Launch of NZ By Design book
22/07/11 10:52 Filed in: Speeches
Launch of NZ By Design book - speech by Jim Anderton
Thursday, 21 July
Legend has it that our great Nobel-prize winning scientist Lord Rutherford was once asked what made New Zealanders such industrious and curious innovators. He replied: We don’t have much money, so we have to think!
Michael Smythe has produced a book that tells us about the process of thinking in New Zealand.
Like Lord Rutherford, Michael Smythe is right that the driving force of New Zealand innovation is our distance and isolation. We don’t have large amounts of money to throw at problems.
I was once introduced to a Japanese entrepreneur who had made a large investment in IT in Christchurch - he bought a business with over two hundred research staff. It didn’t produce a single product for sale. Its entire production was research for his company’s needs in California and Japan.
So I asked him why he came to Christchurch for that investment, and he told me he had a particular research problem that had been troubling his company for years. They had thrown the best IT equipment and brains not to mention money they could find at the problem, and it was taking them years to solve.
Then he brought the problem to Christchurch and found someone who solved it by hooking up a few old PCs and got the research finished in weeks. When he asked why, how his New Zealand researchers had done what no-one else had been able to do, he was told: “We’re not used to having the money to hire huge numbers of people, so we took a fresh look at identifying the problem and how it could be solved with the resources at his disposal”.
New Zealand’s isolation gives us the drive to innovate, to solve problems using our wits. That’s how the Hamilton Jet was developed, and countless other kiwi problems solved. It is not the ‘Number 8 wire’ approach. It’s the application of intellectual grunt. But our isolation also gives us something else - it gives us a precious advantage: the freedom to try things out.
New Zealanders expect to have a go at things, and risk failure. And risking failure is a critical element of innovation. We can have a go, and we can even fail and get back up because we are small and we can, where in many countries, failure is career ending, and so decision-makers are risk averse.
This was how our much-loved myth of Kiwi ingenuity was born. But unfortunately, the so-called Number 8 wire economy has its limits, too.
When I set up a Ministry of Economic Development a bit over ten years ago, one of our priorities in getting our economy growing, and creating jobs, was to sell to the world many more products that rely on our unique skill and creativity. Because uniqueness and creativity command a premium. They are the key to lifting our incomes.
For most of our economic history, our economy relied on the sun shining, the rain falling and the grass growing. But other countries can grow grass too.
The advantage we have that they can never match is our unique creativity. Design is one of the most important expressions of that. Not just styling, but the conception of how a product will be used, a view about what it is for and a unique way to bring that concept into being: That’s how you make products that earn us more tomorrow than we earned yesterday.
Back about five years ago I used to give speeches pointing out that five years before then, at the opening of the twentieth century, no one had ever heard of an iPod. And of course, just five years before today, no one had ever heard of an iPhone.
This week Apple announced they sold twenty million of them … in the last three months. Two years ago, none of us had heard of an iPad.
In the last twelve weeks Apple sold nine million at an average of nearly a thousand dollars each - $9000 million worth!
Each of those products is an example of brilliant innovation from a design-led company that demonstrates, in a spectacular way, that design and creativity have awesome potential.
There are many engineering innovations, but what is special about these products - and others - is that they weren’t waiting around to be discovered. Other people had already come up with mobile phones, and MP3 players. What they might never have come up with was the unique implementation. It was design that made the products different and successful.
This is important when we think about design in New Zealand.
It means there is not some form of ‘New Zealand design’ sitting around to be discovered. Instead, there is a way of looking at things that can only come from New Zealand. And if we want New Zealand to be successful, we have to harness that New Zealand uniqueness. We have to encourage more businesses to embrace a unique way of looking at things.
A few years ago I set up a New Zealand Design Group to work out how to better use design to improve New Zealand’s exporting. It discovered there is far more New Zealand potential in our industry than most people imagined. But the hard question to ask was why more of it wasn’t developed to create New Zealand products.
They found we don’t use our natural advantages very well - advantages they identified included international respect for our education system. Another is our cultural diversity - especially the unique quality Maori and Pacific Island influence.
Experts said that because we have mainly small firms, many see design services as ‘too costly’ or an add-on to their core business. Even among the bigger firms, there is a general lack of understanding of the value of design in the way leading export firms like Fisher and Paykel or Formway have understood.
Fisher & Paykel had a huge commercial hit with their dish drawer, which was created because the design team regarded nothing as given in the design process. They came up with a drawer that washed dishes, and developed a product that was sold all over the world.
That’s a pretty good example of what we need more of. But we have legitimate questions to ask about what is the best way to unleash this potential.
I strongly believe the best - in fact the only way - to get industry to take the necessary risks in a small country like New Zealand is for government to partner with industry.
That’s the only way we will align the elements of our education system, export agencies, industry training and everything else we need to get right.
It’s why the then-government created a research and development tax credit and set up NZ Trade & Enterprise to work with industry in promoting design.
The current government has a different perspective on this issue - its view is that the government should stand back and the market will create the necessary innovation all on its own, which is why one of the first things they did in government was to axe the R&D tax credit.
I don’t want to involve you in a political debate about the merits of these different approaches. But I do want to ask you to engage closely with it.
I get frustrated by hearing people say ‘politicians don’t get it’ when it comes to the need to lift the value of our exports and create more design-led products. The truth is that there is a divide in politics between those of us who see a hands-on role for the government in unlocking our development potential on one side; and those who believe in hands off on the other side.
I urge you to contribute to that discussion - and to have a strong view about what the government can do to help, and make your view known.
My own priorities are in several areas.
I think we need to incentivise R&D. We just don’t do enough in the private sector. Our government research and development is about average by world standards, and we commercialise more of our R&D than most countries.
What we don’t do is spend enough time on R&D in our private businesses. That is both a result and a cause of not putting enough emphasis on design in business processes. As one wag said, too much of our industry is structured around one set of Aucklanders selling haircuts to the people who they pay to mow their lawns.
So we need to promote awareness of the difference design can make.
When people see how success is achieved, they are inspired to emulate that success. If we think of our fashion industry, the success of labels like World and Karen Walker have helped inspire another generation of small businesses built on design and creativity.
A book like Michael Smythe’s will help inspire people and make them aware, too, so I welcome it. It can help us to see how design made a difference to creating the New Zealand we have today.
We tend to think that the way things are today is an inevitable result of history. Those decisions in our past are like water trickling downhill to reach an inevitable stream. But most of history is not inevitable - it is the result of decisions, and because you and I are all decision-makers, we can all influence tomorrow’s history.
We should not accept limitations on what New Zealand can achieve. We need to be fiercely determined to be better than any other country. We need to be prepared to accept failure on the way, and not punish those who try but fail. That is the environment where design can thrive and make a difference to our businesses.
It is an environment that is achievable in New Zealand, but it is not always what we do. Unleashing and exporting more of our creativity is immensely important to New Zealand. It is the only way we will transform our industrial base.
Smart investment in design can produce an enormous return in jobs, and higher incomes.
So I welcome this book’s contribution to that future, and I welcome the change it will help to promote in our attitudes to design and the difference it makes.
I wish this book, and its author, the success they deserve.
Thursday, 21 July
Legend has it that our great Nobel-prize winning scientist Lord Rutherford was once asked what made New Zealanders such industrious and curious innovators. He replied: We don’t have much money, so we have to think!
Michael Smythe has produced a book that tells us about the process of thinking in New Zealand.
