SPEECH: The Regions Are Not “Another Country” but the future

31 August 2017

Speech to Economic Development Agencies Conference

Rydges Hotel,

Wellington

August 31,

11.30am-12.30pm.

 

Thank you for you the opportunity to be in Wellington to address this important conference

 

 

Today, I would like to set out how New Zealand First’s comprehensive range of policies to create a balanced, resilient and prosperous economy across all our regions.   

We include a bold nine-point plan that will be of massive economic benefit to Northland and Southland, as it will be to the renaissance of Auckland’s waterfront and the Waitemata Harbour.

This points to our vision that political parties cannot spend what this country does not earn. 

Where we are today

Last evening down south we saw that no party, save for New Zealand First, has a clue for how we can get out of illusionary economic growth and into real economic growth.

National has ‘fourthtemitis,’ which sees it writing post-dated cheques totalling $13.2 billion, none of which was in the recent Pre Budget Economic & Fiscal Update.

Labour wants to tax New Zealand to nirvana, which of course, will not work but leaves huge questions over its $20.7 bn worth of promises.

The others aside, from New Zealand First, don’t really matter!

Now you may have seen fanciful costings done by the National Party’s provisional wing that unsurprisingly are off the planet.  Let us say this. Our commitments are well under a fifth of Labour’s and a third of National’s.

Our focus is on growing the economy from the regions to the cities.  All roads should lead from Auckland not to Auckland!

The Overall Economic Context

Let us be blunt.

New Zealand First does not buy the fiction that the economy is in great shape thanks to the government’s skillful management.

The “strong economy” line is flim-flam. It has taken in many in the mainstream media but you know from the regions while some are doing well many are flat-lining or going backwards. 

Firstly - the government’s spin about “strong economic growth” is just that - pure spin and manipulation.

Strip out massive and unprecedented net migration of over 72,000 in the year to July and the NZ economy is barely growing. 

Secondly - the much-touted fiscal surplus is illusionary and far from robust given the international climate, China’s huge debt mountain and North Korea notwithstanding.

A couple of billion dollars in the context of the NZ economy is essentially meaningless.

Particularly, when we know there are large parts of the public sector – health – education – welfare – and transport infrastructure that are already grossly underfunded.

Another indicator of National’s economic failure is the chronic balance of payments deficit – now running at $8 billion a year – with no sign of a surplus in sight.

This is the Achilles heel of the New Zealand economy and the government has done nothing to address and fix it.

That is the background against which we frame our regional policy.

New Zealand First has consistently taken the view that broad based regional growth and development is imperative for New Zealand’s overall economic success.

Moving the Port of Auckland to Northland’s Northport

Only parochialism is keeping the port in the Auckland region instead of logically looking to Northport – a natural deep water port.

Aucklanders and Northlanders will end up paying a huge financial price if the Port of Auckland is not moved to Northport.

Auckland Mayor Phil Goff has confirmed the Firth of Thames is his preferred option - in a move that could take between 10 and 20-years. 

Given a new mega-port in the Firth of Thames could cost upwards of $5.5 billion, this is money badly spent, when Northport could be developed within a decade and for so much less.

Going with Northport means 77-hectares of iconic Auckland waterfront could be returned to Aucklanders by the late 2020’s, as opposed to the late 2030’s or perhaps even, the early 2040’s.

The Port of Auckland is moving so the question becomes whether it will despoil fish spawning areas in the Firth of Thames, or light the spark of Northland’s economic renaissance.

New Zealand First’s Nine Point Port Plan

We will order government and council officials to stop spending tax and ratepayers’ money on a new port in the Firth of Thames, estimated at up to $5.5bn and highly problematic environmentally.

New Zealand First will legislate to require:

• the Port of Auckland transfer vehicle deliveries from Auckland to Northport by the end of 2019 - returning Captain Cook Wharf to Aucklanders ahead of the America’s Cup;

• that the Port of Auckland cease container operations at the Port of Auckland by no later than 31 December 2027; and the full development of Northport as a mega-port.

• Immediately fund the upgrade of the Auckland to Northland rail line, including a new rail spur to Northport. • Commission the design of a world-class cruise passenger terminal for Auckland.

