Ladies and gentlemen.

I want to acknowledge the elected officials in the room today: mayors, regional chairs, councillors, community board members.

In a few short weeks you’ll face your electors. I know that for all the noise of election campaigns and media focus on the spending of local government representatives and officials, those who seek to serve their communities don’t do so for personal reward.

Your motivation is a desire to see our communities do better.

Community and service are at the heart of Labour’s vision for local government.

I want to talk about our vision today.

Labour values the word ‘local’ in local government.

Because it is local it is able to be responsive.

I want everyone to have a sense of belonging to their community. Community is the bedrock of security and opportunity.

I see local government as a partner for central government, providing services that make communities safer and stronger.

So that’s our vision: strongly democratic local government, responsive to its own community, working alongside central government to create development and provide services.

When I listen to the Minister of Local Government it too often seems that he sees not the potential for you to contribute, but rather he sees local government as a monster that needs to be restrained. Often it sounds like he sees local government as out of control, doing far more than it should and being reckless and irresponsible with ratepayers’ money.

His ideology is that corporate and unaccountable decision-making is better than transparent and democratic decision-making.

He thinks decisions made in Wellington, and in boardrooms, are better than decisions made by communities.

The Minister trusts hand-picked appointees more than he trusts the people to run our communities.

The Government talks about transparency and accountability – but it is shifting decision-making power, and the management of assets and services, into private hands.

Moving behind closed doors.

That vision mistrusts communities, and it replaces the wishes of the many with the decisions of the few.

I reject that vision because it’s not local, and it’s not responsive.

Labour’s 2002 Local Government Act was based on the idea that local authorities would be responsive to their communities.

Councils were required to consult, and to be transparent.

There were things that it couldn’t do – such as privatising residents’ and ratepayers’ assets against their wishes.

At the end of consultation, councils need to be able to make and implement a decision.

They also need constantly to strive to improve their performance, and reduce costs.

Rates must be kept at reasonable levels, especially in these times when families are finding it tough to have something left over at the end of the week.

But what I don’t support is taking away the power of local communities and councils to make their decisions locally whenever appropriate, rather than being constrained by tight restrictions written in Wellington.

The Government is setting up local government with too many restrictions, new costs and controls.

The result is they are making councils less responsive to local communities.

Instead of what communities want, it is all about what central government wants.

In his speech to you here yesterday, the prime minister said the Local Government Amendment Bill is aimed at getting council decision-making to focus on what he called ‘core principles’.

He described these as waste collection, transport, and water supply.

That’s his list of core services, but look what is missing from the new Bill:

Involvement in economic development.

Involvement in protection of the environment.

A council role in social well-being through, for example, pensioner housing.

What if communities want their councils to do those things?

Many councils won’t be clear about if their communities want a focus on these things.

That’s because the Bill before parliament sets aside some vital requirements to consult – for example on community outcomes in the long term plan, or on the sale of important assets.

Consultation can be demanding for councils, but it is essential to strong communities.

The same principles that have been behind the changes in the Local Government Amendment Bill have also been driving re-organisation in Auckland.

Labour recognised the need to reform Auckland. We set up the Royal Commission there to look at the region’s governance.

I support a vision for a united Auckland.

What I don’t support is re-organisation that takes the local out of local government.

You can’t make communities stronger by reducing the community voice and the responsiveness of local government to its own community.

There are huge possibilities for Auckland, and what the new council can achieve.

Strong communities, that make the city a great place for families and a great place to enjoy its stunning physical environment.

Smart economic development, that creates jobs and opportunity out of clean twenty-first century technology and infrastructure.

A cheap, fast and convenient transport network, and dual waterfronts that will become a magnet for Aucklanders and visitors from around the world.

All this is within our reach.

It’s a vision for a great city, and great communities.

Essential to achieving that was to ensure Aucklanders had a say in – and a sense of ownership over – the future of their city.

But this historic reform of Auckland has been soured.

Aucklanders weren’t listened to, and the rushed process has only alienated us further.

People feel steamrolled.

Opinion polls consistently report a majority of Aucklanders feeling negative and doubtful about the Super City.

Only a fifth to a third support the changes.

The mistakes the Government has made in Auckland are important – because they are not simply flaws in a shambolic process. They are the result of the way the National-led Government thinks about communities.

They distrust communities, and so they constrained the powers of local boards.

Labour will change the law to guarantee local boards real decision making powers.

The Government trusts the boardroom over the ballot box, and so it has handed 75 per cent of the new city’s operations and services to council companies.

Labour says that how council controlled organisations operate is a decision Auckland should make, not Wellington.

The Government sees the city not as a community, but as a corporation, and clearly intends for the business side of local government to be privatised.

It has removed the requirement to get support in a binding referendum before the Ports of Auckland can be sold.

Labour will legislate to restore protection to public assets.

Labour wants to see New Zealand building our assets up, not selling them off.

The Government doesn’t think ratepayers need to be consulted before strategic assets are sold.

Labour will give Aucklanders a say, through consultation and, where it’s needed, through a referendum.

It is generations of Auckland residents and ratepayers who paid for these assets, and Aucklanders as a whole should determine their future.

In Auckland the democratic process has been compromised. In Canterbury it has been chopped off at the knees.

The decision to suspend elections for three and a half years has deprived Cantabrians of a voice.

It means they no longer have access to protections under the Resource Management Act that other New Zealanders enjoy.

Frustration with decision-making there is not a reason to remove the ability of the community to make decisions at all.

The Government appointed commissioners in Canterbury to make decisions about resource consents and to make Water Conservation Orders.

Those orders can’t be challenged.

It is taxation without representation, and that has never been a good way to govern.

There is nothing local, representative or responsive about it.

I think the Government has under-estimated the depth of public concern over this issue in Canterbury.

Labour will rescind the Act that removed the voice of the people of Canterbury. We will hold elections as soon as possible.

Behind the swinging axe in Canterbury are water issues.

And water is a major area of local reform where the Government has an agenda Labour cannot accept.

It is proposing to allow private ownership of water infrastructure for up to 35 years.

That is almost two generations, and eleven electoral cycles.

That is effectively, to all intents, privatisation, even if the asset is returned back to the Council at the end of the contracting period.

New Zealanders want their water infrastructure to be run efficiently but not as a money-making venture for private profit.

We do not want the profits from water disappearing to overseas owners.

I am clear about this – private ownership of water infrastructure for 35-years will result in New Zealanders’ hard earned cash disappearing into the hands of the foreign investors who will buy up the asset.

We can’t afford that in good times. In tight times like today, families will not be able to find the extra costs that private owners will demand.

The record of privatised monopolies around the world is a record of higher prices for consumers.

Water is a natural monopoly. No one is ever going to build a competing set of pipes.

If there is one thing worse than a public monopoly, it is a private one.

It will charge as much as it can. And no one will be able to choose to buy water from a competitor.

If public utilities over-charge, voters can throw you out. That is a fierce control on you.

If you don’t do an adequate job of your water supply, they will remove you at elections.

But protections on foreign-owned utility investors have a habit of slipping away.

Many cash-strapped local authorities are looking for ways to find the long-term investment funds needed to build their infrastructure.

Central government has an obligation to partner local government in resolving this issue.

There is a lot we can do to help.

I want to tell you that Labour is carefully looking at far-reaching options to help.

It is obvious to me that we have a savings problem in New Zealand; We don’t save enough and at the same time we have a savings industry gutted by the collapse of so many finance companies in recent years.

Meanwhile we have local needs all over New Zealand for infrastructure investment.

