Speech by ACT Leader Don Brash to the Federated Farmers Annual Conference
30 June, 2011
Mr President, ladies and gentlemen,
This afternoon you're enduring a procession of politicians.
I'm sure we'll all be telling you what a great contribution farming makes to the New Zealand economy.
We'll probably all make the point that exports from the land generated some $23 billion in exports last year, nearly 60% of all exports of goods from New Zealand.
Some of us will acknowledge that, in the decade after agriculture was so abruptly stripped of all subsidies by the Labour Government of the eighties, farming achieved the highest rate of productivity growth of any major New Zealand industry, while over the whole 30 year period to 2008 labour productivity in agriculture has been right up there with the very best in the economy.
And achieved that without subsidies, and with the lowest rate of taxpayer support of any farming industry anywhere in the world.
I was reminded of just how extraordinary that productivity growth in agriculture has been when I visited the Wairarapa last week. I was told by one farmer that in 1946, shortly after the Second World War, it took seven men to produce 300 bales of hay in a day. In other words, one man could produce about 43 bales of hay in a day. Now, one man can produce 2000 bales in a single day - a near 50-fold increase in labour productivity!
If the whole economy had performed as well as farming has over the last 25 years, New Zealand would have living standards on a par with Australia, not well below Australia.
Despite this extraordinary achievement, of which all farmers should feel immensely proud, successive governments have tended to see farming as a sunset industry, important in our past but increasingly irrelevant to our future.
Politicians have talked about riding a Knowledge Wave, about the importance of the creative industries, of movies, and of fashion. They've talked about high tech start-ups, and the opportunity to build a back office for the world's financial industry.
And yep, all of those things are good and to be welcomed. Some New Zealand high tech companies are doing some extraordinarily innovative things.
But the foreign exchange earned from exporting movies and fashion garments is tiny compared with the exports from the farming industry.
And yet farming is pilloried by people who should know better.
All farmers get blamed for the environmental sins of the minority.
All farmers are assumed to be incredibly rich and to pay no tax.
All farmers are assumed to treat their animals with total indifference to their well-being.
After the next election, ACT will not be using its influence to re-introduce subsidies for the farming sector. I know you wouldn't believe me even if I said that we would be doing that!
But to the extent we can influence the policy of the next government - and that depends entirely on how many party votes we get in the election - we will be aiming to achieve three objectives of direct relevance to the farming sector.
First, we will be pushing to get government spending under control.
In the first four or five years of the Labour Government's nine years in office, you'd have to say that they were reasonably responsible, as left-of-centre governments go. Government spending grew slightly more slowly than the economy as a whole.
But in their last three or four years, they started throwing money around in all directions. In the four years to June 2009, national income grew by 20% but government spending grew by an astonishing 43%, and largely as a consequence the government's budget moved from surplus to deficit.
Much of this increase in spending was of very poor quality. Earlier this month, the Minister of Education mentioned that government spending on early childhood education had roughly trebled over the past five years, from about $500 million a year to about $1.4 billion a year - and yet all that extra money has increased the level of participation at preschool centres by just 1%.
The National Government didn't create this mess. Labour did. But tragically National has failed to fix the mess.
Why does it matter? Well, most obviously the huge increase in government spending, coming on top of the slow growth in revenue as a consequence of the recession and, now, the cost of the Christchurch earthquakes, is pushing up government debt at the rate of knots.
The Government has been borrowing over $300 million a week, week after week. At that rate, before long you're talking serious money! That's equivalent to $300 for every household in the country, every week.
But from the point of view of you in the export sector the most serious consequence of all this borrowing is its effect on the exchange rate. When the Treasury sells $300 million of bonds every week, most of those bonds are not sold to Mum and Dad investors in New Zealand, or even to New Zealand-based institutions. They're sold to foreign investors, and of course those foreign investors have to buy New Zealand dollars to buy New Zealand dollar bonds.
And that adds to the upward pressure on the exchange rate.
Yes, export prices in foreign currency have been pretty good lately, and this has shielded the farming sector from the worst effects of the very high New Zealand dollar.
But New Zealand needs the export sector to be doing not just well but extremely well at present! Over decades, New Zealand has accumulated massive amounts of overseas debt - indeed, our net indebtedness as a country puts us in the same league as Greece and Portugal. Why? Because year after year (indeed, every year since 1973!) we've run balance of payments deficits, and last month's Budget predicts that we'll be running deficits for as far ahead as the eye can see.
So we need you in the export sector to be doing extremely well, strongly motivated to produce more milk, produce more meat, and produce more wool.
And the high level of government spending, and the resultant high level of government borrowing, is blunting those incentives by putting upward pressure on the exchange rate.
Actually, the high level of government spending - and government spending today is higher, relative to the size of the economy, than in any year under Labour - has another damaging effect on the exchange rate.
The Reserve Bank is charged with keeping inflation low and stable. But when the government is spending a lot more than it's taking in in revenue, the Reserve Bank has to keep interest rates at a higher level than would otherwise be necessary. Today, the Reserve Bank's OCR is lower than at any other time in our history, but it's still relatively high compared with other countries (with the single exception of Australia). That makes New Zealand an attractive place for foreign savers to invest their money, with resultant upward pressure on the exchange rate.
So that is the first thing ACT would try to achieve of direct relevance to you in the farming industry, getting government spending under control to help ease the upward pressure on the exchange rate.
Secondly, we would seek a root and branch reform of the Resource Management Act and all the bits and pieces that hang off it - like the proposed National Policy Statement on Indigenous Biodiversity.
As some of you know, I've been the chairman of the 2025 Taskforce for the last couple of years, charged with providing advice to the Government about how to lift New Zealand living standards to the Australian level by 2025.
I'm sometimes asked: what's the single most important thing to be done if we're to achieve that goal? I reply that there's no single thing which will get us all the way there, but the most important single thing to be done in my opinion is to remove the extraordinary obstacles to progress created by the RMA.
I'm constantly regaled with horror stories of the little Hitlers who far too often seem to populate the lower levels of local and regional government, charging for this, complaining about that, throwing their weight around (sometimes in flagrant breach of the law), refusing to grant consents on the most flimsy excuse.
And I've already had anguished letters from farmers distressed about the implications of the National Policy Statement on Indigenous Biodiversity if adopted in its present form.
As I probably don't need to tell you, that directs that local governments ensure that there's "no net loss of biodiversity of areas of significant indigenous vegetation" (Policy 5); and requires that tangata whenua be fully involved in developing and implementing regional and district plans to protect indigenous biodiversity (Policy 7).
No mention at all of compensation for trespassing on the property rights of farmers. No suggestion that tangata whenua should have no more rights to be consulted than any other member of the community.
ACT believes that if a council wants to restrict your ability to manage your property as you see fit, then, provided that what you are doing on your own property is not directly and adversely affecting others, the council must demonstrate one hell of a good reason for doing so. And if the council does restrict you in a way that disadvantages you financially, it should compensate you.
ACT also believes that local and regional government should have an obligation to consult with all members of the community equally, and not give any kind of preference to one racial group over another.
So that's the second thing of direct relevance to the farming sector we want to do.
And thirdly, and finally, ACT will press for the abandonment of the Emissions Trading Scheme.
Why do we have an ETS? I have to admit I know of no good reason at all.
To be sure, it seems pretty clear that on average temperatures around the world have been increasing. But they've been increasing for at least the last 200 years, since the days when the Thames regularly froze over, and that warming began long before greenhouse gases caused by human activity could've had a significant influence on the climate.
And we know temperatures were very warm in the medieval period, and in Roman times, when grapes were routinely grown in what is now the United Kingdom. And greenhouse gases could hardly explain that, or the cooling which took place between those warm periods.
