18 July, 2010
Address to National Party Conference
Ladies and Gentlemen, fellow National Party members, it's wonderful to see you!
I'm proud to be here as Prime Minister.
I'm proud to be the leader of this great Party.
And I'm proud to be leading a government that is making New Zealand a better place.
When our Party was formed back in 1936, it chose the name "National" because it wanted to be a Party that represented all New Zealanders.
That's exactly what we are doing.
The National-led Government is relentlessly focused on what matters to all New Zealanders.
Last election, New Zealanders voted for a brighter future.
And we're doing what it takes to secure that future.
Fellow National Party members, we couldn't do it without you.
So I want to thank all the Regional Chairs, the Deputy Chairs, the Board Members, the Electorate Chairs, the volunteers, and the members.
You make this party strong. You stick with us through thick and thin. You are the reason National is in government today.
In particular, I want to thank our Party President Peter Goodfellow.
I also want to pay a special acknowledgement to my friend and deputy, Bill English.
What a great job he is doing as Finance Minister.
He's delivered two Budgets that have steered New Zealand out of recession and put the economy firmly back on track to grow and create jobs.
I want to thank all our wonderful Members of Parliament, who do such a good job of representing New Zealanders - from Northland to Invercargill, from the East Coast of the North Island to the West Coast of the South Island.
I want to thank my hard-working team of Ministers.
I'm delighted to lead a very talented Cabinet.
And I'd like to thank our partners in Government - ACT, the Maori Party and United Future.
Together we make a very stable and balanced Government.
As with all partnerships, from time to time we disagree. That's healthy and normal - after all, we're not the same party.
But our partnerships work because they are based on trust, respect, and a willingness to find solutions together.
The relationships we have with these three parties demonstrate to New Zealanders our ability to lead a stable government.
I am confident we can do so well into the future.
Delegates, when we meet at next year's conference, we will once again be close to an election.
An election we are in great shape to fight.
An election we are in great shape to win.
We have a strong, united party organisation.
Our opponents have been floundering around trying to work out what they stand for - and indeed what they stand against - and waiting for instructions via text message from New York.
Meanwhile, we have been getting on with the business of making New Zealand a better place.
We have already achieved a lot and we're setting a cracking pace.
I want to talk now about some of the things we've done, and what they mean for everyday New Zealanders.
The first challenge we faced as a government was the global financial and economic crisis.
We steered New Zealand through that crisis by showing strong economic leadership.
We protected New Zealanders from the sharp edges of recession.
But at the same time we resisted calls to spend billions more on extra stimulus.
Doing so would have left us with a hangover of higher debt, a more vulnerable economy and a credit rating downgrade that would have hurt all New Zealanders through their mortgage interest rates or business loans.
The Government got that balance right and New Zealand is better for it.
I appreciate that some families are feeling the pressure as the economy recovers.
That's why it is so important that we lay the foundation for higher economic growth and better times ahead.
We were elected to put New Zealand on a higher growth path and that is precisely what we are going to do.
Economic growth is not just a theoretical construct - it impacts directly on people's lives.
It means an increase in people's incomes, to give them better choices, more security and a higher standard of living.
It means an increase in the income of New Zealand as a whole, to provide better public services like health care, law and order, and better incomes in retirement.
It means improving our performance compared to other countries, so our young people know there is a bright future for them right here in New Zealand.
We have a six-point economic plan to go for growth.
The drivers of this plan to get New Zealand growing faster are the following:
- Changes to the tax system to make it fairer, so that hard work and enterprise are rewarded
- Demanding better, smarter public services
- A multi-billion dollar investment in infrastructure
- Cutting red tape and regulation
- Better business innovation and an ambitious trade agenda
- And improving education and skills
Underpinning all this is a disciplined fiscal policy.
We will maintain firm control of the government's finances, so we can return to Budget surpluses and keep debt tightly under control.
Ladies and Gentlemen, we are making real progress on our economic plan.
First, let's look at tax.
Right now, a lot of countries around the world are looking at raising taxes.
We have been able to cut some of our taxes.
