Source: MIL-OSI Submissions
Source: National Party leader, Todd Muller
National understands that responsible government is about creating a deliberate and considered plan – and then following it.
Today, Constable Matthew Hunt has been lain to rest by his friends and family in Auckland.
He was a brave police officer who had committed his life to protecting his community. I would like to acknowledge him by everyone standing for a moment of silence. Thank you.
It is fantastic to be in Christchurch today to meet with Canterbury’s business community. I am delighted to have here with me, two of my most senior colleagues: Amy Adams, my Policy Chair, Covid-19 spokesperson and number three in caucus; and, of course Gerry Brownlee, my Campaign Chair and set to take one of the most senior roles in my Government in September.
It is also great to have here today Nicky Wagner MP and Dale Stephens, our candidate for Christchurch Central.
Ladies and Gentlemen, when the earthquakes devastated this great city it was a body blow to the whole country. The National Government took decisive action to generate the rebuild. Our legacy isn’t one of ruined buildings behind fences, awaiting insurance settlements, it’s of a new vibrant city, from the beautiful riverside to the shiny new buildings.
A major part of that recovery strategy was the Christchurch Central Recovery Plan, put together in just 100 days. Our execution of that plan returned life to a devastated CBD.
National knows how to shape a plan that delivers. It is going to fall to us again to rebuild New Zealand from Covid-19 and the lockdown. The Prime Minister told her party rally over the weekend that she had no playbook or plan for her three years in Government, no plan for Covid-19 and no plan for recovery.
National understands that responsible government is about creating a deliberate and considered plan – and then following it.
Today I am going to make some remarks on the economy in the context of the next year, the next three years, the next decade, and beyond. And then I am going to make my first major announcement of this election campaign – the structure of National’s Plan to Get New Zealand Working, as we all prepare to battle the looming economic and jobs crisis.
According to the Reserve Bank, New Zealand faces its worst economic downturn for 160 years. I don’t think the magnitude of that has yet sunk in to the public or the media. That’s partly because, these past few weeks, everyone has quite rightly been more preoccupied with the shambles at the border and in our quarantine centres. But, if the Reserve Bank is to be believed, ahead of us lies the greatest economic and jobs crisis that anyone in this room has ever known.
National’s worst fears were confirmed when we saw the March quarter GDP figures last month. There was a plunge of 1.6 per cent for the quarter – the worst in 30 years – despite the data covering just the first week or so of lockdown, and worse than market expectations.
Since then, 40,000 jobs were destroyed in April in the first wave of Covid-19 job destruction, the worst one-month result since records began. The latest statistics from the employment website, SEEK, show that our economy is not generating enough jobs to reduce the 200,000 people on unemployment benefits. And, according to Infometrics, there will be a second wave of job destruction before the election, with 80,000 more jobs destroyed.
Infometrics then warns there will be a third wave of job destruction before Christmas, which National fears will be the worst of them all. NZIER’s Quarterly Survey of Business Opinion on Tuesday confirmed it, with a collapse in business confidence and more than a third of businesses planning to lay off staff between now and the end of September.
In putting together National’s plan, I reconfirm National’s commitment to the basic macroeconomic framework that was put in place from the mid-1980s. That framework has seen New Zealand through previous crises, such as the Asian Financial Crisis, the Global Financial Crisis and the Canterbury earthquakes.
That is, National believes in:
An open and competitive economy;
A broad-based, low-rate tax system;
An independent central bank with the primary goal of price stability;
The Fiscal Responsibility Act, now part of the Public Finance Act; and
A flexible labour market, underpinned since 2000 by good faith.
Our concern is that that basic macroeconomic framework is being diluted by the current Government – mainly through incompetence than the result of any plan.
What is most being challenged, at present, is the general commitment to fiscal responsibility – and, in particular, to New Zealand’s long-standing, long-term target, of 20 per cent net core debt. There is no doubt that the fiscal deficit is soaring in 2020/21 and that net core debt will keep rising through the next parliamentary term.
My Government will not panic in 2020/21 or 2021/22, just as John Key and Bill English didn’t panic after the February 2011 earthquake. It was the right thing for Bill to run the biggest fiscal deficit in New Zealand’s history then. It will be the right thing for my Finance Minister, Paul Goldsmith, to confirm in his first Budget that he and his predecessor Grant Robertson have run an even larger fiscal deficit in 2020/21.
Nor will National cut family incomes. National has already announced that, whatever lies ahead of us through the crisis, we will not raise the taxes you pay or cut the benefits paid to those who need help. We would like Labour to make the same commitment to New Zealand families too.
