Prime Minister’s Statement 
Prime Minister’s Statement 
[Volume:637;Page:7237] 
Prime Minister’s Statement 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 It is my privilege to present this annual statement to Parliament setting out the Government’s priorities for the year ahead. Last year’s statement set out an ambitious programme and a great deal has been achieved. That has been due in no small part to the constructive working relationships that Labour and the Progressive party have with other parties in the House. New Zealand First and United Future as confidence and supply partners and the Green Party and the Maori Party have been prepared to work through complex policy issues with the Government. I thank them all for their contribution. 
There is no question that New Zealand today is a stronger fairer and more confident nation than it was 7 years ago. Many more people are in work incomes are higher educational achievement is up and crime rates are lower. These results have been achieved across the society lifting Maori and Pakeha along with Pasifika Asian and other New Zealanders. But substantial as these gains have been the Government believes that New Zealand can do even better. As we reach each goal and target we set in economic and social policy new ones must be identified and met. 
Meeting the challenges our country faces in the 21st century requires substance not slogans. New Zealand’s future is dependent on long-term sustainable strategies for our economy our society our environment our culture and our way of life. Those strategies have to be driven by strong leadership and sound policies. Our challenge is to build a sustainable economy based on innovation and quality in a world where high-volume low-quality services and goods will always undercut us on price. Our challenge is to sustain family and community living standards in an open and competitive economy. Our challenge is to sustain our unique culture values and national identity in a world of globalised media and culture. 
Building a sustainable nation requires smart active Government working with key stakeholders across the economy and society. The invisible hand of the market does not deliver a sustainable nation as an earlier era of New Zealand politics showed only too well. Now the quest for sustainability has taken on a new urgency because of the scale of the environmental challenge the world faces. Traditional patterns of development and fast-growing populations have put an intolerable strain on the planet. The future economic costs of doing nothing are dire. That is why issues around sustainability and climate change have become the compelling issues of our times dominating international forums and agendas. Two decades ago it was the threat of nuclear war destroying the world as we knew it that galvanised New Zealand to become nuclear-free and work for a more peaceful world. Our Nuclear Free Policy and the values that inspired it have become central to our national identity and how we project ourselves to the world. 
And so it must be with this century’s environmental sustainability challenge. We have to make a stand—for our world and for our own sake. Without a commitment to greater sustainability in our resource use and way of life we risk not only damaging our own environment but also exposing our economy to significant risk. That is why I have called for boldness in our approach to these issues. 
I believe that New Zealand can aim to be the first nation to be truly sustainable—across the four pillars of the economy the society the environment and nationhood. I believe that we can aspire to be carbon neutral in our economy and way of life. I believe that in the years to come the pride we take in our quest for sustainability and carbon neutrality will define our nation—just as our quest for a nuclear-free world has over the past 23 years. 
More than any other developed nation New Zealand needs to go the extra mile to lower greenhouse gas emissions and increase sustainability. In our high-value markets in Europe we face increasing pressure on our trade and tourism from competitors who are all too ready to use against us the distance our goods must travel to market and the distance tourists must travel to us. 
By lowering our carbon footprint we strengthen our position against that sort of protectionism—and the Government is working to lower that footprint in many ways. Several years ago we rewrote the land transport legislation to put emphasis on sustainability and over seven Budgets we have increased spending on public transport by around 750 percent. Now the draft New Zealand Energy Strategy and National Energy Efficiency and Conservation Strategy set out to take sustainability to new levels. They champion renewable energy across power generation and transport and energy efficiency at home and at work. I believe that New Zealand has the potential to lead the world in its commitment to renewable energy. 