Like Lord Rutherford, Michael Smythe is right that the driving force of New Zealand innovation is our distance and isolation. We don’t have large amounts of money to throw at problems.
I was once introduced to a Japanese entrepreneur who had made a large investment in IT in Christchurch - he bought a business with over two hundred research staff. It didn’t produce a single product for sale. Its entire production was research for his company’s needs in California and Japan.
So I asked him why he came to Christchurch for that investment, and he told me he had a particular research problem that had been troubling his company for years. They had thrown the best IT equipment and brains not to mention money they could find at the problem, and it was taking them years to solve.
Then he brought the problem to Christchurch and found someone who solved it by hooking up a few old PCs and got the research finished in weeks. When he asked why, how his New Zealand researchers had done what no-one else had been able to do, he was told: “We’re not used to having the money to hire huge numbers of people, so we took a fresh look at identifying the problem and how it could be solved with the resources at his disposal”.
New Zealand’s isolation gives us the drive to innovate, to solve problems using our wits. That’s how the Hamilton Jet was developed, and countless other kiwi problems solved. It is not the ‘Number 8 wire’ approach. It’s the application of intellectual grunt. But our isolation also gives us something else - it gives us a precious advantage: the freedom to try things out.
New Zealanders expect to have a go at things, and risk failure. And risking failure is a critical element of innovation. We can have a go, and we can even fail and get back up because we are small and we can, where in many countries, failure is career ending, and so decision-makers are risk averse.
This was how our much-loved myth of Kiwi ingenuity was born. But unfortunately, the so-called Number 8 wire economy has its limits, too.
When I set up a Ministry of Economic Development a bit over ten years ago, one of our priorities in getting our economy growing, and creating jobs, was to sell to the world many more products that rely on our unique skill and creativity. Because uniqueness and creativity command a premium. They are the key to lifting our incomes.
For most of our economic history, our economy relied on the sun shining, the rain falling and the grass growing. But other countries can grow grass too.
The advantage we have that they can never match is our unique creativity. Design is one of the most important expressions of that. Not just styling, but the conception of how a product will be used, a view about what it is for and a unique way to bring that concept into being: That’s how you make products that earn us more tomorrow than we earned yesterday.
Back about five years ago I used to give speeches pointing out that five years before then, at the opening of the twentieth century, no one had ever heard of an iPod. And of course, just five years before today, no one had ever heard of an iPhone.
This week Apple announced they sold twenty million of them … in the last three months. Two years ago, none of us had heard of an iPad.
In the last twelve weeks Apple sold nine million at an average of nearly a thousand dollars each - $9000 million worth!
Each of those products is an example of brilliant innovation from a design-led company that demonstrates, in a spectacular way, that design and creativity have awesome potential.
There are many engineering innovations, but what is special about these products - and others - is that they weren’t waiting around to be discovered. Other people had already come up with mobile phones, and MP3 players. What they might never have come up with was the unique implementation. It was design that made the products different and successful.
This is important when we think about design in New Zealand.
It means there is not some form of ‘New Zealand design’ sitting around to be discovered. Instead, there is a way of looking at things that can only come from New Zealand. And if we want New Zealand to be successful, we have to harness that New Zealand uniqueness. We have to encourage more businesses to embrace a unique way of looking at things.
A few years ago I set up a New Zealand Design Group to work out how to better use design to improve New Zealand’s exporting. It discovered there is far more New Zealand potential in our industry than most people imagined. But the hard question to ask was why more of it wasn’t developed to create New Zealand products.
They found we don’t use our natural advantages very well - advantages they identified included international respect for our education system. Another is our cultural diversity - especially the unique quality Maori and Pacific Island influence.
Experts said that because we have mainly small firms, many see design services as ‘too costly’ or an add-on to their core business. Even among the bigger firms, there is a general lack of understanding of the value of design in the way leading export firms like Fisher and Paykel or Formway have understood.
Fisher & Paykel had a huge commercial hit with their dish drawer, which was created because the design team regarded nothing as given in the design process. They came up with a drawer that washed dishes, and developed a product that was sold all over the world.
That’s a pretty good example of what we need more of. But we have legitimate questions to ask about what is the best way to unleash this potential.
I strongly believe the best - in fact the only way - to get industry to take the necessary risks in a small country like New Zealand is for government to partner with industry.
That’s the only way we will align the elements of our education system, export agencies, industry training and everything else we need to get right.
It’s why the then-government created a research and development tax credit and set up NZ Trade & Enterprise to work with industry in promoting design.
The current government has a different perspective on this issue - its view is that the government should stand back and the market will create the necessary innovation all on its own, which is why one of the first things they did in government was to axe the R&D tax credit.
I don’t want to involve you in a political debate about the merits of these different approaches. But I do want to ask you to engage closely with it.
I get frustrated by hearing people say ‘politicians don’t get it’ when it comes to the need to lift the value of our exports and create more design-led products. The truth is that there is a divide in politics between those of us who see a hands-on role for the government in unlocking our development potential on one side; and those who believe in hands off on the other side.
I urge you to contribute to that discussion - and to have a strong view about what the government can do to help, and make your view known.
My own priorities are in several areas.
I think we need to incentivise R&D. We just don’t do enough in the private sector. Our government research and development is about average by world standards, and we commercialise more of our R&D than most countries.
What we don’t do is spend enough time on R&D in our private businesses. That is both a result and a cause of not putting enough emphasis on design in business processes. As one wag said, too much of our industry is structured around one set of Aucklanders selling haircuts to the people who they pay to mow their lawns.
So we need to promote awareness of the difference design can make.
When people see how success is achieved, they are inspired to emulate that success. If we think of our fashion industry, the success of labels like World and Karen Walker have helped inspire another generation of small businesses built on design and creativity.
A book like Michael Smythe’s will help inspire people and make them aware, too, so I welcome it. It can help us to see how design made a difference to creating the New Zealand we have today.
We tend to think that the way things are today is an inevitable result of history. Those decisions in our past are like water trickling downhill to reach an inevitable stream. But most of history is not inevitable - it is the result of decisions, and because you and I are all decision-makers, we can all influence tomorrow’s history.
We should not accept limitations on what New Zealand can achieve. We need to be fiercely determined to be better than any other country. We need to be prepared to accept failure on the way, and not punish those who try but fail. That is the environment where design can thrive and make a difference to our businesses.
It is an environment that is achievable in New Zealand, but it is not always what we do. Unleashing and exporting more of our creativity is immensely important to New Zealand. It is the only way we will transform our industrial base.
Smart investment in design can produce an enormous return in jobs, and higher incomes.
So I welcome this book’s contribution to that future, and I welcome the change it will help to promote in our attitudes to design and the difference it makes.
I wish this book, and its author, the success they deserve.
Youth suicide will rise over the next few years
21/07/11 17:55 Filed in: News Releases
Youth suicide rates will rise over the next two to four years, as a result of shockingly high youth unemployment rates, Progressive Wigram MP Jim Anderton is warning.
“High suicide rates follow high levels of youth unemployment, sure as night follows day.
“Youth unemployment today is near record levels and among the highest in the developed world.
“High rates of youth unemployment inevitably lead to high rates of suicide.
“In the nineties, four peak years of youth unemployment were followed by the highest youth suicide rates in the Western world.
“We are about to see a repeat. Our suicide rates are already at high levels, with over five hundred deaths a year. At the current level of youth unemployment, suicide will increase again in coming years.”
