14 December 2006
Address to Inaugural Jenny Shipley Lecture - part one
Address to Inaugural Jenny Shipley Lecture
Canterbury Manufacturers Association Conference Room, Christchurch
E nga mana, e nga reo, e nga rangatira, tena koutou, tena koutou, kua huihui kia ora katoa, katoa.
To those who have mana, to those who have spoken, behold leaders, greetings, twice greetings, greetings to you all.
Jenny Shipley used this greeting to begin her valedictory speech on retiring from Parliament in 2002, and I humbly borrow from that speech this evening.
Thank you for the opportunity to give the inaugural Jenny Shipley Lecture.
Lectures, I must admit, have never been my strong suit, at least when I was a student here at Canterbury University and sitting on the other side of the lectern. If I thought a lecture would be deathly boring I went off to play squash instead.
There were many deathly boring lectures.
So, in future years, if I am as successful in politics as Jenny Shipley was, you are far more likely to see a squash game in my honour than a formal lecture.
And if I am as successful in politics as Jenny Shipley was, it will in no small part be due to her.
When I returned to New Zealand in 2001, it was Jenny who encouraged me to stand for Parliament, and who used her influence to get me a speaking slot at the National Party's Auckland Regional Conference.
I feel it is my responsibility, delivering the first in what I hope will be a long series of annual lectures, to give something of the sense of Jenny Shipley, at least as a politician.
I then want to look further back in time, at the first two National Prime Ministers, Sid Holland and Keith Holyoake. I want to draw out what they saw as the principles of the National Party, and show how these are equally relevant in the New Zealand of today.
Jenny came into Parliament in 1987, representing what at that time was the Ashburton electorate.
In the intake of 1987, which also included Wyatt Creech, Maurice Williamson and Murray McCully, she marked herself out with some typically thoughtful comments in her maiden speech.
"In my opinion," she said, "it is the State's role to create the environment in which we, as New Zealanders, can enjoy all the privileges of living in a democratic nation and all that it has to offer."
She went on to say that, "Economic independence is the one objective that all New Zealanders seek, and it will be achieved not by the government constantly being involved but by the government managing its own affairs in such a way that it is not fuelling demand for resources, thus affecting the availability of those resources to the private sector."
This argument, about the role of the State and the appropriate size of government, is a perennial one.
It is an easy argument to parody, as some commentators do, by painting a picture of the free-market, small-government party in the blue corner, and the big-spending, big-government socialists in the red corner.
The reality is that in New Zealand, as in almost all developed countries, the government plays a very significant and important role in the economy and in society, and will continue to do so under both National-led governments and Labour-led governments.
It is essential we have a well-resourced public sector to provide strong institutions like those in the areas of law, justice and defence; to build up New Zealand's infrastructure; to provide services that we as a society have decided should be publicly provided, like health and education; and to help the most vulnerable members of our society.
But there is a balance to be struck here.
The more a government spends, the more it has to tax its citizens, and taxes affect people's behaviour in negative ways. The higher tax rates become, the more the economic burden of taxation rises.
At the same time, as more and more money is spent it starts to go on less and less worthwhile things.
Also, and this is the point Jenny Shipley emphasised, the people who work in the public sector – who by and large are highly skilled and motivated people – are also the highly skilled and motivated people who could alternatively be working in the private sector. When the government uses resources, including people's skills, these are not available for other uses.
National is committed, as we always have been, to lowering tax rates over time, and with this goal balanced against other priorities such as education, health, and the environment.
Much of the money for tax cuts under a National Government would come from improving the way the Government spends its budget.
Last year the core government – not including State-Owned Enterprises and tertiary institutions – spent $50 billion. Six years before that, it spent $35 billion.
We are entitled to ask whether this additional money – a very substantial increase – has been budgeted and spent with the same sort of care that hardworking families and businesses apply to their finances every day.
I am inclined to think it hasn't. I suspect that much of the discipline has gone out of government spending in recent years because the government has been fortunate enough to have inherited a strong fiscal position, and has subsequently benefited from an on-going surge in tax revenue.
