Andrew Little: Speech to Cullen Breakfast

Section One – Andrew’s Approach

Tēnā Koutou Katoa.

Thank you so much for the opportunity to address you this morning.

These breakfasts are an important meeting place for leaders and thinkers in modern New Zealand. It’s a real honour to speak today.

I want to give you an idea of the direction of the Government I will lead, and the type of Prime Minister I hope to be.

It won’t surprise you that I think we need to make big changes to the direction of our country.

Some of the most basic aspirations that New Zealanders hold are becoming harder to achieve.

New Zealanders don’t ask the world. But we do have high hopes for our families, and there are some things we see defining our unique place in the world.

Most of all, what Kiwis want is a chance to work hard and build a secure future for ourselves and our families.

That’s what my parents were able to do.

I had a pretty classic Kiwi upbringing. My father was a school teacher and my mum worked as a secretary for an optician.

They taught me to work hard, respect others and, most of all, to think for myself. Given they were both committed National Party voters, they probably did a better job of that than they would have liked.

They worked hard, they saved, and they were able to give me and my siblings a good start in life.

But for too many people today, that’s getting tougher.

You all know this. We can see it all around us.

It’s getting harder to find secure, well paid jobs.

It’s getting harder to buy a home, harder to afford to start a family or even to retire.

And this isn’t just a problem for the low paid.

More New Zealanders on good, mid-level incomes, are finding it harder to save, harder to pay the mortgage, harder to keep their businesses afloat, harder to get ahead.

Families are feeling the squeeze, even though they are working their guts out.

I simply don’t believe what we’re doing is working.

We aren’t delivering the security that New Zealanders need.


Section Two – Struggling Economy

What I see time and again is real unused potential in the New Zealand economy.

Our businesses are innovative and nimble.

Our business people have extraordinary talent and commitment.

Despite these advantages, it’s clear the New Zealand economy is struggling.

Recently, ANZ referred to us as an economy at stall speed.

When we look at the numbers, we can see why.

The ANZ’s Regional Trends report says that half of the country’s regions shrank in the last quarter.

In Taranaki, where I grew up, the region is officially in recession – with the economy shrinking for two quarters in a row.

Global commodity prices, which we are so reliant on as an exporting nation, are at their lowest level in 13 years.

Unemployment is rising, up by 13,000 in the past 12 months.

Job growth has practically stalled.

Credit agencies recently downgraded the ratings of our largest banks.

There is naturally real concern from New Zealanders who wonder what all this will mean for their own financial security, and the aspirations they have for themselves and their families.

We’ve got to start doing better.

And that has to start with being honest about the situation we are in.

The current Government likes to tell us that everything is hunky dory.

Bill English recently said that “New Zealand is enjoying strong, broad-based economic expansion”.

But the figures tell us the opposite.

John Key recently said that he saw no reason to change tack on the economy because “Plan A was working”.

They should have seen the downturn coming, but they didn’t.

Somehow, the Prime Minister seems to have convinced himself that we’re immune to economic gravity – that the boom-bust global commodity cycle didn’t apply to us. That thinking is dangerous as well as out of touch.

Having seen the downturn coming, the Government could have made a plan to limit its impact. It could have invested in our regions. It could have given firms the right incentives to diversify their business, and the New Zealand economy. It could have invested more in education to help Kiwis into 21st century jobs. It could have been an active partner.

But it didn’t do that, either.

The Government has become so wrapped up in its “glass half full” cheerleading mentality that it’s become blind to the new economic reality facing so many New Zealand towns – higher unemployment, lower growth, and fewer opportunities to get ahead.

The truth is the Government didn’t see the downturn coming, and it doesn’t know how to respond to it.

And now, anybody who wants to talk about the state of the economy is accused of “talking the economy down.”

What I say is that New Zealanders and our business people are pragmatic and realistic.

They would rather have honest talk than mindless cheerleading.

“Talking about the economy” isn’t the same as “talking down the economy.”

The Government can’t pretend it’s only the Opposition noticing the way things are going.

A recent MYOB survey of small businesses found that 51% of SMEs expect the economy to go backwards next year.

First NZ Capital puts the risk of a recession at 25-30%.

Westpac forecasts no job growth in the next six months.

For New Zealanders looking at our economy and worried about their prospects, this is sobering news.

If we’re being upfront about our economy, we don’t just need to admit that we have a problem, we also have to be honest with New Zealanders about how we find ourselves in this situation.

We have underinvested for years in the productive elements of our economy.

