Boosting the Economy - Rt Hon John Key

19 Comments
13 August 2010
Boosting the Economy

In this issue of Key Notes, I talk about what we're doing to boost the economy, lift achievement in our schools, and improve the delivery of health care. I also cover my trip to Vanuatu for the Pacific Islands Forum, the Welfare Working Group's newly released issue paper and farewelling Lieutenant Tim O'Donnell.

BOOSTING THE ECONOMY

This week I announced my pilot business scholarship scheme. Under the $1 million scheme, people can apply for up to $110,000 to study at an internationally-recognised business school. This will help Kiwi businesses grow and compete internationally.

National wants to help businesses succeed. We were elected to put New Zealand on a path to higher economic growth, and that is what we are doing. We have a comprehensive economic plan with six drivers, and we have been very busy rolling out the policies in this plan.

Our six drivers of economic growth are:

A growth enhancing tax system
Better, smarter public services
Lifting education and skills
Boosting productive infrastructure
Better business innovation and an ambitious trade agenda
Cutting red tape and regulations

Read a one-page summary of our six-point economic growth plan here.

LIFTING ACHIEVEMENT IN OUR SCHOOLS

Education is a critical part of National's plan to secure a brighter future for New Zealand. We want all children to get the skills they need to succeed.

That's why we introduced National Standards this year. The Standards show what Year 1 to 8 children should be able to achieve in reading, writing, and maths, and by when. They will help identify children who are falling behind. Parents will receive plain language reports on their child's progress twice a year.

Last week we announced our next steps to help those children who are falling behind. This includes investing $36 million over four years for extra resources and programmes, and moving more Ministry of Education resources to the frontline.

Read a one-page summary on National Standards here.

Find out what the reading and writing National Standards are for each year level here.

Find out what the mathematics National Standards are for each year level here.

PUTTING PATIENTS FIRST

National is putting patients first and delivering better, sooner, more convenient health care for all New Zealanders. Before the 2008 election we promised to spend more money on medicines and we have delivered on our promise.

We have boosted funding for medicines by $60 million so far, and last week Health Minister Tony Ryall announced that 250,000 more Kiwis are getting the government-subsidised medicines they need.

WORKING WITH THE PACIFIC

Last week I was in Vanuatu for the Pacific Islands Forum Leaders' Meeting. The meeting was a good chance to talk about how we can work together on issues such as economic development, fisheries, trade, and climate change.

The Government is strongly committed to the Pacific region and playing our part in addressing the challenges we all face. I look forward to hosting the next forum in Auckland in September 2011.

IMPROVING OUR WELFARE SYSTEM

Social Development Minister Paula Bennett set up an independent group this year to look at our welfare system. On Monday the Welfare Working Group released its issues paper, and it will release a final report by the end of the year.

I have a strong commitment to the safety net that welfare provides for those in genuine need. But I also believe those who can work, should.

National wants an affordable and sustainable welfare system that supports the most vulnerable and is fair to those who use it and those who pay for it. We also need a system that supports people into work.

We have introduced legislation to help make that happen. Read a one-page summary of our Future Focus reforms here.

I look forward to seeing what the Welfare Working Group comes up with in its final report later this year.

FAREWELLING A BRAVE SOLDIER

This week New Zealanders paid tribute to Lieutenant Tim O'Donnell, who died while serving with the Provincial Reconstruction Team in Bamyan, Afghanistan. Tim exemplified our Defence Force's values of courage, commitment, comradeship, and integrity. His service was invaluable. My thoughts are with his family and friends.

FROM MY DIARY

Yesterday I spent the day in the Rangitikei electorate with local MP Simon Power and today I've been in Hawke's Bay. On Sunday I'll be in Auckland's Aotea Square for the Indian Independence Day celebration. I hope to see you there if you're nearby.

Best wishes,

John Key
Prime Minister

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#1 - Bruce Simpson said:
2010-08-13 17:59 - (Reply)

The business scholarship offer sounds like a great one but I fear that it could result in simply hiking the brain drain we already suffer from. Unless we address the issues that are encouraging our best, brightest and most qualified people to leave for greener pastures, there's little point in having taxpayers subsidise their education in the way these scholarships would -- is there? If we were to create and foster an economic environment that encouraged more angel and venture capital to flow into the startups that so many bright Kiwis would like to start, I'm sure that would be a far more effective way to grow our economy. As things stand, our clever Kiwis are quite literally forced to leave the country if they want to best realise their dreams and exploit their full potential. One good way to help shift capital from our overpriced property market and into productive enterprises such as hi-tech startups is to get serious about the tax treatment of R&D. Why is this such a "no-go" zone for the government? It's a zero-risk way to promote investment in businesses that would not only create but help grow the vibrant knowledge economy we were promised a decade ago. I'd like to think that JK actually reads the comments that are made -- perhaps he could take a moment to answer this question. Anyone else agree?

