22 July 2012
Speech to National Party Annual Conference
Ladies and Gentlemen, fellow National Party members, it’s wonderful to see you all here today.
It’s great to be the leader of the National Party.
And I’m proud to stand here as Prime Minister.
It’s eight months since National won the trust and support of New Zealanders to form a government for another three years.
On election day, over a million Kiwis supported our plan to build a brighter future.
They said yes to more jobs, lower interest rates and less debt.
They said yes to a better welfare system, more elective surgery and greater achievement in our schools.
They said yes to our tough stance on crime.
And they said yes to a more competitive economy.
National got the highest share of the Party vote ever seen under MMP.
Fellow National Party members, I’d like to thank you for helping secure that fantastic result.
You are the heart and soul of this Party and you make us strong.
I’d like to acknowledge and thank two people in particular.
Our Party President, Peter Goodfellow.
And the man who has delivered four excellent Budgets in the toughest of circumstances – my Deputy, Bill English.
I’d also like to thank all the Board Members, Regional Chairs, Deputy Chairs, Electorate Chairs and volunteers.
The National Party depends on your hard work, and I can tell you that the Caucus knows that and appreciates it.
National Party members, I want to tell you that our Party is in great form.
We have a talented team of MPs who are representing New Zealanders from the top of the North Island to the bottom of the South Island.
We have a strong, hard-working team of Ministers who are committed to taking the country forward.
And we have the support of our confidence and supply partners – ACT, United Future and the Māori Party..
Together, we have delivered strong, stable Government in difficult times.
We are four different parties, and we won’t always agree.
But we share a willingness to find solutions and work constructively together.
That’s not what our opponents are doing.
Labour and the Greens don’t have a plan and they don’t have a clue.
They just want to spend more money, bring in new taxes, and make you work two years longer.
They say no to everything that will move this country forward.
They say no to 90-day trials, which are giving our young people jobs.
They say no to oil and gas exploration.
They say no to irrigation.
They say no to jobs that are coming here from Australia.
They even said no to The Hobbit.
And the latest thing is they want unions to help elect their leader.
Well, good luck with that one!
In the National Party, we seek to govern for all New Zealanders.
We have always had a strong core of principles.
They run through the 76 years of our proud history.
We believe in a supportive government but also in personal responsibility.
We believe in supporting families – they are the most important institution in our society.
We have tolerance and respect for all New Zealanders and we don’t favour one group over another.
We believe in supporting people’s hard work and enterprise.
And we understand that businesses large and small create jobs and prosperity in our country.
These are the principles our Party brings to Government.
They drive the decisions we make and the policies we adopt.
Over the past three-and-a-half years we have been consistent and upfront with voters.
Even people who don’t support us know what we stand for.
At each election we have sought a mandate for new policies we want to put in place.
And we have made clear assurances about the policies we will maintain.
We have stuck to our word and we will continue to do just that.
That is a matter of trust and it’s one that is important to me personally and to our Party.
Our approach has been hugely important, given the challenges New Zealand has been facing.
I want to give credit to the way New Zealanders have stood up to adversity.
The last few years have not been easy.
New Zealanders have experienced a domestic recession which started in early 2008, felt the impact of the Global Financial Crisis, and suffered through a series of destructive earthquakes in Canterbury.
As a country, we are still facing challenges.
The financial crisis in Europe will take some years to resolve, and New Zealand will continue to be affected.
Our economy is still recovering from the debt-fuelled consumption boom and poor government policies of the 2000s.
And the rebuilding of Christchurch will be a long-term project.
But I am hugely optimistic and confident about New Zealand’s prospects.
There are big opportunities in front of us.
Sixty per cent of our exports now go to Australia and the East Asian region that stretches from China to Indonesia.
Asia is the most vibrant and growing region in the world.
As it continues to grow, people will want to drink more milk, eat more beef, build better infrastructure and educate their kids to a high standard, to name just a few things.
That’s where New Zealand can play a big part.
We are a reliable, high-quality producer of food and beverages. And we have world-class technical knowledge and expertise.
The biggest risk is that we don’t take full advantage of these opportunities.
But if we continue do things right, we can stand out from a large part of the pack.
In fact, we are already starting to do that, and I see it as I visit businesses and communities around New Zealand.
Fellow National Party members, our Government has four key priorities this term.
The first is to responsibly manage the Government’s finances.
It’s fair to say that our books have taken a big hit in the last few years.
We have used the resources of government to support the economy, and maintain jobs, through the worst recession in decades.
We have responded to disasters and put aside money to help the rebuilding of greater Christchurch.
But what really hurt the books was that the previous Labour Government ramped up its spending massively and left us with the bill.
Despite all that, we’ve been steadily getting the Government’s books back into shape.