That’s what I mean by “wasted potential.”

Our economy is not delivering the growth in productivity and exports we need to pay our way in the world.

Our balance of payments deficit is now close to $9 billion dollars.

Just last week, our exports as a percentage of GDP fell to their lowest level since Jim Bolger was the Prime Minister.

We need to be honest about the problems we’ve got, and try to solve them on our own terms.


Labour’s Economic Plan

The Government I lead will make kick-starting the economic recovery our chied priority.

We’ve got a concrete plan to build a stronger economy.

It’s about investing more of our resources in the parts of our economy that grow our productivity and our export capacity.

The best way to grow our economic capacity isn’t to just make more of what we’ve always made. The best path to growth is to expand the range of products and services we market to the world.

There are so many things you can make from cows. Our large exporters, like Fonterra and Silver Fern farms, are mainly stuck at the low end of the value chain, selling basics like milk powder and slabs of raw beef.

It’s other firms, mainly overseas owned, who reap most of the value from those ingredients. We’ve allowed companies like Nestle and Danone make billions from turning New Zealand milk powder into baby formula. Synlait, which started as a new Zealand firm, is doing those things. But its now majority overseas owned.

That’s what happens at present when you profit from moving up the value chain.

That’s also what makes the layoffs at AgResearch so bad for New Zealand.

At a time when we desperately need hi-tech skills to broaden the range of agricultural products leaving our shores, AgResearch – a Crown Research Institute – is shedding dozens of scientific jobs.

That decision is tragically short-sighted.

We need those scientists to help expand our export base. We need them, but we’re letting them go.

For New Zealand in the 21st century, making the economic change we need is about harnessing the talents and ambitions of a new generation of workers.

And it’s about grappling with the challenge posed by the future of work.

Let’s start with boosting our productive economy.

We urgently need to boost the investment capital available to Kiwi businesses.

We save too little, we invest too little, and that holds us back.

Labour would change that.

We would immediately resume contributions to the New Zealand Super Fund.

It’s the best performing sovereign wealth fund in the world.

If it wasn’t for the Government’s short sighted decision to halt contributions a few years ago, that fund would now be $17 billion better off.

That’s an extra $17 billion we could be investing in growing Kiwi businesses, while growing our national savings to prepare us for the impact of an aging population.

And, as soon as it’s possible to do so, we’ll start restoring the parts of KiwiSaver that have been dismantled.

It’s smart economics, and it’s the responsible thing to do.

The next part of our plan is to do more to back innovation.

We’ve got some incredible entrepreneurs here in New Zealand

Recently, I visited Comvita Foods. It was started by a Claude Stratford, a beekeeper who saw that honey is more than a toast spread. Comvita now markets almost 100 honey-based products. There’s medicine, toothpaste, wound care, and makeup. It’s a $150 million business.

We need to be doing more to back people like Claude – taking our natural advantages and turning them into final products, not just ingredients.

That’s why Labour will reintroduce research and development tax credits – so that we are giving our entrepreneurs a tax break on money they spend on innovation.

That’s going to help them compete on the world stage.

The next thing we will do to help growing businesses is our Flexible Tax for Business proposal.

It’s a better way of paying provisional tax that lets businesses pay their tax as they earn it, rather than having to estimate their income and liabilities a year in advance.

It means people can spend more time on their business, and less time arguing with the IRD.

The next part of kick-starting our economic performance is ensuring New Zealand is adapting to the future of work.

This has been a major focus for the Labour Party under my leadership.

The ongoing digital revolution today is as world-changing as the industrial revolution was 200 years ago.

It creates opportunities as well as challenges.

We have to make the right decisions now if we are to take advantage of these opportunities, while ensuring no one is left out or left behind as the world changes.

Our Future of Work Commission, led by Grant Robertson our Finance Spokesperson, is taking the lead on developing Labour’s response to these issues.

The Commission’s recent discussion document on the future of education contains critical new ideas for increasing our economic performance.

The Commission recommended investing more heavily in financial literacy education.

We should be teaching our kids the value of creating wealth, and how to get the most out of their money.

The other major issue identified in that paper is New Zealand’s ongoing skill shortage.

A recent global survey found that 73% of CEOs are concerned about the availability of the key skills they need in their industry.

Our companies can’t compete in the global marketplace if they can’t find the skills they need.

A Labour Government will consult closely with businesses to identify skill shortages, and then increase investment in vocational training in the areas we need to make progress in.