Central government faces similar challenges funding infrastructure.

New Zealanders’s can earn a return on their savings and help to build our national and local infrastructure at the same time.

We can do all that in a way that provides the capital required and protects communities from unfair price rises and privatisation.

One idea is the concept of local government bonds, which would allow local authorities to efficiently access capital markets and lower the cost of their funding.

This idea originated with the Capital Markets Development Taskforce last year.

Labour set the Taskforce up, and this is an idea that came out of it with a lot of potential.

We see bonds as an opportunity for Mum and Dad investors who have been burned by finance company collapses to invest their savings knowing it’s good for the community. Their investment can achieve a fair rate of return, and it’s safer.

The use of bonds avoids privatisation of assets that are often monopolies.

Since the Taskforce proposed the bonds, the Government has so far failed to implement it.

I am less persuaded about the merits of public-private partnerships.

Any infrastructure ultimately has to be paid for by either rates or user charges. In a PPP the final cost to the public must take into account the private contractor’s return on investment.

Its cost of capital will always be higher than the cost to government. Governments can borrow cheaply because they are less risky.

So I am sceptical that PPPs are the major answer to the funding challenges councils face.

At the heart of our vision for local government is our commitment to truly local government dedicated to providing services to strong communities.

Democratic control is the best way to ensure services align with community wishes. It’s the best way to make sure everyone gets their say.

I want institutions of government to be managed in the public interest, and for the public good.

The actions of this Government in Auckland, in Canterbury, and with the Local Government Act 2002 Amendment Bill, are not consistent with a vision of stronger communities.

They are not consistent with developing local economies, nor good environmental management.

Labour will support efforts to improve efficiency and reduce red tape and unnecessary costs.

But we will build them into our vision of government that is closer to communities, not further away.

That is an agenda for the future. It is Labour’s agenda now in Opposition, and when we return to Government. 

Ends

Thank you for joining me here.

The Labour caucus has enjoyed being in the sunshine capital and meeting a lot of people here.

If I could stay longer, I would want to spend some time enjoying the National Parks, the conservation areas and the creative industries that make this region such a tourism drawcard.

You have to wonder about the cabinet ministers who have flown over here, looked at the crisp water, the beautiful mountains and the stunning land and said, “there’s just one thing those National Parks need to complete them … an open cast mine.”

Next week, the Government will present its mid-term budget.

And the question that will be asked is what difference will it make for working families?

What will be there to increase their wages? What will it do for a family trying to pay off a house? What will it do to create jobs?

Today I am not releasing Labour’s policies. That will come closer to the elections. But I am indicating broad directions.

Labour’s vision is about putting more money in the pockets of people, and creating jobs and the future New Zealand needs.

I am going to tell you about how we could make fairer changes than National will make in the budget.

Labour has fresh ideas for creating jobs and lifting incomes by boosting exports, boosting savings and promoting a smart economy.

Labour would do things differently not only in making the tax system deliver more for people, but in the way we grow the economy.

The budget is being delivered at a time when the global economy is expected to grow by 3.9 per cent this year.

The threat of the global financial crisis is largely behind us.

New Zealand should come out of the recession faster than most.

We’re not like Greece, where the government went heavily into debt.

The last Labour Government prudently used surpluses to reduce government debt dramatically, rather than spend them as John Key and Bill English proposed.

Our growth rates exceeded those in the US, UK, Europe and Japan, and were on a par with Australia’s.

Our unemployment was the lowest in the world.

We have also been fortunate that Australia and China have remained strong economically and sustained their demand for our goods and services.

The prices we get for our commodities reached record levels in April.

This is feeding into business confidence and should help to boost government revenue and employment.

So this budget is a real opportunity for New Zealand.

It’s an opportunity to put in place long-term plans to give New Zealand a great future.

It’s also an opportunity to do something for hard working Kiwis whose wage increases last year were the lowest in a decade, and for families who are finding it tough to pay the bills at the end of the week.

The government needs to do more than simply sit on the sidelines and wait for international economic recovery to do its job for it.

John Key promised an economy that would catch up with Australia’s.

But we’re yet to see the substance of any plan to deliver on that rhetoric.

To the contrary, wages have risen faster in Australia over the last year.

Our unemployment is higher than Australia’s by a significant margin for the first time in a decade.

In the last couple of weeks we have seen the Australian Government’s initiative to increase employer contributions to superannuation from nine to twelve per cent.

This will not only boost Australian workers’ wage packages by three percent. It will also boost savings that Australians can draw on for investment in growth.

And it will ensure Australia maintains ownership of its own economy.

By contrast here National cut the KiwiSaver employer contribution from four per cent to two per cent.

And it stopped contributing to the Superannuation Fund.

In last year’s Budget Bill English asked why we would continue to invest in the Superannuation Fund.

The Super Fund has in fact returned strong growth.

Since last year’s Budget it has added $3.5 billion in value.

The Key Government’s failure to continue to invest in it has cost the government a million dollars a week in lost interest alone.

In the wake of the Australian tax inquiry one thing the Australian government specifically promised it would not do was increase GST.

John Key made the same explicit promise before the last election. And when he made that promise he spoke to those who feel the bite of recession the hardest.

But he has now indicated he will break that promise.

A rise in GST to fifteen per cent – fifty per cent higher than Australia’s rate – will be in New Zealand’s budget.

This twenty per cent rise in the rate of GST will hit small businesses with small margins on their goods and services – small businesses, who are hurting now.

It’s hard to see how higher prices will contribute to a New Zealand growth strategy.

Bank economists warn inflation here could rise by four to five per cent by the end of the year.

For hardworking New Zealanders and Kiwi families, it’s a bad time to be pushing up the cost of living by increasing GST.

Many retailers are indicating that the rise will be well over 2.5 per cent. They will use this as an opportunity to restore margins.

On top of the price increases, there are the increased costs of Government charges, like ACC.

Petrol and power prices are set to rise still further.

Power companies admit that power will continue to rise at a much higher rate than overall inflation, and the Government continues to use power companies as a source of revenue.

Mortgage interest rates will rise repeatedly over the next year as the Reserve Bank puts up the official cash rate.

The government has promised compensation for increased GST through tax cuts, but it seems these will be at two levels.

For most of the population this will be what John Key terms a ‘tax switch’. That will be what the words suggest – paying more tax with one hand through GST; and getting some back in return on the other.

The only real winners will be top income earners whose tax rates will come down from 38 cents in the dollar to 33 cents.

The highest income earners already got the lion’s share from the last round of tax cuts.

A lot of successful and clever people earn big salaries. Working hard and doing well is a good thing.

But what you have to weigh up is whether the person who got a thousand dollar a week pay rise, as a number of CEOs did last year, is the highest priority for a seven hundred dollar a week tax cut this year.

Labour will address the unfairness National is creating.

We have some options, and we will choose the most effective way to help middle and low income families.

The increase in GST will raise around two billion dollars.

There are fairer ways than National’s to transfer that back to the taxpayer.

Instead of using the extra revenue from increasing GST to cut the top tax rate, we could give bigger tax cuts to middle and low income earners. That’s what I am committed to do.

The larger the tax cut National gives to the top, the smaller the amount left over for people on the average wage.

Keeping the top tax rate at 38 cents doesn’t mean more tax – it means most people can pay less tax.

We can make the top tax rate cut in at a much higher income than the $70,000 rate where it applies today.

Labour hasn’t yet ruled out reversing the GST increase.

What I can guarantee is Labour’s package will be fairer than National’s.

