On this day exactly a year ago, the 19^th of November 2008, the new National-led Government was sworn into office.

I remember the awesome feeling of responsibility as I took my oath that day.

The sense of the huge challenges before us, the sense of opportunity and possibility, and the energising mood created by the hope and expectation New Zealanders had for their new Government. 

On this day exactly a year ago, the 19^th of November 2008, the new National-led Government was sworn into office.

I remember the awesome feeling of responsibility as I took my oath that day.

The sense of the huge challenges before us, the sense of opportunity and possibility, and the energising mood created by the hope and expectation New Zealanders had for their new Government. 

The National Party had won the most votes in the election.  That was our first victory. 

You, the Party members, helped make that victory possible, and I am so grateful for your efforts. 

We had asked voters for their trust and in the hundreds of thousands they had voted for the brighter future we campaigned on. 

Kiwis said good-bye to a distracted, bossy Labour Government, beset by cynicism and political sideshows.

They welcomed in a fresh team, ready to strengthen our economy, raise education standards, improve safety in our communities and get more out of our health system. 

And for the past 52 weeks that is what we have worked every day to achieve. 

National's second victory was to put together a MMP-style Government that took in the support of three Confidence and Supply partners. 

We laid the ground for constructive working relationships with the Act Party, the Maori Party and the United Future Party. 

Those relationships have gone from strength to strength and they have allowed us to lead an inclusive, stable Government.

Twelve months on from these victories, we can look back on a year of change, a year of promises delivered and of challenges met. 

The mood of the country is very different today than it was in November 2008.   

Remember how dark the global picture was?    Banks were being bailed out, sharemarkets were diving, firms were collapsing and our trading partners were haemorrhaging.

New Zealand was looking down the barrel of an exploding debt-track, plummeting growth prospects and soaring unemployment forecasts.

Labour had left us with all sorts of nasty problems to sort out, some we knew about and some that were a surprise to everyone. A gaping hole in the finances of ACC; unfunded commitments in almost every corner of the Budget; and a huge set of fiscal risks and liabilities.

Our Government has squarely confronted these challenges, and as 2009 draws to a close, New Zealand feels like a much more optimistic place.

The unemployment forecasts have come down.

The debt-track has been pegged back.

We have technically exited recession.

And our future growth outlook has picked up.

Many businesses that years ago were looking to retreat and retrench are now seeing new opportunities.  New Zealanders have come together, shown their resilience, and soldiered through some very tough times.    We're not over the challenges yet, but a brighter future is looking much closer than it was. 

I want to take this opportunity today to look back on the achievements the National-led Government has delivered in our first year in office, and to look ahead to the next steps in our plan.

Economic achievements

Let's start with the economy.

Accelerating the growth of our economy has been and will continue to be the driving goal of this Government.  Because that's what will provide secure jobs for New Zealanders.  That's what will deliver better living standards.  And that's what will afford us the public services needed to provide strength and security to Kiwi families.

The first year of our economic plan has been about protecting families from the sharpest edges of the recession, supporting jobs and preparing for future growth.

While we have stuck to the core economic objectives we campaigned on, we've also taken a range of extra measures in response to the severity of the recession New Zealand has faced.

Let me go over the key achievements:   

• - We introduced a ReStart package to provide financial support to Kiwi families hit hard by redundancy. That package has delivered some much-needed breathing space to more than 5000 Kiwis and their families.

• - We held a Job Summit to generate ideas for keeping Kiwis in work and providing new job opportunities. That summit brought unions, businesses and community groups together and it resulted in dozens of great initiatives. These included the national cycleway and the Government's Job Support Scheme - the 9-day fortnight - which has built confidence in Kiwi businesses and assisted more than 3500 workers.

• - We fast-tracked $500 million of infrastructure spending to boost jobs in the recession. That package has brought forward roading projects like the Kopu Bridge, helped fix or build more than 100 schools, and allowed an urgent revamp of the state housing stock.

• - We delivered a $500 million relief package to make life simpler for small businesses. That package has reduced the tax and red-tape burden on SMEs and allowed them to focus their energies on growing their businesses rather than on the taxman's forms.

• - We stopped the ballooning of the bureaucracy by capping the number of government workers in the core bureaucracy. We also conducted a line-by-line review of public spending that resulted in an additional $2 billion being shifted into frontline services.

• - We passed a Budget with the biggest health and education votes in New Zealand's history; a Budget that gave people security during the recession by maintaining benefits and Working for Families payments and a Budget that locked in superannuation payments at a rate based on 66% of the after-tax average wage.

• - In that same Budget we took steps to bring Government spending under control and prevent future generations being weighed down by a large debt burden. These steps have benefited New Zealand's international credit rating and will ensure the Government can continue to finance the services and entitlements Kiwi families rely on.

• - We also included in that Budget $7.5 billion worth of infrastructure investment over the next five years, to ensure New Zealanders can look forward to world-class roads and transport networks, an ultra-fast broadband network, 21st century schools and state housing that is fit for purpose.

• - We launched "Warm Up New Zealand: Heat Smart", a four year campaign to help fund the insulation of 180,000 Kiwi homes. I know many of you in Christchurch have taken that offer up, and as a result you are looking forward to a warmer home, lower electricity bills and better health.

• - We delivered $1 billion of tax cuts to 1.5 million taxpayers on 1 April. We also took the difficult but responsible decision to defer future rounds of tax-cuts until the Government books are in a better position.

• - We passed much-needed legislation to simplify the Resource Management Act, making it easier for businesses to grow, invest, and create jobs, while protecting our environment.

• - We launched major reviews to examine and improve the building blocks of our economy. These included reviews of our health system, electricity system, overseas investment regime and emissions trading scheme, and ongoing examinations of our tax system, productivity policies and building regulations.

• - We created up to 16,900 extra work, education and training opportunities for young people who may otherwise have found themselves hit hard by a growing unemployment rate. We launched that package here in Christchurch three months ago. Since then more than 2700 young people have been given opportunities through the Job Ops and Community Max schemes while thousands more will benefit from new work, training and education opportunities over the next year and a half.

• - We opened up New Zealand exporters' access to world-markets by signing Free Trade Agreements with Malaysia and the 10 countries of the ASEAN block; we've concluded free trade negotiations with Hong Kong and the economies of the Gulf Cooperation Council; while progressing negotiations with other countries throughout the world, including the United States.

• - We helped strengthen the agricultural backbone of this country by investing $190 million in the Primary Growth Partnership to boost research and innovation in agriculture, seafood, forestry and food, as well as launching and gathering international support for a Global Alliance to conduct research into ways of reducing agricultural greenhouse gas emissions.

Ladies and Gentlemen, those are some of the highlights of National's economic achievements in our first year in office.

There is plenty more work to be done and I will discuss our next steps in the latter part of my speech.

Health achievements

But let me first turn to some of the Government's achievements in other areas, beginning with health.

National campaigned on getting more out of New Zealand's healthcare system.  Because while Labour had put more money in year after year, they failed to deliver the results taxpayers expected in return.

Our goals for the health system are to deliver better, sooner, more convenient patient care; to boost and support our doctors and nurses; to cap the bureaucracy and to focus funding on frontline services. 

In our first twelve months we've delivered across all these fronts.  Let me highlight some of the key achievements:

• - We delivered a record increase in the number of elective surgery operations performed in our hospitals. In the year to June, we've seen to it that an additional 11,805 elective operations were performed, as compared to the year before. That number represents reduced waiting times for thousands of Kiwis who needed operations like hip and knee replacements, cataract removal and ear surgery.

• - We made the compassionate and sensible decision to fully-fund a 12-month course of Herceptin for women with Her-2 positive breast cancer. That decision has made Herceptin available to 191 women who may otherwise have missed out.

• - We saved Plunketline, by securing funding for their 24 hour phone service, meaning mums-to-be and new mothers can get the advice they need seven days a week.

• - We introduced 960 places in our new Voluntary Bonding Scheme for graduate doctors, nurses and midwives working in hard-to-staff areas or specialities. That scheme will encourage more of our best and brightest to stay in New Zealand, while helping them pay off their student loans.

• - We boosted the number of doctors being trained in our medical schools by sixty extra places, putting us on track to reach our target of an additional 200 places in the next few years. We also boosted by fifty the number of GPs that can be trained each year, towards our target of 154 places.

• - We capped the numbers in the health bureaucracy, and in line with our focus on frontline services moved $20 million in resulting savings into frontline care. We signed-off future plans to remove 500 more back-office jobs with up to $700 million in resulting savings to be moved into frontline care over the next five years.

• - We've started the hard-work needed to rescue ACC from financial disaster, and to ensure our 24-7, universal, no-fault accident insurance scheme will endure.

• - We invested an additional $750 million in frontline healthcare services. This meant that even during the worst global recession since the Great Depression we were able to boost funding for subsidised medicines by $180 million, to boost funding for hospices and palliative care by $15 million; and to increase funding for maternity care by $104 million.

Ladies and Gentlemen, National has taken these steps to improve the performance of our public healthcare service.  We promised we would take these steps and we have delivered. 

Education achievements

We've also delivered in education.

Education is an area that is particularly close to my heart. Because education is a liberator.  It is the key to unlocking the potential of young New Zealanders from all walks of life.  

So this Government is determined to do better for the one-in-five young people who currently leave the New Zealand school system without the skills or qualifications they need to succeed in a modern economy.

In our first 52 weeks in office we've already marked plenty of progress towards that goal: 

• - We've legislated for and published ground-breaking National Standards in literacy and numeracy for New Zealand's 2000 or so primary and intermediate schools. The standards mean that from next year, every child in year 1-8 will have their progress in reading, writing and maths regularly assessed against national benchmarks. The standards will allow every teacher in every school to clearly identify children who are slipping behind or having problems.

• - We've also introduced mandatory plain English reporting of National Standards. This means that the teachers' assessment of children's progress will be reported to parents in Plunket-style report cards, so that mums and dads have a clear idea of how their children are doing, whether they're learning at the level they should be, and what their parents can do to help.

• - We've backed the National Standards policy up with an additional $36 million over four years to help schools boost help for the children who aren't reaching the benchmarks.

• - We've invested $523 million in a 21^st Century Building Plan to build new schools, improve existing schools and future-proof tomorrow's classrooms. We've started work on three new schools already, and ticked off improvements to another 112.

• - We've created 1800 opportunities for graduate teachers in our new Voluntary Bonding Scheme. This will encourage graduates to work in hard-to-staff areas and subjects by helping them pay off their student loans. We've also introduced a 10% voluntary repayment bonus on student loans to help graduates from all disciplines to pay their loans off faster.

• - We've provided a new vocational education option for 16 and 17 year olds, by creating 2000 Youth Guarantee places in our polytechs and private training establishments. This will allow hundreds of teenagers who might otherwise be left behind by our school system to take part in a fees-free course that fires up their imagination, whether it's a course in agriculture, tourism or plumbing.

• - We've announced six new Trades Academies to be developed in New Zealand's secondary schools. These will provide trade-training opportunities to teenagers while they're still at school.

