Prime Minister’s Statement 
Prime Minister’s Statement 
[Volume:645;Page:14081] 
Prime Minister’s Statement 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 It is a privilege for me as Prime Minister to present this annual statement to Parliament on our Government’s priorities for the year ahead. The year 2007 was a year of progress on many major Government initiatives not least on affordable health care and early childhood education on promoting savings and sustainability and on economic development through the major business tax package telecommunications company regulation infrastructure investment and the tertiary education reforms. 
None of this could be achieved without the willingness of a range of parties in Parliament to work with the Government on issues consistent with their own policies and I do acknowledge and appreciate the assistance that our minority Labour-Progressive Government has had on confidence and supply from New Zealand First and United Future and on a range of bills from those two parties and from the Greens and the Maori Party. Effective Government under MMP is possible only if relationships can be formed across parties on a basis of mutual respect. We may not agree on every matter or detail but the ability to work issues through in trust and confidence is a precious thing. It has guaranteed New Zealand stable Government for the past 8 years and that is essential for developing and implementing the long-term strategies for change that our country needs. It is also essential for leading our small country through the turbulence created far from our shores whether that be through terrorism global market uncertainty the threat of pandemics or the major environmental challenges our world faces. 
In New Zealand’s short electoral cycle it is not an option for the Government to shut up shop in election year to campaign. We have got big policies to roll out and progress this year. Labour will be campaigning as it always has on substance—on policies delivered and policies to come. None of the challenges New Zealand has faced and faces now can be met with short-term fixes. In Government we have been working to bring about the long-term transformational change our country needs for a better future. That change has to be ongoing so that every family young and old in our country can enjoy a better life. Our vision is for a sustainable prosperous New Zealand secure in its identity and proud of its achievements. We are committed to building the potential of all New Zealanders and big investments in education are critical to that. So are investments in other services infrastructure and innovation—all areas of priority for the Government this year. 
Labour goes into this election year knowing that we have led the economy through its longest run of economic growth since the Second World War that the economy is a third larger than it was when we were elected that there are 377000 more jobs in the economy that unemployment hit a new low of 3.4 percent in the December quarter—the lowest level since the household labour force survey began 20 years ago—that the labour force participation rate is the highest ever recorded in the survey and that total working-age benefit numbers are down by almost 140000 on the numbers we inherited from the previous Government. 
Yes it is true there is global market uncertainty at present and the drought and the near-drought conditions in many of our important agricultural regions are cause for considerable concern. The Government is liaising with farm leaders and we will work alongside them to support our farmers to make the best decisions they can in these difficult circumstances. Today’s summit with farm leaders is important in developing a coordinated response to the drought. Overall the consensus of commentators is that New Zealand has a more resilient economy than in the past. It is in times of international uncertainty such as this that the full value of the Government’s strong economic and fiscal management becomes apparent. While growth will slow this year it is expected to return to its trend rate of 3 percent next year. 
Labour in Government has been motivated by one goal above all: to secure the best possible living standards for all our people. Household incomes are up in real terms by 25 percent in the past 8 years—that is 25 percent over and above cost of living increases. Our investments in services that support families like health and education have increased greatly. But now we must take the next steps recognising that while there has been a lot of progress many of our families are feeling stretched and more must be done. Strengthening the economy is fundamental so that people can earn better incomes and so that the Government can fund world-class public services. 
Our vision for the economy is to lift its value through innovation skills and productivity; to underpin its progress with first-class infrastructure; and to increase its export focus. Last year’s business tax package including the incentive for more research and development and the increases in support for businesses seeking to export were all steps in the right direction. This year we plan major innovation initiatives both in our support for the research and development that must drive our economy—particularly in the food and pastoral industries—and in policy to speed up the roll-out of faster broadband than is available to New Zealand now. Progress in these areas requires the private sector to step up to the plate too but the Government can and will play its part. 
On broadband we have got confidence in the new regulatory settings and we are close to finalising Telecom’s undertakings on operational separation and commitments on infrastructure investment. Going forward the aim is to build out high-speed broadband in our cities and rural areas delivering benefits to business the education and health systems and society at large. 
Big investments will be made in New Zealand’s transport infrastructure this year across road rail and public transport projects. Our most congested city Auckland is already seeing the benefit in all three areas with the opening of the North Shore busway being the latest achievement. Last week we announced the next steps on the Waterview Connection. It is a vital part of Auckland’s western ring route. We are exploring a public-private partnership for that in line with the legislation passed in 2003. 
