Spending well not up

Finance Minister Bill English’s fifth Budget is characterised by spending well rather than spending up.

Budget 2013 has freed up a further $1.5 billion by redirecting spending to where it delivers the best results, Finance Minister Bill English says.

This takes the total amount of reprioritised government spending since Budget 2009 to $14.9 billion.

“At a time when the Government’s finances are constrained, reprioritising spending allows significant additional funding for new or proven initiatives that get better results for New Zealanders,” Mr English says.

“It’s about spending well, not spending up.”

In total, Budget 2013 includes new spending initiatives worth $5.1 billion in the current year and over the next four years, paid for by a combination of new spending and $1.5 billion in reprioritisation and new revenue initiatives. Those savings and revenue initiatives include:

• Tax and revenue changes that net an extra $313 million over four years.
• Reprioritisation of $641 million to new spending initiatives within Budget votes.
• Reprioritisation of $252 million of savings from across budget votes into significant new spending initiatives in areas like health, education, welfare reform, and science and innovation.
• $303 million from existing contingencies.

“These savings are consistent with the Government’s approach across its five Budgets, which have together reprioritised almost $15 billion of spending,” Mr English says.

“New Zealanders were conditioned in the 2000s to believe that Budgets should be about the novelty of new, expensive spending programmes that held out promises of economic and social transformation. Those promises were illusory.

“There was no sustainable revenue stream to pay for the increased spending and there was nothing genuinely transformational to show for it.

“Governments should be judged on what they achieve rather than on what they spend. The value of our spending is a better measure than the amount of our spending. This Government is focused on results, and it’s paying off.   

The idea that a government should be judged on its achievements rather than its spending is a relatively new concept.

Budgets used to be focussed on spending and people waited with excitement to see what was in it for them.

The steep increases in spending from 2005 until 2008 show the cost of Labour’s pre-election lolly scramble.

National changed that, improving results rather than increasing expenditure, even going so far as to deliver a Budget with no increased spending in election year.

John Key, Bill English and their team changed that, making a virtue out of restraint and they’re getting results.

“For example, recorded crime is at a 24-year low, and we’re rolling out new technology for frontline police officers, but the baseline funding for Police is not being increased.  Instead, Police are finding more efficient and effective ways of doing their job which is generating savings they can reinvest.

“At a time when many governments overseas are undertaking radical cuts to get their books in order, we are enhancing high-quality frontline public services while maintaining support for our most vulnerable citizens. That is a real achievement.

“The Government will ensure future Budgets continue to focus on improving frontline public services to deliver better results for New Zealanders, at the same time as improving value for money from more than $70 billion of public spending every year,” Mr English says. . .

A friend who worked in Wellington in the late 80s and early 90s saw the results of spending cuts. She was back there during Labour’s last few years in government and was horrified to see the increases in spending, including steep growth in public service employees, without commensurate improvements in services and results.

National had to change that but its restraint has been restrained rather than radical – focussing on protecting people from the worst impacts of the recession, reducing expenditure, improving efficiency and maintaining services.

The LabourGreen reaction to the Budget shows that they still don’t understand the necessity for such measures, they would undo the good National has done just as the 1999-2008 Labour-led government undid the good done by those which preceded it.

They spent up, they didn’t spend well and LabourGreen would follow that bad example.

Building momentum, boosting optimism

We were at the ASB’s agribusiness conference earlier this week.

Chatham House rules applied so I can’t go into details of who spoke and what was said.

But the theme was leadership and one speaker mentioned the importance of optimism.

As an example he said how much he admired John Key’s ability to remain optimistic regardless of what was thrown at him.

Finance Minister Bill English doesn’t always appear as optimistic as the Prime Minister.

That isn’t because he’s a pessimist, he’s not. It’s more a reflection on the tough job he’s had and the knowledge that tough decisions on spending impact on people and it’s not always appropriate to put on a happy face.

However, yesterday he was able to smile as he talked about a more optimistic outlook:

Budget 2013 confirms New Zealand is on the right track, with forecasts of economic growth, more jobs, rising wages, and a return to surplus by 2014/15, Finance Minister Bill English says.

“New Zealanders can look to the future with well-earned confidence and optimism,” he says. “The New Zealand economy grew 3 per cent last year, which is almost the same as Australia, and higher than almost every other developed country.

“Wages have been increasing, cost of living increases have been modest, and interest rates are at 50-year lows.

“There are 50,000 more jobs in the economy than two years ago, although unemployment does remain too high and attracting new investment that creates jobs is a particular focus for the Government.

