Peter Dunne's Address to Wellington South Rotary Club

Hon Peter Dunne

MP for Ohariu

Leader, UnitedFuture

Address to Wellington South Rotary Club
Noon, Tuesday 7 April 2010

Key Points:

• “… While National may be odds-on to win again next year, the dark clouds are already gathering…ACT’s right wing is already becoming impatient and has shown no hesitation in trying to throw its weight around, well beyond the limits of its electoral mandate.”

• “Kiwis do not like walking down the road of extremism. ACT is not a force Kiwis would want shaping an increasingly far right second-term National-led government.

• “(The) Maori (Party) are going to want much more than lip service and personal warmth on issues like devolution; the future role of the Treaty of Waitangi; and, closing the social and economic gaps between Maori and Pakeha. Indeed, the very future of the Maori Party will depend on its making significant progress in each of these areas.”

• “National … (will likely be) the only party capable of forming and leading a government after the 2011 election – but with partners whose core demands are likely to tear it in completely opposite directions.”

• “… Given the experience of 2002, it is a situation UnitedFuture – written off as irrelevant and politically moribund now just as we were in 2002 – is watching with some interest.”

• “(UnitedFuture) has been and is a voice for middle New Zealand families, and it is why we have endured against adversity to date.

• “I bitterly regret that we were diverted by the fundamentalist mania of a few in 2002-2005, and although those elements have long since left us, the false impression they caused that UnitedFuture was just a bunch of religious zealots with a narrow, prescriptive moralistic agenda has lingered, to our detriment. Today, I am drawing the line – those days are well behind us, and will not be repeated.”

• “I am sick and tired of hearing the values and the aspirations of middle New Zealand families derided as dull and boring. I am sick and tired of seeing their hard work and their effort to get ahead and do the best for their families derailed by those who rip off the system, or do not pay their fair share.”

• “We have deliberately used our position as a partner to successive governments since 2002 to introduce common sense policies that are good for middle New Zealand families, and I make no apology for that.”

• “Nor will I ever apologise for getting into government and making a difference. (Our) critics who can not look past their own myopic views around a party that can work with either major party to get things done.”

• “Why be in politics if you are not aiming to do that? Little, if anything, is achieved from the Opposition benches … We have got things done.”

• “The challenge for middle New Zealand next year is to ensure that a second term Key Government … (isn’t) dragged off to the right by zealous support partners.”

• “UnitedFuture will be there to give (middle New Zealand) a voice. To keep on track, National needs a partner that knows how to balance the chequebook, but also understands social justice and compassion – a partner with a hard head, but a warm heart.”

• “That is why UnitedFuture is looking forward to 2011 with some optimism.”

Full text of speech follows:

The National-led Government is almost at the half way point of its first term.

Its performance to date, especially that of the Prime Minister, has been strong and warmly supported by the majority of New Zealanders.

So much so that it would be a brave person indeed (or an extremely foolish one) who would at this stage predict anything other than another substantial election victory for National next year.

But while National may be odds-on to win again next year, the dark clouds are already gathering.

National’s success to date has come because the Prime Minister in particular has been extremely careful so far not to become hostage to traditional conservative policies or interest groups.

He has shown pragmatism many have welcomed, but that may be tested more thoroughly in the future as recent decisions like the proposed welfare reforms, mining on the conservation estate, and maybe even the foreshore and seabed, take hold.

Labour, on the other hand, still looks like the old government thrown out at the last election, rather than a government in waiting.

This is a perception that is unlikely to change while its old guard leadership remains in place.

The last time a major party won government with old guard leadership was Labour under Walter Nash, way back in 1957 – and it took the desperate £100 tax rebate bribe to achieve the narrowest of victories, something that could not happen under proportional representation today.

But while National looks set to win comfortably the largest representation in Parliament again next year, its support will most likely erode somewhat.

It is highly unlikely to be able to govern on its own.

That means National will be even more reliant on its support partners in the next Parliament.

And that is where the dark clouds now gathering start to look decidedly stormy.

ACT’s right wing is already becoming impatient and has shown no hesitation in trying to throw its weight around, well beyond the limits of its electoral mandate.

It has made it very clear that the Government’s reforms are too slow and too moderate for its liking.

Might I suggest that middle New Zealand does not agree with ACT on that?

Might I go further and suggest that your average New Zealander would shudder if they knew the half of ACT’s political ambitions.

Kiwis do not like walking down the road of extremism.

ACT is not a force that Kiwis would want shaping an increasingly far right second-term National-led government.

Assuming the party does not split asunder in the meantime, it can be expected to push the Douglas agenda of asset sales, reduced government spending, and service privatisation with even more vigour in the second term, as the price it will extract for supporting National.

That will test severely National’s nothing-in-the-first-three-years coyness on issues like asset sales, as ACT is unlikely to be as tolerant or pliant as it has been to date on the issue.

The signs of ACT’s current muscle-flexing are just a foretaste of things to come as the true believers and big-money backers will be insisting National implement real, core ACT policies in the second term.

Yet the moment National starts down that path, the popular press, followed eventually by the Labour Opposition, will justifiably excoriate it for returning to Richardson era politics that John Key, to date at least, has seemed so firmly set against.

And then there is the Maori Party.

The key to understanding this unlikely but genuinely strong relationship is that John Key’s invitation to join him after the last election was the first time in modern political history any major political party had invited Maori to join in government.

Labour may like to talk big about the relationship forged with Ratana in 1935, but the truth is it was always a subservient one, where Maoris’ political loyalty was quickly taken for granted and seldom reciprocated in any meaningful way.

Maori understand that.

They know that for generations they were taken for granted by Labour, which is why the strength of the bond now formed with National cannot be underestimated.

It has counted for a lot in the Government so far, and will do likewise for the remainder of this term.

While it could never say so, the Maori Party will be prepared to tolerate a watering down of its Whanau Ora plan, or some compromises over the foreshore and seabed – for now – because it is still relishing the fact it was invited to the table in the first place, and rightly so.

But that too is likely to change in a second term.

Maori are going to want much more than lip service and personal warmth on issues like devolution; the future role of the Treaty of Waitangi; and, closing the social and economic gaps between Maori and Pakeha.

