Address to the National Party Conference
Ladies and gentlemen, fellow party members.
It’s fantastic to be with you as we celebrate the National Party’s 80th birthday.
Back in 1936, the Reform and Liberal parties combined to create our great party.
And didn’t they do an excellent job?
Eighty years ago, New Zealand was quite a different country.
The population was just a third of today’s at 1.5 million, Viscount Galway was the Governor-General, King Edward the Eighth abdicated and Bing Crosby had a number one hit “Pennies from Heaven.”
In case you’re wondering, Otago had the Ranfurly Shield, after taking it off Canterbury the year before.
For all you Blues supporters out there, it took Auckland another 16 years to win it back.
And finally, New Zealand had a flag with the Union Jack in the corner and the four stars of the Southern Cross.
So I guess some things never change.
But back to the National Party.
Its founders used that name because they wanted it to represent all parts of our nation.
It’s as fitting today as it was 80 years ago.
Our party stands for a safe, prosperous and successful country that creates opportunities for all New Zealanders to realise their goals and dreams.
We stand for individual freedom, equal opportunity and, most of all, personal responsibility.
And we stand for strong families and the sustainable development of our environment.
For eight decades now, those values have defined us.
And they’ll define us for the next 80 years and beyond.
This is our first national conference in Christchurch since the devastating earthquakes.
It’s great to be back.
I want to acknowledge the people and local agencies in and around this city. You can take real pride in what you’ve achieved since September 2010.
In particular, can I again thank Gerry Brownlee and his team for their tireless work and outstanding leadership.
I’m sure you’ll agree, they’ve done Canterbury proud.
It has not been easy and there are still challenges ahead. But we’re well on the way to getting this fantastic city back on its feet – stronger and more prosperous than ever before.
On a personal note, this is my tenth conference as Party Leader. It’s as much an honour to lead the party today as it was 10 years ago.
I’m indebted to our strong, unified team. We are busy, energised and focused on delivering a brighter future for all New Zealanders.
It all starts at the top – so please join me in thanking our hard-working President Peter Goodfellow.
I also want to acknowledge someone who has done an outstanding job in getting us back to surplus – my good friend and Deputy Bill English.
Of course, I’m forever grateful for the support and encouragement of my family – Bronagh, Stephie and Max.
Finally, I’d like to thank all of our ministers, MPs, office holders and volunteers.
What a wonderful job you’re all doing.
Ladies and gentlemen.
Isn’t it a great time to be in the National Party?
We’re providing New Zealanders with the strong and stable government they deserve.
In fact, we’re the only party that can do that.
We’re delivering on the issues that matter to New Zealanders – like jobs, health, education and opportunities for our young people.
Under National, 200,000 more people are in work now than just three years ago.
And we expect another 170,000 jobs by 2020.
We have the third highest employment rate in the developed world.
The average wage is forecast to rise to $63,000 a year - $16,000 more than when we took office.
We’re back in surplus so we can repay debt and work towards tax reductions in the future.
And, for the first time in a generation, we have more people moving to New Zealand from Australia, rather than the other way around.
That’s a stark contrast to the more than 30,000 a year who were leaving for Australia when we took office.
As Bill said in his Budget speech, only a handful of developed countries enjoy such a positive outlook.
On the back of our strong economy, Kiwi families are better off under National.
Let me give you some examples.
We were the first Government since the early-1970s to raise benefits for families with children.
We believe in personal responsibility, so we’re supporting more people off benefits and into work.
We’re providing free doctors visits and prescriptions for children under 13, which is helping nearly 800,000 children and their families.
Around 50,000 more elective operations are now performed each year than in 2008.
We’ve increased paid parental leave.
We’re investing around $2 billion every year in housing to support close to 470,000 New Zealanders.
Under our watch, over 300,000 homes have been insulated across New Zealand.
And, as of Friday, the average cost of your motor vehicle levy fell to $130 a year – down from around $330 just two years ago.
As many of you know, I’m a strong believer in the power of education.
Since 2008, the proportion of 18-year olds achieving an NCEA level 2 qualification has increased from 68 per cent to over 84 per cent.
The improvement has been even better for Maori and Pasifika students.
These are just some of the ways National is helping Kiwi families.
I’m proud of every one of those achievements. And you should be too.
They are possible only because we have a growing economy supported by National’s clear and sensible plan for our country’s future.
I’m ambitious for New Zealand. And I back New Zealanders to succeed.
Our future lies in being an open, outward-facing nation that welcomes people and ideas from other countries.
Contrast that with our opponents’ dreary and closed view of the world.
They remain inward-looking, angry and forever negative.
After eight years in opposition, they still have a complete lack of faith in New Zealanders and in our country.
The contrast couldn’t be greater.
I believe we can look to the future with a well-earned confidence, providing we stick with National’s successful plan.