“The fiscal outlook has improved markedly as a result of the Government’s sound management and we are on track to surplus in 2014/15.

“These are real achievements that are benefitting New Zealanders and their families. Budget 2013 is about building momentum in this programme.”

These are achievements which most other countries will be envying.

The Government’s main priorities for this term are:

• Responsibly managing its finances.
• Building a more productive and competitive economy.
• Delivering better public services.
• Supporting the rebuilding of Christchurch.

This will carry on building momentum and boosting optimism.

I’ll vote for that.

For details on Budget initiatives see Budget at a glance.

What will it take?

Dear Aaron,

If you were at the Mainland Conference in Hanmer to the end you’d have heard West Coast Tasman based list MP Chris Auckinvole’s final words.

You might remember him talking about the importance of the two wings of the party, the MPs and the volunteers,  and the good that can be achieved when they’re working in unison.

That was before we knew you hadn’t been at the conference dinner as any MP who took his responsibility to the party seriously, and respected the volunteers, would have been.

The party understands the competing demands on MPs – parliamentary duties, electorate work, family commitments – but just one weekend a year we ask you all to come to your regional conferences.

It’s an opportunity for volunteers to discuss policy with you, air concerns, get to know you. The social functions are an important part of that.

That you chose not to grace the conference dinner with your presence might have been overlooked. Your behaviour at the dinner you did attend can’t be and everything that’s happened since has made it worse.

I was part of the committee which met in 2011 to rank the party’s list.

Our deliberations are confidential but the rankings are not.

You were the lowest ranked sitting MP and anyone with any humility would have worked out why.

Once a list is ranked and put before the public at an election the party can’t change it. But someone can, as Paul Quinn did, turn down the opportunity to take up a place with his dignity intact and get on with his life.

You didn’t take the hint from your list placing and claimed the vacant seat. Why?

You’ve been reported as saying that you have enough money to live  on without needing to work so it can’t be the salary.

I don’t know if you did any good in the few weeks you’ve been back as an MP but in the last few days you’ve done immeasurable harm.

John Key and National have retained a fairly high and reasonably constant level of popularity in polls for several reasons. One of those is party discipline.

Both the wings Chris talked about have been strong and flying in unison.

Your antics are threatening that.

The Prime Minister has lost confidence in you and the president says the party is disappointed.

That is putting it very, very mildly.

If there’s one thing that gets volunteers riled  it’s an MP who doesn’t understand the importance of discipline and unity, doesn’t uphold the standard of behaviour expected and puts himself before the party.

What on earth are you thinking?

If your words and actions are anything to go by it’s not what’s best for the government, the party, parliament or the country.

What will it take to make you understand what you’ve done wrong and what’s the only thing you can now do to make it right?

Yours in disappointment,

Ele

There’s hope

Quote of the day:

. . . Before the electricity market could be replaced with a state-controlled pricing regime, two things would need to happen. Labour and the Greens would need to win the next election, and if they did they would need to carry out this policy. Neither, I think, is likely.

John Key remains the most widely admired of any New Zealand Prime Minister I have seen. National continues to lead all polls by a margin that is remarkable five years into the life of a government.

Unless something disastrous happens, he looks certain to win again next year. . . 
John Roughan.

But winning the most votes of any party isn’t enough under MMP, parties have to get above 50%, by themselves or in coalition.

Should National go into the election with no partners in prospect, an absolute majority is conceivable. Conventional wisdom says it is practically impossible because it hasn’t happened since 1951. But before then, it was not unusual.

Labour won more than 50 per cent of the vote in 1938 and 1946, as did National in 1949 as well as 1951. Since then many have gone as close as 47 per cent, including National at the last election when it became only the third post-war government to be re-elected with an increased share of the vote.

There is nothing magical about an extra 3 per cent. Conventional wisdom is destined to be surprised sooner or later.

It becomes more possible the more often David Shearer stands too close to the larrikin.

Shearer is a sensible man. To enact Norman’s scheme or Labour’s version of it, he would need to ignore all the economic advice available to him. . .

It can be very easy to ignore the soundest of advice if it doesn’t fit your policy and you’re more interested in power – or the electoral rather than the electrical kind – than people.

Yesterday’s  Roy Morgan poll showed National up and LabourGreen down after the latter’s power plan was announced.

However, that poll is notoriously unreliable.

The next few polls will be more significant but even if they do give the thumbs down to the LabourGreen policy it’s more than a year until the election.

We have few one term governments which makes the odds on winning a second term better than reasonable.

Winning a third term is much harder.

Roughan’s comment shows there’s hope. Enough voters might understand the danger of powering back to seventies socialism to scorn LabourGreen.