He says the NZ Institute's snakes and ladders report shows New Zealand has the lowest median school leaving age in the OECD. Over a third of 16 year olds report being usually or always bored at school, and want to leave as soon as possible.
“Teenagers in New Zealand face high levels of unemployment, crime, and depression - materially worse on all these scores than the average of other developed countries.
“As the NZ Institute reported, 'Unemployment is central; it is an important consequence of disadvantage. Disengaged, inactive youth are at greater risk of lower earnings, needing social assistance, criminal offending, substance abuse, teenage births, suicide, homelessness and mental or physical ill health.
“The tragedy of youth unemployment is only the beginning. The Government's choice to do nothing effective about youth unemployment has tragic consequences," Jim Anderton says
“High suicide rates follow high levels of youth unemployment, sure as night follows day.
“Youth unemployment today is near record levels and among the highest in the developed world.
“High rates of youth unemployment inevitably lead to high rates of suicide.
“In the nineties, four peak years of youth unemployment were followed by the highest youth suicide rates in the Western world.
“We are about to see a repeat. Our suicide rates are already at high levels, with over five hundred deaths a year. At the current level of youth unemployment, suicide will increase again in coming years.”
He says the NZ Institute's snakes and ladders report shows New Zealand has the lowest median school leaving age in the OECD. Over a third of 16 year olds report being usually or always bored at school, and want to leave as soon as possible.
“Teenagers in New Zealand face high levels of unemployment, crime, and depression - materially worse on all these scores than the average of other developed countries.
“As the NZ Institute reported, 'Unemployment is central; it is an important consequence of disadvantage. Disengaged, inactive youth are at greater risk of lower earnings, needing social assistance, criminal offending, substance abuse, teenage births, suicide, homelessness and mental or physical ill health.
“The tragedy of youth unemployment is only the beginning. The Government's choice to do nothing effective about youth unemployment has tragic consequences," Jim Anderton says
Asset Sales: Debate on the PM's Statement
08/02/11 18:48 Filed in: Speeches
Mr Speaker,
The headline on the front page of the Christchurch Press on Saturday reads: “Does this look like the road to recovery?”
The obvious answer – 5 months after the earthquake is a resounding NO. In my electorate office area of Selwyn Village, Spreydon – every single business on the opposite side of the road has left their premises – nothing has changed or been done since Sept. 4 and the only answer we get to our urgent enquiries is that the Council is talking to the owner! Every single business in our village is now at risk – almost no parking, cordons everywhere and no action.
FAST FORWARD to NEW ZEALAND’S Economic Recovery and how do John Key’s words about an ‘aspirational government’ and heroic television appearances pledging progress and prosperity match up with the same kind of rhetoric we saw night after night on television at the time of the earthquake.
Again – the obvious answer is “about the same”.
Lots of hype – not enough action.
Here are the problems that the Prime Minister should have talked about this afternoon:
After more than two years of his government, economic growth has stopped.
Any so-called recovery has stalled.
Unemployment is going UP, not DOWN.
Jobs are being lost, not created.
The cost of living is increasing, but incomes aren’t. Keeping pace – particularly for low-middle income New Zealanders.
What is the prime minister’s strategy to tackle those problems?
He doesn’t have one.
He has had all summer, and he comes down to this House with a plan to muddle through - a shopping list that won’t create jobs, won’t lift incomes, and won’t help.
His economic policy consists of assets sales.
That is not an economic policy: It is a surrender of the sovereignty of New Zealand.
Not one new job will be created by selling off the people’s power companies.
But every one of us will be paying higher power bills to the new overseas owners.
We know this because we’ve seen it all before.
John Key wasn’t in New Zealand for most of the eighties and nineties.
But I was here, and I heard all the arguments for asset sales last time around.
The arguments for assets sales were fatally flawed then, and they are fatally flawed now.
I walked out of the then government caucus because assets sales were a bad idea, and the idea hasn’t got any better.
And that’s why we had to buy assets back.
We had to buy back the rail system because National privatised and allowed it to be wrecked.
We had to buy back Air NZ because the private owners bankrupted it.
We had to start a new bank because the foreign owners of our entire banking industry sucked New Zealand dry: They closed 1300 branches, they increased fees and their own profits, shipped from overseas at the rate of $1306 million a year and we had to do something about it.
Why would selling our power companies be any different?
Why would the new foreign owners suddenly discover the virtue of charity over shareholder profit?
Why would the assets not fall into foreign ownership, just like the last lot that were going to be kept for ‘kiwi mums and dads?’
I am here to bear witness that the same mistakes are being proposed as were made last time a government paid for tax cuts by selling off public assets.
The same tired old lines from the past are being trotted out, and the same promises that it will be different this time.
The only thing that has restrained the rapaciousness of the power companies in the last ten years has been the threat of the government changing the composition of their boards.
When the power companies are sold and the boards are free to do what they want, even, worse, what they have to do by law - look after the interests of their minority shareholders, what will protect householders who have to keep paying higher costs for essential electricity.
The National Party says selling assets will pay down debt.
That is exactly what was said in the eighties by Roger Douglas.
It’s what was said in the nineties by the National Government.
And what happened?
After selling nineteen billion dollars’ worth of assets - we had more debt as a country than when we started. Selling the family silver.
Selling assets increases debt, it doesn’t reduce debt.
There is something outrageous about giving tax cuts that cost $43 million a week for just the top ten per cent of earners - and then claiming we have a debt problem because we are borrowing too much.
What we will end up with is more profits going overseas.
And that will mean our overseas debt will get worse.
Every time we turn on a light, the overseas owners will harvest a profit.
Every time a business starts a machine, the overseas owners will get a cheque from us.
A river in New Zealand, dammed by New Zealand for generations, supplies power along a transmission network built and maintained by New Zealanders, to a household in New Zealand. And somehow, someone in another country will clip the ticket on that transaction.
That is what privatisation means.
Mr Key says the assets will be kept in New Zealand hands.
But that is what they said about Contact Energy, the Bank of NZ, Postbank, Air NZ, NZ Rail and practically every other strategic asset which was privatised.
Who owns them now? Not the Kiwi Mums and Dads. The majority interests (apart from those the last Labour-led government bought back) are mainly held in Australia.
Who owns the New Zealand forests that National sold in the nineties, claiming it would pay off all the debt?
If we had kept those forests, the government could today be planting them, providing thousands of jobs, earning exports and growing New Zealand.
But who did they sell them to?
The Chinese Government!
The National Party has never explained why the New Zealand government can’t run a forest, but the Communist Chinese government can – of course, in the end they couldn’t and didn’t.
They said then that transaction would pay off the debt - and now they say we have to sell more to pay off the debt.
This is National’s entire economic programme.
What else have they got in mind to grow and create jobs? Nothing.
After last year’s budget, I made a few predictions in this House about what would happen.
Let’s look at record:
I said the average New Zealander would not be better off, because if people are not on a high income, this government is not going to help.
What happened? People on average or below incomes (the majority of New Zealanders), are worse off now than they were a year ago.
I said that unemployment would be higher - what happened?
Unemployment today is higher than when National took office.
It is higher than it was last December.
And the government has stopped even pretending it has any idea where new jobs will come from – what has happened to Mr Key’s bike trail and the thousands of jobs that were supposed to come from it.
And nothing the prime minister said today will increase exports.
Nothing he said today will boost investment in research and development and help us increase productivity.
Last year I said the gap between rich and poor would increase.