At the halfway point of our third term, the economy remains front and centre of our agenda.
We need a strong, growing economy to provide the hospitals, schools and jobs New Zealanders rely on.
For the Government, this starts with responsibly managing our own finances.
We’re demanding better results from our spending.
Because when we talk about government spending, we really mean the taxes paid by you, the hard-working people of New Zealand.
We’re a party that admires and respects that hard work and enterprise.
We also understand that New Zealand must make its own way in the world.
So the Government is doing everything possible to help our businesses get ahead, build our competitiveness and diversify our exports.
That’s important in a world full of risks and uncertainty.
We’ve seen evidence of those risks in the past week or so.
Britain’s decision to leave the EU has sent ripples through global financial markets and raised deeper economic concerns in the UK and Europe.
It’s too soon to say how disruptive this will be over coming years.
The good thing for New Zealand is that we’re well placed to deal with these kinds of events.
In recent years, our economy has become much more diversified. And we’re now more closely linked to economies in Asia and around the Pacific Rim.
I acknowledge times are very challenging for our dairy farmers.
I met a large number of them at Fieldays a couple of weeks ago and I was impressed by how resourceful and determined they were.
And it was good to see at least one survey showing optimism among farmers improving last month.
In the meantime, other industries are performing well.
I’m talking about tourism, ICT, wine, horticulture, construction and our fast-growing high-tech manufacturers – just to name a few.
It’s important we continue building on this good momentum.
Over the next few years, I believe some of our biggest challenges will be dealing with pressures created by our growing economy.
That’s why the Budget this year included a range of significant packages - from innovation, skills, and regional development, to social investment, health and infrastructure.
They were all aimed squarely at supporting New Zealand’s growth into the future.
Today I want to focus on the next part of our infrastructure programme – in particular, meeting the increasing demands for housing in our fastest-growing cities and towns.
I acknowledge many New Zealanders are concerned about housing and housing affordability. It’s certainly one of our biggest challenges.
The Government has a comprehensive plan to deal with it.
We’ve seen a number of factors combine over many years to boost housing demand and push up prices.
They include low interest rates, growing incomes, more jobs and a rising population on the back of our growing economy.
Housing affordability is an issue for successful cities right around the world. Whether it’s Singapore or Sydney, Los Angeles or London.
The answer is building more houses and building them faster. So the Government has a wide-ranging programme to help make this happen.
We’ve created over 200 special housing areas across New Zealand to speed up the development of land for an estimated 70,000 new homes.
We’re reforming the Resource Management Act to make it easier for councils and developers to get houses consented and built.
We’ve freed up surplus Crown land for new housing here in Christchurch and we’re doing the same in Auckland.
Over the next two years, another 2,000 Housing New Zealand homes will be built.
The construction industry is the biggest it’s ever been. Around 40,000 more people are working in the sector than two years ago.
And there are currently 42,000 apprentices being trained across the country.
Last year we tightened the rules to ensure people buying and selling property for a profit pay their fair share of tax.
And we’ve given the Reserve Bank more tools to manage wider issues associated with the housing market.
All of this work is delivering results.
In fact, we’re now in the middle of the biggest building boom New Zealand has ever seen.
Across our country, building activity is at an 11-year high, with more than 28,000 homes consented in the last year.
That’s up 13 per cent on the previous year and double the number of five years ago.
We’re on track to build 85,000 new houses across New Zealand in this term of Parliament alone. To put that in context, it’s nearly twice the number of existing houses in all of Dunedin.
That’s right – nearly double the number of houses in all of Dunedin in just three years.
But we need to press on.
Over the next few months, we’ll consider public feedback on a National Policy Statement on Urban Development.
It doesn’t sound very exciting.
But it’s a very important part of our housing plan. It will require local councils to ensure land supply for housing keeps ahead of population and economic growth.
The National Policy Statement identifies five high-growth centres: Christchurch, Queenstown, Tauranga, Hamilton and Auckland.
They’re all forecast to have double-digit population growth in the decade to 2023, putting extra demands on housing.
I’ll come back to that shortly.
But the Government’s firm view is that increasing supply is the most important thing we can do to improve housing affordability.
If you doubt that, let me remind you what happened here in Christchurch after the earthquakes, which destroyed around 10 per cent of the houses in this city.
In 2013, faced with a growing population as people arrived to help with the rebuild, and with thousands of locals needing new homes, Christchurch had an acute housing shortage.
Fast-rising house prices were a real problem.
In response, the Government worked with local councils and developers to immediately free up over 25 years of housing supply through the Land Use Recovery Plan.
This provided 40,000 new residential sections in priority areas. And we amended intensification rules allowing up to 10,000 new dwellings within Christchurch City.
This provided certainty for land owners, developers and infrastructure providers to tackle the housing shortage head on.
So how have things turned out?
Well, annual house price inflation in Christchurch has fallen from 13 per cent after the earthquakes to around 3 per cent last year.