Even if a case can be made that human activity is behind the gradual increase in global temperature, it isn't obvious that an increased temperature is necessarily a bad thing for life on the planet. We know that plant life thrives on an atmosphere high in carbon dioxide - which is why many market gardeners deliberately pump carbon dioxide into their glass houses.
And we know that human societies thrive both in Singapore and in Finland, though average temperatures in the two places could hardly be more different.
Incurring the many trillions of dollars in cost which would be involved in any serious global attempt to slow the increase in average temperature would place an enormous burden on all societies, especially those already living on the margins of existence.
And even if it were accepted that human activity is causing the planet to warm, and that the enormous cost of trying to slow that warming is justified, it's entirely unclear why New Zealand should be at the forefront of that effort, at considerable cost to all New Zealanders, including New Zealand farmers.
It's estimated that the average dairy farmer is already incurring increased costs of nearly $4,000 annually (including both on-farm costs from the increased cost of diesel and electricity and the increased costs incurred by Fonterra), and that that will rise to over $10,000 annually by 2015.
So ACT favours the abolition of the ETS system, or at very least its suspension until comparable schemes are in place in all our major trading partners.
But Mr President, ACT's ability to achieve those goals - bringing government spending under control in order to take the pressure off the exchange rate, a fundamental reform of the RMA and all its off-shoots, and the abandonment of the ETS - depends entirely on one thing and one thing only: how many party votes we get in the election.
By all means vote for Bill English in Clutha-Southland, or Shane Ardern in Taranaki-King Country - but please give your party vote to ACT!
Speech to the Association of Integrated Schools Conference
Associate Minister of Education Hon Rodney Hide
Wednesday, June 22 2011
Good morning and thank you for inviting me to speak at your conference today - it’s great to be here.
I believe the best education systems are those where parents have a genuine choice of schools. And a diverse range to choose from.
High quality integrated schools make an important contribution to this diversity.
Parents value the range of educational programmes on offer at your schools – particularly the religious or philosophical values and aspirations that underpin them.
Your schools’ special character allows students to have their needs met. And to be taught in an environment that suits them best.
Today, I would like to talk to you about a subject that I’m very passionate about - public private partnerships - or PPPs.
Since becoming Associate Minister of Education, I have had the chance to visit many schools around the country. And on these visits nearly every school has the same complaint. Property - and the amount of time principals and boards are forced to spend sorting out property issues.
This problem is largely because there are few incentives under our current property procurement processes to think about how a building’s design and construction will impact on its ongoing maintenance and running costs.
This Government has made it clear we are open to greater use of private sector expertise where it makes sense.
Currently underway is a project to commission two new schools at Hobsonville Point in Auckland. These schools will be financed, designed, built and maintained under a public private partnership.
A single establishment board of trustees is overseeing and assisting in setting up the new schools.
The benefits of a PPP is that it ties a school’s design and construction together with its maintenance for 25 years, forcing people to think about what makes sense in the long run.
The land and school will still be owned by the Government, while the board of trustees will remain wholly in charge of the governance and day to day running of the school.
The private partner provides services such as building and grounds maintenance, cleaning, waste management, security, and furniture and equipment.
Penalties will be charged if these services aren’t carried out to an agreed standard or within a specified timeframe.
In addition, the private partner will carry the risk around time-consuming and expensive problems like leaky buildings, and will be required to sort them out quickly or face financial penalties.
So it’s like having a 25 year guarantee on the building.
The private partner will have greater flexibility as to how to deliver a solution. For instance the PPP contract might specify that the buildings don’t leak, but the choice of roofing material is up to the private partner.
All of this means the board of trustees and school leadership can get on with student learning and achievement – and not have to worry about property.
Principals of PPP schools in Australia report having up to fifty per cent more time to devote to improving teaching and learning.
Other benefits of a PPP include:
• more accurate and transparent assessment of whole-of-life costs.
• more motivation for private partners to find the most efficient ways to deliver the facilities we are after.
• potential for better value for money.
So as you can see, a PPP is about a three-way partnership between the Government, a private partner and a board of trustees when it comes to property.
A contract sets out the relationship between the Government and private partner, with sub-agreements and property occupancy documents setting out the school’s relationship with the other parties.
A private provider can only make money through a charge specified at the start of the contract.
Your schools, on the other hand, have entered into an educational partnership with the Crown.
You receive the same government funding for each student as other state schools. But your proprietors retain ownership of land and buildings – and have more say over the school’s operations. Charging attendance dues is one example of this.
This strong relationship achieves our Government’s aims and preserves your schools’ special character.
Looking to the future, PPPs will only be used again when they stack up against traditional procurement methods.
The Ministry of Education’s investigations revealed that PPPs would not be suitable for all new school projects due to the higher procurement costs.
Future PPPs will most likely continue to be for small groups of new schools like Hobsonville Point rather than individual schools.
Lessons learnt from Hobsonville Point will be applied to the future use of PPPs.
Before I finish I want to touch briefly on the changes the Government is making to special education, so every single child gets a fair go.
As you know, last year I launched ‘Success for All – Every School, Every Child’ – an action plan for the next three years that will lead to greater emphasis on mainstream schools doing more for special education students.
An Education Review Office report last year found that only half of all schools in New Zealand do a good job of including students with special education needs.
This is unacceptable, so I set a target for schools to improve their performance.
By the end of 2014 I expect 80 percent of schools to be doing a good job of welcoming and including students with special education needs – with the rest well on their way.
I take this target very seriously as I want every child to learn and succeed in every school.
ERO will be measuring the progress schools are making to meet it – with the first results available later this year.
I want it be quicker and easier for young people with the highest special education needs and their families to get extra help.
Children with high and obvious needs can now enter the Ongoing Resourcing Schemes (ORS) with less assessment and no unnecessary reassessment.
Eleven hundred more young people will get ORS support by 2014, and a further thousand will be able to get specialist support in their first three years at school.
I want to make better use of the special school teaching expertise. Special schools are being encouraged to provide outreach specialist teaching – making their skills and support available to more students in mainstream classes.
In four years time I expect to see:
• Schools welcoming and including every student
• All young people learning and succeeding, and getting extra help when they need it
• Parents who can see that their child belongs, has friends and is learning and succeeding
• Parents receiving good information – without being knocked back.
In conclusion, I believe that innovation is the key to transforming our education system, so it delivers for every single young New Zealander.
We need to look at new ways of doing things, and we need new attitudes and new expectations.
That’s why I’m excited about the potential of PPPs to introduce innovation that will be beneficial across the wider schooling network.
Thank you – and I wish you all the best for the remainder of your conference.
Speech by Hilary Calvert MP to the ACT Scenic South 2011 Conference
Mercure Leisure Lodge Hotel
Sunday, 19 June 2011
The only stable state is the one in which all men are equal before the law. - Aristotle
Today I want to talk to you about some of the principles the Act Party holds dear by highlighting two major issues that are important to all New Zealanders.
First I want to talk about our policy of one law for all, a principle that has been alive and well at least since Aristotle’s days.
The second issue I want to canvass is how we improve our standard of living generally, but with particular reference to employment at the beginning and end of our working lives.
An underlying theme is that sometimes the best-intentioned measures end up harming the very people they were meant to help – the law of unintended consequences.
ONE LAW FOR ALL
ACT’s bottom-line support for One Law For All has been criticised by some as Maori-bashing racism.
This is to completely misconstrue Act’s position.
In 1840 the British Crown signed a Treaty with Maori. Under Article III the Crown granted Maori “the rights and privileges of British subjects”. By implication this includes the right to be treated equally under the law, a right which is guaranteed by the Bill of Rights 1689.
Over the years the Government on behalf of the people did not give Maori equal rights – courts ruled against them on dubious grounds and settler governments confiscated land illegally (eg in the Waikato 1860, Raglan golf course in 1940s).