• - We've provided an $82 million boost for school sport, with our Kiwisport programme to boost direct funding for schools and sports clubs. This will allow hundreds of young Kiwis to get increased opportunities to kick around a ball, throw a discus or join a cricket team.

• - We've changed the rules and provided additional funding so that from next year parents can take up 20 Hours Early Childhood Education in kohanga reo and playcentres as well as in kindergartens and private childcare centres.

• - We've also offered boosted opportunities for young people from our less wealthy communities, with funding secured for 30,000 extra places in holiday activity programmes from 2011. And we've created 100 special places in a Prime Minister's Programme for teenagers who've made a concerted effort to turn their lives around.

Ladies and gentlemen, this Government is delivering in education and it's delivering for the next generation. 

Law and order achievements

Finally today, I want to point to the achievements we've made in the law and order area.  I know that one of the key reasons Kiwis elected National is because they trusted us to take the tough steps needed to tackle violent crime and make families safer in their homes and communities.

We have taken a multi-pronged approach to addressing New Zealand's crime problems, by coming down harder on offenders, boosting the tools for catching criminals, and preventing crime from happening in future by tackling youth offending, gangs and the drivers of crime. 

Let me go over some of what's been achieved:

• - We've passed new laws to toughen sentences and restrict bail for violent offenders; improve police powers, crack down on gangs and support crime victims. These laws includes tougher penalties for belonging to a criminal organisation, tougher sentences for crimes against children, new powers for police to intercept gang communications, dismantle gang fortifications and seize property from criminals, as well as allowing police to issue on-the-spot protection orders for victims of domestic violence. We've also introduced legislation to remove parole for the worst repeat violent offenders.

• - We've budgeted $200 million for an additional 600 frontline police, with 135 officers already deployed to the streets of South Auckland.

• - We've also boosted the police with new tools to go after criminals, including 720 new tasers and a new power to DNA-test offenders arrested for imprisonable offences.

• - We've passed a law that will allow police to crush the cars of repeat street-racing offenders under anti-boy-racing laws. I know that's a policy that the people of Christchurch will welcome with open arms.

• - We've improved services for victims of crime with a new Victims Fund, established with a $50 levy on criminals. This will provide new assistance to victims in the form of funeral grants, court attendance grants and other services.

• - We've invested $72.4 million in our Fresh Start programme to turn young offenders away from crime. This will provide the Youth Court with new powers to place young offenders in 3000 new programme places, including new military-style activity camps, mentoring courses, drug and alcohol rehabilitation, and outdoor activities.

• - We've launched a full-scale attack on P. Our plan includes restricting access to the precursor chemicals gangs use to make P; new dedicated anti-drug Customs taskforces; a new police strategy to go after gangs and dealers; the formation of a new Police Assets Recovery Unit which consists of 22 hardened investigators whose sole mission is to track down and seize the assets of organised crime; and a funding boost of $22 million to provide more places in drug and alcohol rehab. The new strategy is already having considerable success with police and customs working together to make massive seizures of P, including 6kgs of the drug intercepted at Auckland Airport just last week.

My fellow National Party members, as in the economy, health and education, this Government has made considerable progress in law and order in our first year in office.

Taken together, it's been a super-busy twelve months for the Government.  Knocking off these achievements has relied on the efforts of a stellar-team of hard-working Ministers.  I want to acknowledge that team today and assure you that I expect our team to redouble their efforts in 2010. 

Our ministerial team is supported by the best caucus in the country.  I also want to thank them today.  National's MPs do a great job of listening to their constituents, keeping our Government in touch with the concerns of the people who put us in power, and doing the hard yards in Parliament's Select Committees and House debates.  They too will have to redouble their efforts next year.

Because there is so much more that needs to be done to secure the brighter future this country deserves.

As we look ahead to 2010, the Government will remain focused on addressing the concerns and hopes of everyday New Zealanders. 

That means supporting jobs, working to ensure wages keep up with cost of living, improving living standards, continuing to strengthen our health and education systems, supporting families and addressing some of New Zealand's toughest social problems, including the underlying drivers of crime. 

Doing those things will require work across a range of fronts. You will see the Government delivering on more of our manifesto promises, and responding to new pressures.  You will see us getting stuck into longer-term work programmes like Whanau Ora  and improving the performance of New Zealand's public services.  And you'll see us building on the work that's already been done to improve frontline services, tackle gangs and violent crime and improve the opportunities available to our most vulnerable citizens.

Amongst all of this, our most crucial task will be developing the policies needed to kick start New Zealand's growth engine.  Because over the next few years a faster growing economy will mean better jobs and better living standards, and in time it will allow the Government to pay down our debt and fund the improved services Kiwi families expect.   

Ladies and gentlemen, I am hugely optimistic about New Zealand's prospects as we exit the recession.  We have so much going for us.  We are one of the best food-producing nations in the world; we're blessed with beautiful scenery that tourists love to visit; we're located in this century's economic powerhouse region - Asia - and we are home to some of the smartest, hardest-working and most creative people in the world. 

The Government's mission is to unlock this potential.

I want to see our farmers and exporters producing more and fetching better prices for their goods overseas. 

I want to see our tourism industry growing, and attracting bigger-spending tourists all year round. 

I want to see more of our smart Kiwi entrepreneurs selling their goods and ideas to the world so they can expand their businesses and provide new and better paying jobs to New Zealanders.

I want to see more of our talented young people realising their potential in New Zealand rather than abroad.

So as we look to the future I've tasked my Government ministers with working on the key drivers needed to realise these ambitions.  They are about: 

1. Ensuring our tax system encourages people to work hard, save and invest in productive Kiwi businesses. 

2. Focusing the Government's considerable share of economic activity on better, smarter frontline services, rather than waste and backroom bureaucracy.

3. Providing all New Zealanders with the education and skills they need to perform productive well-paid jobs.

4. Building the transport, broadband, and other infrastructure networks that people and businesses need to get their jobs done as efficiently as possible.

5. Removing the red tape and cumbersome regulation that can prevent businesses from expanding, taking on new workers and making the most of new ideas.

6. Supporting Kiwi firms to grow and develop new ideas by connecting them with our smartest researchers and scientists, and helping them reach more global consumers by signing free trade agreements with our trading partners. 

That constitutes a huge programme of work, over a wide range of areas.

As a Government, it is a matter of rolling our sleeves up, focusing on the issues that matter and, in some cases, making some difficult decisions.

By creating the right conditions, we can give people the confidence to work hard, invest in a business, and take up new opportunities.

New Zealanders certainly want to do that.

And we were elected to represent them.

They are the people we swore an oath to serve.  And they are the people this Government works for every day.

Together we can realise the brighter future this country deserves.  Thank you.

The National Party had won the most votes in the election.  That was our first victory. 

You, the Party members, helped make that victory possible, and I am so grateful for your efforts. 

We had asked voters for their trust and in the hundreds of thousands they had voted for the brighter future we campaigned on. 

Kiwis said good-bye to a distracted, bossy Labour Government, beset by cynicism and political sideshows.

They welcomed in a fresh team, ready to strengthen our economy, raise education standards, improve safety in our communities and get more out of our health system. 

And for the past 52 weeks that is what we have worked every day to achieve. 

National's second victory was to put together a MMP-style Government that took in the support of three Confidence and Supply partners. 

We laid the ground for constructive working relationships with the Act Party, the Maori Party and the United Future Party. 

Those relationships have gone from strength to strength and they have allowed us to lead an inclusive, stable Government.

Twelve months on from these victories, we can look back on a year of change, a year of promises delivered and of challenges met. 

The mood of the country is very different today than it was in November 2008.   

Remember how dark the global picture was?    Banks were being bailed out, sharemarkets were diving, firms were collapsing and our trading partners were haemorrhaging.

New Zealand was looking down the barrel of an exploding debt-track, plummeting growth prospects and soaring unemployment forecasts.

Labour had left us with all sorts of nasty problems to sort out, some we knew about and some that were a surprise to everyone. A gaping hole in the finances of ACC; unfunded commitments in almost every corner of the Budget; and a huge set of fiscal risks and liabilities.

Our Government has squarely confronted these challenges, and as 2009 draws to a close, New Zealand feels like a much more optimistic place.

The unemployment forecasts have come down.

The debt-track has been pegged back.

We have technically exited recession.

And our future growth outlook has picked up.

Many businesses that years ago were looking to retreat and retrench are now seeing new opportunities.  New Zealanders have come together, shown their resilience, and soldiered through some very tough times.    We're not over the challenges yet, but a brighter future is looking much closer than it was. 

I want to take this opportunity today to look back on the achievements the National-led Government has delivered in our first year in office, and to look ahead to the next steps in our plan.

Economic achievements

Let's start with the economy.

Accelerating the growth of our economy has been and will continue to be the driving goal of this Government.  Because that's what will provide secure jobs for New Zealanders.  That's what will deliver better living standards.  And that's what will afford us the public services needed to provide strength and security to Kiwi families.

The first year of our economic plan has been about protecting families from the sharpest edges of the recession, supporting jobs and preparing for future growth.

While we have stuck to the core economic objectives we campaigned on, we've also taken a range of extra measures in response to the severity of the recession New Zealand has faced.

Let me go over the key achievements:   

• - We introduced a ReStart package to provide financial support to Kiwi families hit hard by redundancy. That package has delivered some much-needed breathing space to more than 5000 Kiwis and their families.

• - We held a Job Summit to generate ideas for keeping Kiwis in work and providing new job opportunities. That summit brought unions, businesses and community groups together and it resulted in dozens of great initiatives. These included the national cycleway and the Government's Job Support Scheme - the 9-day fortnight - which has built confidence in Kiwi businesses and assisted more than 3500 workers.

• - We fast-tracked $500 million of infrastructure spending to boost jobs in the recession. That package has brought forward roading projects like the Kopu Bridge, helped fix or build more than 100 schools, and allowed an urgent revamp of the state housing stock.

• - We delivered a $500 million relief package to make life simpler for small businesses. That package has reduced the tax and red-tape burden on SMEs and allowed them to focus their energies on growing their businesses rather than on the taxman's forms.

• - We stopped the ballooning of the bureaucracy by capping the number of government workers in the core bureaucracy. We also conducted a line-by-line review of public spending that resulted in an additional $2 billion being shifted into frontline services.

• - We passed a Budget with the biggest health and education votes in New Zealand's history; a Budget that gave people security during the recession by maintaining benefits and Working for Families payments and a Budget that locked in superannuation payments at a rate based on 66% of the after-tax average wage.

• - In that same Budget we took steps to bring Government spending under control and prevent future generations being weighed down by a large debt burden. These steps have benefited New Zealand's international credit rating and will ensure the Government can continue to finance the services and entitlements Kiwi families rely on.

• - We also included in that Budget $7.5 billion worth of infrastructure investment over the next five years, to ensure New Zealanders can look forward to world-class roads and transport networks, an ultra-fast broadband network, 21st century schools and state housing that is fit for purpose.

• - We launched "Warm Up New Zealand: Heat Smart", a four year campaign to help fund the insulation of 180,000 Kiwi homes. I know many of you in Christchurch have taken that offer up, and as a result you are looking forward to a warmer home, lower electricity bills and better health.