For example, cutting the government’s subsidy for polluters will free up some of the two billion dollars a year that subsidy costs.

A comprehensive, low rate GST is an efficient tax.

I have always supported a low rate GST without exemptions.

With the proposed increase in GST, however, New Zealand will have one of the highest levels of consumption taxes as a proportion of GDP in the world.

That undermines the justification for not having exemptions because low and middle income families are being hit harder and harder as the rate of GST goes up.

Other countries, like Australia and Britain, exempt basic food products.

New research by the Wellington School of Medicine shows there are large positive effects from reducing the price of healthy food. People switch consumption from poor health products to healthier options.

With growing obesity among children and increasingly serious health problems in New Zealand, we should not ignore such research.

Each year New Zealanders pay GST of about $175-200 million a year on fresh fruit and vegetables.

That’s about the same amount of money as the government is raising from the increase in tobacco tax.

The tobacco tax may be justified on health grounds for discouraging smoking but it should not be simply a revenue raiser.

If that money were transferred to reducing the cost of basic food items such as vegetables and fruit, it would have a double advantage in health terms and meet equity concerns.

But there are real issues with taking GST off fruit and vegetables. We will need to be convinced that taking GST off these items would work by actually making food cheaper and easing the pressure on family budgets.

We would need to be sure it didn’t create more red tape than it is worth.

National got elected by calling for tax cuts we couldn’t afford.

But having called for tax cuts in Opposition, their record in government will tell a different story:

An increase in Goods and Services Tax.

An increase in property tax, feeding into higher rents.

A tax on innovation, through the axing of the R&D tax credit.

They’ve increased ACC tax.

Last week they increased tobacco tax.

Now they’re putting a new tax on student loans.

And Aucklanders are facing higher rates taxes to pay for the Super City.

There has never been an eighteen month period in New Zealand history when a government has imposed so many new taxes on hardworking Kiwi families.

All this to pay for tax cuts at the top.

National says cutting the top tax rate will help to keep people in New Zealand instead of emigrating.

But the reason talented New Zealanders are emigrating to Australia is not tax.

Australia’s top tax rate is 45 cents in the dollar – much higher than New Zealand’s.

They’re going to Australia for the wages.

Australians earn more than New Zealanders.

And National has no plan to increase wages.

Giving tax cuts to top earners is not an economic plan and it’s not a plan to grow wages.

There needs to be a more credible plan for the economy than a cycle lane.

Today I want to spell out Labour’s thinking.

We need a bold new approach to creating jobs and increasing incomes.

I’ve talked about making the tax system fairer – but just as important are our plans to grow the economy.

Labour will take a different approach

to savings,

to exports

to foreign investment,

to monetary policy, and

to support for research and development, and innovation and skills.

We need to boost exports and earn more overseas.

We need to boost savings so we own more of our own future.

We need a smart economy, based on skills and innovation, so that we can earn the income of countries we like to compare ourselves to.

Last night’s Budget in Australia saw a huge increase in promoting job skills.

In New Zealand, 70,000 young people languish without work, and aren’t in education or training.

We need to boost apprenticeships.

When the building industry recovers, for example, we will again face major skills shortages.

We need to boost, rather than cap, skills training in tertiary institutions.

Boosting exports and savings and creating a smart economy, in Labour’s view, are the key to creating jobs and the incomes we aspire to.

Our recovery needs to be export driven, not consumption driven.

The key to boosting exports is a more supportive monetary policy.

The independence of the Reserve Bank is crucial. But New Zealand is unusual internationally in having a single policy goal for the Reserve Bank of price stability.

The Reserve Bank of Australia, in contrast, is also required to support other objectives: a stable currency; full employment; and the economic prosperity and welfare of the people of Australia.

Labour will require our Reserve Bank here to pursue broader objectives, while retaining our full commitment to price stability, just as Australia is committed to both price stability and broader objectives.

But this alone is not enough to drive the change we need.

We need more than broader objectives; we also need a broader set of tools.

Recently the Reserve Bank has been making greater use of some of its prudential supervision tools to better support monetary policy.

Until now, the rules around banks’ capital requirements have been only weakly linked to risks around loans, and they’re not linked at all to wider economic risks.

An example of those wider risks are the asset bubbles that helped create the global financial crisis.

Monetary policy needs to play its role in not just maintaining price stability, but also in maintaining overall economic stability when there are other risks.

The Reserve Bank needs wider tools, so that we avoid the situation recently where monetary policy designed to dampen house prices simply forced up interest rates and the exchange rate for exporters.

This is a complicated area and Labour will release further information about what we are proposing later this year.

But I will say the Reserve Bank can be given more powers to promote stability in our economy.

I want to make it clear that while we want to support exporters, we won’t allow inflation to run rampant. We know families are struggling enough with prices outstripping wages.

And Labour will not allow some particular ideas that Treasury has floated in the past: Labour will not put a levy on homeowners who are already battling to pay their mortgage. We won’t give the Governor the power to vary GST.

In addition to reforming monetary policy, we also need to boost savings in New Zealand.

This is important for investment. It’s also important so we can own our own future.

Labour has a good track record of building New Zealand’s savings.

Labour created the Super Fund.

Labour created KiwiSaver.

By creating the right incentives to save the response has been spectacular.

Labour will restore contributions to the Cullen Super Fund.

And we will rebuild KiwiSaver and offer new incentives for people to save for their future.

We haven’t ruled out phasing in a universal KiwiSaver program – but that needs further work and discussion.

More of our own savings will help us own more of the profits from goods and services produced here.

But we can’t do it alone.

Foreign investment will continue to be important and encouraged.

In particular we need to attract good greenfield investment that has a net benefit for New Zealand. It can bring factories, jobs, technology and other gains – that’s good investment.

However our overseas investment legislation should not allow loss of control over strategic assets and areas which are natural monopolies within our country.

We need to ensure we maintain New Zealand control over key export areas.

We should not allow cumulative purchases of farms that would allow control over Fonterra, for example, to slip out of New Zealand.

We need solutions that harness our own capital, our own talents and brains and skills, and invest in them so that we do better at earning our way in the world.

The smart economy is the third area, with boosted savings and exports, that will drive more jobs and higher incomes for New Zealand.

We need to promote innovation, skills and adding value to our exports.

If we want to earn more overseas, we have to keep pushing the value of our exports up the value chain.

We haven’t been doing well enough at that.

It is no coincidence that New Zealand’s rate of private sector investment in research and development is the lowest in the developed world. We invest around one third of the OECD average.

The R&D tax credit Labour introduced would have lifted our R&D expenditure to two thirds of the OECD average.

National cancelled it. That has weakened our export performance and made New Zealand poorer.

Yesterday National announced some new R&D steps, but they lack credibility.

Their measures will see just a third of the R&D investment that would have resulted from Labour’s fifteen per cent R&D tax credit.

The Key government dismantled the $700 million Fast Forward fund, which the private sector had agreed to match, creating a $2 billion investment fund.

That would have produced a step-change in added-value research in the primary sector.

A year and half of energy and momentum has already been wasted, when we needed it most. More will be wasted before the latest scheme is up and ready.

Labour will restore incentives for our most innovative companies to move investment into research and development.

We’re also looking at ways to marry up our need for more innovation with our need to save more.

I will talk more about this later this year.

But there is no doubt that New Zealand has the talent to be a smarter economy.

We are in the top five in the world for the number of published papers per scientist.

But what we are not as good at is commercialising that science into products that create higher value for New Zealand.

We export too many raw logs, and not enough high value products from transforming those logs here in New Zealand.

