he pay after it became public instead of waiting four days until parliament resumed? Why was the leader of the opposition walking around parliament all alone where TV3 could ambush him for a humiliating interview on the topic?  What is going on in Labour?

Freedom Isn’t Free
If everybody reading this letter contributed $1 per week to ACT, we would be the best funded party in New Zealand.  We have had feedback suggesting Free Press alone is worth far more than that.  If you would like to help ACT achieve its goal of returning to Parliament with five MPs in 2017, please consider starting or increasing your regular contribution with whatever you can afford.

Speech - Our classical liberal tribe

Delivered by ACT Leader David Seymour on February 21, 2015.
Video is available here.

It’s a pleasure and honour to speak with you as Act Leader in our Party’s 20th year of parliamentary representation.

I’d like to pay tribute to those ACT people who have gone before.  An extraordinary group have kept the liberal flame alive. 

·         For 20 years the world’s most liberal elected party.

·         The eighteen MPs elected by this party over six elections.

·         Our past leaders, many of whom are here today.  I’d like to point out that the last three became leader at ages, 71, 65, 49 and I’m 31.  It’s an accelerating trend.  The next leader may not have been born yet.  I am in for the long haul.

·         The many staffers who have worked in the party office and in parliament, especially the wonderful folks who keep me out of trouble today.

·         ACT’s donors who recognise freedom ain’t free, and that political parties atip civil society’s spear to the heart of state power.

·         Of course, the volunteers who make heroic contributions to our campaigns.  I want to single out John Windsor for his extraordinary contributions.

To my fellow ACT members.  The electoral Act defines a political party as having a certain number of members.  You literally are the party.  Membership lists are secret and your number adds moral weight to our cause.  Thank you.

