The 8th of November 2008. What a night!

With the support of 1,053,398 New Zealanders, we changed the Government and we changed the outlook for New Zealand.

Those voters believed in a better New Zealand. They were tired of being told what they could or could not do, what their kids could have as a Friday treat from the tuck shop, and whether they could choose their own lightbulbs.

They yearned for a more ambitious future.

And with them, you the Party faithful made that change possible. You put up the placards, sold the raffle tickets, knocked on the doors and posted the pamphlets.

Who will forget the stunning wins?

Nine new electorate seats and some great victories.

16 new MPs in our caucus.

Our biggest Party Vote ever.

We did the hard yards and we reaped the rewards.

What a privilege it is to be your Prime Minister.

I am thankful to each and every one of you who brought us here.

Let me express my special thanks to Judy Kirk. Our departing President.

You stuck by the National Party through the rough and the smooth. You built this party the new structure it needed to serve a new generation. You gave us seven great years of presidency, and you led us to our historic victory.

And you did it with grace, with humour, with an unshakeable belief in what we could achieve.

In doing so you helped secure the brighter future this country deserves.

Today we thank you Judy Kirk, forever the Party Vote President.

And we join you in welcoming our new President. The National Party is pleased to have elected you.

I say a special thank you to Bill English. I am grateful to have as our Deputy Prime Minister such a wise, dedicated and compassionate New Zealander.

I say thank you to Steven Joyce. What a stellar campaign you ran.

I say thank you to the rest of our Cabinet, the caucus, the Board members old and new, the electorate chairs, the electorate agents, the office-holders, the volunteers, the members.

It’s good to be in Christchurch isn’t it?

This wonderful city where I spent my school years. Where I lived with my two sisters, and where my Mum raised me with all that she had.

This city where I fell in love with Bronagh.

This great city where I bought my first National Party rosette. Where I went to university. Where I got my first job.

And where I formed my belief that within each of us lies the capacity to make our own lives better.

That with hard work, with personal responsibility, with big dreams, we can all make more of ourselves.

It’s that belief which has always set the National Party apart. We know that Government actions can never replace the determination and drive that lies within each individual. Nor can the Government take the place of our families and our communities.

But a good Government can provide the foundation for greater opportunities.

That’s why the National Party leads New Zealand’s Government today. Because New Zealanders heard our message of opportunity and they voted for it in droves.

They knew that our Party would lead a country which rewards rather than discourages effort.

They knew our Government would not try to involve itself in decisions best made by New Zealanders in their own homes and communities.

They knew we would remain resolutely focused on securing the brighter future this country deserves.

Today let me take a moment to reflect on all that we have achieved in our first nine months in office.

We started by forming a stable, inclusive Government with our confidence and supply partners.

We turned first to our friends in the Act Party. From the moment the election result was known they pledged their support and ever since the relationship has grown and developed.

In Peter Dunne we found a man of honour and integrity.

And with your support and goodwill we traversed a path many in the media believed wasn’t possible and formed an alliance with the Maori Party.

Set against a backdrop of respect and ambition we captured the imagination of Maori and Pakeha alike and forged a relationship with Pita and Tariana. In doing so we broke new ground for our Party and this nation.

We build on our confidence and supply relationships every day. Through everything we achieve together. And through everything we disagree on.

We know that the respect and mana born of these relationships enhances our ability to govern for all New Zealanders. And it ensures that the National Party will be capable of leading a government for many years to come.

I am pleased that we have made so much of the cards voters dealt us. After all, this is a country built on the ideas of partnership and inclusiveness. It is only fitting that those values are reflected in the make-up of our Government.

I am also proud of the new policies our Government has delivered on.

When I travel around New Zealand Kiwis tell me their stories about how much these policies mean for them.

Like the single-mum who thanked me for the Government’s first 100-days decision to publicly fund a 12 month course of Herceptin.

She started 2008 with her life in tatters. She’d been diagnosed with HR2 breast cancer, she’d had a masectomy and 30 lymph notes removed. She was unable to work because of the cancer, and was having to fork out for huge herceptin payments every three weeks.

Thanks to this Government those payments stopped.

Or the mother of a five year old girl with autism. She wrote of the monumental and traumatic campaign she’d had to secure special needs funding for her daughter.

She thanked the National Government for our foresight in boosting special education funding by $51 million, so that many other mums and dads would be spared what she suffered.

Or the woman who wrote in to thank us for the student loan voluntary repayment bonus. She had $20,000 left on her loan and relished the opportunity to pay it off faster so she could get a mortgage and buy a house.

We made a real difference to her life too.

Ladies and gentlemen, thousands of New Zealanders have a good story to tell about this National Government.

Like the one and half million hard-working Kiwis who were made better off by our April 1 tax cuts.

The half a million superannuatants who’ve had their super locked in at 66% of the after-tax wage.

The hundreds of families who have been given a helping hand by the Restart package.

The thousands of people in the Coromandel, and the thousands of Kiwi holiday-goers, who are cheering our decision to fast-track the rebuild of Kopu Bridge.

The parents who, thanks to our National Standards in literacy and numeracy, will get a Plain English report next year telling them exactly how their primary school child is doing.

The 400,000 people of Counties-Manukau who have started to see the first of 300 extra police working their streets.

Not to mention the good citizens of Christchurch who are no doubt looking forward to the Government’s looming ability to crush the cars of boy racers.

And the thousands of families who will feel safer in their homes and in their streets as thanks to our tougher bail and sentencing laws.

Ladies and Gentlemen, these were the policies we campaigned on. Even amidst the fiercest economic storm, we have delivered.

Today we focus on the tasks that lie ahead. There can be no doubt. We have come to office at a difficult time.

The world is in recession and Kiwis are losing their jobs. Our businesses are finding it tough. There are no surpluses left in the Crown accounts.

But we do not shirk from these challenges. Nor do we resile from the ambitions we campaigned on.

A more prosperous economy is at the heart of our vision.
And, yes, we know that strengthening this economy won’t be easy.
But we take this task on gladly, because it will secure the brighter future we wish for all New Zealanders.

Ladies and Gentlemen, there is light at the end of the recessionary tunnel. The New Zealand economy is forecast to start growing again later this year. Unemployment will take a bit longer to turn around.

We will be doing all that we can to ensure that our return to growth continues as strongly as possible for as long as possible.

We have an economic plan for achieving this. As Bill outlined yesterday, it consists of six main policy drivers. I want you to go away and remember these six drivers because they are vital to securing a brighter future for New Zealand.

They are:

• Regulatory reform,
• investment in infrastructure,
• better public services,
• education and skills,
• innovation and business assistance,
• and a world-class tax system

The depth of the recession means that we are experiencing high unemployment for the first time in a decade.

The good news is that our unemployment rate shouldn’t get as high as in the United States, the United Kingdom or Australia. But that is small comfort to the everyday Kiwis who may find themselves without a job.

We all feel for those Kiwis. They are our sons and daughters, our brothers, our sisters, our cousins and nephews.

But the task of the Government is not to pretend it can create a job for every Kiwi who loses one. That will require the effort of all New Zealanders.

Our country’s real jobs engine is made up of the smart ideas of our small businesses, the output of our farmers, the rising fortunes of our exporters the strength of our communities and the foresight and competitiveness of our industry.

The Government’s responsibility is to bolster their efforts and to do our bit to ensure that Kiwis who lose their jobs have the opportunities they need to get back into work.

That means creating a business environment which gives firms the confidence they need to invest and to create new jobs.

It means offering an extra helping hand to families hit especially hard by the financial blow of redundancy.

And it means connecting job-seekers with new job opportunities, up-skilling them and keeping them connected to the workforce.

Our Government is doing all of these things. We are backing unemployed Kiwis and we are confident of their future prospects.

YOUTH OPPORTUNITIES

But even so, I remain concerned for one particular group of people who may be permanently damaged by the lack of job opportunities over the next few months.

I am concerned for our young people.

Those aged 18-24 are the fastest growing age group on the Unemployment Benefit, representing a third of all those who receive it.

The number of young people who wanted a job but couldn’t get one has more than quadrupled in the past year, leaping from less than 4000 in June 2008 to nearly 17,000 by June this year.

My concern is that for a young person starting out in their working life, a long period of unemployment could be very damaging.

These are New Zealanders who may have very limited experience of the routine and rewards of regular work. Without the opportunity to gain that experience their development, and their aspirations, may be permanently weakened.