That’s not rocket science - when you give a thousand dollars a week tax cut to the prime minister, but someone on the average wage ends up worse off after price rises - then the gap between the very top and everyone else widens.
I said more kids would grow up in poverty.
What’s happened in McGechan Close, where John Key went in 2008 to pretend he is compassionate about children in poverty?
What has happened is that he doesn’t want to talk about it anymore.
The people of McGechan Close are worse off. Much worse off.
The young girl he took to Waitangi is now in CYFs care.
What was announced today that would make her better off? Nothing.
Here’s what a respected Professor of Epidemiology in New Zealand said last year:
“In New Zealand, social injustice is killing and maiming our children on a grand scale.”
We top the scales for OECD rates of whooping cough, rheumatic fever, pneumonia and other diseases in children.
28% of our children still live in poverty.
How many have more hope this afternoon than they had this morning?
None.
What do they have instead of more hope?
They have more unemployment.
More GST.
More price rises.
Higher rents.
And a government that doesn’t care about anyone except itself and the top 10% of income earners in New Zealand.
The headline on the front page of the Christchurch Press on Saturday reads: “Does this look like the road to recovery?”
The obvious answer – 5 months after the earthquake is a resounding NO. In my electorate office area of Selwyn Village, Spreydon – every single business on the opposite side of the road has left their premises – nothing has changed or been done since Sept. 4 and the only answer we get to our urgent enquiries is that the Council is talking to the owner! Every single business in our village is now at risk – almost no parking, cordons everywhere and no action.
FAST FORWARD to NEW ZEALAND’S Economic Recovery and how do John Key’s words about an ‘aspirational government’ and heroic television appearances pledging progress and prosperity match up with the same kind of rhetoric we saw night after night on television at the time of the earthquake.
Again – the obvious answer is “about the same”.
Lots of hype – not enough action.
Here are the problems that the Prime Minister should have talked about this afternoon:
After more than two years of his government, economic growth has stopped.
Any so-called recovery has stalled.
Unemployment is going UP, not DOWN.
Jobs are being lost, not created.
The cost of living is increasing, but incomes aren’t. Keeping pace – particularly for low-middle income New Zealanders.
What is the prime minister’s strategy to tackle those problems?
He doesn’t have one.
He has had all summer, and he comes down to this House with a plan to muddle through - a shopping list that won’t create jobs, won’t lift incomes, and won’t help.
His economic policy consists of assets sales.
That is not an economic policy: It is a surrender of the sovereignty of New Zealand.
Not one new job will be created by selling off the people’s power companies.
But every one of us will be paying higher power bills to the new overseas owners.
We know this because we’ve seen it all before.
John Key wasn’t in New Zealand for most of the eighties and nineties.
But I was here, and I heard all the arguments for asset sales last time around.
The arguments for assets sales were fatally flawed then, and they are fatally flawed now.
I walked out of the then government caucus because assets sales were a bad idea, and the idea hasn’t got any better.
And that’s why we had to buy assets back.
We had to buy back the rail system because National privatised and allowed it to be wrecked.
We had to buy back Air NZ because the private owners bankrupted it.
We had to start a new bank because the foreign owners of our entire banking industry sucked New Zealand dry: They closed 1300 branches, they increased fees and their own profits, shipped from overseas at the rate of $1306 million a year and we had to do something about it.
Why would selling our power companies be any different?
Why would the new foreign owners suddenly discover the virtue of charity over shareholder profit?
Why would the assets not fall into foreign ownership, just like the last lot that were going to be kept for ‘kiwi mums and dads?’
I am here to bear witness that the same mistakes are being proposed as were made last time a government paid for tax cuts by selling off public assets.
The same tired old lines from the past are being trotted out, and the same promises that it will be different this time.
The only thing that has restrained the rapaciousness of the power companies in the last ten years has been the threat of the government changing the composition of their boards.
When the power companies are sold and the boards are free to do what they want, even, worse, what they have to do by law - look after the interests of their minority shareholders, what will protect householders who have to keep paying higher costs for essential electricity.
The National Party says selling assets will pay down debt.
That is exactly what was said in the eighties by Roger Douglas.
It’s what was said in the nineties by the National Government.
And what happened?
After selling nineteen billion dollars’ worth of assets - we had more debt as a country than when we started. Selling the family silver.
Selling assets increases debt, it doesn’t reduce debt.
There is something outrageous about giving tax cuts that cost $43 million a week for just the top ten per cent of earners - and then claiming we have a debt problem because we are borrowing too much.
What we will end up with is more profits going overseas.
And that will mean our overseas debt will get worse.
Every time we turn on a light, the overseas owners will harvest a profit.
Every time a business starts a machine, the overseas owners will get a cheque from us.
A river in New Zealand, dammed by New Zealand for generations, supplies power along a transmission network built and maintained by New Zealanders, to a household in New Zealand. And somehow, someone in another country will clip the ticket on that transaction.
That is what privatisation means.
Mr Key says the assets will be kept in New Zealand hands.
But that is what they said about Contact Energy, the Bank of NZ, Postbank, Air NZ, NZ Rail and practically every other strategic asset which was privatised.
Who owns them now? Not the Kiwi Mums and Dads. The majority interests (apart from those the last Labour-led government bought back) are mainly held in Australia.
Who owns the New Zealand forests that National sold in the nineties, claiming it would pay off all the debt?
If we had kept those forests, the government could today be planting them, providing thousands of jobs, earning exports and growing New Zealand.
But who did they sell them to?
The Chinese Government!
The National Party has never explained why the New Zealand government can’t run a forest, but the Communist Chinese government can – of course, in the end they couldn’t and didn’t.
They said then that transaction would pay off the debt - and now they say we have to sell more to pay off the debt.
This is National’s entire economic programme.
What else have they got in mind to grow and create jobs? Nothing.
After last year’s budget, I made a few predictions in this House about what would happen.
Let’s look at record:
I said the average New Zealander would not be better off, because if people are not on a high income, this government is not going to help.
What happened? People on average or below incomes (the majority of New Zealanders), are worse off now than they were a year ago.
I said that unemployment would be higher - what happened?
Unemployment today is higher than when National took office.
It is higher than it was last December.
And the government has stopped even pretending it has any idea where new jobs will come from – what has happened to Mr Key’s bike trail and the thousands of jobs that were supposed to come from it.
And nothing the prime minister said today will increase exports.
Nothing he said today will boost investment in research and development and help us increase productivity.
Last year I said the gap between rich and poor would increase.
That’s not rocket science - when you give a thousand dollars a week tax cut to the prime minister, but someone on the average wage ends up worse off after price rises - then the gap between the very top and everyone else widens.
I said more kids would grow up in poverty.
What’s happened in McGechan Close, where John Key went in 2008 to pretend he is compassionate about children in poverty?
What has happened is that he doesn’t want to talk about it anymore.
The people of McGechan Close are worse off. Much worse off.
The young girl he took to Waitangi is now in CYFs care.
What was announced today that would make her better off? Nothing.
Here’s what a respected Professor of Epidemiology in New Zealand said last year:
“In New Zealand, social injustice is killing and maiming our children on a grand scale.”
We top the scales for OECD rates of whooping cough, rheumatic fever, pneumonia and other diseases in children.
28% of our children still live in poverty.
How many have more hope this afternoon than they had this morning?
None.
What do they have instead of more hope?
They have more unemployment.
More GST.
More price rises.
Higher rents.