#2 - Ross Eion Tought said:
2010-08-13 19:08 - (Reply)

John I get so fed up with N.Z. saying they are going to boost this and kick that.., for $1 million. We dabble and muck around like amateurs! Why don't we do like South Korea did back in the 1990's - invest heavily in something we are capable of on a commercial level; and that means don't sell it off when we think we can make a few bucks for the back pocket! Something like Ship-building in Whangarei, Let's get the timber industry back into this country.., including the processing of the timber. The growing, killing and processing of meat has largely been sold off because some crap politician fancied a few bucks in the back pocket and a pat on the back for five minutes results, to mention a few. How About It, John?

#2.1 - Bruce Simpson said:
2010-08-13 20:08 - (Reply)

You are right Ross, we do need something more than just polishing the knobs and buffing the dials of the economy if we're going to see some real move to close the gaps with our trading partners (Australia for instance). One idea I've promoted is the creation of an electric vehicle industry in NZ. This would fit very nicely with the "clean green" image we like to promote while also reducing our reliance on imported transport fuels and thus the cost of our liabilities under the Kyoto agreement. NZ has some of the best people in the world when it comes to hi-tech composites (which would be used to build the bodies) and we've also got some pretty savvy electrical/electronic engineers too. Such an industry would create jobs, help balance the trade ledger and make the country a better place to live. If we're trying to sell NZ to tourists in a time of concern about climate change, what better way to seal the deal than offer them a 100% green electric rental car to drive around in while they're here? And think of how much less polluted cities like Auckland and Christchurch would be during the "morning commute" if EVs were readily available at a reasonable price. If NZ is going to improve its position it has to do so by taking bold steps, not just standing back and saying "she'll be right" or "patting at it".

#3 - John Knight 2010-08-13 19:20 - (Reply)

Dear John Boosting the economy? What on earth is going on in regard to Alan Hubbard? It makes your government look absurd, and seem to be condoning a bunch of bullies. Put the rotweillers onto the real crooks - not some well-meaning and highly respected gentleman down here in the south. Cheers, John

#3.1 - Wal Gordon 2010-08-14 05:59 - (Reply)

Well said John. They are doing the same to the plumbing industry. Its easier to pick on the honest people than to chase to dishonest. This government dumps on some of the most productive people because they generally don't fight back. They have their head down and backside up keeping the country running. •Better, smarter public services. In the plumbing industry you have a Government appointed Board who break Administrative law and nothing is done about it. •Lifting education and skills. You have a government appointed board who are costing jobs and putting up barriers to entry into the industry for apprentices. The cost of 1,0000 apprentices annually is spent on licensing. •Boosting productive infrastructure. This may happen as the number of people in NZ drop due to being dispondent the infrastructure may get better with the lower numbers •Better business innovation and an ambitious trade agenda. If an industry is continually fighting with the government due to its lack of leadership and mutton policies there will be no innovation from that industry. •Cutting red tape and regulations. The plumbing industry is a prime example of this not happening. The Governments actions are a push towards self certification so they can wash their hands of all responsibility in the construction and related industry. Perhaps builders, plumbers gasfitters, drainlayers and electricians, all 75,000 of them and other related trades will speak next election.

#4 - jason Hitchens said:
2010-08-13 19:21 - (Reply)

Good to see a focused plan on how to get this country moving. Pity there are people around that would slam what you do for the sake of disagreeing. all we need to see now is a self sufficient prison system with hard labour. Keep up the good work.

#5 - Jan Pirrie 2010-08-13 19:30 - (Reply)

An informative page. I agree with your comments on the importance of education, I just hope you will be the first leader in the developed world to get the teacher's unions to agree!

#6 - Sonja Carlile 2010-08-13 19:34 - (Reply)

Thanks for doing everything you have done for New Zealand. I would like to make a suggestion to you about the accidents on our roads. Lowering the speed limits on all the roads will not only cut down on fatal accidents, but also save on fuel consumption. I have lived overseas and it remarkable how the accident rate went down. Kindest regards, Sonja

#7 - Murray Lauer 2010-08-13 23:44 - (Reply)

The number and range of issues, as above and the many others you have previously noted, obviously leaves' you with very little spare time. However I think you should put a little time aside to respond to some of the rubbish the opposition continually dredge up. This latest circular re the GST increase is a case in point. It so blatantly misrepresents the issues involved as to be nothing more than a deliberate attack on the morality of those currently charged with the governance of the country. Unfortunately there are any number who will, willy-nilly believe such rubbish.

#8 - Mrs Pat Bowen 2010-08-14 10:24 - (Reply)

Yes, I agreee with lifting National Standards in Reading Writing and Maths as the current standard is deplorable. More classroom learning and less socialisation. That is the role of Parents or out of school time. Too many children ARE falling through the cracks and add to this dyslexic,autistic and Asperges condition dhildren. Pat Bowen, Bay of Plenty.

#9 - Jim 2010-08-14 10:54 - (Reply)

Thanks for your hard work. These are good plans.