Indeed, the very future of the Maori Party will depend on its making significant progress in each of these areas during the next term.

National therefore faces the unenviable possibility of being the largest party in Parliament – indeed the only party capable of forming and leading a government after the 2011 election – but with partners whose core demands are likely to tear it in completely opposite directions.

And both those directions would take it far away from its core support base and the centre ground pragmatism that has characterised the Key administration to date.

National’s strategists know this and will be very concerned about it. All of which raises the intriguing parallel of the 2002 election and with it, the question of what happens if there is a melt-down in Labour’s support, akin to that of National in 2002.

You will recall that at that time there was a popular Labour-led Government in office, facing an election it was likely to win, but where its coalition partner had imploded, and its two best options were the Greens, who were busy white-anting Labour at every turn (remember Corngate?) and New Zealand First, whose anti-immigrant xenophobia was anathema to everything the Labour Government had hitherto stood for.

Labour’s response to this impossible situation was a desperate plea to voters to just give it an outright majority – the last thing voters still mindful of the excesses of one-party government in the first past the post era were prepared to do.

In the event, a significant number of centre ground voters switched in roughly equal numbers from both National, whom they had written off as not yet ready to govern again, and Labour, whom they felt largely deserved another go, to UnitedFuture.

They did so to give Labour the moderating partner they felt it needed.

They did so, to prevent it being derailed by what they regarded as the extremes.

There are emerging signs that a similar situation may occur next year, this time with soft Labour voters both recognising their party is unlikely to win and, being not too unhappy with current government’s direction, looking for a moderating influence on National in its second term.

And, given the experience of 2002, it is a situation UnitedFuture – written off as irrelevant and politically moribund now just as we were in 2002 – is watching with some interest.

But regardless of that scenario, as a party we remain committed to the cause of middle New Zealand families – the true champions of our society.

These are the people who make our community tick – who run the school boards and the sports clubs, who join the service clubs, and who genuinely care about the state of their communities.

They are not hell-bent on selling our state assets or slashing government’s social spending, nor do they want the government telling them what they can and cannot do, or providing everything for them.

They just want to get on with their lives, on a live and let live basis, knowing there is someone in government who understands and respects their concerns, and stands up for them.

That has been UnitedFuture’s role.

This party has been and is a voice for middle New Zealand families, and it is why we have endured against adversity to date.

However, I accept we have to earn afresh the trust of voters we have had in the past.

I bitterly regret that we were diverted by the fundamentalist mania of a few in 2002-2005, and although those elements have long since left us, the false impression they caused that UnitedFuture was just a bunch of religious zealots with a narrow, prescriptive moralistic agenda has lingered, to our detriment.

Today, I am drawing the line – those days are well behind us, and will not be repeated.

For the record, this is what we believe and stand for:

• Ideas and principles are more important than serving special interests.
• Promoting social advances involves all of us, not just the state.
• Participation is the key to successful communities and nations, and families are the building block of these.

These are the politics of principle and courage – not the politics of compromise and surrender as some would have it.

They are utterly consistent with our role as the protector and upholder of common sense in politics.

I am sick and tired of hearing the values and the aspirations of middle New Zealand families derided as dull and boring.

I am sick and tired of seeing their hard work and their effort to get ahead and do the best for their families derailed by those who rip off the system, or do not pay their fair share.

I think the good, honest people who do their best, day in and day out, who are long-suffering and often uncomplaining, deserve more of a look-in as far as government is concerned.

We have deliberately used our position as a partner to successive governments since 2002 to introduce common sense policies that are good for middle New Zealand families, and I make no apology for that.

Nor will I ever apologise for getting into government and making a difference.

And yet, there are those critics who can not look past their own myopic views around a party that can work with either major party to get things done.

Why be in politics if you are not aiming to do that?

Little, if anything, is achieved from the Opposition benches.

If you are going to get things done, then you need to get into a position to do it.

And we have got things done.

In 2002 it was not fashionable to talk about policies that were family friendly.

We were too politically correct for that, so Governments simply did not talk about families.

Well, UnitedFuture changed all that, and nowadays political parties of whatever hue bend over backwards to proclaim their family friendly credentials.

Some have criticised our commitment to families as meaning no more than a prescriptive view of families in the way conservative groups like Family First do.

Well, that is not UnitedFuture – in our view, families are far more dynamic, and their very attraction is their diversity.

We stand up for families for the very specific reason that strong and cohesive families, whatever their particular structure, are the key to our society’s future development, so it is only right that their voice be encouraged and heard.

Indeed, allowing families to spend more time together was one of the reasons why I pushed successfully to extend daylight saving to six months of the year, and our commitment to promoting outdoor recreation opportunities is because of our belief in enabling New Zealanders to spend more quality time together enjoying our magnificent natural environment.

These are mainstream Kiwi values we have lost a little sight of in recent years.

We developed the national medicines strategy, Medicines New Zealand, to ensure all New Zealanders are better placed to get the medicines they need when they are ill, and at a price they can afford.

Again, this is all about promoting, wellbeing, and better social cohesion.

Our ongoing efforts to reform the tax system to make it fairer, through the range of personal and business tax cuts I have been part of introducing since 2007, and including the work I am involved in with the Minister of Finance in developing the Budget 2010 tax package are about improving the lot of families across the board, and making it easier for them to play a full part in the development of our society.

Later this year, I will take that a step further by introducing legislation to allow parents with dependent children to split their incomes between them for tax purposes.

We have pushed successfully for major infrastructure developments like Transmission Gully to keep our communities more connected and closely linked.

And my efforts to promote a greater culture of giving and more philanthropy amongst New Zealanders by removing the previous limits on the level of charitable donations qualifying for a tax rebate, and introducing payroll giving, are all about recognising more strongly the important and growing role that the charitable and voluntary sector plays in our community.

What is significant is that UnitedFuture has introduced and sustained these policies under governments led by both major parties, demonstrating both philosophical consistency and a capacity to deliver.

In St Paul’s Cathedral in London there is the famous epitaph for the architect Sir Christopher Wren, “If you seek his monument, look around you.”

Well, to those who still ask what UnitedFuture stands for, let me say, “If you seek our purpose, look at our achievements.”

