John Key MP 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”.

Quite so.

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.

Four years on, as National Party Leader, I too see myself as a guardian of its values.

But just what are those values?

What I want to do now is to look back further in time at the values and principles articulated by National Party leaders of the past, and in particular by the first two National Prime Ministers, Sid Holland and Keith Holyoake.

I believe those principles have endured, and remain the principles of the National Party today.

That’s not to say that the specific policies of the Holland and Holyoake years are relevant to the New Zealand of 2006 and into the future. We need to find our own solutions.

But what informs those solutions – the principles of the party – remain the same. These principles are the vital yardstick against which any National Party policies must be measured.

The New Zealand National Party was formed in 1936 by formally merging the Reform and the United Parties, which had previously been in coalition together.

The Reform Party was essentially a rural party, whereas the Liberals were dominated by city-based concerns. These two parties united to form an alternative to the socialist Labour Government.

The name "National" was chosen as the new party sought to represent all parts of the community, without favouring any one class, race, gender, religion or region.

The name “National” also emphasised that the party’s principles and policies grew out of the New Zealand experience. Its first leaders were men born and brought up in New Zealand – Holland, Holyoake and Marshall – who thought of themselves first as New Zealanders, not Irish, or Scots, or English.

Many in this new party were practical farmers and businessmen who wanted common sense solutions to New Zealand’s problems, not ones designed to fit theoretical and utopian models originating from Europe or America.

The National Party has stuck with this belief in the practical and the possible. As I said in my first speech as National Party Leader, ”I am interested in what works, and not what should, or could, or might work in theory. I do not intend to blindly follow an ideological path without ever challenging the concept or considering its appropriateness in our unique New Zealand setting”.

Ours then, is not a party that advocates for revolution or for all-or-nothing solutions.

The title of the National Party’s first newspaper tried to encapsulate in one word the party’s major objective and guiding principle – freedom. It is worth remembering that, of 200 nations in the world today, only six – Britain, the United States, Sweden, Canada, Australia and New Zealand – have been both democratic and free throughout the 20th century.

Sid Holland was the National Party Leader for 17 years, and was Prime Minister for eight of these years. In his spare time he was an amateur magician, and the ability to pull rabbits out of empty hats must have proved extremely useful in his professional career as well, particularly around the time of the Budget.

In 1943, Holland gave a speech in the Auckland Town Hall outlining what he believed were the National Party’s guiding principles: individual freedom, a competitive economy and the minimum of bureaucratic intervention, regulation and restriction.

That belief in economic, political and social freedom did not translate into an unfettered free market, where business cowboys would be free to ravage the country and its inhabitants. Nor did it mean an uncaring society where those who weren’t able to help themselves were left to suffer.

Holland was a pragmatic and humanitarian leader. He believed that New Zealanders should be guaranteed security in times of misfortune through a rational and sustainable welfare system. Like Jack Marshall after him, he saw that for individuals to truly be free, they needed to have sufficient material means to ensure that they were free from the constant anxiety of how to support themselves and their families.

Holland further believed that the government should ensure all New Zealanders, not just wealthy New Zealanders, were provided with opportunities to ‘climb ladders’ and advance themselves materially and socially.

He was determined that all New Zealanders should have the opportunity to better themselves and the lives of their families. To that end, he was vigorous in his aspirations for Maori, stating that their customs and culture should be preserved and celebrated.

Holland’s successor, Keith Holyoake, was National’s leader for 15 years and Prime Minister for 12.

Holyoake was New Zealand’s first self-consciously nationalist Prime Minister, a man who always thought about what was in New Zealand’s best interests, not those of Britain, the United States or Australia.

He was a fourth generation New Zealander, all eight of his great-grandparents having arrived in New Zealand in the 1840’s.

It was no coincidence that Holyoake, as Prime Minister in 1967, broke tradition by recommending the appointment of the first New Zealand-born Governor-General, Sir Arthur Porritt. There has not been a British-born Governor-General since.

In 1949, Holyoake told Parliament that National was a party that sought “to grant greater personal freedom; to achieve higher material standards of living for all; to administer for all people and not for one section; to end class warfare; to foster cooperation and above all to give New Zealand a government that will govern and not be pushed hither and thither by any pressure group.”

Some years later, during the 1954 election campaign, Holyoake reflected more fully on what he said were three of his basic beliefs.

First he said, “I have always mistrusted the placing of too much power in the hands of politicians”. Holyoake felt that MPs had no right to assume they automatically knew more than the people who had voted them into power, especially when it came to spending taxpayers’ money.

If only all politicians were that modest about their capabilities!

It seems to me that Holyoake’s modesty was underpinned by a profound respect for the individual. He felt that every New Zealander had the right to make their own decisions about how they lived their lives.

My deputy, Bill English, describes this principle as one of the government underpinning rather than dominating, recognising that its reach is ultimately limited but that it has a vital role to play. As he said recently in an interview, “People run their own lives, and government’s role is to provide clear rules, show respect and allow people to express their humanity collectively and individually.”

Arguably, it is this principle, developed decades earlier, that attracted Maori parliamentarians like Sir Apirana Ngata to National. The Labour Party, they agreed, had with good intentions tried to raise the living standards of Maori, but in the process had unintentionally destroyed their independence and increasingly separated them from their land and culture.