On biofuels the time has come to implement a sales obligation. Biofuels can replace diesel and petrol and reduce our greenhouse gas emissions. With domestic production they can also be positive for the current account. The Government has decided that a biofuel sales obligation will be set at 3.4 percent of the annual energy content of total petrol and diesel sales by 2012. This initial target is considered sufficient to encourage the uptake of bio-diesel and the development of infrastructure for ethanol distribution. Further details about the biofuel sales obligation and other announcements relating to sustainability are being announced by Ministers later today. This measure complements decisions already made to see that cars imported into New Zealand in future meet higher emission standards and that consumers have proper information on the fuel efficiency of the cars they are purchasing. Last year in recognition of the import contribution of forestry to climate-change mitigation strategies the Government announced its Permanent Forest Sink Initiative. Already an announcement has been made of a major investment to develop 30000 hectares of permanent forest on NgatiPorou land on the East Coast. 
But there is potential to do much more. In the coming weeks consultations are being held on the wide-ranging proposals for sustainable land management in agriculture and forestry released before Christmas. These major export sectors have much to gain from association with sustainability policies. In the future business overall will need to be sustainable to make money and there will be money to be made from being sustainable. In agriculture part of the answer lies in changing farming practice now while longer-term answers are also sought on how to reduce animal methane emissions. We should aim for world leadership in this area of science. 
I am also announcing today new sustainability priorities for the Government this year. Firstly the Government intends to lead by example by moving the public service towards carbon neutrality. This year the first group of six departments will commit to achieving carbon neutrality by 2012. By early next year the Ministry for the Environment the Ministry of Health the Ministry of Economic Development the Inland Revenue Department the Department of Conservation and Treasury will have reduced their carbon footprint significantly. Their objective will be to reduce their department’s emissions and then at the point at which it is not feasible to reduce further to offset them—for example by supporting tree planting on Crown land which also contributes to our sustainable land management policies. Over the next year all other departments will develop their plans. In 2012 all the public service departments will be on the path to carbon neutrality and the wider State sector will also be encouraged to join the programme. 
I want to say a word on the role of Government procurement in achieving sustainability. The Government sector is a significant purchaser of services within the economy. We intend to use that purchasing power to help drive innovation cleaner production and improved cost-effectiveness over the whole life cycle of goods and services. 
 So we will be developing a single procurement policy for the Government requiring sustainably produced goods and services to be used wherever possible. We are announcing today that as the VIP car fleet of the Department of Internal Affairs is replaced vehicles that are more fuel efficient and have lower emissions will be acquired. It is estimated that this move will lead to 550 fewer tonnes of carbon dioxide being emitted 400000 fewer litres of fuel being used and half a million dollars being saved over 3 years. We accept the responsibility to lead by example in these areas but we also want to encourage and support others to reduce their carbon footprint. 
A big priority this year will be to raise the awareness of our households about sustainable practice in energy water use transport and waste disposal. Already the Government has many separate initiatives ranging from EnergyWise grants for assisting with energy efficiency retrofits to solar water heating programmes and improving energy efficiency requirements within the review of the building code. These programmes need to be integrated so that our households can see that the initiatives are all part of a programme they can implement to achieve the overall objective of improved sustainability. 
Then there is business sustainability. We believe that business has a big contribution to make in improving New Zealand’s overall sustainability performance and can take up the commercial opportunities that the worldwide interest in sustainability creates. Many businesses are involved already and many more are interested. The new Government procurement policy will give companies an added incentive to be sustainable. Already the Crown research institute Landcare Research has developed a CarboNZero programme enabling businesses that meet its criteria to brand themselves credibly as carbon neutral. 
The Government will work with leading business networks like the Business Council for Sustainable Development and the Sustainable Business Network to promote awareness among companies of what they can do to improve both their sustainability and their profitability. Working together we can ensure that standards are set that give businesses and customers confidence in the integrity of our sustainability programmes. We are also following closely the exciting work in the private sector on the development of carbon trading regimes and we will be willing to consider what legislative and regulatory changes might be needed to put them into effect. 
