Clark Helen: Prime Minister’s Statement 
Clark Helen: Prime Minister’s Statement 
[Volume:623;Page:18151] 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Two thousand and five began with the international response to the catastrophe caused by the tsunami in the Indian Ocean. Worldwide hearts were touched by the appalling death toll the plight of the survivors and the sight of the devastated communities. This was a natural disaster affecting human beings in their communities on a scale without precedent in our lifetimes. It is the scale and extent of what happened that evoked the massive international response. 
I am proud that individual New Zealanders wanted to play a part in that response and I fully back the work of our many agencies that got involved in the relief effort. Our people on the front line in Thailand and Indonesia especially from the police Defence Force personnel the Ministry of Foreign Affairs and Trade and the non-governmental organisations all have made incredible efforts to help. And so back home have agencies across the board. My thanks go to them all. 
New Zealand’s official response to the tsunami relief and reconstruction effort amounts to this country’s largest ever relief effort. The scale of what happened justifies that as does our country’s desire to be a good neighbour. It is easy to be a good neighbour when times are good. But it is in times of crisis when neighbours are put to the test. New Zealand has never been found wanting when disaster has struck in the Pacific. Now as disaster affects our regional partners in South-east Asia and our Commonwealth partners in the Indian Ocean region we have been proud to play our part and we have the means to do so. 
New Zealand at the beginning of 2005 is a confident nation and it is moving ahead. The gloom and doom merchants can get little traction as job and economic growth roll on. What a disappointment for those who pin their hopes for political salvation on economic failure! They know they cannot improve on New Zealand’s current performance so they try to talk the country down. But that is a hard task when the economic indicators are positive. And it is a hard task when this Government’s policies are working and their policies which are based on the 1990s never did and never could. Growth for the year ended September came in at 4.6 percent—equal to that of the United States and second only to Korea in the OECD. Our GDP growth per capita has been running ahead of the OECD average over the past 5 years. 
It is performance like that that is giving New Zealand momentum and confidence. The results are being felt in homes across our country. In the past 5 years more than a quarter of a million jobs have been added to this economy. Along with that extraordinary growth unemployment has plummeted—down 44 percent from the September quarter 1999 to the September quarter last year. 
The crime rate is down too to its lowest level for 21 years. This Government has been prepared to take a tough line on crime and sentencing. The cost of that has been increasing prison numbers despite the drop in the crime rates. Legislation will be introduced this year to keep the pressure on crime through a civil forfeiture regime to target the profits of organised crime and now we must increase our focus on steps that will over the longer term reduce crime and imprisonment rates by tackling the causes of crime. Early intervention drug and alcohol treatment and crime prevention initiatives like the recently announced Vehicle Crime Reduction Strategy will all help reduce the number of New Zealanders who become the victims of crime. 
Benefit numbers have tumbled too. In the past 5 years the numbers of working-age adults supported by benefits has dropped by over 100000 which is a drop of 23 percent. That is spectacular but we aspire to do even better. Industry is crying out for labour and we have responded. There are now nearly 7000 Modern Apprentices and more than 126000 people involved in industry training. But we must keep doing more to equip New Zealanders with the skills they need to do the work available. 
As the economy has done so much better so the Government has been able to invest back into the things that matter to New Zealanders. Health spending is up by 40 percent over the past 5 years. We are seeing the results in more affordable primary care more hospital treatments higher-quality and better-coordinated mental health care and more initiatives in public health. Education spending is up 39 percent over the past 5 years with especially big increases in early childhood education—the foundation for later learning. Teacher numbers have soared and tertiary participation rates are high. 
The big new investment coming out of last year’s Budget and projecting forward is in the Working for Families package at an annual cost of $1.1 billion when fully implemented. From 1 April this year 300000 low and modest income families with dependent children will get significant boosts to their incomes and that comes on top of increases in support for childcare and the accommodation supplement which began last October. Those changes will have a dramatic effect on child poverty reducing it by 30 percent. At this new level the rate of child poverty here will be well below that of the European Union and it will be on a par with that in the Netherlands. That is an outstanding result for New Zealand. 