Personal taxes have been reduced across the board, to reward effort and to give people an incentive to get ahead and make a career here in New Zealand.
Our top two personal tax rates will soon be 30 per cent and 33 per cent. In Australia they are much higher - 37 per cent and 45 per cent.
On a straight dollar-for-dollar basis, Australians earning over $55,000 will soon pay more income tax than New Zealanders on the same salary.
That's a big change from the current tax scale where an Australian doesn't pay more tax than his or her New Zealand counterpart until they earn almost $230,000.
These tax cuts will arrive in people's pockets from October 1. And the vast bulk of New Zealanders will be better off through our GST and personal income tax switch.
The company tax rate will also be reduced to 28 per cent.
That is lower than Australia's company tax rate, and indeed lower than anything Australia is planning.
By lowering the company tax rate we are encouraging productive investment in New Zealand and better paid jobs for our people.
I want New Zealanders to be aspirational - to want more for themselves and their families, and to know that they have opportunities to do that.
Our tax reform encourages that.
As a party which has personal responsibility as one of its core values, we know that the best way for New Zealanders to get ahead is through their own hard work, and their own effort to make a difference to their lives.
We're also making good progress toward better, smarter public services.
Since we came into office - and after years and years of increases - the number of public service bureaucrats has finally gone down.
That's because we are clear about our priorities - and our priorities are frontline services, not a larger bureaucracy.
We're also taking big steps towards addressing New Zealand's gaping infrastructure deficit.
All over the country we've been kicking off major new roading projects to get the country moving.
We're investing billions through Transpower to upgrade the national electricity grid.
We've put money aside for rolling out ultra-fast broadband across the country.
Another important aspect of our economic plan is cutting red tape and regulation.
We're searching in all areas of Government to find places where overly-restrictive regulations are getting in the way of doing business.
That has already resulted in changes. There are more to come.
Let's not forget this is the party who within 12 months of being elected had already changed the Resource Management Act.
Delegates, science and research is a priority in the Budget because we know that our future economic performance depends on generating and using new ideas.
We want to be a smart economy.
Fellow members, we also have an ambitious trade agenda because unlocking overseas markets will boost New Zealand exports and help our companies grow.
We are currently negotiating with some of the biggest countries in the world - the United States, Korea, India and Russia.
At the heart of our trade push are living standards and jobs.
Because we know that only a strong economy can provide financial security for our families, real opportunities for our young people, and world-class public services.
That's why my visit to Korea, China and Viet Nam was so valuable.
I'm delighted that we have injected new life into trade talks with Korea.
I have ambitious goals for trade with China, and I hope that Viet Nam will join us as a full participant at the Trans-Pacific Partnership negotiating table soon.
There is no doubt there are enormous opportunities for New Zealand in Asia - we are determined to make the most of them.
Delegates, education and skills are also essential parts of our plan to lift this country's economic performance.
We're moving forward with our Youth Guarantee and Trades in Schools policies and at the younger end of the education system we've introduced National Standards in our schools.
I want to read from a letter about National Standards. It was written to Anne Tolley from the parent of a child with dyslexia.
The letter reads:
"We struggled for years to try and get some idea of just how badly this was affecting her. I am furious we wasted several crucial years, while we were told by the school ‘not to judge her against everyone else', and that ‘she will catch up when she is ready'. How on earth can any professional teacher object to having a national standard, and object to parents being aware of these?"
I couldn't agree more.
Anne gets a lot of letters like this, from parents who really appreciate being told in plain English how their child is doing at school, so they can do something about it.
With National Standards, we are putting parents and their children first because we are not willing to stand by and let one in five children leave school without the qualifications and skills they need to succeed in a modern economy.
National Standards will help to identify kids who are falling behind or those that can be extended, so that teachers and parents can get alongside them and support them.
Friends, this Government has made a choice. That choice is to put the future of our children and this country ahead of the interests of those who resist change even when the status quo had been so clearly failing our kids.
I for one am very proud of that.
We're getting a great response from the public in other areas where we're making a real difference too.
