Thank you for your welcome.

Your excellencies, distinguished guests, ladies and gentlemen.

First, may I offer my thanks to the New Zealand European Union Centres Network and the New Zealand Europe Business Council for inviting me to give this year's Europa lecture.

Can I also take this opportunity to acknowledge the 50^th Anniversary of New Zealand's diplomatic relations with the European Union.  

My topic tonight is Europe's place in New Zealand foreign policy.  This significant anniversary provides an occasion to look at how we can work together over the next 50 years. 

This evening I would like to discuss our commitment to a broad and substantial European relationship, and our plans for carrying the relationship forward.

New Zealand and its people have a very close and natural affinity to Europe.  New Zealand has adopted and adapted much of its norms, values and institutions from Europe. 

The experience of Two World Wars and the massive loss of life on European soil is an example of our entwined heritage. 

For many New Zealanders, Europe has an enormous draw - for its culture and its history.   The thousands of young New Zealanders who travel to Europe each year for their overseas experience are testament to this.  The strong European influence within our society is augmented by New Zealand's cultural diversity and our Maori culture as well as the more recent influences from other parts of the world, most notably the regions of Asia and the Pacific.

New Zealand, like Europe, has experienced significant demographic change   over the past five decades.   Thirty years ago upwards of 85 per cent of our population considered themselves to be of European origin or Pakeha.  Our last census, in 2006, showed that people of European descent now number 68 per cent of the population.  More than 14 per cent are Maori, 7 per cent Pasifika, and 9 per cent people of Asian descent.

This illustrates that today's New Zealanders come from diverse cultural backgrounds, a situation that is becoming more common in Europe as well.   We celebrate this.   We also continue to value our European heritage - our culture, our institutions and our shared values.

In terms of our foreign policy, throughout the last 50 years New Zealand has become a nation that is more self-confident. 

New Zealand in 2010 sees itself as a vibrant and multicultural nation, with an independent foreign policy, as confident with our position in the Asia-Pacific region as we are with our strong European and Maori cultural influences. 

New Zealand, with its strategic location within the Asia-Pacific region, has established new relationships and agreements with the emerging economies of Asia and more recently with the Gulf States.  Developing these trading networks is key to New Zealand's economic growth. 

Our growing set of free trade agreements with our near neighbours in the region has led to a significant broadening of these bilateral relationships.

Most recently, New Zealand has announced its intention to negotiate a Free Trade Agreement with Russia, a country that links both the Asia-Pacific and Europe regions.

The overarching point I would like to stress this evening is that our focus on relationships with Asia-Pacific partners does not mean that we are turning away from Europe - far from it.   "Likemindedness" has become a key word used to describe the similarities of our views on major international issues.

We have been fortunate that New Zealand's location in the Asia-Pacific region has, in the last few decades, brought significant economic advantages to New Zealand. 

Europe, too, has begun to shift its focus towards the Asia-Pacific as member states seek to tap into the region's flourishing economic activity.  There is also recognition of the growing global influence of the regional heavy weights, India and China. 

In my view, the relationship between New Zealand and the EU provides significant potential for both sides in this changing geo-political environment. 

New Zealand's membership of the Asia Europe Meeting or ASEM provides a further opportunity for New Zealand and the EU to engage on regional issues.  New Zealand is pleased to be part of ASEM and we see it as another important strand in our broader relationship with both regions. The Deputy Prime Minister, Mr English, led the New Zealand delegation to the leaders' summit in Brussels last week, which also included Foreign Minister McCully. 

I had been looking forward to attending ASEM and was disappointed not to be able to.  Unfortunately the Christchurch earthquake and the Government's focus on recovery and rebuilding have seen me minimising my official overseas travel for the time being.  However, I hope to make an official visit to Europe in the early part of next year.

When talking about the relationship between New Zealand and Europe in its early years - particularly around the time that the UK joined what was then the EEC - it would be fair to say that it was heavily focused on defensive trading interests.  At the time, our relationship was dominated by questions of market access for our agricultural trade and Europe's action on international markets.    

Trade issues, while still important, are today only one part of the issues and agenda with Europe.  This is the result of closer engagement with the EU across a wide range of areas.  The EU and New Zealand now have extremely useful sectoral agreements with the EU, covering animal products, science and technology, mutual recognition, and other areas.

The trade and economic relationship with the EU remains significant for New Zealand.   The EU is our second-largest trading partner behind Australia - ahead of both China and the US.  

Total trade in 2009 amounted to nearly $12.5 billion, with New Zealand exporting nearly $5.5 billion in goods to the EU.  Our main exports are primary products, such as sheep meat and fresh fruit, with wine, medical products and yachts also appearing in the top 20 export items. 

In the other direction New Zealand imports nearly $7 billion in goods from the EU each year, mainly vehicles, medical products and other manufactured items.

Our trade levels have remained fairly static over the past five years compared to trade with other markets, after relatively steady growth in both directions between 1995 and 2004.  

New Zealand is a consistent market for high-tech EU manufacturing; however there is a risk that the EU may lose its market share in New Zealand to competitors in the region.   New Zealand, for its part, is also keen to ensure that it retains its position as a top provider of high-quality food and beverage to the high-value EU market. 

On the investment side the EU's stock of direct investment into New Zealand is around $10 billion.  This figure is the third highest but has remained at broadly the same levels over the past five years, while investment levels from Australia and the US have grown significantly over the same period.   New Zealand's investment in the EU stood at $2.7 billion in 2009 - a figure which has nearly quadrupled over the past five years.