Such a situation would have seemed very foreign to the incoming Bolger Government in late 1990, and to its new Social Welfare Minister, Jenny Shipley.
Looking back, it is hard to overstate the fiscal crisis of the early 1990s. The economy was in the middle of a very deep recession. The government had run budget deficits for many years and, as a result, our public debt levels were the highest they have ever been. Debt servicing was the largest item of government spending, costing $80 million a week.
It is one thing to be a social policy minister when the government's coffers are awash with cash and the biggest problem is how to spend all of it; it is quite another to be a social policy minister when the cupboard is well and truly bare.
To Jenny Shipley's credit, she was a minister who was willing to be accountable to the public for what went on in her portfolio, including the fallout from some tough Cabinet decisions.
She was clear about her core beliefs as minister. "How we manage the vulnerable within our community and society", she said in one of her first speeches, "is …a clear reflection of how we view the worth of ourselves as a nation."
I made it clear last week that, as someone who has benefited from New Zealand's welfare system, I will never walk away from it. I am also committed, though, to making sure the welfare system does not discourage people who have the means to pick themselves up and make better lives for themselves.
After the 1993 election, Prime Minister Jim Bolger recognised how difficult the Social Welfare portfolio was and gave Jenny Shipley a break – by giving her the equally demanding post of Minister of Health.
The health sector had just recently been restructured into a new regime of Regional Health Authorities and Crown Health Enterprises. The integration of the health and disability support sectors, which she had previously been overseeing from the Welfare side, was still under way.
Jenny Shipley made a number of contributions to the health sector in the mid-1990s, of which I want to briefly mention three.
First, she oversaw a number of reforms in the disability area, as she had in her previous capacity as Minister of Social Welfare.
She championed the right of people with psychiatric and intellectual disabilities to live in the community, and for elderly people to stay living in their own homes.
She commissioned the Mason Inquiry into mental health services and set up the Mental Health Commission.
Secondly, she encouraged flexibility and innovation in the delivery of health services.
In particular, she wanted to see the focus of the health system move away from hospitals and towards community care. She saw general practice at the heart of the health care system, and oversaw innovations in general practice funding through managed care and budget holding.
Thirdly, although she increased health funding quite significantly, she tried to move the health funding debate from how much money is given to the health sector, to how we can get the best possible health outcomes from the money we have available.
This concern persists today, and has in fact been magnified now that the health budget has topped $10 billion.
Last year the Treasury noted that while government spending on health has been increasing by an average of 7.7% a year, there seems little to show for it.
Its briefing papers to the incoming Minister of Finance say that "It is difficult to tell what improvements in health outcomes or services have been achieved for the additional expenditure on health, and whether New Zealanders are getting value for money".
The Government seems paralysed in health at the moment, content to tip in large amounts of money without knowing what it is getting for its money, let alone whether this is a good investment.
Jenny Shipley became Prime Minister in 1997. As you all well know, she was the first woman in New Zealand to attain this position.
Now that we have had female Prime Ministers for 10 years, two female Governors-General, a female Speaker, and a female head of our largest company, it is easy to lose sight of how significant and ground-breaking Jenny Shipley's achievement was.
As Prime Minister, she continued to be a strong supporter of social policy, while at the same time being realistic about what the government could afford, and where it could make a real difference.
She did not think governments were always better at spending people's money than they were themselves, and she oversaw the last significant tax cuts we have had in New Zealand.
Her Government also oversaw many significant Treaty settlements, including the Ngai Tahu settlement, and she chaired the APEC meeting held in New Zealand in 1999.
However, the economic recession bought on by the Asian crisis, and by consecutive droughts, meant that the period between 1997 and 1999 was not an easy time to be Prime Minister.
But she did not grumble about the succession of tough hands she was dealt as a politician, firstly as a minister and then as Prime Minister.
In her valedictory speech she said, "I believe as a politician one should play the hand one is dealt and not grizzle about it".
In that speech, she also said that as National Party Leader she was a guardian of its values, and had the privilege of carrying forward these values on behalf of the country.