Many New Zealanders became concerned about the way the government was behaving.
We tried to redress earlier wrongdoings and to show Maori the respect they should always have been able to take for granted.
But we made serious mistakes while trying to correct the wrongs. The law of unintended consequences struck.
If we want to honour the treaty, correct the historical property issues and pay proper respect to Maori we should:
- Repeal special laws – all issues should be resolved by general agencies under universal principles (eg breaches of Treaty should be resolvable at law under Article 3 – if Labour had let this happen in 2004 with Ngāti Apathere would now be no Marine & Coastal Area Act.
- Review how agencies deliver on general principles – everyone has a taniwha at the bottom of the garden and legislation/courts/agencies should be able to deal with them sensitively and in the right context. We do know how to deal with spiritual issues – we deal with them all the time when we sort out what to with consecrated ground for example the cemetery that is in the way of the proposed dam at Beaumont.
- Allow for majority to prevail while having regard to the rights of the minority. The disaffected can bring issues to the attention of the majority and demand a fair hearing.
- Remember that Parliament as the House of Representatives is supreme, and has full power to make *and unmake* laws (Constitution Act 1986 s 15)
We did a reasonable job trying to sort out treaty settlement claims.
But then we went completely down the wrong track.
We created a separate class of New Zealanders with special rights that applied only to them.
Sometimes we kept the rights in place long after they had fulfilled their purpose.
In 1867 the government created four seats reserved for Maori to bridge the gap until enough Maori met the property qualification then in place. Although only intended to last five years, this ‘temporary’ measure is still in place, but expanded, despite more people of Maori descent standing for general seats than for reserved seats.
It is interesting to compare our history concerning Maori treatment with our history concerning another section of society who were not always treated equally - women.
We have also reached the conclusion that we should have women treated as equal citizens – we legislated for women’s suffrage in 1893; Otago was the first University in the British Empire to admit women students by right; we brought in widows’ pensions, the Married Women’s Property Act, the Domestic Purposes benefit.
But we did not try to give women special seats in parliament, or give them special quotas at university or special laws that allowed them to occupy public land and charge their neighbours for walking on it.
What held women back was a lack of equal opportunity – nothing else.
We dismantled the unfair barriers and women are doing the rest. When I entered law school, women made up 10% of the roll. Now the majority of law graduates are women and women are taking their places as judges and senior counsel and partners – without having to rely on positive discrimination which, positive or not, is still discriminatory.
MARINE AND COASTAL AREA (TAKUTAI MOANA) ACT
This is example of what can happen when the process goes wrong and also a time when the government went against the overwhelming will of the people as expressed to a government review and a select committee.
If the issue of customary title had been left to the courts in 2004, there would be no fear and loathing on the high-tide line.
The new law gives Maori the right to go to the High Court to ascertain the extent of their property rights in the foreshore and seabed.
This was the right thing to do. It is also where the new law should have stopped.
Instead, the Government gave some Maori special rights that are denied to all other New Zealanders.
- Iwi can avoid the court process by negotiating privately with the Crown. Political negotiations almost always lead to political outcomes. Justice will take a back seat as deals are struck that would never have made it through the transparent court system.
- The new law gives customary titleholders the right to override resource management laws that apply to everyone else. It creates a special ability to fine people and to charge any amounts for use of some resources.
- Iwi can unilaterally declare that a part of the foreshore is a sacred site, a wahi tapu area and then stop others from going on it, rather than using current law to protect special and historical sites.
The National Party knew this separatist law went against all they stood for.
National’s concessions were made for political reasons, and now we all need to know:
How much more are the two major parties willing to concede in exchange for the Maori Party’s support?
I spent some time in the impoverished and strongly Maori Far North talking to Northlanders about what is holding many Maori back.
Up there many pakeha feel that Maori have not had a fair go.
They are concerned that Maori are still not getting the same chances as other New Zealanders. Too many Maori are forced to attend inferior schools, receive sub-standard medical treatment, and end up entangled in the welfare net with little hope of escape.
One hundred and sixty-one years after the Treaty was signed there are still proportionately more Maori in prison, unemployed, in ill-health or earning less income than the rest of us.
But instead of focusing on these issues, Parliament has been tied up with legislation giving special rights to Iwi over the foreshore and seabed. The Marine and Coastal Area Act will do nothing to address the issues that really matter. It will divide us even further and advance the separatist agenda.
Separatism will not keep Maori out of prison or in the workforce.
So what’s the alternative?
We can implement policies that bring New Zealanders together. That’s one law for all again.
A Government that borrows over $300 million a week and refuses to cut spending hurts everyone – Maori and non-Maori.
New Zealand will prosper again only if we get government spending under control, and let our entrepreneurs and industries create high-paying jobs.
In short, we must take New Zealand off the separatist path and focus our energy instead on creating a successful and prosperous nation.
IMPROVING LIVING STANDARDS THROUGH EMPLOYMENT
It used to be said in farming circles that if dairy, sheep meat and wool prices ever peaked at the same time New Zealand would be the richest country on earth.
Well, they have. We’re not. But we should be, if not the richest, at least well up in the top quartile of the OECD.
This week our neighbours in Canterbury have had to contend with yet more rumblings under their feet. It must be terrible to live with the constant fear that any shake might be another disaster on the scale of the two big quakes, and we can only admire the courage of those who stay to keep the city running.
In addition to the human cost there is also a financial cost to us all. The effect on the national economy of the big shakes so far has been in excess of $20 billion. If we are to do justice to the people of Christchurch by reinstating our second largest city we must take a firm line with some of our sacred cows.
John Key has said that the pension age will not go up while he is Prime Minister. But we should all admit that the age at which people become eligible for New Zealand Superannuation will need to gradually increase to ensure that the cost of the scheme remains fair to younger New Zealanders.
This affects Dunedin people more than most, given the high ratio of seniors in the city. It’s time that we stopped dumping people into retirement when they can work and want to work. Someone who was 60 in 1960 was old, but today’s 60 year-olds have had a dream run compared their parents: no war, no depression, no hunger –and they can expect to live another 20 or more years in comparatively good health and mobility.
We need to stop treating seniors as if they were past their use-by date. There’s many a good meal to be had from mature beef.
Some countries allow people to defer their pensions until a later age in return for which they receive a larger annuity. We should look at new paradigms rather than relying on policies designed by the first Labour government for our grandparents.
At the other end of our lives we have an issue of youth unemployment.
In this regard I would like to mention the role of youth rates in keeping young people out of work.
It’s vital that this issue doesn’t disappear from the radar screen because it would be so easy to deal with it without Bill English having to lose a night’s sleep.
The tragedy is that 44% of New Zealand’s unemployed are under the age of 24. Nearly 28% are in the 15-19 age group where unemployment has more than doubled since Labour abolished youth rates in 2005.
Forcing employers to pay school leavers the same rate as more mature workers is a substantial barrier to getting many of these young people on to the first rung of the career ladder.
ACT wants the Government to allow employers to pay youth rates. This is apparently an “extreme” policy.
In 2007 John Key said in the House that he thought that a Youth Minimum wage is good for young people.
On May 11 2011 I asked him in the House whether he supported Paula Bennett in her opposition to youth rates when Labour’s abolition of youth rates increased youth unemployment by 12,000,
He replied: “I think that we all admit that and accept that one of the factors for youth is the rate they are paid.
“Yesterday in the ODT we saw an article entitled “Indications youth minimum wage not ruled out as policy option”. This article explained that in March the Government ruled out supporting Sir Roger Douglas’ bill to allow the reintroduction of a youth minimum wage. Now the Government has said they will not rule this out as a policy option.