On waste management during this year we will be advancing new proposals. They will include funding the construction of more recycling facilities for use in public places. Although household recycling is progressing well we do need more facilities to encourage the recycling of waste when people are away from home. We want to continue to work with the Green Party on refinements to the Waste Minimisation (Solids) Bill that is currently before Parliament. We want effective legislation for some form of waste levy to help fund better waste minimisation infrastructure. Product stewardship will also be improved by measures in that legislation. Although voluntary initiatives have been useful some form of regulatory back-up will be necessary for the environmental impacts of manufactured products to be minimised as much as possible. 
So overall this year the Government has a huge and credible work programme to improve the country’s environmental sustainability credentials and to move our country towards the vision of carbon neutrality. This is the way the world will move and we have the opportunity to be at the forefront. Sustainability and an identification with the vision for carbon neutrality can be central to our national identity and to the way the world perceives us—and that is to our overall benefit as a nation. The theme of sustainability is also central to our Government’s programme across all three key policy themes: economic transformation families young and old and strengthening national identity. We are committed to long-term sustainable strategies to take our country ahead. 
On economic transformation this year’s Budget will outline the Government’s decisions on new settings for business taxation aimed at increasing innovation investment and growth. Business tax changes this year are made possible by solid economic and tax growth over 7 years and by careful Government fiscal management. Export Year 2007 is under way with extra funding for market development grants more targeted trade missions and business-Government collaboration around export-focused events and forums. I thank the many private sector agencies throughout New Zealand that are exporting Export Year. I salute Ken Stevens Export Year’s business champion. He is a superb example of how to take Kiwi ingenuity to the world and grow a high-value export business. 
The year 2007 is a big year for trade policy with the Doha round of the World Trade Organization showing signs of life again and our Minister of Trade and his officials are very actively engaged in that process. That round is our top trade policy priority. New Zealand negotiators have recently completed the eleventh round of talks with China on the free-trade agreement. The best possible access to China’s fast growing markets for goods and services is essential for our economy. Planning is beginning on how to make the most of the New Zealand pavilion at the Shanghai Expo in 2010 as one of many initiatives to lift our country’s profile in China. A study on the potential of a free-trade agreement with Korea will also be advanced this year. 
Three regional trade initiatives are of keen interest to New Zealand: the ASEAN closer economic relationship free-trade agreement negotiations which are expected to be completed this year; the proposal for a free-trade area of the Asia-Pacific region that is being developed for the APEC summit in September; and the study on the potential of a free-trade area covering the 16 countries of the East Asia Summit. As a high proportion of New Zealand’s trade is now done with nations around the Asia-Pacific the Government is an enthusiastic supporter of developments that could improve our access to those markets. 
A highly educated and skilled workforce is critical to realising the opportunities for New Zealand in international markets and to developing a high-value economy. Over the past year the Government has undertaken a major review of tertiary education policies and funding aimed at getting better value for the money from the investments we make. An Education (Tertiary Reforms) Amendment Bill will be introduced this year. As well we will continue to increase the numbers in work-based training and in the Gateway programme which introduces high school students to industry. These programmes are well supported by business and union partners. We will continue to work with them to lift skill and productivity levels and we will be strengthening the Skill New Zealand tripartite forum. 
The development of Auckland as a world-class international city is critical for New Zealand’s overall growth and development. The Government is currently considering its response to the region’s proposals for strengthening its governance and our investments in Auckland’s transport infrastructure are large and growing. It has become increasingly important to align central and regional strategies for Auckland transport and joint working parties are progressing that. Time lines around rail electrification will need to be agreed on and new funding mechanisms for transport initiatives outside the current funding parameters need to be developed. The Government has also reviewed the public transport procurement legislation with the objective of enabling our regional councils to get better value for money in their public transport spend. Decisions will be made shortly on what changes will be advanced to the legislation. 
Already this year there have been major developments in guaranteeing Auckland’s power supply. The Electricity Commission’s announcement on the upgraded transmission into Auckland is going through a formal consultation process. Its proposals are consistent with the Government’s priorities of ensuring security of supply and focusing on renewable sources of energy. 