For this Government investing back into health education and people from the surpluses we have built are our top social priorities. That is why we are rolling out lower-cost access to primary health care and pharmaceuticals over the next 3 years. Already all under-18-year-olds and over-65-year-olds enrolled with the primary health organisations are benefiting. This year the 18 to 24-year-olds come into the scheme next year the 45 to 64-year-olds and in 2007 the 25 to 44-year-olds. In health we believe a stitch in time saves nine. That is why we want people to be able to afford to go to the doctor early on and be able to afford their medicines. The same philosophy is driving the roll-out of the meningococcal meningitis vaccine across New Zealand. We can stop this deadly disease in its tracks. We are doubling the number of hip and knee joint operations over 4 years which will bring much-needed relief especially to our older citizens and now we are working on a similar project for cataract operations. Also a top priority is to resolve the long-term funding pressures in the elder care and disability services sectors. 
In education investments are rolling out across the sector. We have big programmes in early childhood education and in further education and training to overcome the neglect of the 1990s and to improve quality. In the school sector our main focus will continue to be on standards and achievement especially in literacy and numeracy. We will continue to invest in improving teaching and there will be new initiatives to support parents getting more involved with their children’s learning. At the tertiary level we are continuing to work to make education more affordable. This year eligibility for allowances has been expanded so that around 50 percent of students will get a tertiary allowance. 
Making it possible for every individual to fulfil his or her potential through education is our dream and it is the dream that every family has for its children. Making that possible enables our nation to fulfil its dreams of prosperity high living standards and a great quality of life. Everything this Government does in education reinforces the vision we have for taking New Zealand ahead—and becoming more innovative more skilled more productive and more prosperous and lifting overall well-being. 
It is important at the beginning of this election year to restate our vision for the future and to set out our direction and new areas of policy development for the years ahead. In Government we have set out to build a prosperous economy a healthier and well-educated society and a sustainable and better quality of life for all New Zealanders. Working together we and New Zealanders have achieved a great deal in the past 5 years. New Zealand is a very different place now from the way it was in the 1990s. But our country has to keep moving ahead to become an even more compelling place to live in work in bring our kids up in invest in and above all take pride in. 
Our country does move ahead when there is the opportunity for every individual to make the most of himself or herself and for every hard-working family to enjoy the fruits of their labour with higher living standards and a secure asset base. No matter what part of New Zealand society people come from each is entitled to the opportunity to reach the New Zealand dream. That is what this Government dedicates itself to. Together we can build a society in which every New Zealander has a stake. By unlocking all the talents we can build a progressive modern economy capable of continually renewing and reinventing itself. 
Building a strong New Zealand requires leadership commitment and good policies. There is no place for complacency or the status quo or going back to the failed policies of the past. There is no place for the kind of Government that sets New Zealanders against each other. New Zealand needs Governments that draw on the strengths of all to move the whole country ahead. That is the model of Government we have followed and we will continue to follow to reach the vision we have for New Zealand. 
Building and sustaining prosperity is a never-ending task. As fast as we make progress new benchmarks are being set. In our lifetimes we have seen countries devastated by war in Asia and Europe rebuild to overtake our living standards. We have seen the dramatic difference European Union membership has made to poorer regions and nations. That is why across Central and Eastern Europe to the Ukraine and from the Balkans to Turkey countries aspire to join. 
Our country has forward momentum now and we will keep it by committing to upskilling innovating and being more productive for the long term. In Government we have to be continually re-evaluating our policies to sustain growth and development—and we do. We have to be prepared to measure our progress against key indicators and against the performance of other developed countries and we are. This week the  
Economic Indicators Report 2005 
 will be released. The good news is that on a number of key indicators our performance is already good and on a number it is improving. No indicator shows deterioration. But the report also tells us where our performance needs to improve—most critically in labour productivity and in our levels of innovation. Not surprisingly these issues were also highlighted in the Workplace Productivity Working Group report released in November by the Minister of Labour. 
