Today I'm going to talk about our policy package to upgrade and grow our economy and how we turn that growth into a foundation for a decent and fair society.
But first I want to address the issue of our body politic, and the blows it has taken to its reputation over recent weeks, and the last few days in particular.
The facts that have been exposed about the attack politics and practices in the Prime Minister’s office, and the close involvement of his staff and a senior Minister – the Minister of Justice, no less – with others like Cameron Slater are deeply worrying to most New Zealanders.
Democracy relies upon its reputation with the public. Public confidence is needed to maintain democratic institutions, and the rule of law.
This in turn rests upon transparency and freedom from corruption.
While fully respecting their independence, I am confident the legal authorities will carefully consider investigating the allegations of a potentially corrupt conspiracy to undermine the Serious Fraud Office and the Financial Markets Authority.
Similarly, the inquiry by the Inspector General of the Security Intelligence Service is important.
But a broader inquiry is needed in relation to Ministerial conduct.
The public must find out what has been going on inside the Beehive.
Something has changed, and it is not the rules. It is how ministers and their offices are conducting themselves.
To restore confidence in New Zealand’s political system, there should be cross party support for the terms of reference. We intend to circulate draft terms of reference to all parties currently represented in parliament this afternoon.
Broad cross-party support is essential to ensure a durable outcome that will restore public confidence.
As leaders in business and in your communities you'll know that trust in, and regard for, our system of governance and our public institutions are critical to a functioning democracy, and to healthy competitive markets.
A failure of trust and regard too easily leads to disengagement and cynicism by citizens. And with it an undermining of the fundamental capability of our political system to affect real change with the true mandate of its people.
In saying this I am reflecting on my own serious concerns – concerns I know many other leaders in parliament and in our broader society share.
If we do not act to reassure New Zealanders of the integrity of our governance, to reassure them that they can trust our political system, then we will quickly see the compact that underpins our democratic society erode.
That's something we should all be very concerned about.
We must do more than reassure New Zealanders. We have to find a way to demonstrate we are deadly serious about restoring faith in democracy and our political system.
In 2011 more than 800,000 New Zealanders did not cast a vote. My worst fear is that more of you have turned away from politics saying it’s not for you. When in fact it is all about you, and should be conducted for you and with you.
Cynicism is the cancer of our political system. We cannot, must not let it get the better of us. I cannot let it get the better of us.
New Zealanders deserve better.
What has troubled me most is the fact that some New Zealanders are not shocked by recent events and allegations. And that they believe that this is just politics as usual, and that little can change, is immensely disheartening.
It shows a disaffectedness that goes hand in hand with an increasing number of New Zealanders not voting – it is the sense of disenfranchisement that leads to real, material, disenfranchisement as our citizens turn away from civil society.
We need, we desperately need, to recover our democracy and to reassure New Zealanders that this is not what government is. And to reassure them that they do indeed have a voice and that they should participate in our civil society.
If we don’t do this we will lose our way as a nation.
This is not a matter of politics. These issues concern all citizens, whatever their political persuasion.
This is about our responsibility to New Zealanders to make the New Zealand system of government more transparent and more accountable
We have already announced that we will in government conduct a Commission of Inquiry into our State Services.
We have seen more personal appointments, personal details of public servants disclosed for destructive purposes and a decline in free and frank advice going to ministers.
And recently we have seen evidence of much more than that.
Recent revelations only underscore the need for a thorough restating of the principles of accountability which underpin our state sector.
That is why as Prime Minister I will not turn a blind eye to such actions. Instead I will act to ensure that events are thoroughly and independently investigated and that the findings of that investigation are made public.
But while such an investigation is critical, an investigation alone will not assuage the cynicism many New Zealanders feel toward the body politic.
We’ve been giving this matter serious consideration for some time. From well before this latest scandal. Because we have been concerned for several years now about New Zealanders drifting away from democratic engagement.
Whether it’s the many years loss of regional democracy in Canterbury, or declining voter turnout where voting rights remain, these are issues we should all be concerned about.
We have thought hard about the role we can play in restoring standards of good governance and transparency, including making sure there is public accountability for Ministerial behavior.
I’ll be announcing further measures to enhance our democracy before the election.
We will do this because I have personally committed to running an open, transparent, and accountable government in which everybody is held to the same rules.
