Families, communities and small business

It’s great to be in Auckland. I’m pleased to be giving my first formal speech as Leader of the New Zealand National Party here, and to be with my Deputy Leader Nikki Kaye for whom this city is home. 

Let me start by acknowledging our Finance Spokesperson and Auckland-based List MP Paul Goldsmith, and our Spokesperson for Economic and Regional Development and MP for Papakura Judith Collins.

Let me also acknowledge National’s List MP based in Te Atatu, Alfred Ngaro, List MP based in Auckland Agnes Loheni and our candidate for New Lynn, Lisa Whyte.

I can claim to be at least a bit of an Aucklander.

My wife Michelle was born and bred in Meadowbank.

And Michelle, our family and I lived in Auckland for three years, when I worked for New Zealand’s biggest business, Fonterra, over in the CBD.

We loved living in Auckland for all the reasons you do.

And we found it tough living here for all the reasons you do – mainly the traffic.

Nikki Kaye has Auckland hardwired in her DNA. In our caucus, she is a relentless advocate, not just for her own electorate, but for all of Auckland.

I am also pleased that we have with us here today shadow minister Amy Adams.

Amy is a died-in-the-wool Cantabrian, but we won’t hold that against her.

She is a tried and tested senior minister in the last National Government. She is in charge of our A to Z policy development process, from ACC through to supporting Zealandia in Wellington.

As Communications Minister Amy successfully built the Ultra-Fast Broadband Network which we have all relied upon so heavily these last three months.

Her role in my Government will be to lead and co-ordinate our Covid-19 recovery.

My experience at Fonterra and Zespri means I value the role of big business in New Zealand.

I would like this country to have many more big businesses, particularly those capturing the full value for New Zealand from the value chain.

But, make no mistake, small business, including our farms, and orchards and rural support businesses, are the backbone of this country, and our economy.

They are the backbone of our country because they provide jobs and work to almost a third of New Zealand workers, and produce more than a quarter of our country’s income each year– and because they can be so innovative, agile and potentially grow at a much faster rate than big business.

There are just over 100,000 businesses in New Zealand that have 1- 5 employees.

If each of them had the confidence and optimism to take on just one extra person, it would create 100,000 jobs, and give an immediate boost to our economy.

But that is not the only reason small businesses are the backbone of our country. It is also because they are so deeply steeped in our communities and the families that make them up.

Along with our other community and social institutions, they tie people together. They make communities and families strong, and they are the ultimate building blocks of this society we call New Zealand.

So, as I said in my first speech as Leader of the National Party, my economy is not the economy of the Wellington statisticians and policy analysts, important as both are to give us a sense of where our country is heading collectively and help us think about what to change.

When I think of families, communities, small business and the economy, I am largely thinking about the same thing.

My economy is the economy of:

  • you and your families and your communities;
  • of the little shops back home in Papamoa;
  • of the local church and local marae;
  • of the manufacturing hubs of South Auckland and here in West Auckland;
  • of the tradies stuck on the Northwestern Motorway trying to get to the job in Pt Chev;
  • of the vineyards and horticulturalists growing the world’s best fruit and vegetables and wine in Pukekohe, Clevedon, Kumeu and Waiheke;
  • of the tourism operators taking people fishing in the Hauraki Gulf and up the Sky Tower;
  • And – yes – even the baristas serving lattes on Ponsonby Road – with great New Zealand milk from our local dairy farms.

Covid-19, to be frank, has not been as devastating to our agriculture and horticulture industries as it could have been.

For many in the agriculture sector, the drought has been at least as big an issue.

We know very clearly that the worst hit parts of our country from Covid-19 are our tourism communities, and the families that work in the industry.

The effects on Air New Zealand and its families break every New Zealander’s heart.

Our wonderful tourism spots, like Paihia, Rotorua, Taupo, Nelson, Kaikoura, Hanmer, Wanaka and Queenstown have been absolutely devastated.

Likewise they’re feeling it in Greymouth and Hokitika on the West Coast, Stewart Island and in the Deep South, Kerikeri in the Far North and everywhere in between that relies to some extent on the tourism dollar.