Some may be tempted to fill unoccupied hours with petty crime, drinking and drug use, or other activities that sell them way short of their potential.

My fears are backed by the research. Young people are disproportionately affected by long periods spent on the benefit.

We simply can’t afford to leave our young languishing on the benefit. If we do we risk diminishing the potential of an entire generation of New Zealanders. I won’t accept that.

So today I am announcing a Youth Opportunities package that is designed to strengthen the ladder of opportunity for young people during this period of heightened unemployment.

These policies will provide young unemployed Kiwis with an expanded range of opportunities to better themselves, whether through work, training or education.

The Youth Opportunities package reflects my belief that it’s up to individual young people to make the most of the opportunities they face. We owe them a chance and they owe us their best efforts in return.

These policies are also driven by my conviction that all New Zealanders have a stake in the plight of the next generation.

I am yet to visit a Kiwi community, business or family that is not concerned about the prospects of those who will fill our shoes tomorrow.

So these policies draw on that passion. They require the commitment of not just Government but of all those who have a stake in securing a brighter future for New Zealand.

Because we in the National Party know it’s not just Government who can solve our problems.

Ladies and gentlemen, we need to be realistic. These policies will not create a job for every young person who finds themselves unemployed over the next 18 months.

But the initiatives I am announcing today will provide a new rung on the ladder. A rung that could fire up a young person’s motivation and aspiration, while increasing their chances of getting and maintaining a job in future.

Let me touch on some of the highlights of the Government’s Youth Opportunities package.

Many of these policies are about encouraging businesses and community groups to make job opportunities available to young people.

We know that while the economy turns itself around, many employers will be reluctant to hire young people who are yet to develop basic work skills.

A small-business owner may have enough work to justify a new entry-level worker, but may lack the will needed to hire and train a young person for the job.

Or a community group may have a great project in mind, but may not have considered using a team of young people to get that project off the ground.

In both cases, good ideas could end up in the too-hard basket for the next couple of years.

Today I am announcing that the Government will provide specific funding to help firms and communities take these ideas out of the too-hard basket, and into the realm of possibility.

Job Ops

The first policy is Job Ops. Job Ops is the Government’s policy for backing businesses that create jobs for young people.

We want young people who have limited work experience to get a chance to prove themselves and to get a taste for what they might be good at.

To make this happen, the Government will ask businesses to provide lowly-skilled young people with a job for a minimum of six months. We will ask businesses to work with these young people to build work skills, foster confidence and, where appropriate, provide them with references for future work.

In recognition of these efforts we will provide funding to the employer. This funding will be spread across two payments totaling $5000 over the six months.

It will be money well-spent. Because I for one would rather invest your taxes in jobs for our young people than in unemployment benefits.

So, all you community-minded business people out there, ask yourself: Are you ready to give back to the young people on whom our future depends? If you are, this policy is for you.

The Government has put aside $20 million in funding for up to 4000 Job Ops over the next eighteen months and I want to see it cranking-up as soon as possible.

We’ll be taking expressions of interest from Monday, so let’s hear them.

Community Max

Of course, businesses aren’t the only ones with a role to play in creating opportunities for young people. Local authorities, mayors, iwi and community groups are also ready to step-up.

So I’m announcing “Community Max”. Community Max is the Government’s policy for connecting young people to the positive work that goes on within our communities.

I know that up and down the country there are community organisations with good development ideas. I’m asking those groups to come to the Government with local community projects that could be worked on by young people.

It might be time to renovate the local marae or kohanga reo. Or to smarten-up local parks and reserves. Or to get rid of graffiti and tagging.

The Government will fund young people to work on these projects. We’ll help fund their training. And we’ll fund supervisors to help.

Because we want our young people helping our communities and we want our communities helping them.

I expect huge demand for Community Max. So the Government has set aside $40.3 million to back this policy until December 2010.

I expect many of these projects will pick-up significant numbers of Maori and Pacific Youth, who are over-represented in the youth unemployment statistics.

Te Puni Kokiri and the Ministry of Pacific Island Affairs will work with Maori and Pacific organisations to develop project proposals. And I fully expect Tariana Turia, Pita Sharples and Georgina te Heu Heu to get out there and promote this policy to the Maori and Pacific Island communities they serve.

Because I know that they, like me, are impatient to see all our young people fulfilling the true promise of their potential.

The development of the National Cycleway project also provides a great opportunity. Today I am announcing an additional $5.3 million for the cycleway that will be set aside to encourage those developing Great Rides to take on and train young people.

We are also going to put a greater emphasis on youth in our Industry Partnership Programme, with 600 new work and training opportunities.

The young people targeted will get access to industry-specific, on-the-job training and a chance to build a career for themselves.

I imagine that industries supporting the Rugby World Cup could be particularly interested in using this programme to upskill their workers over the next 18 months.

My fellow delegates, for many young people in this recession, work experience and on-the-job training like I’ve outlined will be the leg-up that’s needed.

It will provide them with a proven work record, basic job skills and a sense of the routine, discipline and dignity that comes from paid employment.

After all, those are the values that this Party and this country believes in.

But some young people may be better served by more time spent in more formal education and training.

Put simply, there are currently too many young New Zealanders who aren’t engaged by any of these options. They might be turned off school or feel trapped without the basic skills needed for an apprenticeship or formal education.

We have to do better for these young people. Particularly in light of the forecast rise in unemployment. Because if we fail to keep them engaged in education their chances of finding a job will be lower than ever.

Well, this National Government won’t accept that.

That’s why we are devising new options to make education and training more relevant and accessible for a greater range of young people.

Let me outline some of the ways we will do this.

Youth Guarantee Jump-Start

From January next year we will jump-start Stage One of National’s Youth Guarantee policy.

This policy will help 16 and 17 year-olds who are no longer engaged at school get a second-chance at education.

Stage One will allow up to 2000 16 and 17 year olds to undertake vocational training at a polytechnic, wananga or private training establishment. They will pay no fees for this training.

The Government has allocated a total of $53 million to allocate 2000 places for this purpose in both 2010 and 2011. Because we know that traditional secondary school doesn’t work for everyone, we’re doing something about it.

Students on the Youth Guarantee might, for example, join a mechanical maintenance course, working on cars and completing literacy credits at the same time. Or they might do a pre-trade course that uses workshops and hands-on learning to prepare them for an apprenticeship.

In whatever form it takes, the Youth Guarantee promises to engage young people that may otherwise be left behind by our education system.

Because our National Government believes in them, and we believe in their futures.

New Service Academies

In addition to the Youth Guarantee we are opening up the options in our secondary schools.

Because we know that some kids will get more out of a ripping an engine apart than studying Macbeth.

We are already considering business proposals for Trades Academies, which will give young people the ability to gain practical, hands-on vocational skills while still at school.

I also want to expand the number of Service Academies throughout the country. Service Academies are military-focused programmes based in schools where students may otherwise be less likely to gain a qualification.

The programmes are designed for Year 12 and 13 students who want to pursue a career with the New Zealand Defence Force. They include a minimum requirement that students sit and attain Level One NCEA Maths and English.

I want to see more of this kind of training available for school students. So I am pleased to announce that the Government has set aside $2.6 million in funding for that purpose.

I am confident that the discipline and values this service training provides will make a difference for hundreds of young Kiwis.

Expansion of Limited Service Volunteers

I am also committed to enhancing the education and training opportunities for those aged 18-24.

We have already started working with the New Zealand Defence Force and the New Zealand Police to devise new training opportunities. Ministers are busy developing gap-year options and we will make further announcements about these in future.

But all some young people need is a short burst of this type of training. Just enough to give them the encouragement they need to push on into further education or employment.

That’s how the Limited Service Volunteers Programme works. It runs for six weeks at Burnham Military Camp and uses a military-type training programme to instill self-discipline, confidence and motivation.

It’s got a great track-record, and I want to see more young people being able to take part in it.

So today I’m announcing that from January 2010 the Government will invest $19 million to create an additional LSV programme in Auckland and another in the Lower North Island.

This will allow a total of 2500 additional young people to take part in LSV over 2010 and 2011.

That’s an investment in them and it’s an investment in our future.

Polytechnics and technology institute funding boost

Of course, some of the best vocational education and training for young people is provided by our polytechnics and institutes of technology (ITPs).

The forecast increases in unemployment may well put more pressure on them over the next few months.

The National Government makes no apologies for expecting polytechnics to do more with less during this recession. Even so, we will work with polytechs so that as enrolment pressures build they are able to ensure adequate education opportunities for our young people.