Finally, my fellow Epsom electors.  We are the only electorate that consistently uses both votes to get the government we want.  I don’t just mean those of us who sit on the right.  Our left wing neighbours try it too, but thankfully they aren’t too numerous.  Representing my community in parliament is a great honour and responsibility.

~~~~~~~~~~/~~~~~~~~~~

 

Kiwis have a lot to be proud of.

We are a free, harmonious, technologically sophisticated and prosperous country.

Even our government sector is better than most.  If you doubt that, try renewing a Russian passport.

Our country is relatively free of corruption and we rate extremely well on many international indices – on lifestyle, quality of our institutions, social capital, the economy, on ease of doing business.

Even the most shop-worn of clichés is true – NZ is a great place to bring up kids.

But our job as a political party is to identify policy weaknesses.

To identify what could improve, and how to improve it.

But in doing that, let’s try not to be, as we sometimes have been, too cranky, too negative, too downbeat about New Zealand’s prospects.

Because the Act Party can justifiably take the credit for much that is good in New Zealand today.

Through the 1970s and into the early 1980s, New Zealand was heading towards a destination similar to that of modern Greece. 

The reforms starting in 1984 saved us from that.

It wasn’t the Labour Party as it is today that drove those reforms.

And it certainly wasn’t the National Party –Muldoon had effectively staged a coup.

As we know, it was Act’s founders and first political leaders that led those reforms.

And it was Act’s political philosophy that motivated them.

 

That’s why New Zealand now rates so well on international rankings.

For example, the latest Fraser Institute Economic Freedom indices rank NZ third (as does the Heritage Foundation index), just behind Hong Kong and Singapore. On most of the variables that go to make up this ranking, we do pretty well, comfortably in the top ten in the world.

New Zealand has adopted more of ACT’s policies than any other nation bar two.

On the Legatum global prosperity index funded by a New Zealander, NZ again ranks 3rd, but this time after Norway and Switzerland. This index looks at much more than just GDP related incomes but considers education, health, social capital, and safety, amongst the usual other factors.

On a per capita income basis, however, we rank somewhere in the 21st to 31st range, depending on the currency adjustment.

After the upheavals of the reform period our long decline stopped. But we are only holding our position, not improving it much.

In these global surveys there are clues about what matters.

We rate poorly on size of government (too big of course).

The costs of regulation on business, our labour market regulation and restrictions on foreign direct investment all count against us.

Land use regulation has made the supply of housing inelastic, with property prices absorbing gains.

While our performance overall in education is good, we have a long tail of underperformance.

That’s both a source and a symptom of the problems we face.

 

There are areas of significant socio-economic disadvantage in NZ.

But these inequalities are largely self-inflicted.

·         Building human capital is the key to escaping from poverty. We need a more responsive and flexible education system.

·         The lack of affordable housing is a major contributor to poverty.  We need reform of the RMA and council restrictions on land use.

·         A lack of jobs of course drives poverty.  We need RMA reform so that businesses can expand without having to jump through a hundred hoops.

We can do this. It doesn’t need a magic wand.

It just needs governments with the determination to do the right thing.

 

In spite of all that, NZ is doing pretty well.

Act principles, classical liberal principles, have underpinned our successful policy reform.

Our tribe is the standard-bearer for classical liberalism in NZ, representing a general orientation towards a defence of private property, freedom of contract and limited government.

This is by no means an extreme or pure libertarian position. Classical liberalism takes a larger and more realistic view of government.

In short, we all know that government must respond to problems of pollution, the creation of infrastructure, of monopoly power, and raise funds through taxation.

But we seek a more even application of government sanctions: we challenge government monopoly in education and health, and the exemption of unions from anti-trust legislation.

 

Those principles have a long history in New Zealand politics.

You could think of us as a tribe – a tribe of classical liberals.

Our tribe and our diaspora are scattered through other political parties and organisations.

We have a history.

We have ancestors.

We have war stories.

And no doubt we have our myths.

 

The reformist period of the 1980s was substantially due to some of the founders and previous leaders of the Act Party – to Roger Douglas and Richard Prebble. 

Of course, there was unfinished business – Roger always has unfinished business.

Some of that was left to the classical liberal supporters who achieved positions of influence in the National Party.

These notably include Derek Quigley, fired most honourably from Muldoon’s cabinet, and who became in 1993 a founding member with Roger Douglas of the Association of Consumers and Taxpayers

And, of course, there was Ruth Richardson, who got on with some of the unfinished business, and since leaving Parliament has been a strong Act supporter.

Ruth is New Zealand’s most efficient politician.  Her legislation sunk the profligate fifth Labour government 14 years after she left parliament. Greece could have done with a Ruth Richardson and a Greek version of the Fiscal Responsibility Act.

 

That belief in small government, low taxes, self-reliance and personal responsibility can be traced back to the early British settlers in New Zealand.

Court judgements and Parliamentary debates from our early history reflect beliefs that people should stand on their own feet to the extent of their capacity, and not rely on the state.

In 1928, a group of mainly Auckland businessmen formed the 1928 committee, wanting an end to inefficient state trading organisations. They wanted a more business-like approach. They cast about for a Leader and found Sir Joseph Ward, half blind, diabetic and with a dicky heart.

He gave a speech where his notes reveal he was intending to announce that his United Party would raise loans of only 7 million sterling, rather than the customary 9-10. But he misread his notes, saying he would borrow 70 million.  The crowd went wild. They loved it.

That sums up the challenge we face.

Later, a new ACT-like party was established, the Democrat Party. It contested the 1935 election. They polled well in several seats but won none, and instead split the centre-right vote to the advantage of the Labour Party.