These statistics illustrate the significance of our trade and economic relationship, but they also show that there is scope to do more.

Europe is also the second largest visitor market for tourism.  Visitors from Europe are particularly valued because they tend to stay longer in New Zealand and spend more.   Thousands of young Europeans come to New Zealand each year to study or to participate in our working holiday schemes.  There are now nearly 10,000 Working Holidaymakers per year from the UK, more than 7,000 from Germany, and more than 3,000 from France.  Not to mention the numbers who shift to New Zealand to work and take up longer-term residence.

An education example of our closer engagement is the facilitation for New Zealand graduate internships to the European Parliament, which is an initiative supported by the European Union Centres Network.

Europe is also a major regional partner for science, technology and innovation - nearly 40 per cent of all collaborations funded by the New Zealand Government involve European partners.  This illustrates Europe's immense capabilities in the areas of scientific and technological advancement, which New Zealand benefits from in many ways. 

It would be remiss of me not to mention the close sporting ties between New Zealand and Europe, particularly as we prepare to welcome countries from Europe to New Zealand for the Rugby World Cup in 2011.  The All Blacks enjoy huge brand recognition in Europe and, likewise, visiting teams from Europe are assured of pulling spectators through the turnstiles. 

Rugby World Cup 2011 present a unique opportunity for New Zealand and Europe to interact on the rugby fields, in the stands, in the restaurants and in the many activities planned throughout the country as part of the REAL New Zealand Festival.   New Zealand will be opening its doors to Europe.

At the political level, you will see a multi-faceted engagement not only with the EU as a whole, but also with the individual member states.

The changes that we have seen in Europe over the past 50 years, through the expansion of the EU and the development of its institutions, have in fact provided greater scope for New Zealand to cooperate with the 27 member states of the EU then ever before.    We welcome the closer links forged with the new member states in Eastern and Southern Europe; particularly as they begin to look beyond the EU for likeminded partners in other regions.

The increased institutional cohesiveness of the European Union and its expansion are goals that are shared by New Zealand.   The implementation of the Lisbon Treaty is the latest milestone in a long trajectory of European integration - a process that was supported at the outset by New Zealand governments, notwithstanding the immediate concern it raised for our economic interests and well being.   It also provides a new basis upon which New Zealand and the EU can work together. 

From New Zealand's perspective, a united Europe not only provides security and prosperity for its members, but projects values globally that are important to us - democracy, good government, the rule of law and respect for human rights.   The EU's role is vitally important in ensuring international peace and security.

Looking across the range of issues on which we interact, you will see many examples where New Zealand works with Europe to make the world fairer and safer.

Take the International Assistance Force in Afghanistan, known as ISAF.  New Zealand military and civilian personnel are working alongside European partners in reconstruction efforts as we seek to ensure the transition to a stable and secure Afghanistan.  New Zealand works closely with the EU Police Mission team, called EUPOL, in Bamyan province, one of five provinces where EUPOL has chosen to focus its resources. 

Afghanistan is in fact the second deployment of New Zealand personnel under NATO auspices; the first was to Bosnia over a decade ago in the biggest deployment of New Zealand troops to Europe since the Second World War.  

This illustrates the importance that New Zealand attaches to working with European partners on peace and security initiatives. 

These efforts encompass initiatives aimed at ensuring peace and security in a world that is facing increasing challenges on these fronts.  The EU and New Zealand have, for example, worked together on a number of practical projects in the region that enhance security and counter radicalisation.  This includes the New Zealand-EU partnered East Asia Regional Media Programme, which brought together over 50 regional journalists and aimed to promote better media understanding and reporting on situations involving terrorism or insurgency. 

New Zealand and the EU share a common commitment to reduce the effects of climate change.  We value the EU's leadership within international negotiations and its example as a leader on sustainability issues within your own region and your countries.  As pioneers of the use of emission trading systems, we have much to share to ensure that these mechanisms play the desired role in incentivising greater use of renewable energy, energy efficiency and of course reducing greenhouse gas emissions.

We have common climate change interests in agriculture too.  In this regard New Zealand is appreciative of the support and leadership of EU member states for the Global Research Alliance on Agricultural Greenhouse Gas Emissions, an initiative spearheaded by New Zealand.  Nine EU member states participate in the Alliance to date.

The EU also plays an important role in our own region, the Pacific.   The EU and individual member states make significant contributions to the region through international development assistance.  These include efforts to address and mitigate the effects of climate change and your support for good governance and human rights. 

The EU has increased its engagement with the Pacific Islands Forum in recent years, through for example the EU-Pacific Islands Ministerial Troika. 

New Zealand, Australia and the EU also work closely together to ensure alignment in the delivery of our development assistance in the Pacific and consult regularly on key policy questions. 

We have appreciated the EU's support for the Pacific Forum's position on Fiji and we are also committed to closer practical collaboration in a range of development areas including budget support to Pacific Island countries, and renewable energy projects.

I have outlined only a small cross-section of New Zealand's cooperation with Europe on the world stage this evening.   But it illustrates the fact that the EU is a natural ally for New Zealand as we advance our interests globally. The task now for both sides is to consider where we want take the relationship over the next 50 years. 

I see significant opportunities for us to work together. Many of the issues confronting the European Union and New Zealand, both now and into the foreseeable future, are global issues that must be approached internationally. Closer cooperation between two such likeminded parties can bring benefits not only in bilateral but also in global contexts.

Given our likeminded approaches on a wide range of issues, we also think that our economic relations should be on the same level, or better, than those that we have formed with other countries or regional blocs.

We think our relationship offers significant benefits to both parties. 