That will require innovation from them, and it may require some flexibility from us.

So today I am demonstrating the Government’s commitment by announcing that later this year the Tertiary Education Commission will allocate $8 million of further funding for polytechs.

We expect this extra funding to be targeted at those with the highest needs, with those under the age of 24 expected to be a particular focus.

This funding is additional to the significant investment we already make in our wananga, polytechnics, private training establishments, industry training organisations, modern apprenticeship co-ordinators and universities, all of whom provide important educational options for our young people.

I am a huge believer in the liberating power of education and our investment priorities reflect that belief.

Summer scholarships

Finally, we expect that the high unemployment rate may well be paired with a reduction in the number of jobs available for tertiary students this summer.

That’s hard on them and it’s hard on their families.

We will respond to this in two ways.

First, by beefing up the number of jobs available through Student Job Search.

We will do this by referring all suitable Work and Income job vacancies to Student Job Search. Work and Income will also work with employers, local councils, mayors, iwi and community groups to identify vacancies for students.

Second, we will put a new Summer Scholarships Scheme into action during the summer break. This was an idea that came out of the Job Summit, and is based on a partnership with New Zealand’s University Vice-Chancellors.

The scheme will provide up to 1600 summer research scholarships worth $5000 each. This scholarship funding will go directly to the university students involved. The Government is putting $4 million towards this initiative, and we are being matched dollar for dollar by the universities.

We think it’s a great example of what’s possible when the Government works with others to develop solutions.

Ladies and Gentlemen. The policies I have announced today are going to make a big difference for our young people.

They will create up to 16,900 additional youth opportunities over the next two years.

The total cost of this package will be $152 million. It’s an investment I’m proud to be making.

Some of this funding was allocated in the 2009 Budget, while the rest will be appropriated from the between-Budget contingency. So I can reassure you, this package will in no way add to the Government’s debt levels.

Conclusion

My fellow delegates, the policies I have announced today will add significant rungs to the ladder of opportunity for our young people.

They send a clear message to all young New Zealanders: This country backs you. We will invest in you and we will invest in your future.

We have big aspirations for you. And we want you to have big aspirations for yourselves.

The manner of your climb is up to you. It may be through work, it may be through education, or it might be out in the community.

We simply ask that you strive to make the very best of yourself.

We will judge you not by where you are today, but by what you have decided to become.

My fellow delegates. Today’s policy announcement is not just about New Zealand’s young people.

Today I am asking all of us to set our sights a little higher.

Each of us has a choice to make. Will we sit back and complain about the increasing numbers of jobless youth? Or will we stand up to do our bit?

What can we do to give our young people the opportunities they deserve?

After all, the future success of our country, the future success of each of us, relies on unlocking the potential of a new generation.

I am proud to lead a Government that is making this a greater country for the next generation to inherit.

I am proud to be leading a Government that believes in the power of individuals to take control of their own lives.

And I am proud to be leading a Government that will give every Kiwi greater opportunities to get ahead.

Those are the aspirations this Party was founded to reflect.

Those are the aspirations this Government was elected to deliver.

And those are the aspirations that I am proud to represent. Thank you.

It’s a pleasure to be here tonight to speak to your annual conference.

I’d like to acknowledge my colleagues – David Carter and Kate Wilkinson, Andrew Fenton, Peter Silcock, and the board of Horticulture New Zealand, as well as the sponsors and delegates.

Horticulture New Zealand plays an important role representing 7000 growers and advocating for the concerns of your industry.

We value the job you do and the input you provide to government policies.

We may not always agree with what you say, but we will always listen.

Because your industry is very important.

Horticulture contributes around $5 billion a year to our economy.

As well as putting fruit and veges on the tables of four million Kiwis, you earn our country more than $2 billion a year in export receipts.

What’s more, it’s clear from your Industry Strategy that there is real potential to grow the value of those exports.

And it’s good to see you have a clear idea about how you can do that.

So tonight I’d like to reflect on your ambitions for horticulture in the context of the ambitions the National-led government has for New Zealand.

I’ll talk about some of the challenges and opportunities we face, and some of the steps our government is taking to help your industry achieve its goals.

But before I do that, I’d like to take you beyond our shores for a few moments.

Two weeks ago I led a delegation through the Pacific to Tonga, Samoa, Niue, and the Cook Islands.

We had some very useful meetings with government and business leaders in the region.

Beyond the formal events on the trip, one of the highlights was a visit to Poutasi Village in Samoa. 

More than 240 people from the village have taken part in our Recognised Seasonal Employment (RSE) scheme over the past two years. 

The scheme has given young people from Poutasi an opportunity to work in Hawke's Bay picking and thinning apples in the harvest season.

Those villagers appreciate the income this work has brought them, and are investing in the development of their community.

The village put on a show for our delegation. 

They fed us fresh coconuts and breadfruit while we watched a fantastic performance by children in the church hall.

It was a great visit, a fun show, and a sign of how strong our ties are with the Pacific.

But it also showed what can happen when government works with industry.

The RSE scheme benefits growers, exporters, fruit pickers, people who buy and eat our fruit around the world – and the crown accounts.

It shows that when we work together, we can all win.

So I’m proud that last month, the National-led government announced improvements to the RSE scheme.

We have listened to growers and launched a new Supplementary Seasonal Employment permit.

This will allow growers to employ visitors to New Zealand in the peak season when local labour is unavailable.

We have also amended the RSE policy to ensure the rules for deductions from RSE workers’ wages are the same as those for New Zealanders.

This will make life simpler for growers and their employees.

And we have required employers to arrange health insurance for their RSE workers while they are in New Zealand.

RSE workers are not eligible for publicly-funded healthcare and the lack of insurance cover has created problems for growers and workers in the past.

These changes are an example of how the National-led government is listening and working with you.

They are just some of the many ways we can work together.

We welcome your Industry Strategy – “Growing a New Future” – which has been prepared with co-funding from New Zealand Trade and Enterprise.

And we recognise that government has a part to play in helping you achieve your four key objectives:

• Building global competitiveness,
• Dominating product categories within target markets,
• Creating value, commercialising products, and controlling intellectual property, and
• Setting the standard for sustainably produced products.

New Zealand Trade and Enterprise is working with Horticulture New Zealand to identify two industry projects that will demonstrate the principles of your industry strategy, and I look forward to learning about these later in the year.

Your goal of more than doubling the size of horticulture in New Zealand to become a ten-billion dollar industry by 2020 is a big one.

It will take a lot of hard work and innovative thinking to achieve.

But given that total horticultural exports have doubled in value since 1995, I am confident you can achieve your goal if you remain focused and you work together.

In that respect, the challenges that you face in your industry are not that different from the challenges we face in government.

New Zealand is confronting the deepest, most synchronised global recession since the 1930s.

This is having a profound effect on everything from unemployment to the government’s spending plans.

But despite these difficult times, I am optimistic about the future of our primary sector and our economy.

Because even though many Kiwis – and some growers – are struggling at the moment, we need to look beyond the recession and focus on the longer-term opportunities we face.

The high-quality products you grow and produce are one of the keys to our recovery and our future prosperity.

During this recession, demand for food has declined far less than demand for manufactured goods.

And in spite of this recession, the middle classes in China and India are continuing to grow and demand better quality food products.

New Zealand is well-placed to feed that appetite.

We have a good climate, quality land, relatively abundant water supplies, and the world-class expertise and know-how of our farmers.

We are well-positioned on the edge of Asia, and have a growing number of free-trade agreements with countries in the region.

We have a clean and green brand, and a reputation for producing safe, high-quality food.

Our challenge as a government, and your challenge as growers, is to make the most of these competitive advantages and the opportunities they present.

That won’t necessarily be easy.

As growers, you have to contend with pressures on the resources you rely on – land, water, and workers.

Meanwhile, consumers around the world are increasingly aware of carbon footprints, climate change, and environmental performance.

So if New Zealand is to meet these challenges and make the most of our opportunities, we need to play to our strengths.

We need to harness the experience born of generations of growers.

We need to make the most of cutting edge technology and know-how.

And we need to protect our environmental credentials.

These are factors you acknowledge in your industry strategy, and which will play a part in boosting the performance of horticulture.

Just last week I outlined the government’s six main policy drivers for boosting the performance of our economy.

These are:

• Regulatory reform
• Investment in infrastructure
• Better public services
• Education and skills
• Innovation and business assistance
• A world-class tax system

And I’d like to spend a few minutes exploring three of these drivers – regulatory reform, investment in infrastructure, and innovation – and how they are helping the horticulture industry.