Three years ago in my Prime Minister’s statement I set out the growth and innovation framework that would guide the Government’s economic development programme. Over the past 3 years the framework has been taken on board across Government. We have focused on lifting our skill and innovation levels investing in science and research and developing regional and sector strategies and offshore markets and contacts. This year’s Budget will see many more new initiatives linked to the framework. As a Government we have set out to give leadership to the transformation of the economy and to work in partnership with a wide range of stakeholders to achieve that. The future of our dreams will provide better wages and salaries. They will be driven off a sophisticated economy producing goods and services that the world will not want to do without and will pay to get. The more skilled the more innovative the more enterprising and the more market and brand focused we are the more progress we will make towards that future. 
Today I want to emphasise key areas of activity and policy development that are critical to lifting New Zealand’s performance and living standards and realising our vision for the future. The first is lifting labour productivity which is essential for maintaining growth in our living standards over the long term. Labour productivity has grown in recent years but it remains well below the OECD median rate. Most of the gap between our GDP per capita and that of the United States is attributed to our lower rate of labour productivity. 
The investments that both the Government and industry are making in skills innovation science research and technology will all boost productivity. But at the level of industry and the workplace there is also a lot that can be done to build leadership and management capability create safer and more productive workplace cultures organise work more effectively and network and collaborate to build best practice. The emphasis we have placed on building good employment relationships will also pay dividends in lifting labour productivity. It is pleasing to see last week’s statistics reporting the lowest loss in wages and salaries from workplace stoppages since the relevant data series began in 1988. 
A new reference group drawn from industry nominations is being established to follow through on the workplace productivity report. It is being asked to identify concrete actions to drive productivity improvements in the workplace with a report expected mid-year. Building a more highly skilled workforce remains a top Government priority to be achieved both by investing in New Zealanders and through the skilled migration programme. 
We also want better value for money than we have been getting in some areas of further education and training spending. Low-quality providers and courses should not expect to survive. The money they have consumed can be far better spent elsewhere. 
Net migration is heavily influenced by the flows of New Zealand citizens. Many of the hundreds of thousands currently offshore have skills this country needs. The Minister of Immigration is looking at how to encourage more migration back by expatriates and he will be looking for input and ideas from employers so many of whom are reporting skills shortages. This year’s Budget will also support business innovation by for example increasing the rate of depreciation on short-lived assets. 
The second key area is lifting participation rates in the workforce. While overall New Zealand’s labour force participation rates are high—seventh in the OECD in 2003—our women’s rate lags and in particular sits below the OECD average for woman aged 25 to 34. Treasury estimates that our GDP per capita would rise by 5.1 percent if we lifted our participation rates overall to the average of the top five OECD nations. That is a worthwhile objective and this time of labour shortage is a good time to be pursuing it. 
In last year’s statement I highlighted the need to increase women’s participation in the workforce and a number of steps have been taken to do that. The Working for Families package means that a single-parent family for example along with other family types will always be better off at work whether full or part time than being dependent on a benefit. Reforms to the whole structure of the benefit system will make case management of clients back into work its central focus. That will deliver New Zealand a value-for-money social security system designed to meet the needs of the 21st century. The legislation for 4 weeks’ annual holiday and the improvements to the paid parental leave scheme will also help our working parents. 
So will the big boost for early childhood education and care in last year’s Budget. It increased the funding for childcare and after-school care subsidies provided for more places in early childhood education and from July 2007 provided for 20 hours of free education a week in community-based services. In the first 3 months of the new subsidy levels for childcare and out-of-school care there was almost a fourfold increase over the same period the year before in the number of subsidy claims granted. That means thousands more families have got help with their childcare costs and that is helping more women return to the workforce. 
But still more needs to be done. In the United Kingdom one of our key source countries for skilled migrants proposals are now being considered for a year’s paid parental leave. Plans have been announced there for “dawn to dusk” out-of-school care—8 a.m. to 6 p.m.—based at schools for 5 to 11-year-olds with the aim of going to 14-year-olds in time. Those kinds of policies will be increasingly important in influencing the decisions of people considering whether to come to New Zealand and the decisions of expatriate Kiwis on whether to come home or not. 
