New Zealand Executive Government Speech Archive

This afternoon I want to paint a picture from a more personal palette, rather than from one with perhaps the more limited colours of Government policy. I want to leave you with a vision of New Zealanders which gives you a real feeling for how we see ourselves as a country and how this impacts on the way we view the world.

If you take anything from this address Id like it to be the impression New Zealanders are driving at full speed, committed to economic and trading excellence, and selling ourselves, and our high quality products to the world. Being at the bottom of the Pacific we have to take this full-on approach.

As a nation with the population of a medium sized US city we are genuinely interested in the world outside our own borders. Our recent stunning economic turn around makes us determined to get out there and capitalise on our new found confidence.

At this stage let me briefly outline where we head from here. I want to spend a few minutes on New Zealand - what we are up to - economically, politically and socially - and finish by reminding you of the vital part the US plays in our foreign policy considerations.

At Home

If its been a while since you last visited or read about our country youll notice some big changes.

In the last 15 years weve been on a headlong rush of reform, restructuring, deregulating and privatising, and latterly especially, growth and development. We are currently the most economically free nation on earth. This is according to a group of ten leading economists and politicians surveyed by The Economist magazine.

Even if governmentally neglected for many decades, this notion of freedom is very much a part of the New Zealand pysche - our national love of wide open spaces of wilderness and sea re renowned.

The Economists accolade reflects a huge transformation. Not so long ago we were a heavily over regulated, almost East European, economy. There had been virtually no economic growth for ten years and debt was high and growing.

In 1983 a period of dramatic restructuring began. They were tough years - our rugged, independent farmers probably bore the brunt of it. But they, and the rest of New Zealand, rose to the challenge. Less than ten years later the OECD described our reforms as the most comprehensive in any developed country in decades. The economy is now fully exposed to international competition.

An environment exists which provides an excellent base for sustained economic growth, investment and employment.

How did we do it? Well here are a few examples:

• industry and retailing were deregulated followed by the financial markets, the exchange rate was floated and we unilaterally removed all quantitative controls on imports and slashed tariffs
• we undertook one of the largest privatisation programmes as a percentage of GDP in the world, selling state agencies worth over $12 billion since 1987. Folk from this country were involved too - Bell Atlantic and Ameritech bought our telecommunications system, Chicago based Wisconsin Central bought our railway and EDS from Plano, Texas bought our Government computer system.
• the public service government workers, partly due to this, were reduced by nearly two thirds;
• we abolished all farming subsidies with the result being, after a difficult transition, our farmers are now innovative, and more importantly responsive to their markets in a way the government never was;
• the employment sector was modernised by the Employment Contracts Act which abolished compulsory union membership and put in its place a flexible labour relations framework; and
• finally, to be sure all this hard work wasnt unravelled, we locked these policies in legislation. The Fiscal Responsibility Act requires the Government to report regularly to Parliament using an accrual accounting method - something I gather is unique to New Zealand. And under the Reserve Bank Act we made our central bank independent and gave it the sole task of maintaining price stability. The Governor, or Chief Executive, is on contract to keep this within a range of 0-2%.

The result is an economy forecast to grow at 3-4% well out beyond 2000; underlying inflation averaging 1.7% in the last four years and unemployment at 6.1% (the third lowest rate in the OECD) from an alarming peak of 11.1% in 1991.

Last year for the first time in almost twenty we had a budget surplus of 3% of GDP. We expect another surplus this year of over $2.9 billion - and this is expected to double next year. Net public debt is expected to fall next year too to 17.6% of GDP from a high of 52% three years ago and all foreign currency debt will be repaid.

If this sort of excitement wasnt enough we opted for a new electoral system. As my former Australian counterpart, Gareth Evans very wryly put it - as a political party you have written the longest suicide note in history. From the end of this year Parliament will be made up of members, half of whom will gain their seat in a first past the post constituency based vote, and the other half from party lists, gaining their slot under proportional representation.

In a recent speech to a local chamber of commerce I noted the challenge of this new system will be maintaining a level of policy stability despite inevitable party political pressures and consequent uncertainty. There are bound to be some short term policy flip flops but I believe New Zealands broad foreign and economic policy framework will remain much as it is today.

Finally, a word or two about the social changes in the last decade. New Zealanders now have a renewed confidence in their ability to foot it on the world stage with the best of them.

We know we can go beyond our rural base, which isnt in any way to denigrate its importance - it still accounts for a good 35-40% of our exports. Tourism is now our largest foreign exchange earner and manufactured exports have grown from 6% of our exports in 1970 to 20% today.

Our success is also reflected in our growing pride in ourselves as a truly Pacific nation - not a European outpost but a diverse mix of peoples with their own character. Our multicultural make up - much like the US - is the source of our vibrancy.

Here in the USA

And so here we are in Atlanta. I am very pleased to be here - the center of the world in July. The presence of companies like CNN and Coca-Cola are omnipresent reminders of the citys world stature.

Id like to acknowledge at this stage the events co-sponsors - Bell South International - one of a number of excellent US corporate citizens attracted to New Zealand and now playing a real role in our economy.

You could perhaps say New Zealand is a sort of dynamic Georgia of the South Pacific. And its fitting recognition of Atlantas importance as a regional hub that we have established an Honorary Consulate here - in fact in this very building. Ian Latham, an expatriate New Zealander is a partner of Ogilvy and Mather and has kindly agreed to represent us. After lunch Ill open the new consulate.

Could I say, turning to the broader bilateral relationship, New Zealand feels very fortunate to have a really close friend in the US. Your leadership in the post-cold war world is unrivalled - in terms of global security and prosperity.

Ive just come from a round of discussions in Washington with members of the Administration and Congress. These talks confirmed, while we dont always agree on every subject, our relationship is in very good shape.

We work well together in a range of fields:

• in international security we are proud to contribute to multilateral peacekeeping efforts around the world;
• we warmly welcome your signature of the South Pacific Nuclear Free Zone Treaty and hope to work with you to conclude a Comprehensive Test Ban Treaty by the end of the year; and
• we cooperate closely In the UN - the only global organisation addressing political and security issues. The quantum leap in demand for its services makes its reform vital. The UNs credibility is at stake. Could I also make a plug for an almost global hope that the US will pay this years contributions and arrears. Reform is irrelevant if the organisation cant function.

Finally, in the continuing struggle for free trade the US has no stauncher ally than us:

• we played complementary roles in the successful conclusion of the Uruguay Round and are working closely to get the new World Trade Organisation running. We are currently supporting the US challenge to a EU ban on certain meat products; and
• in the APEC we both want to harness the regions dynamism to generate world economic growth.

Our relationship obviously goes well beyond governmental level, important though it is. I believe there is scope for all our linkages, from business people to sporting endeavours, to become stronger.
We are bound to become firmer friends and allies. Stay in touch - wed love to see all of you in New Zealand at some stage. Thanks for the opportunity to speak to you this afternoon.