New Zealand needs to offer a high-quality regulatory environment if we are to overcome the economic disadvantages of our small size and geographic location.

We have introduced a 90-day probationary period to give smaller businesses the confidence to take on new employees.

We are reviewing the Holidays Act to make it easier to apply.

We are undertaking the biggest overhaul of the Resource Management Act since its introduction in 1991.

The first phase of our RMA reform programme focused on streamlining and simplifying processes under the Act.

A second phase of reform is currently underway.

We have also kicked off a programme of reviewing and reforming the Building Act, and rules around electricity, telecommunications, and overseas investment.

There are too many regulations in New Zealand and our approach is, in general, to reduce these, across central and local government.

Rodney Hide is leading the charge for us in this area.

While I am on the subject of regulations, there are a couple of important issues I would like to touch on – country of origin labelling and biosecurity.

The government supports voluntary country of origin labelling where consumers demand it.

This delivers the benefits of labelling without the costs of regulation and without compromising New Zealand’s trading interests.

But we do not support mandatory labelling.

We are a major food exporter.

We need as much flexibility as we can for marketing our food in both the domestic and export markets.

Mandatory labelling could reduce that flexibility and potentially see significant costs passed onto consumers.

Another area where I think there is a real opportunity for regulatory improvement is at the border – particularly with Australia.

Following my meeting with Australian Prime Minister Kevin Rudd earlier in the year, we are working on streamlining customs and immigration at international airports for trans-Tasman flights.

Our thinking is that the more we can get Trans-Tasman travel to feel like a domestic flight, the more Australians will come to New Zealand.

I know you are worried about the biosecurity implications of this, and I understand that the Ministry of Agriculture and Forestry has consulted with Horticulture New Zealand on the proposed changes. 

I want to reassure you that we hear your concerns.

In fact we think that the changes we are looking at will actually improve standards at the border, by ensuring that Biosecurity NZ is working smarter and making the most efficient use of its resources.

I expect to make further announcements about improvements to the Trans-Tasman border next month.

Another issue that remains on our agenda with Australia is disagreement over New Zealand apples.

The government is continuing to work through the disputes panel at the World Trade Organisation to get a resolution over access for our apples into the Australian market.

Earlier this month, a second hearing was held before the disputes panel in Geneva, and the panel is expected to release its report in early 2010.

We are committed to working with Australia to secure commercially meaningful access for our apples.

The second government policy driver I would like to talk about tonight is infrastructure investment.

We are investing $7.5 billion over the next five years to build and upgrade schools, roads, housing, hospitals, telecommunications, and the national grid.

We are also boosting state highway spending by $1 billion over the next three years, and are looking at allowing trucks to carry heavier loads.

And we have taken the first steps towards rolling out our $1.5 billion broadband plan to provide ultra-fast broadband to schools, hospitals, businesses and 75% of homes.

Although we remain the furthest country from world markets, ultra-fast broadband is a breakthrough technology.

It will give you and your businesses the ability to reach customers far across the globe.

Another area where there is real potential to lift our performance is how we use our precious water resources.

New Zealand has plenty of water.

But it’s not always in the right place at the right time.

Our fresh water resources are the envy of many other countries.

And they are one of our competitive advantages.

About 600,000 hectares of land is irrigated and – depending on how you calculate it – at least three times that area is suitable for irrigation.

That’s a huge potential gain we can make in productivity.

The problem is that in many parts of the country, water quality is poor or deteriorating, and demand is outstripping supply.

That’s why we are also looking at including water in the government’s plans for infrastructure development.

And that’s why we are establishing the Land and Water Forum to help set the direction of water reform.

The forum is a collaborative approach involving major water users in agriculture, industry, and power generation, as well as environmental and recreational groups.

I’m pleased that Horticulture New Zealand will be playing a part in the forum.

The final area I want to talk about is covered in some detail in your Industry Strategy.

Innovation isn’t just about working smarter in the orchard or out in the field.

It’s also about continuous improvement in research, intellectual property, market development, and branding.

Our horticulture sector has a long history of continuous improvement.

From developments in irrigation and fertilisers, frost protection, cool storage, and high-tech fruit handling and grading systems – such as electronic colour sorting of blueberries.

Through to new crops and cultivars, dwarf rootstocks, hybrid seeds, new apple varieties, and the development of ZespriGold.

Doing things smarter on and off the land has been a key part in lifting the value of your annual exports to well over $2 billion in 2008.

This in turn, has driven better returns to growers and to our economy.

We believe that the success, the know-how, and the innovative thinking in industries like horticulture provide a massive opportunity for New Zealand.

And we believe there is capacity for even bigger gains in the future.

That’s why we’ve established the Primary Growth Partnership (PGP).

This is an ambitious public-private partnership aimed at boosting research and development, driving innovation, and doing things smarter right across the value chain.

In education.

In research and development.

In product development.

And in commercialisation, market development, and technology transfer.

The Government is investing $190 million in the partnership over the first four years, and $70 million a year after that. 

Funding will be increased as industry shows capacity and the need to invest even more.

With a matching commitment by industry, over time up to $140 million a year will be invested.

There will be five sections of funding with each proportioned a dedicated amount.

The rest will be contestable.

These sections are:

1. Pastoral and arable production,
2. Horticulture,
3. Seafood,
4. Forestry and wood products, and
5. Food processing (including nutriceuticals).

PGP is a true partnership between government and industry.

Its priorities and strategic direction will be led by the industries that choose to be involved.

The more that industries put into each section, the more that government will fund it.

Its success will therefore be determined by how much you support it.

So my challenge to you is to get together and contribute to the partnership.

By working with each other, we have a better chance of developing the innovations we need – the ZespriGold of tomorrow – to make the most of our commercial advantages, drive higher value products, and boost grower returns in the years to come.

An area where innovation will be increasingly important is our response to climate change.

That’s why, last month, we announced that the Government is establishing a Centre for Agricultural Greenhouse Gas Research which we expect to be up and running next year.

The Centre will develop technologies that reduce emissions and improve on-farm efficiency and productivity.

It will have three areas of focus:

1. Methane from farm animals and waste systems,
2. Nitrous oxide from farm animals and nitrogen fertiliser, and
3. Soil carbon from agriculture and horticulture.

We have allocated $5 million dollars a year from the Primary Growth Partnership for the centre.

It will also be able to bid with industry partners for PGP's additional contestable funding.

The centre will be a key part of our sensible and pragmatic approach to climate change.

This includes reviewing the emissions trading scheme to balance our environmental responsibilities with our economic opportunities.

And it includes working carefully towards setting a 2020 greenhouse gas emissions target as part of our international climate change obligations.

Ladies and gentlemen, I am impressed by the ambitions you have for your industry.

And I welcome your Horticulture Industry Strategy – “Growing a New Future”.

The successes you have had in recent decades suggest that your goal of becoming a ten-billion dollar industry by 2020 is very realistic.

The key to reaching that goal is working together, learning from each other, and making the most of the opportunities New Zealand provides.

The government is playing our part.

We are improving the RSE scheme.

We are reforming the regulations that are holding back growth across our economy.

We are increasing investment in infrastructure.

And we have established an ambitious Primary Growth Partnership to boost research and development on the land and off it.

But there is much more that we can do in these and other areas.

So let’s keep working with each other.

Let’s keep getting smarter at what we do.

Let’s keep developing the policies that your industry and New Zealand needs.

And let’s grow a new future together.

Thank you.

New Zealand’s economic performance is vitally important.

This Government wants New Zealanders to have a decent enough wage packet to have real choices in their lives, and a genuine sense of opportunity.

As a nation, the income we generate enables us all to enjoy world-class public services – like health care and education – and to strengthen our national institutions.

And in a mobile world, relative differences matter a lot. Skilled people will move to countries where they can earn more. Businesses will locate where conditions are favourable to them. Investors will put their money where it can get a good return.

I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.

That’s why this Government is focused squarely on improving New Zealand’s economic performance.

And to be frank, New Zealand’s economic performance over a number of years has been disappointing.

We have a lot of things going for us, but in the OECD’s league of developed countries our economy is now essentially a third-division economy, and our closest comparators are countries like Greece, Korea, and the Czech Republic.

Even in the last decade we have slipped down a couple of places in the OECD rankings, despite “Knowledge”, “Economic Transformation” and the “Growth and Innovation Framework”.

