Groser Tim: Address in Reply 
Groser Tim: Address in Reply 
[Volume:628;Page:139] 
TIM GROSER (National) 
: 
 It is truly a privilege to be a member of this Parliament. I have been a public servant for over three decades and any adviser whether official or unofficial obviously from time to time has some influence over policy but I never doubted that the beginning of every major policy shift whether good bad or indifferent has its roots in the great campaign for electoral support that this Parliament represents. I suppose in many cases members here have some misgivings about having put aside earlier career choices but in my case perhaps it represents an extreme example of the cliché: “If you can’t beat them join them.” 
It is true that in the distant past I started on the left as a student activist. As somebody who enjoys a paradox—I may not be the only person in this room—I rather enjoyed that part of the National Party application form that asks: “Have you ever held any previous office?” The only thing I could think of saying was that I had once been president of the Victoria University socialist society. This was I should emphasise before I came across Oscar Wilde’s observation that the essential problem with socialism is that it does not leave the evenings free. 
In my mid-twenties I moved away from those views. I began to embrace a view of politics that does not deny the importance of social change—provided it is examined critically and not adopted like some transitory fashion item—and seeks to put the primary not the sole emphasis for individual social and economic outcomes on the individual and not transfer that responsibility to the State. So I got my waka-jumping in early and since then I spent most of my professional career before coming to this Parliament on one theme—economic reform both domestic and international. I believe finally that they are two sides of the same coin. 
Let me start with some observations about the domestic side of the reform equation. There is no doubt that we have made tremendous progress in this country over the last two decades or so in wrenching our formal trade policy our fiscal policy and our micro-economic policy structures into the modern era. We have made great progress and I celebrate that. But I am already less optimistic having heard some of the contributions made in my brief time in Parliament that the New Zealand public and the New Zealand electorate really have some understanding as to why in this country for example we have almost doubled the growth rate of our per capita income over the last 15 years compared with the 20 years between 1970 and 1990 and why it is that we are today concerned about inflation rising over 3 percent when 20 or more years ago in my youth we were worried about double-digit inflation. I am much less confident that that message has got through. Finally I believe it does matter that societies work out correctly what went wrong in the past and why things have gone right in the more recent past—at what explains their relative successes and at what explains their relative failures. 
The late Michael King said early on in his brilliant synthesis of New Zealand history that one of his reasons for writing that synthesis was “to identify the myths that have shaped New Zealand. Societies are conditioned not so much by events as by group memories of events.” Allow me to illustrate the point I think Michael King was making by deliberately taking a non - New Zealand example. I will take a French example—always popular with New Zealand audiences. 
What does not work well in France is the job market. The general unemployment rate is about 10 percent. It has not fallen below 8 percent for 20 years. If members think that is bad they should spare a thought for the youth. The youth unemployment rate in France is a tad under 25 percent and there are regions of France where it is above 50 percent. The Prime Minister today rightly drew attention to the riots or near-riots now tearing urban and parts of provincial France apart. She did not talk about the causes of them and the causes are certainly deeper than youth unemployment but those riots are inexplicable without reference to the pervasive lack of jobs facing young French people. 
Unfortunately for France there is a vast appetite for the continuation of policies that entrench the problem. Draconian legislation exists to protect those jobs in existence. The 35-hour week is intended to share around what work is available. The minimum wage is set at a very high proportion of the median wage for production workers. Collectively these and other policies—all introduced with the best of intentions—vastly complicate the task of the non - State sector to employ additional workers particularly young and low-skilled workers. 
Unfortunately France is no exception to Michael King’s point about the potentially damaging nature of collective myths. The particular collective myth here is that all the real solutions to France’s sclerotic labour market are immediately labelled by the French political elite as “ultra-liberalism of the Anglo-Saxon type”—end of debate end of discussion; we may have to wait another 20 years until the real problems are addressed. 