So we must look again at our set of policies—across parental leave child and out-of-school care flexible working hours and work-life balance—to see how to boost both participation in the workforce and good outcomes for our children. In that mix of policies we are looking at options for boosting the provision of home-based childcare as part of the overall solution to getting enough places. 
Women’s participation is also likely to be affected by pay rates in female-dominated sectors. Last year the nurses’ pay claim was settled on the basis of our moving to remedy years of underpayment in that sector. The Government is continuing to work on a staged programme to address pay equity issues in the public sector. 
Thirdly I want to mention new savings initiatives. The Government is developing such initiatives both to help New Zealanders build up their assets and security and to reduce our country’s reliance on the savings of others. Since 2001 our saving rate has exceeded that of Australia the UK and the US but it does remain below the OECD median. Asset ownership is important for enabling people to participate fully in society. Assets provide families with greater security control over their own lives and independence. The more evenly assets are spread in the community the more social cohesion there is at a national level and the more all New Zealanders can benefit from economic growth. 
Savings are also needed to finance better standards of living in retirement. With the New Zealand Superannuation Fund established by this Government all New Zealanders have the certainty that a basic pension will be there for them when they retire. But New Zealand superannuation alone cannot provide the standard of living to which most retirees aspire. For that New Zealanders must add to New Zealand superannuation with their own savings but we know that for many developing the habit of putting money aside now for the future is not easy. There are many pressing demands on limited incomes. 
Yet the international and domestic evidence suggests that our failure to save adequately is not just because people do not have a lot of money. Many people lack confidence in making decisions about how to save and that means they put off the difficult decisions and fall back on non-saving habits. Establishing a saving habit will be the single biggest factor in lifting the saving rate and that is why we will take active steps to help people establish that habit. We believe that New Zealanders will save more if they have confidence in the saving vehicle chosen and when they are aware of the differences it will make to their life chances. 
Our first step last year saw us establish a new superannuation scheme for public servants providing for employer and employee contributions. Forty-six percent of those eligible to join that scheme have already done so and as awareness improves I am confident the numbers will go up. 
But it is not only our own public service employees who deserve some assistance to establish retirement savings. The comprehensive report from the workplace savings group last year does offer a viable way ahead for retirement savings. Proposals have also been put to the Government for encouraging tertiary education savings. This year we will be announcing further initiatives to encourage more families to participate in workplace savings schemes. That will help build a more broadly based ownership society in which more New Zealanders can enjoy the security of their own home afford higher education for their children and have a good standard of living in retirement. 
Traditionally New Zealanders’ principal assets have been their homes yet the thorough dismantling of State support for first home ownership by the last National Government took away tools developed over the previous half-century to help Kiwi families acquire their homes. Our Government is concerned at falling rates of homeownership. The mortgage insurance pilot introduced in 2003 was our first step back into that area of policy. How to encourage savings that could lead to homeownership is under consideration now. 
Homeownership is not the only investment families may want to make. Establishing savings to reduce the need to borrow for tertiary education or training is also likely to be an objective for many families. This Government believes that new initiatives are needed in those areas and we are developing policy to encourage a coordinated lifetime approach to savings. We know that the building blocks for a confident and secure nation are confident and secure families. An ownership society in which every family has a stake and sees a future makes our country strong. 
Fourthly I want to mention the Hui Taumata and Maori development. This decade and this century will see Maori emerge even more strongly as very significant stakeholders asset holders and contributors to economic development. The Maori commercial asset base is already estimated at $9 billion with Maori owning 37 percent of the fishing quota and 10 percent of land in the forest estate as well as contributing 7 percent of agricultural output. Last year’s aquaculture settlement on the same basis as the 1992 fisheries settlement provides iwi with entitlement to the equivalent of 20 percent of all space allocated to aquaculture since 1992 and 20 percent of any future new space. That will add significantly to the already large asset base. Future treaty settlement monies wisely invested have the potential to do the same. 
