It’s wonderful to see you all.
Can I acknowledge our Prime Minister and our Deputy Prime Minister, the President, Party Board, Party management, can I acknowledge Ministerial and Parliamentary colleagues and fellow candidates, and fellow passionate New Zealanders.
This last week in politics has reminded us that we are heading into an election campaign. Election campaigns are tough. No order is given, they’re never smooth sailing and the Labour Party, we also learned last week, will stop at absolutely nothing to succeed; and we’ll come back to that.
I want to talk about what we’re fighting for. We’re fighting for this country, taking a new and modern approach to the world that is delivering for New Zealanders, that’s what we’re fighting for.
In the last four weeks, I have been around this country talking to people about a certain budget – Budget 2017, so far I’ve done around 32 different speeches to business groups, to social services, to communities and to iwi.
It’s been a great experience to take a pulse of this country. And can I say this, New Zealand is shaping globalisation to its advantage. New Zealand is doing magnificently.
I’ll put it this way, we are up on our foils, we’re going faster and stronger than our competition, that’s what this country is doing. Let me take you through a couple things.
First, economic progress. We, last year, were the fifth fastest growing economy in the developed world. And that’s good because I can remember those conferences in the early 2000s that a certain former Prime Minister would run when we were 22nd in the world and then eventually did nothing about it.
So that’s a good story. We are growing faster at this moment, and expected to over the next couple of years, faster than the UK, faster than Europe, faster than Japan, faster than Canada, faster than the US and faster than our very close friends who we like to beat every now and then on the sports field, and now in economic terms, the Australians.
And that’s good, but actually economic growth is not a mean in itself. I don’t expect to walk into a house in Lower Hutt, knock on the door with Chris Bishop and say “good news, the economy is growing well!”
They would rightly say, “Well, what’s in it for me?”
And what’s fundamentally in it for them, is job growth and wage growth, that’s what it’s all about, and you can’t have those things without economic growth.
You can’t have job growth, you could maybe do in a quarter or two, but you can’t have it without economic growth, and this country is growing jobs like it never has before. We are growing employment in this country at the rate of 10,000 jobs a month.
I met the Reserve Bank of Australia governor a few weeks ago, he was over here for the séances that Reserve Banks have from time to time. He was sitting there and he asks how’s it going? I said “it’s good, we’re growing at 10,000 jobs a month.” He said really, we’re not doing much more than that in Australia, 15-16,000 a month, and he’s right, over the last year they’ve been growing at 15-16,000 jobs a month and they are five times the size of New Zealand.
So don’t underestimate how important that is.
We now have more than three quarters of the New Zealand population between the ages of 15 and 65 in work, 76.2 per cent if you want to be precise. That is not only the second highest rate of employment for adults in the OECD, it is the highest rate of employment we have ever had in this country.
And we have wage growth, our average wage is around $56-57,000 and it’s going to go through to $63,000 over the next four years, and that’s good steady growth but it’s not as big in dollar terms as sometimes it was in the past, but it’s much bigger when you adjust for inflation.
And that’s actually what it’s all about, it’s what I can afford, my purchasing power. So yes, people were getting pay rises at 5 per cent back in 2008 and inflation was 5 per cent in 2008, so they were saying, how are we getting these pay rises and not getting ahead?
The answer was inflation and the cost of living. And last year the cost of living was nil and the average wage increase was 2 per cent and it all goes to the purchasing power of New Zealanders, that’s what it’s all about.
If you talk to the OECD they’ll tell you that we have faster real wage growth than the US and Europe and it’s not often that we can say that.
The other thing that’s really important is how much we owe the world, how much the world funds our growth. And many of you have been in these rooms, coming to these conferences will know that at various times it’s been a big subject of discussion.
In fact in the later part of the last decade when Labour were in office, a fair bit of that growth was funded by increase in what we owed the world. We effectively borrowed from the world to fund our growth.
When we came into office in 2008, New Zealand’s international liabilities, what we owe the world, was around 82 per cent of our GDP. And the ratings agencies around the world were saying that that’s a bit high. Well I can tell you that’s been coming down since.
Under this government, we have a steady growth record now of six years of growing every quarter all but one quarter, ever since the GFC, and what that means is now our international liability is down to less than 60 per cent.
