Roger Douglas speech to the House on the Budget Policy Statement 2011:
On the 28th May 2009 I said in this House that “this is a budget of deficits. A deficit of spending, a deficit of the current account, a deficit of courage, but most importantly, a deficit of imagination”.
I realise that I got it wrong – I was being far too generous to the Government. This country is up the proverbial creek, not only without a paddle, but in a boat that is quickly sinking. We are running a cash deficit of $300 million a week (which is about to get much larger) and the Government’s response has been to act like cowards.
They have refused to do the right thing. They want to fund reports, hold press conferences, give speeches – do everything humanly possible to avoid making any decisions that might be unpopular. I am sick of it. We are in a state of financial ruin and the Government wants to sit on its hands. I am disgusted and have had enough.
New Zealand faces problems that are of a long standing nature. If we look around the world we can see inspiring examples of countries that have had the guts to do what is right, made the tough decisions, and are now enjoying tremendous success.
Their economic prosperity has meant that the vulnerable and old in society are looked after, the physically able have access to productive jobs, the sick have access to healthcare and their children are well-educated. These are the hallmarks of a functioning society. For many politicians in this House a vision of a prosperous society is just too difficult for them to fathom. Steve Chadwick made this clear when she said that her children had already resigned themselves to earning less in New Zealand than they would overseas. Is this the vision and inspiration we see coming out of the Labour Party.
What a great future and vision she has instilled in her children for New Zealand. Instead of looking for reforms that could see us pass Australia many politicians in this House have given up! It is a disgrace and unacceptable from a politician in this House. If this is what you are selling to New Zealand as their future you should give up.
In this speech I do not want to focus on a comparison with Australia, the National Party by rejecting the 2025 taskforce report shows that they do not want to catch Australia. This was too ambitious for them. I want to look at a country that we should be outperforming almost in every respect – Singapore. Singapore has everything against it, it has roughly the same sized population as New Zealand, it has absolutely no mineral wealth, and it could easily fit into Lake Taupō. In almost every respect we should outperform them, however the reality is that we do not even come close.
Let us draw comparisons between the two countries. First, New Zealand GDP growth in 2010 was under 1 percent. Singapore grew at a whopping 14 percent. In 1960, our GDP value was almost 3 times that of Singapore. In the last 20 years, Singapore has raced ahead. In 2015, Singapore will have a GDP value that is 3 times that of New Zealand. If we are to look at labour productivity per capita in New Zealand dollars – Singapore labour productivity in 2010 was $182,546 per person, that is almost twice New Zealand’s $93,365.
Why have they been able to achieve such prosperity with no minerals, no land and a relatively small population? They certainly did not do it by giving $43 million loans to private televisions channels. It is because they were willing to make tough decisions.
Government expenditure accounts for only 17% of GDP, that compares to New Zealand’s 43%. Their tax rates are also low, the top take rate being on 20 cents in every dollar kicking in at around $320,000 New Zealand dollars rather than the 33 cents which kicks in at $70,000 in New Zealand. Most importantly, their politicians had a vision for the future, they put aside short-term political gains and focused on the future – in short they had the guts to do what was right. They outlined a blueprint of where they want to go and they moved swiftly to achieve it. In doing so, they have left New Zealand in the dust.
But that is enough of that. What vision should we lay for New Zealand’s future? The first point should be to not accept apathy and poverty. We need new leaders that are inspired and inspiring. They need to implement quality reform. I want to outline what will be needed to leap over Australia and catch Singapore.
We need to decide to switch from government delivery, to private sector delivery like Singapore did in a whole range of industries. I have an 11 point action plan to get this country back on track:
1. Tax Choice
1. Introduce a $35,000 dollar tax free threshold.
2. Right to stay on current system for over 30s if they so choose.
3. Allow the poorest in society to keep their money – compassionate.
4. Singapore has a tax free threshold of around $21,000 NZD, and only taxes at 2% up to around $35,000 NZD.
2. Flat tax rate beyond $35,000.
1. Singapore have significantly flattened their tax rate. There top tax bracket is 20%, kicks in at around $320,000 NZD.
3. Replace company tax with an asset tax
1. 1.2 cents in the dollar (not available to fee based industries i.e. lawyers and engineers).
4. Healthcare –
1. Singapore 1 – 3 percent GDP v 9% in NZ.
5. Education
1. Māori – underachievement For Maori, 56 percent will not gain NCEA level 1 or above before they leave school.
2. More generallya third of school leavers fail to achieve NCEA Level 2 or higher.
3. Singapore – education is seen to be a great source of social mobility. Singapore has released statistics recently that show that children from disadvantaged backgrounds continue to achieve academically. Of students in the bottom third socio-economic bracket, about half score within the top two-thirds of their Primary School Leaving Examination (PSLE). This is cannot be said about New Zealand.