But hope doesn’t win elections.

That takes good people, good policy, active party members, money and a lot of hard work.

There’s hope but no certainty.

Green’s not for growth

The Green party is soliciting funds for its election campaign with an email that says:

 . . . National’s policies of more mining, weakening environmental protections, poor economic management and growing inequality are not the recipe for a fair society and a better future.

 In contrast to National, we have the ideas to deliver a richer New Zealand. . .

Green is supposed to be the colour of growth but these Greens are really reds promoting the policies that have failed in the past.

Take their plan to bring down the exchange rate. Prime Minister John Key says currency intervention and printing money won’t work:

. . . “It didn’t work very well for Argentina, or Venezuela or Zimbabwe and it could never be done in New Zealand at the sort of magnitude we’ve seen in the United States,” said Key.

As for the New Zealand dollar versus its United States counterpart, Key used a seesaw analogy.

“It’s a bit like being a seesaw and if I weigh 85 kilos and you weigh 170 kilos, I’m going to go up when you sit on the seesaw and you’re going to go down. And that’s really the situation we’ve got at the moment.”

“We kind of weigh 85 kilos and the United States weights 850 tonnes. Right up to this point it (the US) has been very unwell. It has got everything from aids to bird flu. It has really been pretty unwell so the market’s just massively adjusting what they’re doing.”

When people say the Reserve Bank should be printing money, Key said you wouldn’t do that with base rates – the Official Cash Rate – at 2.5%.

“All you do is cut interest rates for a start off. The second thing was even if you printed money, it’s never going to work. I think they’ve printed US$5.5 trillion in the US. I mean it’s massive. So what would we print? NZ$50 billion or something? It wouldn’t make an iota of difference.”

“So my view would be I know we want to get the exchange rate down and I know it’s hurting a lot of companies. But it’s a cycle you’re going to have to ride through and all the Government can do is control the things that are in our control. So get out there and reform the Resource Management Act, make sure we don’t spend too much money, make sure we keep pressure off interest rates, manage the place well,” Key said. . . .

The reds want to increase the burden of government, their policies will lead to higher interest rates and they haven’t a clue about good economic management.

. . . Furthermore, he said intervention in the currency markets never works.

Here Key cited an example from his previous career at Merrill Lynch, where at one time he was head of global foreign exchange. One of Merrill Lynch’s biggest clients was the Bank of Japan, which used to intervene in the currency markets through Merrill Lynch.

“To tell you how bad it got, one night we were sitting there and the Bank of Japan rang up and the US$-yen was about 90 or something and they didn’t want it to go down lower. And the guy said to me ‘I want you to start buying dollars at 90′. And I said ‘how many do you want me to buy’, and he said ‘well, I’m going out for three hours so I’ll give you a yell when I get home.’ And I said ‘yeah, but how many do you want me to buy?’ And he said ‘I’m going out for three hours, don’t you understand the conversation?’

“I bought US$4.5 billion in three hours. He said ‘where is it (the US dollar-yen exchange rate)’ and I said ‘it’s 90, you bought US$4.5 billion. And he said ‘ah, well I’m off to bed now give me a ring in the morning’,” said Key.

“It never worked, it just never worked. I don’t know how much money they lost on intervention but it was massive.” . . .

Who do you believe – someone who has worked in international finance and has managed the country through the global financial crisis or people who want to print money and whose power policy would have a chilling effect on on private investment? Rob Hosking writes:

. . . There is something essentially frivolous about anyone who would cheerfully rip up the value of some of the country’s largest firms, and the value of the investment in those firms, simply for a political positioning exercise.

This is why the exchange caught by TV3 between Green energy spokesman Gareth Hughes and party spin zambuck Clint Smith was so telling.

For those who missed it, Mr Hughes was asked if the party was pleased at the reaction: Mr Hughes paused, turned to Mr Smith and asked “Hey, Clint – are we pleased?”

It was telling that he even had to ask.

But the almost palpable glee coming out of the Green and Labour camps at the destructive impact of their policy is highly revealing. 

It underlines – not for the first time – the problem with the makeup of both parties. They are dominated at the MP and the staff level by the sub-genus homo politicus.

That is, they are full of people who have done nothing in their lives apart from politics. All parties have a complement of this group, but with Labour and the Greens the group has reached critical mass.

This group has been involved in politics at university, moved from there to various political/union offices and then into parliament. 

There is little real world experience and everything is viewed through a very narrow prism of political advantage.

It’s the sort of attitude which means the value destruction seen this week can be just laughed off.

There will, unless we are careful, be more such frivolous policies to come.