Maybe this is because as The Honourable Kate Wilkinson said “National is always willing to listen to good ideas”. We the Act Party remains ready willing and able to provide good ideas for the government.
Ours is a potentially prosperous and socially homogenous country which could be the envy of the world if we would just stop shooting ourselves in the foot.
We are subject to the vagaries of world markets and we have inherited a legacy of racial injustice that has generated resentment in some sectors of our community.
We face some challenges in social policy and we have to solve those by managing our costs and increasing our revenue, just as households have to – in fact, the research suggests that New Zealanders have heard the message about borrowing and spending less much more clearly than the Government has!
Despite all this, ACT is positive about the future. We must give centre-right New Zealanders the message that a party vote for ACT will return a National-led government with a steel spine comprised of a team of ACT MPs who will give John Key and his colleagues the support they need to deliver a stable platform of equality before the law and economic sanity.
Thanks to ACT, the future has never looked brighter.
Hon Sir Roger Douglas Speech to Budget Debate; Parliament; Wednesday 8 June 2011.
Mr Speaker, the National and Labour parties are the biggest obstacles to the reform, modernisation and eventual success of New Zealand. This Budget shows why.
National, like Labour, have elevated means over ends, pragmatism over principles, posture over policy, cynicism over sincerity and symbols over substance.
National may have inherited the financial mess from Labour, but that’s no excuse for not tackling its causes head on.
When it comes to means over ends, we can all agree we want to see New Zealanders enjoying the best living standards possible. Only ACT, however, identifies and promotes means based on private enterprise, choice and competition that will deliver that end on a viable and lasting basis. National has unfortunately long since succumbed to bribery, via Government spending, as a means to that end, a means which is not viable and leads only to lasting debt.
The end result of decades of bribery by both National and Labour Governments is a level of central and local government spending that now represents over 40 percent of GDP. Best international estimates of the optimal level of government spending are in the region of 19 – 22 percent of GDP. Running at nearly double that level can only mean an economy hobbled by excessive taxation and bureaucracy, and warped incentives. That is exactly what our economy is.
A government that makes no serious effort to change this when it has the opportunity is clearly a government that puts pragmatism over principle. It fails to do the right thing because it’s simply too hard and runs the risk of upsetting vested interests and lobbyists.
While ACT welcomes the opening up of certain SOEs to private ownership up to 49 percent, we are left wondering why National lacks the courage of its alleged private enterprise convictions and wants to retain a majority interest in, for example, an airline and a television network when such things are properly the purview of the private sector.
Cuba nationalised everything in sight in the 1960s, but eventually learned its lesson and is now busy privatising again. If they can do it surely we can.
It’s not just a question of the money, Mr Speaker, that so-called “asset sales” would bring into empty government coffers; it’s that governments have no business owning such things in the first place.
In its obsession with not frightening the horses, this government tries to create the appearance of tackling our present crisis when in fact it does as little as possible. This is where posture over policy comes in.
National at one time pretended to be enthusiastic about New Zealand catching Australia by 2025. It even created a taskforce charged with telling us how we could do that. The taskforce was even chaired by one of the best economic brains in the country, ACT leader Dr Don Brash. It made many excellent recommendations. What has National done? Filed them in the rubbish bin. National’s purported commitment to catching Australia by 2025, if ever, is now shown to be as hollow as Helen Clark’s infamous commitment to returning New Zealand to the top half of the OECD by 2010.
All posturing, no policy to back it up. Even the posturing was eventually abandoned. Has Mr Key abandoned any pretext of wanting to catch Australia by 2025? Let him tell us. But, if the answer is “yes”, as this Budget would indicate, where does that leave his claim to be ambitious for New Zealand?
In its failure to tackle the looming crisis facing our nation, this Budget is a symbol of National’s cynicism. National knows, for example, that in reinstating a youth minimum wage at least 12,000 new jobs for young people would be created in short order. The Budget could have signalled National’s intention to do that. It did no such thing. Instead it relied on the tired old Muldoonist tool of subsidisation – its Youth Employment Package – which creates fewer than half as many jobs at enormous cost to the taxpayer. A further instance of this Government not only spending too much money, but spending it unwisely.
I mentioned at the outset the Government’s propensity for symbolism over substance. Is there a more eloquent example than National’s continuation of Labour’s big government approach to early childhood education. Ever greater wads of taxpayer money have been thrown at the sector, with both parties touting it as illustrating their caring natures. In practice what’s to show for all this “generosity” with other people’s money? A 300 percent increase in expenditure over five years has resulted in a 1 percent increase in participation. Symbolism over substance – and at what cost!
Mr Speaker, in 2009 Russian Prime Minister Vladimir Putin, in a speech in Switzerland, observed that: “Any fourth grade history student knows socialism has failed in every country, at every time in history,”. As a surviving luminary from the collapsed Soviet Union Mr Putin should know what he’s talking about. It would seem our politicians have failed to heed the lesson that Mr Putin correctly says is obvious to any fourth grade history student. Sadly, this Budget confirms this to be the case. Government assets over the last 10 years have doubled to 120 percent of GDP, or $223 billion – money taken from the private sector now invested in poorly performing government assets.
As President Ronald Reagan once observed: “In our present crisis, government is not the solution to our problem; government is the problem.” New Zealand’s government is too big, too intrusive and it spends too much. National’s Budget did nothing meaningful to change this. It was, as my colleague Hon Heather Roy so accurately described it yesterday, a dire disappointment and an abject failure of nerve.
ACT Parliamentary Leader Hon John Boscawen speech to Budget 2011; Parliament; Thursday, May 19 2011.
New Zealand was once the most prosperous country in the world. However, by the 1960s our fortunes began to turn and that decline has accelerated over the last 30 years to the point where we are now ranked just 26th on the OECD world rankings.
We now have a society with major social problems and intergenerational dependency and with no immediate solutions on the horizon. As Hon Tariana Turia often reminds us social welfare dependency has robbed so many Maori of self-reliance and dignity.
We have an Education system that on one hand generates our best and brightest so they can be snapped up by the world’s leading employers in Europe, the US and Australia, and on the other hand fails so many with one child in four leaving school without even NCEA Level One. And we all know the statistics are tragically even worse for Maori.
We have a Health system that condemns so many to a long waiting list with only the affluent or the hardest working able to buy themselves out of this through private medical insurance.
The founders of the ACT Party, and two of them are in the House this afternoon, saw these problems 18 years ago when the party was formed and foresaw that without significant structural reform these issues would only get worse. And sadly the fears they had 18 years ago have tragically come to pass. The last 18 years has been a tragic loss for New Zealand with little difference between the solutions offered by both Labour and National. And the Prime Minister confirmed this just yesterday when he admitted that we are actually poorer today than we were in 2004.
The budget presented an opportunity to finally show some real leadership, some real vision for New Zealand but, sadly, both are lacking in this Budget.
For months the Minister of Finance has been warning New Zealanders that we can’t go on borrowing in excess of $300m a week, that we have to get our house back in order and that we need to exercise tight restraint to get back into surplus by 2015.
And what has he delivered? He delivered little more than a commitment to make a few timid reductions in programmes introduced by the last Labour government - and then not starting until 2012.
Over the next financial year the Government proposes to borrow over $13,000 for every family in the country to add to the many thousands borrowed over the last three years.
Cutting back spending programmes which recipients have come to enjoy would have required real political courage which, like the last Labour Government, this Government seems to lack. But, someday soon, people will realise that the goodies which Government is handing out are charged back to our children and our grandchildren.
This Budget provided an opportunity to make comprehensive changes to the way that we deliver our social programmes. This was an opportunity to introduce more choice in education, greater private sector involvement in the health services and to adopt the recommendations of the recent Social Welfare Taskforce. Instead, the Finance Minister chose to fiddle.