The second letter I want to read from was written to me by a mother-of-three who was about to begin Herceptin treatment.
She wrote: "I want to express my gratitude and sincerely say thank you for easing the financial burden for my family. In times like this it is really hard to get through day-to-day. I wish you and yours the best of health, happiness and a long life - because that is what you have given me."
I am personally very proud that our party has delivered on our promise to fund a full 12 month course of Herceptin.
It is money that has been very well spent.
The Government's law and order policies have also had a great response.
And why shouldn't they?
We've put more police on the streets and it's making a difference.
We've already got 255 new frontline police officers in the Counties-Manukau district.
The police in that district can be far more proactive because there are far more of them.
For example, bag snatching is down 80 per cent as we add more front line Police on the beat.
We're hiring more Police and we are putting more of them on the street.
Provisional statistics also show that house burglaries in the district are down by almost 14 per cent compared with the year before.
That's not all we're doing to make our communities safer.
We've declared war on P and we're cracking down on the gangs that sell it.
Already in the first seven months of this year a total of 23 kilograms of methamphetamine has been seized - that's four times as much as we seized in the same period last year.
Fellow National Party members, these are just a few of the things the National-led Government is doing to make New Zealand a better place.
We are doing what we were elected to do and we have kept our promises.
New Zealanders put their trust in us and we are delivering.
There is plenty more to come from this Government.
Today I want to announce some policies that will help productivity and employment in New Zealand.
As we continue to grow out of the recession, it's important we have the right environment to create more jobs.
It's also important for greater growth that we improve New Zealand's overall productivity, meaning we generate more value from the hours we work.
I know these can be fairly abstract concepts.
So this is how I look at it.
In the real world, economic growth happens because a business sees an opportunity and is prepared to invest, expand and put its own money on the line.
Employment happens because a business is prepared to give someone a chance - often someone they have never met before and know very little about.
So an important role for the government is to give businesses of all sizes the confidence to do these things - to seek out new opportunities to invest and take on new workers.
Shortly after the 2008 election we introduced a 90-day trial period for businesses with fewer than 20 employees - as we said we would do.
We introduced that trial period to encourage employers to take on new staff, and to expand job opportunities for people who often struggle to get work.
We wanted those people to back themselves - to say "give me a go and I will prove I can do the job".
That law change has worked extremely well.
We recently received an evaluation of the 90-day trial period from the Department of Labour.
It found that half of employers had used a trial period when hiring workers.
And in relation to the last employee they hired on a trial period, 40% of employers said they would not have, or were unlikely to have, hired that person without the trial period.
The evaluation suggests employers viewed dismissals during the trial period as an unfavourable outcome, and actively tried to avoid them.
Take this quote from an employer who used the trial period:
"I think this new 90-day trial period for a small business such as my own is a brilliant idea, and it gives me the confidence to be able to take someone on like I've done and know that if they don't work out we can do something about it, whereas before you were stuck..."
In general, employers have acted responsibly, and workers have been treated fairly.
So I want to announce today that the Government is going to extend the 90-day trial period to cover all employers.
That's all employers, not just those which are small or medium sized.
As with the existing law, the 90 day trial period can only be entered into by a written agreement between the employer and the new worker at the beginning of the employment relationship.
This is a policy of opportunity. It is about giving people the chance to find a job, and nothing is more important than that.
We are giving many more businesses the increased confidence to hire new employees, and giving many more people a chance to prove themselves in the job market.
It's worth noting that many other developed countries we compare ourselves with have similar policies. A number of countries have employment rules that go even further.
For example, in the United Kingdom, no employee - whether or not they have agreed to a probationary period - can normally make a complaint of unfair dismissal until they have completed 12 months continuous employment.
Similarly in Australia, employees must have served a minimum employment period of 12 months if they are employed in a business with fewer than 15 employees, or six months in any other business, before they can make an unfair dismissal claim.
So I consider that the 90-day trial period we are introducing is very fair and balanced.
But that's not all.
Extending trial periods is just one part of a package of amendments to New Zealand's labour laws that the Government is releasing today.