• - We delivered $1 billion of tax cuts to 1.5 million taxpayers on 1 April. We also took the difficult but responsible decision to defer future rounds of tax-cuts until the Government books are in a better position.

• - We passed much-needed legislation to simplify the Resource Management Act, making it easier for businesses to grow, invest, and create jobs, while protecting our environment.

• - We launched major reviews to examine and improve the building blocks of our economy. These included reviews of our health system, electricity system, overseas investment regime and emissions trading scheme, and ongoing examinations of our tax system, productivity policies and building regulations.

• - We created up to 16,900 extra work, education and training opportunities for young people who may otherwise have found themselves hit hard by a growing unemployment rate. We launched that package here in Christchurch three months ago. Since then more than 2700 young people have been given opportunities through the Job Ops and Community Max schemes while thousands more will benefit from new work, training and education opportunities over the next year and a half.

• - We opened up New Zealand exporters' access to world-markets by signing Free Trade Agreements with Malaysia and the 10 countries of the ASEAN block; we've concluded free trade negotiations with Hong Kong and the economies of the Gulf Cooperation Council; while progressing negotiations with other countries throughout the world, including the United States.

• - We helped strengthen the agricultural backbone of this country by investing $190 million in the Primary Growth Partnership to boost research and innovation in agriculture, seafood, forestry and food, as well as launching and gathering international support for a Global Alliance to conduct research into ways of reducing agricultural greenhouse gas emissions.

Ladies and Gentlemen, those are some of the highlights of National's economic achievements in our first year in office.

There is plenty more work to be done and I will discuss our next steps in the latter part of my speech.

Health achievements

But let me first turn to some of the Government's achievements in other areas, beginning with health.

National campaigned on getting more out of New Zealand's healthcare system.  Because while Labour had put more money in year after year, they failed to deliver the results taxpayers expected in return.

Our goals for the health system are to deliver better, sooner, more convenient patient care; to boost and support our doctors and nurses; to cap the bureaucracy and to focus funding on frontline services. 

In our first twelve months we've delivered across all these fronts.  Let me highlight some of the key achievements:

• - We delivered a record increase in the number of elective surgery operations performed in our hospitals. In the year to June, we've seen to it that an additional 11,805 elective operations were performed, as compared to the year before. That number represents reduced waiting times for thousands of Kiwis who needed operations like hip and knee replacements, cataract removal and ear surgery.

• - We made the compassionate and sensible decision to fully-fund a 12-month course of Herceptin for women with Her-2 positive breast cancer. That decision has made Herceptin available to 191 women who may otherwise have missed out.

• - We saved Plunketline, by securing funding for their 24 hour phone service, meaning mums-to-be and new mothers can get the advice they need seven days a week.

• - We introduced 960 places in our new Voluntary Bonding Scheme for graduate doctors, nurses and midwives working in hard-to-staff areas or specialities. That scheme will encourage more of our best and brightest to stay in New Zealand, while helping them pay off their student loans.

• - We boosted the number of doctors being trained in our medical schools by sixty extra places, putting us on track to reach our target of an additional 200 places in the next few years. We also boosted by fifty the number of GPs that can be trained each year, towards our target of 154 places.

• - We capped the numbers in the health bureaucracy, and in line with our focus on frontline services moved $20 million in resulting savings into frontline care. We signed-off future plans to remove 500 more back-office jobs with up to $700 million in resulting savings to be moved into frontline care over the next five years.

• - We've started the hard-work needed to rescue ACC from financial disaster, and to ensure our 24-7, universal, no-fault accident insurance scheme will endure.

• - We invested an additional $750 million in frontline healthcare services. This meant that even during the worst global recession since the Great Depression we were able to boost funding for subsidised medicines by $180 million, to boost funding for hospices and palliative care by $15 million; and to increase funding for maternity care by $104 million.

Ladies and Gentlemen, National has taken these steps to improve the performance of our public healthcare service.  We promised we would take these steps and we have delivered. 

Education achievements

We've also delivered in education.

Education is an area that is particularly close to my heart. Because education is a liberator.  It is the key to unlocking the potential of young New Zealanders from all walks of life.  

So this Government is determined to do better for the one-in-five young people who currently leave the New Zealand school system without the skills or qualifications they need to succeed in a modern economy.

In our first 52 weeks in office we've already marked plenty of progress towards that goal: 

• - We've legislated for and published ground-breaking National Standards in literacy and numeracy for New Zealand's 2000 or so primary and intermediate schools. The standards mean that from next year, every child in year 1-8 will have their progress in reading, writing and maths regularly assessed against national benchmarks. The standards will allow every teacher in every school to clearly identify children who are slipping behind or having problems.

• - We've also introduced mandatory plain English reporting of National Standards. This means that the teachers' assessment of children's progress will be reported to parents in Plunket-style report cards, so that mums and dads have a clear idea of how their children are doing, whether they're learning at the level they should be, and what their parents can do to help.

• - We've backed the National Standards policy up with an additional $36 million over four years to help schools boost help for the children who aren't reaching the benchmarks.

• - We've invested $523 million in a 21^st Century Building Plan to build new schools, improve existing schools and future-proof tomorrow's classrooms. We've started work on three new schools already, and ticked off improvements to another 112.

• - We've created 1800 opportunities for graduate teachers in our new Voluntary Bonding Scheme. This will encourage graduates to work in hard-to-staff areas and subjects by helping them pay off their student loans. We've also introduced a 10% voluntary repayment bonus on student loans to help graduates from all disciplines to pay their loans off faster.

• - We've provided a new vocational education option for 16 and 17 year olds, by creating 2000 Youth Guarantee places in our polytechs and private training establishments. This will allow hundreds of teenagers who might otherwise be left behind by our school system to take part in a fees-free course that fires up their imagination, whether it's a course in agriculture, tourism or plumbing.

• - We've announced six new Trades Academies to be developed in New Zealand's secondary schools. These will provide trade-training opportunities to teenagers while they're still at school.

• - We've provided an $82 million boost for school sport, with our Kiwisport programme to boost direct funding for schools and sports clubs. This will allow hundreds of young Kiwis to get increased opportunities to kick around a ball, throw a discus or join a cricket team.

• - We've changed the rules and provided additional funding so that from next year parents can take up 20 Hours Early Childhood Education in kohanga reo and playcentres as well as in kindergartens and private childcare centres.

• - We've also offered boosted opportunities for young people from our less wealthy communities, with funding secured for 30,000 extra places in holiday activity programmes from 2011. And we've created 100 special places in a Prime Minister's Programme for teenagers who've made a concerted effort to turn their lives around.

Ladies and gentlemen, this Government is delivering in education and it's delivering for the next generation. 

Law and order achievements

Finally today, I want to point to the achievements we've made in the law and order area.  I know that one of the key reasons Kiwis elected National is because they trusted us to take the tough steps needed to tackle violent crime and make families safer in their homes and communities.

We have taken a multi-pronged approach to addressing New Zealand's crime problems, by coming down harder on offenders, boosting the tools for catching criminals, and preventing crime from happening in future by tackling youth offending, gangs and the drivers of crime. 

Let me go over some of what's been achieved:

• - We've passed new laws to toughen sentences and restrict bail for violent offenders; improve police powers, crack down on gangs and support crime victims. These laws includes tougher penalties for belonging to a criminal organisation, tougher sentences for crimes against children, new powers for police to intercept gang communications, dismantle gang fortifications and seize property from criminals, as well as allowing police to issue on-the-spot protection orders for victims of domestic violence. We've also introduced legislation to remove parole for the worst repeat violent offenders.

• - We've budgeted $200 million for an additional 600 frontline police, with 135 officers already deployed to the streets of South Auckland.

• - We've also boosted the police with new tools to go after criminals, including 720 new tasers and a new power to DNA-test offenders arrested for imprisonable offences.

• - We've passed a law that will allow police to crush the cars of repeat street-racing offenders under anti-boy-racing laws. I know that's a policy that the people of Christchurch will welcome with open arms.

• - We've improved services for victims of crime with a new Victims Fund, established with a $50 levy on criminals. This will provide new assistance to victims in the form of funeral grants, court attendance grants and other services.

• - We've invested $72.4 million in our Fresh Start programme to turn young offenders away from crime. This will provide the Youth Court with new powers to place young offenders in 3000 new programme places, including new military-style activity camps, mentoring courses, drug and alcohol rehabilitation, and outdoor activities.

• - We've launched a full-scale attack on P. Our plan includes restricting access to the precursor chemicals gangs use to make P; new dedicated anti-drug Customs taskforces; a new police strategy to go after gangs and dealers; the formation of a new Police Assets Recovery Unit which consists of 22 hardened investigators whose sole mission is to track down and seize the assets of organised crime; and a funding boost of $22 million to provide more places in drug and alcohol rehab. The new strategy is already having considerable success with police and customs working together to make massive seizures of P, including 6kgs of the drug intercepted at Auckland Airport just last week.

My fellow National Party members, as in the economy, health and education, this Government has made considerable progress in law and order in our first year in office.

Taken together, it's been a super-busy twelve months for the Government.  Knocking off these achievements has relied on the efforts of a stellar-team of hard-working Ministers.  I want to acknowledge that team today and assure you that I expect our team to redouble their efforts in 2010. 

Our ministerial team is supported by the best caucus in the country.  I also want to thank them today.  National's MPs do a great job of listening to their constituents, keeping our Government in touch with the concerns of the people who put us in power, and doing the hard yards in Parliament's Select Committees and House debates.  They too will have to redouble their efforts next year.

Because there is so much more that needs to be done to secure the brighter future this country deserves.

As we look ahead to 2010, the Government will remain focused on addressing the concerns and hopes of everyday New Zealanders. 

That means supporting jobs, working to ensure wages keep up with cost of living, improving living standards, continuing to strengthen our health and education systems, supporting families and addressing some of New Zealand's toughest social problems, including the underlying drivers of crime. 

Doing those things will require work across a range of fronts. You will see the Government delivering on more of our manifesto promises, and responding to new pressures.  You will see us getting stuck into longer-term work programmes like Whanau Ora  and improving the performance of New Zealand's public services.  And you'll see us building on the work that's already been done to improve frontline services, tackle gangs and violent crime and improve the opportunities available to our most vulnerable citizens.

Amongst all of this, our most crucial task will be developing the policies needed to kick start New Zealand's growth engine.  Because over the next few years a faster growing economy will mean better jobs and better living standards, and in time it will allow the Government to pay down our debt and fund the improved services Kiwi families expect.   

Ladies and gentlemen, I am hugely optimistic about New Zealand's prospects as we exit the recession.  We have so much going for us.  We are one of the best food-producing nations in the world; we're blessed with beautiful scenery that tourists love to visit; we're located in this century's economic powerhouse region - Asia - and we are home to some of the smartest, hardest-working and most creative people in the world. 

The Government's mission is to unlock this potential.

I want to see our farmers and exporters producing more and fetching better prices for their goods overseas. 

I want to see our tourism industry growing, and attracting bigger-spending tourists all year round. 

I want to see more of our smart Kiwi entrepreneurs selling their goods and ideas to the world so they can expand their businesses and provide new and better paying jobs to New Zealanders.