The European Union, too, is seeking to extend its role in a wide range of international activities, including in our Asia-Pacific region. 

New Zealand's growing engagement with Asia-Pacific countries offers not only a point of comparison for the European Union, but also tangible opportunities for joint approaches to investment, trade, research, education and other linkages.

There are opportunities for the EU to work with New Zealand, as a likeminded partner, in contributing to global and regional security, counter-terrorism and promotion of human rights; movement of people; and development cooperation.

But if we want to take the relationship forward in the future, then I think it will be important to achieve the right framework that will allow us to work together as bilateral partners in an increasingly complex world.   We need to be forward-thinking and creative; we need to look across all aspects of our relationship and adopt a comprehensive approach. 

New Zealand realises that it is by far the smaller partner, but we are committed to working with the EU to realise common goals. 

Last year Commission President Barroso and I agreed to take discussion of our partnership to the next stage: a formal comprehensive agreement.  The aim is to build on the 2007 Joint Declaration on Relations and Cooperation between New Zealand and the EU. 

In my view, a formal agreement that covers all areas of the relationship between the EU and New Zealand, including political, security, economic and trade elements is both a logical and desirable next step for a relationship of such significance.  We have a mature relationship, but this does not mean we cannot do more.

A comprehensive agreement would provide the opportunity to significantly lift our trade and economic relationship.  This has been our experience elsewhere in the Asia-Pacific region.  The success of our agreement with China is a case in point.  The EU will have had similar experiences.  We should seize the chance.

It would not only provide a platform for cooperation between the EU and New Zealand bilaterally, but also for further EU engagement within the Asia-Pacific region; a region that is becoming increasingly economically integrated.

Both New Zealand and the EU are proponents of liberalised trade.  In any objective terms New Zealand is not a threat to European economic interests, but we recognise the sensitivities that exist.  I believe an agreement between the EU and New Zealand could thus be of very high quality.  It could also provide a blueprint for future comprehensive agreements with other partners.

We have been discussing this proposal with counterparts in the Commission and member state governments.  I am pleased at the encouragement to pursue this proposal.  I hope that EU Members will consider their long-term interests in an agreement with this part of the world.  I would like discussions on a comprehensive agreement to continue and, at the right time, take this proposal to the negotiations phase.

My message this evening is that New Zealand is ready to work as a close partner of the EU - this is in New Zealand's interest, and Europe's. 

We have a strong basis on which we can build: shared values and strong personal, cultural, political and economic ties. 

New Zealand is ready to strengthen our links further.  It will be the responsibility of all sectors, both government and society, to take this relationship to its full potential over the coming 50 years.

Thank you.

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Thank you for inviting me to speak at the opening of your 2010 Annual Council. It is a great pleasure to be back again this year.

I'd like to acknowledge your national executive committee and your national president Robin Klitscher. Robin has done an excellent job in his role as president since 2007.

I'd also like to take this opportunity to thank all Royal New Zealand Returned and Services' Association members for the good work you do in our communities, and on behalf of veterans.

The RSA is a well respected and trusted institution in New Zealand. You play a vital role, advocating for veterans and keeping alive the memory of their sacrifices and their contributions.

Thank you for all that you do.

As Prime Minister I have had the privilege of meeting many veterans and hearing their remarkable stories.

You are an inspiration to us all, and I know I speak on behalf of New Zealanders when I say how much we value the contribution you have made to our peace and our security, our prosperity and our future. 

You will always hold a very special place in our nation's history, and the National-led Government is committed to honouring the sacrifices you have made.  

Today I'd like to talk about some of the Government's initiatives that will be of interest to you.

But first, I'd like to reflect on some commemorative events I've been involved in recently.

Commemorations

In April I went to Turkey for the 95^th anniversary of the Gallipoli landings.

This was my first trip to Gallipoli, and it was an extremely moving experience.

The Gallipoli campaign is a deeply significant part of our history, and that history comes alive when you stand at places like Quinn's Post and the summit of Chunuk Bair.

In 1915, our forebears in the armed services landed at Gallipoli, thousands of miles from their homes and families.

More than 2700 New Zealanders did not return home. Thousands more were wounded. I cannot begin to imagine the suffering, hardships, and horrors they endured.

It was humbling to be in Gallipoli this year to mark their courage and sacrifice.

I was proud to be accompanied by 22 veterans of subsequent wars as well as a group of 21 young New Zealanders.

The Ministry of Culture and Heritage is currently planning commemorations for 2015 - which will mark the 100^th anniversary of the Gallipoli landings.

Although it's too soon to provide a definitive list of events, 2015 will be an important commemorative year for New Zealand and many countries around the world.

A major project to mark the First World War centenary will be the development of a memorial precinct around the National War Memorial here in Wellington. This is due to be completed in time for the centenary celebrations.

This year I also had the opportunity to visit Korea for the 60^th anniversary of the start of the Korean War.

I went to the War Memorial in Yongsan, Seoul, for a wreath laying ceremony in tribute to New Zealanders who lost their lives in the conflict.

Like Gallipoli, it was a very moving experience, and I salute those of you who served in that war.

This year New Zealand also marked Merchant Navy Day for the first time.

I hope the annual commemorations on September 3 will continue to raise awareness of the invaluable contribution made by the Merchant Navy in both world wars.

Tomorrow is the anniversary of the Battle of Passchendaele, in which more than 2700 New Zealand soldiers were killed, declared missing in action, or wounded.

More New Zealanders died on that single day in 1917 than in any other day in our history.