The key elements of these changes were signalled in National's election manifesto.
They are now going to come into effect.
In advancing this package, I would especially like to acknowledge the involvement and assistance of the ACT party, who will be working with us to ensure the passage of legislation through Parliament.
The package contains pragmatic solutions to real issues facing real businesses and employees.
I have often said that I am interested in what works, not ideological changes for the sake of them.
That applies in the area of labour relations as much as it does anywhere else.
National campaigned at the last election with an express commitment to improve labour laws in this country with targeted changes, rather than a radical revolution.
That is precisely what we are doing.
Another area of change will be the personal grievance system.
We are committed to maintaining a fair and equitable system that protects the rights of New Zealand workers.
But there are currently a number of problems with personal grievances.
So we are going to make a number of changes to more speedily resolve employment problems, discourage poor practices, reduce costs, and improve confidence in the system.
For example, we will give the Employment Relations Authority the ability to filter out vexatious or frivolous claims at an early stage.
We will also introduce penalties for delaying behaviour at the Authority, and ensure that an employer's processes are not the subject of pedantic scrutiny.
We are going to make some other changes to improve the way the Employment Relations Authority works, including moving to a more judicial mode of operation, with the right to cross-examine witnesses.
We will be protecting reasonable union access to the work place, although prior consent of an employer will be required.
That consent cannot be unreasonably withheld.
However, this change will make access to worksites consistent for everyone, enabling visits to occur at times when they will not compromise things such as workplace safety.
Another change is around employers talking to staff.
Currently, many employers feel they cannot communicate directly with their workers during collective negotiations.
So we are going to amend the law to make it clear that employers can communicate directly with their staff while bargaining is underway, including talking to them about the terms of any settlement offer.
There will also be changes to the Holidays Act.
The issue of "relevant daily pay" has proved to be the most difficult and frustrating part of the Act.
We are going to fix this issue by introducing a new calculation known as "average daily pay" for workers with variable hours and pay.
This will be based on an average of their pay over the last year.
This will fix a festering issue that has proved difficult for both workers and businesses over the past seven years.
National's election manifesto also proposed a change to the Holidays Act to allow workers to "cash-in" their fourth week of leave.
That is part of the package we are announcing today.
Workers will be allowed to request a trade of up to one week of their annual holiday entitlement for cash.
Strict conditions will apply. Cashing-in leave entitlements can only be at the employee's request and cannot be raised in salary negotiations.
In particular, we do not want to see a situation where employers can pressure workers into taking this option.
Altogether, this is a package of changes that I believe is pragmatic, credible and effective.
These changes will provide more clarity. They will reduce delays in the system and resolve problems earlier, meaning that both employers and employees can have more confidence in the system.
This package is one more step on the road to a more productive economy and increased employment.
This package is about increasing opportunities for employment.
Ladies and Gentlemen, the National Party is firmly focused on looking forward.
We are focused on securing that brighter future that New Zealanders so resoundingly chose when they cast their votes in the 2008 election.
You have today heard of the actions that our government is taking to put New Zealand on the path to that brighter future.
New Zealand needs strong leadership if it is to take advantage of the opportunities that lie ahead.
New Zealand needs responsible management of the country's finances, so that debt can be kept under control and a strong foundation can be built for the future.
And the National Party is the right party to deliver that leadership.
We will back New Zealanders to be the best they can be.
We will make sure Kiwis have the opportunity to reach their personal goals and dreams.
And we will do it by governing in a pragmatic and balanced way.
We will be guided by the values and principles that have underpinned this great Party for so many decades.
Because we believe in a future where we celebrate achievement.
Where we reward effort.
Where the economy is strong and our communities are safe.
Where education standards are high.
Where our young people choose to live in this country because it offers all the opportunities they need and want.
My fellow Party members.
In a year's time we will once again be gearing up to fight an election.
We will be in great shape for that battle.
We will have a team we can be proud of, a record we can campaign on, and forward looking policies that will take New Zealand the next step towards a brighter future.
Thank you very much.