None of the policies I have spoken of would have been achieved had UnitedFuture not been part of government over the last eight years – nor, I suggest, will many survive if we are not there in the future.

All of them have been focused on making life better for middle New Zealand families, and restoring to them a sense of dignity that had been stripped away during the major political upheavals of the 1980s and 1990s.

But middle New Zealand’s greatest strength is also its greatest weakness – it just gets on with the job, without fuss or bother.

As a consequence, it is often wrongly overlooked as uninterested, or apathetic.

It is flexible, pragmatic and realistic – many of the virtues the Key Government has demonstrated to date.

The challenge for middle New Zealand next year is to ensure that a likely second term Key Government can retain those virtues, without being dragged off to the right by zealous support partners.

UnitedFuture will be there to give those Kiwis a voice.

To keep on track, National needs a partner that knows how to balance the chequebook, but also understands social justice and compassion – a partner with a hard head, but a warm heart.

That is why UnitedFuture is looking forward to 2011 with some optimism.

Ends

Mark Stewart | Press Secretary | Office of Hon Peter Dunne
Cell +64 21 243 6985 | unitedfuture.org.nz |

Hon Peter Dunne: Address to Conferenz 5th Annual One Stop Update

Address to Conferenz 5th Annual One Stop Update

Accountants in Practice Conference
10am, Intercontinental Hotel, Wellington

I am very pleased to speak to your conference today on developments in tax policy.

The Government’s tax policy work programme, which was announced in March this year, and updated in September, has four broad themes.

They are:

1. Better positioning New Zealand in the world economy.
2. Responding effectively to the changing economic and fiscal environment.
3. Maintaining tax revenue.
4. Improving tax administrative systems, so that they can operate more effectively and deliver greater value for money.

These four, very broad themes cover just about everything on the government’s tax policy work programme.

But before I go into specific policy projects that may be of interest to you I will turn for a moment to the influence of the fiscal and economic climate on tax policy, because, whatever else may be the case, the fiscal and economic climate will always be critical in setting tax policy.

When it was elected, late last year, the new Government faced an immediate challenge from the worldwide economic crisis.

As a small, open economy with high levels of external debt, New Zealand was especially exposed to the economic downturn, which in late 2008 threatened a re-run of the depression of the 1930s.

However, several months down the track, there is now growing confidence that such a scenario has been averted by the actions of governments throughout the world, including New Zealand’s.

The position now seems to have stabilised.

But although there are positive signs, the world economy is still not robust, with the hangover from the turbulence likely to be with us for some time.

Since 2008 the New Zealand Government has gone from budget surpluses to deficits.

And the Treasury’s post-election, medium-term fiscal projections are for budget deficits to remain until the 2016/17 year.

Even then we will return to a sustainable fiscal position only by fiscal drag moving the average worker on to the top personal marginal tax rate of 38 percent.

That is why the Government is committed to moving to an alignment of the top personal tax rate, company rate and trustee rate at a maximum of 30 percent as a desirable medium-term goal.

It just so happens that alignment has long been UnitedFuture’s policy, so obviously it has my full support.

But moving towards such alignment while also achieving a sound fiscal position requires us to look again at the tax system in fundamental ways.

This examination is being done in conjunction with the Tax Working Group, which is being co-ordinated by Victoria University.

The working group is leading a debate on the medium-term direction of New Zealand’s tax system.

In doing so it is drawing on the experiences of other countries and their tax systems.

Some other countries have capital gains taxes and land taxes.

One question for the working group whether there is a place for such taxes in the New Zealand tax mix.

This is a discussion we should and need to have, but encouraging the debate is not without its political difficulties.

Despite what you may have heard from the media, the Government has made no decisions on the future tax mix.

What is more, the working group itself has not yet reached a final position on the many options, let alone presented it to the Government.

The Government is also closely monitoring the progress of Australia’s comprehensive review of its tax system, which is chaired by Dr Ken Henry and is expected to report in December.

Tax developments in Australia, our closest economic partner, are of special importance to us, given our economic interaction and the fact that about 55 percent of foreign direct investment into New Zealand is from Australia.

New Zealand’s submission to the Henry review, made in October last year at the invitation of the Australian Treasurer, presented the case for introducing trans-Tasman mutual recognition of imputation and franking credits.

I believe that mutual recognition is essential if we are to have a truly Single Economic Market, while retaining our respective imputation systems.

We have put our own review of aspects of our imputation system on hold until we know the outcome of the review.

Regardless of what results from the review, there will doubtless be important tax consequences for New Zealand.

All this is a reminder of how important it is to ensure our tax system remains competitive in a changing world.

It is also a key focus of the Tax Working Group.

In the meantime, we have made major progress in the reform of our international tax rules.

The taxation bill that passed its final stages in Parliament in September removed tax on active income earned through offshore subsidiaries and on foreign dividends received by New Zealand parent companies.

The idea behind this far-reaching reform is to help New Zealand grow its own internationally competitive businesses.

That will not happen if our businesses face tax disadvantages they would not face if they shifted to Australia or somewhere else.

We have now moved our rules into line with Australia's, removing a major disadvantage for our businesses.

The next stage in the reform will be to take the policies we have now legislated for and apply them as appropriate, not just to subsidiaries but also to branches, joint ventures and other significant offshore investments.

A discussion document with suggestions on how the active income exemption could apply to significant interests in foreign investment funds will be released within the next few months, while rules for branches and financial CFCs will be developed next year.

To turn briefly to our double tax agreements with other countries, withholding tax on cross-border income has been subject to increasing international pressures.

Over the last few years, many other countries have been progressively reducing their withholding tax rates on cross-border income flows, which has put pressure on New Zealand to do the same.

Australia has been reducing withholding taxes in its major treaties over the last ten years.

New Zealand has now developed a new double tax agreement strategy to reduce withholding tax rates with our major trading partners.

The idea is to reduce tax barriers to New Zealand businesses investing offshore and to the repatriation of profits when that investment takes place.

We have recently done that in new or updated DTAs with Australia and the United States, and we are looking forward to doing the same thing with our other major trading partners.

Re-negotiation of our DTA with Canada will begin in November, and re-negotiation of our DTA with the United Kingdom will begin in February.