Biofuel and finished wood products are much better value for New Zealand than the export of raw logs.

We need to back the companies and talents we have here.

Take the skilled workers we have at Dunedin’s Hillside and Petone’s Woburn rail workshops, who are already building high quality railway carriages.

National won’t even let them tender to build new rolling stock for KiwiRail.

This could create up to 1300 jobs, growth in GDP of up to $250 million and up to $80 million of tax revenue.

But National is happy to see the work go offshore without even a fight.

Labour backs Kiwi firms because we believe in them and their skilled workers.

And we believe in the creativity happening in our regions.

Here in Nelson there are some good examples.

The Cawthron Institute, the Wakatu Incorporation and Crop and Food Research are collaborating on aquaculture research right here. Some of our MPs visited this morning.

Growing oysters, mussels and paua sets up this region to provide high quality, high value product to markets around the world.

Nelson is also home to some of the great innovators in clean technology.

People here are developing biofuels from algae, improved solar technology and high spec communications technology.

We can export knowledge in these areas faster than we can export commodities.

That is why I am committed to expanding New Zealand’s investment in clean technology.

New Zealand’s future lies in environmental sustainability and economic development going together.

Ill-conceived proposals to rip up New Zealand’s protected conservation estate, with most of the profits going overseas, damages New Zealand’s brand and cannot be part of New Zealand’s future.

Low carbon technology is an enormous opportunity for New Zealand.

It not only helps to reduce climate change – it can be source of new jobs and business opportunities as well.

In 2008 a UN study estimated 2.3 million people were employed in renewable energy around the world.

By 2030, there will be that many employed in wind energy alone; three times as many in solar energy; and potentially five or six times as many in bio-fuel related industry and agriculture.

These are opportunities that businesses in New Zealand are already working in – and the government needs to get in and work alongside them to ensure we harness our share of the opportunities.

By investing in technology and innovation, and contributing to R&D, along with skills for technology industries, New Zealand can secure our piece of this exciting, job-rich growth.

Today I’ve focused on two related topics.

The need to keep the cost of living affordable when National implements its tax switch; and the urgent need to create jobs and increase incomes for New Zealand.

National needs to do more than focus on tax cuts for the highest earners and a tax switch for the rest.

Labour’s commitment will be more money in the pockets of the many, not the few.

And more than that, we have a long term vision for growing our economy, creating jobs and generating a better future for New Zealand.

We will have a focus on the future.

On earning our way by being smarter, not just cheaper.

We will strengthen the incentives to help people save, and to innovate more.

We will increase skill levels and change the way monetary policy and foreign investment rules work for New Zealand.

Over time, our incomes will rise if we invest in New Zealand.

Our incomes will rise if we invest in people.

Labour wants a government focused on jobs, incomes, the cost of living and making a better future for New Zealand.

Labour wants a budget that invests in the future and positions us for what’s best for New Zealand, instead of focusing on photo opportunities.

And that is what we are committed to fighting for.

ENDS

 

Parliamentary colleagues:

Nanaia Mahuta and Sue Moroney

Darren Hughes and Grant Robertson.

 

Ladies and gentlemen

 

Thanks for coming along to join me.

Today I want to talk about some of the economic and social priorities that Labour will be fighting for this year.

We are entering 2010 after a tough year – a year of job losses, and for a lot of working people – a wage freeze.

This year, every major economy – every G20 economy – is out of recession.

New Zealand was fortunate to enter the slow-down with one of the lowest levels of unemployment in the world, and one of the lowest levels of government debt.

New Zealand was well-placed to deal with the global recession, which was much shallower and short-lived than earlier feared.

Westpac has said in its latest commentary that, after past recessions, New Zealand has grown at up to six per cent a year.

A six per cent growth in wages would mean a weekly pay increase of $57 for someone in an average full time job.

The International Monetary Fund yesterday said the global economy is recovering faster than previously anticipated. The world economy will grow at around 3.9 per cent this year.

So New Zealand can also expect strong growth – even without any plan from the government.

That should deliver tens of thousands of new jobs and more money in people’s pockets.

So today I’m here to say the recovery has to benefit hard working New Zealanders and kiwi families.

The benefits of economic recovery and the proposed tax changes must be shared fairly.

2010 needs to be a recovery for the many, not the few.

Labour’s priority is to make sure opportunities are there for people who are prepared to do the work.

Today people who are unemployed don’t physically line up in a dole queue for the unemployment benefit.

But last week we did see unemployed people standing in line, desperate to find work.

Over two days, three and a half thousand people queued in South Auckland for 150 jobs at the new Countdown supermarket.

I challenge anyone who thinks unemployed Kiwis don’t want to work to watch those pictures.

Last year an employer told a meeting that unemployment was a great opportunity to wind back wages and conditions in the workforce.

Many of his colleagues at the meeting agreed.

I hope they all watched those pictures and understood the effects of what he was actually saying.

That’s why dealing with unemployment needs to be a priority for this Government.

In practice, the National Government wants to want to sit on the sidelines doing nothing – hoping that economic recovery will bail them out.

2010 has to be the year for those who, last year, made sacrifices, lost jobs, had their hours reduced, and battled to have something left over for their families at the end of the week.

It can’t be just party on the top floor, while everyone else does it tough.

The National Government must manage New Zealand for all New Zealanders, not just for a privileged elite.

You would have thought John Key yesterday might have delivered something more than 25 cents to people on the minimum wage.

How can you raise and support a family on that sort of income? How can people hope to pay their bills at the end of the week when rent, power and doctors’ fees are going up – and they get a miserable 25 cents an hour extra.

What the lowest paid are getting doesn’t even compensate them for the rise in the cost of living over the past year.

By the time they’ve taken out tax, and put up ACC levies, how much is left?

At the end of the working week, you would be lucky to have $6 – that wouldn’t even cover a packet of Weetbix for the kids.

If you do an honest weeks work, you deserve a living wage.

That’s why Labour will introduce a bill to increase the minimum wage to $15 an hour from next year.

Compare the pay packets of those on the lowest wages with what’s going on at the other end.

The chief executives of New Zealand’s top companies get paid fifty times the minimum wage – and twenty-five times the average workers’ income.

I want everyone to do well.

 But the gap between those at the top and most New Zealanders has grown too large.

If we’re going to tip the balance back towards Kiwis who are doing the hard work; in favour of the many, not the few, then the one place the government could show leadership is the public sector.

Since 1997 state sector chief executive salaries have increased by an average of 90 per cent. That’s over eight per cent a year – or more than twice the rate of inflation. 

Remember – if you’re on the minimum wage this year, you’re getting less than the rate of inflation.

The government is freezing the wages of many of those who clean schools and work in our hospitals.

But there’s a different rule for state sector chiefs.

They get paid about the same as their Australian counterparts, despite the difference in size of their jobs and departments.

Under Labour no public service chief executive should be able to be paid more than the base salary for the Prime Minister. 

Just under four hundred thousand a year should be enough to attract good people who believe public service means just that.

I am not going to cut existing salaries, but we will introduce a cap on new salaries at the top.

Labour says the entire workforce is deserving – not just the CEOs.

We are not alone in coming to this conclusion.  Even the Conservatives in Britain are proposing the same thing. 

The government has to deliver for the many, not the few.

The government can’t keep rewarding the elites and the privileged at the same time as hundreds of thousands of New Zealanders are suffering a drop in real income.

When they’re finding it harder to stretch their budget to cover groceries, power prices, rents, doctors’ fees and ACC levies.

There is another thing that Kiwis have been talking to me about this year.