Many in Maoridom detested having their lives increasingly controlled by the Maori Affairs Department. National recognised that personal independence and the mutual inter-dependence of one’s whanau and iwi were essential for Maori mana, dignity and self-respect.

Holyoake’s second principle was a belief in the toleration of differences. He said that while socialism preached uniformity, the political and economic freedom espoused by National involved “many diverse groups whose interests are in conflict with each other”.

This was true not only of New Zealand society as a whole, but also within the National Party itself, because the party cannot and never will be able to establish uniformity among its membership.

It was essential, however, that disputes among different groups within both the party and society should be minimized through tolerance, not maximised by “burning antagonism”.

Holyoake’s vision for New Zealand was one in which all parts were harnessed, where every New Zealander had the capacity to contribute to the common good. We would be a country of many voices, singing the same song.

Since becoming leader of the National Party two weeks ago, I have sought to stress this fundamental principle of inclusiveness and social cohesion. Any government I lead will govern for everyone, not just those who vote National.

That doesn’t mean that a government under my leadership will shy away from making the tough decisions that are necessary. We won’t.

But it does mean that such a government will be inclusive and encourage all New Zealanders to work together for the good of our society.

The final principle which Holyoake espoused was that of equal opportunity.

Though he believed in everybody having the opportunity for success, he did not believe that “success in one individual should be thwarted by efforts to prevent the failure of another”. That was the approach, he said, of communists, socialists and bureaucrats.

Holyoake believed in Holland’s ’ladders of opportunity‘, and the government’s obligation to create those ladders.

This was borne out by Holyoake’s push to vastly expand participation in tertiary education in New Zealand. Otago, Canterbury, Victoria and Auckland Universities were all rebuilt, and Massey and Waikato Universities created, while he was Prime Minister.

Holyoake also recognised that there needed to be various ladders available, because different people required different paths by which they could fulfil their aspirations.

So where does that leave us today?

I would argue strongly that the National Party has not moved, and does not need to move, away from its original values and principles, as enunciated and applied so successfully by its early leaders.

For me, the core National principles of personal freedom, equality of opportunity, competitive enterprise, smaller government, and tolerance and respect for all New Zealanders have an enduring quality.

It is interesting to note that, in contrast, the Labour Party appears a very different party to that founded on the principles of collective ownership and socialism. The Labour Party of 2006 has much more distinct tinge of blue in its costume now than it did 90 years ago!

Why does all this matter, you might ask.

To my mind, there are at least three reasons why principles matter.

I think the primary reason is that in electing a government, voters accept that their chosen government will make decisions across a wide range of issues, and at least three years into the future.

Voters will never know the ins and outs of every policy area a government is forced to consider. At election time these issues may never have crossed voters’ minds, and the relevant policies may not appear in the party’s pre-election manifesto.

A party’s principles are a guide to how it is likely to react to situations in the future. It’s important that voters don’t become the victims of constant surprises and that they have some idea, if not of the decisions that will be reached, but at least of what considerations will inform them, and of what thought processes the decision-makers will likely go through.

In many regards, modern-day communication has made this even more necessary. Gone are the days when voters gathered in town halls, or around the wireless, to listen to politicians giving long speeches.

Tonight is a welcome exception.

Nevertheless, most New Zealanders get their dose of politics through watching short snippets on television or listening to the radio news.

These 7-second sound bites are a bit like going to see Billy Connelly but hearing only the end of every joke. You get the punch line all right but you’re not quite sure why it’s so funny. You also miss the chance to expand your vocabulary with some choice Scottish adjectives.

The second reason why principles matter is that the decisions of political parties are made by and ratified by consensus, whether in caucus or in Cabinet.

It is, therefore, important that MPs have a foundation of principles to inform and validate the various policies they need to approve. In this regard, principles act as a benchmark – a sort of unwritten constitution if you like.

Finally, although it seems obvious to say, party leaders, influential figures and individual MPs come and go from Parliament. Party principles, however, should endure.

They act as an intergenerational guide that ensures the essence of the party remains the same. Without that continuity there is a serious chance that the party could lose its way and be damaged for a considerable time.

In this regard, it’s worth reflecting on the experience of the 1984-90 Labour Government. I’m not debating the need for the economic reforms that government introduced. My point is simply that many core Labour voters woke up to a party they felt was a million miles away from what they understood to be its core principles.

The workers’ party no longer seemed to care about workers, which led rather quickly to the birth of the Alliance.

So it’s my conclusion that principles matter, that they indicate how a party is likely to react in the future, and that they provide the continuity by which a party is linked to its predecessors and to the party in the future.

Ours is a party of sound and strong principles that have developed to serve all New Zealanders. We have a proud history and have been led by men and women of great integrity.

It is my responsibility, as Leader of the National Party, to live up to the legacy of those past leaders, and to ensure that the principles of the National Party endure, in order to shape New Zealand for another day.

“As Prime Minister,“ said Jenny Shipley, upon taking office, “it is my task to see that New Zealand has an outward looking, economically responsive and socially progressive government. It must be a government that is respected for what it does, how it manages and responds to people’s concerns, and what type of New Zealand it delivers.”

This was the task of the first National Government, it was the task of Jenny Shipley’s National Government, and it will be the task of the next National Government as well.

Thank you.

Ends

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