Rt Hon Winston Peters - Speech to the House – 28 April 2020

Rt Hon Winston Peters, Leader of New Zealand First

As Mahatma Ghandi said: The Seven Sins are

  • Politics without principle.
  • Wealth without work.
  • Pleasure without conscience.
  • Knowledge without character.
  • Commerce without morality.
  • Science without humanity.
  • Worship without sacrifice.

When this lockdown started we knew that:

  1. There would be a massive economic downturn
  2. The government needed to intervene to keep businesses running and people employed
  3. The government could spend money to increase economic activity
  4. Government is not unlimited
  5. The government needed to rapidly increase employment
  6. The government could change regulations and legislation to increase economic activity. We knew this costs the government almost nothing.
  7. Sectors like hospitality and tourism would not recover quickly, if at all, so there would be a very large number of people needing employment in other industries.
  8. This meant training programs for people needing to transition from one industry to another.

The Setting

Before the COVID-19 pandemic the global economy was in a troubled state. The global economy was already struggling with slowing economic growth and a massive accumulation of debt. The fundamental factors behind the 2008-2009 recession were never resolved but just plastered over.

The global economy was only being sustained by unprecedented monetary stimulus, quantitative easing and ultra-low interest rates – rates that were already at bedrock low.

That catastrophe is not a singular crisis like Covid-19 for which a vaccine may ultimately be found.

The Global Shock

The Covid-19 crisis is an unprecedented deflationary shock to the entire global economy.

It has been seen that much of the global economy is in the realm of discretionary spending and a ‘nice to have.’ Sectors like international tourism and hospitality have been turned off like a tap.

Responding to the crisis will lead to huge increases in budget deficits and government debt, in NZ, as everywhere else.

All the ‘rules’ on ‘fiscal prudence’ are now obsolete.

Uneven Impact

An important dimension of the crisis is its uneven impact.

Wage and wealth disparity and income insecurity have beeen growing rapidly as an aspect of globalisation. Widespread discontent was seen in 2019 in countries such as Hong Kong, Chile and France. This may spread with the uneven consequences of the crisis.

The Social Internet

A profound crisis calls for society to respond in a cohesive way. NZ has shown that capacity under the Prime Minister’s leadership. Social media appears to undermine social solidarity because rather than sharing a common experience we are free to pick and chose content that coincides with our prejudices and opinions. In other words, we tend to see what we want to see.

Social media embodies the notion that what is important is what matters to us, as individuals. This can undermine a sense of a collective or shared reality and in dealing with a crisis such as Covid-19 that sense of sharing a common challenge is vital.

‘Business as Usual?’

The global industrial system has had a massive shock. The longer the pandemic prevails the greater the probability that all sorts of unforeseen, second order disruption will kick in as the global economy unravels.

The fragility and the vulnerability inherent in the highly interconnected and networked global economy has been revealed. The recent collapse in oil prices is one example.

The downside to the current global economic system has been exposed. Much of the global economy, such as international tourism and aviation, has been built on assumptions that no longer apply.

The global economy will not pick up where it was at the start of 2020. The notion of returning to ‘business as usual’ fades by the day as global output collapses and unemployment soars.

Looking Ahead

With all the uncertainty there is no clear global consensus on what is needed and what the path ahead should look like.

But, like everywhere else, NZ has serious thinking to do about its future in the transformed global economy.

This is the time for an urgent look at the possibilities that the future offers NZ.

We are resolved that our future economy will have these features about it;

  1. Far greater autonomy for the New Zealand economy – in short if we can grow it and make it at near competitive prices then we will grow it and make it, use it and export it, before we waste valuable offshore funds importing it. The pitfalls of globalism have been laid out dramatically before us. And some of us have known that for a long long time
  2. If a job can be filled by a New Zealander, then that job should be filled by a New Zealander trained and skilled and paid properly to do it
  3. That we need to put up the shutters to offshore ownership of the New Zealand economy and go back to owning as much of it as we possibly can
  4. If there is to be overseas investment, which is a good thing, it must be in terms of the New Zealand economy’s needs, the New Zealand peoples interests, and building resilience by means of our, not foreign, ownership
  5. It means overseas investment should be encouraged where it expands our employment, wealth creation and export capacity in a way that is clearly new and not just an offshore takeover of what we were already doing
  6. It means that if you’re a banker then the rules apply to fair, sound reasonable and competitive banking offshore will apply to New Zealanders onshore – not one set for New Zealand and a separate set for the place of ownership and domicile
  7. It means that if we’re to have a responsible and responsive social welfare system then part of that social pact is that the recipient will do something for the receipt of the state’s largesse. In short it is not an alternative to do work but a stop-gap before or between work
  8. It means that all New Zealanders need to be productive and if we can in anyway help, to fund our society, then we all should
  9. It means designing welfare that places emphasis on the need for all to contribute to the economy, rather than accepting that some beneficiaries choosing to take form it and give nothing back in circumstances where they clearly can and should.
  10. It means us all being eyes wide open about the impact of this crisis and how every ounce of our collective effort is going to be required to right here, right now, in the short term, the medium term, and the long term, to fix it.

Public Health

In the light of Covid-19, like nearly every other country, NZ needs to strengthen its public health system. The threat of a global pandemic was always there even if its specific form was unknowable.

On 24 April the UK Guardian revealed a confidential Cabinet Office briefing that showed the potential damage to the UK, and that warning was not heeded. The tragedy in their tens of thousands can be seen today.

It is all fine, on this day as we go into Level 3, to look into the future and try and forget some of the valuable lessons so cleanly enforced. We cannot waste this moment. We must go forward a more responsive people.

Last year NZ was in the grip of the worst measles outbreak in two decades, after a cluster of cases occurred in Canterbury in March 2019. That outbreak was an example of the need for vigilance and preparedness in the area of public health.

Export and Wealth

In 1882 when our first export of frozen meat left New Zealand we confirmed that we were going to be then and thereafter, an export nation. All of our policies should be focused on that as well as import substitution.

New Zealand has enormous wealth and natural products above ground, below ground, and at sea.

It has a truly amazing people when put to the test.

They’ll all be needed now.

Banking

On business rentals and leases one couldn’t put it better than independent economist Cameron Bagrie did a few days ago when referring to the big picture: if you have a tenant, and you have credit, try and keep that tenant going, try and keep that tenant in business.

One last thing – to all those who under Level 4, and now Level 3. Honor the rules. Stick to the regime. Think about this – if you do your job, then others will have a job. We have to stick together.

 

ENDS

 

winston.peters@parliament.govt.nz

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