This was a terrible loss for our country and we will never forget the incredible sacrifice by these soldiers on the 12^th of October, 93 years ago.

Commemorations are very important for veterans, their families and friends, and for fellow Kiwis.

They help keep the stories and spirit of our valued veterans alive. 

New Zealand Defence Service Medal

Another way to remember and recognise those who have served is by the awarding of medals. 

The RSA has proposed a defence service medal for many years, and National has supported this idea.

We set up a working group last year to consider the medal and its eligibility criteria, under the direction of an independent chair, Neil Walter.

The working group reported back late last year and I am pleased to update you on our progress. 

I am delighted to announce today that the Government has established the New Zealand Defence Service Medal, subject to the Queen's approval.

Cabinet has also approved an additional $3.85 million for the manufacture and distribution of the medal.

The medal is for those who have served in the military for more than three years since World War Two, and those who did compulsory military training or national military service.

This is a fantastic way to give our servicemen and women the recognition they deserve.

It is estimated that there are more than 160,000 people eligible for the medal.

The initial call for applications will be restricted to those aged 50 years and over, but after six to 12 months we will open it up to all others.

In cases where an ex-serviceman or woman is deceased, their family can apply for the medal.

We hope that applications will open early next year, and that the first batch of medals will be delivered soon after.  

Defence policy

Today I'd also like to update you on the Government's defence policy.

As you know, the Government is conducting a defence review.

Our Defence White Paper is on track to be released soon and I want to thank the RSA for your contribution to this.

The White Paper will be a blueprint of the future strategic and defence challenges for New Zealand, and the type of defence force we will need to face them. 

It will make sure that the New Zealand Defence Force has what it needs to protect New Zealanders and New Zealand's interests well beyond 2020.

It's important for us to take the time to make the right decisions.

We've consulted with a lot of people, including the public and a panel of independent experts.

We've also undertaken a comprehensive value for money review because we want to get the most out of our defence budget, and put as many resources as possible into the frontline.

Because it's our troops that matter most of all.

And they are doing a fantastic job at home and abroad.

Just last month we saw the Defence Force step up to help Canterbury after the devastating earthquake.

And at present, New Zealand forces are proudly representing us in Timor Leste, the Middle East, Sinai, Iraq, the Solomon Islands, Korea, Sudan, and Afghanistan.

Afghanistan

In May this year I had the privilege of visiting our troops in Afghanistan.

It was good to spend some time with our servicemen and women in Kabul and Bamiyan.

They're doing a great job, helping to build schools and hospitals, protecting the Afghan people, and restoring security to the region.

I enjoyed visiting the bazaar in Bamiyan and meeting some of the locals.

It was clear to me that the people there are very grateful for the support of our troops.

I was also struck by the camaraderie, commitment, and courage on display by our servicemen and women.

You can be really proud of them and the work that they are doing.

They are continuing in the spirit and traditions that you, and those before you, have left.

And I know that they do this wherever they are sent.

In August New Zealand lost a fine young officer in action in Afghanistan, Lieutenant Timothy O'Donnell.

Tim was a man who exemplified the Defence Force's values of courage, commitment, comradeship, and integrity.

His death was a stark reminder that when our servicemen and women leave home to serve overseas it comes with very real risks.

But when I was in Afghanistan I saw first hand that our men and women are making a real difference.

I'd like to take this opportunity to pay my respects to all our troops serving us so proudly in Afghanistan and elsewhere overseas.

Veterans' affairs

Now I'll touch on a few of the National-led Government's initiatives that may be of interest to you.

This Government has made good progress in the area of veterans' affairs and I'd like to acknowledge the hard work of Minister Judith Collins.

The Law Commission report into the review of the War Pensions Act was tabled at Parliament in June. It contains 170 recommendations on changes to the war pension scheme.

The Government is considering the report at the moment and will make an announcement in due course. This is a large report and it is important that we work through it carefully and take the time to ensure that we get it right.

You will also be aware of our work to increase engagement between the Government and veterans.

Veterans' Affairs New Zealand started Case Management in the Community last year.

Under this initiative, case managers travel throughout New Zealand to hold events with groups of veterans. There are four a month.

It's a chance for veterans to share their views and get information on what support is available.

I'm pleased to report that the initiative has been very successful so far and has had good attendance.

It's important that veterans can express their views directly to the government.

That is something the RSA has strongly advocated for, and the case management initiative is one way to make sure that happens.

Since your last annual council we have also changed travel concessions for severely disabled war veterans.

Our changes bring fairness and certainty back into the system.

As you will know, Cabinet considered a number of options and decided to make changes which reflected the proposal made by the RSA.

We really appreciate your input into veterans' affairs issues such as this, and we hope this will continue.

Wider government policy

I'd like to finish today by sharing my thoughts on New Zealand's future prospects.

This Government is intent on ensuring this is a country where your children and grandchildren are able to enjoy the quality of life that you and our forebears were prepared to fight for.

To that end, the Government is firmly focused on lifting the long term performance of New Zealand's economy.

That's the only way we will create jobs, boost incomes, raising living standards, and provide the world-class public services New Zealanders deserve.

Our October 1 tax changes are an important part of our plan to grow the economy.

We've cut all personal income tax rates, GST has increased to 15 per cent, and we've boosted New Zealand Super, Working For Families, and benefit payments by 2.02 per cent to compensate for the rise in GST. That includes the Veteran's Pension.

The tax package leaves the vast majority of New Zealanders better off.

It's worth nothing that since mid-2008, thanks to tax cuts and other adjustments, New Zealand Super and Veteran's Pension payments have increased significantly.