I want to see more of our talented young people realising their potential in New Zealand rather than abroad.

So as we look to the future I've tasked my Government ministers with working on the key drivers needed to realise these ambitions.  They are about: 

1. Ensuring our tax system encourages people to work hard, save and invest in productive Kiwi businesses. 

2. Focusing the Government's considerable share of economic activity on better, smarter frontline services, rather than waste and backroom bureaucracy.

3. Providing all New Zealanders with the education and skills they need to perform productive well-paid jobs.

4. Building the transport, broadband, and other infrastructure networks that people and businesses need to get their jobs done as efficiently as possible.

5. Removing the red tape and cumbersome regulation that can prevent businesses from expanding, taking on new workers and making the most of new ideas.

6. Supporting Kiwi firms to grow and develop new ideas by connecting them with our smartest researchers and scientists, and helping them reach more global consumers by signing free trade agreements with our trading partners. 

That constitutes a huge programme of work, over a wide range of areas.

As a Government, it is a matter of rolling our sleeves up, focusing on the issues that matter and, in some cases, making some difficult decisions.

By creating the right conditions, we can give people the confidence to work hard, invest in a business, and take up new opportunities.

New Zealanders certainly want to do that.

And we were elected to represent them.

They are the people we swore an oath to serve.  And they are the people this Government works for every day.

Together we can realise the brighter future this country deserves.  Thank you.

Thank you for your warm welcome.

Can I start by acknowledging the Chair of the Organising Committee for this Summit, Ms Chong Siak Ching, as well as my fellow panelists:

• President Bachelet of Chile
• Mr Tom Donohue, CEO of the United States Chamber of Commerce
• Mr Richard Adkerson, CEO of Freeport-McMoRan
• Mr Teng Theng Dar, the chair of ABAC.

I spoke at this summit a year ago in Peru and can I say, what a difference a year makes.

This time last year, Lehman Brothers had recently collapsed and many other large financial institutions had been bailed out by the government or acquired under duress. It was a time of rapid change and unpredictable developments.

Fortunately, the world has responded well to the crisis. The extraordinary measures by governments to shore up banks and develop stimulus plans have averted catastrophe.

The world's financial markets have settled down and most countries have passed the worst of the financial and economic crisis.

But it would be foolish to think that everything is back to normal. In particular, high private sector debt and rapidly rising public debt will be a major issue for many countries. With financing harder to come by than in the past, growth prospects will be subdued for a while yet.

I want to offer a few thoughts today on the crisis and its aftermath, from the perspective of a small country whose fortunes depend to a considerable extent on what is happening elsewhere in the world.

That is no criticism of globalisation. New Zealand is actually testament to its potential.

We are a small and very open country. We are the descendents of immigrants from Polynesia, Europe, Asia, and elsewhere, and we have created a unique Kiwi identity.

We are a nation built on imported capital. And from our earliest days trade has been the lifeblood of our economy.  Our farm exports in particular provide the base on which New Zealand's prosperity lies.

We feel the pain when our access to overseas markets is threatened or when our exchange rate fluctuates wildly because of external factors. So we know about the exposure to risk that small economies must deal with.

What the economic crisis has reinforced is that small economies can get badly knocked about by the shockwaves of a global upheaval. Policy choices by the powerhouse economies can have far-reaching effects, and effects that are hard to predict.

It is therefore crucial that as a global community we better understand and manage the inter-connected nature of the global economy.

In that regard we welcome the emergence of the G20 as the premier forum for international economic co-operation.

It is encouraging that G20 members are continuing to consult with non-G20 members. We would welcome taking that process a step further and establishing a regional outreach mechanism in the Asia-Pacific region.

The G20's Framework for Strong, Sustainable and Balanced Growth is an opportunity for the world to work more closely together to manage globalisation.

That's important because my view is that future recessions could become even more correlated across countries and as a result could potentially be deeper than those we have seen in recent decades.

That is because the world's economies are becoming more and more inter-connected and the flow of information around the globe is only going to get faster and more comprehensive. Economies will therefore find themselves more in step, not less.

So in global forums like the G20, and in regional forums like APEC, we need to think seriously about the future economic cycles that will affect us all.

The topic of this Summit is "What APEC can do for Business".

At the top of my list would be a continuing focus on economic policies to resolve global imbalances, a renewed commitment to free trade, and a considered and coordinated look at financial regulation.

At the moment, many of the major world economies are still breathing pure oxygen in the form of massive stimulus packages. That has got them through the crisis but is not sustainable. At some stage - and probably sooner rather than later - that stimulus will have to be unwound.

That won't be easy, as I know all too well. In New Zealand we have had to sharply rein in Government spending increases over the medium term to ensure our rising public debt is brought back under control.

So a sustainable recovery can't happen through ongoing fiscal stimulus. But what will be critical for a long-term sustainable recovery is resolving global imbalances.

Many developed economies, including New Zealand, need to re-orient towards exports, and away from credit-fuelled domestic consumption. That will require economic policy changes to encourage more productive activity.

On the other side of the ledger, many high-saving emerging economies, whose exports have been hit hard in this recession, will need over time to lift consumption among their own people.

That could happen through a variety of channels.  But exchange rate adjustment is likely to be part of the mix.

That shouldn't be something to be fearful of, or something done as some sort of sacrifice to "help out" other countries.  For a fast-growing country with very large trade surpluses, a higher exchange rate is just one of the ways of ensuring that its citizens - and not just its exporters - share in the prosperity. 

I would also strongly urge a new commitment to free trade.

That is essential in the current climate where there is always the risk of protectionist policy responses.

But I don't just want to argue about how bad it is to go backwards on trade - I want to argue about how good it is to go forwards.

Trade benefits everyone. That is why in New Zealand we are continuing to pursue free trade agreements with a number of countries. In the last two weeks, for example, we have signed an FTA with Malaysia and concluded free trade negotiations with the Gulf Cooperation Countries and with Hong Kong.

APEC has been a part of this process. APEC was the catalyst for the P4 trade agreement involving New Zealand, Brunei, Singapore, and Chile.

Building on that high-quality agreement, we are working towards a Trans-Pacific Partnership which would involve another four APEC countries including the United States.

That, in turn, could be a stepping stone to an eventual trade agreement involving all the economies in the Asia-Pacific region. As APEC economies, we should be ambitious for free trade across the region, because this helps create the conditions for business success in all our economies.

Policy makers will also need to look carefully at financial regulation.

I believe that many of the shortcomings that have become evident during the last two years are ultimately about how the financial sector manages risk. As a former head of global foreign exchange at Merrill Lynch, I have seen first hand the sort of risks that are taken on a daily basis.

In my opinion we won't get anywhere if we fall into the trap of somehow blaming ‘the markets' and financial innovation per se. Risk taking is part and parcel of how financial markets have been so successful, over a long period of time, at allocating capital.

There will be booms and busts again.  We shouldn't fool ourselves that we can prevent them. But we do want to minimise collateral damage and to ensure that policy isn't feeding excessive risk taking.

Over the past year or so, governments around the world have needed to step in and support many large financial institutions. However, the danger is that these actions will have the effect of eroding market discipline in the future. Institutions may be managed in a riskier way if creditors and management think they are ‘too big to fail'.

In my view we should be careful not to create rules for banks that merely push the risk into other institutions, like hedge funds or global insurers, which then become systemically important but are not appropriately regulated.

Liquidity risk is also important. Too many institutions were overly reliant on short-term wholesale funding markets prior to the crisis.

That was certainly the case in New Zealand, where too much of our current account deficit was being funded by short-term wholesale liabilities. We are now implementing new liquidity rules to strengthen the resilience of New Zealand's financial sector, while keeping a close eye on related developments at the Basel Committee on Banking Supervision.

Internationally, attention has also been given to the issue of cash bonuses to executives, particularly senior executives in investment banks.

While the huge bonuses paid to such people can often appear obscene, it seems to me that many of the changes suggested worldwide are largely symbolic.

To be really effective, it is necessary to look well beyond senior executives to the incentives on traders on the floor, fund managers, hedge fund promoters, and so on. 

Pay should, wherever possible, be based on long-term performance, and in a way that reflects the fact that often high short-term returns are simply the result of excessive, and potentially dangerous, risk taking.

Employee compensation may also need some limiting where institutions are getting heavy taxpayer support.

But we should also recognise that it is hard for people in many financial institutions to limit risk-taking, when the wider environment is one in which their investors are constantly demanding that they do whatever is needed to generate high returns, this quarter, next quarter, and every quarter that follows. Those are the facts of life for traders and for their bosses.

So it is important that the global debate on these sorts of issues continues. We need to get our policy responses right.

There is a role here for APEC to work alongside the G20 and others to ensure there is a clear understanding of the issues and a coherent debate in this region.

In conclusion, it is clear to me that opportunities are there for the taking.

The world economy, its businesses, financial institutions and markets have enormous potential to improve living standards.

We have seen their shortcomings, but those shortcomings can be overcome. The challenge now is to position ourselves to realise the potential that our region has.

The APEC economies can work their way back to more prosperous times, and I and the other leaders are determined to work with you to make that happen.

Thank you.

Thank you for the invitation to address your Biennial Conference. It's good to be here. 

I last addressed the CTU at your Productivity Conference in March. I enjoyed that opportunity and I was pleased to get a good hearing, so when Helen Kelly and Peter Conway asked me to address this conference I was keen to accept.

After all, despite our different perspectives, your union and our Government share many of the same hopes and concerns.

We're both relieved to be seeing the back of the recession.

We're both concerned to see as many Kiwis in work as possible. 

We're both worried about the gap between New Zealand and Australian wages. 

We both want to see a more productive New Zealand, with a better-skilled, higher-wage economy that produces goods and services valued throughout the world. 

These are goals I am keen to work with you to achieve. The Government values the co-operation we have with the CTU across a range of areas and we want it to continue.   

But I'm upfront about the fact that we don't and won't see eye to eye on every issue. 

I remain optimistic however that the sum of our disagreements is no match for our shared interests. After all, the workers whose interests you seek to represent are the same New Zealanders whose interests my Government seeks to represent. 

In my speech today I want to share with you my view of where the New Zealand economy is headed, the challenges and opportunities the Government sees ahead of us, and our take on some of the issues that are of particular concern to you and your members.

The Economic Outlook:  Challenges and Opportunities

Like you, I'm very pleased that we have technically moved out of recession and that we are in better shape than many other countries. 

But I'm as conscious as you are of the challenges that lie ahead. 

The unemployment rate has been growing, although I'm confident it will peak at a lower level than Budget forecasts.

The Government is trying to keep New Zealanders in work by supporting businesses to keep their staff, setting the conditions needed to give them confidence to take on new workers, and supporting individuals to get back into employment. 

We are particularly concerned about high rates of youth unemployment.

That's why in August I announced a $152m Youth Opportunities package that provides nearly 17,000 additional places for young people aged 16-24 to take part in work, education or training. It's a great package and it's making a big difference to a lot of young people. 

In addition to our concerns about unemployment, the Government is conscious that the hangover from the recession means many families are still finding it hard to keep up with the cost of living. 