Two important transport bills now before Parliament will be given priority for passage this year. The Public Transport Management Bill will give regional councils the ability to get better integrated passenger services and better value for money and I look forward to the not too distant day when Auckland passengers will be able to buy one ticket that takes them across bus ferry and rail services. The Land Transport Management Amendment Bill provides for a regional fuel tax to speed up infrastructure investment and for improvements to regional and national transport planning. 
But one cannot talk these days about innovation and infrastructure without linking both to the need for New Zealand to be more sustainable and that was the major focus of my annual statement to Parliament last year. A great deal of action has flowed from that. New Zealand is now recognised as a leading nation in facing up to the sustainability challenge. We are stepping up because it is the right thing to do and it is the smart thing to do too. We need to be part of the solutions to the world’s biggest problems and certainly not a reluctant last mover. And in our own economic interests we have to move or face significant barriers in key markets where our consumers will increasingly be making ethical choices. This is particularly important for our land-based industries which will continue to be major growth engines for our economy. I see good business leadership on sustainability issues complementing the many Government initiatives. 
Our priorities in this area this year include the passage of the emissions trading scheme legislation. The Government will continue to engage closely with industry iwi and other stakeholders to get the best possible scheme finalised. Passage of the Biofuel Bill which mandates the biofuel sales obligation will enable New Zealand to lessen its dependence on fossil fuels. We will be updating the  
New Zealand Transport Strategy 
 to sharpen the focus on sustainability. Our policies are aimed at having effective carbon neutrality in the transport sector by 2040. We will be implementing policies signalled in the energy and energy efficiency and conservation strategies especially those promoting investment in renewables and energy-saving measures. Following these strategies New Zealand can be effectively carbon neutral in the electricity sector by 2025. We will be rolling out the $175 million plan of action on sustainable land management and climate change which will help improve the environmental performance of our land-based industries and support them in adapting to a changing climate. We will be working towards a national policy statement on freshwater management. As the recent state of the environment report makes clear New Zealand’s water resource is under considerable strain both in its quality and in demand for it. We seek to finalise and pass the Waste Minimisation (Solids) Bill—a Green Party initiative to which the Government has contributed. We will be continuing to lead by example in the public sector on sustainability and building awareness among households and businesses on how they too can contribute to making our country more sustainable. We will be playing a full part in the international negotiations for a comprehensive post-2012 agreement on climate change. New Zealand has played a key role already not only in the UN-level talks but also in getting momentum for an agreement and momentum within APEC the East Asia Summit and the Commonwealth too. 
Overall what our Government is seeking is a better balance between economy environment and society. The unifying concept is sustainability. Inherent in that is the need for long-term durable strategies backed by clear action plans. That is nowhere more important than in policies and initiatives for our families so that we can offer them all the opportunity and security that living in a First World country should bring. 
For the past 8 years our top priority has been to improve both living standards and the services that our families young and old need. The 377000 more jobs in the economy have made a big difference to our families. So has the Working for Families tax relief directed to 70 percent of our families with children. So has the increase in the rate of New Zealand superannuation. So has the big increase in the rates rebate for those on low and modest incomes which has been especially helpful to many older New Zealanders. So has paid parental leave to enable parents to spend more time with new babies. Four weeks’ annual holiday has given families more time together. Big reductions in doctors’ fees and prescription costs and the 20 free hours for 3 and 4-year olds in early childhood education have brought considerable financial relief to many families. It has also helped to have income-related rents for State housing and support for first home owners through the Welcome Home Loans. It has certainly helped to have interest-free loans and capped fees for tertiary students to make education more affordable. I see this policy is getting more exciting and supported by the day. The introduction of KiwiSaver is important helping New Zealanders save for the future with well over 400000 people now enrolled in the scheme. And there have been the big investments in apprenticeships and other skills training. 
So now the next steps can be taken. Priorities for the Government this year in supporting our families include an announcement about the programme of personal tax cuts to be made in this year’s Budget and this will help ease pressures on household budgets. There is the roll-out this year of the B4 School checks for 4 to 5-year-olds to give our kids the best possible start at school and for life. If we intervene early on health and behaviour issues we can give our children more opportunity to succeed and we can head off problems that might otherwise be destructive of young people and society. 
