Auckland Rotary Club

29 May 2006

Speech highlights the risks to New Zealand of continuing on our present track

Ladies and gentlemen,

With just 4 million people, New Zealand is not a large country.  But it is a great country. 

A country of incredible natural beauty.

A country where it no longer feels awkward to sing the national anthem in two languages.

A country where the son of a radical Presbyterian minister can grow up to be the leader of the National Party.

A country where I can watch my 13-year-old Eurasian son playing happily with a dozen of his friends, and count two Chinese, one Korean, one Sri Lankan, one Eurasian, six Pakeha, and the grand-son of a Maori activist. 

A country which has produced truly remarkable sons and daughters:

  • the woman who fought for New Zealand to become the first country in the world to give women the vote;
  • the boy from Havelock School who went on to split the atom, win a Nobel prize, and be described by Albert Einstein as “a second Newton”;
  • and years later the second boy from Havelock School who, not to be outdone, led the team that put a man on the moon; 
  • the beekeeper from Tuakau who became the first person to conquer the world’s highest mountain;
  • the woman from Wellington who was the most decorated of all the women in the Allied forces in the Second World War.


A country which sacrificed proportionately more of its young people in the defence of freedom than any other Allied country during the First World War.

I’m a proud New Zealander.

But this great country – your country, my country, our country – is at risk.

It’s at risk partly because over the last 40 years we’ve seen a gradually widening gap between living standards in New Zealand and those on the other side of the Tasman, a gap which shows every sign of increasing rapidly in the next few years.

In 1999, after-tax incomes in Australia were 20% higher than those in New Zealand.  Last year, the gap was 33%.   On present trends, that gap could easily be 40% within three years.

And this isn’t just about statistics: that gap has profound implications for the quality of education we can afford for our children, for the quality of our housing, for the quality of our roads, and for the quality of our healthcare.  It’s no doubt a major reason why mortality rates from breast cancer are 30% higher in New Zealand than in Australia.
  
As a result of that gap in living standards, we’ve seen a rapid rise in the net flow of Kiwis to Australia.   With the Australian Government hell-bent on increasing the number of skilled people migrating to Australia, and reducing income taxes across the board in each of their last four budgets, that outflow seems bound to get greater.

We’re increasingly in a global market for doctors and nurses and builders and plumbers and engineers and teachers and scientists.  Every country’s trying to attract skilled migrants, and New Zealand’s being left behind.

New Zealand’s also at risk because, despite the racial harmony which exists at many levels of society, we’re seeing a slow but steady drift towards racial separatism: separate Maori electorates at central government level; an increasing number of Maori wards being set up at local government level; a requirement to have specific Maori representation on district health boards; a requirement for local authorities to consult with their communities and with iwi, as if iwi were somehow not part of our community; and on and on it goes, each new requirement implying that Maori New Zealanders (almost all of whom have both Maori and non-Maori ancestry) somehow have a different and superior status to that of other New Zealanders.

The Labour Government’s doing nothing to deal with these risks, and indeed most of what the Clark/Cullen Government does makes those risks greater.

What did they do to reduce the gap between our living standards and those in Australia in the Budget 10 days ago?

Well, let’s be completely honest.  They did one positive thing: they increased the amount of money to be spent on the roads, and provided a degree of certainty about funding for roads over the next five years.   The National Party’s been calling for that for several years, so we applaud that move.

But there’s no sign the Government will remove the regulatory barriers which mean that it takes a good deal longer to get approval to build a new road than it takes to build the road itself.

And no sign they’ll clear away the obstacles to letting the private sector invest in building new roads either, as happens in most other developed countries.

And of course, no sign the Government will reduce the over-taxation of New Zealanders which acts as a disincentive to hard-working Kiwis getting ahead under their own steam.

No sign they’ll release even some of the quarter of all full-time earners now caught by the top tax bracket – plumbers and builders and senior teachers included – from that top bracket.

No sign they’ll take aboard the recommendations of their own tax committee, which highlighted the need for a lower, flatter, tax structure.

No sign they’ll take the slightest heed of Nobel Laureate Ed Prescott’s views on the relationship between economic growth and tax.

And of course we shouldn’t be surprised the Budget did almost nothing to close the gap between New Zealand and Australia – only one of the seven pledges on Helen Clark’s infamous Pledgecard was even slightly related to improving living standards.

What’s the Government done lately to arrest the slow drift to racial separatism?  Nothing at all.  On the contrary, the drift goes on, with a law passed last year asserting that an iwi covered by a Treaty settlement was “a progeny of both divine and human parentage”; and the Ministry of Health now requiring district health boards to incorporate Treaty of Waitangi clauses into their contracts with dentists and optometrists, as if Maori teeth and eyes require some different treatment from that required by other teeth and eyes.