However, in a society which has become so disenchanted with its governance that many accept the kind of actions we have recently seen from senior ministers with a pessimistic shrug, we need to do more than just clean up the system.
We need to be seen to do so.
Which is why the Government I lead will also implement independent reporting on inappropriate Ministerial behavior by the Cabinet Secretary.
We have seen a failure to hold Ministers to account, and we have seen that there is no recourse available if the Prime Minister decides to turn a blind eye.
This policy will change that.
We will also ensure transparency and accountability by enhancing the powers of the Ombudsman to enforce the Official Information Act.
It is critical that we move quickly on this matter, that we address it head on, and that we do so in a manner that is transparent to New Zealanders.
We must reassure our citizens that these sorts of practices will not happen again. We do this for democracy, and the democratic institutions which enable both the protection of what is good and the ability to improve what can be made better.
Because building a better nation, and doing so in the public service is what politics should be about. It’s why I am in politics.
And I want to talk to you, as leaders, about Labour’s plans to build a better New Zealand.
It starts with the economy. Because without a strong economy we cannot build a fair society.
To get there we need an economic plan. And that takes vision and leadership. It’s much more than simply doing a good job of minding the shop.
Sure getting the fiscals right year on year is important – it’s also something Labour has a superb record on:
- we delivered nine surpluses in our last nine years in government
- we reduced government debt to zero
- we drove savings with NZ Super and Kiwisaver.
- And we negotiated the free-trade deal with China that is currently keeping us afloat.
We also took the hard political call to reject tax-cuts that would have risked overheating an already hot economy and instead paid down debt and got New Zealand into a position where it could weather the global financial crisis. We have shown strong management, and we’ll do it again. Labour will run surpluses every year. In fact, Labour will run larger surpluses than forecast in Budget 2014 and we will keep net new spending within the operating allowance set in Budget 2014.
That restrained spending means we’ll pay off National’s record debt by the end of our second term.
At the same time, we will build up public assets. We’ll restart contributions into the Cullen Fund to secure the future of New Zealand Superannuation. We’ll invest in KiwiBuild so that our families have warm, healthy, affordable homes to live in.
Of course the Pre-election Economic and Fiscal Update has shown the economy isn’t doing as well as expected. Well we watched the government’s management of the economy and we were prepared for that.
Which is why we ensured that there was headroom in our budget to cope with the reduced forecasts. And why we have had to trim very little of our policy platform to ensure we continue to stay in surplus and pay down debt.
But fiscal management alone – not even the kind of solid and sound management Labour has shown – does not ensure the kind of long-term growth and success that New Zealand should have.
That we will need if we want to maintain and grow a vital and prosperous nation.
No, that requires a bigger vision, the ability to look ahead, to understand not just how to manage in the world as it is now but as it will be. In short it takes governance and leadership.
That last point is significant. Because preparing for the GFC wasn’t a decision of management – it was governance.
Unlike the current government, Labour realises that to ensure ongoing prosperity and quality of life we need to do more than just manage the ebb and flow of the economic cycle. Especially if the country is as small and distant from the market as New Zealand.
The next Labour government will continue to manage the economy and the government’s books responsibly but, crucially, it will also govern. Post GFC that means doing things differently, but no less carefully.
And we will do so because we have a clear vision of a long-term pathway for New Zealand's economic wellbeing.
How we get there
We need to look past the milk sales and insurance cheques that are propping up the economy and deciding what we can do to upgrade our economy so that when the cheques stop and the commodity prices come back down (and they are looking increasingly shaky) we continue to have options.
Simply patting ourselves on the backs when commodity prices go up and tightening our belts when they drop isn’t an economic strategy.
We need a government that is willing to back Kiwi businesses to create secure, well-paid jobs by innovating and adding value.
That’s why we have announced a series of economic upgrades based on three main principles – Investment, innovation, and industry.
We will make Kiwisaver universal, restore payments to the NZ Super fund, and introduce a capital gains tax to dissuade investors from speculating in the housing market and encourage them to put money into the productive exporting side of the economy.
And then there’s our monetary policy economic upgrade which reduces interest rates and eases the over-valued currency. That will make our exporters more competitive overseas and boost businesses at home.