We are moving on lifting the age of participation in school or other forms of education to 18. This is a critical policy for young people and for New Zealand because our country is selling itself short when close to 30 percent of our teens leave school before the age of 17 and 40 percent are failing to achieve National Certificate of Educational Achievement level 2. Major OECD reports are now showing the extent to which our teenagers’ participation in education is falling behind. There has been no significant improvement in school retention at ages 16 to 18 for the last 15 years. The situation is no better than it was before the school-leaving age was raised to 16. Later this month the OECD will be publishing a new report on jobs for youth in New Zealand and it is highly likely to recommend steps to improve retention rates in secondary education and the expansion of apprenticeship training as we plan. This report reinforces the need the Government sees to move on these issues. The buoyant jobs market in recent years has largely disguised the problem of low achievement in education. But we cannot build New Zealand’s future on a low-skill low-wage economy. That is why we need change in education and a quantum leap in the aspirations we have for our young people. 
The programme of action we have is called Schools Plus. The schools of the future will be the gateway to the range of education and training opportunities that are on offer be it a Young Apprenticeship tertiary courses or programmes offered by the school itself. The annual costs of Schools Plus when fully operational will be around $170 million a year. But that investment I know will be repaid many times over by rising education levels and a greater ability to contribute positively to the economy and society. 
So will the big investments we are making in upskilling the workforce overall. The strong partnerships the Government has had with industry have seen us double the number of New Zealanders in work-based training. A priority this year will be work on the unified skills strategy for the existing workforce. That will be developed through a partnership between the Government Business New Zealand and the Council of Trade Unions. 
There is public concern which the Government shares about crime among young people. In fact the rate of youth crime has decreased over the past decade but the rate of violent offending has risen. Exactly the same is true for the adult population. We have legislation before Parliament now that strengthens the justice system’s treatment of young offenders including by extending out to 6 months the time that they can be required to spend in residential facilities. We have got a strong action programme in place to counter youth gang activity in Counties-Manukau. It brings together our Government agencies with local government and the community sector and it is making a difference. The model will be applied to other areas with these problems. 
I will also be making announcements shortly about new initiatives to combat tagging. Tagging is not a nuisance crime; it is a destructive crime that attacks people’s homes and other public and private property and we will be strengthening measures against it this year. 
As well the time has come to do much more to support the community-based organisations that are providing essential services for vulnerable families children and young people. I have an important announcement to make today about the next steps in our Pathways to Partnership programme between the Ministry of Social Development Child Youth and Family the Ministry of Justice and the community sector. This programme was announced last year and it signalled our intention to develop a stronger relationship between the Government and non-governmental organisations. Today I am announcing significant new funding so that that partnership can be firmly established and put on a secure and sustainable footing. 
The new funding model that I am announcing today will see essential services with which we have multi-year contracts like our parenting programmes support for at-risk youth women’s refuge services family violence programmes and services for victims of crime funded for the full cost of delivering the agreed services—the full cost of delivering the agreed services! The good news for the many small service providers is that we will be moving from a contracts-based to a grants-based model so that they will face less bureaucracy and fewer compliance costs in dealing with the Government. This new sustainable funding path will begin with an extra $37 million in the next financial year. It will build to an annual increase of $192.8 million in 2011-12 and out-years. That is a total of $446 million committed over the next 4 years. 
Through the new funding model we will be able to make automatic annual cost adjustments to funding and they will reflect both the cost changes and agreed volume changes. It will provide more certainty to the sector and that will help the sector to build its workforce capability. It will support non-governmental organisations to work together more closely to reduce duplication and direct more resources into services. As I said those smaller organisations will be able to focus on providing services rather than on compliance costs. These changes not only will give huge relief to our social service non-governmental organisations which are struggling to provide quality services to families children and young people but also will ensure that we can do more at source to prevent family violence and breakdown and youth offending. This is critical to building a safer and more sustainable society for every one of us. 
The issue of housing affordability is also a big priority for the Government this year. Since 1999 we have added 7500 homes to the State housing stock and we have made the rents fair. We have issued 3200 Welcome Home Loans. They have helped people on modest incomes buy their first homes with little or no deposit. But we know that the fast-rising cost of houses in recent years has made the dream of homeownership more difficult to achieve. It is not a problem unique to New Zealand; it is seen in Australia Canada Britain and elsewhere too. It is not a problem that can be solved by throwing a whole lot more money at mortgage subsidies as that would only drive prices up further in the current conditions. Fundamentally the problem is lack of supply of affordable homes so our solutions must focus on increasing supply and this year we are launching a comprehensive action plan to do that. 