I would use a far stronger word than frivolous and the business community certainly isn’t taking it lightly.

In an open letter to LabourGreen they say the policy would harm jobs, growth and investment, causing interest rates to rise, reducing KiwiSaver retirement savings and making people less well off.

. . .Business shares your concerns about constantly rising power prices and their impact on our global competitiveness. Businesses and consumers work hard every day to minimise their spending on electricity in order to stay in business and

to make their household budgets stretch further.

However, we do not think that electricity policies based on subsidies and greater state control are the right answers. Such policies have been tried in the past and have been shown to be incapable of meeting the challenges of a modern economy

with a complex, real-time electricity market.

 

Putting aside the sheer complexity of their implementation, policies that protect businesses from the full costs of the inputs they use ultimately dull the incentive to innovate and make them less, not more internationally competitive. Reducing retail

prices below the full marginal cost of production encourages households to use more than they should.

Of particular concern with the policies announced is their chilling effect on investment across the entire economy.

 

We are especially concerned at investment analyst reports noting the potential for $1.4 billion of shareholder value to be wiped off the books of the private power companies. A similar amount, if not more, will come off the value of the public power companies.

 

 

Capital destruction on such a scale will severely undermine business confidence.

It sends signals to investors, on whom the New Zealand economy relies, that their wealth and the benefits it provides are not welcome.

 

Investment plans and job creation opportunities are foregone.

 

Rather than remote and intangible, this dampening of investment intentions will have a direct and real economic impact on those of all walks of life who seek to accumulate wealth by working hard to save, invest and grow. It causes interest rates

to rise, depletes retirement savings held in KiwiSaver accounts and means that other economic opportunities such as first homes are foregone and new business ventures as savings are unexpectedly reduced.

 

Individuals are less well-off as a result.

 

With the good of all New Zealanders in mind we ask you to withdraw these damaging policies. We offer to work with you in increasing public understanding of the operation of the electricity market and in ensuring consumers, both small and large,

have better choice from one of the increasingly competitive electricity markets in the world.

 

Yours sincerely,

 

 Phil O’Reilly Chief Executive BusinessNZ

 

Ken Shirley Chief Executive Officer Road Transport Forum

 

Catherine Beard Executive Director Manufacturing NZ

 

Ralph Matthes Executive Director Major Electricity Users Group

Chris Baker Chief Executive Straterra

John Scandrett Chief Executive Officer Otago Southland  Employers’ Association

Raewyn Bleakley Chief Executive  Business Central–Wellington

Kim Campbell Chief Executive EMA

Peter Townsend Chief Executive CECC

Michael Barnett Director  New Zealand Chambers of Commerce

These people represent people who employ people, the ones who need certainty and confidence to make investment that creates jobs, earn export income and pay taxes.

These are people who work in the real world.

They know there’s nothing funny about bad policy that would take the country backwards, cost jobs and make us all poorer.

They know that Green isn’t for growth and it doesn’t mean go.

Green economic policy is bright red and it will mean stop to economic growth and job creation.

Rural round-up

Drought breaking rain sparks race to prepare for winter:

Farmers are rejoicing that the drought breaking rain finally arrived, but hope winter can hold off for a few more weeks to maximise pasture growth and better insure their feed supplies until spring.

“We have heard from nearly all our provincial presidents that the rain has broken the drought in their areas and that grass is growing again,” Federated Farmers adverse events spokesperson Katie Milne says.

“Some areas had a bit too much rain, while others are still a bit dry, but overall the rain brought by last weekend’s subtropical trough was exactly what was needed, with grass growth returning to many areas. . .

Drought status likely to remain until September:

Recent rainfall has been welcomed by farmers but the problems created by the dry summer will be felt for some time, says Minister for Primary Industries Nathan Guy.

“The dry conditions may have ended in many parts of the country but there are still major challenges ahead. It will take time to build up enough grass cover to provide feed for winter.

“There’s no doubt the rain over the last week has been a real boost, especially for those in areas that have missed out before like the central North Island. . .

Prime Minister Attends Blessing for New Fonterra Plant:

Construction of Fonterra’s new $126 million UHT milk processing plant in Waitoa today took another step forward with the site’s blessing attended by Prime Minister John Key.

Fonterra’s Chief Executive Theo Spierings said the plant, which will be running from April 2014, will enable Fonterra to increase UHT production by 100 per cent over the next few years.

“The five new UHT lines will produce a range of products including UHT white milk and UHT cream for the foodservice sector, which is a part of our business that generates more than $1 billion in sales a year and this plant will allow us to meet the growing demand in Asia for these products,” said Mr Spierings. . .