I’ve been highlighting these failings of the Labour Government, and for my pains I’ve been labelled a racist and a person who’s somehow disloyal to New Zealand.

Well, I don’t enjoy being labelled a racist.  I’ve never been a racist.  In my radical student days, when I was doing post-graduate study in Australia, I declined to join the Australian Labour Party because I refused to sign a pledge to uphold the White Australia policy. 

And I certainly don’t enjoy being accused of being disloyal to New Zealand either. 

In any event, it’s a charge I totally reject.  I was born in New Zealand of New Zealand-born parents.  One of my ancestors arrived in Dunedin on the Philip Laing in 1848.  I am passionately committed to New Zealand.  I’m a fervent nationalist.

But I’m not a blind nationalist.  And I’m not xenophobic.  I don’t need to demonstrate my patriotism by disliking traditional friends and allies, like Australia and the United States. 

I lived for four years in Australia and five in the United States.  I like and admire much about both countries. 

I recognise that, but for the US navy, New Zealand would have been invaded by the Japanese during the Second World War.  I don’t have to agree with every policy of the US Government to recognise the huge contribution the United States has made to the creation of an open world trading system and a security environment which has enabled us to benefit from that openness. 

I recognise that New Zealand and Australia have fought alongside each other in every conflict in the last century, save only Iraq – and even there, we’ve deployed troops since the invasion.  Just this month, Ministers of both countries reaffirmed a commitment to mutual defence. 

And with both Australia and the United States we share a commitment to democratic values and human rights which transcends occasional differences on policy.

So wanting to strengthen the relationship with both Australia and the United States, while not putting at risk our relationship with new friends in the Asian region, doesn’t make me any less a patriotic New Zealander.

Warning fellow Kiwis that we’ll be in serious trouble if we continue down the path we’re being led by this Labour Government doesn’t make me unpatriotic.

Warning fellow Kiwis that unless we change direction, our grandchildren will grow up cheering for the Wallabies doesn’t make me unpatriotic either.

In fact I would argue, with US Senator William Fulbright, that

“To criticise one’s country is to do it a service and pay it a compliment.  It is a service because it may spur the country to do better than it is doing; it is a compliment because it evidences a belief that the country can do better than it is doing.  Criticism, in short, is more than a right; it is an act of patriotism – a higher form of patriotism, I believe, than the familiar rituals and national adulation.”

How patriotic is it to spend the money taken from taxpayers to buy your way back into office rather than do anything constructive to narrow the gap between our living standards and those in Australia, as Helen Clark did last year?

How patriotic is it to tolerate a situation where more and more of our young people feel obliged to look abroad for the sake of their families’ future?

How patriotic is it to do nothing while Australia makes it more and more attractive for companies to move across the Tasman?

How patriotic is it to keep right on fostering a perception that Maori New Zealanders have rights which are in some way different from – and superior to – those enjoyed by other New Zealanders?    How can that be a mark of patriotism?

Ladies and gentlemen, I resigned as Governor of the Reserve Bank just over four years ago because I was deeply concerned about where we were heading under this Labour Government.  I am even more concerned now.  

Tragically for New Zealand, they’ve squandered the best export prices in a generation and have done nothing to improve our standard of living compared to that in Australia.

They continue promoting the notion that New Zealanders of part-Maori ancestry should be given some special status denied to all other New Zealanders.

I think forward to my vision of what New Zealand could be like after two terms of a National Government in 2014, about the time my youngest child will be leaving university –

  • a multicultural country where people of all races are treated with dignity and are equal before the law;

 

  • a country where success in sport, the arts, in science, and in business is celebrated;

 

  • a country where men and women, young and old, gay and straight, are treated with courtesy and respect;

 

  • a country where it’s acceptable to want to do well, acceptable to aspire to get ahead, and unacceptable for able-bodied people to be indefinitely dependent on a hand-out;

 

  • a country where living standards are rapidly approaching the living standards enjoyed by our cousins in Australia;

 

  • a country where every person, regardless of income, can get access to high quality education and healthcare;

 

  • a country where the rule of law is firmly upheld, and where we’ve rooted out the culture of domestic violence and child abuse which so  disgraces our country now.


Most of all, I want New Zealand to be a country to which most New Zealanders will want to return.  I don’t want to suggest that New Zealanders should stay in New Zealand forever.  I gained an enormous amount by living overseas for nine years.  I want New Zealanders to have the skills and the confidence to foot it with the best in the world, as so many have done in the past. 

But I don’t want bright, energetic, innovative Kiwis deciding they have to leave to make a decent living for themselves and their families. 

If that’s the situation in 2014, I will have failed.  And I don’t intend to fail.

29 May 2006.
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