However, whether we liked it or not comprehensive change would have meant the need to make sacrifice across the board.
ACT strongly believes we need to protect the most vulnerable 25%, but at a time when the Government is borrowing over $200 a week for every family and will continue to do so for at least the next 12 months the rest of us need to be prepared to make sacrifices.
We need to make both short and long-term changes. In the short term, we need to get rid of wasteful and unnecessary spending, but in the long term we need to improve productivity in health, education and welfare.
Today the Finance Minister announced minor changes in student loans.
This is the same man, who in opposition called interest-free student loans “an election year bribe on an unprecedented scale”.
There is no such thing as a free lunch and we now incentivise young 17, 18 and 19 year old students to go out and borrow as much as they can, while leaving their holiday earnings in a bank account to earn interest. They would be crazy not to, and in fact when they can pay their loan back in devalued dollars some years later, if at all, you would almost say that those who didn’t weren’t smart enough for tertiary education.
Not only is it not fair for the parents of children in Otara and Porirua to pay taxes to subsidise the children of the better off who are most likely to go on to tertiary education we have also incentivised our young to take on debt for courses that they neither need nor would use and are then saddled with debt for the rest of their lives.
To the parents and grandparents of those students I ask do you really want to see your children and grandchildren permanently emigrate overseas only to be condemned to talking to them by Skype each night?
Or do you want to see your children and grandchildren grow up in a prosperous country whose income levels not only equal but exceed Australia and are the envy of the world? A country with low marginal tax rates that incentivise work, savings and personal responsibility. A country that truly delivers a world class education system, not just for some New Zealanders but for all New Zealanders. And a country that allows not just the wealthy but all New Zealanders to have access to a proper health system.
Sir, in the same way that the poor have subsidised those with student loans, if not through the income tax they pay certainly through GST, the poor have also been a net contributor to the very generous Kiwisaver subsidies.
While Kiwisaver has been an undoubted success and the cost blowout is due to this success, the poor and the disadvantaged are the least able to make that minimum 2 percent contribution that triggers those taxpayer subsidies.
The Budget also forecasts a significant increase in the cost of New Zealand superannuation. You would expect this as a consequence of rising incomes and the growing number of New Zealanders reaching the age of 65. This number is set to balloon over the next 15 years to the point where it will no longer be sustainable.
Most New Zealanders understand and accept this, and certainly those under the age of 55.
Already countries are signalling an increase in the age of entitlement as people live longer and the baby boom bubble works its way through. Australia’s Labor Prime Minister Julia Gillard recognises this too and their pension age is set to increase at a rate of 6 months every two years beginning in 2017 and reaching 67 years in 2023.
ACT agrees. However, what we wouldn’t do is change the age of entitlement for those already 65, or close to it. What we would do is actually be honest and tell those in their 50s now to give them the maximum time to prepare.
This is a Budget that was an opportunity missed. It was an opportunity to radically transform our growth prospects and to show leadership and courage to the nation.
The ACT Party has policies that can transform this nation, address our underlying social problems and return it to the world leadership position it had over 50 years ago.
We will be going out there on to the hustings and telling the story and will be telling it honestly. We heard less than 15 minutes ago from Russel Norman who talked about a $2 billion subsidy to polluters. What Russel Norman didn’t tell New Zealanders is that we’re all paying more for electricity and for petrol to subsidise those who planted forests, with the overwhelming amount of this subsidy going to owners of forests that were actually planted before January 1 2008, the date those subsidies took effect from.
This scheme effectively provides a one off allowance of over 200 tonnes of carbon or $4000 per hectare for foresters who perpetually harvest and replant their forests on, say, a 28 year cycle. This subsidy is enough to purchase high country marginal land and to plant the initial trees. The Government is essentially taxing all of us more for electricity, petrol and food to provide a subsidy so big it is effectively giving away free forests to anyone smart enough to understand how the scheme works.
All New Zealanders pay for this, with the poorest paying disproportionately the most.
We in the ACT Party look forward to taking those policies to the electorate over the next six months and I say to the Prime Minister rather than encouraging people to vote National, or Labour for that matter, vote ACT and we in the ACT Party look forward to taking on both Mr Key and Mr Goff in the hustings.
We welcome the election. Bring it on.
ACT Parliamentary Leader Hon John Boscawen speech to First Reading of Nga Wai o Maniapoto (Waipa River) Bill, Ngati Porou Claims Settlement Bill, Ngati Pahauwera Treaty Claims Settlement Bill; Parliament; Tuesday, May 17 2011.
I rise to oppose the Nga Wai o Maniapoto (Waipa River) Bill, the Ngati Porou Claims Settlement Bill and the Ngati Pahauwera Treaty Claims Settlement Bill. ACT opposes these Bills as they are a radical departure from the principle of one law for all.
ACT believes in fair and final settlements to Treaty grievances, which is why we have in the past sent Treaty settlement Bills to Select Committee. ACT cannot, in good conscience do the same with these Bills.
Let me first outline why ACT will oppose the Waipa River Bill. Part 2 of the Bill will extend a co-governance framework to parts of the Waikato River, including the Waipa River. Co-governance is an affront to the principle of equality before the law, something that ACT has championed for over a decade.
The co-governance framework will provide legal mechanisms for Maniapoto to participate in the governance and management of the Waipa River. It forces local authorities to put in place joint management agreements covering functions of the Resource Management Act.
The activities of people who use the Waipa River are currently regulated by elected officials; if they object to the management of the River, they have the simple option of voting the officials out of office. If this Bill is passed users of the River will also be regulated by officials within Maniapoto, officials who are not elected and are not accountable to the users of the river. This is not democracy; this is not one law for all.
The bad news does not end with the Waipa River Bill. The Government seems intent on replicating the undemocratic model of co-governance in its other Treaty settlements. In Minister Finlayson’s own Press Release announcing the Ngati Porou Deed of Settlement last December he boasted that the Settlement would provide “Ngati Porou with input into the strategic governance of specific conservation sites”.
Clause 45 of the Bill forces resource consent authorities to provide Ngati Porou with a summary of applications for resource consent in the same way they would have to do for an affected person as defined under the Resource Management Act. Instead of only consulting iwi who are actually affected by an RMA activity, authorities must now give certain iwi special consultation rights over and above the rights afforded to other New Zealanders.
There is no way for the Government to deny that this Bill forms a co-governance framework. Clauses 23 to 31 provide for, in the Government’s own words, Nga Whakahaere Takirua which translates directly to dual authority. This is not democracy; this is not one law for all.
Of similar concern is the Ngati Pahauwera Treaty Claims Settlement Bill. The Agreement in Principle states that cultural redress should include co-management regimes over parts of the Mohaka, Waikari and Waihau Rivers.
As with the Ngati Porou agreement clause 64 of this Bill requires local authorities to forward applications for resource consents in each of the three rivers to iwi. Again, instead of having a duty to simply consult all New Zealanders according to the same process authorities will be forced to consult iwi separately.
The Ngati Pahauwera Development Trust must also be appointed as an advisory committee in relation to the fisheries activities in the Mohaka River. Instead of fisheries activities being regulated by elected officials they will now be regulated by unelected, unaccountable officials, who are appointed simply because they are part of the right iwi. This is not democracy; this is not one law for all.
ACT first rose to speak against co-governance in Treaty legislation when the Waikato River Settlement Bill was before the House last year. ACT said then that governance should be the preserve of elected representatives. Iwi representatives are not elected by the general public nor are they accountable to the public.
ACT strongly opposes the recent trend towards co-governance arrangements in Treaty settlements.
ACT has always called for fair and final Treaty settlements. If the Bills before the House simply addressed historical grievances, as past settlements did, ACT would support them. What we do not, and will not, support is Parliament legislating for two standards of citizenship.