• By the end of 2018, designate land near to Northport in Whangarei District as New Zealand’s first Special Economic Area.

• As port functions are transferred to Northport, progressively return 77-hectares of Auckland’s iconic harbourside back to Aucklanders.

• Work with Aucklanders, Auckland Council and stakeholders on a masterplan for the 77-hectares of waterfront land that will become available over the next decade.

• By the end of 2019, subject to discussions with the people of Invercargill and Southland, designate land within Invercargill City near to South Port as New Zealand’s second Special Economic Area.

• Create a comprehensive ports and coastal shipping strategy.

Thinking outside the box with Special Economic Areas (SEA’s)

National and Labour have failed the regions. Northland has some of the worst social statistics in New Zealand with decades of neglected infrastructure.  Southland similarly lives on a knife edge given Tiwai Point’s uncertain future. 

It is time for visionary thinking and thus New Zealand First will create New Zealand’s First Special Economic Areas

Based on successful models overseas, Special Economic Areas are like economic islands within the Port environment.  Aside from biosecurity and key legislative requirements, they will be subject to less compliance and will have tax and duty free status.

These will be highly attractive to value-add manufacturing, logistics and allow New Zealand to access entrepot trade.  The potential future value is measurable in the billions of dollars that will radiate into the regions that surround them.

A competitive exchange rate therefore helps.

Our wider policy framework begins at the top with a competitive exchange rate. Fundamental to regional success over the long term is an exchange rate that supports exporters and the regions.

NZ needs an exchange rate that serves real economic goals like strong and growing regional exports

That is why NZ First is committed to reforming the Reserve Bank Act - as a vital step in safeguarding our economic future – and the future of regional New Zealand.

Inflation targeted monetary policy has had its day because that battle has been won, but as we continue to fight it, we risk losing the war. Reorientation of the economy towards exports means looking towards Singaporean-style Exchange-rate based monetary policy. 

Tax policy which works for business and employees

NZ First policy is to support businesses with a tax regime that enables them to grow and to pay better wages – and in that regard – NZ First is committed to raising the minimum wage to $20 an hour.

Specifically, our tax policy includes reducing company tax rates to 25% over three years commencing 1 April 2019.  There will be an export tax rate of 20% for export generated income to bolster the export economy.

There are a range of other measures such as 100% deductions for professional expenses at the time of start-up to 100% depreciation for business equipment worth up to $20,000 for each item.

We will introduce R&D Tax Credits if companies invest 2% of revenue on research.

New Zealand First will also give businesses an even break by treating seismic strengthening as “repairs and maintenance” and reinstate depreciation for commercial buildings with a life of 50 years.  Without these changes manufacturing and provincial centres will suffer.

We will further provide wage subsidies for small businesses that take on apprentices, job seekers or to provide work experience.

Tackling Regional Infrastructure Deficits

Everyone knows about Auckland’s massive infrastructure deficit and the billions that are now needed to fix it – thanks again to the government’s reckless immigration policy

But the regions are also facing a deep infrastructure deficit.

This is why New Zealand First will return the full GST from Foreign Tourism back to the regions.  We will further implement a Royalties for the Regions policy, whereby a quarter of the Royalty will be returned to the region it was extracted from.

We will extend this to include water extracted as drinking water.

In terms of the fiscal uplift, this could be well in excess of $1.6bn annually, giving the regions the economic means to remedy infrastructure without punitive fuel taxes or stiff rates increases.

While we will put a Royalty on drinking water, New Zealand First also strongly opposes Labour’s resource rentals such as a Food and Production Taxes on water.

We similarly reject National’s race-based amendments to the Resource Management Act.  Labour is being overt but National’s Koha for Consents is equally as bad but has sailed under the radar.

Conclusion

Over the past nine years the government has treated New Zealand beyond the major metropolitan areas as a second class hinterland.

Their attitude to the regions has been – at best – one of indifference.

The regions have been left to do the best they can - with the left overs when it comes to investment and spending priorities. 

Well, New Zealand First is committed to ending the era of neglect.

We say New Zealand as a whole cannot succeed if the regions languish

The regions Are Not “Another Country” they are the future. 

And that is why New Zealand First is committed to ensuring all New Zealand’s regions get the priority they deserve and merit.