And a government that doesn’t care about anyone except itself and the top 10% of income earners in New Zealand.
Lots of hype, not enough action
08/02/11 18:47 Filed in: News Releases
The lack of action on recovery for Christchurch from last September’s earthquake matches the National Government’s lack of action on economic growth, jobs and the cost of living, Wigram MP Jim Anderton told parliament today in debate over the Prime Minister’s Statement.
He warned that the National Party’s planned asset sales would not create any jobs, but would send more profits overseas.
“Does this look like the road to recovery? Five months after the earthquake every business on the opposite side of the road from my electorate office has left their premises. Nothing has changed or been done since September 4,” Jim Anderton said.
“Fast Forward to New Zealand’s economic recovery: After more than two years of his government, economic growth has stopped. Unemployment is going up, not down. Jobs are being lost not created, the cost of living is increasing but incomes aren’t.
“What is the prime minister’s strategy to tackle those problems? He doesn’t have one.”
Jim Anderton said asset sales are not an economic policy.
“It is a surrender of the sovereignty of New Zealand. Not one job will be created by selling off the people’s power companies. But every one of us will be paying higher power bills to overseas owners. And that will mean our overseas debt will get worse.
“Every time we turn on a light, the overseas owners will harvest a profit. Every time a business starts a machine, the overseas owners will get a cheque from us. A river in New Zealand, dammed by New Zealand for generations, supplies power along a transmission network built and maintained by New Zealanders, to a household in New Zealand. And somehow, someone in another country will clip the ticket on that transaction. That is what privatisation means.
“Mr Key says the assets will be kept in New Zealand hands. But that is what they said about Contact Energy. The Bank of New Zealand, Postbank, Air New Zealand, NZ Rail and practically every strategic asset which was privatised - who owns them now? Apart from those the last Labour-led Government bought back, they are mainly held in Australia,” Jim Anderton said.
He warned that the National Party’s planned asset sales would not create any jobs, but would send more profits overseas.
“Does this look like the road to recovery? Five months after the earthquake every business on the opposite side of the road from my electorate office has left their premises. Nothing has changed or been done since September 4,” Jim Anderton said.
“Fast Forward to New Zealand’s economic recovery: After more than two years of his government, economic growth has stopped. Unemployment is going up, not down. Jobs are being lost not created, the cost of living is increasing but incomes aren’t.
“What is the prime minister’s strategy to tackle those problems? He doesn’t have one.”
Jim Anderton said asset sales are not an economic policy.
“It is a surrender of the sovereignty of New Zealand. Not one job will be created by selling off the people’s power companies. But every one of us will be paying higher power bills to overseas owners. And that will mean our overseas debt will get worse.
“Every time we turn on a light, the overseas owners will harvest a profit. Every time a business starts a machine, the overseas owners will get a cheque from us. A river in New Zealand, dammed by New Zealand for generations, supplies power along a transmission network built and maintained by New Zealanders, to a household in New Zealand. And somehow, someone in another country will clip the ticket on that transaction. That is what privatisation means.
“Mr Key says the assets will be kept in New Zealand hands. But that is what they said about Contact Energy. The Bank of New Zealand, Postbank, Air New Zealand, NZ Rail and practically every strategic asset which was privatised - who owns them now? Apart from those the last Labour-led Government bought back, they are mainly held in Australia,” Jim Anderton said.
National Government has no ideas
21/07/10 17:54 Filed in: Speeches
Jim Anderton’s speech in the General Debate in parliament
This is a government with no plan, no new ideas - but lots of smiles from Mr Key - who is starting to look like the Wizard of Oz.
A traveling magician who pulls out another trick every time the last trick fails.
But you can only trick Dorothy and the tin man for so long.
Because the people of New Zealand are starting to see - there is no plan. There is no way back to Kansas.
What has the Wizard of New Zealand pulled out of his bag so far?
We’ve had the 2025 Taskforce which was meant to show how we could catch up Australia.
What happened to that? Nothing. Don Brash failed to deliver - no surprises there - as the Kiwi kid says about the Aussie kid on that TV ad.
But Don’s still being kept on to give another report next year!
Yet he’s run out of money already; some trick for a former Governor General of the Reserve Bank in charge of New Zealand’s monetary policy!
Then we had the job’s summit.
How’s that going?
No new jobs and unemployment is on the rise.
We halved the rate of unemployment when we were in government to under 4%.
Under this government it has risen to 6% already- an increase of 50%.
Now It’s almost returned to what it was under the last National government
You can’t blame that on the recession.
Especially when the only idea to save jobs was the 9-day fortnight. That was meant to save thousands of jobs by getting people to work less, so they get paid less, and businesses stay afloat.
At the most it saved only about one hundred jobs.
But now John Key has come up with another wizard idea: you can sell your 4th week of annual leave.
So he thinks the solution is to get people to work for longer - and that will save the economy?
Which is it? A 9-day fortnight and work less - or sell your holidays and work more?
And what a magicians slight of hand to suggest that you have the choice to ‘sell’ your annual leave.
In my book, it’s just working for an extra week and getting paid for it! Nothing new about that.
John Key says you can even sell your sick leave and your public holidays.
Why not take Christmas day tomorrow - then decide to sell it - and work anyway?
Then we had the cycle way. That was meant to create jobs. Tourist industries were meant to pop up all along the cycle way.
All we’ve seen so far is pictures of John Key on a bike - smiling as always.
It’ll take more than a push bike and cycle way to grow New Zealand.
Mining is now meant to save the New Zealand economy.
What happened to that? Another flip-flop because this smiling Prime Minister doesn’t want to be unpopular.
So what’s the next big idea?
There isn’t one.
If John Key and his government were serious about growing the economy, they wouldn’t just pay lip service to the the farming sector.
The truth is - Agriculture makes up 43% of New Zealand’s exports, compared to tourism which makes up 17%.
And yet John Key didn’t mention farming in 2008 in the post-election speech from the throne.
Didn’t mention it in 2009 in his speech in parliament at the beginning of the year.
Nothing wrong with supporting tourism. But there is something wrong with ignoring farming.
If he thinks he can grow the New Zealand economy while ignoring the farming sector and building cycle ways - he’s dreaming.
What kind of mickey mouse economics smashes the Fast Forward Fund for research into the primary sector, and cancels the tax credit for businesses in favour of a cycle way?
That was a loss of over $2 and half billion for the productive, export earning sectors of the New Zealand economy.
You don’t have to be a rocket scientist to see that the farming sector belongs at the centre of any government’s economic strategy.
Previous governments had demoted it to a ‘sunset industry’.
John Key’s government is doing the same.
Instead of playing wizard tricks on the people of New Zealand, John Key needs to get serious.
New Zealand could be a global centre for food production; for IT and for good ideas that add value to what we already do well - grow and make food.
This government has no plans to grow the economy. No plans to create jobs.
Like the Wizard of Oz - Mr Key is hiding behind bright lights and all the tricks of the trade.
But New Zealanders are starting to see that there are no more tricks in the bag. The Wizard has no clothes
This is a government with no plan, no new ideas - but lots of smiles from Mr Key - who is starting to look like the Wizard of Oz.
A traveling magician who pulls out another trick every time the last trick fails.
But you can only trick Dorothy and the tin man for so long.
Because the people of New Zealand are starting to see - there is no plan. There is no way back to Kansas.
What has the Wizard of New Zealand pulled out of his bag so far?
We’ve had the 2025 Taskforce which was meant to show how we could catch up Australia.