Three years ago, rents in the city were rising by up to 16 per cent. Last year, they actually dropped a little.
And the shortfall in housing supply is expected to be eliminated in Christchurch by March next year. But we still need to prepare for future population growth.
This has all happened alongside strong economic growth in the city.
Now, I’m certainly not saying every housing issue in Christchurch has been resolved.
But this city has shown the rest of New Zealand what can be done.
The Productivity Commission and councils around the country have pointed to the cost of infrastructure as one of the issues restricting new housing supply – at least in the short-term.
For example, some councils have strict debt limits preventing them from investing in the infrastructure they need for more houses to be built.
So today I’m making an announcement to help overcome this.
The Government has decided to set up a $1 billion Housing Infrastructure Fund.
It will provide targeted interim funding to bring forward the roading, water and other infrastructure required for new housing – especially where financing issues are holding up development.
The one-off contestable fund will be open to applications from councils in high-growth centres – which are currently Christchurch, Queenstown, Tauranga, Hamilton and Auckland.
It will accelerate the short and medium-term supply of new housing where it’s needed most.
It will do that by investing up front in infrastructure to ensure more housing can be built in a timely fashion.
In other words, the fund will directly finance or own the infrastructure until councils receive revenue from the new houses, when people move in and start paying rates.
Councils will then have to repay the capital or buy back the assets – so this is not a grant or an ongoing subsidy.
To access the fund, local councils must outline how many new houses will be built, where they will be built and when they will be available.
Ideally, they will have agreements with developers.
The fund will be tightly targeted at core infrastructure supporting additional new housing.
It will not be available to replace infrastructure for existing housing or for infrastructure built by developers within subdivisions.
Funding may also have other conditions attached, such as faster processing of resource consents.
All of this will require close collaboration between central and local government.
We’re considering a number of options for managing the fund and processing applications.
With roads, for example, we’ve already accelerated priority Auckland transport projects through the New Zealand Transport Agency. We could use a similar model for roading projects under the new fund.
Another option is a special purpose vehicle along the lines of Crown Fibre Holdings, which was created to manage the roll-out of Ultra-Fast Broadband.
At the time, there was a high degree of uncertainty about the likely uptake of the new broadband network, which was preventing a commercial roll-out.
Under the Crown Fibre model, the Government effectively took on that risk by buying the assets and selling them to providers once customers were on board.
We’ll work on these details with councils before we call for applications later this year.
In the meantime, councils can start identifying projects to put forward.
Depending on the timing and the number of projects approved, the new fund will require the Crown to borrow up to $1 billion – temporarily adding to government debt.
I want to emphasise this is not a hand-out. It’s about getting infrastructure and housing built faster in high-growth areas.
The new fund will sit alongside other parts of our comprehensive housing plan.
It includes our social housing build, our emergency housing programme, special housing areas, the expanded HomeStart Scheme for first home buyers, freeing up surplus Crown land, the National Policy Statement, RMA reform and the extra tax measures we took last year.
By any definition, this is a very comprehensive plan to meet our country’s extra housing demands.
I’m also announcing one further measure today.
That is, the Government is considering independent Urban Development Authorities for specific areas of high housing need.
They will have streamlined powers to override barriers to large-scale development.
This could include responsibility for planning, consenting and other powers.
UDAs have been used widely overseas, including in Australia, to help unblock development pipelines in high-growth areas.
They can be structured in a number of ways.
We’ll consider the best approach for New Zealand’s fastest-growing centres over coming weeks, with a view to introducing legislation later this year.
Ladies and gentlemen.
I’m confident the measures I’ve announced today will further help to increase the supply of new houses where they’re needed most.
New Zealanders understandably want to enjoy the benefits of a growing economy.
For that to happen, we must build the modern infrastructure needed to support growth into the future.
In case there is any doubt, let me be absolutely clear about my expectations.
We will not allow unresponsive planning and slow infrastructure development to lock New Zealanders out of much-needed housing.
Fellow National Party members.
It’s my huge privilege to lead our party and our country.
New Zealand has come a long way under National’s strong and stable leadership.
We’re delivering better healthcare and educating more of our young people.
We have more jobs and fewer families relying on benefits.
Incomes are rising and the books are back in the black.
And we have a vibrant, growing economy that’s unlocking opportunities for New Zealanders here at home.
I’m proud that National’s team is making a positive difference to the lives of New Zealanders. And you should be too.
But more importantly, we have a busy work programme ahead of us.
I can assure you we will continue working hard to build the brighter future we all want for ourselves and for our families.
Providing we stick with our successful plan, I’m confident we can continue to deliver great things for our country.
As I said yesterday, there is no room for complacency, no room for arrogance and no room for mediocrity.
Our party might be 80 years old, but just like our country our best years are ahead of us.
Thank you very much.