On digital matters last year’s far-reaching reform of regulatory settings for telecommunications has ushered in a new era of competition in the market. Broadband is already cheaper and faster. The new settings are helping us to catch up with other countries that have enjoyed more competitive settings for longer. But there is still a long way to go. Now to keep up and press ahead we need to continue to challenge the telecommunications sector and our regions to lay down new high-speed infrastructure to match our aspirations to be a knowledge economy and society. 
This year the Government will be refreshing its strategies for broadband and high-speed connectivity. New Zealand needs a clear pathway to the roll-out of fibre infrastructure and we will be working with business and local government on that. Specific decisions are pending this year on the three-way operational separation of Telecom New Zealand and on a range of mobile issues including termination rates collocation roaming and spectrum. The digital content strategy will be launched as will the free-view digital TV platform. The Minister of Communications who is also the Minister for Information Technology will be convening an information and communications technology summit aimed at refreshing the digital strategy and getting input from the sector itself on its future growth and development. 
On families policy the Government has major programmes rolling out and others are in development. In health the success of the district health boards in meeting targets for big increases in joint replacement and cataract surgery has encouraged us to develop a similar approach in other areas of surgery. Elective services will increase across the board by about 10 percent this year and nearly all district health boards are already eligible for the extra funding. In addition we will be negotiating specific targets for delivery with district health boards in areas other than elective surgery where progress is both needed and is achievable. 
On 1 July 25 to 44-year-olds will be brought into the Primary Health Care Strategy completing the coverage of all age groups. As with the earlier extensions to the scheme doctors’ fees for this age group will reduce substantially and their prescription charges will drop from $15 to $3 an item. This is very helpful to family budgets. Health legislation this year will include the introduction of the new Public Health Bill updating legislation that is half a century old. We are making big investment in the health of children and young people by moving to screen all new babies for hearing loss increasing funding for dental health and tackling obesity through the promotion of better nutrition and more physical exercise. 
In housing income-related and fair rents for State housing remain fundamental to the Labour Party. This year will see big moves to upgrade the social housing stock moves to increase the supply of affordable housing—including through the integrated development at Hobsonville—and decisions about the shared equity scheme for first home owners. Homeownership has always been part of the Kiwi dream and we believe that the State has a role to play in supporting modest-income families reaching that dream. 
On 1 July the new KiwiSaver scheme will begin encouraging savings for first home ownership as well as for retirement. This year the rates inquiry will look at the factors driving the steep rates increases that have been of such concern to superannuitants and others on fixed and modest incomes. Legislation for the SuperGold card for superannuitants and the Veterans card will be passed this year with the cards becoming available from August. 
In education 1 July heralds the introduction of 20 hours of free early childhood education and care for 3 and 4-year-olds with substantial uptake by the sector likely. This is a huge advance. 
Hon Member 
: They hate it. 
Rt Hon HELEN CLARK 
: They do hate it. The review of school operational funding is complete and the Government will be considering its response this year. The new school curriculum will be published in September. New initiatives have been taken to ensure school attendance with the district truancy services being strengthened. Parents whose children are not attending school regularly can expect to be prosecuted. New funding is being introduced this year to give more support to schools to manage disruptive behaviour. 
Although New Zealand’s overall levels of attainment in the school system are high relative to those of other OECD countries we do have a significant minority of young people who fail badly. That needs to be tackled at a number of levels. One of them is to engage those young people in education that is meaningful and relevant to their futures. We have already invested heavily in the Gateway programme and this year we will go further with the development of a young apprenticeship scheme for schools. Overall the Government is looking to personalise education so that it is tailored to meet the needs of every student. That requires effective teaching strong professional leadership engaged families a strong grounding in the basics of literacy and numeracy completion of secondary school the setting of clear boundaries for students and adequate resourcing. I have no doubt that the New Zealand education system can deliver the quality teaching that children and young people need in order to learn. 