That’s important, because the fact that it’s down to 58.5 per cent of GDP indicates that we are becoming a much stronger economy.
There’s a politician who’s been around for about 40 years, can’t remember his name, who rails about this stuff, and what really gets him wound up is how much everything has improved under this government, and that’s why he’s so grumpy. He’s had 40 years in politics and he hasn’t achieved anywhere near what’s been achieved by this National Government.
Why is this happening?
It’s happening because Kiwi companies and Kiwi entrepreneurs are getting out there and taking on the world and winning. They’re showing through their innovation, grit and determination that this country can compete on the world stage and get ahead, and create greater prosperity for New Zealand.
Last night I met a couple young guys at the Bay of Plenty Export Awards who won the ‘best emerging exporter’ category and I said to them, “how are you going?”
They said, we’re good, it’s really cool this business, what we’re doing is making stuff we’d like to be able to buy ourselves, and we’re now selling it to the world. I said, well that’s great.
They’re just 25-26 years old, and they’re not interested in hearing how we should shut this country down and stop growing, they’re not interested in how we should keep immigrants out and skilled workers to come help them with their businesses, they’re not interested in people who turn up and say we need to be tougher on trade deals because they’re getting out and showing New Zealanders how to do it, and doing a fantastic job.
And all of that work that these companies are doing are flowing through the Government’s Budget.
Our current Prime Minister and former Finance Minister has brought us back into surplus.
This government has been one of the first, if not the first, in the developed world to get back into a structural surplus which is sustainable in the years ahead, and that has allowed me to walk in through the door and act like Father Christmas.
It has allowed me to work with colleagues to come up with a Budget 2017 that delivers for New Zealanders, with a big investment in public services, $7 billion over the next four years.
Now these numbers get pretty big pretty quickly, especially when you talk to Jonathan Coleman, because the health budget goes up by nearly $4 billion over the next four years.
When we first came into office this country was spending $11 billion and change on health, this coming financial year we will be spending $16.8 billion a year on health, and that’s a massive increase in investment.
Our little friends in opposition are spending a lot of time telling us that it’s a cut, and there’s no way that $11 billion to over $16 billion is a cut, it is growing the health sector of New Zealand and this government is investing in the health of New Zealanders.
We are also New Zealand’s infrastructure government.
We are investing billions in infrastructure. When the Budget came out, people noted that we put an extra $4 billion into infrastructure this year and it was a debate for five minutes whether that was enough until they realised that the investment we’re making in infrastructure.
The Government alone over the next four years is $32.5 billion which is if you don’t know how that looks is 40 per cent more than the last four years, and double what is was a decade ago. That is a big increase.
We have the capacity to deliver all that infrastructure over the next four years. And that actually is a big part of what we have to do. Then we’ve got to be thinking about the four years after that because it’s going to be even bigger after that as this country grows.
And the other thing we were able to do in this budget was the family incomes and that is the bit that makes me the most proud.
When I was standing with the Prime Minister on Budget night watching the TV news and seeing those families in West Auckland and South Auckland and around the country saying hey this budget will help me get a chance to help my kids get ahead.
That’s what made it all worthwhile, the last eight and a half years work that we have all done to get this economy into shape so these families can be better off to bring up their kids and provide for their kids and that’s what’s important.
Those packages delivered the Accommodation Supplement changes, it delivered the tax changes and it delivered Working for Families changes that will ensure these families have a great opportunity over the next few years, we want to do it again if we have the opportunity.
What I still don’t understand is how the New Zealand Labour party, a party that might be chosen voted against that Family Incomes Package – I do not understand that at all. It’s just politics at all costs, it’s got nothing to do with Kiwis, it’s got nothing to do with families if they hadn’t they would have voted for it.
Of course we know they don’t. We know they don’t have a compass because they’ve been caught red handed this week in absolute scandal, no doubt about it.
Bringing international students on sham courses, saying they’re going to be doing courses on politics, not paying them, putting them up in substandard accommodation and making them sign non-disclosure agreements so they can’t talk about it to anybody.
I’m sorry, but that’s appalling.
Imagine how they would have attacked us if they weren’t the Labour Party, if it wasn’t the Labour party doing it. Well they sort of attacked us, they’re trying to get us to believe that it wasn’t them.