Treaty settlement legislation should be about righting past wrongs; it should not become a rubber stamp to the carving up of our nation’s rivers and conservation sites. ACT believes strongly in having one law for all and we will be voting against these Bills.
Let me also go on to record that when I rose to speak on these three Bills I was greeted by a constant barrage of heckling and criticism and let me say to the members in this House and to the members in the gallery there is no political party more dedicated to righting the wrongs and solving our social crises than the ACT Party.
We have championed the rights of 16 and 17 year old young Maori people, the right for them to go out and get an apprenticeship and earn eight or ten dollars an hour and when we asked the Minister for Social Development and Employment last week in Question time she couldn’t bring herself to acknowledge that it was better to have a young Maori in work.
Let me conclude to the members, particularly in the gallery, that there is no party in Parliament who believes it will do more with its policies to help young unemployed Maori than those in the ACT Party.
The ACT Party, more than any other political party in this Parliament, wants to make a difference, wants to solve the country’s growing social problems. We had a situation last Thursday where the Minister for Social Development and Employment struggled, absolutely struggled, to stop herself from acknowledging that it is far better to have a young Maori apprentice earning ten dollars an hour than sitting at home on the unemployment benefit.
My message, not just to the members of this House but to the people of New Zealand is that we actually need to solve our social problems and you don’t solve social problems by setting up an arrangement of co-governance. You need to actually look at the issue and address the underlying cause.
It’s a pity the Minister for Social Development couldn’t actually bring herself to acknowledge, in fact it took three points of order for her to acknowledge, that she would much rather have someone on an apprenticeship than on the unemployment benefit.
I am very proud to be the Parliamentary leader of the ACT Party. We oppose these Bills but we certainly don’t oppose policies that will actually address the underlying causes of problems in New Zealand. Thank you.
ACT Deputy Leader and Parliamentary Leader Hon John Boscawen speech to the General Debate; Parliament;
Wednesday May 11, 2011.
The last fortnight has been one of great change, rejuvenation, and optimism within the ACT Party.
When we returned to Parliament last Tuesday, we did so having elected a new Leader, Dr Don Brash, and a new Leader of the ACT Parliamentary Party.
Dr Brash is of course a former leader of the National Party who is deeply concerned about the current economic and social state of our country at a time when we are borrowing over $300 million a week, and when we have high levels of unemployment, and in particular amongst Maori, Pacifica, and young peoples.
Dr Brash’s economic credentials are of course unparalleled. He spent 14 years as a governor of the Reserve Bank, a five year stint with the World Bank in Washington D.C., and has served on many policy advisory groups for government since 1974.
He has also spent extensive time in private enterprise.
More recently, Dr Brash chaired the ACT-inspired 2025 Taskforce charged with analysing and promoting policies that will assist in eliminating the 35% income gap between New Zealand and Australia.
After two years and two well-reasoned reports, National’s only response has been to scrap the 2025 Taskforce out of sheer embarrassment.
How ironic then that the Prime Minister’s very first response in Parliament last week to the new ACT team was to move a motion congratulating the New Zealand Breakers basketball team on their outstanding victory in the Australian National Basketball League.
They dared to dream and to achieve something that few New Zealanders thought possible and that had never been done before by winning an Australian-based A-grade professional sporting championship.
The ACT Party asks why New Zealanders can’t also dream, as the Breakers did, and aspire to raise their living standards to that of Australians. We have been there before and there’s no reason we can’t in future.
However, if we’re to be successful, we need to have the courage to articulate sound economic policies and to be honest with our fellow New Zealanders.
It’s a pity that when Phil Goff lamented about the price of electricity at Grey Power’s National Annual General Meeting last weekend he didn’t also tell them that he voted for an Emissions Trading Scheme that would’ve pushed those prices 10 percent higher than they otherwise needed to be.
Expect to hear more from ACT on the ETS, choice in Education, the damage to our society from creating a social welfare dependent culture, and wasteful government spending to name just a few issues.
The public will see a different approach from ACT over the coming months.
We do, however, remain absolutely committed to the confidence and supply agreement that we signed with National and to providing solid, reliable, and stable government.
However, ACT is not prepared to be taken for granted. National opted to insert a Treaty clause in the Environmental Protection Authority legislation going through the House. We weren’t consulted, let alone given the 48 hours’ notice required under the confidence and supply agreement for major amendments of this nature. We voted against that Treaty clause in the committee stages and will be voting against the legislation during its third reading this afternoon.
I am immensely proud of the ACT Party.
ACT is the only party in New Zealand that stands consistently for individual freedom and personal responsibility.
For smaller and limited government.
For one law for all, with all New Zealanders treated equally in law regardless of their race or their beliefs.
ACT is the only party in New Zealand that consistently stands up for private property rights, free markets, choice and competition, low and flat tax.
ACT is the only party that has the policies needed to achieve a free and prosperous future for New Zealand.
I am very proud of ACT’s achievements.
It was ACT’s success in Epsom in 2008 that ensured the change of government. If ACT had not succeeded in Epsom, Helen Clark would still be Prime Minister.
It’s the feature of MMP that it took both National and ACT to succeed to make John Key Prime Minister. I am very proud of that.
I am proud of what ACT has achieved in government. We promised and delivered - and will continue to deliver - stable, centre right government.
We achieved our Three Strikes legislation making New Zealanders safer from the thugs and the bullies, the 2025 Taskforce provided the road map for New Zealand’s future prosperity, we successfully reformed the governance of our biggest city, our Regulatory Standards Bill slashes red tape and our Spending Cap Bill puts government on a much-needed diet.
But what ACT has achieved in government so far is not sufficient to reverse New Zealand’s relative decline or to return us to a society where Jack is as good as his master, no matter the colour of his skin.
This can only happen if ACT succeeds at this year’s election in greater numbers and so strengthen the John Key-led National government.
The future success of New Zealand depends critically on ACT’s success on November 26.
My entire focus since Don announced his bid to be ACT leader has been what’s best for ACT and to ensure, as we promised, continued support for the John Key-led government.
I have kept the Prime Minister and the Deputy Prime Minister fully briefed throughout.
I believe that Don Brash is the best person to lead ACT to success in this year’s election. I told the Prime Minister last night. I rang Don this morning to tell him he has my support.
The process now is for Don to join the party. His membership will be accepted by the Board on Saturday. I have asked our whip John Boscawen to organise a caucus for Saturday where Don will have my full support to be leader, and the Board will reconvene that afternoon to ratify his leadership.
I must stress that ACT and National’s Confidence and Supply Agreement remains in force with the agreement of all parties including that of ACT’s new leader and there is no risk to the Government. It’s business as usual. The only change is that ACT will have a new leader to take it into the election and to lead it into the next government.
If you will allow me a minute just here at the end to say a few more words. It is a great honour and a privilege to be the Member of Parliament for Epsom, the people here have all been wonderful to me, I have been both proud and humbled to be the leader of the ACT Party, but there’s no doubt that the highest honour and greatest privilege has been to serve as a Minister in the John Key-led government.
John Key and Bill English have my respect and admiration. It’s the greatest honour and privilege to assist their leadership of our country as we have faced and continue to face such tough and challenging times.
I have always worked hard to the best of my abilities with the best of motives. I have always put the country first. I set high standards for myself. I have at times fallen short. I have always worked to put whatever mistake I have made right and not to repeat it!
Finally I would just like to thank all ACT members and supporters for their continued support and inspiration and to the people of Epsom who have welcomed me into their homes and their communities and for whom it is such a privilege to be their Representative in the wonderful and venerable institution, our Parliament.
Minister for Regulatory Reform Rodney Hide
Wellesley Boutique Hotel, 2-8 Maginnity Street, Wellington.