That's why we're focused on unleashing New Zealand's growth potential - so that Kiwis can find and keep jobs, workers can get ahead and families can improve their living standards.

We can see that growth potential in individual New Zealanders, and we can see it in the country as a whole - whether it's our agriculture industry, our tourism sector or our innovative businesses.

The Government's economic vision is about unleashing this potential. It's about backing sectors with growth potential and ensuring government policies maximise New Zealanders' can-do attitude, their ingenuity and their work ethic.

Our work programme for achieving this revolves around six key economic drivers. They are tax, innovation, education and skills, infrastructure investment, better public services and regulatory reform.  

My Ministers are working hard on these drivers, and we're interested in your ideas in each area. I'm going to speak briefly about each today, as well as addressing some issues of particular concern to the CTU. 

1. A world-class tax system

The first driver we're working on is ensuring New Zealand has a world-class tax system.

We want to make sure our tax system doesn't hold back people's potential or dampen their aspirations. That means operating tax policies that don't get in the way of people working hard, investing and saving, and that support Kiwis in their efforts to get ahead and improve their living standards.

While New Zealand's current tax system is OK, there's always room for improvement. So together with Victoria University, we have established a Tax Working Group to consider the medium-term tax policy challenges facing New Zealand. It will report at the end of the year. 

I will have more to say about tax after that. You should be assured however that the Government doesn't propose to make any changes to our tax system unless we can be absolutely satisfied that the benefits outweigh any costs. In making that judgment, we will carefully consider the impacts for everyday New Zealanders and the equity and fairness implications for all. 

2.  Innovation and business assistance

The second driver we're working on is innovation and business assistance. This covers government and business investment in research and development, in innovation and in developing new markets and products. 

We're looking at ways we can improve the value of the Government's investment in these areas so that it maximises our economic opportunities. 

It's about ensuring Kiwi employers and entrepreneurs are encouraged to make the most of smart ideas, both at home and on the world stage.

It's about ensuring our firms have the R&D edge needed to get good prices for their products, so they can grow, take on new workers and pay them well.

And it's about ensuring our clever Kiwi companies are able to connect with overseas markets and sell their goods on the world stage.

3.  Investment in infrastructure

A third driver is investment in infrastructure.

For too long a lack of infrastructure investment has been holding back the growth potential of New Zealand.  

We want New Zealanders to have the reliable public infrastructure they need to do their jobs as well and productively as possible. 

The Government has embarked on a $7.5 billion boost in infrastructure investment over the next five years to achieve this. We will be building and upgrading schools, hospitals, and roads, improving the quality of the state housing stock, and investing in ultra-fast broadband. 

In February we decided to fast-track almost half a billion dollars worth of this infrastructure investment to support jobs during the recession. That meant the start dates for projects like the Victoria Park motorway project and the Kopu Bridge were brought forward, allowing construction to begin and workers to be hired. So all through the country the impact of the Government's infrastructure investment is already evident.

4.  Education and skills

A fourth key driver we have identified is education and skills. 

The Government and the CTU agree that to improve New Zealanders' wages and living standards we need to get better at producing the goods and services the world wants, and be paid more for them.

That's what productivity growth is about. It's not about making people work harder and harder. New Zealanders are already amongst the hardest workers in the OECD. It's about helping our people to work smarter.

That's why education and skills are so important. 

I think the New Zealand education system already has a lot going for it, and that we can be proud to boast some of the world's best teachers, researchers and institutions. 

But we all know that we can do better. I am particularly concerned with the long tail of underachievement in our schools, perhaps as big as one in five young people, who are not getting the skills they need to succeed.

That tail represents a huge slice of unrealised economic and social potential. 

The Government wants to reduce the number of young people slipping through the educational cracks.

That's why next year we're introducing National Standards in literacy and numeracy.  

National Standards will give schools and teachers clear expectations of what children should be achieving.

They will ensure parents are well informed about their children's progress.

And they will clearly identify the kids who are struggling and need extra help. 

For those teachers here today let me say that the Government wants National Standards to be an aid to better teaching and learning rather than a cause of resentment in the sector. I am backing my Education Minister 100 per cent on their implementation and I am confident that unions can work constructively with her to make this policy work.

The Government is also focused on expanding the learning options for secondary-age students. Because we all know that some kids are going to be much happier taking apart a car in class than studying Macbeth.

That's why we're developing Trades Academies, and looking at ways we can get schools, employers and polytechnics to work together better. It's also why we're introducing a Youth Guarantee that in its first phase next year will allow 2000 16 and 17 year olds to undertake fees-free study at tertiary institutions. 

We're also aware of the need to improve the skills of those New Zealanders already in the workplace and the Government is keen to engage the CTU further about the ways we can do this. 

The Minister of Labour will be chairing a revitalised Skills Forum to focus on what we can all do in this area. The continued leadership of the NZCTU in this forum, together with other social partners, will be critical to its success. 

5.  Better public services

The fifth driver in the Government's sights is delivering better, smarter public services. 

The wider public sector makes up around a quarter of economic activity in New Zealand, so what we do here can make a real difference to the overall performance of the economy. 

The expectations New Zealanders have of their public services are rightly high. The recession and the corresponding dent in the public finances, means meeting those expectations will be a real challenge over the next few years. 

In next year's Budget we only have $1.1 billion extra to invest across the entire public sector. This compares to an average of $2.8 billion extra a year in Labour's last five Budgets.

Making those dollars stretch, while also meeting the public's expectations for frontline services, will require innovation, new thinking and some difficult trade-offs. We will need to do some things differently and we will need to ensure we get maximum value for every dollar. 

Some of you might say that the way around this challenge is for the Government to borrow more, and to allow for bigger increases in spending. 

The truth is the Government will already be borrowing at an average rate of $250 million every week for the next four years. This means government debt will double by 2014.

Additional borrowing on that scale can't continue indefinitely. New Zealanders trust the Government to manage the country's books responsibly, and we are determined to do that. So we simply must get better bang for every taxpayer buck. 

It's my sense that those working in the public sector appreciate these challenges and are prepared to play their part in improving productivity and the delivery of public services. They understand the pressures the Government's finances are under and the need for very careful spending decisions. 

It's with this in mind that the Government has set out our expectations to Chief Executives about future pay negotiations. We have made it clear that settlements must be fiscally sustainable within baselines, they must be responsible and they must demonstrate value for money. 

So in the coming years you can expect all public sector pay demands will be subject to high levels of scrutiny. Chief Executives will have to weigh them up against other demands, and prioritise them accordingly. A climate of restraint will prevail. 

So my message on this issue is straightforward. Next year's public sector pay negotiations will take place in a seriously constrained funding environment.  Every dollar spent on wage increases will be a dollar that can't be spent on pressures elsewhere. And there are very few dollars for elsewhere as it is. 

We cannot escape this fact nor wish it away. 

6.  Regulatory reform

Finally, number six, regulatory reform. I don't pretend this is the rock-star of public policy, it's hardly sexy. But I do think it makes a difference. 

It's about ensuring there isn't red tape getting in the way of good ideas and that laws and regulations make New Zealand a better place to work and live.

It's in this context that the Government views employment law.

We think employment law should give employers the confidence to create new jobs and take on new employees and it should provide for fair and up-front working relationships.

Of course there is always a balance to be struck between ensuring employers aren't put-off hiring new staff on the one hand, and promoting workers rights and entitlements on the other hand.

Let me acknowledge today that there are a few areas of employment law where the Government and the CTU disagree about where that balance should be struck.

I'm not going to avoid talking about these areas today just because we disagree. But I do think they should be seen for what they are, a relatively small part of the Government's overall agenda. 

In our first 11 months in office we have progressed two key areas of employment law reform. 

The first was the introduction of a 90-day trial period for smaller employers.

I know your unions opposed that law. Well, let me give you my take. I think it's working. It's helping to ensure that those on the margins of the workforce, who might otherwise struggle to get a shot at a job, are getting a go.   

The Government has also put together a working group to look at how we can make the Holidays Act work better for employers and workers. I'm pleased the CTU is on that working group.

It reports back in December and it's my hope it will come up with sensible recommendations that will protect workers entitlements while making employers' obligations clearer.

Beyond these two areas, the National Party's election policy outlined some other possible areas for employment law reform. I know you are keen to hear how that work is progressing. 

Again, let me be upfront. I understand the Minister of Labour has taken a first look at these issues. The Cabinet is yet to consider any recommendations however. The fact that these issues have not been progressed more rapidly reflects where they sit in the Government's agenda - they're not a driving priority. 

That's not to say the Government is ruling out any future changes to employment law. We are a solutions-focused government, so if we can see employment law is causing serious problems for people, we will be prepared to look at it.

When I travel around the country people do raise employment law concerns with me from time to time. The most common problems they point to are with the confusing aspects of the Holidays Act, the lack of flexibility in the rest and meal breaks legislation and the potential abuse and costly nature of personal grievance processes.

The Government has responded to the first, we are responding to the second, and I'm flagging today that the Minister of Labour will take a look at personal grievance processes as well. 

ACC

Before I leave today, and in the spirit of the upfront discussion I want to have with you, let me take a moment to talk about the ACC issues that the Government is grappling with.

The National-led Government supports a comprehensive, 24/7, no-fault accident insurance scheme, that delivers certainty of coverage for New Zealanders. That is what ACC provides and that is what the Government is determined to maintain.  

However, we have been very concerned to learn that the ACC scheme is in financial dire straits. This is not a surprise we welcomed on assuming the Treasury benches.

Some have questioned whether it's truly the case. If only it weren't.  

The consensus is overwhelming. The ACC Board has confirmed it is the case, their independent actuaries Price Waterhouse Coopers Sydney have confirmed it, the Department of Labour's independent actuaries Finity Consulting have concurred. Even the Audit Office's independent auditors Ernst Young have verified the figures. 

Every single actuary and auditor who has looked at ACC's books has confirmed they're in trouble. You would be very hard-pressed to find a qualified auditor who has seen the books who would claim otherwise.

Whether we like it or not, the Government is now faced with the unenviable task of financially rescuing ACC. 

So the question for the Government is how we make up the funding shortfall.

The ACC Board has proposed a way forward - 64% hikes on levies for the Earners Account and 44% increases to levies on the Workers Account. 

I don't think levy hikes that big are fair on workers and I worry that imposing those hikes on employers could threaten jobs. But if the Government makes no changes to the law, that's what will happen. 

Some have said that all we need do is extend the period over which the scheme becomes ‘fully-funding'.

In fact we are already proposing to do that. The Bill we are introducing shifts the full-funding date from 2014 to 2019. But even with this change, the scheme still won't be in the black.  

So the Government has proposed further modest changes that strike a balance between levy increases on the one hand and reducing the scope of some unfunded entitlements on the other. 

Our Bill means that average levies will rise by a lot less than the ACC Board has been proposing. It's not a piece of legislation we're pleased to have to introduce. But the alternative is worse.  

Like you, I worry about what huge levy hikes would mean for families and I worry about the impact on jobs if we load those costs onto employers. 