Nevertheless, National will work to keep borrowing as low as possible. Out of the $80 billion plus they spend each year, all governments have wasteful spending that needs to be trimmed. All finance ministers review all spending each time they bring together a Budget. And we will do the same.
Since the Fiscal Responsibility Act, the economic and political debate in New Zealand has tended to be on the quantity of borrowing or debt repayment each year. These remain critically important. Getting back to fiscal surplus and then paying down debt to 20 per cent of GDP is necessary, not least because New Zealand will inevitably confront another natural, economic or health disaster in the next couple of decades or beyond. But just as important is to focus on the quality of spending.
Labour forecasts net core debt will reach 53.6 per cent of GDP in 2024 under their policies. That’s an eye-wateringly high level. We will work hard to try to keep it lower than that, which would put New Zealand in a better position to recover. But of far greater longer-term importance is that Labour projects that under its policies, but with a far stronger economic environment than we face today, net core debt will still be as high as 42 per cent by 2034. That means Labour intends a mere 11 per cent reduction in net core debt, over a decade. At that rate, we will not get back to the safe 20 per cent mark until perhaps the mid-2050s.
National does not regard Labour’s attitude as anything like prudent. It would leave an enormous debt, not so much to our children but to our grandchildren. And it would leave our children and grandchildren – and also ourselves – profoundly vulnerable were the global economic and strategic outlook anything other blissful for three successive decades. Covid-19, the trade war between the US and China and this city’s recent history all say that is not a safe bet.
In reality, of course, it is unlikely even Labour would take such a reckless punt. Its DNA would see it opt for the higher taxes on income and the new taxes on houses, KiwiSaver funds and other assets that the Labour Leader is not ruling out.
We learn two lessons from Labour’s economic and fiscal projections and their refusal to rule out higher taxes. First, they don’t have anything to offer except borrow, spend, hope and then tax. Second, and even more important, they don’t think any of their borrowing and spending will actually do anything useful to improve New Zealand’s productivity, economy or the overall wellbeing of every one of us.
I’m not hiding that my Government will borrow large amounts over the next three years, and in 2020/21 in particular. National will always be more disciplined in its spending than Labour. Yes, we will borrow what we need to, to support New Zealanders through the crisis – neither more nor less. But we will not just fling money around, the way the Labour Party is. Instead, we promise to spend it better and invest it better than Labour, in a way that does in fact improve New Zealand’s productivity, economy, the overall wellbeing of every one of us, and which, in turn, makes it easier to pay the debt off.
The last National Government developed the Living Standards Framework to properly measure wellbeing beyond crude GDP or GDP per capita. And we developed the social investment, or actuarial approach, to help analyse which types of government spending and investment will in fact improve overall wellbeing. The Government has failed to implement either. Its talk of wellbeing is sadly just a cheap slogan. It is making its spending decisions using the same criteria and processes as all previous governments. As a result, Labour shouldn’t be surprised that it isn’t getting any better results either in terms of GDP per capita or the wider measures of wellbeing, or in worsening child poverty.
Under Helen Clark, John Key, Bill English and Jacinda Ardern, New Zealand has spent, in 2020 dollars, $505 billion on social welfare, $302 billion on health, $260 billion on education, and $27 billion on corrections. That is well over a trillion dollars on those four areas alone just since the year 2000, or well over $200,000 for every single person living in New Zealand today.
When we see more than one in eight New Zealand children still living in material hardship; more than 310,000 Kiwis on a benefit even before Covid-19 (and now up to more than 350,000); more than a million food grants needed last year; and the state house waiting list having more than tripled since Labour was elected, then I don’t think anyone can believe we have achieved the best possible return on that trillion-dollar-plus investment.
Over the next 20 years, we will spend at least another trillion dollars – at least another $200,000 per New Zealander – on those four areas alone: social welfare, health, education and corrections. We must do better in the interests of this decade’s taxpayers, of course. But, even more so, we must do better in the interests of those that the spending is meant to help and in the interests of future taxpayers, who will otherwise have to pay higher taxes to support them.
Let me tell you what that means in practice. In 2020/21 and 2021/22, my Government will not be scared of investing more in retraining, if we are confident it will genuinely improve productivity, lower unemployment, increase the tax take, reduce the cost of welfare and improve wellbeing over the following decade. My Government will not be scared of investing over the next decade more in the first 1000 days of life, if we are confident it will improve outcomes from the school system for a generation. Similarly, social housing and mental health. Nor will my Government be afraid of investing more in roads and public transport, if we are confident they will still be improving New Zealand’s productivity 50 or 100 years hence. And my Government will not be afraid to invest more in water storage or carbon-replacement technologies, if they will support higher living standards and greater wellbeing on an even longer timeframe.