That is one of the reasons why it is important to get historical claims settled. Both Maori and Pakeha want us to complete the treaty settlements so that we can move forward together. Our aim is to complete the historical settlements in the next 10 to 15 years. Achieving that will need a closing-off date for the lodging of claims to be set. The focus then can be forward-looking. The Hui Taumata being convened in Wellington next month is just that—forward-looking. It is focused on developing people assets and enterprise. The hui sees Maori picking up the challenge of development and planning how to accelerate it. This matters to all of us. Maori children comprised 25 percent of all children in 2001 and are projected to comprise 28 percent by 2021. Ensuring that they can stand tall and make a big contribution to New Zealand’s development and well-being is critical to our future and that is why the Government—and I would hope every political party—backs the hui. 
I want to say a word on infrastructure development because many years of under-investment in the national infrastructure showed up when the significant economic and population growth of recent years put pressure on it. This Government has been working with local government and other stakeholders to find solutions and put new policies and funding in place. 
For Auckland land transport another $1.6 billion has been committed over 10 years on top of the 50 percent increase in funding that went into Auckland from 1998-99 through to 2003-04. Last week we announced a quarter of a billion dollar increase in funding for land transport development in Wellington. That funding not only allows for faster roading development but also will significantly boost public transport which must be a significant part of a sustainable solution to transport issues. 
Increased investment is also required in the energy sector. The State which owns the transmission system and a large share of generating capacity will be expected to stump up a major share of it. The new Electricity Commission is charged with ensuring security of supply. [ 
Interruption 
] 
Mr SPEAKER 
: I refer members to Speakers’ ruling 115/2. This speech has been available to every member of Parliament since 10 o’clock. The Prime Minister’s speech will be heard in silence. I will allow all other parties’ members the same right if they wish it too. 
Rt Hon HELEN CLARK 
: The new Electricity Commission is charged with ensuring security of supply. It is important that as much of the new supply as possible can be derived from renewable sources. Changes to the Resource Management Act reinforce that objective by giving renewable energy a greater weight in decision making. 
Fast Internet access is also a critical component of modern infrastructure. The Government’s commitment to Project Probe is bringing broadband to schools throughout New Zealand and has hastened the roll-out to regional communities. Complementary to that is the completion this year of the digital strategy for New Zealand. There will be significant Budget initiatives to support that strategy this year. 
We are committed to developing first-class infrastructure for our First World nation. Governments have to lead in this area. We are and we will. 
Next I will talk about the dynamic trade agenda. Building our export capacity and opening up markets are critical for an open economy like New Zealand’s. In respect of Australia where our trading relationship is well established our efforts will be directed towards progressing the single economic market. Our two Governments have a big work agenda towards that end. 
Our top trade policy agenda is the World Trade Organization round and significant resources are being applied to it. But we cannot stand by and see others negotiate preference through free-trade agreements that disadvantage our exporters. From 1 July this year the new free-trade agreement with Thailand kicks in improving our access to that growing market. Negotiations for a free-trade agreement with China are under way and we are well advanced on the trilateral free-trade agreement with Singapore and Chile. The China agreement alone is estimated to be worth $400 million per year to New Zealand over its first 20 years. ASEAN has agreed to negotiate with New Zealand and Australia and a study of the possibilities with Malaysia is being done. Faraway Egypt in the Middle East where we are to open a new embassy next year has approached us about a free-trade agreement too and we have agreed to respond positively to its proposal. We remain ready to enter negotiations with the United States as the mutual benefits of a free-trade agreement between us are clear. 
All these agreements open up new opportunities for New Zealand businesses. We accept responsibility for seeing that knowledge about the free-trade agreements is widely dispersed and for working with business to maximise the gains for New Zealand. New funding so that we can get the most from the new agreements will be announced in the Budget. 
Beyond trade we have forged an independent foreign policy record that we can be proud of. We continue to place disarmament human rights and engagement in peacekeeping at the forefront of foreign policy. New Zealanders overall have taken pride in seeing their country’s foreign policy express their values and our country’s pride in its independence of mind. Nuclear-free status will not be gone by lunchtime with a Labour-led Government. 