In closing, I know the changes to ACC are controversial. I know your organisation has concerns about them. There will be a full Select Committee hearing on these proposals. I encourage you to put forward your views and I assure you that the Government will listen.

But let me be very clear about our motives - the Government is committed to saving the ACC scheme while minimising the cost burden on Kiwi families and that is what our proposed changes are designed to do. 

Conclusion

Looking back on the past six months since I last spoke to you, I can point to many areas where our interests have aligned.

In a way, the recession was a real driver for increased co-operation between the government, business and the unions.

The Job Summit was a case in point, where we all came together to devise ways of keeping Kiwis in work during the recession.

The summit inspired some great ideas and many of these came to fruition.  The nine-day fortnight, accelerated infrastructure investment, even the national cycleway. 

But more important than any one initiative was the clear understanding that we're all in this together.

I know the CTU and the Government will continue to disagree with each other on some issues. 

The reason I am here today however is that I think your members deserve a fair hearing and we deserve a fair hearing in return.

I look forward to continuing our discussions and working with you in the years ahead. Thank you.

It's great to be here once again. This is the third year in a row I have addressed your conference and it's an occasion I always enjoy.

This is of course the first time I address you as your Prime Minister. So today I won't just be talking about ideas, but I will also be highlighting action the new government has taken in the law and order area and action we will take in the near future. 

Because, make no mistake, improving law and order in New Zealand is a critical priority for the National-led Government. Our actions over the past 11 months have reflected that priority. 

That's because, like you, we share New Zealanders' concerns about growing levels of violent crime. We are determined to make our communities safer and to promote the security of law-abiding families. 

Those goals simply cannot be achieved without you, the officers of the New Zealand Police Service.   

Today I would like to thank you and the 11,880 or so police around the country for all that you do in service of this country. Your dedication, your sense of duty and your courage set you apart as the guardians and heroes of our communities. 

It takes a special person to take on the sacrifice and risk that so often comes with your role. That fact is highlighted when we remember those officers who have died in the line of duty in the past year. 

Let me acknowledge them:

Senior Constable Len Snee, fatally wounded in Napier on 7 May this year. 

Sergeant Don Wilkinson killed at Mangere on September 11 2008.

In seeking to protect their fellow New Zealanders and uphold the rule of law, these officers paid the ultimate price. 

My thoughts go out to their families, and indeed the families of all police whose support you depend on. 

Your work is incredibly important and it is highly valued by those you serve. Whether it's working with troubled young people, breaking up gangs, investigating homicides, or helping out with Disaster Victims Identification, the face of the New Zealand Police Service is one of professionalism and integrity. 

Most importantly, yours is the face of law enforcement.

In my speech today I want to focus on the steps the Government is taking to support you in that role.   

Since coming to office, National has worked hard to make this country a safer place for law-abiding New Zealanders, and a much tougher place for criminals.  We have used all the levers of Government in support of that goal; our law-making powers, our funding ability, and our leadership role.  

We've also brought some clear values to the law and order agenda.  

We believe improving public safety means ensuring there are appropriate consequences for offenders.

That requires laws that make it clear to those who threaten public safety that their behaviour is unacceptable and will be punished accordingly.  The policies of this Government reflect that belief and they will continue to do so. 

We also believe that the police make up the critical frontline of crime-fighting in New Zealand and that the Government must back them accordingly. That means ensuring you have the mandate, the legal back-up and the crime-fighting tools you need to work effectively.

That's why we have implemented policies to ensure there are more police on our streets, that you have better tools for protecting yourselves and the public from criminals, and that you are backed up by the legal powers you need to secure prosecutions.

Finally, this Government understands that the responsibility for preventing crime occurring does not fall solely on the police. To make our communities safer the Government must focus on the drivers of crime and ensure we tackle the root-causes of criminal offending. 

That's why this Government has focused so much attention on fighting criminal gangs, on reducing youth offending and on ensuring more of our young people get the start they need in life. 

Those are the values we have brought to Government.

When I spoke at your conference last year, those values were reflected in the announcement I made about the first 10 steps in National's Action Plan for Violent Crime.

It's worth revisiting those steps to measure the progress we have made.

1. Our first pledge was to clamp down on criminal gangs and the "P" trade they support.

We have acted on this pledge. 

We've given police the legislative teeth you need to recover property and proceeds of crime from criminals.   We have passed the Criminal Proceeds (Recovery Act) and the Sentencing Amendment Act. 

We have also directed that we're not just going to take away gangs' profits; we're also going to use those profits against them.  We will ensure that the ill-gotten gains of criminal activity are poured back into the fight against gangs and drugs. 

In addition, within our first 100 days of office, we introduced the Gangs and Organised Crime Bill. This legislation will be passed as a matter of priority. It doubles the penalty for participation in a criminal gang, gives police greater powers to investigate gang members and enables removal orders for gang fortifications.

It is supported by new Search and Surveillance and Anti-Money Laundering Bills.    These too will give police extra powers for investigating and fighting gang operations.

Finally, last week I launched the Government's Action Plan for tackling P. 

The plan calls on the full force of our arsenal. 

In addition to coming down on gangs, it restricts access to the precursor chemicals gangs use to make P; it establishes dedicated Customs drug-forces to stop drugs and precursors coming through the border; it provides 3000 more treatment places to get P users off the drug; it supports families and communities to resist P use and it provides the leadership and accountability needed to make sure we get results.

The Police Association has been warning about the P-problem for more than a decade. This Government has listened, and the Action Plan I announced last week is our response.

Taken together, our actions are sending a clear message to gangs and those involved in the P-trade: the Government is coming after your business and we will use every tool we can to destroy it. We will be ruthless in our pursuit of you and our actions will reflect that.

2. Our second pledge was to tackle increasing violent youth crime by bolstering the Youth Court with a range of new interventions and sentences.

We have acted on this pledge.

We have introduced new legislation and $82 million in new funding to support a strengthened range of up to 3000 new interventions for young offenders. 

Like you, we know that the young offenders of today are the unexploded time bombs of tomorrow.

We also know that we have the power to turn young people off a life of crime, if we get in early and intervene effectively.

Thanks to our new Fresh Start youth justice initiatives, from next year the following will be possible:

• Up to 1000 more young people a year will take part in Community Youth Programmes. These will be designed to keep at-risk young people out of court.  We will be calling on the proven success of the Police in running these kinds of programmes and we look forward to working with you to deliver them.   

We're also giving the Youth Court the ability to ensure that:

• Up to 300 more offenders a year can take part in a mentoring programme,
• 230 more can take part in alcohol and drug treatment and
• Up to 700 families of youth offenders take part in parenting programmes.

We're also funding new intensive programmes to change the behaviour of young offenders and get them back on the rails. These programmes are about instilling self-discipline, a sense of personal responsibility and clear boundaries.  We are increasing funding over time so there are hundreds of new places in these programmes:

• Up to 200 young offenders will be able to take part in 10-day long Youth Court supervised activity camps.
• More than 200 will be placed in innovative new youth justice programmes designed by experts. 
• Up to 30 young offenders will be placed on electronic bail.
• 175 more places will be created in supported bail programmes.
• 50 more hard-end young offenders will be able to take part in Supervision with Activity programmes of up to six months
• And 40 of the most troubled offenders will be able to take part in residential military-activity camps.

Taken together, the Government's Fresh Start package will help turn more young people off a life of crime, it will help make our communities safer and it will save lives.

3. Our third pledge was to toughen the bail laws and make it harder for criminals awaiting trial to get bail.

We have acted on this pledge. 

We passed the Bail Amendment last year to ensure that criminals who pose a risk to public safety can be remanded in custody.  This overturned the 2007 changes that had made our bail laws easier on criminals and harder on the public. 

We heard the fierce criticism those changes received from victims. We too were shocked that of the 5000 more offenders bailed under Labour's law, more than a third were facing serious violent charges including manslaughter and murder. 

So we acted. For the line-ball decisions, we changed the law and returned the benefit of the doubt to the public, rather than the accused. 

Looking ahead, we are also doing a review of specific aspects of bail to make sure it is effective as possible in protecting the safety of the public. 

4. Our fourth pledge was to remove the right of the worst repeat violent offenders to be released on parole.

We have acted on this pledge.

Within our first 100 days of office we introduced legislation to restrict eligibility for parole for the worst repeat violent offenders and to those accused of the worst murders. 

This legislation makes it clear that parole is a privilege not a right. The Bill is at Select Committee and a report-back is due late next month. 

5. Our fifth pledge was to train 600 additional sworn police officers.

We have acted on this pledge.

Even amidst the toughest economic times, our first Budget provided an additional $180 million for 600 extra police.

By the end of next year there will be extra 300 police in Counties Manukau, and by the end of 2011 there will be an additional 300 police throughout the rest of the country.

We also wanted to ensure that all police had a better means of protecting yourselves from dangerous, violent offenders. That's why in our first Budget we provided $10 million for the national roll-out of tasers. 

6. Our sixth pledge was to make it easier for police to catch and prosecute criminals by giving you the power to take DNA from people arrested for imprisonable offences.

We have acted on our pledge.

In our first 100 days of office we introduced legislation that will give you the power to collect DNA from people you intend to charge and match it against samples from unsolved crime scenes. This is the modern-day fingerprint and it will be a critical tool in helping police make New Zealand a safer place. 

This legislation has been reported back to the House by the Select Committee and getting it passed is a high priority in the Government's parliamentary agenda. 

7. Our seventh pledge was to give police the power to issue on-the-spot protection orders to help protect victims of domestic violence. 

We have acted on this pledge.

In our first 100 days of office we introduced the Domestic Violence (Enhancing Safety) Bill that will give police that power and allow sentencing judges to issue protection orders on behalf of victims. That Bill is now at the Committee stage of the parliamentary process and is tagged as a high priority for enactment.

8. Our eighth pledge was to set up a Victims Compensation Scheme funded by a levy on criminals, and to use those funds to upgrade services for victims.

We have acted on this pledge. 

In our first 100 days of office we introduced the Sentencing (Offender Levy) Amendment Bill. We will pass this law in time to ensure that levy collection commences from 1 July next year. Our first Budget also provided the $2.3 million needed to get the scheme up and running.  

This levy will help address the financial costs that fall on victims of crime and ensure that offenders are obliged to help address the harm that criminal behaviour causes victims.

We have also progressed a Bill which will ensure that victims of crime no longer have to be means-tested for the legal aid associated with attending inquests and Parole Board hearings. 

In addition we are reviewing the Victims Rights Act and victims' services generally, to reduce the impact of crime on victims by protecting them from potentially alienating experiences in the criminal justice system. 

And we have introduced legislation to remove the Provocation Defence from the Crimes Act. 

We believe this defence enabled offenders to use their defence to tarnish the character of their victims. It effectively provided a defence for lashing out in anger, and rewarded a lack of self control. So we are acting to change it.

9. Our ninth pledge was to increase the maximum sentences for offenders who commit acts of violence and abuse against children.

We have acted on this pledge.

Last year we passed the Sentencing (Offences against Children) Amendment Act.  This requires the Court to take into account the defencelessness of children when it sentences offenders.

We have also introduced a Child Family Protection Bill which gives the Courts some additional powers to protect children and families from all forms of violence and abuse. 