But capacity to learn is also heavily influenced by wider social factors. Labour in Government has focused on more affordable health-care fair State house rentals for low-income families and adequate incomes through rising employment levels and the family tax credits of Working for Families. There is no doubt that our policies have made a big difference with the numbers of children living in households below the poverty line decreasing dramatically. At least 60000 children were lifted out of income poverty between 2001 and 2004 and another 70000 will have been lifted out with the full implementation of Working for Families after 1 April this year. On that date all families eligible for family support will receive another $10 a week per child. Can we do better and move to eradicate child poverty? That is certainly my dream—but let us not dismiss the huge progress that has been made in that direction. 
Over the past 7 years the number of working-age beneficiaries has gone down by over 28 percent or close to 115000 people. That has been achieved by huge decreases in the numbers on the unemployment benefit and now with decreases in the domestic purposes benefit numbers too. The numbers of those on unemployment benefits for 2 years and over are down by 70 percent. We believe that the numbers on benefits can be reduced further by extending employment services to those on all categories of benefits and by setting stronger work expectations. Significant changes in legislation policy and services are being made this year so that we can support even more beneficiaries into work. Labour believes that the best form of social security is a job underpinned by fair labour law good public health-care and education and affordable housing for people on low incomes. Good policies in these areas followed over the long term help to build a more sustainable society. 
But we are also directly targeting the violent and destructive behaviour in the community that causes so much concern and grief. Late last year we launched a 26-point action plan aimed at young people at risk and those already causing mayhem in their communities through youth gangs. Seven Government departments were involved working closely with local government non-governmental organisations schools and communities including supportive businesses backing good programmes. Across Auckland where the youth gang issues are most prominent the police are adopting a no-tolerance approach to offending by youth gang members and have increased their presence in areas known for gang violence. The message is clear: no part of our communities will be abandoned to gang influence. There must be no no-go areas. 
Family violence is also being targeted with new prevention and support services being rolled out this year. A major community campaign will begin to reinforce the unacceptability of family violence and change attitudes towards it. High priority is being given to the SKIP programme which teaches positive parenting and alternatives to physical discipline. I believe that the changes recommended by the Justice and Electoral Committee to section 59 of the Crimes Act would also have a positive impact on violence in the home. It is my hope that Parliament will support them to help make our children safer. 
Last year the Government announced significant changes to law and practice in the criminal justice system. Legislation now before the House aims to deliver greater consistency in sentencing greater truth in sentencing through reform to parole laws and more effective community-based sentences for low-risk offenders. New drug and alcohol and special treatment units are being set up in prisons this year and there will be many more opportunities for prison employment. 
We want better results from the criminal justice system through a greater emphasis on rehabilitation and through more appropriate punishment for low-risk offenders. The recent violent offending by a prisoner on parole leading to murder and the infliction of serious injury has shocked our nation. Inquiries establishing exactly how this case was handled are ongoing but the Government has already decided to give serious consideration to allowing the police to make a recall application to the Parole Board where they have serious concerns about a parolee’s behaviour. Where a recall application has been made on the basis that an offender is failing to comply with the conditions of his or her release or is acting in a way that makes those conditions now inappropriate it is proper that responsibility for applying for recall rests with the Community Probation Service because the probation officer supervising the offender has first-hand knowledge of the information upon which the application is based. 
However where the application is based upon the fact that the offender is posing an undue risk to the safety of the community or has committed an offence punishable by imprisonment it is likely that the information on which the application is based will have been derived from police investigations or intelligence received by the police. In these circumstances it can be argued that the police should have the power to make an application for recall rather than the Community Probation Service determining whether to act on the information the police provide. This proposal for enhancing the ability to recall prisoners from parole is aimed at improving public safety and security. 