In recent times the New Zealand economy has flattered to deceive.

Growth in our GDP has been driven by more people joining the workforce and working longer, rather than through an increase in the value of what we produce.

Furthermore, our growth has been very unbalanced.

It has been built on an increase in consumption, a debt-fuelled housing boom, and large increases in government spending.

It has not been built on the more solid foundations of growth and investment in the internationally competitive sectors of the economy.

Because of this unbalanced growth, and because of the effects of the global recession, the New Zealand economy is now more vulnerable to future economic shocks.

First things first: we are currently dealing with the deepest, most synchronised global recession since the 1930s.

What is more, this global slump came on top of our own home-grown recession.

The Treasury predicts that over the next three years, the economy will be $50 billion smaller than was expected a year ago in the 2008 Budget.

The Treasury also predicts that unemployment will reach a high of eight percent.

That is why much of the Government’s economic attention over the last eight months has been on managing through the immediate impacts of the recession.

We cannot magic away a deep recession; nor can we turn back the tide of rising unemployment.

What the Government can do, however, is take the sharpest edges off the recession.

That involves a careful balancing act, and we got that balance right in the Budget.

The Government maintained all entitlements to income support, and increased spending on front-line public services, particularly in health, education and justice.

That support for the economy has helped to maintain activity, support jobs, and give people a degree of security during tough times.

At the same time, however, we put in place measures to keep government debt from skyrocketing and we avoided the very real threat of a credit downgrade, which would have pushed up interest rates and cost jobs in the longer term.

As far as this recession goes we are not out of the woods yet, but the Government is keeping a careful watch on international developments and is ready to respond accordingly.

What I want to focus on today, however, are our longer-term economic objectives and what we are doing to meet them.

This Government has three key economic objectives, which together will result in improved and enduring economic growth. These are:

• increasing New Zealand’s productivity growth
• maintaining high levels of employment, and
• reducing New Zealand’s vulnerability to adverse events.

Increasing our productivity growth basically means getting better at producing goods and services the world wants, and getting paid more for them.

At the same time we want to keep employment high, although this will always fluctuate along with the economic cycle.

Reducing New Zealand’s vulnerability means lessening the risk that another economic shock could severely affect our economy.

We will always have better-than-average periods and worse-than-average periods – that is the nature of economic cycles – but meeting these three objectives will result in an increased long-term growth rate.

And meeting these objectives depends on the fundamental strengths and weaknesses of the New Zealand economy.

Let’s start with our strengths.

New Zealand has sound economic foundations, like low levels of corruption, an independent judiciary and strong public watchdogs, an independent central bank, highly-transparent government finances, and a flexible labour market.

New Zealanders are amongst the hardest workers in the OECD. We have high rates of employment compared to other developed countries and we work relatively long hours.

We have plenty of opportunities.

We are closer to the emerging centres of economic growth than we have ever been.

We are experts at food production, and the growing middle classes of China and India are increasingly demanding better quality food products.

New Zealand has the potential to fill pantries and fridges, not just in Asia but throughout the world, with high-quality, efficiently-farmed products.

We are blessed with a beautiful landscape and a unique culture that tourists want to experience.

Although we remain the furthest country from world markets, ultra-fast broadband is a breakthrough technology that will give New Zealand firms the ability to reach customers far across the globe.

Over the next six months I will take the message about New Zealand’s strengths to the rest of the world, as I visit other countries.

An important part of my job is to promote New Zealand, to help build commercial networks, and to develop a sense of where our opportunities lie with the rest of the world.

But let’s not ignore the weaknesses of the New Zealand economy.

The most fundamental problem facing the New Zealand economy is poor productivity growth.

Our productivity is already low by comparison with other developed countries, and in recent years has been growing much slower than in most other countries.

A significant part of the poor productivity growth in New Zealand has been the stagnation of the tradeable sector of the economy.

The tradeable sector is made up of those firms that are in competition with the rest of the world – that is, they either export to other countries or they compete with imports here in New Zealand.

This sector includes agriculture, fisheries, manufacturing, tourism, and forestry – the industries that make us money in the world.

The sad fact is that the tradeable sector has effectively been in recession for the last five years.

During that period, output in the tradeable sector has shrunk by around 10 percent, while the non-tradeable sector of the economy – which has lower productivity – has grown by 15 percent.

That constitutes highly unbalanced growth. As I mentioned earlier, we have had consumption-led growth fuelled by increasing debt and excessive government spending. There has been insufficient growth and investment in the internationally competitive sectors of the economy.

We like to think of ourselves as a trading nation, yet we export less as a percentage of GDP than many other small OECD countries. And that percentage has only grown slowly over the last 30 years.

Over 90% of our exports come from just under 5% of exporters, and these exports are also very concentrated in a few sectors.

Because of our poor export growth, and our reliance on foreign savers to fund much of the investment in New Zealand, our current account deficit has grown unsustainably large.

Over time New Zealanders have built up liabilities to foreigners of $177 billion, the vast bulk being household and business liabilities, rather than those of the Government.

That total amounts to 98 percent of GDP, which is one of the highest proportions in the OECD, and constitutes a large part of New Zealand’s economic vulnerability.

Our challenge as a country is therefore to preserve the strengths of the New Zealand economy, while addressing its weaknesses.

We need our economy to become more productive through investment in sectors that are internationally competitive.

We need a business environment that enables firms to move resources to their best use.

We need a public sector which is better-performing and more efficient.

In short, we need to reverse the trends of recent years, and get the tradeable sector growing again.

Then can we can begin to narrow the income gap with other developed countries.

I cannot emphasise enough that there are no quick-fix solutions here.

And we must always be conscious that New Zealand’s wealth is generated by the private sector – by the small firms, the big companies, and the sole traders who generate the jobs, the profits, and the return on investment that drives our economy.

But there are things the government can do to further our economic objectives, by providing an environment in which the private sector can thrive.

The Government is working on six main policy drivers – these are:

• regulatory reform
• investment in infrastructure
• better public services
• education and skills
• innovation and business assistance
• a world-class tax system.

Regulatory reform

The Government’s first policy driver is the regulatory environment under which firms operate.

Regulation helps ensure we get treated fairly, protect and manage our environment, have a competitive and efficient economy, and so on.

But regulation also has its costs. As a recent ANZ publication noted: “The cost of poor regulation is investment that never takes place, jobs never created or income never earned.”

New Zealand needs to offer a high-quality regulatory environment if we are to overcome the economic disadvantages of our small size and geographical isolation.

Other OECD countries have increased the attention they give to regulatory reform and have surpassed us in international measures of regulatory impact and competitiveness.

This Government has begun to address that. 

We have introduced a 90 day probationary period to give smaller businesses the confidence to take on employees. 

We are undertaking the biggest overhaul of the Resource Management Act since its introduction in 1991. The first phase of our RMA reform programme focused on streamlining and simplifying processes under the Act.  A second phase of reform is currently underway.

We have repealed Labour’s ban on building thermal power stations.

We are changing overseas investment regulations to reduce compliance costs for minor investment applications. Bill English will detail these changes and give an update on our Overseas Investment Act review in a speech next week.

We have also kicked off a programme of reviewing and reforming regulations including those in the Building Act, electricity and telecommunications rules, and the emissions trading legislation.

Rodney Hide, as Minister for Regulatory Reform, has been looking out for what we call "low-hanging fruit".  These are the infuriating laws that people often complain about.

In an annual Regulatory Reform Bill, there will be a regular opportunity to reduce red tape and make positive changes to regulations.

And together with Rodney, we are working on ways to improve the quality of new regulations, and to systematically review existing regulations.

Investment in infrastructure

The second policy driver is investment in productive infrastructure.

A lack of investment over a number of years has resulted in infrastructure deficits that have clogged the arteries of the New Zealand economy.

This Government has begun to clear out those arteries.

We are investing $7.5 billion over the next five years to build and upgrade schools, roads, housing, hospitals and telecommunications. We announced in February that we were fast-tracking almost $500 million of this investment, and much of this is already underway.

This investment is realising some immediate benefits.

For example, the start date of the Victoria Park motorway project has been brought forward by a year as a result of the Government's $1 billion boost to state highway spending over the next three years.

Later this month, work will begin on the Kopu Bridge, and we have identified an affordable, funded option for the Waterview Connection in Auckland.

We have been improving the quality of the state housing stock through a substantial upgrade programme.

School building programmes have been brought forward.

And we have taken the first steps towards rolling out our $1.5 billion broadband plan.