They don’t mind working hard to make life better for their families, and they don’t mind contributing their share for services like health care and education.

But they do object to also carrying the burden for others who are not pulling their weight.

It’s not right that greedy and reckless individuals here and overseas who caused the financial crisis have escaped responsibility for their actions. 

While many Kiwis lost their life savings, their jobs, or both, the CEOs and directors of shonky finance companies still drive their Porsches, live in their mansions and enjoy their holiday resorts. 

Waiting two and a half years for a response from the SFO to decide whether to prosecute those individuals just isn’t good enough.

Too many people on good incomes avoid and evade paying taxes. It’s not right that some top earners pay a lower percentage of their income in tax than those on the average wage.

Some of them move to live as tax exiles, avoiding their responsibility to the country that gave them an education and a start in life – while still expecting and getting their knighthoods.

People who take from New Zealand but don’t give back are bludgers, wherever they live and whatever their bank balance.

Frankly, I would have given the knighthoods to Heather May and James Tuhoro here in Hamilton, who spent their lives fostering nearly 400 kids and gave them a decent start in life.

We celebrate people getting ahead. But not by ripping off your fellow Kiwis.

And at the other end are those who dishonestly rip off the community for which they are not entitled; who think the rest of us owe them a living, while they make no effort to help themselves.

People like the guy from Kaikoura who spent years on ACC because he supposedly had a bad back, but his neighbours videotaped him doing hard physical work around his own property, including lifting boulders.

He was prosecuted and convicted but hasn’t had to pay the money back.

Like the Christchurch crime family who have been on a sickness benefit continuously since 1984 because they are said to be addicted to cannabis – who claimed a grant to fence the swimming pool at one of several properties they own.

They’ve got the gall to make demands on a community they are essentially ripping off, at the same time that people in genuine need are visiting WINZ offices for the first time in their lives.

We need to crack down on people whose behaviour will be used as an excuse to cut back on social services – services that are necessary for the majority of people who have a genuine need.

Labour will fight all the way to protect social services for those who need our community support because of their illness, unemployment, or adversity.

We will fight for a community where every person has the opportunity to flourish and make the most of their lives.

As Labour develops social policy this year, it will be based on the principle that no child should be held back or disadvantaged in their education or their health care because they come from a poor family.

No child should fail to reach his or her potential because a parent fell on hard times.

So we have a community responsibility to provide the means for every child to prosper.

Everyone who brings a child into this world also has a personal responsibility to ensure that the child is loved and not neglected and abused.

Every child who suffers abuse and neglect represents a human tragedy.

And they also represent huge costs in lost potential and in the social costs of angry, alienated and destructive young people who grow up in those environments.

Social workers I have talked to say that all parents want to do their best for their kids.

But this doesn’t happen where families are dysfunctional and don’t provide their children with what they need.

When parenting is failing, the community has to ensure that children get the care and priority they deserve.

We also need to be there to help out kids when they’re going off the rails, before they fall off forever.

 When I was Minister of Justice, I helped set up a pilot program called Te Hurihanga here in the Waikato.

 It is a place to send young offenders, hold them accountable for their behaviour, and put the work in that will turn them away from a lifetime of serious crime.

 It gets hold of boys who are under seventeen and it gives them a wake up call, but it also teaches them literacy skills, teaches them how to become better men and make better decisions – a kick in the pants, and help to make them better before it’s too late.

It’s not cheap, but the alternative is far more costly and less effective.

Stopping recidivist offenders saves the victim, it saves the police, the justice system and the long-term prison costs.

Hamilton police have described the program as a ‘Godsend.’

But the government has yet to give a commitment to keep it going when the pilot ends this year.

Why would you dither over a successful program like that, but rush ahead with a three strikes policy, which over the next five years will result in locking up only about twelve extra people a year.

The political rhetoric gets headlines, but the policy doesn’t make any real difference to make our community safer.

If we are going to create better opportunities for our young people, we need to tackle not only the kids who are already in trouble.

We also need to work on underachievement in our education system.

This applies to all of our community.

It is disproportionately an issue for Maori and Pasifika communities, with greater numbers of children who will be our students and workers in the future.

That’s why the greatest challenge for Maoridom is not about Foreshore and Seabed and even less about the tino rangatiratanga flag. It is about creating a breakthrough generation in educational achievement and job skills.

As Labour MP Kelvin Davis said recently, the greatest challenge for Maoridom (and for all New Zealanders) is that every Maori child born must be loved, fed and educated so that he or she may go on to be successful, lead and do their best for their families, their community and New Zealand.

Early intervention is vital to ensure all children can grow up in a stable and secure environment where they are loved, and where they are encouraged to get the best education they can.

So too is a change in our education system to tackle the tail of underachieving students.

One in five of our students leave school by age sixteen yet only around 10 per cent of new jobs will be unskilled.

Twenty-five thousand teenagers are not in work, education or training. This is damaging to them and our community.

Four thousand kids are kicked out of school each year. At risk kids without supervision is a social disaster waiting to happen.

If we’re going to cut crime, we need to give these kids a better education and more skills.

Around eighty per cent of those appearing in the Youth Court have left school, or don’t turn up.

Addressing educational under-achievement will be a policy development priority for Labour this year.

Lifting skills helps to improve the performance of our economy and lift incomes across the board.

Upskilling our population is a critical part of achieving lower unemployment and a more productive and wealthier society.

But to make a difference to incomes, and a long-term difference to New Zealand’s economy, we will need to do much more.

The Government is not going to make a difference to New Zealand’s long term future by sitting on the sidelines.

I’ve talked today about the need for hardworking New Zealanders and Kiwi families to be delivered higher incomes. There are clear differences between National and Labour about how to achieve that.

For example – improving investment in research and development will make our economy more productive. National cut Labour’s research and development tax credit and our Fast Forward innovation fund.

Labour believes we need to reform monetary policy to better help the productive sector.

A volatile and often over-valued exchange rate and interest rates that are often among the highest in the developed world indicate that current monetary policy is not serving New Zealand well.

The other big issue under consideration this year is changes to our tax system.

The Tax Working Group has sent options, analysis and recommendations to the Government.

The ball is now in the Government’s court.

Even though National backed out of discussions over the Emissions Trading Bill, Labour is still ready to work with the Government, ready to build consensus around tax changes, ready to make changes that will be sustainable.

The offer is there that we will work with them on tax policy, but it is a conditional offer.

The test Labour will apply to tax proposals is whether they are fair, and help the productive sector.

There is no way, for example, that Labour will agree to a deal that saw hard-pressed families face a rise in living costs through higher GST while the benefits of personal tax cuts went overwhelmingly to those on the highest incomes.

All New Zealanders need to share the benefit of tax changes – not just the privileged few at the top.

Loopholes that allow high income earners to avoid tax have to be closed.

Secondly, the tax system has to stop disadvantaging the productive economy and favouring speculative investment.

Over $200 billion is invested in property – and yet rather than getting a net return, overall the taxpayer subsidises the sector. That can’t be sustained.

Soaring property prices and lack of capital investment in the real economy works against a high-skill, high-wage future for New Zealand.

And if National wants to address the tax problem by cutting public spending, it should start by cutting the $110 billion it’s committed to paying emitters to pollute – but leave alone vital social expenditure like health and education.

Short term savings in those areas means long term costs, human tragedy and a more unfair society.

My speech today has been about the need for the Government to deliver for the many, not the few.

It’s been about how to grow and build a stronger community.

It’s been about the privileged elite carrying their fair share of the burden, just like hundreds of thousands  of hard working kiwis who are struggling to get ahead.