Our international education sector is also in a similar boat.

We need international students back, not just for the money, but for their essential role in creating vibrancy, diversity and the exchange of ideas in our universities, polytechnics and secondary schools.

But it is small business in Auckland, Hamilton, Wellington, Christchurch, Dunedin and all our cities and towns that have really been hit hardest – and for whom survival is most difficult.

The first essential step to recovering from Covid-19 is to maintain the basic macroeconomic framework that is broadly agreed across parties:

  • an open and competitive economy;
  • a broad-based, low-rate tax system;
  • an independent central bank with the primary goal of price stability;
  • the book-keeping rules of the Fiscal Responsibility Act, now part of the Public Finance Act; and
  • Voluntary unionism and a flexible labour market.

Paul Goldsmith, as Minister of Finance, will be the custodian of core macroeconomic disciplines in my government.

Paul has previously set out the broad principles National believes should guide New Zealand’s recovery from Covid-19.

I will revisit these briefly today before turning to a specific small business announcement.

National does not start by saying everything should be closed unless the Government says it can be open. Instead, our guiding principle is that everything should be open unless there is good reason for it to be closed.

The Coalition Government has not shared with us the secret Cabinet papers on which it made its decision to keep New Zealand in Level 2 for another month, so – like you – we are operating a bit blind here. Safety must remain paramount. But our instinct is to agree with the Deputy Prime Minister that we should be in Level 1 now.

We will support Scott Morrison and Jacinda Ardern in their work to establish a Trans-Tasman bubble as soon as it is safe to do so.

We have an absolute focus on safely restoring the tourism and international education industries. I will need to be convinced there are very good reasons why we shouldn’t have Australians on our ski fields this season and eating in our restaurants.

These are basic things that represent our getting economy going again, and putting Aussie dollars into our small businesses.

Another guiding principle for National is not to increase the taxes that New Zealanders pay.

We urge Labour, NZ First, Act and even the Greens to provide certainty to small business by adopting the same stance.

National dug New Zealand out of the $50 billion hole caused by the Global Financial Crisis and Canterbury earthquakes with responsible economic management. It took discipline and a focus on growth.

National believes we must unlock new business investment to drive growth and create jobs.The whole point of economic policy is to raise wages, including the average wage and most especially lower wages, including minimum wages.

We’ve already announced our policy to allow businesses to write off new investment of up to $150,000 per new asset instantly. This will help those businesses that have come through the crisis with resources to invest in and drive our recovery. National will also reduce regulation, and free up inward investment from overseas.

Under my Government, as under the last National Government, there will be regular, incremental increases to the minimum wage, which some employers, business groups and think tanks won’t like – but we’ll take that on the chin.

But a government, like this one, that significantly increases the minimum wage in the middle of a lockdown, when firms have no revenue, simply has no idea about small business or employment at all.

In Government, National will launch the largest infrastructure programme in our history.

That was necessary even before Covid-19 and our planning was well underway. It is critical now.

Every part of New Zealand will benefit. I am aware, having lived here – and as both Nikki and Judith Collins and even Paul never tire of telling me – Auckland has particular and urgent needs. Another three years of Phil Twyford should be out of the question.

Finally, National will invest in skills and technology so New Zealand succeeds in the post-Covid world.

It’s easy to announce $1.6 billion for apprentices, as the Budget did, but this is the same Government that has turned the trades-training sector upside down in a massive and expensive restructuring.

We have no more confidence in their ability to deliver new trades-training than in their ability to deliver Kiwibuild and Light Rail– that is, we have none.

Having outlined these principles, I now want to turn to today’s policy announcement.

Earlier this week I announced that in my National Government, as Prime Minister, I will also serve as Minister for Small Business.

Previous Prime Ministers have taken portfolios to signal what is important to them.

Helen Clark was the Arts Minister and many would agree the arts community in Auckland and New Zealand is stronger as a result.

John Key took tourism – and what makes the current situation so deeply sad is how well tourism boomed under his leadership.

Jacinda Ardern also took arts and child poverty – sadly, and at least so far, with very poor results on the most important child poverty measures, such as material hardship.

I have chosen Small Business. 