What happened to that? Nothing. Don Brash failed to deliver - no surprises there - as the Kiwi kid says about the Aussie kid on that TV ad.
But Don’s still being kept on to give another report next year!
Yet he’s run out of money already; some trick for a former Governor General of the Reserve Bank in charge of New Zealand’s monetary policy!
Then we had the job’s summit.
How’s that going?
No new jobs and unemployment is on the rise.
We halved the rate of unemployment when we were in government to under 4%.
Under this government it has risen to 6% already- an increase of 50%.
Now It’s almost returned to what it was under the last National government
You can’t blame that on the recession.
Especially when the only idea to save jobs was the 9-day fortnight. That was meant to save thousands of jobs by getting people to work less, so they get paid less, and businesses stay afloat.
At the most it saved only about one hundred jobs.
But now John Key has come up with another wizard idea: you can sell your 4th week of annual leave.
So he thinks the solution is to get people to work for longer - and that will save the economy?
Which is it? A 9-day fortnight and work less - or sell your holidays and work more?
And what a magicians slight of hand to suggest that you have the choice to ‘sell’ your annual leave.
In my book, it’s just working for an extra week and getting paid for it! Nothing new about that.
John Key says you can even sell your sick leave and your public holidays.
Why not take Christmas day tomorrow - then decide to sell it - and work anyway?
Then we had the cycle way. That was meant to create jobs. Tourist industries were meant to pop up all along the cycle way.
All we’ve seen so far is pictures of John Key on a bike - smiling as always.
It’ll take more than a push bike and cycle way to grow New Zealand.
Mining is now meant to save the New Zealand economy.
What happened to that? Another flip-flop because this smiling Prime Minister doesn’t want to be unpopular.
So what’s the next big idea?
There isn’t one.
If John Key and his government were serious about growing the economy, they wouldn’t just pay lip service to the the farming sector.
The truth is - Agriculture makes up 43% of New Zealand’s exports, compared to tourism which makes up 17%.
And yet John Key didn’t mention farming in 2008 in the post-election speech from the throne.
Didn’t mention it in 2009 in his speech in parliament at the beginning of the year.
Nothing wrong with supporting tourism. But there is something wrong with ignoring farming.
If he thinks he can grow the New Zealand economy while ignoring the farming sector and building cycle ways - he’s dreaming.
What kind of mickey mouse economics smashes the Fast Forward Fund for research into the primary sector, and cancels the tax credit for businesses in favour of a cycle way?
That was a loss of over $2 and half billion for the productive, export earning sectors of the New Zealand economy.
You don’t have to be a rocket scientist to see that the farming sector belongs at the centre of any government’s economic strategy.
Previous governments had demoted it to a ‘sunset industry’.
John Key’s government is doing the same.
Instead of playing wizard tricks on the people of New Zealand, John Key needs to get serious.
New Zealand could be a global centre for food production; for IT and for good ideas that add value to what we already do well - grow and make food.
This government has no plans to grow the economy. No plans to create jobs.
Like the Wizard of Oz - Mr Key is hiding behind bright lights and all the tricks of the trade.
But New Zealanders are starting to see that there are no more tricks in the bag. The Wizard has no clothes
Comment on economics and the recession
21/05/09 12:37 Filed in: Columns
Response to Daniel Silva's comments for Country-wide magazine
So Daniel Silva thinks that the current international recession isn’t going to affect New Zealand much. Well that’s all right then? Actually – no. He’s quite wrong to think so for two significant reasons quite aside from the fact that any nation which earns its living as an international commodities trader is going to be affected by what happens to purchasing power in our major markets.
The first of these reasons is that it’s perfectly true that the New Zealand banking and finance sectors have not to anything like the same extent been in the business of offering the sorts of ‘toxic loans’ that banks in the United States and Europe have been. That’s to say they have not been lending large sums of money on securities which are wholly inadequate to cover the loans, to people who can’t afford the repayments and then packaging the loans in ways that make it almost impossible to untangle the debt and which spread it far beyond the originating banks.
But we have nevertheless experienced an overheated speculative housing boom which has now come to an end. At the same time our financial securities market which, although it was re-regulated to an extent following the excesses of the nineteen eighties and nineties remains significantly less regulated than others in the OECD, has paid the price in an unprecedented series of finance company crashes.
All of this exacts a toll that leads to recessionary pressures which when coupled with the impact of the international recession means a significant downturn in our economic growth. Fortunately for the incoming government they have two major advantages to assist them in responding to this situation. The first is the healthy state of the New Zealand economy because of the prudent, some thought over conservative management, of the economy over the last nine years by Finance Minister Michael Cullen.
The irony of that is that had he followed the then advice of his successor Bill English and engaged in significant tax cutting three or four years ago the current Minister of Finance would be far less well placed to cope with recessionary pressures than he actually is. No doubt that irony is lost on Mr Silva.
The second is that there is the backstop of local financial institutions, including the Kiwibank, which are able to pick up a certain amount of the slack although they obviously don’t have the capacity of the major Australian banks which do business here and which we know are more significantly affected by the international downturn.
The second reason why Mr Silva is wrong is that we are already feeling the negative effects. It may be, of course, that he leads a very cloistered life and has not picked up on the reports of job losses which are beginning to come with increasing rapidity.
The unemployed stand at 115,000 for the quarter to March or 5% with more job losses reported daily and the Treasury reporting a possible high of more than 8%.
This compares very unfavourably with the figures for the past nine years which reached lows of just over 3%, a figure not seen for over two decades.
In another of life’s little ironies these unemployment rates were largely the result of the Labour-Progressive government’s emphasis on regional growth and development. Both as Minister of Economic Development and Agriculture I was intent on placing considerable emphasis on regional development to the extent that we inherited an economy in which many regions were in negative growth mode and within three years we had all regions growing at rates which had not been seen for decades in some cases.
We maintained this throughout our nine years in office and thereby provided a cushion against subsequent unemployment. It will be interesting to see if the current government can maintain that record. I do know however that they will not do it by building bicycle tracks or by cutting back on the working fortnight which are measures which are no more likely to resolve unemployment than similar schemes did in the Depression of the thirties. Nor will they do it by cutting public expenditure which didn’t work in the thirties either.
The other area in which the impact is being felt, but which is possibly outside the ken of Mr Silva, is in the voluntary sector in which many organisations rely upon charitable and community trusts and similar bodies to underwrite their activities, many of which are vital to the well being of our communities. These trusts, for very good reasons, have traditionally diversified their investments and in some cases had significant sums invested in overseas securities.
The Auckland Community Trust alone is reported as having suffered losses amounting to two billion dollars and has had to regretfully tell some of its long term beneficiaries that they can no longer be supported. The potential ripple effect of that sort of loss may be incalculable.
Mr Silva is, however, right about one thing. We won’t get through the current downturn by panicking. We need to keep our nerve and mange our way through the recession by continuing to invest in our future as an exporting nation. But hiding our head under the blankets and pretending it isn’t happening is not going to get us there.
So Daniel Silva thinks that the current international recession isn’t going to affect New Zealand much. Well that’s all right then? Actually – no. He’s quite wrong to think so for two significant reasons quite aside from the fact that any nation which earns its living as an international commodities trader is going to be affected by what happens to purchasing power in our major markets.