We’re on track to post a surplus in two years and we’ll be starting to pay down debt when a lot of countries will still be borrowing.
Our second priority is to continue building a more competitive and productive economy.
We’re building a solid platform for growth based on savings, exports and productive investment.
We’ve made big improvements to the tax system, to encourage people to work hard and save.
We’ve reformed planning laws and labour laws, to boost jobs and growth.
We’re investing heavily in New Zealand’s infrastructure.
We’re encouraging oil and gas exploration.
We’re negotiating free trade agreements with some of the biggest countries in the world, to help our exporters.
We’re encouraging New Zealanders to save and invest, and we’re giving them opportunities to do so.
And, over the next few months, we’ll be continuing to unfold our comprehensive plan across the areas of innovation, skills, capital markets, natural resources, infrastructure and exports.
New Zealand is actually doing very well compared to many other countries.
Our economy is almost two-and-a-half per cent larger than it was this time last year, despite the difficult world environment.
While that growth is still not as high as we’d like, it was stronger than growth in almost every other developed country over the same period.
On my visit to Australia two weeks ago, business leaders in Sydney and Melbourne were sitting up and taking note of New Zealand’s increased competitiveness.
Some have already moved jobs to this side of the Tasman.
So we’re heading in the right direction.
Our third priority this term is to deliver better public services.
The Government is firmly focused on getting results.
Not on how much money we are spending, but on actually getting things done – getting traction on difficult issues like reducing crime and long-term welfare dependency.
I came into politics to make a difference.
And there is no greater place to make a difference than with these most difficult social issues.
That’s why we are reforming the current system of benefits to help people get off welfare and into work.
We are determined to raise achievement in schools.
We are providing more elective surgery.
We are reducing waiting times for cancer treatment, first specialist appointments, diagnostic tests, elective surgery, and for people waiting in emergency departments.
And we are strengthening sentencing, parole and bail laws.
On top of all that, I recently announced a set of results I personally expect the public sector to achieve over the next five years.
For example, we have set targets to reduce violent crime by 20 per cent, and reduce the incidence of rheumatic fever by two thirds.
We have set some very challenging targets but we make no apologies for that – it’s what New Zealanders deserve.
Our fourth and final priority is to rebuild Christchurch, our second-largest city.
Good progress is being made on the rebuild and recovery, although there is a long road ahead.
Later this month, I will be in Christchurch with Gerry Brownlee, to launch the blueprint for the implementation of the Central City Plan and the CBD rebuild.
This will give property owners, developers and the business sector a clear picture of the layout of the rebuilt city and how they can be involved.
I want to take this moment to thank Gerry and our team of MPs in Christchurch for all their hard work.
Christchurch will be the example for how recovery from a major disaster should happen.
And it will continue to be the economic powerhouse for the growing South Island economy.
I want to take a bit of time now to talk about savings and investment, and what the Government has been doing in this area.
I’ll then have some announcements to make.
The first thing I want to say is that as the economy continues to pick up, it is crucially important that growth is built on solid foundations.
Those foundations are savings, exports and productive investment.
So we want New Zealanders to be saving more, reducing our reliance on foreign debt, and investing in a wide range of assets.
That has already started to happen.
Households and businesses up and down the country are being careful with their money, paying down debt and saving more.
And the Government has been encouraging that saving through changes in the tax system.
Household saving is positive for the first time in more than a decade and is forecast to increase steadily.
But, for a number of reasons, New Zealanders have tended to put their savings into property, term deposits and finance companies.
We own relatively low levels of financial assets like shares, compared to people in other countries.
And our markets for those assets are small.
Our share market, for example, is only a quarter of the size of the New Zealand economy, compared to around 80 per cent in Australia.
And that’s a problem. The share market is a key way for companies to obtain capital and capital is essential for a growing economy.
So the Government has been doing two things.
First, we have been making changes to restore confidence in our financial markets.
We have set up the Financial Markets Authority with extra functions, duties and powers.
And we have been making significant changes to securities law, to make it easier for businesses to raise capital, while ensuring that investors know all they need to know about what is on offer.
Second, we have been working to provide investment opportunities by offering New Zealanders shares in four state owned energy companies.
Our policy of partial share sales is a win-win, and I stand totally behind it.
It’s good for savers, because it opens new opportunities to invest in large local companies, whether directly or through managed funds like KiwiSaver.
It’s good for taxpayers, because we expect to generate between $5 billion and $7 billion in proceeds.
The Government is going to invest these proceeds in new public assets like modern schools and hospitals.
And that is money we won’t have to borrow from overseas lenders.
Partial share sales are good for the companies themselves, because of increased oversight and commercial discipline.
And they are nothing new for New Zealand.
We have living, breathing examples of mixed ownership companies already, like Air New Zealand and Port of Tauranga.