We are continuing to do work in this area, so we can ensure our laws send a clear message that crimes against children are utterly abhorrent to our society and should be punished accordingly. We will be making further announcements about this in the near future. 

10.   Our final pledge was to make our prisons work smarter by increasing drug and alcohol rehab and compulsory work programmes for prisoners.

We have acted on that pledge. 

We are funding an additional three Drug Treatment Units in our prisons, which will by 2011 double the number of prisoners able to undertake rehabilitation.

We are also ensuring 1000 extra prisoners will learn industry-based skills in prison. 

Taken together these policies will help reduce the reoffending rates of ex-prisoners.  They will result in fewer victims, a reduction in the cost of crime and safer communities. 

New Challenges

Ladies and gentlemen, these are the steps the National Party pledged to take and these are the actions the National-led Government has taken so far. 

It's been a very busy few months.

We have also been responsive in the face of emerging challenges.

Our response to the ‘boy-racer' problem is a good example of that. 

The cowardly attack on Sergeant Nigel Armstrong in Christchurch by a mob of illegal street racers and their friends was the last straw for the Government.

You the police told us you needed better tools for dealing with these offenders. The National-led Government listened to you and we took action.  

We have introduced legislation that will make it harder for illegal street racers to avoid penalty. It will also prevent some of the increasingly violent behaviour we are seeing when groups of illegal street racers get together.  

As we look to the future we can be sure that new challenges will emerge.

My pledge to you is that my Government will remain vigilant in our pursuit of safer communities.

Our actions will reflect that pledge.

I am conscious that we will do so against the backdrop of a challenging fiscal environment.

The Crown accounts are forecast to be in deficit for the next decade. Government debt is growing. There will be very little money available for additional public spending.

That presents a challenge for the Government as we try and get better value for every taxpayer dollar. 

It also presents a challenge for you as police, as you too try to achieve more within tighter Budgets. The Minister of Police has made it clear to the Commissioner that these decisions must be made very carefully so as not to jeopardise the safety of the public.

I think the police are well-placed to rise to this challenge. 

For one thing, the addition of 600 new officers to your ranks puts you in a position of strength. This extra manpower means you will increasingly be able to focus on the kind of proactive community policing that can prevent future crime from happening. 

As I travel around the country I hear numerous stories about the great proactive work police are already doing in their communities. 

The "Safer Porirua" project is a good local example, where police got together with the Porirua City Council and community agencies to improve public safety in their area. I've been told that the results have been huge, with reports of; improved public perceptions of safety, the lowest crime rates in the Wellington region, a reduced rate of serious and fatal road injuries, international accreditation as an "International Safe Community" and the Supreme Public Sector Excellence Award.

As you well know, police are taking the initiative on this kind of thing all over the country. Whether it's Blue Light programmes diverting young people from criminal careers, work with local high schools, or work with at-risk families and neighbourhoods. 

This isn't the side of policing that shows up in the arrest statistics but it is incredibly important, and ultimately it has the power to reduce our crime rates. With more police on the beat, more of this kind of work will be possible, and more crime will be prevented. That's a smart approach for the future and it's one this Government is keen to see more of.   

I also think that as we look to the future new technology will help you save time on form-filling and administration so that you can commit more time to frontline duties. 

Finally, you should know that the Government understands it is not the police alone who should be charged with responsibility for making our communities safer.

In fact, we all have a role to play in reaching that goal.  We all have a role in addressing the drivers of crime and making New Zealander a better, safer place to live.   

The Government is working hard to lead that progress and address those drivers of crime. 

It's about strengthening our economy to provide more jobs and better living standards. 

It's about making our education system more effective so that fewer young people fall through the cracks.

It's about providing better support to vulnerable families and the children they are raising.

It's about many actions that, taken together, add up to a stronger, more prosperous, country.

These are the priorities your Government is focused on. 

In closing, let me wish you all the best for an excellent conference

The New Zealand Police Service has a critical role to play in making this country a better place. 

I value your service and your hard work and I thank you for it. 

Know that when you leave this conference, and return to your daily work of serving this country, you will be backed your fellow New Zealanders and you will be backed by this Government. 

Thank you. 

Thank you for being here.

Let me acknowledge my Ministerial colleagues.  Let me also acknowledge our serving police officers, customs officers, treatment providers, community workers, volunteers and all of you who care deeply about New Zealand.

It is my privilege to regularly meet with groups like this one to celebrate some of the success stories of our country. 

Today my speech has a different purpose.  I want to talk about a problem that is wrecking lives, wrecking families and fuelling crime.

I'm here to speak about "P".  Methamphetamine, crank, ice, crystal.  Call it what you will.

Everyone in this room knows something of its horrors.  Some of you will have family members or friends who have struggled, or who are still struggling with it.  All have heard stories about the harm it does.

‘P' is a seriously addictive, viciously destructive drug. It's hugely damaging to those who take it and the people who share their lives. It comes hand in hand with violence. It allows gangs and organized crime to flourish. It entices young people into criminal careers. 

P hurts not just users and their families but also law-abiding New Zealanders who suffer from the crime it creates. 

To fuel their habit, many P addicts steal from others, typically stealing $1840 worth of goods each month to fuel their habit. They also finance their habit by dealing drugs in our communities, with a typical P user selling drugs worth up to $5100 a month to our children and loved ones. 

We have all read about the hideous violent crimes that have been committed by P users.  A P-fuelled car chase down the Auckland motorway ending in the death of an innocent 17 year old.   A samurai sword-wielding man on a violent rampage. William Bell and the RSA shootings.

Sadly, P is a very New Zealand problem.  We have one of the highest proportion of P users in the world.   

Some say we can't fight it. It's been around too long. The gangs will never give up.  There's nothing we can do. 

I don't accept that.  And this National-led Government won't accept that.

We will confront the P problem, using the full force of the Government's arsenal. 

My speech today will outline our plans for doing that.

My announcements draw on the work of a cross-Government taskforce that has been led by my Department for the past four months.

It's called on the best experts available, including my Chief Scientist Professor Sir Peter Gluckman. It's involved people who have been battling P for years including treatment providers, frontline police officers, Customs officials, researchers and community action groups.  

I have valued the input of Associate Minister of Health Peter Dunne as we have put this plan together. He is delegated with responsibility for the National Drug Policy and he will have a critical role in making our plan against P work. 

I set up that taskforce with a clear mission.  Tell us what we can do to tackle P.

The resulting government action plan on methamphetamine contains a comprehensive set of policy changes.

Let me share its highlights.  The Government's plan has five main prongs:

1. We will restrict access to the precursor chemicals P is made from.

2. We will use new powers to break drug supply chains by attacking the gangs and criminal organisations that make, supply and distribute P.

3. We will ensure more P addicts get the treatment they need to quit by providing more treatment capacity and better routes into treatment.

4. We will support families and communities to stop people from becoming P users in the first place.

5. We will provide the leadership needed to ensure that government agencies charged with the responsibility for tackling P get results.

I'm going to outline each of these steps in some detail. 

Controlling Precursors

The first step is about making it harder for people to make P in New Zealand by controlling the availability of precursor chemicals.

As you may know, the main precursor chemical for the making of P is pseudoephedrine.

In New Zealand, pseudoephedrine (or PSE) can be bought over the pharmacy counter in a range of cold and flu medications.

What seems like straight-forward pain and symptom relief to you and me is gold to a drug-cook. 

It's just about all a first time P cook needs to get their drug enterprise started. That's why P cooks are prepared to pay crews of workers to buy it up at pharmacies. And it's why they have developed sophisticated techniques for manipulating pharmacists into giving it to them. 

Of course PSE is also sourced from offshore. However Police find evidence of domestically-bought cold and flu medication in up to one third of the P labs they bust each year.

So there's no doubt that the PSE available in many cold and flu medications is fuelling our P problem.  

That's unacceptable to me.

But I do accept that PSE offers relief from cold symptoms to many New Zealanders.

So the question is, can we provide that same level of relief while also restricting the availability of P to drug-cooks?

That's what I asked my Chief Science Advisor.

Professor Gluckman advises that clinical evidence shows there is a safe and effective alternative to PSE available for cold and flu relief.  It's already being used in up to three quarters of the cold and flu medications Kiwis use.  It's called phenylephrine.

For most people, medications based on this chemical are just as effective as those containing PSE.   

However, there's still a small group of people who may in some circumstances benefit from using PSE-based products instead.  

Based on this advice, and the advice of drugs experts, the Government has decided to amend the Misuse of Drugs Act 1975 to make pseudephedrine a Class B2 controlled drug. This will make pseudoephedrine a prescription-only medication. 

Legislation to achieve this will be introduced to Parliament shortly. 

When this law change is enacted it will mean that - as with other Class B2 controlled drugs - very tight restrictions will apply to the circumstances in which a doctor can prescribe pseudoephedrine and the quantities and way in which they can prescribe it. 

However, the alternative - phenylephrine -  will continue to be available in over-the-counter medication. 

This will be a blow to P cooks, and it's a blow I'm pleased to be delivering.

Happily, professor Gluckman has advised that we can be confident this decision won't affect the health of everyday Kiwis. 

I am also prepared to take further action if need be.

The Government's Expert Advisory Committee on Drugs (EACD) has made a preliminary recommendation that pseudoephedrine should in future be de-listed as a medicine altogether, meaning it would not be available on prescription. 

Before authorising an outright ban of this sort, I first want to see how effective the new restrictions are and to gather more information.

Accordingly I have asked Medsafe to review the status of PSE as a medicine under the Medicines Act.   If they did recommend a ban, and the Government went ahead with it, I am advised that patients with a specific medical need for pseudoephedrine could still have access to it in tightly controlled circumstances.

I am also concerned about the seemingly ready availability of some of the other chemicals used in the production of P.

Stories of retailers selling in bulk are worrying.  But at the same time I don't want to unduly restrict the availability of these chemicals for law-abiding citizens.  There is a balance to be struck.

So I have asked Ministers Dunne and Collins to examine further means of restricting criminals' access to other chemicals involved in P production. They will report back to me with their recommendations by no later than May next year.

Breaking Gangs and Drug Supply Chains

The second part of the Government's plan is about coming down on the gangs and organized crime syndicates who peddle P for a business.

We know they will respond to a pseudoephedrine ban by trying to get more precursors and P in from overseas, through our ports and through our mail system. 

We will be ready for them.                                                   

At my direction, the New Zealand Customs Service is mobilising its resources against the trafficking of P and its precursors.

Today I am pleased to announce that Customs is establishing new dedicated anti-drug taskforces. 

Customs will direct these taskforces to undertake a series of high-intensity detection and investigation operations aimed at increasing the seizures of P and its precursors.

These taskforces will have access to the specialist detection equipment needed to blitz the channels that P smugglers use to import drugs and precursors into New Zealand.

More than 40 Customs officers will be redeployed to these specialist drug-taskforce duties.

Their work will include undertaking intensive inspection exercises to detect P and its precursors in cargo, fast freight and mail streams.  They will use new techniques that allow them to detect who is bringing in the P, who they're bringing it in for and when they're doing it. 