I would like to turn now to developments in a number of other projects on our work programme that you may be interested in.

The Government is soon to embark on a review of the scope of gift duty.

Gift duty serves to protect against the use of so-called “gifts” for purposes of income tax avoidance, sheltering assets from creditors or spouses, and avoiding obligations such as paying child support.

Over the past year or so there have been repeated requests for the Estate and Gift Duties Act to be amended to exempt certain gifts from gift duty.

In considering those requests, it became apparent that the current exemptions from gift duty that are set out in law are fairly ad hoc, and there appears to be no coherent framework to determining which exemptions should be granted.

This leads to some undesirable inconsistencies – for example, gifts to some central and local government entities, such as Te Papa, are exempt from gift duty, whereas gifts to others, such as the Auckland Art Gallery, are not.

Clearly, the policy needs sorting out, and just how this could be done will be the subject of consultation early next year that will give interested parties the opportunity to have their say.

A tax bill to be introduced shortly will include legislation that allows transfers of retirement savings between certain Australian superannuation funds and New Zealand KiwiSaver funds.

That is good news for people who have retirement savings in both Australia and New Zealand, as many people have, because they will be able to consolidate them into one account in their current country of residence.

The bill is expected to be passed by the middle of next year.

The portability arrangement will take effect two months after both countries have enacted the necessary legislation.

Income splitting, or allowing families with children to split their incomes for tax purposes, thereby reducing their overall tax liability, also remains an area of interest for me.

Indeed, the post-election Confidence and Supply Agreement between my party, UnitedFuture, and National includes support to the first reading in Parliament for a bill giving effect to my party’s income splitting policy.

The idea was first floated in a discussion document published in April last year, to which there was a good response.

That initial consultation is to be followed up by an officials’ issues paper, planned for release by the end of this year, seeking submissions on the detailed design of the proposal.

The forthcoming tax bill will also introduce some refinements to the KiwiSaver scheme, including more coherent policy for savers under 18.

The KiwiSaver Act does not prescribe who can contract with a provider on behalf of people under 18.

It is at the discretion of the provider whether or not an application is accepted.

Consequently, there have been complaints from parents, guardians and children themselves.

To provide certainty and clarity, the bill will introduce a new set of rules to prescribe how young savers can enrol in KiwiSaver.

One of the main changes is that those under the age of 16 may not enrol themselves, but must be enrolled by their legal guardians.

The final big theme I want to address today is the need for a more efficient and effective public service as reflected in the Inland Revenue Department, my area of responsibility.

We cannot achieve a world-class, internationally competitive tax system by policy measures alone.

We also need a first-class tax administration that collects revenue and delivers services with speed and certainty.

In the time since I was chairman of the Finance and Expenditure Committee’s Inquiry into Inland Revenue, back in 1999, I have been impressed with the improvements the department has made.

There is, however, still room for improvement, especially at a time when the government is pushing to ensure that we get increasing value for money from the public service as a whole.

Greater efficiency will not be achieved by increased funding for the public service – there is simply no money for that.

The public service has to think and act smarter – just as the private sector has to do.

With that in mind, Inland Revenue is embarking upon a major transformation exercise.

It needs to move away from the technology and management style of the 1980s, when its computer system, FIRST, system was built, to a model suited to this century.

That will mean making increasing use of e-business tools and the internet, tools that did not exist in the 1980s.

I will illustrate this point with an example I have used on a number of occasions, because it is a very good example.

Each working day Inland Revenue posts, on average, over 100,000 envelopes containing various pieces of correspondence.

That is over half a million letters a week, and over 25 million letters a year.

It is an impressive amount of mail for a population of a little over four million people.

Inland Revenue is aware that it needs to cut that mail dramatically.

Streamlining the system will require some policy and legislative changes, which the government will back.

We need to if we want to have a 21st century tax administration.

The first step in the modernisation process is to simplify the administration of student loan repayments.

The idea is to move away from the time-consuming paper-based management of loan repayments to electronic management and communication.

A bill giving effect to the student loan changes is planned for early next year.

The next step in the transformation process will be to look at what can be done with PAYE and the personal tax summary systems.

These are early days yet in planning the next stages in the modernisation of the tax administration, and detailed proposals have yet to be developed, much less agreed to by Cabinet.

There will of course be a lot of consultation with affected taxpayers, tax advisors, and professional bodies.

To conclude, I trust this brief update has given you a glimpse an idea of where the Government is in terms of tax policy, and where we are going over the next year or so.

Thank you and I wish you all the best for your conference.

ends.

Mark Stewart
Press Secretary to Hon Peter Dunne:
MP for Ohariu
Leader of UnitedFuture
Minister of Revenue
Associate Minister of Health

Parliament Buildings
Wellington
New Zealand

Direct Dial: 04 817 6985
Cell: 021 243 6985

Address To The Rotary Club Of Western Hutt

Hon Peter Dunne
MP for Ohariu
Leader, UnitedFuture

Address To The Rotary Club Of Western Hutt
Boulcott Golf Club
Lower Hutt
Tuesday 9 June 2009 At 7:00 pm

We live in truly remarkable times – economically to be sure, politically and socially.

A year ago no-one would have imagined the depth of the international economic crisis now facing the world.

Nor would we have imagined that the decade of budget surpluses would be replaced by the decade of deficits we are now facing.

A year ago, as Minister of Revenue, I was collecting consistently more revenue than forecast – now we face significant revenue shortfalls.

This time last year the National Party looked odds on to win the election all by itself, and return the country to one-party majority government.

But today, while we certainly have a National-led government, it is supported by ACT, the Maori Party and UnitedFuture, and even the Greens on specific issues.

A year ago, who would have thought Helen Clark and Michael Cullen would be off the local political scene by now, and knights and dames would be very much back in the picture?

This Alice in Wonderland turn of events seems set to continue for the foreseeable future, as international and domestic events unfold as unpredictably as ever.

This is especially so in politics, where the impressive new intakes of both National and Labour MPs at the last election are already having a significant influence.

These new MPs reflect today’s instant world, where decisions are made quickly and decisively, based on a combination of intuition and diverse experiences, and often on a no-regrets basis where it is no big deal to admit things did not work out as intended and have to be changed, and then just move on without recrimination to the next issue.