We need a strong economy.

We also need a strong community, committed to ensuring all New Zealanders get a good start and a fair go in life.

In 2010, with economic recovery, the Government has the opportunity to deliver both.

And Labour’s priority will be standing alongside working New Zealanders to ensure that they get a fair share and the opportunity for their families to get ahead.

Ends

 

New Zealand is at a cross-roads.

We can celebrate the rich tapestry of our heritage and use it to move forwards as a nation; or re-open wounds and divisions where there can be healing.

I want to talk about some of these issues today, and the choices that the Government is making this week, and in weeks ahead.

It will make choices in the global community of nations about climate change. It will make choices about Treaty settlements relating to forestry and about the foreshore and seabed.

I believe that the Treaty settlement process is vitally necessary to address the real grievances of the past and to remedy them so we can move forward as a country.  But should that process be manipulated in shabby political deals between National and the Maori Party, what we have achieved and still need to achieve can be fundamentally damaged.

We can choose our future based on principle and with the interests of all New Zealanders at heart.

Or we can have a country where one New Zealander is turned against another, Maori against Pakeha, in a way that Labour strongly rejects.

We can make a promise to young New Zealanders that their lives will be as rewarding as they can achieve; or we can burden them with the costs of today’s decisions, and hold them back when we should ask for so much more.

We can have a New Zealand that respects our heritage, and finds solutions in the fair way Kiwis always try to.

We can recognise that we have all worked to build our country.

Over generations, Maori and Pakeha have lived together, worked together, and played sport together.  We have married one another and raised our children together.

Since the first New Zealanders died on the battlefields of World War One, we have fought alongside each other for the future of our nation and the values which we together uphold.

I’m a former defence minister, and I take considerable pride that our soldiers, in their own words, ‘share a bond no bullet can shatter, no bayonet can pierce.’

When you contemplate this history, it is no wonder that so many, both Maori and Pakeha New Zealanders, were deeply offended by the comments made by Hone Harawira.

The true offence was that by abusing one racial group in New Zealand he thought he could justify his side trip off to Paris, when his expenses were being paid by the taxpayer to fulfil his duties at the European Parliament.

Nearly everyone who spoke to me about this episode mentioned their unease that this controversy takes race relations backwards.

In times when our community is challenged, we look to our leaders to articulate our hurts and our hearts.

So the Prime Minister had a choice.

He could have condemned the comments and showed leadership.

We cannot reconcile New Zealanders and make progress together in an environment where hatefulness can flourish, wherever it comes from.

But he made a different choice. A cynical choice.

The prime minister decided shabby, short-term political deals suit him more.

So we saw the payback this week when National, with the help of the Maori Party, legislated a $110 billion subsidy for big polluters in the emissions trading scheme they have adopted.

New Zealand must be part of the global solution to climate change. There is no dispute between parties over that.

The issue is who pays.

Labour says: Big polluters should pay.

The government says Kiwi families will pay.

It is loading every hardworking family with a bill of $92,000 in today’s dollars.

This is a decision that loads enormous costs on to future generations of taxpayers.  It will cost our children and grandchildren dearly.

Polluters should pay the cost of their pollution because we want them to change their behaviour.

When the government subsidises them, they will keep on polluting.

When the people who cause pollution have to pay for it, they will change their ways and choose better and cleaner solutions because they will be cheaper.

To hit the taxpayer with a bill like this, the National Government had to do a cynical deal with the Maori Party.

They re-opened Treaty settlements that were made full and final in the nineties.

They did this because some iwi who got forests in the nineties say their forests won’t be worth as much now.

But every other forest owner is in the same position.

The iwi negotiators say they didn’t know about the chance of an emissions trading scheme when they signed their deal, and they asked if the Crown breached its obligations by not warning that a future government might adopt an emissions trading scheme.

Last year the Labour-led government took their question seriously.

No one wants settlements soured by bad faith.

Crown Law retained a QC to consider the issue. Her report came back and said:  In the nineties, no one knew an emissions trading scheme would be adopted, or what it would look like.

So she concluded: ‘there is no evidence of a breach of the Crown’s obligations’.

The Government has ignored that advice.

Instead, it’s just done a deal to advantage some large Maori corporates, which other forestry companies do not get from the government, which will give the Maori corporates an estimated $1.75 billion.

Let’s be clear. This deal will not benefit Maori as a whole.  The rebellion within the Maori Party membership who have criticised their parliamentarians recognizes this – that the average taxpayer, Maori and Pakeha, will be paying this bill and it will be huge.

They and the rest of us know this will cost our children dearly.  And the pay-off, to polluting businesses, isn’t compensation for that.

This shabby deal, agreed to in secret and not subject to examination by the Select Committee, was about buying Maori Party support for National’s shambles of an ETS.

My colleague Shane Jones says it is not so much pork barrel politics as ‘pork bone’ politics.

Some corporates saw the chance for a handout and naturally they’ve taken it.

Some of these are very large incorporations, and they are very sophisticated businesspeople.

And they’re hiding behind some of the poorest in the country who won’t benefit from this at all.

If they see the chance of getting hundreds of millions of dollars from the taxpayer, they will take it.

Any other business would do the same.  I don’t blame them.  I blame the National Party that was prepared to use the taxpayer’s money to buy off the Maori Party with a deal which doesn’t stack up in terms of principle.

I reject strongly the allegation the Prime Minister made that anyone who has concerns about this deal is playing the race card.

Race is a red herring in this deal. It’s about subsidies for big corporations, and I am not going to shy away from saying so.

I opposed a special deal for Rio Tinto, just as I oppose the special deal for a Ngai Tahu corporation.

Just as we as taxpayers had to pay for Rob Muldoon’s supplementary minimum prices to farmers that many of you here will remember – so someone has to pay for the subsidies of today.

The subsidies aren’t free – ordinary New Zealanders have to pay for them – and in this case for generations to come.

The burden of paying will fall disproportionately on people less able to pay – hard working Maori and Pakeha taxpayers alike.

This is not a time to put at risk the concept of full and final settlements.

You see, when we considered this issue last year, Cabinet decided not to go down this route.

We looked at it and decided we would have created a permanent class of ‘post-Treaty asset’ – Assets that were once part of a Treaty settlement would forever be eligible for compensation if they were ever affected by adverse decisions by government.

If the government ever changed the rules relating to forestry, or tax law, or the exchange rate, here is now a precedent for having to compensate the owners of an asset that had once been part of a Treaty settlement.

That’s a bad principle. 

Full and final settlement would become impossible.

And as Shane Jones pointed out this week, by allowing some select corporations to top up their settlements, the government is keeping the grievance going.

If you can never settle Treaty grievances, there can never be healing, and you keep alive a grievance from one age into another.

We must address grievance, but we must not sustain it.

The promise I want to make to young Maori New Zealanders is that we will work as hard as we can to help ensure that the next generation of leaders will be a breakthrough generation.

They understand tradition. They understand that the future can be changed – by education and by opportunity.

And therefore we should make sure everyone gets a fair go.

Everyone should be supported to ensure they have the opportunity to fulfil their potential, so that the breakthrough generation can open any door, achieve any ambition, triumph in any test.

Imagine if the government decided not to spend billions of dollars in coming years on subsidies for polluters.

Imagine if we spent that money invested in this subsidy instead on the achievement and success of all young New Zealanders, and in particular lifting the level of educational success of those who are underachieving.

Imagine what their parents could do if, instead of paying taxes to subsidise climate changing gases, they could take the pressure off their own family budgets.