The first of these reasons is that it’s perfectly true that the New Zealand banking and finance sectors have not to anything like the same extent been in the business of offering the sorts of ‘toxic loans’ that banks in the United States and Europe have been. That’s to say they have not been lending large sums of money on securities which are wholly inadequate to cover the loans, to people who can’t afford the repayments and then packaging the loans in ways that make it almost impossible to untangle the debt and which spread it far beyond the originating banks.
But we have nevertheless experienced an overheated speculative housing boom which has now come to an end. At the same time our financial securities market which, although it was re-regulated to an extent following the excesses of the nineteen eighties and nineties remains significantly less regulated than others in the OECD, has paid the price in an unprecedented series of finance company crashes.
All of this exacts a toll that leads to recessionary pressures which when coupled with the impact of the international recession means a significant downturn in our economic growth. Fortunately for the incoming government they have two major advantages to assist them in responding to this situation. The first is the healthy state of the New Zealand economy because of the prudent, some thought over conservative management, of the economy over the last nine years by Finance Minister Michael Cullen.
The irony of that is that had he followed the then advice of his successor Bill English and engaged in significant tax cutting three or four years ago the current Minister of Finance would be far less well placed to cope with recessionary pressures than he actually is. No doubt that irony is lost on Mr Silva.
The second is that there is the backstop of local financial institutions, including the Kiwibank, which are able to pick up a certain amount of the slack although they obviously don’t have the capacity of the major Australian banks which do business here and which we know are more significantly affected by the international downturn.
The second reason why Mr Silva is wrong is that we are already feeling the negative effects. It may be, of course, that he leads a very cloistered life and has not picked up on the reports of job losses which are beginning to come with increasing rapidity.
The unemployed stand at 115,000 for the quarter to March or 5% with more job losses reported daily and the Treasury reporting a possible high of more than 8%.
This compares very unfavourably with the figures for the past nine years which reached lows of just over 3%, a figure not seen for over two decades.
In another of life’s little ironies these unemployment rates were largely the result of the Labour-Progressive government’s emphasis on regional growth and development. Both as Minister of Economic Development and Agriculture I was intent on placing considerable emphasis on regional development to the extent that we inherited an economy in which many regions were in negative growth mode and within three years we had all regions growing at rates which had not been seen for decades in some cases.
We maintained this throughout our nine years in office and thereby provided a cushion against subsequent unemployment. It will be interesting to see if the current government can maintain that record. I do know however that they will not do it by building bicycle tracks or by cutting back on the working fortnight which are measures which are no more likely to resolve unemployment than similar schemes did in the Depression of the thirties. Nor will they do it by cutting public expenditure which didn’t work in the thirties either.
The other area in which the impact is being felt, but which is possibly outside the ken of Mr Silva, is in the voluntary sector in which many organisations rely upon charitable and community trusts and similar bodies to underwrite their activities, many of which are vital to the well being of our communities. These trusts, for very good reasons, have traditionally diversified their investments and in some cases had significant sums invested in overseas securities.
The Auckland Community Trust alone is reported as having suffered losses amounting to two billion dollars and has had to regretfully tell some of its long term beneficiaries that they can no longer be supported. The potential ripple effect of that sort of loss may be incalculable.
Mr Silva is, however, right about one thing. We won’t get through the current downturn by panicking. We need to keep our nerve and mange our way through the recession by continuing to invest in our future as an exporting nation. But hiding our head under the blankets and pretending it isn’t happening is not going to get us there.
Budget 2009 Speech
28/05/09 12:30 Filed in: Speeches
This is a budget that has all the competence that you would expect from the people responsible for Melissa Lee’s Mt Albert by-election campaign.
The good news: Inflation is no longer a problem. We have finally got the low inflation economy the National Party always said would deliver us its dream economy. How’s that working out now?
National has produced a lacklustre budget that Bill Birch would have been proud of.
In troubled times, when the economy is rocking on the waves of global economic storms, the government has responded weakly.
Not with a vision for the future.
Not with bold steps that will lead New Zealand on a developmental path.
But with a weak, uncertain, sitting on their hands response.
Governments around the world are investing in the future.
This one has slashed the future.
This one is the Broken Promise budget.
The total value of primary sector science investment falls from $2 billion in NZ Fast Forward under the last government to as little as $1.2 billion now.
It is cutting nearly as much out of science and research in the primary sector as it is investing in infrastructure.
Government spending on science and research, on a like for like basis, falls from around a billion government dollars in the NZ Fast Forward Fund, to $610 million in National’s replacement.
With matching private sector funding, the total investment in primary sector research and development falls by $800 million, or about 0.4 per cent of GDP.
In addition, the government has not replaced a cent of the cancelled research and development tax credit.
This is huge cut in science and research.
It is a disaster for the future of New Zealand’s economy.
It is a disaster for the future of our most important economic sector.
Other developed countries are preparing themselves to come out of this recession stronger.
New Zealand is preparing by switching from science and research to poltergeists and UFOs.
The government promised the primary sector it would spend more on science and research.
That is what David Carter repeatedly promised.
He promised it as recently as this year.
Farmers and our agri businesses will be looking it up.
And they will find not increases, but cuts.
It has broken that promise as surely as if it has broken its promise on personal taxes.
I want to turn to some other features of this disappointing budget.
I want to draw the House’s attention to the table on Page 55 of the fiscal strategy report.
In there the government points to its expected increases in nominal average wages over the next four years.
If you deduct those from the CPI – the cost of living index - there will be no increases in real wages for four years.
No increase in real wages for four years!
This is the curious branch of economics that says the way to make New Zealand better off is to make everyone worse off.
Not since the eighties have we had an economy that didn’t increase real wages for four consecutive years.
It’s hardly conducive to keeping working New Zealanders here.
If they were leaving before, wait until John Key’s policies result in no increase in real wages for four years.
I have to give the National party credit for one thing.
There was a time in the past when National would have said the way to fix that would be to spend up on tax cuts.
At least Bill English and John key have now accepted that tax cuts do not stimulate the economy.
But that is not what they said when they wanted to get elected.
They promised New Zealanders tax cuts.
They now say they can’t afford them. Fair enough. But that’s not what they said when they wanted a vote.
Back then they said their promises took into account the worsening economic climate.
Back then they said
“National has structured its economic package to take account of the changing international climate.”
They weren’t telling the truth when they made the promises that got them elected.
They said: “Our tax cut programme will not require any additional borrowing”.
They weren’t telling the truth when they made the promises that got them elected.
The only way that promise could have been true is if his tax policy wouldn’t require borrowing because it was never going to go ahead anyway - and John Key knew that even before the election
Last year John Key said his tax policy was "appropriate for the current conditions" and would require "no additional borrowing.”
There is no excuse for this.
John Key was here in the eighties and he was here in the nineties when governments got elected and immediately tossed out the promises they got elected on.
I was in here in 1991.
I remember the Bolger government got away with the 1991 budget to begin with.
People gave them the benefit of the doubt that the economy had been wrecked by Roger Douglas and needed hard measures.
But over time it was a disaster.
This one will be too.
Those tax cuts needed to be cancelled.
But they should never have been promised in the first place.
John Key owes New Zealand an apology for getting himself elected on a promise that could never have been kept.
Did he know before the election that the international economic situation was deteriorating, or did he only find out when the Treasury told him?
Neither possible answer reflects well on his fitness to lead a country through a crisis.
I want to turn in the time left to the cuts to the Super Fund.
This is very sneaky politics.
Cutting the Super Fund now reduces the ability of any government in the future to provide for super at anything like existing rates or retirement age.