I mentioned at the outset that the Prime Minister has conceded she has not had a plan these last three years. We see the evidence of that all around us. KiwiBuild is the most obvious example. The Ghost Trains to Rolleston and Auckland Airport are others. We see the Metro Sports Centre and the Christchurch Stadium now three years behind where they should be. State Highway 1 upgrades north and south of Christchurch have been cancelled. Most disgracefully, the Government’s failure to plan and deliver means child poverty has got worse against five of the Government’s nine measures despite the Prime Minister appointing herself Minister of Child Poverty Reduction.
National’s plan is comprehensive, holistic, and ambitious. It is National’s Plan to Get New Zealand Working.
Today, I am outlining just the framework for the plan and discussing why we have chosen these particular themes. We will be releasing the lion’s share of National’s Plan to Get New Zealand Working in a series of major speeches through this month and into early August. We want to ensure each element of our Plan gets maximum public attention, part by part. The economic and fiscal elements of National’s Plan to Get New Zealand Working will then be finalised in the days after the Government chooses to release the Pre-Election Economic & Fiscal Update (PREFU) in August. The full plan, amended if necessary following the PREFU, will all be available by Wednesday 2 September, when overseas voting begins followed by early voting on Saturday 5 September.
Responsible Economic Management
The first element of National’s Plan to Get New Zealand Working is responsible economic management.
This is National Party DNA. We will retain for our party and our country our reputation for sound economic management. We are urging the nation’s economists, business organisations, unions, NGOs and journalists to judge the main parties not solely by the short-term quantity of spending – one way or the other – but by its quality in terms of medium-term outcomes. Will another billion here or a billion there, in fact, raise productivity, reduce child poverty or deliver a faster, cheaper transport system? Or is it just a big number for the media?
Our short-term initiatives within our Responsible Economic Management theme will be to save jobs, create jobs, reduce the cost of living, enhance family incomes, improve the lives of some of our most poorly served communities and stimulate the economy in 2020/21 and 2021/22. We have already announced JobStart to pay $10,000 for each new permanent, full-time job businesses create before Christmas and in the first quarter of New Zealand. We have announced our $100 million Tourism Accelerator. And we have announced the immediate write off of new business assets, of up to $150,000 per asset, to encourage you to invest, create new jobs and grow.
The NZIER data on Tuesday revealed negative investment intentions. We need to reverse that urgently. National will announce a wide range of other initiatives before voting begins on Wednesday 2 September.
Responsible Economic Management also involves strong and secure borders, not the chaos we have been seeing. Strong and secure borders are essential to progressively re-opening New Zealand to tourists, students and businesspeople, when it is safe. We cannot passively wait for a vaccine that may never come. We can perhaps accept there are no foreign tourists in Canterbury this winter. It is unthinkable there will be none in the winter of 2021 or even 2022. Getting border management back on track is crucial if those tourists are to return.
Delivering Infrastructure
The second element of National’s Plan to Get New Zealand Working is delivering infrastructure.
National will finally deliver New Zealanders the First World infrastructure we have been promised, for so long. That includes Cantabrians. It includes Aucklanders. It includes everyone. You saw that yesterday when I announced National will invest $1.5 billion to four-lane the road from Christchurch to Ashburton.
Before the end of this month, I will announce the biggest infrastructure package in this country’s history. It will include roads, rail, public transport, hospitals, schools and water. But, as Phil Twyford, David Clark, Jacinda Ardern and Shane Jones have shown us so conclusively, announcing infrastructure projects or a new hospital is as easy as pressing send on a press statement. What matters is delivery.
National has the track record on infrastructure delivery. We built the Roads of National Significance. We built – Amy built – the Ultra-Fast Broadband Network. We rebuilt – Gerry rebuilt – this city, along with you, the business community.
Reform of the Resource Management Act and the Building Code is also urgent to deliver infrastructure. The fact that Labour and the Greens are legislating for a handful of case-by-case RMA exceptions just shows how broken our planning rules are, yet they will not fix them. National will.
Reskilling and Retraining Our Workforce
The third element of National’s Plan to Get New Zealand Working is reskilling and retraining our workforce. This has two elements – an urgent short-term priority, and a longer-term, ongoing imperative.
As tens of thousands of people become unemployed over the next few months, they need urgent assistance with touching up their skills – not all to become super-coders for the video-game industry, but for jobs that suit their background and experience. This is not the time to be gutting the power of our local polytechnics and have them run from Wellington. My Deputy and Education Spokesperson, Nikki Kaye, has already said Labour’s radical plan for polytechnics will not proceed. National will save regional polytechnics and ensure community assets stay with the community.