Our country needs large-scale urban housing projects that incorporate realistic numbers of affordable homes. The private sector and central regional and local government need to work in partnership to deliver these projects. The Hobsonville development in west Auckland is one example of this approach. We are using Crown land to provide over 3000 new dwellings alongside schools employment heritage areas and reserves. We have 500 of those homes targeted at first home owners on modest incomes and another 500 are to be built for the Housing New Zealand Corporation. There is another example of the Government taking the lead in the Tamaki redevelopment announced last week by the Minister of Housing. Up to 3000 new homes will be built there and as with Hobsonville affordable housing for first home owners and renters will be a significant component. 
Other countries have set up urban development authorities to achieve these outcomes and we believe that such arrangements could work for New Zealand as well. So we will have officials reporting by May on how such agencies can be established in New Zealand for brownfield and greenfield housing developments including through private sector and public sector partnerships. 
We will also want to support the development of a larger not-for-profit housing sector. That could include working more closely with community-based organisations that are already active to scale up their provision of affordable housing and it could include creating new dedicated entities like Britain’s housing associations. We will have reports on that too by mid-year. 
As immediate steps we will be carrying out a review of public land holdings starting in Auckland to see what areas are available to contribute to new urban housing projects. We will be looking at how much land presently zoned residential is actually available for housing development now. We will be tackling issues in the building consent process that are adding unreasonably to the costs of building a home beginning with simplifying the design and building consent processes for starter homes. We really think that will be useful. In July this year we will be launching the shared equity scheme targeted at new builds to help people in high-cost areas get on to the homeownership ladder. And we will be progressing the legislation before Parliament now that gives local government the power to require affordable housing as part of a development. 
There is no simple easy or quick way to make homeownership more affordable but by taking a range of approaches as I have outlined today to increase the supply of affordable homes we can ensure that the dream of homeownership continues to be achievable for New Zealand families. That matters to Labour and we will pursue it. 
Major legislation was passed last year to make the criminal justice system more effective especially in providing alternatives to prison for low-risk offenders. The new community-based sentences have been embraced by the judiciary leading to a welcome reduction in prison numbers. Our Government believes that as long as public safety is not jeopardised we should be working to keep lesser offenders out of jail. The rate of recidivism of those who have been to jail is high and community-based sentences have more effective outcomes in any case. 
This year the new Sentencing Council will be appointed and will move to finalise best-practice sentencing and parole guidelines. A new agency to fight organised crime will be established within the police and a new organised crime strategy will be adopted. We will be responding shortly to the select committee report on victims’ rights. We will be developing and implementing a charter of victims’ rights and making amendments to the legal aid legislation. A nationwide 0800 line and an information website for victims will be established. We have asked the Law Commission now for advice on the select committee’s recommendation for a victims’ compensation scheme and we will make decisions after we have received that advice this year. We are also considering the introduction of victims’ advocates in our family violence courts. I would also observe that passage of the Criminal Procedure Bill presently before Parliament would help speed up court processes which is important to the system of justice. 
In response to the Ombudsman’s report on the criminal justice system we will be appointing a group of highly qualified and eminent people to act as an advisory board to the justice sector Ministers for the next 3 years. The board will meet with those Ministers regularly to advise on further improvements to the system. It will engage with the public. To facilitate informed debate about the issues the Ministry of Justice will be issuing factual information about the system as it stands at the moment. New Zealand’s high imprisonment rates continue to be cause for concern especially at a time when crime rates are at their lowest in more than 20 years. 
In the health system this year our top priorities include setting new targets for increases in elective surgery and driving more productivity and quality in the hospital sector. New Zealanders expect and deserve to get first-class service in our public hospitals and we cannot tolerate the system letting people down. We will be progressing the Public Health Bill which replaces legislation more than half a century old. We will be ensuring that the massive funding that is now going into affordable doctors’ fees actually keeps those fees low. We will be focusing on our public health goals in areas like reduction of smoking and tackling obesity. And there will be action on the very wide range of major health strategies and action plans that now exist across age groups and communities and across key diseases and conditions. 
Taken together economic social and environmental policies substantially define the kind of nation we seek to be: progressive outward looking inclusive and sustainable. We project our country’s values through our foreign and defence policies and 2008 will be another high-tempo year. Our contribution to development assistance is growing steadily; we are about to host a major United Nations negotiating conference around the control of cluster munitions; and we are particularly active in regional initiatives in the South Pacific and in east Asia. This year we will need to provide considerable assistance to Niue in its role as host of the Pacific Islands Forum so that there is a successful and well-organised leaders’ meeting. Our significant defence deployments in East Timor Afghanistan the Solomon Islands and the Sinai will continue. Yesterday’s attempted assassinations of East Timor’s leaders were deeply shocking and they suggest that there will be no quick end for the international security presence in East Timor. 