New A2 formula ready for China – Christopher Adams:

NZX-listed alternative milk company A2 Corporation says the first consignment of its new infant formula brand will be shipped to the lucrative Chinese market next month, followed by distribution in New Zealand and Australian supermarkets soon after.

The company has appointed the China State Farms Holding Company Shanghai, a subsidiary of state-owned China National Agriculture Development Group Corp, as the exclusive Chinese distributor of its Platinum formula brand.

The formula will initially be sold in Beijing, Shanghai, Guangzhou, Tianjin and Chongqing before sales are progressively expanded to other major cities in mainland China, as well as Hong Kong and Macau, A2 says. . .

Outdoor workers shun sun protection- Tamara McLean:

The sun protection slogan Slip, Slop, Slap and Wrap is being dangerously ignored by two thirds of Kiwis working in the great outdoors, with farmers and builders among the worst culprits.

A University of Otago study of more than 1000 workers across nine outdoor occupations has revealed that sun smart messages are not getting through to those who spend their lives working outside.

Just one in three outdoor workers wear sunblock or a suitably protective hat while at work, despite being more at risk of sun damage than other people. . .

Last of founding vineyard empire goes on the market for sale:

A large landholding of what was once the family-owned and operated Nobilo wine empire west of Auckland has been placed on the market for sale.
The 7.49 hectare property bordering the township of Kumeu was once planted in white and red grapes, and was part of the huge landholding created by New Zealand wine legend Nikola ‘Nick’ Nobilo.

Nick Nobilo was born in Croatia and emigrated to New Zealand with his family in 1937 to settle in Kumeu. Nobilo came from a winemaking family which had been producing vintages for some 300 years. . .

Locally bred Habibi sold after winning 6th consecutive race:

New Zealand Derby winner Habibi has been sold to a United States buyer.

A winner of six of her nine races, Habibi was sold to Pennsylvania buyer George Strawbridge after finishing fourth in unsuitably heavy conditions in the Australian Oaks at Randwick last Saturday.

Her owner-breeders Peter and Heather Crofskey will keep a minority share in the filly for the rest of her racing career. . .

Gibbston Valley mountain bike resort soft opening:

Queenstown’s new Rabbit Ridge Bike Resort will have a ‘soft’ opening on April 27 with riding available on some of the newly constructed trails. Rider numbers are limited to invitation only to reduce traffic and enable trails to bed in.

Invited local bikers, bike shop owners and front line staff will get to try out the new trails for the first time this weekend (April 27/28) at the new bike ‘playground’ on 400 hectares of land adjacent to Queenstown’s award-winning Gibbston Valley Winery.

Locals eagerly anticipating the opening of the new resort will then be able to ride the trails on Free Locals Days scheduled for the first Saturday of every month, starting May 4. . .

Even benign environments need safeguards

The ODT says:

There cannot be many people in New Zealand not concerned over this week’s revelations of illegal spying by the Government Communications and Security Bureau.

There cannot be many not worried about the Government’s subsequent announcement it will make sweeping changes to laws governing that agency which will change its mandate and make it legal to spy on New Zealanders. . . .

If that’s the case, I’m one of the few.

I’m not particularly concerned about the revelations of illegal spying nor worried about the prospect of change.

The illegality appears to be technical – a result of badly drafted law which didn’t do as it was intended to do and Prime Minister John Key has announced proposals to tidy that up:

“The GCSB plays a vital role in protecting the security and safety of New Zealanders,” says Mr Key.

“It has been making, and will continue to make, a significant contribution to our national security.

“However, Ms Kitteridge’s review shows difficulties of legal interpretation around the GCSB Act as well as compliance and cultural issues within GCSB.

“As a result of this, the GCSB has ceased providing support to agencies like the NZSIS and Police as it used to do and had done for more than a decade.

“It is now the responsible thing to do to clarify the legislation, to make it clear the GCSB can provide support to agencies which are undertaking their lawful duties.

“To do anything less would be to leave our national security open to threat, and as Prime Minister I am simply not willing to do that. To do nothing would be an easy course of action politically, but it would be an irresponsible one.”

Mr Key says the proposed changes to the GCSB Act will clarify its long-standing practices, so the GCSB can provide assistance to other agencies, subject to conditions and oversight.

“The clarification of the GCSB’s long-standing practices was also the purpose of the 2003 legislation:

“Section 3 of that Act made it clear that its purpose was to ‘continue the GCSB and establish it as a department of state.’

“And when the Act was passed in 2003, this assistance had actually already been occurring.”