It’s nothing to do with us, it was set up by a rogue former staff member – right, Matt McCarten, the former Chief of Staff you’re referring to.
The guy that’s not worked for the Labour Party for about 18 days? “It’s nothing to do with us, it wasn’t the Labour Party.
And if it was, it was the Auckland Labour Party, nothing to do with us.
It’s nothing to do with us, we’re solving the problem. We’ve discovered it, and we’re sending in senior officials to sort out these other individuals.
It’s nothing to do with us; but we should get brownie points for admitting to it.
Ok, that’s reasonably low bar.
It’s nothing to do with us but yes it has got the former Prime Minister as one of its speakers, it has got the current leader and deputy leader named on the sheet, but that was nothing to do with us, it was over exuberance.
People got carried away. That’s what the Labour Party are trying to tell you – it wasn’t me, it was our little friend Matt McCarten who we are completely disowning and we have nothing to do with.
Well, let’s be clear, it’s a scam.
And the Labour Party leadership are now exposed as massive hypocrites.
We can’t take them seriously on immigration, on education or on standards of housing ever again. We have confirmation that that Labour Party of 2017 has no principles at all.
As Paula said, they only want to be in government because it’s their turn. That’s what they’re saying, they want to be in government because it’s their turn and they’re sick of being in opposition.
Well, I’m sorry but the New Zealand public, business owners, workers, mums and dads, retired people, they all deserve much better than that.
So delegates, we have a lot of work to do.
All we have done in the last few years is prove to ourselves that if we operate a good, sensible, consistent, reliable economic policy that values the contributions of individual New Zealanders that this country can go much faster and achieve much more and provide much more for its people than it has in the past.
That’s what we’ve proved to ourselves in the past few years.
Our job now is to keep delivering that for New Zealanders over the next three years.
We have to invest more in R&D, yes it’s growing, yes we are showing ourselves that we can build rockets off the Mahia peninsula and we can have clever yacht designers who can take on the world and win, fingers crossed.
We need to keep simplifying our tax system, and keep improving the rewards to Kiwi families. We need to keep growing and keep paying down our debt to the world.
We are here at this conference to set ourselves up for an election in 91 days’ time.
Where we are going to fight for kiwi businesses who come up to me every day and say you guys better stay in; because my business is growing, I’m employing more people, I’m providing for my family, you guys have to stay.
We’re here to fight for those people. We’re here to fight for the 10,000 people a month who have a new job, in construction, in hospitality, in farming and in IT.
We are here to fight for families who will get a tax break on 1 April next year – and who won’t get one under Labour because they’re already sidling away from their commitments.
We’re here to fight for the vulnerable people who need our help and we can only do that from a position of strength.
And we are here to fight for a positive aspirational New Zealand.
I have two young kids, I’m younger than I look.
My daughter is nine and my son is seven and for the first time in my life, I’m absolutely sure that both of those kids have a positive future in this country.
And I miss them a lot when I’m away, but I do it because I reckon if we all work together we can deliver that future, in a way we haven’t been able to do since our friends in Great Britain went off and joined the European Union – which they’re now leaving but that’s a different story.
I reckon this country over the next four years has the ability to be internationally connected, take advantage of all the opportunities in our region.
Turn into a place with the highest quality services and the cleverest technology and cleverest ideas happening in front of our eyes, there are hundreds and hundreds of kiwi companies doing this all around the country, and we have the ability with ultrafast broadband, and the way the world is connected to us these days, to do it from a New Zealand base.
Any young person who wants to do it can give it a crack.
That’s what we are able to deliver for this country over the next twenty years.
And I think we are on track to be one of the fastest growing and one of the most technologically savvy little countries in the world and definitely the best place to live.
And that’s what we’re fighting for, in the election on September 23.
The Government will shortly introduce legislation aimed at putting the Public Trust on an equal footing with private sector institutions.
The new legislation will remove the Crown guarantee of the Public Trust, in line with government policy for several decades that Crown-owned commercial businesses should not have a competitive advantage through being Crown-owned, Finance Minister Steven Joyce says.
“Public Trust recently received an AA credit rating from independent credit rating agency Fitch. This rating is a sign of very low credit risk, and a high level of ability to meet financial commitments. The rating places the Public Trust just one notch below the Government's own rating.”