On the trade policy front we welcome the United States’ decision to join the negotiations with New Zealand Chile Singapore and Brunei for investment and financial services under our existing four-way free-trade agreement. I hope in the coming weeks to be able to announce the outcome of the free-trade agreement negotiations with China which if successful will come to Parliament for scrutiny and enabling legislation this year. Negotiations for free-trade agreements with ASEAN and the Gulf Cooperation Council are ongoing and we continue to pursue what must be our top trade priority: a successful outcome to the World Trade Organization’s Doha round. 
Our country is now making a contribution to international interfaith and inter-civilisation initiatives. New Zealand’s voice is respected because of our country’s reputation for dealing with injustice and being committed to inclusion. Shortly we will be releasing the New Zealand action plan drawn up in response to the UN’s Alliance of Civilizations report. It builds on work that we have been doing over the years to build cohesive communities in today’s complex multicultural and multi-faith New Zealand. Tackling inequalities overall has been part of our programme from 1999 and progress is being made. The average Maori unemployment rate in the year ended December 1999 was 16.6 percent. The same figure for the year ended December last was 7.7 percent—a drop of 54 percent. For Pasifika people the drop has been from 13.6 percent to 6.5 percent—that is a drop of 52 percent. For other Kiwis not including European/Pakeha the drop is from 10.6 percent to 5.6 percent—down 47 percent. We are proud of these outcomes. 
All relevant Government agencies are working for better outcomes in employment education health status and other key indicators across all New Zealand’s communities. That work is complemented by Te Puni Kokiri’sMaori potential strategy and by the work of the Hui Taumata task force which involves Maoridom Business New Zealand and the Council of Trade Unions. It is complemented by the Ministry of Pacific Island Affairs’ Pacific Economic Action Plan and Pacific Women’s Economic Development Plan and also by the work of the Office of Ethnic Affairs and other agencies to support emerging ethnic communities. 
Critical in moving New Zealand ahead now is getting closure on historical Treaty settlements with the deadline for claims to be lodged in September this year. The Government welcomes the substantial steps made towards settlement of the Waikato River claim and the Taranaki Whanui (Wellington) claim just before Christmas and we look forward to progressing these and other claims this year. The signing of the heads of agreement under the Foreshore and Seabed Act between the Crown and NgatiPorou is a hugely significant agreement and a number of other iwi are also in negotiation or exploring the possibilities with the Crown for foreshore and seabed agreements. 
We have major Maori affairs legislation to progress this year including the Waka Umanga (Maori Corporations) Bill which provides for legal entities tailored to meet the organisational needs of iwi and others who manage Maori communal assets and the Maori Trustee and Maori Development Amendment Bill which aims to accelerate investment in Maori economic development. As well priority will be given to the Mauao Historic Reserve Vesting Bill which transfers title of what many Kiwis know affectionately as the Mount to local iwi while maintaining the public’s right to enjoy that special place. This year other priority areas for engagement with Maoridom will be around issues pertaining to emissions trading water and coastal management and fisheries sustainability. 
Our Government has always put a big priority on sustaining the arts cultural and heritage sectors not least because of the role they play in expressing what is unique about New Zealand. The main priorities this year will be ongoing sustainable funding for the sector support for significant regional museum and gallery infrastructure projects considering the next steps to take our domestic film industry ahead and I hope advancing legislation to provide for resale royalties for visual artists—a move that is overwhelmingly supported by Kiwi artists. 
Other major legislation in a range of fields to be progressed this year includes the Immigration Bill which overhauls the principal Act of 1987; the new police legislation replacing the 1958 Police Act; the Real Estate Agents Bill to set up a more effective regulatory regime; the financial service providers bill and the Financial Advisers Bill to strengthen the regulatory framework for public protection; and the injury prevention rehabilitation and compensation amendment bill improving coverage under the accident compensation system. 
In my statement today I have addressed the Government’s key priorities for building a fairer more prosperous inclusive and sustainable New Zealand. We offer strong and proven leadership a record of delivery on our promises and new initiatives that build on what we have already achieved for New Zealand. Our programme of change is about developing potential and opening up opportunity for all because we are in this to make life better for New Zealand’s families through practical policies that enable everyone to get ahead. This is a very substantial Government programme. It looks to New Zealand’s future and it tackles the real issues and challenges that face our families and our country. We look forward to advancing it throughout the year and beyond. Thank you.