This is in many senses a refreshing approach, which the Prime Minister typifies, and is one which people are responding to warmly, but, and perhaps because, it is in marked contrast to the way in which politicians of recent generations have behaved.

References to what happened in the 1990s, let alone what side one was on during the Springbok Tour or, heaven forbid, the Vietnam War are utterly irrelevant to the values of this new generation, as Helen Clark found out dramatically last year, and Phil Goff is continuing to find out.

It all serves to reinforce the fact that besides the specific party political changes that occurred, the last election was a generational change in New Zealand politics – in the same way that the elections of 1935, 1972, and 1984 broke the mould that went before them.

Since the advent of MMP in 1996 the norm had become for the process of government to be more considered, and risk averse than in the high wire act era of the 1980s and early 1990s.

This new generation of politicians makes that norm look rather staid, but without showing too many signs of reverting to the recklessness of the earlier period.

They are achievers, focused on outcomes, and genuinely keen to make a difference, before moving on to what comes next.

Yet that is not to say there is no place for moderation or reason in today’s politics.

If anything, the current environment should strengthen the hand of the reasonable moderate, more inclined to the long view, than the lead story on the next news bulletin.

There is still a place in New Zealand politics for a party committed to the enduring liberal principles of freedom of expression, conscience and belief, which promotes economic and individual freedom but accepts these must be tempered by social responsibility, and which regards families and communities, in all their richness and diversity, as the basis for a thriving society.

There is still a place for a party that speaks for those many thousands of politically dispossessed New Zealanders who continue to see the National Party as simply too flinty-faced and conservative, the Labour Party as too focused on yesterday’s glory and on promoting the power of the state, and the rest as just too dogmatic or extreme to be a credible political home.

And there is still a place for a party that is proud to seek New Zealand’s future as the best multicultural country in the world, and is unafraid to promote the political and constitutional changes necessary to achieve that.

UnitedFuture’s flame may flicker faintly at the moment, but for those who hold dear those values, and who yearn for centrist politics that seek to draw out the best from both sides of the line in the common interest, it will continue to burn, as a rallying point to ensure balance, reason, and dignity still play a part in our political process.

Just as the last election may have torn up the political rule book, the global financial crisis has torn up the economic management manual.

By the early 1980s, the old-style welfare state had almost had its days across the western democracies, and, starting with Thatcher and Reagan, gave way to a new, and more rampant round of laissez-faire capitalism which swept through the west, and eventually the European communist bloc , like some new liberation wave.

New Zealand was not immune from that process – which led to a form of harsh extremism most people, the ACT Party and Sir Roger Douglas excepted, have long since abandoned.

Now, as it excesses lie exposed, governments are searching for a new way that does not involve either too much welfarism or New Right economics.

We are all looking for a balance between the extremes that allows the restoration of our economies, without the social dislocation of the 1980s, or the only government knows best approach of earlier years.

This tone has been evident in the New Zealand Government’s response to the Jobs Summit, and the “rolling maul” of initiatives arising from that, through to the recent Budget.

It goes well beyond the “Third Way” politics Tony Blair and Bill Clinton espoused of a middle path between old style socialism and capitalism.

It is not about picking one’s way between the shibboleths of the left and the right, but about doing things that work.

Today’s “right” answers come from across the political spectrum, with practicality and feasibility the key tests, not their ideological acceptability.

It is why, for example, the National Party continues to do so many unthinkable things, wrong footing the Labour Party constantly in the process – from bringing the Maori Party into government (in one fell swoop doing more to honour Maori political aspirations than any previous government, and thereby completely smashing Labour’s self-assumed monopoly on Maori voting loyalty since the 1930s), through to implementing a home insulation programme with the support of the Greens, more generous and comprehensive than the Greens were ever able to achieve working with Labour.

The lessons from all this are important for a centre party like UnitedFuture.

Major change can be achieved, if it is properly focused on resolving a particular problem, rather than satisfying an ideological craving.

Let me take health policy as an example – and my remarks here are made primarily as the leader of UnitedFuture, but who just happens to be Associate Minister of Health.

Over the last 60 years, healthcare in western countries including New Zealand has gone in three broad phases.

The first phase emphasised promoting and extending universal healthcare and equal access for all, consistent with the mainly post war development of the welfare state.

New Zealand’s health system followed this phase through until at least the late 1970s.

But as the system grew, containment pressures did likewise, leading to the introduction of spending caps and various forms of rationing.

This was certainly a dominant strand of New Zealand’s health policy in the 1980s and 1990s, as successive governments grappled with the issue of cost containment on the one hand, while maintaining reasonable levels of access on the other.

The emphasis from the time of the infamous Gibbs Report, through to the establishment of Crown Health Enterprises was on gaining efficiencies through greater competition, but on a business, not a service basis.

Today’s emphasis around the world is on the introduction of competition and incentives to make health services more efficient and responsive to patient needs, the critical element left out of the earlier reforms.

New Zealand has not yet followed this path, with government priorities in the last decade seeing a dramatic rise in the level of public spending on health, but without any commensurate increase in the level of service provided, despite the goodwill of health professionals.

We are now at a crossroads.

The limitations of the centrally provided, taxpayer funded public health system are becoming obvious for all to see, as government budgets tighten in the wake of economic contraction.

Yet the alternative of a fully privatised business approach to healthcare is understandably socially and politically unpalatable, and no-one is seriously advocating that.

Instead, what we need is a way of preserving universality, while meeting the currently unmet needs of patients.

A universal national health insurance scheme, along the lines of that currently applying in the Netherlands is therefore an option I think we should consider.

Under such a scheme health insurance scheme, taxpayers would pay their premiums directly to competing health insurance companies, who would then buy particular specialist and elective services from healthcare providers.

The premiums payable by individual contributors would approximate to the current cost of the public hospital system, and could be offset against personal tax rates, so that no-one was paying more overall than at present.

An insurance based approach to social provision is not unknown in New Zealand – it is after all the model ACC has operated under since 1974, and there is no reason why ACC coverage could not be included within the ambit of a national health scheme, eventually providing comprehensive coverage for all health and disability issues.

Nor should we necessarily stop there – the Canadians include coverage of high cost medicines within their insurance models, and that is something we should consider here as well.