I dream of families, Maori and Pakeha, whose taxes are not spent on subsidies for big polluters, but instead invested in science and education. And a young scientist in this family gets a better start, and gets the backing to find a job in a laboratory where she or he develops the breakthrough technology that reduces emissions from our agriculture.

I dream of young entrepreneurs, Maori and Pakeha, who develop the exports of clean technology to the world, and create hundreds of jobs here in New Zealand.

I can think of many better uses for our money than giving it to big polluters.

This is about what kind of country we want to be.

Proud, forward-looking and hopeful; or grieving, backward-looking, short-term and ashamed.

I want us to be the kind of country where we take these issues seriously, instead of looking for quick fixes.

Where we take the principled option, not the cynical, short-term one.

That’s my approach to the foreshore and seabed, too.

That’s another issue that is being cynically re-opened for politics, and not for principle.

The National Government has indicated it will repeal the foreshore and seabed law.

It won’t say when we’ll start hearing the details of what it plans to replace the law.

It won’t disclose the deal that has been reached or is being considered.

It won’t say how it is going to reconcile its arrangement with the Maori Party and its own National Party MPs, who in 2003 criticised Labour for giving too much away.

The foreshore and seabed became an incredibly divisive issue, with big concerns expressed from both sides.

New Zealanders’ fears were whipped up in an unprincipled way, with National running a “Save Our Beaches” website.  It suggested New Zealanders were about to lose access to beaches around New Zealand.

The National Party is trying to erase that part of its history.

Back in 2004, Labour’s process on dealing with the issue, in a different environment, could have been better.

But for all the criticism I have heard, most people accept that the current foreshore and seabed rules aren’t broken and they’re a good foundation for moving forward. They believe its good legislation for all New Zealanders.

Re-opening the foreshore and seabed issues by repealing the legislation might be just a cynical move by National and the Maori Party to create the perception of change.

In reality it may be no more than simply renaming the existing Act, with pretty much the existing arrangements.

It’s hard to see why the country should be put through all the grief just to put a new brand on law that’s working.

Or it might be more than that, in which case the Government should tell us.

Access to the beaches is a birthright for New Zealanders, Maori and Pakeha alike, and must be preserved.

Equally, we accept that where traditional Maori usage and rights exist they should be respected.

New Zealanders also respect the guardianship role Maori have in many parts of the country, and accept protection of sacred sites and customary activity.

Local iwi should be consulted before development occurs on the foreshore, and their traditional rights respected.

That is provided for under current legislation, as the Ngati Porou agreement under Labour has demonstrated.

Ngati Porou wants that agreement honoured by the current government. If that can occur through negotiation between iwi and the Crown, what are they fixing? The right to achieve a similar outcome in the courts? 

Ngati Porou successfully negotiated an agreement with the Crown under the foreshore and seabed law.

It recognises there is a special relationship, and the Crown commits to consultation with Ngati Porou at all levels of Government.

The agreement recognises sacred sites and rights to undertake customary activities.

The settlement maintains Crown Ownership but provides full respect for Maori customary rights.

It would be totally irresponsible for National, on the basis of a political deal, to repeal the legislation and leave uncertainty and the opportunity for disputes to fester unresolved.

If the foreshore and seabed issue is left for the courts to resolve, we could be tied up in knots for years.

The government has a choice between sticking with the status quo, which guarantees access but allows for agreements around customary rights, and the alternative of never ending court battles.

Labour believes in access for all New Zealanders, with respect for custom and heritage.

National wants to reopen the Foreshore and Seabed Act.  Labour asks: What isn’t working? Will reopening court action help or would it see wounds fester?

This is about the kind of nation we want to be.

A respectful, forward-looking country or one stuck in shabby, short-term deals that divide New Zealanders, and set one against another.

We can be better than that.

We can be a country of opportunity and fairness for everyone.

There is so much New Zealanders have to be proud of, so much we have to achieve together.

We can be proud of the bi-cultural foundation of our nation and the multicultural nature of our community today.

 It is part of our nationhood and we should celebrate the overall tolerance and mutual respect on which good relations between our communities are based.

New Zealanders can draw on our heritage to enrich our community – or to find cause for division and to impose that on generations to come.

What we are seeing are decisions that take the wrong choice.

What is missing is leadership that brings New Zealanders together.

And we have a right to expect more.

Secretary Peter Conway

Parliamentary Colleagues, Trevor Mallard, Darien Fenton, and Carol Beaumont, Delegates.

Thank you for inviting me to address the conference today, for my first opportunity to speak to you formally as leader of the Labour Party.

Can I start by placing on record my appreciation for the warm working relationship I have enjoyed with leaders of the CTU.

I welcome the big contribution union members make to our party and the strength we gain from organised labour working alongside the Labour Party to build a better and fairer New Zealand.

New Zealand made great gains for working people under the last government

Unemployment fell to record low levels with the creation of 350,000 new jobs, and workplaces put a new emphasis on skills, instead of trying to compete by driving wages down. We rebuilt the apprenticeship and skill training system.

Fair industrial laws led to better pay and conditions for many New Zealanders.

The minimum wage rose nine times, and more than a hundred thousand New Zealanders benefitted as a result.

Hundreds of thousands benefitted from Working for Families, which John Key once described as ‘communism by stealth’.

We set up a KiwiSaver scheme, to extend a workplace retirement savings scheme to all working people.

We introduced 14 weeks paid parental leave, and a minimum of four weeks’ annual leave for all workers.

This was a time of sustained gains for working New Zealanders, and it shows how hardworking families benefitted from successful organisation by the broad labour movement.

Helen Kelly, in her tribute to Helen Clark, noted that although the CTU and the Labour-led government did not agree on every issue, our debate was usually about the pace of change rather than the direction.

But, delegates, today we are meeting in a different climate.

We are meeting in the shadow of lack of job security and huge pressure on family budgets.

This year jobs have been lost at a rate of around 2,000 a week. Unemployment has nearly doubled to around 6%.

Working people who are struggling to pay the bills and have something left over at the end of the week are being told to make cuts and sacrifices.

The sacrifices workers are being called upon to make however are one-sided. Chief Executives continue to have their big salaries boosted by large bonuses, even as company profits declined and tax cuts legislated last December saw nearly a third of extra money go just to the top 3% of income earners while families earning under $40,000 got nothing.

We have seen an attack on workplace rights with workers denied any protection against unfair dismissal in the first 90 days of their employment.

This is a time when the labour movement is needed more than ever before to stand alongside working New Zealanders.

New Zealand entered this year under the threat of an international recession which could have become a depression.

While many developed countries were heavily affected, New Zealand was lucky to be able to confront the storm from a base of having low unemployment and one of the strongest sets of public accounts in the world. Thanks to good economic management, Labour reduced our net public debt to zero last year. It was a wise precautionary move, allowing the current government to borrow to maintain activity during the recession.

Today, the global crisis has eased.

Our trading partners are in recovery.

Australia is already growing again and our exports to China over the last year have gone up by over 60% as that country’s economy has continued to grow.

The Prime Minister said here yesterday, New Zealand is seeing the back of the recession.

I agree with that. The international economy overall is improving and carrying us with it.

But as the economy comes right, working people are still not getting ahead – even though they are working harder and harder.

For Maori and Pacific workers, weekly earnings have fallen in the last year. Down from an average of $398 a week for Maori in June last year, to $392.

And for Pasifika New Zealanders, average incomes are down from $375 a week to $359.

Incomes are falling because hours are being cut and jobs are being lost.