So what Bill English is doing is pushing out by ten years the hard decisions about the huge tax increases or cuts to super that will be needed to make super affordable.
He has calculated he won’t be finance minister in ten years.
He is right about that!
After this budget he won’t be finance minister in three years.
But he has delivered an enormous burden to future taxpayers.
The affordability of superannuation in the future must decline because we are no longer putting aside something now to pay for some of it in the future.
It was going to pay for around fifteen percent of the future cost.
Now it will pay for less than seven per cent.
That means the age of eligibility for superannuation will be increased to around 67; or else there will be huge tax increases required to pay for it.
That is the doozy the government has announced today.
This is not a budget that prepares New Zealand for the challenges of the future.
There is not a word in here about preparing New Zealand for the effects of climate change.
The Green party will be disappointed that the sum put aside for home insulation has been slashed from a billion dollars to $244 million.
Then we look over at the infrastructure spend, and we can see that the government is shifting $258 million of spending from rail to roads.
So this is what the Greens have got for their cooperation deal with the National party.
They have actually lost money!
They have lost $14 million!
Then what about the Maori party?
Who do they think is going to be hardest hit by this recession?
The National party is not doing anything for new jobs, and the Maori Party is voting for that!
At least Pita Sharples can wave at the unemployed as he drives by in his new car.
The good news: Inflation is no longer a problem. We have finally got the low inflation economy the National Party always said would deliver us its dream economy. How’s that working out now?
National has produced a lacklustre budget that Bill Birch would have been proud of.
In troubled times, when the economy is rocking on the waves of global economic storms, the government has responded weakly.
Not with a vision for the future.
Not with bold steps that will lead New Zealand on a developmental path.
But with a weak, uncertain, sitting on their hands response.
Governments around the world are investing in the future.
This one has slashed the future.
This one is the Broken Promise budget.
The total value of primary sector science investment falls from $2 billion in NZ Fast Forward under the last government to as little as $1.2 billion now.
It is cutting nearly as much out of science and research in the primary sector as it is investing in infrastructure.
Government spending on science and research, on a like for like basis, falls from around a billion government dollars in the NZ Fast Forward Fund, to $610 million in National’s replacement.
With matching private sector funding, the total investment in primary sector research and development falls by $800 million, or about 0.4 per cent of GDP.
In addition, the government has not replaced a cent of the cancelled research and development tax credit.
This is huge cut in science and research.
It is a disaster for the future of New Zealand’s economy.
It is a disaster for the future of our most important economic sector.
Other developed countries are preparing themselves to come out of this recession stronger.
New Zealand is preparing by switching from science and research to poltergeists and UFOs.
The government promised the primary sector it would spend more on science and research.
That is what David Carter repeatedly promised.
He promised it as recently as this year.
Farmers and our agri businesses will be looking it up.
And they will find not increases, but cuts.
It has broken that promise as surely as if it has broken its promise on personal taxes.
I want to turn to some other features of this disappointing budget.
I want to draw the House’s attention to the table on Page 55 of the fiscal strategy report.
In there the government points to its expected increases in nominal average wages over the next four years.
If you deduct those from the CPI – the cost of living index - there will be no increases in real wages for four years.
No increase in real wages for four years!
This is the curious branch of economics that says the way to make New Zealand better off is to make everyone worse off.
Not since the eighties have we had an economy that didn’t increase real wages for four consecutive years.
It’s hardly conducive to keeping working New Zealanders here.
If they were leaving before, wait until John Key’s policies result in no increase in real wages for four years.
I have to give the National party credit for one thing.
There was a time in the past when National would have said the way to fix that would be to spend up on tax cuts.
At least Bill English and John key have now accepted that tax cuts do not stimulate the economy.
But that is not what they said when they wanted to get elected.
They promised New Zealanders tax cuts.
They now say they can’t afford them. Fair enough. But that’s not what they said when they wanted a vote.
Back then they said their promises took into account the worsening economic climate.
Back then they said
“National has structured its economic package to take account of the changing international climate.”
They weren’t telling the truth when they made the promises that got them elected.
They said: “Our tax cut programme will not require any additional borrowing”.
They weren’t telling the truth when they made the promises that got them elected.
The only way that promise could have been true is if his tax policy wouldn’t require borrowing because it was never going to go ahead anyway - and John Key knew that even before the election
Last year John Key said his tax policy was "appropriate for the current conditions" and would require "no additional borrowing.”
There is no excuse for this.
John Key was here in the eighties and he was here in the nineties when governments got elected and immediately tossed out the promises they got elected on.
I was in here in 1991.
I remember the Bolger government got away with the 1991 budget to begin with.
People gave them the benefit of the doubt that the economy had been wrecked by Roger Douglas and needed hard measures.
But over time it was a disaster.
This one will be too.
Those tax cuts needed to be cancelled.
But they should never have been promised in the first place.
John Key owes New Zealand an apology for getting himself elected on a promise that could never have been kept.
Did he know before the election that the international economic situation was deteriorating, or did he only find out when the Treasury told him?
Neither possible answer reflects well on his fitness to lead a country through a crisis.
I want to turn in the time left to the cuts to the Super Fund.
This is very sneaky politics.
Cutting the Super Fund now reduces the ability of any government in the future to provide for super at anything like existing rates or retirement age.
So what Bill English is doing is pushing out by ten years the hard decisions about the huge tax increases or cuts to super that will be needed to make super affordable.
He has calculated he won’t be finance minister in ten years.
He is right about that!
After this budget he won’t be finance minister in three years.
But he has delivered an enormous burden to future taxpayers.
The affordability of superannuation in the future must decline because we are no longer putting aside something now to pay for some of it in the future.
It was going to pay for around fifteen percent of the future cost.
Now it will pay for less than seven per cent.
That means the age of eligibility for superannuation will be increased to around 67; or else there will be huge tax increases required to pay for it.
That is the doozy the government has announced today.
This is not a budget that prepares New Zealand for the challenges of the future.
There is not a word in here about preparing New Zealand for the effects of climate change.
The Green party will be disappointed that the sum put aside for home insulation has been slashed from a billion dollars to $244 million.
Then we look over at the infrastructure spend, and we can see that the government is shifting $258 million of spending from rail to roads.
So this is what the Greens have got for their cooperation deal with the National party.
They have actually lost money!
They have lost $14 million!
Then what about the Maori party?
Who do they think is going to be hardest hit by this recession?
The National party is not doing anything for new jobs, and the Maori Party is voting for that!
At least Pita Sharples can wave at the unemployed as he drives by in his new car.
All talk and no jobs
15/07/09 11:53 Filed in: News Releases
National is talking big about agriculture, but it’s running up a surrender flag with no new ideas, Opposition agriculture spokesperson Jim Anderton says.
“Today John Key billed his speech as a major statement on the economy, but he had no new ideas while unemployment is increasing.
“Unemployment in a region like Gisborne increased from 3.8% in 2006 to 7.8% in March this year and it will be inevitably higher now. Yet while unemployment is rising quickly in regional New Zealand, National has no ministry or policy for regional development or industry development. They never did and they don’t have now.
“National imposed a massive tax increase on research and development and it cancelled a two-billion dollar partnership between the government and private sector to invest in primary sector innovation.
“While John Key talks about the economic performance of agriculture, he has no idea about why our farms, businesses and homeowners are paying much higher interest rates than Australians, when the same banks are doing the lending.
“John Key is all talk and no jobs,” Jim Anderton said.