We’ve also begun to improve the way public sector agencies manage their existing infrastructure assets and plan for future infrastructure needs.

In March this year we established two bodies – a National Infrastructure Unit to co-ordinate the Government’s infrastructure activities, and an Infrastructure Advisory Board, made up of representatives from the private sector and local government, to provide independent advice on investment priorities.

These will help lift the level of capital asset management and planning across the public sector.

Together they will also develop a National Infrastructure Plan by the end of the year.

The challenge for New Zealand is to emerge out of recession with a better stock of infrastructure, with investment decisions better analysed and better regulated, and with the efficiency of commercial disciplines entrenched into decision-making.

We are addressing that challenge.

Better public services

The Government’s third policy driver is lifting the performance of the public sector.

The wider public sector represents around a quarter of economic activity in New Zealand.

Therefore the most direct thing the Government can do to improve the productivity of New Zealand economy is to get its own house in order.

The previous government spent a lot of money on the public service without a corresponding increase in actual services to the public.

This Government is committed to improving the quality of public spending, by delivering better, smarter services within a limited increase in funding.

Our first move was to put a cap on the number of core government administration staff.

And our ongoing focus will continue to be on shifting more resources to front line services.

We made a good start in this year’s Budget.

We identified a total of more than $2 billion in spending over the next four years that either did not accord with our priorities, or that had a relatively low value.

That money was used to fund other, more valuable, initiatives, including boosting frontline health and education services.

That is only a start, however, and we need to make enduring and significant changes in the public sector to improve its performance.

This drive for change has been given added impetus by our decision to reduce the allowance for new operating spending in future budgets to a maximum of $1.1 billion.

To put that in perspective, that is less than half the new operating spending over the last five Budgets.

The expectations of New Zealanders of their public services are rightly high.  The restraint I’m talking about is permanent.

So delivering better, smarter services with smaller increases will be an ongoing challenge.

Looking ahead to Budget 2010, public sector chief executives and Crown entity boards are working with Ministers to find further savings and drive improved performance.

I have tasked my Ministers with getting the best possible value out of every taxpayer’s dollar. 

Education and skills

The fourth policy driver is education and skills.

We are focused on literacy and numeracy at the primary school level, driven by National Standards.

National Standards will set clear expectations about what children should have learned at each stage of schooling.

Schools will assess students against those standards and convey that information to parents in plain English.

National Standards will be in place for Years 1 to 8 at the start of the 2010 school year.

The Government wants to introduce National Standards constructively, in a cooperative spirit. We want them to be an aid to better teaching and learning rather than a cause of resentment in the sector.

But there should be no doubt about the Government’s commitment to National Standards.

Parents want them, this Government is going to deliver them, and I am backing the Minister of Education 100 percent.

Our second focus is on options for secondary-age students outside the traditional school system.

The Ministry of Education has received a number of proposals for Trades Academies, and is looking to get these underway as soon as they can.

Trades Academies, based in schools, will give young people wider choices in education and the ability to gain practical, hands-on vocational skills while still at school.

The Government is also ensuring that there are options for students outside of the school system.

Our Youth Guarantee will focus on 16 and 17 year olds and will allow them to study towards school level qualifications at a polytech, institute of technology, wananga, or private training establishment.

We will soon be announcing details of a staged roll-out of the Youth Guarantee, beginning from next year.

Innovation and business assistance

The Government’s fifth policy driver is the investment that both government and business make in research and development, in innovation, and in developing new markets and products.

Broadly speaking, the Government’s investment in this area, which is considerable, should contribute to either of two goals:

• helping firms connect with overseas markets, businesses and consumers
• helping firms access, or develop, new ideas to create new and higher value products and services.

Those two goals will help drive productivity growth and investment in the tradeable sector, and improve our export performance.

New Zealand firms that wish to export or operate internationally face twin challenges of distance and size.

To help overcome these disadvantages, our trade assistance for exporters needs to be world class.

The Government is determined to ensure that our overseas presence helps pursue our wider economic objectives.

We are working on ways to best deliver an "NZ Inc" approach on the part of all Government agencies operating offshore.

A seamless network amongst these agencies will best support our trade and economic interests overseas, with Government working alongside New Zealand exporters.

At a more general level, we are pushing ahead with our efforts to secure free trade agreements, particularly in Asia, alongside our commitment to a multilateral trade agenda.

Despite what some people in the Opposition might say, I’ll be disappointed if Tim Groser doesn’t have a large travel bill in this parliamentary term, because that shows me he is doing his utmost for New Zealand’s trade.

In terms of innovation, our emphasis is on promoting a stronger interactive relationship between the business sector and our publicly-funded research institutions.

Universities and Crown Research Institutes need to be more responsive to the needs of firms. Our innovation system also needs to encourage firms to increase their take-up and application of research.

One of our first initiatives in this area has been the Primary Growth Partnership. This will invest in significant research and innovation programmes across the primary and food sectors.

When fully up and running, it will see the Government investing $70 million annually in primary sector innovation, matched dollar-for-dollar by industry.

Because it is a partnership between the sector and publicly-funded research institutions, the research will be more relevant, take-up will be greater, and it will be more effective.

A world-class tax system

The final policy driver is the tax system.

The primary function of the tax system, not surprisingly, is to collect revenue.

In the current environment, when we are facing a decade of budget deficits, we need to make sure we can fund the Government’s activities in a sustainable way.

But the tax system is also important because it changes the way people behave in the economy. People do things because of the way the tax system is structured, not necessarily because those things represent the most productive use of resources.

So we have to ensure that New Zealand maintains a world-class tax system that doesn’t get in the way of people working hard, saving, and investing in productive enterprises.

This Government has already reduced personal tax rates for a great many taxpayers, in a tax cut package worth $1 billion a year.

We have also introduced a $500 million tax assistance package that makes it easier and less expensive for small and medium enterprises to pay their taxes.

Together with Victoria University, we have established a Tax Working Group to consider the medium-term tax policy challenges facing New Zealand.

The Working Group will be chaired by Professor Bob Buckle and will report at the end of the year.

The Government considers that a strategic review of the tax system is very timely at this stage – particularly in light of the challenges posed by the current economic and fiscal environment and by our medium-term goal of a 30 percent top personal tax rate.

And since our overriding aim is to be competitive with other countries, we can’t consider our tax system in isolation.

In particular, the Government will be watching closely what comes out of Henry Review of taxation in Australia, which is due to report back at the end of this year.

Conclusion

The Government has a comprehensive plan, not just for managing through the current recession, but also for improving the fundamentals of the New Zealand economy.

The six policy drivers I have outlined will help to create an environment that allows businesses to thrive.

I am going to push my Ministers to get as much done as they can, as quickly as they can, inside these policy drivers.

But the government cannot itself create prosperity.

In the end, New Zealand’s economic prosperity relies on the hard work and inventiveness of our businesses and their employees.

That’s who we have to back.

That’s the only way we will lift our economic performance.

Thank you very much for inviting me to your One Event National Conference.

I’d like to start by acknowledging your President Don Nicolson, the Board of Federated Farmers, and those of you who have travelled to be here from farms and rural communities all over our beautiful country.

It’s a great pleasure to be speaking to your annual conference once again, and it’s an honour to be speaking as your Prime Minister.

If I can look back for just a moment, I’d like to repeat a few words I said when I addressed your annual conference two years ago.

National and Federated Farmers share many of the same values – a firm belief in free enterprise and individual responsibility, a deep respect for property rights, a realisation that governments don’t have the answer to every problem, and a conviction that hard work, initiative, ambition, and success should be encouraged and celebrated, not taxed and regulated out of existence.

Those are very much the values we are bringing to this Government. And – despite the global recession and the difficult economic times we face – they are very much the values that will drive us in the years ahead.

I know you had a busy session yesterday and that Agriculture Minister David Carter spoke about many of the issues you are concerned about and that the Government is working hard on.

I don’t want to go over too much of the same ground, but I do want to touch on some of the challenges and opportunities that I see farming facing in the years ahead, and talk further about some of the larger initiatives we have announced in recent months.

As you know, the National-led government views agriculture as a key driver of New Zealand’s economic engine.

We value the contribution that farmers make to our economy, our lifestyle – and the Crown accounts.

When things are going well on our farms, this flows through into the small towns, the provincial cities, and into our big cities.

Conversely, when the primary sector sneezes, the New Zealand economy catches a cold.