#10 - Harmen Van Weerden 2010-08-14 13:35 - (Reply)

I hope the government has the tenaciousness to look after this country, not sell off the silverware and create jobs for NZ'ers through to exporting completed goods and services. Good on you Paula for addressing the issues of long term social welfare dependence - this is long over due.

#11 - Jas 2010-08-14 18:12 - (Reply)

You John are the man. At last, me and my wife have positive vibes about our nation and future. Jas

#12 - Peter Bacchus 2010-08-15 16:28 - (Reply)

Hello John, When one wishes to lift economic performance one needs to sell what others are prepared to pay a premium for. To things come to mind and there may be others, one is tourism in a clean green country as our brand suggests people might find here. Issues to watch out for are seeing that we live up to our clean green and 100% Pure N.Z. brands and that people can purchase top quality organic meals if they wish to puchase2cpq them. People traveling to the Coromandel region have expressed these wishes. We are known for our agricultural produce. We should be selling as much ready to use as we can and I note that that which is sold under organic brands sells at a premium that is sometimes significant. Such produce also fits the above mentioned branding well. I would like to suggest that the educational package help with this aspect as many farmers I speak with suggest that their net profits are at least double those of "conventional" farmers with similar enterprises on similar land. If I can be of further help I will be more than happy to assist. With best wishes, Peter.

#13 - Mike The Engineer 2010-08-16 10:07 - (Reply)

Hi John and all, although our economy seems to be purely agricultural in its orientation, there are lots of good electronics and software engineers who are risk adverse. Its all very well spending money on education and health, but these are bottomless pits as regards spending and don't create real jobs and therefore real tax payers. Only designing new products creates real opportunity. I propose micro-loans to help fresh young engineers from university to get their ideas off the ground and then connect them to people on the business management program for mentorship. I'd like to see educational establishments able to fund engineers to buy software and hardware development kits so that the young engineer is not burdened with both the startup costs and his bloated student loan. The last thing we want is to create any barriers to young, creative minds. Even if one in ten of the microloans produces a good business, it will have been money well spent. The university could even take a small stake in the business which would in turn fund further micro-loans. Even a $500 development kit is a barrier to an endebted student. Point 2: Why do we have so many people paid to do nothing on the dole when we have no effective police force? Lets select candidates with no criminal record and make them police wardens. Give them a very basic training and let them be the eyes and ears of the main police force. Give them a uniform and this will deter crime. Its not the punishment, but the certainty of being caught that deters as Robert Peel said many years ago and its still true today. We have almost the certainty of not being caught right now!

#13.1 - Bruce Simpson said:
2010-08-16 10:47 - (Reply)

Mike your points are well taken but I don't think microloans are the answer. It's not the government's job to provide venture or seed capital but it *is* their job to create an environment where that capital is readily available from the private sector -- which is where successive NZ governments have failed abysmally. The whole concept of grants and loans from government is counterproductive. I have winced many times when I see a competitor of mine getting a government grant (taxpayers money) to develop a product which competes with the products I develop and sell. Why are *my* taxes being given to my competitor by the government? That makes no sense and is very much anti-competitive. Loans are no different. At the risk of harping.. the government should be addressing NZ's appalling treatment of R&D taxation in a way that makes this country and its innovative startups attractive to investors. Right now those who are investing money in R&D in NZ are at a huge disadvantage when compared to those doing the same in other countries -- hence seed and venture capital are very hard to come by. Why invest money in NZ when investing it offshore will yield much higher tax-paid gains? Why invest money in NZ-startups when buying a new rental property will yield much higher tax-paid gains? However it appears that no NZ government in recent times has the testicular fortitude required to really get in behind the creation of bold new hi-tech industries in this country. What a shame, what a loss to the country as our best and brightest get a taxi from the capping ceremony to the international airport :-(

#14 - John Revill 2010-08-16 14:28 - (Reply)

Thanks John for another great insite to your Government's programme. I am inspired and hopeful for the future of New Zealand

#15 - david taylor 2010-08-17 13:25 - (Reply)

I comment on what is not in this news letter. Why are we not reducing the Alcohol level of drivers? We, as a pary, promised tougher measures across the board. Education. I taught in the secondary sector for 23 years. the present English curriculum is conceptually confused and confusing. Marking, in this subject, is subjective. What's 'excellent'to one person is 'Merit' to another. Successive governments have tampered with assessment, in English, to a degree where it is becoming inaccurate.

#16 - Max Legg said:
2010-08-18 17:16 - (Reply)

Hey John, your tireless work is greaty appreciated. I read a good note in the latest NZ Business Magazine last week that "The World bank research shows NZ is second only to Saudi Arabia in natural resources wealth per person. Quote; Phil O'Reily...this includes agriculture, and pasture land, timber forests, oil, coal, natural gas, metals and minerals. This alone shows how little we are fulfilling our potential. The answer is simple John, "why don't you get stuck in and use these God given resources. If you want to come up to Aussie levels economicaly, this is clearly the way to go.I'm amazed, 20,000+ eco-terrorists marching up Queen street have killed Nationls excellent vision to wisely mine some of DOC areas.

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