The rate for a married couple has risen from $439.80 for each person a fortnight to $511.06 after 1 October. That's an increase of $142.52 a fortnight per couple - a 16 per cent boost in just over two years.

We're also relentlessly focused on providing better public services in areas such as health, education, and law and order.

In health, more patients are getting the elective operations they need than ever before. That includes the likes of hip replacements, cataract removals, and ear, nose, and throat surgery.

In law and order, we are putting victims first, getting tough on criminals, and addressing the drivers of crime. We've put more police on the street, made sentences tougher, and strengthened bail laws.

In education, we've implemented National Standards to make sure our young people are getting the reading, writing, and maths skills they need to succeed.

We're also expanding the successful Limited Service Volunteer programme for 17- to 24-year-olds. This programme is a six-week military-style camp, supported by life skills courses.

We've had fantastic feedback on the LSV programme. Many graduates go on to study, get a job, or join the armed forces.

These initiatives are just a snapshot of the work we are doing to secure a brighter future for New Zealanders.

Ladies and gentlemen.

We will never forget the New Zealanders who gave their lives in the service of their country.

We will never forget the sacrifice that all veterans have made for a peaceful, secure, and prosperous world.

And we will never forget those who are proudly serving us today.

This Government remains committed to honouring your contributions.

Thank you to all members of the Royal New Zealand Returned and Services' Association for the invaluable job you do.

I wish you all the best for a successful 2010 Annual Council.

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At 4.36 on Saturday morning Canterbury was hit by a devastating earthquake measuring 7.1 on the Richter scale.

People woke in the darkness to a loud rumbling noise and a shaking home.

Those with families gathered them together and took cover under a doorframe or wherever they could.

Everybody in Canterbury has an earthquake story from that morning.

By the time the sun came up, it was clear just how much damage the earthquake had caused.

Having visited Christchurch on Saturday after the earthquake, I can appreciate the magnitude of loss that people have suffered, and the trauma they have experienced.

I was awestruck by the power of the earthquake and the damage that it has caused in the city I grew up in.

Buildings have collapsed. Roads have been ripped apart. People have been injured. 

There are estimates that 100,000 homes may be damaged - some beyond repair.

It's a miracle that nobody was killed.

The earthquake was the same magnitude as the one in Inangahua in 1968, which caused extensive damage.

It was as strong as the earthquake in Haiti earlier this year, which caused widespread devastation and is estimated to have killed approximately 230,000 people.

Although no one lost their life in the Canterbury earthquake, families have been traumatised and lost their valued possessions.

As one eye witness put it, experiencing the earthquake was like being in the horror movie, The Exorcist.

It was a frightening experience for everyone, but it has proven one thing: that in the worst of times, you see the best of New Zealand.

I have been impressed by the community spirit shown - from private individuals, to government agencies, NGOs, and businesses, both local and national.

People who cannot stay in their homes have been taken in by family, friends, or neighbours.

Work and Income staff have been ringing or visiting all the elderly people who are known to be living alone.

Students have used Facebook to find hundreds of people willing to help with the clean up.

Local mayors Bob Parker, Ron Keating, and Kelvin Coe have stepped up and shown excellent leadership.

Everybody involved in responding to this disaster has done a tremendous job so far.

I am proud of the spirit shown by the people of Canterbury and New Zealand in the wake of this devastating natural disaster.

We are also thankful to have had an outpouring of support and sympathy from governments around the world.

It will take us a long time to work through the damage caused by the earthquake and we will need to be patient as we move into the rebuilding phase.

Christchurch is New Zealand's second largest city so there is likely to be considerable disruption to both the local and national economy.

The Government will help alleviate bottlenecks and speed up the rebuilding phase.

Yesterday I announced that the Government has donated $5 million to the mayoral earthquake recovery fund.

This is just a start. The Government is prepared to step up financially to rebuild the region.

This afternoon I am travelling to Christchurch again with other Ministers.

We are committed to working with local mayors and Civil Defence to get the region up and running again.

I have also cancelled my visit to the United Kingdom and France that was due to begin this Friday.

Mr Speaker, the thoughts and sympathy of the New Zealand Government are with the people of Canterbury in the aftermath of this earthquake.

As the frightening aftershocks continue, we stand alongside them, committed to helping them rebuild their lives.

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Good afternoon.

Cabinet today held an extensive discussion lasting nearly three hours on the Canterbury Earthquake and the Government's response to it.

Firstly, can I express my sympathies to the people of Canterbury, both to those injured and those who have lost property or had their houses damaged.

Having visited Christchurch on Saturday after the earthquake, I can well appreciate the magnitude of loss that people have suffered.  I was awestruck by the power of the earthquake and the damage that it has caused in the city I grew up in.  It was miraculous that nobody was killed. 

I understand that the three people who were seriously injured are now stable and are making a recovery.

Health and safety of the public is a big focus for the authorities. 

I note there have been continued aftershocks today. 

The biggest issue appears to be water supply and wastewater. The Civil Defence Minister is this afternoon meeting with the Mayors and officials, about taking up help that has been offered from around the country to resolve this important issue as quickly as possible.

There are just over 160,000 homes in the Selwyn, Christchurch and Waimakariri areas, and there are estimates that 100,000 of them may be damaged, some beyond repair.

We do not yet know how many people are uninsured, but officials, EQC and the insurance companies are working on that.  I am advised that the national average of uninsured houses is around 5 per cent.

It is important to note that any homeowner who has a mortgage or business that has borrowings, will almost certainly have insurance as a requirement of that liability.