The Seriously Asia conference of late 2003 brought new focus and energy to this country’s engagement with Asia. Asia’s fast rate of economic development provides huge opportunity for New Zealand but only if we are proactive and only if we realise the importance of building well-rounded and deeper relationships overall. The Government is providing leadership for “New Zealand Incorporated” in making this country relevant to and engaged in Asia’s future. That is why this year New Zealand will be at the world expo in Aichi Japan. That is why we pursued a summit relationship with ASEAN leading to the first summit at leaders’ level for 27 years last year. That is why I led a Government and business mission to India—the first visit at prime ministerial level for 19 years. The Ministers of foreign affairs and education will follow up with visits this year. And that is why we are pursuing the free-trade agreement initiatives with key Asian nations. Further investments in building our Asian relationships will feature in this year’s Budget because of the sheer importance of Asia to this country’s future. 
I want to say a word about building national identity and pride in New Zealand. In this Government we are proud New Zealanders. We believe that this country has every reason to be confident about its future and proud of its achievements. We believe that a confident proud nation is precisely one in which people will want to work live raise their children and invest. And that creates a virtuous circle: the more confidence and pride our country has the more that will enhance our well-being. 
We believe in celebrating our people’s successes across business education science sport arts and culture—across the many many areas where Kiwis are doing so well. Arts culture and heritage have a special role to play because they reflect the essence of who we are where we have come from and what we can aspire to be. Our film success communicates to a wider international audience and so does our contemporary music. Our performing and visual arts are critical to our expression of identity and talent and they do define us as unique and creative to the wider world. In our appreciation of our historic heritage we New Zealanders are finding new meaning in the experiences of the past from the settlement of New Zealand to the mass mobilisation of the young of previous generations to fight under our flag offshore. The return of the casket of the Unknown Warrior brought those memories back and provided closure on painful chapters from our past. 
A strong sense of national identity makes us a stronger nation. It builds our national resilience for the challenges that inevitably lie ahead and it builds our capacity working together to succeed in meeting those challenges. 
There is a lot else on our nation’s agenda this year and in the coming years. A constitutional debate is in its early stages and a debate on our flag is in full swing. Let us celebrate the fact that our nation is now mature enough to embark on these debates. That is another sign of the confidence we have in our future. Change however could occur only after full public debate and consideration of the options over a lengthy period of time. 
There is a relatively short period of parliamentary time left before the general election. Among the significant legislation the Government will be looking to pass are the Resource Management Act amendments the Lawyers and Conveyancers Bill the Overseas Investment Bill the Prisoners’ and Victims’ Claims Bill the Architects Bill the Charities Bill the Securities Bill the Relationships (Statutory References) Bill and a number of treaty settlement bills. We will also be looking to progress our proposals for walking access along significant water margins and to negotiate access where it is important for recreational walkers. 
Work is proceeding on new legislation to replace Part IVA of the Immigration Act which this Government inherited. It has been shown to provide a poor and untimely process for determining security risk. A fair balance needs to be struck between the State’s right to defend its borders and security and the human rights of individuals. 
In progressing policy and key legislation over the past year the two coalition partners Labour and Progressive thank United Future for its commitment to stable Government thank the Greens for their support on a range of measures and thank New Zealand First for its willingness to help find a fair and equitable solution to the complex foreshore and seabed issue. 
Later this year New Zealanders will determine the course the country will take for the next 3 years. The choice this year is straightforward: stick with the Government they know works is getting results and is building a stronger future for New Zealand; or run the risk of lurching back to the division the unfairness and the sheer nastiness of the 1990s. That is no future for our country. I am privileged to lead a Government committed to a New Zealand that takes its place with pride among First World nations and has the policies to grow and sustain prosperity and opportunity. We are building a nation that offers fairness and opportunity is tolerant and respectful of all and is economically dynamic creative and committed to a sustainable future. This is a nation with huge potential. This is a Government with a bold agenda to realise that potential. And it is this nation and this Government that I am proud to lead and serve as Prime Minister.