These share offers are nothing like the asset sales of the 1980s and early 1990s.
The Government will decide the initial allocation of shares.
And on behalf of taxpayers it will retain at least 51 per cent control and no other shareholder will ever be able to hold more than 10 per cent.
Each of the share offers will be organised so that New Zealanders are at the front of the queue for shares.
When we do the share offers, we expect around 85 to 90 per cent New Zealand ownership of these companies.
Shares will be owned by the Government, individual New Zealanders, and funds like KiwiSaver, ACC and the Super Fund.
Our intention is for the first share offer – in Mighty River Power – to happen later this year, subject, of course, to market conditions.
And now that Parliament has passed the necessary legislation, we’re seeing a lot of interest from New Zealanders in how they can get more information and be at the front of the queue.
I’ll talk a bit more about that in a moment.
First I want to acknowledge that a lot has been said in the last few weeks about the ownership and allocation of water. That’s not unexpected.
But the Government’s position is clear.
Selling shares in power companies doesn’t affect any of the regular and on-going discussions we have about water issues, and won’t change the outcome of them.
So we are very confident about the process that’s going on.
Today I can announce that a number of decisions have been made in relation to the Mighty River Power share offer and how New Zealand retail investors will be involved.
These decisions are all about putting New Zealanders at the front of the queue, making it as easy as possible for them to buy shares and encouraging long-term share ownership.
First – as the Treasury has announced today – a retail syndicate of share brokers and banks has been appointed to assist with the marketing and sale of shares to New Zealanders.
This syndicate will help New Zealand investors – particularly first-time share investors – understand how they can participate in the share offer.
For example, it will soon be able to tell people how they can pre-register their interest, without having to commit at that time to buy shares.
And the syndicate will ensure widespread access for all New Zealanders.
People will be able to pick up a prospectus, and other information about the share offers, from around 500 bank branches throughout the country.
People will also be able to get information through an 0800 number, or on the internet, and they will even be able fill in an application for shares online.
They won’t have to use a broker to buy shares, but will of course be able to do so, and can get advice from a broker or other financial advisor.
Let me assure you – we will make it as easy as we can for New Zealanders to take part in the share offers.
And we will make sure they get all the information they need to make informed decisions.
Second, Ministers have agreed that, for New Zealanders, the minimum application for Mighty River Power shares will be $1,000.
That is low compared to other recent share offerings, for example by TradeMe and Pumpkin Patch.
It will help promote broad access and affordability for a wide range of New Zealanders.
Third, we have decided that New Zealanders who want to buy up to $2,000 worth of shares will not have their applications scaled back.
In other words, New Zealanders applying for up to $2,000 worth of shares are guaranteed to receive the shares they applied for.
Big institutions aren’t getting any guarantees, so this is another way we’re putting everyday New Zealanders at the front of the queue.
Finally, we have agreed to offer New Zealanders a loyalty bonus.
New Zealanders who keep their Mighty River Power shares for a certain length of time will get a loyalty bonus, in terms of additional shares.
We’re working through the time period that’s involved here, but it’s likely to be somewhere around three years.
The Government believes it is important to recognise the loyalty of New Zealanders who retain their shares.
And we want to encourage long-term share ownership among New Zealand savers.
Details of the loyalty bonus will be announced closer to the time of the share offer.
Decisions about other aspects of the share offer will also be made over coming months.
But the Government’s intention is clear.
As promised, we will put New Zealanders at the front of the queue for shares and we’re confident of widespread New Zealand ownership.
It is one part of my Government’s broad programme to build a more competitive economy based on savings, exports and productive investment.
Fellow National Party members, our Party is thriving.
Our Government is delivering strong, stable leadership.
And our country is on the right track.
With your help, we are building a brighter future for all New Zealanders.
A future where we celebrate achievement.
Where we reward effort.
Where the economy is strong.
Where our communities are safe.
And where education standards are high.
Party members, National is the right party to be leading New Zealand towards that brighter future.
Thank you very much.
The Crown is considering offering shares to the public in one or more of Genesis Power Limited, Meridian Energy Limited, Mighty River Power Limited, Solid Energy New Zealand Limited and Air New Zealand Limited. No money is currently being sought and no applications for shares will be accepted or money received until after an investment statement containing information about for the relevant offer of shares is available.
This press release is not permitted to be distributed in any country outside New Zealand. No decision has been made as to whether an offer will be made in any country other than New Zealand. Nothing in this press release constitutes an invitation to subscribe for, or offer of shares, securities or financial products to any person, whether in New Zealand or in any other country.
This release does not constitute an offer of shares for sale in the United States or to, or for the account or benefit of, any person in the United States. The Crown’s shares have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from, the registration requirements of the U.S. Securities Act of 1933.