The above-ground damage is obvious, but it could take some time to understand just how much damage there is to underground infrastructure.

The Ministry of Education is checking all the schools in the Christchurch, Selwyn and Waimakariri areas, which have been closed until Wednesday, to ensure that they are safe for students and teachers to go back. 

Power supplies have been restored in most places, with very few customers still out - about 3500 I am advised - and the bulk of them should be restored over the next few days.

I am advised all rail lines will be restored by tomorrow, but in the meantime freight is being brought into Christchurch by road.  The state highway network is fine, but there has been significant damage to some local roads.   Christchurch Airport and the Port of Lyttelton are open.

Today we've had at last count just over 4000 calls to the Government earthquake helpline (0800 779 997), but we expect that to grow.

EQC has at early this afternoon had more than 15,000 claims, and of course that is expected to keep growing. 

I am advised that EQC are looking to establish three field offices in Christchurch.  Each will contain about 40 staff, the first of which is due to open later this week.

The Government will be working alongside EQC and the other relevant players, to provide as streamlined a system as possible in order to process what will be a huge workload.

It is also worth repeating that anyone with home and contents insurance can claim up to $100,000 plus GST on their house, and $20,000 plus GST on their contents.  EQC has advised that irrelevant of when a claim is made, GST will be calculated at 15 per cent.

I want to thank everybody involved in responding to this disaster.  There has been a real community spirit shown - from private individuals, to government agencies, NGOs, and businesses, both local and national.

Some government agencies have flown extra staff down to help local staff out - for example in health, education, and Work and Income.

One example of the effort being put in by agencies is shown by Work and Income's staff ringing all the elderly people who are known to be living alone in Christchurch.  Ten thousand calls were made as of this morning, and we anticipate all 16,000 of those over 65 living on their own will have been contacted by the end of today.   Where contact cannot be made, Work and Income staff are physically checking the premises.

As to the economic impact, we've received some preliminary advice from Treasury on the effects of the earthquake on the economy.

That advice suggests there will be considerable disruption to both the Canterbury and national economy in the short term due to a loss in activity as people and businesses deal with the immediate aftermath of the quake.

But, looking out a little further, there should be an increase in activity once reconstruction and repair work kick into full gear.

This high expected level of construction activity could put some pressure on prices, but this will be balanced by the relatively weak level of activity in the construction industry at this time. So the effect on inflation should be limited.

These events could mean some volatility for tax revenue over the next year, but due to our work to control debt the Government is well placed to absorb this.

The Minister of Finance is in the process of talking to the banks, and IRD officials, to work with them to see how they can take into account the impact on business of the earthquake.

Treasury has conveyed to ratings agencies the message that the earthquake will not fundamentally alter New Zealand's fiscal position. Those agencies have said the earthquake will have no immediate effect on NZ's sovereign credit rating.

I'll now move to some decisions taken by Cabinet today. 

As you are aware, a Mayoral fund has been established.  This is consistent with practise in previous natural disasters.  These funds are typically used to assist local residents facing genuine hardship in areas not covered by direct state assistance.

Overall, pledged donations so far have totalled just under $6 million, including substantial contributions from some of the major banks, and others.  I want to thank those organisations who have made contributions, and we'd encourage any organisation or individual to consider also contributing to the fund.

The Government has today decided to contribute an initial $5 million to the fund.  Further contributions will be considered in due course.

The decision has been taken that for coming weeks, Gerry Brownlee will be the Minister responsible for earthquake recovery.  

He will be based in Christchurch and give daily media briefings, keeping in touch with all relevant ministers and government and local agencies.

There was discussion about appointing a special commissioner to work between central government and local government.  No decision has yet been made but the intention is to sit down and have discussions with the relevant local authorities as soon as possible on the idea. 

A Cabinet committee, called the Cabinet Committee on Canterbury Reconstruction, will be formed, chaired by Mr Brownlee. Its membership and Terms of Reference will be decided upon shortly and that information released by the end of this week.

The officials committee supporting the new Cabinet committee will be led by the Department of Prime Minister and Cabinet, which is already playing a strong co-ordination role in the Government's response.

In terms of roading infrastructure, there is $94 million immediately available in the emergency works fund for the rest of this year (this is for use across the country).  This is definitely enough to get us started.

The three affected Councils are working to ascertain what needs to be done and how much that will cost, and NZTA engineers are working alongside them.  Until that work is complete, we simply don't know the size of the problem.  The government stands ready to assist beyond the emergency works fund if required.

I am pleased though to hear that, for the most part, the state highway network has held up very well - including bridges.  Canterbury's main arterial local roads are also ok.  The main area of concern is a number of residential streets and roads across the region, and often the issues are linked to water and sewage infrastructure issues.

As for my diary this week, I intend to make a ministerial statement in the House tomorrow afternoon.  I will then fly to Christchurch with a number of other Ministers.

We will meet with all the local Mayors -  Bob Parker, Ron Keating and Kelvin Coe - at the Civil Defence headquarters, for a full briefing.  That night I will visit the welfare centres that are open around the city.

I will stay the night, and on Wednesday morning I will visit some of the hardest-hit rural areas surrounding the city.

The final programme is still being organised, and is subject to change, but we will get a detailed advisory out as soon as we can. 

We have also received a number of messages of support and sympathy from foreign governments.

I have received messages from Prime Minister Julia Gillard, Prime Minister David Cameron, the Prime Ministers of Tonga, Israel, and Singapore, and the foreign ministers or officials of the United States, Chile, Spain, the European Union, and the Netherlands.