GCSB Act proposed changes

At a high level, GCSB will retain its three main functions. These are:

• Information assurance and cyber security
• Foreign intelligence; and
• Cooperation assistance to other agencies.

However, these functions will be clarified and updated so that:

• Information assurance and cyber security will include cooperation, advice and help to both public and private sector organisations;
• Foreign intelligence will remain broadly as is; and
• Cooperation to assist other entities such as the NZSIS, NZ Defence Force and Police will be clarified to include help in the performance of their lawful duties.

“With regards to the three main functions, the Act will be amended to make it clear the GCSB can use its powers when undertaking activities in all of these areas, subject to controls and conditions.

“We intend to make it clear the GCSB can undertake activities on behalf of other named agencieswhere those agencies can lawfully undertake those activities.

“This includes the other agencies’ lawful investigations of New Zealanders.

“Section 14, which prohibits activities involving New Zealanders, will be retained but will apply only to the foreign intelligence function of the GCSB, and not to the other two functions.

“This will allow the GCSB to provide essential support to specified agencies and to undertake important work with both public and private sector New Zealanders in the area of information assurance and cyber security.

“These changes will ensure the GCSB is on a sound footing to keep doing the job the Government expects it to do in the interests of New Zealanders,” says Mr Key.

The changes would also be subject to the enhanced oversight arrangements.

Oversight regime

A solid oversight regime will help build confidence and enhance public trust in intelligence agencies.

There are five key changes proposed to strengthen the oversight regime.

1: The pool of candidates who are able to perform the role of Inspector General will be widened, by removing the requirement that the person be a retired High Court judge. This will broaden the range of experience and capability available to the role. For example, Australia’s equivalent is a former ombudsman.

2: The Inspector General’s office will be made more proactive, taking it a step further from the role it currently has, which is more review-focused. The office would be able to undertake its own inquiries more easily, and it will be expected to specifically note publicly each year its view on whether or not the agencies it oversees are compliant with the law.

The Government will increase the scope of the Inspector General’s active review programme to include a much broader range of the agencies’ activities. This will have the effect of making the Inspector General’s role more proactive.

3: The resourcing and staffing of the Inspector General’s office will be increased, and the new role of Deputy Inspector General will be created.

4: Legislation will explicitly expand the Inspector General’s work programme, including compliance audits and greater reporting responsibilities. GCSB’s own quarterly reporting processes will be tightened up.

5: The Inspector General’s work will become more transparent, through greater availability of its reports and views publicly.

Mr Key says the changes will be made by amendments to the Inspector General of Intelligence and Security Act 1996.

Even if we lived in a benign environment, which we don’t we’d need safeguards. We can’t guarantee that everyone in New Zealand subscribes to a desire for peace, good will and democratic processes for change.

Someone has to be able to follow up justifiable suspicion that one or more persons could pose a threat to security.

We neither need nor can afford more than agency equipped to do what the GCSB does so it makes sense for it to be able to assist the SIS, Defence Force and police – with reasonable controls and conditions.

If I have any concerns at all about the issue it’s the media’s fascination with it.

I’m a political tragic and I’m not particularly interested in it so I doubt if many outside the Bowen Triangle are either.

I am however more interested in who leaked  Rebecca Kitteridge’s report.

Today, Mr Key also released the terms of reference into the unauthorised disclosure of Ms Kitteridge’s report.

The Commissioners of the report, DPMC Chief Executive Andrew Kibblewhite and GCSB Director Ian Fletcher, have appointed David Henry to conduct the inquiry.

Mr Henry is a former senior public servant who has held a number of positions, including Commissioner of Inland Revenue, Chief Electoral Officer, Electoral Commissioner and Commissioner on the Pike River Royal Commission.

He has also carried out a number of reviews and assignments in the public and private sectors.

Mr Key says it is anticipated Mr Henry will present his findings by the end of May.

The government must be able to trust everyone who works for it and who has access to reports like this.

The number of people in a position to leak the report is small and I can’t think of any motive for doing so but a political one.

Not finished yet

Quote of the day:

Well, look, you know, the thing is I’m actually enjoying it.  As Prime Minister, what are they going to remember when they look back?  And the answer is going to be is the economy strong, does the education system work better, does health system work better, is New Zealand a stronger, more confident country?  I’ve been Prime Minister for four and a half years.  My own personal view is that we are building that sort of New Zealand.  Now, you know, is there perfection?  There will never be perfection in politics, but you can do your very best and you can see the course, and that’s what we’ve done.  I really believe passionately that— And again, I’ve read lots of stuff in the media that I’m not going to be there in 2014, I’m not going to run National in the election, that’s not true.  None of that is true.  I’ll be there.  As long as National wants me there, I’ll be there in 2014.  Why?  Because I don’t think we’ve actually finished the job yet. And, you know, there will always be some weeks that are better than others, but for the most part I’m in an incredibly privileged position.  You know, I’m the 38^th prime minister of New Zealand, and I’ll always be grateful to the New Zealand public that they gave me that chance.  Prime Minister John Key (on Q+A yesterday).