These ideas – more domestic investment capital, more support for entrepreneurs and grappling with the changing nature of work  –  will kick-start our economy, create jobs, and return a sense of security to New Zealand families.

They’re honest, practical answers to the question of how we get our economy growing strongly again.

The time for sticking our heads in the sand is over.

The time for blind cheerleading is over.

It’s time for solutions.

That’s the plan my Government will deliver on.



Having the policies to generate wealth so we can have a secure and healthy society is essential. But in government and politics, that’s not enough.

Almost as important as “what we will do” is “how we will do it.” That leads me to the question of integrity.

New Zealanders pride ourselves on the high standards for probity and responsibility that we set for our Governments.

In a Western liberal democracy we are bound by a number of essential principles – government by democracy, the rule of law, an independent judiciary, respect for civil, political, and human rights.

Upholding the rule of law means the public must have complete confidence that the power of Government will be wielded appropriately.

That means good oversight, proper accountability, high standards and public resources only being used for the public good.

The public needs to have total trust in the processes and integrity of their Government.

I think New Zealanders are increasingly shaken by this Government’s cavalier approach to standards of ministerial and government conduct. In this term of Parliament alone we have seen:

  • misuse of the Prime Minister’s office and unhealthy – and possibly unlawful – relations between the PM’s staff and bloggers;

  • the use of security agencies to assist a Minister with his application for an overseas job;

  • the Minister of Corrections ducking his responsibilities to house the country’s prisoners securely and safely.

But the high water mark on this Government’s low standards must surely be the Saudi sheep deal.

In that deal, we see a Government totally subverting proper process, avoiding accountability and playing fast and loose with the truth.

We all know the ridiculous parts of this dodgy deal.

Pregnant sheep.

Flown to a farm.

In the desert.

Where many died in a sandstorm.

You couldn’t make it up.

But what is even more disturbing is the way that Ministers have deliberately subverted the proper processes of Government to do this.

Our Foreign Minister paid off a Saudi businessman who was standing in the way of the Gulf States free trade deal to the tune of $4 million, and topped that up with a $7 million farm for a supposed agrihub that almost no one has visited. The tender for that farm went to the New Zealand business partners of the Saudi businessman.

John Key not only defended the deal, he said he had evidence it was all the fault of the previous Labour Government, much to the bemusement of the Minister from that time.

The argument was that the Clark Government had initiated the live sheep export ban that was behind the Saudi businessman’s concerns.But that ban had been renewed – twice – by the current government. And it was the current government that raised expectations the ban would be lifted, but took no action to do so.

The Auditor-General is yet to release her report. However, I’m prepared to bet the Prime Minister will say it supports his Minister’s actions, and it was all Labour’s fault anyway.

This is just one deal, but it comes on the back of dirty politics, the SIS leak, and the Government’s dodgy deals with Sky City and Warner Brothers. It leads to a creeping sense amongst right-minded New Zealanders that their Government isn’t playing it straight.

The Government I lead will be different.

We’ll restore proper processes of Government and restore public confidence. And we’ll make sure when we’re an active partner for business, its for local New Zealand firms, not offshore interests.



We often hear from politicians on the right about all the dangers of a Government that does too much.

But what we forget is the dangers of a Government that does too little.

Yes, Government can’t do everything, but there are some things only our Government can do.

Only Government can set the tone, by doing the right thing and by doing it the right way, with clarity of purpose and integrity of action.

If the Government decides business as usual is good enough, then innovation falters through lack of a partner.

If the Government refuses to partner with local towns and businesses, but does shady deals with offshore companies instead, then our country suffers and foreign firms succeed.

Our challenge as a small country, at the bottom of the world, is to maximize what we can do here, what we can own here, and to keep the profits here.

I’ll be honest – the change we need in our economy is large, and it’s not easy to achieve.

Changing our export mix, taking new product classes to the world, and deepening our capital markets will be difficult tasks. They require entrepreneurship and agility, retraining and upskilling, creativity and vision.

Looking around New Zealand, I know our people are ready for it.

They need an active partner to help unleash their potential.

To do that, our Government has to change course. Business as usual just gets us more of the same.

I’m not talking about a pipe dream. I’m talking about doing on a national scale what any sane financial adviser preaches to every family they meet.

Diversify. Spread your risk, safeguard your rewards.

That’s what New Zealand needs, and that’s what I’ll deliver. It’s hard, but it can be done. And it’s the right move for New Zealand.

Spreading our risk, safeguarding our rewards puts more wages into more pockets. More food on more tables. More Kiwi dreams becoming reality.

Thank you.