In essence, the model I am proposing would be based around competing health insurance companies using their premium power to strike better deals than the state for more innovative, timely and responsive services to patients.

The state, however, would retain important overall roles.

Because the system would be funded mainly through taxes which would now be diverted directly to health insurance companies as patient premiums, the state would remain the major funder of health services.

It would also be the ultimate guarantor of the system, as is its appropriate responsibility.

Such a scheme would clearly take time to develop, and should not be viewed as an immediate panacea.

But carrying on the way we are now will not significantly reduce waiting lists or waiting times, especially if the health expenditure increases of recent years cannot be maintained.

Wholesale privatisation of the system is clearly neither a viable option nor a likely political reality.

So we need to learn from the experience of other countries which suggests very strongly that a universal national health insurance scheme is an option we can no longer afford to ignore.

In the meantime, while we are developing the national health insurance scheme, there are interim steps we ought to be taking, particularly focused towards reducing elective surgery waiting lists.

Elective surgery waiting lists are still far too high, with many patients failing to get treatment within the Ministry of Health’s six month elective surgery goal.

Meanwhile, we continue to have surplus private sector surgical capacity which we need to be making greater use of to bring these numbers down.

Our current practice of approaching the private sector late in the financial year to carry out a number of operations in short time, when it is clear that public hospital targets are not being met is a lazy approach that does not work, nor serve patients well.

Often the private sector is unable to respond thoroughly enough because it has not had the time to plan throughput, thus leaving the cynics in the public sector to claim that when given the opportunity, the private sector cannot meet the challenge.

Instead, we should be setting a fixed target at the start of the financial year for procedures to be provided privately – say 25% – and then contracting with private providers for their delivery, and holding them accountable for achieving that level of service.

And we should also look again at incentivising people, particularly older New Zealanders, to retain their private health insurance through partial tax deductibility of private health insurance premium payments by those over age of 65.

It strikes me as absurd that mounting costs currently force many older New Zealanders to give up their health insurance at the very time they are likely to need it most.

However, the introduction of tax deductibility for private health insurance could not be on an unconditional basis.

I was interested to hear the Health Funds Association reporting recently that there was increased interest in taking up health insurance, and then in almost the next breath advising that significant rises in premium costs were likely.

If a tax incentive was to be introduced, I would be insisting strongly that part of the trade-off would have to be stability in premium charges.

A tax incentive should not be an opportunity to gouge more out of policy holders, let alone at the taxpayers’ expense.

In time, the national health insurance scheme would deal to this through the competition it would engender amongst health insurance companies, but in the interim, governments would need to be vigilant to prevent price gouging.

As a small party, with a demonstrated and unique record of being able to work constructively in government with both National- and Labour-led administrations, UnitedFuture is ideally placed to make the running on an issue like this, and to be able to bring a fully-fledged proposition to the table in future government formation negotiations.

While I have focused my remarks this evening on health policy, our detailed policy work continues in other areas that will also have an impact on our nation’s future – such as the conversion of the disparate communities around Wellington into one cohesive supercity, ideally in time for next year’s elections; continuing to develop a culture of giving, a stronger commitment to philanthropy and a stronger role for the charitable and voluntary sector; and, resolving our nation’s constitutional future, to name a few.

But each of them is an address in itself, so will have to await another occasion.

ends

Mark Stewart
Press Secretary to Hon Peter Dunne:
MP for Ohariu
Leader of UnitedFuture
Minister of Revenue
Associate Minister of Health

Parliament Buildings
Wellington
New Zealand

Direct Dial: 04 817 6985
Cell: 021 243 6985

Disability News

UnitedFuture – Disability News
Issue 1: May 2009

Welcome to the first of our Disability Sector Newsletters!

UnitedFuture are back in Parliament and back in government, with Peter Dunne filling the role of Minister of Revenue and Associate Minister of Health.

One of our top priorities in this parliamentary term is to be an effective advocate and voice in Wellington for those who often struggle to be heard, people with disabilities and organisations and groups up and down the country who provide support for them.

Judy Turner announced as National Disabilities Spokesperson

Peter Dunne is very pleased to announce Judy Turner as UnitedFuture’s National Disabilities Spokesperson.

Judy was a Member of Parliament from 2002 until 2008 and has been UnitedFuture's deputy leader since 2005 and was the Party Whip in 2007/08. She is now the party’s President. As an MP her major portfolios included Social Services, Education, Health & Disabilities and she also sat on the Social Services select committee.

Judy has a particular interest in helping improve areas such as Child, Youth and Family (CYF), a better Family Court system, support for those with disabilities, supporting community organisations and NGOs like Plunket, and has consistently pushed for more help and recognition for issues where males are disadvantaged, like education and health.

Judy reflects on the new government’s direction on disability issues:

“Recently I represented Peter Dunne and UnitedFuture at an Auckland Disability Service Providers network meeting. My reason for traveling to Auckland for this event was because the newly appointed Minister of Disability Issues, Hon Paula Bennett was speaking, and I was keen to hear if she was ready to make any fresh commitments to this sector.
 Her speech was predictably light on content but strong on tone. I don’t think anyone doubts for a minute that she wants to make progress, but she doesn’t hold the government purse strings and there was no hint of any new money for new initiatives. 
The proverbial elephant in the room is “funding”. There just isn’t enough available to close the blaring gap that currently exists for support of those who did not become disabled as a result of a trauma, compared with those receiving ACC support. One in five New Zealanders live with a disability. That is a sizable slice of voters and I will be doing all I can in the next three years to encourage them to flex their collective muscle and to become a political force to be reckoned with. 
Let’s not let the ‘R’ word (Recession), become a convenient excuse to slacken off in our efforts to make sure that these New Zealanders get the chance to realise their dream of living an ordinary life.”

We want to hear from you!

What are the issues that affect your organisation? How can government be more responsive to the needs of your organisation and the people you serve?