Thursday, April 24 2011
Thank you for the opportunity to speak with you this morning. It’s always a pleasure to be amongst the people who create the wealth in this community.
If New Zealand is going to close the income gap with Australia, we’re going to need a lot more of you!
My topic for today is regulation – why it matters, and what the Government is doing about it.
I suspect that for a business audience, the question of why regulation matters is pretty self-explanatory. But I think it’s worth briefly discussing why regulation is important.
Regulation is important because it can be costly. Some of these costs can be attributed to lost time, as people like you, have to wait for a license or a permit before you can get on with business.
But a major proportion of the cost of regulation comes from lost opportunities
Take the Hazardous Substances and New Organisms Act. One effect of the Act has been a ‘significant reduction’ in New Zealand research into genetic modification.
This is concerning. The primary sector is a key driver of New Zealand’s income. Genetic modification is an opportunity to create more wealth from our major export industry, and the chance to develop new supporting industries. Yet we’ve set the bar so high, that farmers and researchers have basically given up.
Or consider the case of IKEA – the world-famous furniture and homeware retailer. They wanted to set up shop in Mt Wellington in 2008, but were blocked by the Environment Court - because they might attract too many customers and create traffic problems.
According to the 2025 Taskforce, almost one-third of the income gap between New Zealand and Australia could be due to regulatory barriers. We simply can’t afford to waste these chances, especially given the state of our economy.
Regulation is also important because it is one of the key levers of Government influence.
Governments can tax you, they can spend money on your behalf, and they can try to change your behaviour by regulating.
We apply a great deal of scrutiny to how our money is collected and spent – and rightly so. Every year, the Government produces lots of documents on the Budget, spending, and the fiscal position. Journalists comment on these in the press, and politicians debate them in Parliament.
Much less attention is paid to regulation, yet its effects can be just as significant on us as taxes and spending.
This is one of the reasons why I became the first ever Minister for Regulatory Reform.
For me, good regulation is a question of good governance.
Governments shouldn’t impose more costs and restrictions on people than they absolutely have to.
They should consider the full range of options – including self-regulation – before they create more rules.
And governments should be open and transparent about the reasons why they are regulating, and the likely impacts regulations will have.
These three goals – keeping costs down, ensuring good analysis, and providing openness and transparency – are what I have focused on over the past three years.
I’d like to talk a bit about each of these goals, what we’ve been doing to achieve them, and what they mean for you.
The first goal has been tackling regulatory costs, both big and small.
At the big end, the Government has been reviewing the major pieces of regulation that business has identified as big constraints on growth. Two of the most significant constraints have been the Resource Management Act and the Building Act.
On the RMA, the Government acted quickly once it came into office to remove some of the more troublesome aspects of the Act.
This included removing the potential to make frivolous, vexatious and anti-competitive objections to development, and streamlining processes for projects of national significance.
Since then, my colleague Dr Nick Smith has been working on a number of more complicated aspects of the RMA. These include:
- reducing duplication between the RMA and other laws, such as the Conservation Act, the Building Act and Forest Act;
- reducing unnecessary barriers to the development of the aquaculture industry; and
- improving the planning, design and delivery of infrastructure and urban environments.
On the Building Act, the Government has agreed to replace the old system with a risk-based model, which will clarify who is accountable for failures, ease compliance costs, and remove consenting requirements for low-risk and smaller renovations.
These are just two parts of a much wider programme of major regulatory reviews, covering such laws as the Holidays Act, Employment Relations Act, Food Act and the law covering the electricity industry. In each case, the Government is working to modernise the law and reduce unnecessary burdens.
The Government has also been focusing on the smaller sources of compliance costs.
There are a whole lot of laws and regulations scattered throughout the statute books, which create hassles for specific industries.
Until recently, it’s been hard to make any progress overhauling these laws because – on their own and individually – they’ve been too minor to get on to Parliament’s agenda.
What we’ve done is bundle up all these minor amendments into one piece of legislation, called the Regulatory Reform Bill, so that industries burdened by out-of-date and clumsy red tape can finally get some relief.
For some industries, these burdens are substantial. Here’s an example; one of the laws we are currently in the process of reforming is the censorship legislation.
The current law says that any DVD, video or computer game must have a rating label ‘affixed’ to its cover.
What this means in practice is that every time a distributor brings into a new DVD for sale in New Zealand, they have to hire someone to unwrap it, remove the cover from the plastic casing, stick on the censorship label, and then wrap it up again. This process costs the film industry over $10,000 a day!
We’re going to change the law, so that DVDs can have the rating labels printed directly on to the covers, just like in other countries. It’s a small change, but it will cut $3m a year off the industry’s costs.
Other changes we are making through the Regulatory Reform Bill may save some of your businesses money.
For example, we’re proposing to change the Companies Act, so that shareholders can vote at AGMs using electronic technology and can receive company documents electronically, rather than in print. This will save business about $1.5m a year.
My aim is to introduce a Regulatory Reform Bill each year, so that we can keep chipping away at outdated and costly rules. If you know of any laws or regulations that need updating or replacing, let me know so that we can put them on the agenda next year.
We’ve also been working on clearing up the statute books, and getting rid of laws and rules that aren’t needed any more.
The law books are bit like hedges – if you don’t prune them from time to time, they soon get out of hand.
So I have a Bill before Parliament at the moment which will repeal 31 obsolete laws, and am preparing an Order for the Governor-General that will revoke over 150 unnecessary regulations.
My second major goal for regulatory reform has been getting better analysis. The Minister of Finance and I have put a great deal of work into raising the quality of thinking across the government.
Back in 2009, we issued a Government Statement on Regulation, which laid out our expectations for better regulation and less regulation. We said that we would only introduce new regulation if we were satisfied that it is required, reasonable and robust.
This set the benchmark against which all departments and Ministers have to justify their proposals for new regulation.
Next, we have raised the quality standards that we expect from Regulatory Impact Statements.
For every proposed new regulation, Government departments must prepare these Statements, spelling out the problem they want to fix, the full range of options, and why they recommend one option over another.
Where the proposed regulation could have a significant impact on the economy, Treasury has to review the Statement and make sure it is of a high enough quality.
In some cases, departments disagree with their Ministers about the best way forward.
Many of these Statements are published on departmental websites, or on the Treasury website, so that you – as citizens and taxpayers – can judge whether the Government has made the right call.
In addition, the Government has established a New Zealand Productivity Commission. The idea for the Commission came from the Confidence and Supply Agreement that ACT made with the National Party, and I am especially proud that it has come to fruition.
Those of you who are familiar with the Australian Productivity Commission will know that it has led the charge for policy reform across a wide range of issues, including aged care, gambling, energy efficiency and the impact of migration.
It has also looked closely at the regulatory burdens facing specific industries, and proposed improvements to lighten the load.
This is very much my vision for the New Zealand Commission.
My hope is that, like its Australian counterpart, the Commission will bring independent and high-quality thinking to the big issues and problems facing New Zealand.
It will engage with communities like yours, to fully understand all the issues and to build support for change.
And it will help raise the quality of debate in the public, politicians and press about key public policy matters.
The Government has recently given the New Zealand Commission its first two tasks – an inquiry into housing affordability and one on international freight transport services. As I’m sure you will agree, these are two issues that have a direct bearing on New Zealand's international competitiveness.
I hope that those of you in the audience with an interest in these topics will make a submission to the Commission and get involved with its work.
My third goal is to ensure more openness and transparency.
Many of you will know the statement made by US Supreme Court judge Louis Brandeis that sunlight is the best of disinfectants, and electric light the most efficient policeman.
The idea behind this statement is that openness can act as a check on the misuse of power, or on bad ideas.