I'm not going to give the P smugglers a tip-off by revealing what those techniques are.  But what I can tell you is that a trial of them has been very successful. 

Over a two week period in August Customs trialled their new anti-P approach.  It resulted in 26 separate seizures totalling 46 kg of methamphetamine precursors.  This single operation resulted in seven arrests and it prevented the manufacture of up to 13kgs of P, representing a street value of up to $13m.

The impact of this operation on P dealers was swift.  Our intelligence tells us that as a result P became harder to obtain and the street price for precursors spiked.

And all that was achieved in just two weeks. So you can be sure, with the specialist taskforces running on a regular basis, P smugglers will find it very tough.

But breaking up drug supply chains is about more than what happens at the border.

It's also about the gangs and organized crime syndicates who make P in clandestine labs, distribute it, peddle it to users, and profit from its use. 

My Government is coming after them as well.

In response to the priority I have placed on tackling P, the New Zealand Police have developed a new Methamphetamine Control Strategy, which will be operating from November this year.

The Strategy is about disrupting and undermining P-related criminal activity.  It specifically aims to:

• Use intelligence in new ways to target gangs,
• work with customs to investigate syndicates who bring in P precursors illegally,
• target P cooks and
• seize funds and assets gained through P-related activity.

I won't go into much more detail than that today.  Because if I reveal the specific Police plans we can be sure the P dealers will adapt accordingly.

You can be sure that the Police will have more tools for fighting P at their disposal than ever before. 

Critically, their strategy will make use of the new legal powers this government is making available to the Police through our range of tough new anti-gang legislation.

These include:

• The Gangs and Organised Crime Bill.  When enacted this will give Police new powers to disrupt criminal gangs involved in the P-trade, including new powers to intercept gang communications, meaning they will find it easier to prosecute key gang figures.  It will also strengthen the law that makes it an offence to be a member of a criminal organisation, double the penalty, and make gang membership an aggravating factor in sentencing. 
• The Anti-Money Laundering and Countering Financing of Terrorism Bill.  When enacted this will help detect and trace the profits of domestic criminal groups.
• The Search and Surveillance Bill. When enacted this will provide a more powerful search and surveillance regime, with new examination powers, more straight-forward rules around the use of surveillance devices, and enhanced powers to retrieve electronic evidence.

Most importantly, the new strategy will see Police using new legal tools to hit the gangs where it hurts the most.  In the back-pocket.

The Criminal Proceeds (Recovery Act) and the Sentencing Amendment Act we passed this year make it easier for Police to recover property and proceeds of crime from criminals. 

I expect the Police to use these new powers to take the criminal profits from those who make money from the drug trade.  Because I want to see these ill-gotten gains used to control the drug market. 

So today I am announcing that the recovered proceeds of crime that are returned to the Crown will be used to fund anti-P initiatives. This will include additional Police and Customs initiatives to fight gangs and organised crime syndicates. And it will include expanding drug treatment services. 

We will take the profits from the criminals and use them to heal those they have harmed. 

My message to gangs is clear:  this government is coming after your business and we will use every tool we have to destroy it.  We will be ruthless in our pursuit of you and the evil drug you push. 

Better treatment for P-users

Ladies and gentlemen, I am convinced that the two parts of the plan I have just outlined will make a dent in P supply, and ensure there is less of it in our communities.

But they alone won't be enough. 

Because for as long as we have large numbers of P users, and for as long as there are people who want to experiment with P, this ugly problem will plague our country. 

So the announcements I am making today are about fighting criminals.  But they are also about reducing demand for P, by helping addicts quit and deterring new users.

At the moment, too many P users who are ready to quit are not getting the help they need, when they need it.

Earlier this year the New Zealand Herald ran a series of stories about the effects P has on our communities.

One mother told of her desperate attempts to get her son into detox. 

After four years on the drug and constant urging by his family he had finally realised he needed to stay in a specialist addiction service.

But the shortage of treatment beds meant there wasn't a place available. He would have to wait for five to seven weeks.

She watched him cry on the phone, begging to get treatment.

He struggled for several weeks, but without the treatment he needed, fell back into his addiction.

The mother said that for her family it was like holding their breath and waiting and hoping they would get back their happy, wholesome son, brother and father.  They sought help and were told to keep waiting. 

I am determined to do better for families like those.

I am determined to help more P users to quit for life.

So today I am announcing the development of a dedicated treatment pathway for P users.

Starting this year the Ministry of Health will invest an extra $22m in the clinical services needed to ensure there is P treatment available for more than 3000 additional patients over the next three years. 

This investment will be made across different addiction services that cater to the varying needs and backgrounds of P users.

I have asked the Ministry of Health to make their investment wisely, and to ensure that only proven providers are funded to provide these services.

The Government's investment will allow around 2700 additional people to have ready access to one of 20 dedicated new ‘social detox' beds.

These are specialist services where addicts can get the immediate intensive support they need to address their P problem, and that will link them with the follow-up services in their community to help them stay off the drug.

The new funding will also allow up to 400 additional patients to get a longer course of treatment in one of 60 new residential beds that we will fund in specialist facilities, with treatment lasting up to four months. That's a 60 per cent increase in the amount of residential addiction treatment available. 

It's a huge step forward.  But it won't happen immediately.    

It's critical we ensure that these addiction and treatment services are staffed by properly trained employees and proven providers.  There simply aren't enough experts to dramatically expand addiction services overnight. But we can start improving them right now and keep building on them year after year.

So the Government's investment will build up over three years, with up to 700 additional patients receiving treatment over the next year, increasing to 1040 the year after that, and 1400 at full roll out.

This investment will make a difference to hundreds of families. But I don't pretend it will be enough to turn all P users away from their habit. Because some simply won't put their hands up for treatment.

We must to do all we can to encourage them.

Part of the responsibility for doing that falls on Government. 

Police and the Courts already have the power to divert known P-users into treatment.  I have asked my Ministers to ensure they are doing all they can to ensure this power is used wherever appropriate. 

But I am also making it clear to other government agencies that they have a role in helping P addicts get treatment. 

If someone turns up at a Work and Income office for example with obvious signs of P addiction then I want the Work and Income officer to know what he or she can do to help them. 

So I've asked the Ministry of Health to report back to Cabinet early next year about how we can ensure all frontline government staff are properly equipped to provide P users with the information and support they need to get treatment. 

In most cases however, we have to accept that the Government doesn't have the most important role in getting P users into treatment.

Instead, that burden lies with the family and loved ones of P users.

They are the ones who best know the havoc that P addiction wreaks upon their sisters, daughters, brothers and husbands.

So it worries me greatly when I hear stories of families who are at their wits-end trying to get a user to face up to their P-problem.

Too often, they find themselves without the support they need to intervene.

My Government is going to do better for these families.

For a start we will beef up and promote the alcohol and drug helpline so that people know who to call and can get expert help if they're worried about someone using P.

We will also ensure there's a better website with dedicated information on P use, and advice about what they can do to help.

Most importantly, I want to give families and medical professionals the power to help those who aren't ready to help themselves.

It's deeply sad to hear stories of families who know their loved one has a severe P addiction, who can see the harm that addiction is doing to themselves and the people around them, but who are powerless to force them to get help. 

Evidence suggests that once addicts are de-toxed from the drug, they are more able to make rational decisions and accept treatment.  So we need to get them to that first step, get the drug out of their system and get them into effective treatment. 

Right now the only relevant legal tool available to families who want to force their loved ones into treatment is the Alcoholism and Drug Addiction Act 1966. This Act is outdated and little used. 

It's time there was a more effective legal means for families and doctors to get P addicts into compulsory assessment and treatment.

So I have asked the Minister of Health to review the Drug Addiction Act to ensure that compulsory assessment treatment for severe alcohol and other drug dependence is readily available by civil court order. 

Some may argue this is an incursion on the rights of individual drug users.  Well I say that ignoring their problems isn't good enough.  We have a responsibility to free them from their addiction, if forcing them into treatment is the way to achieve that then so be it.

Supporting whanau and communities to resist drugs and help users into recovery

The steps I have just outlined focus on treating known P users. But we also have to prevent new people getting hooked on P. 

I'm interested in what works. And I'm advised that the best tool we have for putting people off drug abuse is ensuring they get good advice from the people they are closest to, the people they look up to and respect in their own communities.  It could be a family member, a teacher, a coach, a kaumatua or their friends.

So if we're going to get on top of P then every New Zealand community needs to take ownership of the problem.   Our schools, whanau, clubs, and businesses all have a role to play in stamping out P use.

Our Government will help them do that. 

We will promote new Drug Education Guidelines for schools and as I outlined earlier we'll be promoting the drug and alcohol helpline and improving online advice.

We will also continue to fund ‘Community Action on Youth and Drugs' programmes in 29 parts of the country. These programmes support schools, sports clubs and other groups to keep people off drugs. I've directed that they include a specific focus on stamping-out P.

But I know that the efforts of non-Government organisations are just as valuable as our own. I'm heartened by the great work we're seeing these groups do in our communities, and the willingness talented people are showing to help fight P.

In the audience today are members of the Stellar Trust, which is one example of the kind of voluntary organisation that the Government wants to work with as we tackle P.   Today let me acknowledge all those involved in fighting P, and thank you, and others in organizations like yours, for all your efforts. 

We need your help, we are very grateful for it and we want to work alongside you. 

You have a vital role in ensuring fewer people try P and in making our families and communities stronger to fight against it. 

Leadership and Accountability

Ladies and gentlemen, in speaking of these plans I am conscious that their success will depend on the efforts of our frontline government agencies.  Our Police, customs officers, health and other workers. 

I will make their Chief Executives accountable for delivering on this plan. 

They will have to report to me every six months on the actions in the plan, the impact they're having and the progress they are making. 

These indicators will be very clearly set out in a public document I will release next week.  They will be clear, measurable and individual departments will be held responsible for achieving them.

If departments don't make progress towards this plan they will answer to me. I will expect their best efforts and, in return, where they are struggling the Government will stand ready to act. 

Conclusion

Ladies and gentlemen, I don't see the announcements I have made today as the conclusion of all that we will do on P.  These are critical steps.  But if further action is warranted, we will take it.  I am confident that with a clear focus we can make progress together. 

But I'm also realistic about how big the problem is.

I'm not going to claim that when this plan is fully rolled out P will be stamped out for good.  I'd love to promise you that, but I can't.

Throughout the world, wherever leaders have promised to stamp out drug use altogether they have found that to be an elusive goal.  Because drug-dealers and drug-users are notoriously adaptable. 

That's why we have to come at the problem from all directions.  By cracking down on precursors, breaking supply chains, providing better routes into treatment, supporting families and communities and strengthening leadership and accountability.

None of these steps will work in isolation. 

But I am confident that, taken together, they will make a difference.

That difference will save lives.

It will reduce the amount of P on our streets.

It will give families hope.

It will make P dealing harder for gangs. 

It will make our communities safer.

It will free people from the pain of addiction. 

If we can make progress towards those goals we will make this country greater.

We can make that progress, we will make that progress, and that's why I'm proud to be tackling P.

I look forward to working with you to do that.     

Thank you.