I turn now to New Zealand. New Zealand unquestionably is performing at or a little better than the OECD average growth rate but we are still below par in terms of productivity as Dr Brash observed today. The reason why we are doing relatively better I think is obvious. It is because finally we did start to tackle economic fundamentals and that is the message that needs to be repeated and repeated often. I believe that in a democracy if people believe that fundamental myths are responsible it prepares the ground for bad solutions. It does not prepare the way for getting electoral support for sound policy frameworks that have given us a better future in this country. Misleading and occasionally even malign interpretations—I will not quote the obvious example I have in my mind—will mislead the public and provide the basis for complacency and if they persist long enough will lead frankly to political sclerosis of the type we saw in this country 25 to 30 years ago. 
Let me turn to the other side of the reform agenda: the international side. Unquestionably there are great opportunities emerging for New Zealand from for want of a better word the globalisation process now under way. There are great opportunities and it is up to us to put up our hands and take those opportunities. None is more important than the Doha round agriculture negotiations which I had the privilege of chairing until recently. As with the Uruguay round before it these negotiations have the potential to add significant new opportunities to New Zealand and to add significantly to our long-run potential growth rate. 
Understandably I am following the round with more interest than most and with some pretty serious concern right now. Things look very difficult. Those difficulties will be at the centre of the APEC meetings this week. We can certainly expect a strong and standardised—one would almost say “boiler plate”—reaffirmation by APEC leaders of the absolute importance of concluding the round. And they should make that declaration because the absence of such a declaration would send perverse signals to certain political markets right now and would be very damaging. 
That in itself however will do nothing to fix the problem. To fix the problem we now need to identify some middle ground on market access that is consistent with the objectives of the negotiation. Sure New Zealand is sitting comfortably and there are some others who have further ground to make up in that respect but some serious discussion I hope will take place out of the public gaze amongst the delegations on putting something together in a few weeks’ time in Hong Kong because this country has more at stake in this negotiation than anyone else. Wishful thinking will not suffice at this late stage in the negotiation. A bold political declaration is essential for the reasons I discussed but will not address the substance of the problem at all. I hope that our delegation will engage in those serious discussions away from the public gaze so we can look forward in Hong Kong to getting at least some elements agreed to carry this negotiation forward. 
I still believe—and I have always said this—it is highly likely that this negotiation will succeed. To some extent that is a straight extrapolation of the past. There have been eight rounds of multilateral trade negotiations since 1947. They have all been incredibly difficult. The last three have all gone over time. All the original game plans had to be redrawn and new road maps had to be prepared. But finally they all succeeded and I suppose it is less likely that this will be the first to fail. I suppose it will follow that pattern but it will require some very tough work. Mistakes are made in international negotiations and I hope New Zealand will be behind those negotiations urging a reality check at this late stage. There will of course be another round although armchair technicians will say as they did last time that there will not be. But there will be after the political wounds of the last negotiation have healed. 
International negotiations are many things but they are also very human affairs. It takes time to implement them. It takes time for these wounds to heal. A breathing space is sometimes required internationally. Perhaps to return to the domestic side of the equation a breathing space is inevitable domestically too. If that in the future is how observers come to see the political history of this country from 2000 until—well who knows—perhaps the next election then so be it. But there is a political agenda for carrying this forward. It will not change much. It will not vary in its substance; it will vary in its detail. It is an agenda that New Zealand will embrace when and if the New Zealand electorate collectively decides that improved though our lot has been this is not good enough—that this is not “as good as it gets”. 
And that agenda is unsurprisingly an agenda about further tax reform—lower taxes for all taxpayers and companies which will re-incentivise middle-income New Zealand. It is an agenda—and there is nothing surprising here—that will impose real disciplines on Government expenditure instead of masking it behind manipulation of data against a rise in GDP. It is an agenda that asks some tough questions about the explosion of social welfare beneficiaries in this country over the last 30 years while fully understanding that many of our folk need permanent support from these arrangements. And it is an agenda that prioritises excellence not mediocrity in our schools. It is an agenda about removing some of the more obvious and ridiculous impediments that stand in the way of our workforce our companies our farmers and our people building the next phase of wealth creation to build on the success. Finally I believe that this just comes down to a question of confidence—a belief that New Zealanders have done it in the past and can do it in the future—and strategic leadership behind it.