I think there’s a lot to this idea.
The knowledge that you are being watched, or that your actions are open to challenge, means that you are more likely to act carefully and think through your proposals.
The problem with applying the full force of openness and transparency to regulation is that there is so much regulation made every year. To give you a sense of the scale here, last year Parliament passed 139 Acts, totalling 3020 pages.
Much of this regulation is also very technical and complex, which makes it difficult for the ordinary citizen to comprehend how a Bill might affect them.
What we need is something which spells out very clearly and very succinctly what each law will do, in terms of the key things that matter to New Zealanders.
This is what my Regulatory Standards Bill is designed to do.
The Regulatory Standards Bill lays out a set of principles that all new legislation and regulations will need to comply with.
These principles set out what I think we’d all agree good laws should look like.
For example, good laws don’t take your property away without a good reason and without full compensation.
They don’t take away your right to appeal to the Courts. They respect your freedom. And good laws treat everyone equally.
Ministers and public service chief executives will need to certify that any new proposed rules and laws meet these principles.
Parliament will still be able to pass laws that do not comply with these principles. But MPs and Ministers who want these laws will need to explain to Parliament and to you why it is necessary to break the principles, and why it is ‘reasonable and can be demonstrably justified in a free and democratic society’.
And if you as a citizen believe that a law doesn’t meet the ‘good regulation’ principles, you will be able to apply to the Courts.
If the Courts agree with you, they will issue a ‘declaration of incompatibility’.
The law in question will remain in force, but the ability to have the Courts issue a declaration will put pressure on MPs and Ministers to be honest with New Zealanders about the impacts of their regulations.
The Regulatory Standards Bill is due for its First Reading shortly and my colleagues in the National Party have agreed to support it to Select Committee.
I think the Bill has much to offer business, and I would encourage you to have a look at it and to make a submission.
I’d like to take my Ministerial hat off briefly here, and talk a bit about one more initiative that should be of interest to you.
As we are all too aware, the Government’s coffers are in pretty poor shape. We are facing one of the biggest deficits in recorded history and are unlikely to return to surplus for several years.
Some of this is due to the unexpected and dreadful Canterbury earthquakes.
But a significant part of our current economic woes arise because previous Governments spent too much.
They assumed that the windfall gains from the debt-fuelled boom of the past decade were permanent and they locked in more spending on such dubious projects as ‘interest free’ student loans.
This is unsustainable.
Too much spending during a boom increases inflationary pressures, squeezing businesses like yours.
And too much spending now is just committing our children and grandchildren to indebtedness and penury.
We need more discipline and responsibility in Government spending.
My Spending Cap (Peoples’ Veto) Bill will introduce this discipline. Under the Bill, Government spending would only be able to increase at the rate of inflation and population growth.
To put this in context, if my Bill had been in place from 2004, Government spending would be around $10 billion dollars lower than it is today.
A spending cap puts pressure on Governments to prioritise. It makes Ministers think long and hard about what needs to be done, and limits the potential for waste.
Of course, some Governments will want to spend more. That is part of the democratic process.
But under the Spending Cap Bill, a government that wanted to spend more than the cap would need to explicitly seek the permission of the people through a referendum. They will need to prove to the public that the extra expense is worthwhile.
I will be introducing the Bill to Parliament in the middle of the year, and look forward to interest and submissions from the business community.
Coming back to my main theme for today, getting the regulatory environment for business right is one of this Government’s key economic goals.
We know that poor regulation costs you time and money, and costs New Zealanders opportunities.
We are working across a number of fronts to get compliance costs down, to improve the quality of decision-making, and to bring greater openness and scrutiny to the creation of regulations.
But it’d be fair to say that there is still a lot of work to be done.
It would also be fair to say that, as Minister for Regulatory Reform, I am sometimes ahead of my Cabinet colleagues on the sorts of steps that should be taken to control red tape.
The focus that this Government has put on reforming regulation is new. Unlike Australia and the UK, New Zealand hasn’t had a Ministerial portfolio devoted to regulatory improvement. It’s still a bit of learning curve for us.
Embedding the sorts of cultural changes across government that are needed to control regulation is going to take time.
It’s also going to need people like you reminding us that getting compliance costs down is a priority for business, and reminding us that we need to constantly keep our eye on red tape.
If I were you, I’d expect no less from my elected representatives. And as one of your elected representatives, I welcome your scrutiny.
Hon Sir Roger Douglas Speech to Ministerial Statement on AMI support package; Parliament; Thursday, April 7 2011
Over the past 15 years successive Labour and National Governments have played a game of brinkmanship with the New Zealand economy. They both have drastically increased spending and recklessly borrowed billions of dollars to fund their vote buying schemes. The impending bailout of AMI has led us right to the precipice of economic collapse. We now have a decision to make, we can either go over the cliff, or step back from the edge, there is no other choice.
In normal circumstances, the Government should not step in and bail AMI out. Certainty is essential to the operation of the market, bailouts undermine this certainty by suggesting to businesses that the Government will start actively picking winners and losers.
In the case of insurance companies, there should be very little problem. It is not difficult to sell insurance, collect premiums, hedge your risk elsewhere with reinsurers and then conservatively invest the remaining premiums.
However, in AMI’s case this was a company that gained a large market share through low premiums and a policy of limiting expenditure by having too little reinsurance. They took a risk and those who took out insurance with them benefited from the risk for a while, it was a risk that did not work.
If the Government is going to step in here, what about those people in Canterbury who ran a similar risk by getting no insurance at all? What is the Government going to do with them? In principle, it has no option but to bail them out also.
What do we do from here? We, as New Zealand citizens, might just be able to go along with the Government decision to bail AMI out but only under certain conditions. If these conditions are not met, then any bailout should not proceed. These conditions would require the Government to urgently act to pull us back from the brink.
There need to be two non-negotiable conditions set on this bailout. First, the Government must send an unequivocal warning to all New Zealanders that the Government cannot afford, nor will it entertain, any future bailouts. This is it. If you want to try and benefit from running a risk, you must be prepared to live with the consequences. The Government can no longer afford to pick up the tab.
Second, the Government gets its books in order. We may have been able to absorb various shocks to the economy if Government was not already standing on the economic brink. We need to get Government spending under control immediately; going slow is no longer possible.
Once again with the AMI bailout, we are doing what we have done before – looking for a quick way out instead of fixing the problems at their root. This approach will have consequences that hardly bear thinking about, maybe not this time, but in the end it will push us up to and over the economic brink.
I have been warning the Government of this moment for the last two years. Here is what I said in March 2009:
“All this talk of bailouts and the like undermine certainty. It suggests to business that the Government may begin to actively pick winners and losers. But such an approach is a recipe for disaster.”
The fact is that at this time the country cannot afford an irresolute Government like the one we have now, or a Labour Government that wants to go back to the policies it pursued in the last decade. New Zealanders need to separate the rhetoric from the reality. We simply cannot go on borrowing $300 million a week - piling up debt onto our grandchildren.
It is time the Government started to act in the interests of the nation as a whole. The Government’s refusal to get public spending under control has been economically disastrous given the risks we face at home fiscally. What principles should Government follow to get us out of the mess we find ourselves in?
Government needs to focus more on creating an environment where there is choice, competition and diversity. Government does not itself need to be provider of services. Competition within and between the private and public sectors is vital. Ownership often distracts from what is important. There should be no rule or special assistance that favours one sector over another, the consumer should be sovereign.
The 10 lessons from my speech in 10 March 2009 are equally relevant.
When you boil it down, the way Bill English has run the economy is no different to the way AMI has run their business. They have both lived on the edge of financial ruin where one more unforeseen catastrophic event will push them over the edge. My question is this: who is going to bail out Bill English when the New Zealand Government can no longer play this game?