Contact us here: [judytjurnerk.ohop2e@xtrja.co.snzi]

unitedfuture.org.nz

Peter Dunne's Address to Tawa Rotary Club - March 2009

When I last spoke to your Club nearly two years ago, I speculated about the likely outcome of the 2008 General Election, which was at that stage about eighteen months away.
I suggested then that “the next election is National's for the losing” and that “Labour's biggest problem is voter fatigue or the political clock, which is ticking more loudly as each day goes by” because “voters, it would seem, tire of the same government after three continuous terms. “
Turning to the then new leader of the National Party, John Key, I commented that “he appears to understand inherently that MMP government is about establishing durable partnerships, between like-minded parties, and then working to make those partnerships succeed.”
I concluded that from UnitedFuture’s perspective, “I have no doubt at all that we could work together effectively in a governing arrangement, were the opportunity to arise, in just the same way we have with Labour”.
And so it has proved to be.
The 2008 General Election was one more momentous step in this country’s journey of government under proportional representation.
Not only did it see a continuation of the type of government formation arrangements that the largely self-appointed media and academic political cognoscenti had been so sneering and dismissive of as impractical and unworkable in 2005, it actually saw them enhanced considerably, thereby shattering most of the commentators’ reputations and credibility.
Whereas in 2005 the two Ministers from the two parties other than the Labour/Progressive coalition has been formally described as “Ministers from parties not part of the government”, in 2008 there were five such Ministers from three parties other than National, now described as “Ministers from support parties to the government.”
What might at first appear no more than a subtle shift in wording is really far more significant, and shows the extent to which Mr Key has mastered the dynamics of government under MMP.
When I spoke to you last, I foreshadowed the possibility of UnitedFuture being prepared to work with a National-led government after the election – it was what a centre party does, I recall saying to you.
Yet, my announcement last October that UnitedFuture would support a National-led government, rather than a Labour-led one, was greeted with a fair measure of media derision and scepticism about the motivation behind it, despite the facts that the ground had been laid from the time of my last address to you, and that there had been frequent media speculation in the interim that not only was this likely to happen, but that it was appropriate that it should happen as well.
The reasons for the move were very simple.
As New Zealand’s now only genuine centre party, UnitedFuture is the one party credibly able to work with either major party in government.
Our focus has always been on achieving our policy objectives, rather than getting bogged down in the ideological battles of others.
We had no great bust-up with Labour – I was never suspended because of my conduct as a Minister.
Indeed, our relationships with Helen Clark and Michael Cullen, in particular, were extremely cordial throughout the entire six years of our partnership.
What it came to was simply recognition that, in terms of common ground, we had gone as far as we could.
Virtually every single point of our two confidence and supply agreements in 2002 and 2005 had been achieved, but we knew full well that the next steps we wanted to take in various areas such as a greater focus on public private partnerships for infrastructure developments like new highways; better utilisation of public and private sector surgical hospital capacity to curb ever increasing elective surgery waiting lists; income splitting to spread the tax burden more evenly across families; and a greater recognition of the role of the recreational sector in the management of our national game estate were all steps too far for a fourth term Labour Government, likely to be heavily reliant on the Greens.
At the same time, these were issues National was showing far more sympathy towards, so by election time last year the choice was clear – did we continue working politely with Labour but being increasingly rebuffed and frustrated, or did we take on the challenge of a new and varied government, where we were on the same wave length on major policy issues?
The decision was an obvious one.
Since the election, I have been extremely pleased at the progress we have been able to make, albeit in our diminished Parliamentary state, as a support partner of the new National-led government.
This Government already has a much more inclusive feel about it than its predecessor.
Non-National Ministers now participate regularly and fully in Cabinet committees, and not just for the items which relate to their portfolios, which was the case previously.
Last week, for example, as Minister of Revenue I participated fully in the Government’s Jobs Summit, even though the issues it covered went far beyond taxation matters.
As Associate Health Minister, I now have a full range of delegated responsibilities in the portfolio beyond the continuing work on Medicines New Zealand, the national medicines strategy I initiated during the term of the previous government to make it easier for New Zealanders to get access to the medicines they need.
One of the areas where National and UnitedFuture do have common ground is more effective use of private surgical hospital capacity to reduce public hospital elective surgery waiting lists.
Over the last decade, public health expenditure has grown to record levels, yet, the goodwill and professionalism of medical and nursing staff notwithstanding, there has not been a commensurate increase in service delivery to the public.
The most obvious example of this is the growth in waiting lists for elective surgery, fuelled in part by the fact that many previously specialised procedures have now become more routine and readily available, with a consequent increase in both public demand and expectation.
Against this, the Ministry of Health’s ‘sort-of’ commitment that people should not have to wait more than six months for treatment looks pretty inadequate.
What it means in practice is that if people are not able to be treated within that time frame, their case is reassessed, which is often code for being “bumped off” the waiting list and forced to start all over again.
But this is not a problem peculiar to New Zealand – it is happening right across the world as medical science continues to improve and make procedures which were at the top end of medicine less than a generation ago more straightforward.
Not only will that pressure continue to intensify, but also the capacity of governments, especially in a time of global economic meltdown, to meet those pressures through more and more funding is likely to reduce sharply.
It is little wonder, therefore, that governments around the world, from the left to the right, are facing up to the reality that the private sector needs to be more involved in hospital care in some shape or another.
This involvement takes many forms, and I am not saying tonight that any one model is an automatic fit for New Zealand, although I am saying we need to look at what is going on in countries like Britain, Spain, Holland and Australia, and be open to ideas that actually work.
This is a challenge both National and UnitedFuture have agreed on in our confidence and supply agreement, and I am looking forward to working alongside the Minister of Health to develop a model that draws from the world’s best practice, and is appropriate for New Zealand’s circumstances, for the benefit of patients presently suffering from the delays they are being forced to endure.
This is not an especially ideological issue.
Rather, it is simple pragmatism – if there is surplus capacity in one part of the system, and long waiting lists in the other, there has to be a logical way of utilising both parts effectively to bridge the gap.
I have no patience for ideology that stands in the way of solutions that are blindingly obvious.
Similarly, I have no particular hang-up with private organisations being contracted to manage public prisons, if they can do a better job.
It is not about privatisation – the assets still remain in Crown ownership – but its simply a recognition that some things may be done better by the private sector, and given the shambles within the Corrections system at present, I would be surprised if there were still too many people prepared to die in a ditch for the view that the State is always best manager in these matters.