Reinforcing and celebrating New Zealand’s unique national identity is very important to my Government. As I said in my Prime Minister’s statement to Parliament last year there is an evolving New Zealand way of doing things and a stronger New Zealand identity is emerging. We pride ourselves on being a nation with a sense of fair play on being clean and green and on being nuclear-free. We do stand for decent values at home and abroad. We take pride in all those who put our country on the map like Sir Edmund Hillary whose exploits were celebrated in Antarctica last month and like Professor Alan MacDiarmid one of only three New Zealanders to win the Nobel Prize who sadly passed away last week. Our sportspeople artists and performers and leaders across the community provide inspiration at many levels. 
In Government we seek to support and strengthen what is fundamentally good and unique about New Zealand. In a globalised world we cannot take the preservation of our unique culture and our values for granted. In this globalised world we are determined that there is a place for a small smart inclusive creative and sustainable nation like ours. 
Many of our values are played out through foreign and defence policies and 2007 will be particularly busy in that sphere. Our defence deployments will continue at a high tempo with New Zealand playing a critical role in peace building in the near neighbourhood and beyond. Supporting resolution of conflict and lowering tension in the Pacific is a top priority with particular attention being paid this year to the situation in the Solomon Islands Fiji and Tonga. Relationships with the nations of Asia are more important than ever and we are now accepted as a partner in East Asian regionalism. In the Middle East we will be continuing our peacekeeping involvement beginning negotiations on a trade agreement with the Gulf Cooperation Council countries and opening the new New Zealand embassy in Cairo. Our Latin American strategy has led to much more contact with that region across diplomatic economic cultural and other relations. The Commonwealth Heads of Government summit to be held in Uganda this year reminds us of the traditional network of relationships we have in Africa. The new South Africa has emerged as a world opinion leader and our relationship with it is also growing fast. 
I do want to emphasise the very high value our Government places on its relationship with other Western nations. We are part of a community of shared values with Australia with the United States and Canada and with Europe. These bedrock relationships must be continually nourished and refreshed. This year the Government will be hosting three major international conferences: the Commonwealth Local Government Conference; The World Heritage Committee of Unesco; and the Regional Interfaith Dialogue at Waitangi and an associated symposium on the major Alliance of Civilizations report made to the United Nations. 
Our international work on dialogue across civilisations and faiths is highly relevant to the nation we are building at home. New Zealand’s growing diversity is recorded in last year’s census. A commitment to social cohesion and the willingness to be inclusive across ethnicity culture and faith is more important here than ever before. It is critical that all New Zealand’s peoples benefit from the progress our country makes and have a stake in our society. The Human Rights Commission Ministry of Social Development Office of Ethnic Affairs the Ministry of Foreign Affairs and Trade and other agencies are all contributing to work in this area. Reconciliation at home between Maori and the Crown matters too. The historical Treaty settlement process has considerable momentum. This year the Government will be working with over 20 claimant groups each with a number of claims. 
Major developments in culture and heritage this year will include the commemoration of the 90th anniversary of the Battle of Passchendaele Government-funded road works to safeguard the Kerikeri mission station and development of the plans for the New Zealand memorial park in Wellington. Government support for culture in partnership with local government the corporate sponsors and philanthropy will continue to play an important part in the development of new productions across theatre music and dance. There continue to be exciting developments in film and contemporary music which attract considerable international attention. 
Major legislation before the House this year and not already referred to include: legislation for election law reform to clean up campaign funding; the Therapeutic Products and Medicines Bill establishing the trans-Tasman regulatory agency; the Terrorism Suppression Act ensuring that New Zealand is fully compliant with its international obligations the Property Law Bill which rewrites the 1952 Act; Treaty settlements bills; and a major overhaul of immigration legislation. 
My annual statement to Parliament this year has been a call to action on sustainability. Complacency will not do—[ 
Interruption 
]. That is the other side. We have to secure our future. I believe that New Zealanders value our country’s clean and green fair and inclusive status and our First World living standards. But none of that is a God-given right. Only strong leadership driving far-sighted and sustainable strategies can lock that in for future generations. And only this Labour-led Government offers the leadership the vision and the substance to do that. We look forward to 2007 and progressing our work with and for New Zealanders.