Today I am announcing a significant part of National’s plans to support small businesses. The policy I am announcing is about job-creation. It is sorely needed.

Grant Robertson prefers to believe the Treasury’s view that unemployment in New Zealand will stay below 10 per cent throughout this year.

Private sector and Reserve Bank economists seem less sure.

Under the worst-case scenario in the Reserve Bank’s Financial Stability Report released on Wednesday, unemployment would reach 18 per cent. Even under the Reserve Bank’s less severe scenario, it would range between 9 and 13.4 per cent.

Already we’re seeing these grim scenarios playing out.

I think the Government got a bit of a shock yesterday when Statistics New Zealand released the latest job numbers.

Job numbers plunged by a record 37,500 last month.

It’s the worst fall in both numbers and percentage terms since the filled jobs series began more than 20 years ago.

Unemployment of 18 per cent would be absolutely, devastatingly catastrophic for this country, and its families and communities. We have never known anything remotely like it in New Zealand, at least since the Great Depression.

It must not be allowed to happen.

There is no doubt that by the election there will be tens upon tens of thousands of people newly unemployed.

No matter how long the Government decides to extend the Wage Subsidy Scheme, for some businesses the day of reckoning will arrive. That’s why Labour has announced its new two-tier welfare system, where people get more or less depending on which day they become unemployed.

National believes it is small business that can get those of our neighbours who become unemployed back into paid work as quickly as possible.

We want the small business that had to lay some of its team off to re-employ them as quickly as possible.

At a stretch, we want other small businesses, including sole traders, to take that step of employing one more person.

If you, as small business owners, give just one of your newly unemployed neighbours a job before Christmas, you will be the heroes of the economic crisis, the way that our nurses and doctors and all five million of us who stayed at home and washed our hands were the heroes of the health crisis.

National knows that businesses coming out of Covid restrictions and facing a major economic downturn are taking a risk to expand by employing new staff.  

It will be very hard to do, given the uncertain economic climate.

That is especially true for small business.

You don’t have a flash HR department. Many can’t even afford the local lawyer down the way for a bit of advice – especially right now.

If you decide to take someone on, you might have to run an ad, and then you’ll have to buy new tools; new machinery; a new laptop and desk; whatever is needed for your business.

It all adds up, especially for the smallest businesses.

The 90-day trial period is crucial to give a four-person business the confidence to hire that fifth person during these difficult times, or anytime. Under National it will stay.

But we also want to help small businesses with the immediate costs of hiring someone new.

So today I am announcing National’s JobStart policy for small businesses.

We will announce other elements of our policies for small business in the weeks ahead, which will focus more on job retention.

JobStart is designed to address the unemployment crisis the economists are telling us we will face in our first months in office.

The JobStart policy will provide a $10,000 cash grant for all additional new hires.

As an emergency programme, it will begin on 1 November and run for five months through to the end of your financial year, 31 March 2021.

In early January it will then be reviewed and adjusted as required.

The $10,000 per new hire will be paid to all businesses when they employ an additional worker for the business.

The first $5000 will be paid on the hire, and the second $5000 after 90 days.

The JobStart policy is for all New Zealand businesses, up to and including the giants, but it is focussed on small businesses.

It will be capped at 10 new employees, or $100,000 per business.

A payment of $10,000 will make an enormous difference to the 500,000 small businesses of this country – the heroes of the economic crisis ahead.

In good times, the economy generates around 30,000 net new jobs a quarter.

The scheme will be capped at $500 million, or 50,000 new jobs.

If you, the heroes of the economic crisis, employ even 10,000 of your neighbours under the scheme before Christmas, then there will be:

  • 10,000 fewer people on the dole,
  • 10,000 families who can face next year with confidence and who have choices they otherwise would not have had, and
  • Ten, twenty or thirty thousand kids who might get a Christmas present that they might otherwise not.

This is the biggest economic crisis in a generation. The JobStart policy is one important part of getting our economic recovery underway. 

It will get actual cash into small business owners’ accounts.

National is the party of small business.

It’s where we come from. And it is small business, with our help, who will rebuild New Zealand after Covid-19.