Perhaps the most innovative part of this package is our variable savings rate – the idea that the rate on a universalised Kiwisaver will be able to be adjusted to decrease or increase direct spending into the economy.
We want this new investment to drive innovation. We are a nation of innovators – it’s part of our culture.
But in commercial terms New Zealand’s investment in R&D is well below par in global terms, and it is in private R&D that we are particularly weak.
Our R&D spend is currently 1.27%.That’s less than half of Denmark’s, and not much more than a quarter of Israel’s.
We need to turn our numbers around, and fast. Which is why we’ll restart New Zealand’s stalled innovation story by renewing the R&D tax credit, increasing Crown investment in R&D, and encouraging our research and teaching institutions to partner with industry.
Investment and innovation are the essential frameworks for supporting business and growth and leading the economic upgrade.
But government should also back positive Kiwi businesses, not leave them to the wolves of international trade. Labour will do that. We want good jobs in every region in New Zealand.
That also means attracting industry to New Zealand regions that need it most.
Our Economic Upgrades include tax incentives to guide investment into plant and machinery – we’re doing this because we want to see an increase in innovative value-add exports.
In manufacturing in particular we’re seeing opportunity disappear with every company that shuts it doors sending skilled workers into joblessness or emigration.
That’s because our manufacturing exporters are going out to an international market that’s rigged in favour of competitors who are backed by their own governments and not having their goods priced up by a high dollar.
Indeed it speaks to the immense resilience and innovation of our exporting community that so many are still managing to carve out a living in such hostile conditions.
Labour believes that we can do better which is why we’ve announced more than just investment incentives. We’ve also announced procurement policy that will help build a domestic market for our manufacturers. That will provide a base and a buffer for their export operations.
As I have said we don’t just build the economy for the sake of it. We do so to ensure that we can afford a strong and fair society.
And part of that is making sure we do not leave our second largest city to languish in a stalled rebuild.
Which is why Labour has a coherent and sensible plan to kick-start the recovery and ensure that the people of Canterbury are not left behind.
Labour will do whatever it takes to get this recovery moving for the people of Canterbury. Our plan will cover the key areas we believe are crucial to a faster and stronger recovery. This will include relieving the housing crisis that is plaguing this city and speeding up insurance settlement.
We will build 10,000 affordable KiwiBuild homes in Canterbury over four years, and provide the first 3,000 of these homes as affordable rentals until the housing crisis is fixed.
We will also increase the accommodation supplement for Christchurch by up to $50 a week until the housing crisis is fixed to correct the shortfall.
We will also begin work on protecting homes from flooding immediately after we become government. Christchurch has been made to wait too long already.
And we will ensure the government will pay its share to help protect homes that are suffering flooding due to the Canterbury earthquakes.
Our Earthquake Court will cut through the huge backlog of insurance cases, and ensure claimants are provided with up to date information on the status of their claims,
And KiwiAssure – our insurance company will work to keep the insurance industry honest, just as Kiwibank has in the banking sector.
We will also ensure that red-zoned residents are treated fairly and equally, and that democracy is restored to Canterbury.
And just an hour ago I announced our Christchurch transport policy which includes a $100 million dollar investment in high quality commuter rail which will serve as the backbone of Canterbury’s transport system in the future.
This is not a short term project or a pilot study – it is an investment in the public transport network that will serve Canterbury for the next century.
This new rail system will link Rolleston and Rangiora with Christchurch. We will invest $100 million dollars to upgrade the track, build new stations, and buy rolling stock.
Commuter rail will open up Rangiora, Kaiapoi and Rolleston for residential and commercial development. The urban stations will also stimulate urban renewal in places like Hornby and Papanui.
Labour’s plan means a modern, 21st century transport system for a modern, vibrant city.
It means an end to the gridlock and frustration. It means getting things moving in Canterbury.
New Zealanders have a couple of fundamental values – we work hard, and we look after each other.
These are the values that have made New Zealand great, and they are the values that will be at the heart of the Government I lead.
We should aim to be a prosperous and fair nation, and we should be focused on working with each other to get there.
We are all in this together. Government and business, employers and workers.
Labour has a vision for a high value, sustainable future with better jobs and higher wages.
We will make a positive difference by upgrading our economy, and using it to provide the decent society New Zealand and New Zealanders deserve.
That includes doing right by the people of Canterbury, and cleaning up the political system.