24 thousand more people were thrown out of work in the last three months.

Hardworking New Zealanders who are losing their jobs too often get no support. Take the forecourt attendant here in Wellington who was made redundant this year. When he lost his job, the family income halved. But the mortgage payments didn’t halve. They stayed the same. His wife has a job as a cleaner, working sixty hours a week. And because she works hard in a low income job, that family doesn’t get any help.

And that’s why I support the Bill put forward by Darien Fenton to ensure workers in all jobs get redundancy payments.

New Zealand is one of the few developed countries where there is no legislative requirement for redundancy payments and in these difficult times there is a real need for it.

The government can’t sit on the sidelines.

The number of long-term unemployed is going up fast – 22-thousand New Zealanders are long term unemployed now. That’s double a year ago.

Remember when National said they were going to make sure New Zealand catches up to Australia? One area where they have kept their promise is unemployment. New Zealand unemployment has risen so quickly, it’s gone past Australia’s unemployment levels.

When Labour delivered the lowest level of unemployment in a generation, we reduced the welfare rolls by tens of thousands.

We delivered opportunity and a better future for tens of thousands of young New Zealanders.

Today, jobs are going and incomes are down. But the day to day grocery bill for those families hasn’t been falling.

Your monthly power bill for example might be as much as four hundred dollars.

It’s up by 4.5 percent compared to a year ago.

This was a winter when working New Zealanders needed a government to step in and tell the publicly-owned power companies to keep prices down. Families don’t have the cash.

The Government did the opposite – the Minister of SOEs demanded bigger dividends from power companies this year two of which alone in recent months passed across more than half a billion dollars to the Government. That’s a form of taxation, but a particularly regressive taxation falling most heavily on those with kids, who are often low income.

Delegates, Labour should have acted in this area in Government and didn’t We will not repeat that mistake. My commitment as leader of the Labour Party is that Labour will not allow electricity companies to price gouge We will not demand excessive dividends coming back into state coffers above what is needed for investment in new generation. And we will stand resolutely against National’s plan to privatise the power companies.

That would just see profits rise further and go into the pockets of private and overseas owners.

Food prices went up 5.4 percent in the last year.

That means families on static incomes have to make a choice between 5.4 percent less food on the table, or else less of something.

Budgets are under strain.

When it’s a struggle to pay bills and have something left over at the end of the week, New Zealanders are right to expect better times ahead.

On a personal note, I want to say that it’s a privilege to lead the Labour Party, and to have the opportunity that provides to make a difference for hard working New Zealanders.

I joined the Labour Party the same year I first joined a union, when I left school and got a job in a freezing works, where I did seven seasons.

I learned a lot there:

* That a boy from Mt Roskill and South Auckland could seize opportunities

* That the cornerstone of the labour movement is the hopes and aspirations of ordinary people.

* That working hard is necessary to achieve what you wanted to in life

* And that the guys working on the chain beside me were the people paying the taxes that paid for my education and other people’s education.

The Labour Party I lead is a party that will fight for a fair go for everyone.

The party for people who aspire to a better life for themselves and their families.

And the party for people who rely on hard work and fair pay to make ends meet.

And it’s a party that supports strong social services. This week, parliament was presented a petition signed by more than 53-thousand people asking the government not to cut night classes.

The government and its cheerleaders disparage those classes as hobby groups.

But I think of the woman I met in Auckland who had dropped out of school aged fourteen. For her, going back to school to do night classes helped turn her life around.

Today she has a degree and a top job and she’s making a huge contribution to New Zealand as the head of Onehunga High’s renowned Business School.

These are the people National is throwing barriers in front of by cutting night classes, and if National sneers at those men and women and their ambition for a better future.it is out of touch.

The lights will be off at our night schools next year with this government destroying a century long tradition of learning for life – life skills like parenting, vocational and ESOL skills, training community volunteers and simply allowing people to improve their quality and enjoyment of life.

Skills are necessary to get people into jobs, and for jobs which are well paid.

We don’t agree with National that the best thing to do is sit on the sidelines and just ‘blunt the sharp edges of the recession’, as they put it.

For full employment and a high-wage economy, we need to increase skill-training opportunities.

We need scientists and researchers. And we need well-trained and skilled tradespeople.

My two sons did apprenticeships. Now they have jobs, one as an electrician, the other a refrigeration engineer … along with eighteen thousand other young New Zealanders who finished their Modern Apprenticeships before we left office.

That’s a core part of the future for New Zealand.

Skills will drive our productivity higher.

We need to lift productivity in our economy, and we need to ensure productive gains are enjoyed by the working men and women who create them.

I note the facts on productivity that the CTU has published. These show that since 1980, labour productivity in New Zealand grew by 82 percent.

But average ordinary time real wages in that period have grown by only 18%.

If real wages had grown as fast as workers’ productivity grew, then the average hourly wage would be $38.60.

We need to continue to grow our productive economy, and we need to improve productivity while making sure working people enjoy a fair share for their labour.

I strongly reject the weakening of ACC that the National Government is introducing.

I heard Tariana Turia say on Sunday that she was “very concerned” about privatising the ACC Work Account. She said privatising the Employer’s Account would see ACC costs “go up exorbitantly.” She’s right about that!

As Minister of Disabilities she said she would be “very opposed” to plans to slash spending for badly injured New Zealanders.

But three days later she said that the Maori Party would support the introduction of the bill that will cut entitlements and open up ACC to privatization.

Privatisation, or opening it up to competition as the Prime Minister describes it, will simply result in hundreds of millions of dollars in profits going to insurance companies. That will be paid for by higher costs imposed on workers and less money available for injury prevention, income support and rehabilitation.

The only ones who will benefit from privatisation are the big Australian insurance companies who will get the business. Ordinary Kiwis will pay more and get less.

Labour will fight the government’s cuts to ACC.

We will fight the attempts to privatise ACC.

We will fight massively increased levies for working people.

And I know we will be together in this fight.

We do need to look at the problem of rising costs, as medical costs go up and new medical technology allows seriously injured people to survive.

But pushing out fully-funding ACC, expanding rather than cutting injury prevention programmes as National is doing, better rehabilitation and stopping rorts are all better alternatives to cutting assistance to New Zealanders who genuinely need it, and forcing up costs higher than they need to be.

As a biker I am outraged that motorcyclists who are saving the country petrol and congestion riding to work now face a $750 bill for registering a bike, when two thirds of accidents involving bikes are caused by cars.

The government says that’s fair, it’s user pays. But where does that end?

If you are going to move to user pays, does that mean that next, kids and adults playing sport will be charged more because of injury risk and should stay at home and watch TV instead?

In Australia there are families whose kids aren’t allowed to play sport any more because they can’t afford the private health insurance they need before they run on the field.

If you think that’s a good policy – ask yourself what the All Blacks, the Ferns or the Kiwis would look like if kids from poor families were stopped from playing rugby, netball and league.

Delegates, Labour will work with you for the interests of working New Zealanders, for jobs, a good start in life for all kids, for access to education so people can achieve their potential, for access to healthcare, regardless of means.

Our commitment is for a New Zealand where there is opportunity for families striving to achieve their dreams to make tomorrow better than today.

Can I finally take the opportunity to place on record the Labour Party’s deep appreciation to the CTU and its affiliates for your support for Labour at the elections last year.

While we lost the election, the political cycle will turn. We are determined to win back the Treasury benches to advance the interests of working New Zealanders.

By both wings of the Labour movement working together, we can enhance our chance of achieving that.

Thank you again for the invitation to be here.

ENDS