The Constitutional Society of the 1950s and 60s, led by the remnants of the 1928 Committee, had been urging the National Party to change direction for many years. They even cast about for a more market-oriented leader than Keith Holyoake.

But the long slide had started.

NZ drifted from having the third highest living standard in the world to the 21st by the mid-1980s.

Increasingly for the business sector it was like trying drive a car with the handbrake on.

Actually it was worse – you had assorted politicians, like timid learner drivers, pushing hard on the brake pedal at every turn or imagined threat.

More recently you have had to cope with an Occupational Health and Safety Officer and a council planner shouting directions from the back seat.

It’s madness.

 

The turning point came when Bob Jones launched the NZ Party, with a strong free market, almost libertarian message, and helped tip National out of office in 1984.

We all know the rest of that story.  Act’s founders and first Leaders launched the revolution now known as Rogernomics.

It only seemed radical because of where we were coming from. We were just catching up. By 1984 Thatcher had been in office for five years, Reagan for three.

 

So here we are.

Act NZ is a political party, not a think tank.

Now that we play a role in government, we have to deal with political realities.

I want to talk about those briefly.

National’s shifting and changeable commitments to free market are a source of immense frustration to us. As they are to many National supporters.

But sometimes we have to cut our natural political partners of the centre right a little slack.

National has to win over the median voter, to win the centre ground, and without that you remain in opposition.

It’s an unedifying business, winning the centre ground. A dirty job, but somebody’s got to do it.

You sort of feel lost in a Groucho Marx gag – you don’t like my principles; I have others.

 

Given that political reality, our job in Act is to stop the centre ground of politics moving to the left.

The only way we can do that is to be sufficiently persuasive that we have enough support, enough MPs, to tilt the centre of gravity of politics towards a classical liberal position.

The National Party and John Key have been extremely successful by any reasonable political metric.

For our part, we need to be frank about our failure in recent elections.

We should be able to attract those National voters who want a more energetic, more principled government, who want smaller government, lower taxes, less regulation, more choice in education and healthcare services.

It is we that need to do better, and I am determined that we will.  I believe our failure stems from the lack of a clearly defined and widely agreed definition of our party’s mission.

We are, among other things, the party of business.  Here is how we add value: New Zealanders who want a larger role for business and community and a smaller role for government currently have the worst of all words.

We are a disorganised minority.  We will never be the majority in New Zealand but when we are organised we are a highly effective tribe.

Our mission is to represent our fellow New Zealanders who want a larger role for business and community, and a smaller role for government.  To be the voice for an organised minority, firmly pressing New Zealand toward a more liberal future.

 

So what are we up against?

Well, much of the electorate has an enthusiasm for big government? 

Voters look to government for entitlements, and they look to the political left to supply them.

And National plays that game too.

But the left also face formidable obstacles in selling their vision.

First, they have to overcome the individualism of our culture, especially the post-Rogernomics generations.

Then there is the demonstrable bankruptcy of most of the left’s programmes - poor incentives, no allowance for individual responsibility, and a disastrous track record.

And they are pitched against middle-class energy, aspiration and the desire of most of us to stand on our own feet. 

The entrepreneurial values in our culture are newly resurgent.

 

And one more thing. Real incomes are steadily rising. If historic trends continue, average weekly incomes, in 2014 dollars, will lift from $56,000 now to around $70,000 by 2030, and $94,000 by 2050.

More and more households will be perfectly capable of looking after their own affairs, so long as taxes don’t keep on rising ‑ and especially if they fall.

Income trends are a problem for the political left.

And that might explain something else.

The way the left have become not just the enthusiasts for the nanny state, but also the new puritans.

H L Mencken expressed it best; puritans seem to have the “the haunting fear that someone somewhere may be happy”.

In the past, the Puritans were conservatives, fighting against the booze, sex and drugs.

Today’s Puritans are still shrill, bossy, freedom-hating and totalitarian in attitude.

Now the focus is on haranguing us about what we eat, whether and where we might smoke, how our food is packaged, what we are allowed to see in newspapers, all for our own good, of course. It’s not just protecting children so much, as treating us all as children.

A population of infants. 

 

Well, the fightback against all this got underway in 1984.

It was people like Douglas, Prebble, Richardson, along with many others, that enabled NZ to flourish.

They didn’t make it flourish; they enabled it.

Those who are making it flourish are the entrepreneurs, the thinkers and doers, whether in business, in the arts, our bravest educators, or most innovative healthcare workers.

They are business people, small and large businesses, from trades through to software and high-tech; those in agriculture, horticulture, fishing, the wine industry; not to mention our flourishing craft beers.

In short, people with an idea and willing to back it with their energies and capital.

Actually, our whole approach can be routed back to a simple question: Is it the efforts of individual New Zealanders that make a difference in their own lives and the lives of those they care about, or is it politicians and their grand government schemes?

It’s clear where the Labour, the Greens, New Zealand first, and sometimes even National stand.  There’s not a problem in the world that can’t be solved by a government directive.

Child poverty?  Another $60 per week on top of the current welfare state is their answer.

Energy innovation?  Subsidising a particular energy type with government dollars.

RMA killing growth? Make more rules so that councils will do what they’re told.

Educational failure? Set a ratio of 26 students per teacher by state decree.

In the eyes of our opponents, there’s nothing that can’t be solved by just another government directive.

Our view is the opposite.