6. Welfare
1. Minimum income.
2. Time limit.
3. Re-education.
7. Government expenditure
1. Goal to get total government expenditure under 20 percent – ideally get it to 17% like Singapore.
8. Regulations
1. Get rid of remaining tariffs.
2. Cut through red tape.
9. Immigration
1. Open up immigration – get skilled people in.
10. Reform Government assets
I want to provide a future where my grandchildren live in New Zealand and can earn wages that are competitive with the world. I have a vision. I know how to get there. I refuse to be like Steve Chadwick and let my grandchildren accept that we will always be poorer than everyone else. It is disgusting. It is time to wake up – it is time to lay the groundwork for our children, make the tough decisions, rather than sit back and give in to apathy and poverty.
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12 comments:
One of the best speeches you'll ever hear in our parliament.
I'm frankly sick of Roger Douglas. There's nothing he is saying that is new or revolutionary. We all know all of that. Yet he's the one been voted into parliament by those that agree with all he says, but he sits on his hands, just like he is blaming Labour and the government are doing: that's when he's not jetting around on the taxpayer dime. Giving this sort of speeches is meaningless, what is he actually doing about it? His party is in government for god sakes, but have managed nothing more than a supercity stuff-up and internal revolt. They cower away to their limos when the going gets tough, or bail out altogether.
It's easy to sit and criticize and come up with this sort of speeches, what's the actual plan he's got, and what is he doing to achieve it? Answer: none, nothing at all, hot air, words, words and more words, hollow drumbeating, devoid of any substance, unaccompanied by the guts and nuts to really stand up.
Cowards and bludgers working on an attempt to save their sorry butts in the upcoming election.
Bez
Bez - I think you'll find the problem is not Roger Douglas, but his colleagues. What is he supposed to do on the back benches other than give speeches? The alternative is to get rid of Rodney Hide, and... oh gee, he already tried that, didn't work. You're pointing your finger at the wrong man, and while you rightly point out that nothing he says is new or revolutionary, that's the problem. We have a government (and opposition) that refuses to listen to sound policy and continues to kick the socialist can down the road.
@Blair: I don't buy that argument at all. It's not for us to say what he should do in detail, that's what he's been send to parliament for, to work out a way to achieve something of substance on the basis of the principles he was elected on. Reading the newspaper in the house and giving a lame speech now and then is never going to achieve anything.
If he cannot actually get any traction, even with his party in government, he should man up to fact and resign so that perhaps someone with more strength of initiative and character can take his place.
Bez
Exactly right Bez.
Actions speak louder than words. We know ACT by their actions, their words have no credibility.
I am not sick of Roger, but I am sick of NZ's sour nay-sayers!
Faversham
Words are fine, but actions speak louder.
Under the dismal leadership of Rodeny Hide, ACT has withered on the vine, and there is a strong possibility the party will be turfed out in November.
All the blame should be on Hide's shoulders. Rightly so.
bez is a little harsh on Roger Douglas. bez is correct that the theories are neither new nor revolutionary given that Roger Douglas proposed to implement these, or very similar, measures when he was Minister of Finance in the Lange-led Labour Government of the mid-1980's. Douglas, as Financ Minister, had already established a reputation for bold implementation of his fiscal beliefs, many generally unpopular, but he pressed on regardless of the uproar that these caused. His flat tax policy, however, was vetoed by Prime Minister Lange, who was believed to have been unduly influenced by his "secretary" Margaret Pope. Pope was orthodox in her far-left ideology. Douglas was effectively sidelined, and his resignation as Minister followed.
Douglas subsequently was instrumental in the formation of the ACT Party, and later reappeared in Parliament on ACT's list, as a strong signal as to that Party's economic intent. The defeat of the the Clark-led Labour Government in 2008, meant ACT was offered Ministerial posts in a National-led Coalition, however National ruled that Roger Douglas was unacceptable in a Ministerial role. This was a very clear signal by the ruling major Party that Financial Policy would not be following the Douglas theories, and consequently, National could see no point in listening to Douglas' opinion at every Policy debate. He was sidelined again, twenty five-odd years on.
So Douglas can scarcely be credibly accused of sitting on his hands. His speech to Parliament should not be dismissed as a voice in the wilderness. If Parliament can be so described, then why do we persist in thinking the MMP Electoral System has any merit as a forum for the views of the minorities? Hone Harawira's most recent speech gives the lie to that.