Why welfare reform matters

Helping people help themselves

Welfare reforms developed by Social Development Minister Paula Bennett passed into law yesterday.

“The changes we’re introducing will modernise and simplify the welfare system,” Mrs Bennett said.

“They will also ensure work expectations and social obligations are balanced with the right incentives and support.” . .

“The legislation also introduces new social obligations to ensure children in benefit-dependent homes get quality Early Childhood Education, are enrolled with a doctor, get their Well Child checks and are in school if they are school-age,” Mrs Bennett said.

The law will also require Jobseekers to be drug-free, and will allow benefits to be stopped for outstanding arrest warrants.

“Over 40 per cent of jobs advertised with Work and Income require a drug test. It is simply unacceptable that many are unable to work and take up available job opportunities because of recreational drug use.”

An actuarial valuation based on the expected durations of all current beneficiaries shows the lifetime costs to be $78 billion.

The investment approach will target interventions and support to those most at risk of long-term welfare dependence.

“By investing in people sooner, we can actually start to break that cycle of dependence.”

“Jobseeker Support will include those capable of work and those who are temporarily exempt, but will soon be able to work,” says Mrs Bennett.

This includes those currently on the Sickness Benefit, who according to work capability, will have a part-time or full-time work expectation or a temporary exemption until they are work-ready.

People currently receiving Women Alone or Widows Benefit will retain their higher rate of benefit when they transfer to Jobseeker Support and along with those on the DPB, they’ll also retain current part-time benefit abatement rules.

“Benefit rates will remain unchanged and there will be extra support for those who want to work but need more help to get them ready,” says Mrs Bennett.

The current annual reapplication for the Unemployment Benefit will apply to all those on the new Jobseeker benefit.

The opposition thinks these reforms are beneficiary bashing.

On the contrary they are designed to ensure those in genuine need get the assistance they require and help those who could support themselves to become independent.

As it was, the welfare system trapped people on benefits and didn’t provide support some people need to be able and willing to work.

That came at a very high cost for those on long term benefits and those of us who pay for them.

Helping people into work improves their long term prospects and decreases the long term costs of welfare.

Not in the same league

Quote of the day:

SUSAN          So you’re not a rich prick?

DAVID            I’m- Obviously, as a New Zealander, I’m fortunate, but I’m not in the same league as our prime minster, no.

That comes from David Shearer on Q+A  yesterday.

Not in the same league as the Prime Minister, David Shearer isn’t in the same league as John Key, and not just in terms of personal wealth.

Schadenfreude

Prime Minister John Key resisted the temptation to attack David Shearer for  his memory lapse:

It is “unfortunate” Labour leader David Shearer forgot to declare an offshore bank account with at least $50,000 in it since he became an MP, Prime Minister John Key says. . .

Key said the oversight was “unfortunate”, but mistakes could be made.

However, National had not had much support from Labour when that was the case in the past, he said.

“In the end he’s [Shearer] got to make peace with the New Zealand public,” Key said.

He had “tried not to” forget about investments worth $50,000, and he said Shearer’s bank account could hold quite a bit more than that.

Key had been criticised for failing to declare Tranz Rail shares. . .

Act leader John Banks was unable to resist the temptation.

Hon John Banks: Could the Minister for State Owned Enterprises tell me whether funds could be used from a secret bank account in New York to purchase shares in this initial public offering? [Interruption]

Mr SPEAKER: A legitimate question.

Hon TONY RYALL: That is a very good question, because if a New Zealander was one of the pre-registered 400,000 and they were able to get the benefits of that pre-registration in terms of their shares, they would have to pay for them. We would be unclear of whether the bank account was secret or not, but we would presume people would actually know they had a bank account.

Given the delight Labour took in criticising Banks for his memory lapse he could be excused this schadenfreude.

There’s already been a referendum

The petition seeking a referendum on the government’s policy to sell minority shares in a few energy companies was presented to parliament yesterday.

Parliamentary Services staff will now have to waste their time and our money ensuring the validity of the signatories.

They shouldn’t have to do it because Keeping Stock shows us there’s already been a referendum.

Labour’s then leader, Phil Goff said so.