In addition, both Prince William and Prince Charles have also given us messages of support.

A note about my official visit to the United Kingdom and France. At this stage it's my intention to continue with this and leave on Friday night.  By then I hope to be confident that all the recovery processes will be in place.

We will continue to monitor the situation and we won't go unless we are absolutely confident that based on the best information, it is prudent to do so.

While away, I will be receiving regular briefings and updates, and talking to my Ministers.

I should also note that at this stage we see no reason to delay the impending local government elections in October.

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I'd like to begin by saying thank you for inviting me to speak with you today.

I know many of you are victims of crime - and for you, coming here is not an easy thing to do.

You are all courageous advocates for victims of crime and the effort you are making is welcomed.

The Sensible Sentencing Trust and its members make a real contribution to public debate and policy in New Zealand, and it's a pleasure for me to be here with you today.

When National came into Government in late 2008 we were elected to get our economy growing faster, to lift education standards, and to make our communities safer.

I have been clear that law and order policy is a crucial part of my overall vision for New Zealand, because I believe Kiwis have a right to feel safer.

I have also been clear that where there is a balancing of rights to be done between criminals and victims, I will take a side.

That is the side of the victim. And where New Zealanders become victims of crime, I want the National-led Government to make sure they get the support and respect they deserve.

We have been relentlessly focused on these issues since we came into Government, and we have a record to prove that.

I'd like to take this opportunity to talk with you about what we have done and where we are moving to as we look to improve the security of New Zealanders.

You'll be aware that we've passed into law a three strikes policy with the help of the Act Party.

It will keep the country's worst repeat violent offenders in prison, because strike three means the offender gets the maximum penalty with no parole.

New Zealanders deserve to know that the worst violent offenders are not walking alongside them in their communities, so I'm proud that the three strikes law is in place.

And I'd like to acknowledge the hard work of Police and Corrections Minister Judith Collins in bringing that policy to reality.

We've also made a number of other changes that you will be interested in.

We moved quickly after being elected to strengthen bail laws, reversing Labour's dangerous mistake.

We have toughened sentences for crimes against children.

We've given Police the power to collect DNA from people who they intend to charge with particular offences, and we've widened that range of offences.

This change comes into effect in the next couple of weeks and it gives the Police another tool to help solve crimes and bring to justice those who are responsible for damaging our communities.

We've also closed loopholes for child sex offenders.

We've given Police stronger powers to detect, trace and seize the profits of organised crime.

I can tell you today that the estimated value of restrained property so far under the Criminal Proceeds (Recovery) Act is more than $20 million.

That represents millions of dollars that criminals would have had as a reward for their crimes - these are profits we intend to take away from them.

We've given Police the opportunity to issue on-the-spot safety orders for victims of domestic violence.

I'm particularly proud of this law change because it's important New Zealanders can feel safe in their own homes.

As I said earlier, the National-led Government is very much focused on the victims of crime.

Justice Minister Simon Power has been working hard to put victims at the front of our law and order agenda, and he's made a raft of changes to help those who suffer at the hands of criminals.

We have introduced a $50 levy on criminals to improve services for victims.

We're providing more financial support for victims, including helping them attend coronial inquests and Parole Board hearings.

We have also abolished the partial defence of provocation.

This particular change makes the court experience less traumatic for victims and removes a defence that effectively rewarded a loss of self-control.

I'd like to acknowledge the work of Simon Power in bringing forward all these changes - he has a huge capacity for work and Simon is doing a great job in putting victims first.

When we were elected to Government one of our commitments to New Zealanders was to put more Police on the streets to fight crime.

I'm proud to say we are delivering on that promise.

We promised to increase Police officer numbers nationwide by 600 before December next year, including 300 in Counties-Manukau.

To date, there are 413 more Police officers on the street and we are on target to reach the full 600 by the end of next year.

We've already got 271 out of 300 new Police officers in the Counties-Manukau district, and the rest have been recruited and are in training.

The boost in Police numbers is making a difference too.

The Police in Counties-Manukau can be far more proactive because there are far more of them.

For example, robberies in that district are down 52 per cent.

House burglaries are down 31 per cent.

And there's been a 34 per cent drop in stolen vehicles.

That's good news and I believe more is possible as the extra Police we are deploying really make their presence felt on our streets.

Ladies and gentlemen, there is no getting away from the fact that New Zealand locks up a lot of offenders.

I checked earlier this week to see just how many.

I can tell you that on Monday this week, my advice is that there were 8829 offenders in prisons or Police cells.

That is the highest number ever.

I agree with you that bad people, particularly the most serious and repeat offenders, need to be taken out of our communities.

That's why my Government has taken the actions it has during our time in office to do just that.

But it's important to remember, as you know better than anyone else, that every person locked up in prison leaves behind a victim and their family.

These victims and their families aren't statistics - they are real people, and very often they have lost a loved one.

So just as the Government is focused on taking the worst offenders out of circulation, we must also turn our attention to reducing the number of people who are likely to commit crime.

Because it stands to reason that every person who we prevent from embarking on a life of crime is also a person who will not leave behind a trail of victims.

In 2009, under the leadership of Simon Power, my Government convened a summit on the Drivers Of Crime. Slowly but surely, we have been working to address some of the very real catalysts that cause people to commit crime.

High on this list is drugs and alcohol.

That's why I declared war on P through a multi-pronged approach to fight this evil drug in October last year.

We all know that P is 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 organised crime to flourish. And it entices young people into criminal careers.

We are committed to using every tool we have to fight P.

The changes we have made include cracking down on precursors, breaking supply chains, providing better routes into treatment and supporting families and communities.