We believe in personal responsibility.  We applaud the charitable sector where helping doesn’t mean voting every three years, but getting out and helping people every day.

Take the example of Terrance Wallace.  An American who moved here and saw an opportunity to help.  He approached the United Maori Mission and suggested their premises on Owens Road could become a hostel allowing underprivileged kids to access Auckland Grammar.

He travelled the regions north and south of Auckland and recruited kids with the offer of new hope.  When the authorities said he was illegally hosting kids in the zone, he legally adopted fifty boys.

The first cohort of twelve graduated this year.  Nine are going to University and three to apprenticeships or professional sports projects.

Now he has opened another hostel down the road.  It is an inspiring story that government could never have invented.

We in Act have a particular interest in education and in Partnership Schools. Although they are new, they are already making an impact on the lives of many kids. But they have come under sustained attack from the political left, in an appallingly mean-spirited manner.

I find it astonishing that there is so little good will displayed to the educators who have embraced the challenge of addressing the demonstrable failure occurring in some parts of our education system.

They should be commended for their bravery, supported in their efforts, be accountable for their failures, and congratulated for their successes – not attacked for simply trying to help kids succeed.

These educators are also risk takers and entrepreneurs.

Their efforts most certainly make a difference to New Zealand.

And you, you brave supporters of a long tradition of classical liberalism, now manifest in the ACT NZ Party. – your efforts make a difference.

 

I’d like to finish with a challenge to our political class.  A challenge to stop ducking an issue that has no immediate political payoff but is vital to our nation’s sustainability.

I have been sitting on the “new flag” committee, charged with organising the process leading to a referendum on a new flag.

I am not quite sure why.  Maybe we need a new flag, maybe not.

But the interesting thing is the process.

Clearly we wouldn’t want to leave a decision about a new flag to a bunch of politicians, with their various agendas and likely dubious aesthetic preferences.

Thus we are charging a committee to come up with options, put those to the public in a referendum to find a preferred alternative, and then run that off against the “no change” option in a second referendum.

And it occurred to me that if we can do that about a matter that is largely symbolic, why not follow the same process for another intractable problem, one that politicians have been dodging for decades.

Namely the changes needed to ensure that NZ Superannuation is viable over the longer term.

That it doesn’t cause undue fiscal pressure, and pressure on tax rates, and is reasonably fair across the generations.

It is clear that political parties cannot resolve this, as balanced positions are too easily misrepresented and attacked.

It is too dangerous politically.

National is ducking the issue; Labour courageously tried but is now gun-shy.

This is a political Mexican stand-off, with the guns pointed at the younger generations, of which I am a member.

All New Zealanders know that this is an issue that must be addressed

 

How could we make progress then?

Well, let’s follow the “new flag” process.

Let’s appoint a group with the necessary expertise to come up with options. A good starting point would be members of the Retirement Policy and Research Centre (RPRC) at the University of Auckland Business School, perhaps in conjunction with the Retirement Commission.

We would charge them with consulting with the public and presenting a series of options for the future, of which “no change” is one.

As with the referendum on a new flag, we would put those options to the public in an initial referendum to establish a preferred alternative.

And then that would go to a binding referendum as an alternative to the no-change option.

Let’s be very clear, this is not an issue that will affect those over, say, 50-55 years of age, and the changes will be modest for those just a little younger.

Let’s also accept that this is not just an issue of raising the age of eligibility.

The issue is more complex. 

For a start, many working people are not capable of working much past 65 – eg a gib-stopper, painter, builder, forestry workers, even a hair-dresser etc. 

Others can comfortably work on past the age of 65 and earn a high income doing so – ie most professionals, even some politicians.

Putting up the age of eligibility is only one element of what might be a suite of options. These might include the age of eligibility; provisions for those who cannot work on past 65, or even to it; means testing issues (whether full or partial); the basis for indexation; the relationship to kiwisaver in the decades ahead; and eligibility criteria for migrants and kiwis returning home.

It would be up to the group charged with consulting the community to come up with serious options on these matters.

So, in light of the cricket world cup, here’s a proposal.

Lets knock this issue out of the park, taking it away from day-to-day politics.

Today I want to challenge the Leaders of all political parties to support this approach.

In particular, I want to challenge the leaders of both the National and Labour Parties to support me.

I challenge the PM to let the people decide.

John Key has committed to not changing superannuation. Fine.  He would not be breaking any promises by letting this issue go to a referendum.

I challenge the new Labour Leader, Andrew Little, to show some leadership on this issue.  Your party rather courageously campaigned on raising the age of eligibility at the last election, to your cost. Your Party clearly recognised that changes must be made.

I challenge the Hon Winston Peters Leader of NZ First to also support this issue going to the electorate to decide. He has supported referenda before.  NZ First clearly have a significant constituency amongst the elderly, but this proposal will not affect those in or near retirement in the slightest.

I challenge the Co-Leaders of the Green Party to support this initiative.  They speak often of the need for sustainability, often where the meaning of that word is obscure or entirely undefined.  The sustainability of NZ Super is profoundly important, and making it so is entirely within our powers.

And I challenge the Co-Leaders of the Maori Party, and the Hon Peter Dunne Leader of United Future to also support me on this.  The United Future proposal for a flexible start date for people taking up their superannuation (lower if taken earlier, higher if taken later) may well be a feature of the options presented.

In short, let’s resolve this Mexican Standoff.

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