Looking beyond the immediate crisis, we have heard ever since I was in student politics that we need to build a life-long learning culture and that people will need to re-train and change careers through their lives. When we used to talk this way 30 years ago we referred mainly to manual labour. But AI is now challenging jobs more in the white collar space. Take one example: much of what the local accountant used to do is now done by Xero or MYOB. That trend will accelerate. Despite all the rhetoric, New Zealand didn’t really catch Helen Clark’s Knowledge Wave back in the 2000s. Accountancy is probably not the best profession with which to apply this term, but we better all catch the Creativity Wave in the 2020s. Everyone must have the skills they need to do the job they want through the 21st Century.
A Greener, Smarter Future
That third element is inextricably linked to the fourth element of National’s Plan to Get New Zealand Working: a greener, smarter future.
New Zealanders want a greener future, and the world wants food, fibre and holidays that are green and sustainably produced. My commercial background is in agri-business, on the senior executive teams of Zespri and Fonterra and as CEO of Apata. But my political background has been mostly in climate change policy, negotiating the historic Zero Carbon Act with the Greens’ James Shaw, including bringing along some of the more sceptical voices in my own party.
National commits to the Zero Carbon framework, and to cleaner lakes and rivers in provincial New Zealand – and a cleaner Lake Ellesmere/Te Waihora here in Canterbury, and a cleaner Waitemata Harbour in Auckland. I do not see any conflict between the interests of agri-business and a greener future. I reject the Government’s demand on Tuesday that agriculture must be “transformed” rather than constantly evolve and improve by building on our status as the most productive and sustainable food-and-fibre producers in the world.
New Zealand has the world’s best farmers, and New Zealand agricultural scientists. National launched the Global Research Alliance on Agricultural Greenhouse Gases, which now involves nearly 60 countries working together to find ways to grow more food without growing greenhouse gas emissions. It is well within New Zealand’s capability to keep improving productivity while protecting and enhancing the natural environment from which we all draw our mauri as New Zealanders, and on which our economy is based. That in turn creates intellectual property for export.
A greener, smarter future is about much more than tourism and agri-business. It is about technology and intellectual property across the board, which is clearly the future New Zealand must focus on whatever the industry – including the super-coders I mentioned for the video game industry, and in every area, from movies, to rocketry, to accounting software.
As well as the looming challenge of AI we also need to invest further in connectivity, as a major enabler of better services, better productivity and better lives, whether you are in Auckland or Akaroa. Where would New Zealand have been these past few months without Amy’s Ultra-Fast Broadband Network? We need to take it to the next level of its development. As we enter the 2020s, every New Zealander and every one of our businesses needs to know that the whole world is open to them in a way that other countries can only envy – and that’s what my Government will deliver.
National’s vision is of a post-Covid economy that is greener, smarter and better than the one we had before.
Building Stronger Communities
The fifth and final element of National’s Plan to Get New Zealand Working is building stronger communities. This will be a personal passion of mine as Prime Minister.
I believe that the institutions of our communities are as vital to our economic and social progress as any other initiative we might take. The other four elements of our plan help strengthen communities. In turn, stronger communities underpin the other four. Every community needs strong community institutions to maintain and enhance their social capital. Many of those institutions were damaged a generation ago, and I don’t believe they have been repaired.
The local marae, the local sports club and the local voluntary organisation – these are ultimately what bind us together. They help us to get to know our neighbours, to know when one of them needs a helping hand and they provide the structure for us to effectively offer that helping hand. They form the threads with which the cloak that is New Zealand is woven. To neglect our community institutions, is to neglect New Zealand. To value them, and support them, is to value and support New Zealand. It is to get New Zealand working again.
Ladies and Gentlemen, in the end, I have a very simple message for you and all New Zealanders this election campaign: National has a plan to rebuild our communities and our economy, to get Kiwis back to work and to deal with the economic and jobs crisis.
We will give our businesses the confidence to invest and grow to create more jobs. Our strong team will bring the leadership, experience and vision to get our economy back on track.
In contrast, our opponent doesn’t believe in having a plan, hasn’t delivered on her promises, and has a track record of failure across the board. Her Government has made no progress on infrastructure, KiwiBuild is a disaster and child poverty is getting worse.
Labour is taking on a massive amount of debt. What New Zealand borrows now, must be repaid by future generations through taxes. We must invest that money wisely to build a better economy, not least to help pay off the debt earlier but, most importantly, to build stronger families, stronger communities and a better life for everyone.
That is National’s promise in 2020.