And we are making good progress.

In the first six months of this year, Customs seized a total of 630 kilograms of methamphetamine, or P precursor, at the border.

That would produce up to 178 kilograms of P - with a street value of around $178 million.

The Police and Customs have been doing a great job and their efforts have been out there for you to see in the form of multiple arrests and record drug busts.

This was evidenced by the seizure by Customs in May of just over eight kilograms of pure P in the luggage of a tour group arriving at Auckland Airport.

There was also the seizure of more than $5 million worth of methamphetamine and the arrest of six people by Police in Auckland last month after a year-long drugs operation.

We are determined to bring those who peddle P to justice.

And as we do it, we are disrupting and undermining P-related criminal activity.

Our War on P has some way to go yet. But we are determined, we are committed, and we are already achieving progress.

Alcohol, too, is a significant driver of crime.

It is implicated in 30 per cent of all police recorded offences, 34 per cent of recorded family violence, and 50 per cent of all homicides.

The public has been calling for change, and this week we responded to those calls with a comprehensive alcohol law reform package.

We are focused on minimising alcohol-related harm, particularly among young people.

The measures we have announced are an acknowledgement that the pendulum had swung too far towards liberalisation of alcohol laws.

But we also know there are a lot of responsible drinkers in New Zealand and we don't want to unduly affect them.

So we have been careful to get the balance of our alcohol reform package right.

I'd like to run through a handful of the measures with you now. As you may know we have adopted in full, or in part, as many as 126 of the Law Commission's 153 recommendations for alcohol reform.

Among them, we have decided to empower communities to decide on the concentration, location and hours of alcohol outlets for both on and off-licences in their area.

We have listened to the calls from people who wanted a greater say in the way alcohol is sold in their local community, and we are giving them that say.

We are also putting forward a split alcohol purchase age of 18 for on-license venues and 20 for off-license venues.

The National caucus will have a conscience vote on this particular part of the alcohol reforms. The split age reflects the different levels of supervision that apply to on-license and off-license venues.

We are also going to restrict RTDs to 5 per cent alcohol content, and no more than 1.5 standards drinks per container.

I think you will all be aware that RTDs are particularly appealing to young people. In some cases they don't taste like alcohol but they can have substantial levels of alcohol in them.

The National-led Government's overall alcohol reform package zeroes in on where harm is happening - particularly around youth.

The RTD changes are part of that focus.

We're also giving parents more tools to manage their children's access to alcohol and requiring more parental and individual responsibility for supply to minors.

We're tightening the criteria for licence applications too.

And we're increasing penalties for a range of licence breaches, including selling to a minor, serving an intoxicated person, and allowing violent behaviour to take place on premises.

Ladies and Gentlemen, this is just a start for alcohol reform.

We know that legislation alone will not turn our binge-drinking culture around and eliminate harm.

Our binge-drinking culture is a function of something we've grown up with and each and every one of us can change that if we want to. The law can only go so far.

As well as reforming alcohol laws and tackling P, the National-led Government is working hard to help young people and young offenders, and to turn them off a life of crime.

Today I want to talk about three of our initiatives aimed at young people - Fresh Start, Limited Service Volunteers, and National Standards.

Fresh Start is a revolutionary range of programmes designed to

give young offenders what they need to make a fresh start.

It's about intervening early to divert these young people from a life of crime.

Fresh Start legislation has been passed into law this year and it starts on October 1.

You're probably familiar with some of the aspects of Fresh Start - such as military-style activity camps for the most serious repeat young offenders.

These camps will teach self-discipline, respect and responsibility, and there will be mentoring, parenting and drug and alcohol rehabilitation programmes wrapped around it to address the causes of offending.

There are many other aspects to the package which better equip judges with the tools they need to deter young offenders from a life of crime.

With the investment we are making in Fresh Start, we have the opportunity to make a real difference in the lives of young offenders.

We're also expanding the highly successful Limited Service Volunteer programme for 17- to 24-year-olds.

The programme is a six-week military-style camp, supported by life skills courses.

When I visited the Burnham LSV programme last year, I sat down and chatted with a couple of young men who were about to finish the programme.

I asked them how they felt about leaving. They said that it was going to be the saddest day of their lives.

I asked why, and they said because LSV was the first time they had really had family around them, a sense of boundaries, and a sense of purpose.

The feedback that the Social Development Minister Paula Bennett and I are getting about the LSV programme is fantastic.

Many graduates go on to further study, to get a job, or to join the armed forces. They leave instilled with self-discipline, confidence, and motivation.

And finally, I also want to talk today about National Standards.

This is a crucial part of our plan to help children get the skills they need to succeed and reach their full potential.

National Standards will identify the kids in our schools who are falling behind so that parents and teachers can give them the support they need to catch up.

I'd like to read from an email sent to Education Minister Anne Tolley, about our National Standards.

It reads: "I think it is a brilliant idea. I worked as a Probation Officer for 12 years and was appalled at the number of offenders who couldn't read or write. Hopefully National Standards will go some way towards addressing that."

I couldn't agree more, Ladies and Gentlemen.

This National-led Government is committed to addressing the problem of crime in this country.

We have a plan to make our communities safer and our initiatives so far have had a great response.

We are putting victims first, getting tough on criminals, and addressing the drivers of crime.

The Sensible Sentencing Trust has a vital role in advocating victims' rights and promoting a safer New Zealand.

I have enjoyed the close relationship we've had for several years now, and I look forward to it continuing in the years ahead.

Thank you and I wish you a successful conference.

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