Associate Justice Minister Mark Mitchell says the rating gives the Public Trust’s customers certainty that it is a strong, stable, sustainable business.
“Gaining the AA rating is a considerable achievement. It shows customers that they can have confidence in the organisation, and that they will not be disadvantaged by the removal of the guarantee.
“No other business in New Zealand that provides the same services as the Public Trust is underpinned by a Crown guarantee,” he says.
The Crown guarantee will remain in place until the legislation is passed by Parliament. This is likely to be in the second half of 2018.
The New Zealand Labour Party must explain how it can possibly justify exploiting 85 international students for its election campaign while at the same time campaigning against legitimate law-abiding international education providers, National Party Campaign Chair Steven Joyce says.
“This is truly appalling behaviour both for its lack of human decency and industrial strength hypocrisy,” Mr Joyce says.
“If the allegations are correct, Labour has brought international students to New Zealand on false pretences, failed to look after them, and failed to meet their obligations to the students in the most basic way, while at the same time campaigning against exploitation of migrants.
Mr Joyce says Andrew Little, Jacinda Ardern and Campaign Chair Phil Twyford must explain how this happened, apologise immediately to the students involved, and put things right for them.
“They also must explain their personal involvement given their use as a drawcard to lure the students into the scheme,” Mr Joyce says. “They can’t pretend Matt McCarten has nothing to do with Labour.
“This is not how we do things in New Zealand. Labour is known in campaigning circles for a win at any costs approach, but this is a new low even for them.
“Labour has attacked people with Chinese sounding names and attacked international students studying in New Zealand. Little did we know that at the same time they were exploiting vulnerable young migrant workers.”
Three Community Housing Providers have been given the opportunity to present formal proposals to take over up to 2500 Housing New Zealand properties and tenancies in Christchurch, the Government announced today.
This follows an invitation in April for Expressions of Interest from Community Housing Providers interested in participating in the proposed transfer, centred on the suburbs of Shirley, Bryndwr and Riccarton.
The three short-listed respondents each bring together an experienced New Zealand registered community housing provider with equity providers that have worked on social housing and major infrastructure projects. The three providers are:Community Futures Christchurch, a consortium whose members are the community housing provider Trust House Limited, Whitehelm Capital Pty Ltd, and Broadspectrum (New Zealand) Limited Ōtautahi Community Housing Consortium, made up of the community housing provider Ōtautahi Community Housing Trust and Morrison & Co PPP GP 2 Limited A third consortium whose members are the community housing provider Compass Housing Services Co (New Zealand) Limited, AMP Capital Investors Limited, and Brookfield Financial Australia Securities Limited.
Finance Minister Steven Joyce said all three respondents submitted high-quality Expressions of Interest.
“Each demonstrated their capability for providing innovative and responsive services for tenants from a sound, sustainable financial base, while also delivering on the Government’s requirement to supply at least another 150 social housing places,” Mr Joyce says.
Social Housing Minister Amy Adams said the purpose of the process was to ensure that not only the social housing stock is increased and improved, but to deliver better services to tenants.
“While ownership of these properties may change, the properties will remain as social houses, just as they are now. They won’t be able to be sold off and must continue to be used as social housing. Current tenants will remain in their homes. Neither their rent or rights will change as a result of the transfer, including their eligibility for social housing,” Ms Adams says.
“At the same time we are looking for a provider who will apply fresh thinking and make a positive difference to the way tenants are supported, and properties are managed.”
Housing New Zealand will continue to own and manage up to 3300 properties across Christchurch.
The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax.
The consultation document, Better administration of individuals’ income tax, was released today by Finance Minister Steven Joyce and Revenue Minister Judith Collins.
“The Government is very keen to ensure that the tax system is as simple as possible so people can clearly see the link between their efforts and their after-tax income,” Mr Joyce says. “We started the process in Budget 2017 with the tax threshold changes and the removal of the Independent Earner Tax Credit, and this is the next step to a simpler fairer tax system.”
Ms Collins says currently, many people might be owed a refund or have tax to pay and not realise it.
“This could occur if they haven’t worked for the full year, they have fluctuating earnings, or some of their income has been taxed at the wrong rate,” Ms Collins says.