It’s fair to say that – just like all developed countries – New Zealand is facing some real challenges at the moment.

But despite these difficult economic times, I am very optimistic about the future of farming and the future of our economy.

Because even though many Kiwis – and many farmers – are struggling, we need to look beyond this recession and focus on the longer term opportunities we face.

The high-quality products you grow and produce are one of the keys to our recovery and our future prosperity.

During this recession, demand for food has declined far less than demand for manufactured goods.

And despite this recession, the middle classes in China and India are continuing to grow.

As they grow, their appetite for high-quality food will also grow.

New Zealand is well-placed to feed that appetite.

We have a temperate climate, quality land, relatively abundant water supplies, and the world-class expertise and know-how of our farmers.

We are well-positioned on the edge of Asia, and have a growing number of free-trade agreements with countries in the region.

We have a clean and green brand, and a reputation for producing safe, high-quality food.

Our challenge as a government, and your challenge as farmers, is to make the most of these competitive advantages and the extraordinary opportunities they present.

If we succeed, agriculture will play a critical role in lifting New Zealand’s productivity, the value of our exports, and the growth levels of our economy. 

That won’t necessarily be easy.

Other countries are increasing their agricultural production and positioning themselves to compete with us in our markets.

What’s more, after several years of expansion and intensification, our farmers have to contend with pressures on the resources they rely on – land, water, and – despite rising unemployment – even skilled workers.

And all of this is happening in the context of a world where consumers are increasingly aware of carbon footprints, climate change, and environmental performance.

So if New Zealand is to meet these challenges and make the most of our opportunities, we need to play to our strengths.

We need to harness the experience born of generations of farmers.

We need to make the most of our cutting-edge technology and know-how.

And we need to protect our environmental credentials.

All these factors will play a part in differentiating what New Zealand produces and ensuring better prices for your products.

The question, of course, is how this is best achieved.  

The Government has an important role to play in answering that question, and I’d like to take a few minutes outlining what we are doing.

There is no one big idea we can implement to make the most of our opportunities in agriculture – or, for that matter, in any industry.

But there are hundreds of small, relatively unexciting, pragmatic, but important things we need to do.

Individually, these things may not seem to make much difference.

But when you take them together they will have a significant impact.

From working to remove barriers to free trade, reforming the Resource Management Act, amending the Building Act, and reducing compliance costs for small businesses.

Right through to bonding vets, doctors, nurses, and teachers in hard-to-staff rural areas, boosting investment in State Highways and broadband, and allowing trucks to carry larger loads.

These and many other things are important and we are driving progress on them.

But there are three larger initiatives the Government has announced in recent months that I would like to explore in more detail today:

• The Primary Growth Partnership,
• Our plans for tackling climate change, and
• The Water and Land Forum.

Our primary sector has a long history of continuous improvement.

Doing things smarter on and off the farm has boosted production and the value of our agricultural products.

This in turn, has driven better returns to farmers and growers, and to our economy.

From historical developments such as refrigerated shipping, aerial topdressing, the adoption of electric fences, and the boning out of slaughtered meat, to more recent successes such as the development of ZespriGold kiwifruit and significant gains in lamb weights over the last decade or so.

Just the other day I was told that Fonterra has developed a new process for making mozzarella cheese that cuts the time down from three months to twelve hours.

That’s half a day from cow to pizza.

We believe that the success, the know-how, and the innovative thinking in our agricultural industries provides a massive opportunity for New Zealand, and that there is capacity for even bigger gains in the future.

And because our agricultural industries have the scale, the market share, and the supply chains to be truly competitive on the world stage, we believe the government has an important role in helping farmers make these gains.

That’s why in this year’s Budget we announced the Primary Growth Partnership.

The Partnership is aimed at driving innovation and doing things smarter right across the primary sector value chain.

From education, research and development, and product development, through to commercialisation, market development, and technology transfer.

PGP is a bigger commitment than the Fast Forward Fund which it replaces. It is also less complicated.

As David outlined yesterday, Budget 2009 provides $190 million of Government funding over four years for PGP.

It will start at $30 million this year; go to $40 million next year; $50 million the year after that; rising to $70 million per year ongoing from 2012/13.

Funding will be increased as industry shows capacity and the need to invest even more.

With a matching commitment by industry, that’s up to $140 million a year that will be invested.

There will be five sections of funding with each proportioned a dedicated amount.

The rest will be contestable.

These sections are:

1. Pastoral (including wool) and arable production;
2. Horticulture;
3. Seafood (including aquaculture);
4. Forestry and wood products; and
5. Food processing (including nutriceuticals).

In addition to these five sections, $5 million will be proportioned for Greenhouse Gas research – and I'll talk more about that shortly.

PGP is an ambitious project.

And it is a true partnership between government and industry.

Its priorities and strategic direction will be led by the industries that choose to be involved.

The more that industries put into each section, the more that government will fund it.

Its success will be determined by how much you support it.

So our challenge to you and to farmers all over the country is to get together and contribute to the fund.

By working together, we have a better chance of developing the innovations we need – the aerial topdressing of tomorrow – to make the most of our commercial advantages, drive higher value products, and boost farm returns in the years to come.

An area where innovation will be increasingly important is in our response to climate change.

New Zealand’s greenhouse gas profile, where the bulk of our emissions come from ruminant farm animals, is unique.

If we can make real gains in reducing agricultural emissions the payoff to farmers and New Zealand’s economy will be – relatively speaking – much larger than for any other country.

That’s why we are taking climate change seriously, and that’s why a major component of the Primary Growth Partnership will be focused on tackling agricultural greenhouse emissions.

We have always been clear that agriculture will be part of New Zealand's emission reduction efforts.

Equally, we have always been clear that there must be effective and affordable technology that allows farmers to reduce emissions without reducing productivity.

That’s why, last month, we announced that the Government is establishing a Centre for Agricultural Greenhouse Gas Research.

The Centre will develop technologies that reduce emissions and improve on-farm efficiency and productivity.

We want to be world leaders in the field of agriculture greenhouse gas research and development for one important reason – because we have to be.

 The Centre will have three areas of focus:

1. Methane from farm animals and waste systems,
2. Nitrous oxide from farm animals and nitrogen fertiliser, and
3. Soil carbon from agriculture and horticulture.

We have allocated $5 million dollars a year from the Primary Growth Partnership for the centre.

It will also be able to bid with industry partners for PGP's additional contestable funding.

Just as importantly, we are exploring how the Centre can be expanded internationally.

An international centre for research on agriculture greenhouse gas emissions can provide a platform for broader engagement with the international community.

It can also allow New Zealand to make a vital contribution to the challenge of climate change.

The Centre will be a key part of our sensible and pragmatic approach to responding to climate change.

We need to make sure that our efforts to tackle emissions don’t simply result in key sectors of our economy shutting down and exporting jobs overseas.

We need to balance our environmental responsibilities with our economic opportunities.

Our review of the Emissions Trading Scheme is firmly focused on this goal.

As David mentioned yesterday, the select committee reviewing the Emissions Trading Scheme is due to report back to Parliament in the next month or so.

In the meantime, the Government has delayed some of the dates that the forestry sector had to meet under the current legislation.

The review is very important and we await its findings with great interest.

We have made it very clear that we want a more balanced emissions trading scheme than the one Labour put in place.

It’s also important that our ETS is well aligned with Australia’s to ensure that our businesses, our farms, and our consumers do not face a comparative disadvantage.

While we wait for the select committee, the Minister for the Environment, Nick Smith, is kicking off a series of public meetings around the country on New Zealand's 2020 greenhouse gas emissions target.

Setting a 2020 target for emissions reduction is an important part of our international obligations.

We have already set a long-term goal of 50 by 50 – reducing New Zealand's emissions to 50% of 1990 levels by 2050.

Setting an interim target for 2020 requires careful consideration, especially in the recession.

The target needs to be realistic and achievable, and it must be both environmentally effective and economically efficient.

It’s important that Federated Farmers and your members have a say on the target by attending the public meetings and contributing to this process.

The third area I want to emphasize today is every bit as important to farmers as innovation or climate change – our precious water.

If we want to grow our agricultural output and the quality of the goods we produce we need water.

We simply can’t do without it.

New Zealand has plenty of water.

But it’s not always in the right place at the right time.

Our fresh water resources are the envy of many other countries, and they are one of the keys to our competitive advantages in agriculture.

About 600,000 hectares of farmland are irrigated and – depending on how you calculate it – at least three times that area is suitable for irrigation.