Gooner rates Douglas' speech much higher than either bez or Dave Christian do. The problem for any minor Party - ACT, Greens, NZF, and even Labour currently - is traction. ACT may be judged solely by the Super City legislation, just as the Greens' seem to be for S-59 changes under Labour. Third Party success depends on more general appeal than the mostly single issue stuff that brings about their inception (although arguably the Greens might fare better if they dropped their extreme left ideology and concentrated on the "real green" issues which have widespread appeal). Labour and National have the easier ride in that they represent the default positions of left and right in NZ politics. Those on the outer fringes who despair of the slowness of change that the "steady as she goes" big Party's engender, are forced either to wait out the apprenticeship process in the major two parties, or join the "nutters" waiting for crumbs from the master's table. Arguably the one man bands, like Dunne and Anderton, have more clout ( well usefulness more than clout) given that they get to sit at the big table, have no one else to answer to, are no threat to the ship of State, and can be given a little authority where the Government does not need to take the heat if anything goes wrong. (Whereas S-59 and Auckland Super City have the Government of the day identified as being complicit ).
Douglas is a spent force and has announced his unavailability beyond the end of this Parliamentary term. While this speech may be described by some as no more than a parting shot, it is recorded in Hansard and may enhance the thinking of someone else when desperation calls for policies that have some credence elsewhere in the world.
kurt
Kurt, that is a good summation of Douglas' time in parliament since the halcyon days of Lange. I won't reiterate what you've said, except to expand slightly on what you said at the end - the national Party's refusal to include Douglas at cabinet level is a sign of their unwillingness to make the hard decisions.
As Douglas pointed out in his speech, our politicians are borrowing $300m a week, which is simply unsustainable and will bankrupt this country in short order. Wasn't this sum $250 million under Labour, so hasn't this amount of borrowing actually increased?
Rodney Hide has killed off ACT's chances at the next election, unless Epsom re-elect him. The Libertarianz Party will be stepping into the breech, offering the (only) chance to vote for free market ideas in November. And we will be contesting Epsom and calling Rodney Hide to account for his actions over the past 3 years which have impacted significantly on the people of Auckland.
I agree Roger Douglas has earnt his retirement. Sadly, he did blot his copybook significantly by sticking his nose into the trough and then claiming "But I was entitled!". And, even more sadly, he never explained Rogernomics in terms of promoting individualism - the right to live for one's own sake and not be sacrificed to others. He never provided a moral basis for the tax cuts, the reduction of trade tariffs and the privatisation of government assets that characterised the radical changes he implemented. But I guess the Labour Party has never championed individual rights, and they weren't elected on that basis in 1984 - it was the 21% of people who voted for the the very libertarian New Zealand Party that swept Douglas and Co into office. If only we'd had MMP then, and Bob Jones had been elected as an MP!
Kurt, that is a good summation of Douglas' time in parliament since the halcyon days of Lange.
Douglas - once a socialist, always a socialist.
One of the best speeches you'll ever hear in our parliament.
Oh please:
Introduce a $35,000 dollar tax free threshold.
Note: This doesn't mean that you don't pay any tax on income over$35,000 - it means you pay no tax on income under $35000. Phil proposed the same thing at only $5000. yep - Roger's point 1 is seven times more communist than Phil!
Replace company tax with an asset tax
not "remove company tax". Not even "reduce company tax" - but institute a wealth tax.
Yep. Really f-ing capitalist!
And on and on and on: education - he wants vouchers but who pays for the vouchers? answer: productive Kiwis.
Did Roger cut one single benefit while he was in government? Did he drop the dole by one single cent? of course not
Look to Ruth if you must:
but Roger was and always has been, a socialist.
The fact that he is the standard-bearer for NZ's least left-wing party just goes to show how distorted NZ's politics are - ACT is far to the left of Barack Obama for example.
As for the Libz - aka leftertarians - just as bad, and still far to the left of Obama on every important issue.
@Richard: the fact that National got away with refusing Douglas at the cabinet table meant only one thing, that ACT was at that point already mortally wounded internally (in terms of personalities)and morally of course.
They were simply out negotiated by Key who smartly saw what was the real driving force for the ACT individuals, not their principles, but the baubles of office and some window dressing for the voters.
Because of that same problem, ACT forgot to make a deal that closed the door to the Maori Party, or even worse, they were complicit in leaving it open.
I have no confidence in what the Libz have on offer either, from what I can see that is a club that is divided even deeper than ACT, and this will come to the surface with the slightest bit of pressure. It also is one that is elitist to a level that will never give them any appeal to sufficient numbers of voters.
In my view a new party would be required. One based on solid principles and with mostly fresh faces, perhaps some solid die hards. I'm thinking Brash, maybe Newman, and the rest new candidates coming from solid libertarian/conservative backgrounds each of them with sufficient economic knowledge and fiscal prudence.
Bez
solid libertarian/conservative backgrounds
libertarians aren't conservative.
libertarians are effectively just another kind of leftist.
Oh and Roger's Singapore: 55% effective marginal tax rate when the Compulsory Government Super Scheme is included.
(Oh yeah, that single scheme with something like
90% Home ownership via the compulsory Hosing Development Board.
Singapore may be conservative but it sure isn't libertarian. With 60%+ of Singapore's GDP in Government controlled companies it's really just another Commie Paradise.
Which is why Roger loves it so much.
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