“It would mean that Inland Revenue will have better income information and will be able to calculate and issue refunds, or let people know if they have tax to pay without the need for taxpayers to do anything else.”
“Under this new system people will be much less likely to end up with large tax bills at the end of the year. They’ll be paying a more accurate amount through the year and receive any refunds automatically. This is good news for about three million taxpayers,” Mr Joyce says.
Submissions close on 28 July 2017. See www.makingtaxsimpler.ird.govt.nz for the detailed proposals.
Finance Minister Steven Joyce has welcomed the OECD’s latest review of the New Zealand economy as outlined in a report released today.
“The 2017 OECD Survey of New Zealand notes New Zealand’s strong economic growth off the back of a booming tourism market, strong net inward migration, solid construction activity and supportive monetary policy,” Mr Joyce says.
The report is also positive about New Zealand’s sound fiscal position with low public debt and a balanced budget.
“The report highlights that New Zealand outperforms most OECD economies in regards to our standard of living, health status, the quality of our education system and our overall environmental quality.
It shows that New Zealand’s labour market is performing strongly with high levels of employment and relatively strong real wage growth since the Global Financial Crisis. New Zealand also has one of the lowest gender pay gaps in the whole of the OECD.”
The OECD makes recommendations under three key themes, making growth more sustainable and greener, improving productivity, and adapting to the changing labour market.
“The report is consistent with the government’s economic policy direction, with our strong focus through the Business Growth Agenda on increasing our international connections, encouraging more international investment, improving environmental outcomes, lifting the level of business research and development, and training young people in the skills needed for the modern world, especially in fields like engineering and ICT.”
“One of the OECD’s recommendations is adding debt-to-income limits to the Reserve Bank’s macro-prudential toolkit with attention to satisfying a cost benefit analysis,” Mr Joyce says. “Last week the Reserve Bank released its consultation document on that proposal, and I am looking forward seeing the responses to it.”
The OECD also recommend bringing forward the age of eligibility for Superannuation increase, lengthening the transition period, and indexing the pension age to life expectancy.
“The Government is confident its existing plans for adjusting superannuation policy strike the right balance between ensuring sustainability of the scheme and providing time for current generations of working New Zealanders to respond to any change.”
Mr Joyce said the OECD report will be helpful in assisting New Zealand policymakers to respond to current and emerging economic issues.
“It is always good to have our thinking tested by international agencies like the OECD. While we don’t always agree with the OECD’s proposed policy response, it is encouraging to see that government agencies and the OECD broadly aligned on the future opportunities and challenges facing the New Zealand economy.”
GDP figures out this morning are a reminder of the importance of focusing on policies that create and sustain economic growth, Finance Minister Steven Joyce says.
New Zealand's GDP grew a slightly lower than expected 0.5 per cent in the March quarter, taking New Zealand's growth rate for the year to 3.0 per cent.
"Moderate GDP growth over the last six months is a reminder that every economic gain is hard-won in what is still a challenging international environment,” Mr Joyce says.
"This is not the time to rest on our laurels and start considering policies that would damage growth in key sectors or across the economy."
Growth in the quarter was across 11 of 16 industries, including:
• Agriculture, forestry and fishing (up 2.8 per cent)
• Manufacturing (up 1.0 per cent)
• Retail, trade and accommodation (up 1.8 per cent)
• Healthcare and residential care (up 1.6 per cent)
These were partially offset by weaker growth in the transport and construction sectors.
“Construction fell in the quarter, by 2.1 per cent, but the annual construction figure increased by 9.3 per cent for the year ending March 2017,” Mr Joyce says. “These figures move around from quarter to quarter, but we remain in one of the biggest building booms New Zealand has ever seen.”
Today’s GDP figures followed on from the release of New Zealand's external accounts for the March year yesterday, which showed a current account deficit of 3.1 per cent, which is the same as the March 2016 year.
"The international liability position – a measure of our indebtedness to the rest of the world – is down again to 58.5 per cent of GDP, compared to over 80 per cent when the current government came into office," Mr Joyce says.
"The improving external accounts show the benefit of a strong economic plan that delivers steadily improving economic results relative to the rest of the developed world.
"The Government will continue to take the right steps to encourage businesses to invest and grow more jobs for New Zealanders."