That’s a huge potential gain we can make in farm productivity.

The problem is that the management of our water resources has not kept up with the extra pressure.

In many parts of the country, water quality is poor or deteriorating, and demand is outstripping supply.

This has already created real costs, such as the $450 million that has been allocated over the next 10 to 20 years to clean up Lake Taupo, the Rotorua lakes, and the Waikato River.

That’s why we are establishing the Land and Water Forum to help set the direction of water reform.

The forum is a collaborative approach involving major water users in agriculture, industry, and power generation, as well as environmental and recreational groups.

And that’s why we are looking at including water in the government’s plans for infrastructure development.

I have already indicated that if the numbers stack up, and if farmers are on board, I can see a role for the Government in assisting with large-scale water storage infrastructure in Canterbury.

A similar approach may be a possibility in other parts of the country.

These are just some of the many areas where the Government is taking significant steps to help farmers and our agricultural industry make the most of our opportunities.

But as people who work the land in all conditions, at all hours, through droughts and floods and snowstorms – far from the world of politicians and bureaucrats – you know better than anyone that there is only so much that the government can do.

We do not – and never will – have all the answers.

When it comes to on-farm innovation, when it comes to protecting our environment, and when it comes to using our water resources as sensibly as we can, by far the greatest responsibility falls on you.

And so, as you wrap up your conference today, and head back to your farms, your families, and your communities, I want to leave you with a final thought.

The high-quality agricultural products you produce are one of New Zealand’s great competitive advantages.

The National-led government wants to work with you to make the most of the opportunity that this competitive advantage presents for New Zealand’s future.

If we succeed, we have much to gain.

Agriculture will continue to play a critical role in lifting New Zealand’s productivity, the value of our exports, and the growth of our economy. 

To help achieve these goals, the Government is taking many actions from regulatory reform through to boosting infrastructure.

We have launched the Primary Growth Partnership.

We are tackling climate change by improving the Emissions Trading Scheme, setting an emissions target for 2020, and establishing an ambitious Centre for Agricultural Greenhouse Emissions.

And we have started on a path to reforming the management of our fresh water resources for the benefit of farmers and all New Zealanders.

But – at the end of the day – we know that the future of New Zealand’s agriculture is not up to us.

In so many ways that future is in your hands.

And that future will only be as bright, as innovative, as clean and green, and as prosperous as each and every one of you wants it to be.

Thank you very much.

Good afternoon and thank you for the opportunity to be part of this fantastic event.

I would like to extend a warm welcome to our international guests - the tourism buyers and international media – and to our New Zealand tourism operators, media, and invited guests.

To say I am blown away by the sheer scale of this event would be understating it.

To see more than 1,200 of you in one room brings home to me the vital importance of this industry. And the enthusiasm and excitement I have encountered during my walk around today, has reinforced my belief that tourism will play an ever-increasing role in taking this country forward.

This event proves there is huge confidence in New Zealand’s tourism sector, despite challenging times.

I know it isn’t easy doing business out there at the moment but your presence here, and the hard work and commitment you are putting into generating new and exciting business opportunities, should be applauded.

And while I am talking about hard work, may I take the opportunity to congratulate the Tourism Industry Association for a spectacular show.

This Government recognises the absolute importance of tourism to New Zealand’s economy.

In our first six months, we have:

• Made changes to the Resource Management Act to make things easier for small and medium enterprises.

• Invested $50 million into the New Zealand Cycleway project knowing that this will deliver jobs in the present, and an enduring, high-quality national tourism asset for the future.

• Funded a feasibility study into a large-scale convention centre that will be able to cater for conferences of up to 4,000 people.

• Approved an additional $2.5 million in government funding for marketing in Australia.

• Invested $440,000 to allow TIA to develop an Essential Skills training programme for tourism and hospitality workers.

There is more investment coming and together we will find solutions.

I want to talk to you about what I see as the most valuable tourism opportunity we have been presented with in recent times - and how I see us taking full advantage of that.

That opportunity is the 2011 Rugby World Cup.

The eyes of the world will be on New Zealand, with billions of television viewers and an estimated 70,000 fans here in person.

In short, this is the third-biggest sporting event on the planet.

This is an unprecedented chance to present the best of New Zealand to the world – and in doing so attract people to visit here and invest here.

We have been successful in securing games in 13 different venues from the top of the country to the bottom, and we must look after our guests in true Kiwi style.

We are doing all we can, as fast as we can.

The Eden Park resource consents have been approved, the redevelopment project is on time and on budget, and upgrades of other key stadia are also underway – some with government funding.

But it will be ordinary New Zealanders who will make the difference.

We are a not just a country of four million fans, we are a country of four million hosts.

It is through the involvement of all New Zealanders that we will maximise the experience for our visitors and send them away with a positive and warm impression of New Zealand.

We are working on involving the entire country in this opportunity, because it is the entire country that will reap the benefits.

The Rugby World Cup will leave us with a legacy that will extend far wider and far longer than the tournament itself.

Auckland will be a focus for the opening ceremony, and the last two weeks of the tournament when the semis and finals are on at Eden Park.

However it will also be the main gateway for international visitors.

Most great cities have great waterfronts.

Auckland is one of the most naturally endowed harbour cities in the world and we now need to make sure our main waterfront area lives up to that potential.

You will recall the transformation of the Auckland viaduct for the America’s Cup events a decade ago, and how this has remained a valuable and enduring legacy.

The Rugby World Cup presents an opportunity to further transform the Auckland waterfront - not just for the tournament, but as a legacy for all New Zealanders long after the visitors have gone home.

Over the past few weeks there has been a good deal of discussion, and even more speculation about the types of initiatives that might be taken by Auckland to maximise the impact of the Rugby World Cup in 2011.

That is a healthy process.

It is my view that there is an opportunity to turn Queens Wharf into an important public space.

This wharf has been waiting for an opportunity to be developed and opened up for years.

It should be a place of celebration, excitement, and fun for generations to come.

My vision is that it will be a place that all New Zealanders will be even more proud of - and a place that visitors and tourists will be drawn to, remember, and return.

I can confirm today that as a bare minimum we have secured Queens Wharf for a number of initiatives for the period of the Rugby World Cup.

At the very least this will see Queens Wharf loaned from the Ports of Auckland for the period of the Cup.

But I hasten to add that negotiations are continuing to purchase the wharf so it can be a legacy asset with a view to long-term development.

I have made it clear to the leaders of the region that this is an opportunity we must embrace. Over the coming days and weeks, through my Ministers, I expect urgent progress to be made.

The current agreement allows Queens Wharf to be the home of a Rugby World Cup ‘Live Site’ - a large open air space capable of hosting between 10,000 and 15,000 people.

This will be ‘party central’ - the focus of a mass public opening ceremony and the magnet for fans who can’t be at games during the six-week tournament.

In the event Queens Wharf is purchased, plans such as the development of an international cruise ship terminal would occur by 2011.

I see Queens Wharf as the cornerstone of this Rugby World Cup phase of the waterfront development.

However there are other major developments being pursued by the region as well.

The Jellicoe Street and North Wharf area will also be redeveloped by 2011. This will see the street and surrounding area developed into a high quality boulevard with shops, restaurants, working wharves, leisure attractions and a Rugby World Cup viewing area.

The result will be stunning.

I know Auckland City Council is also planning a Marine Events Centre for the Halsey Street extension wharf at Viaduct Harbour.

The completion date for the centre is being brought forward to have it ready by 2011. This large, multi-purpose events centre is yet another project that, combined with the others, will propel Auckland’s waterfront into a spectacular, world-class attraction.

It will make the New Zealand tourism industry richer.

Not just temporarily, through hotel nights, food, and entertainment for six weeks in 2011, but by leaving a legacy of infrastructure that will enhance the visitor experience long after the cheers have faded and the scores are forgotten.

It is unlikely this opportunity will present itself again.

The plan for Auckland’s waterfront could be a development whose speed and scale really does justify being called transformational – and of national and international importance.

This is they sort of action that I believe will help bring New Zealand out of this recession faster and in better shape.

It would show a confidence in ourselves and a belief we can make things happen.

We are a Government willing to act when the time is right.

However, this is not a decision we can make on our own.

Auckland needs to unite to bring this to fruition.

The Rugby World Cup will be a party on a scale never seen in this country before – but it will require Auckland to come to the party first.

My simple challenge to the leaders of this city is to make it happen.

Enjoy the rest of your conference – and thank you for inviting me.