Yet that was the block we faced with the previous government.
Too much ideology standing in the way of too many practical outcomes.
And if ever we were in an age where we need to be adaptable and focused on results, it is today with all the challenges we face with the global economic crisis.
We need to apply pragmatic solutions to problems across the board, and not be held back by rigid, hide-bound ideologies.
There was this unshakeable ideologically obstinate view that only the state should have a role in providing health, education and corrections services, even if it was struggling to satisfactorily provide those services, and that any significant increase in private sector participation was in effect a form of privatisation that diminished the core responsibilities of the state to its citizens, and that was unacceptable.
It is a peculiarly short-sighted and narrow view, out of step with even what other social democratic parties are doing in countries our Labour Party has traditionally looked to for guidance.
In a small country like ours we cannot afford the luxury of parallel systems that leave everyone equally disadvantaged and under-serviced.
This is not a call for the wholesale privatisation of government services, or for the slashing of the public service, because I do not agree with either of those.
All I am suggesting is that it be acknowledged that in certain areas there is a role for the private sector to work alongside a public provider, rather than in direct opposition to it.
And then there is the ongoing issue of Transmission Gully.
I am sick and tired of the delays, and some of the local political sniping, surrounding bringing this vital project to fruition.
I want all our Mayors, Councils and MPs working together, instead of continuing to see this issue of how best we develop Wellington’s roading infrastructure from their own narrow municipal or partisan interests.
The plain facts are these – whatever study is done on Wellington’s northern access and egress, Transmission Gully emerges as not only the overwhelmingly preferred public option, but also the only one capable of being constructed within a reasonable time frame.
The so-called Coastal Highway is simply never going to happen.
Aside from the practical and aesthetic constraints cantilevering a highway out over Cook Strait impose, no matter how the Resource Management Act may be reformed, there is the inescapable issue of the community disruption the likely route will cause, not to mention the prospect of Treaty claims, and the fact that most of the land required has now been sold for residential housing.
It is hardly surprising therefore that the 2006 study concluded that the Coastal Highway option, even if approved at that point, would take at least 20 years from then to develop.
Put bluntly, it should be forgotten once and for all, because it will never happen, and the quixotic and sadly deluded few who continue to advocate for it should be ignored.
Transmission Gully, on the other hand, is ready to go.
The geotechnical work has been completed, a preferred route and design have been identified, and a number of the required consents are already in place.
Funding remains the major outstanding issue.
Tolls and the funding already set aside by the Government account for just over half the total cost, but a very large gap still remains.
There are options for bridging this gap, ranging from a combination of regional petrol taxes and local authority contributions, to various forms of public private partnerships, or to full government funding of the shortfall.
I am working with the Minister of Transport, the chair of the Greater Wellington Regional Council, local MPs, and the New Zealand Transport Agency to resolve this issue.
What we need to focus on is not the hoary old chestnut of whether Transmission Gully should go ahead, but the best and most innovative method of funding it so that the long overdue project can get underway.
Our confidence and supply agreement with National makes specific reference to Transmission Gully, so I expect to see this matter brought to fruition during this term of Parliament.
Another issue that has long been close to UnitedFuture’s heart is income splitting for tax purposes for parents with dependent children, and it is an issue many people both continue to quiz me about, and say that this was the main reason why they may have caste a vote for UnitedFuture.
During the last term of Parliament under the Labour-led government, as Minister of Revenue I issued a government discussion paper proposing the introduction of a voluntary income splitting system for couples with dependent children up to the age of 18.
That proposal received over 200 submissions, of which more than 90% were in support, and I am now ready to take the issue further.
So, as part of our confidence and supply agreement with National, I will be introducing legislation next year to introduce a voluntary income splitting system for couples with dependent children up to the age of 18, to be effective from 1 April 2011.
However, despite the co-operative and pragmatic way in which the new Government has been operating to date, there will inevitably differences between the parties in the future that will need to be handled with a large dose of the deftness the Government has already demonstrated elsewhere.
One potential area of disharmony is constitutional reform.
As a strong advocate for New Zealand undergoing a comprehensive constitutional review and reform process, which faces up to and resolves the hard questions of whether or when we become a republic; whether we adopt a written constitution and where the Treaty of Waitangi fits in that context; and the future of our electoral system, I am very sceptical that the constitutional review agreed between National and the Maori Party will in fact be that bold.
I think its objectives will be far more limited, and are really about getting both parties off their respective high horses on the future of the Maori seats in Parliament than setting our country’s constitutional tone for the 21st century and beyond.
On the face of it, their two positions are incompatible: National wants to finally abolish the seats by 2014, but the Maori Party wants to entrench them in perpetuity.
A constitutional review which produces a face-saving formula that allows National to back off its 2014 promise, in return for the Maori Party taking an entrenchment “but not yet” approach, while professing to still respect each other in the morning, would be convenient from each of their partisan points of view, but would sell New Zealand short in terms of its long-term impact.
Constitutional reform involves all New Zealanders – Maori and Pakeha – and is a real opportunity to determine the future identity of our country and how we achieve that.
In that sense, it goes far beyond the hitherto sacred cow of just its impact on tangata whenua. Maori representation in Parliament and their traditional relationship with the British Crown are certainly considerations which cannot be ignored – but they are not exclusive, and letting them become so, albeit by default, simply ensures constitutional stagnation.
Yet that is the path down which I fear we may be heading, and why I believe an independent process is required to ensure the promised constitutional review is meaningful, not cynical.
I believe that not only are all New Zealanders ready for this discussion, they also want the chance to participate fully in this , and do not want to see it stifled by backroom deals.
Overall, the 2008 General Election represented a further maturing in the process of government under MMP.
I am pleased to have been at the forefront of that process over the years – from the development of the notion of confidence and supply arrangements while formally remaining outside the government in 2002; to enhanced confidence and supply arrangements with a Ministerial post outside the government in 2005; to being a support partner as a Minister to the government in 2008.
The most exciting aspect is that we are developing a uniquely New Zealand system of government under proportional representation, which will endure and develop further in the years to come, whatever the particular fate might be of MMP.
Against that backdrop, it is an exciting time to be involved in government.
Ends
Contact: Mark Stewart, Press Secretary, 021 243 6985