The Government has released the Major Projects Performance Report for the period November 2016 to March 2017, covering 55 complex major projects across government with a whole of life cost of $38.5 billion.
“The Investment System is continuing to mature with an increasing focus on realising the benefits of investment, and addressing risks before they turn into issues,” says Finance Minister Steven Joyce. “The portfolio as a whole continues to perform as expected.”
“Through this regular assessment, the Treasury aims to improve visibility of challenges and potential risks on projects where significant public funds are being invested,” says Mr Joyce. “It is my clear expectation that the public sector continue to focus on lifting productivity as a result of these investments so we can do more to help New Zealanders.”
The portfolio continues to perform well with 91 per cent of projects rated Amber or better, over half of the major projects are rated Green or Amber/Green, only nine per cent is rated Red or Amber/Red over this period.
The Red or Amber/Red rated projects are:
· Māori Land Service Programme – Te Puni Kokiri (Red)
· ANZAC Frigate Systems Upgrade – Defence (Red)
· 2018 Census Programme – Stats NZ (Amber/Red)
· Lincoln University/AgResearch Joint Facility – Tertiary Education Commission (Amber/Red).
Major projects are a collection of the most challenging projects Government agencies are currently undertaking. A red or amber/red rating is not uncommon during the life cycle of these large scale projects and highlights that there are issues or risks that are either being addressed or need to be addressed to ensure the project is delivered successful. Project governance teams are working with central government agencies to resolve those issues.
The interim report can be found at http://www.treasury.govt.nz/statesector/investmentmanagement/publications/majorprojects
Finance Minister Steven Joyce has today welcomed the release of the Reserve Bank's consultation document on the use of Debt to Income ratios for mortgage borrowers as an additional macro-prudential tool.
"The document is a comprehensive summary of the pros and cons of adding Debt to Income ratios to the Reserve Bank's toolkit of regulatory options,” Mr Joyce says.
"The use of Debt to Income ratio restrictions would be a significant intervention in the housing market, so it's important that all interested parties have their say during this consultation period."
The Reserve Bank has been using Loan to Value ratio (LVR) restrictions since 2013, and they were re-calibrated in 2016.
"The Reserve Bank's analysis suggest that LVR's have helped moderate demand in the residential housing market, particularly in Auckland where prices have been flat to falling over last ten months,” Mr Joyce says.
"The Reserve Bank has stated that even if DTIs were available now, they wouldn't be using them currently. That gives us all time to consider their possible future use carefully."
The consultation runs for 10 weeks and closes on 18 August 2017.
The Reserve Bank’s consultation document is available here.
The Government and Auckland Council have agreed on Terms of Reference to establish a project to investigate smarter transport pricing in Auckland.
“Alongside our current multi-billion dollar transport investment in Auckland, we need to look at new ways of managing demand on our roads to help ease congestion. Smarter transport pricing has the potential to be part of the solution,” Finance Minister Steven Joyce says.
“Work undertaken last year by the Government and Auckland Council found that smarter transport pricing could help make a big difference in the performance of Auckland’s transport system,” Transport Minister Simon Bridges says.
“Smarter transport pricing could involve varying what road users pay at different times and/or locations to better reflect where the cost of using the roads is higher (i.e. where there is congestion). This could encourage some users to change the time, route or way in which they travel.
“It is essential that we carefully consider the impacts of pricing on households and businesses. A key factor will be the access people have to public transport and other alternatives.
“The Government has also made a clear undertaking that any form of variable pricing will be primarily used to replace the existing road taxes that motorists pay. This is about easing congestion, not raising more revenue,” Mr Bridges says.
The Smarter Transport Pricing Project will undertake a thorough investigation to support a decision on whether or not to proceed with introducing pricing for demand management in Auckland. Officials from the Ministry of Transport, Auckland Council, Auckland Transport, the New Zealand Transport Agency, Treasury and the State Services Commission will work together and engage the public to develop and test different options.
The first stage of the project, which will lay the groundwork for assessing pricing options, is expected to be complete by the end of 2017.
“Any decision on the use of a demand management tool like road pricing is still some years off,” Mr Joyce says. “We look forward to receiving advice from officials as this work progresses. The Government and Auckland Council will then consider the project’s findings.”
Auckland Congestion Pricing Project Terms of Reference are available at www.transport.govt.nz/smarterpricing