Mr Goff said Prime Minister John Key had made this year’s election a referendum on whether New Zealanders wanted to see their most important assets being sold.

Perhaps the current leader, David Shearer, could explain why he’s wasting public money on another referendum when the 2011 was decisive.

And apropos of waste – does anyone know who paid for all those boxes in which the petition pages were delivered and the delivery?

Why is NZ lamb tastier?

An email says:

A friend in London asked me about why Scottish lamb isn’t as good as New Zealand lamb. I thought you might know, or might know someone who knows what the actual difference in it is.

I’ve had lamb at Gleneagles and it was less dense in texture and a different flavour, perhaps more intense lanolin, but I am not sure.

All lamb isn’t equal.

John Key was one of the judges at the Glammies last year and said it was easy to detect  distinct differences in taste and texture between the entries.

A Spanish speciality is baby lamb which has a very different taste and texture from the older lamb we’re accustomed to.

Breeding and feeding both influence taste, even if the meat is prepared and cooked the same way.

I am not sure if climate and soils also have an influence which might explain why New Zealand lamb is tastier  than Scottish lamb and welcome answers to the email question from anyone who knows more.

Looking east

The Eurocentric view of the world has always regarded the East as Asia and the Middle East.

But our East is the Americas and while we’ve long established and strong links with Canada and the USA, we haven’t paid nearly as much attention to countries further south.

Prime Minister John Key’s very full agenda on his trip to Mexico, Columbia, Chile and Brazil is a sign that we’re not only recognising the importance of Latin America but keen to do business there.

The presence of Minister for Primary Industries Nathan Guy on the trip was no coincidence. Agriculture is one of the sectors with the potential to gain from improved relations with, and access to, Latin America.

Results from the trip include:

* The extension of the Chilean Government’s “Penguins Without Borders” scheme, through which high-achieving Chilean students travel to New Zealand for six-monthly study visits.

* A pledge for further trade and economic co-operation between Chile and New Zealand.

* A willingness for improved strategic co-operation between Colombia and New Zealand which could provide opportunities for New Zealand companies to enter into joint ventures and offers significant potential to increase our exports of agricultural services.

* A commitment to stronger trade relations with Mexico.

The Prime Ministerial visit has opened doors.

It’s now up to businesses to make the most of the opportunities this provides.

Selling at last

National’s policy to sell, or partially sell, a few state owned assets was forecast before the 2008 election when John Key made it clear no assets would be sold in the first term and any proposal to sell anything in the second term would be part of the election campaign.

It became a big part of the 2011 campaign, not just because national campaigned on the policy of selling minority shares in a few energy companies but even more because opposition parties campaigned so hard against the policy.

National won, the opposition lost but continued to campaign against the policy.

Like their election campaign that will get them nowhere.

The court ruling against the Maori Council’s bid to stop the sales cleared the way for the sales process and the government has lost no time in getting it under way.

Prime Minister John Key today confirmed the Government will offer the public up to 49 per cent of Mighty River Power in the second quarter of this year – subject to market conditions.

“This will begin tomorrow, with the opening of the process for investors to pre-register their interest in finding out more about the Mighty River Power share offer,” says Mr Key.

The Supreme Court last week dismissed challenges by the Māori Council and others to the Government’s sale of a minority shareholding in Mighty River Power. This follows the High Court reaching the same decision late last year.

“It means we can now proceed with offering a minority share in Mighty River Power.

“The Government’s share offer programme is an important policy. It is expected to free up $5-7 billion that we can then invest in other assets such as modern schools and hospitals, without having to borrow in volatile overseas markets,” says Mr Key.

“Under the share offer programme, New Zealanders will be at the front of the queue. They will have an opportunity to invest in big Kiwi companies at a time when they are telling us they want to diversify their savings away from property, bank deposits and finance companies.”

Cabinet today made a number of decisions about the timing and details of the Mighty River IPO.

These include:

• The Order-in-Council decision was taken to remove Mighty River Power from the SOE Act.
• A pre-registration process for New Zealand retail investors interested in finding out more about Mighty River Power shares will open tomorrow (5 March 2013) and run though until 22 March, around three weeks.
• The offer period is expected to open in mid-April and run for three weeks. The share offer document will be available at that time.
• Details of a loyalty bonus for New Zealand retail investors will be announced before the offer period starts.
• When the offer period closes, the institutional book-build takes place. Ministers then make share pricing and allocation decisions.
• We then expect that Mighty River Power will list on the sharemarket.

“My expectation is that, subject to market conditions, this process will be completed in mid-May, most likely before the Budget,” says Mr Key.

“The Mighty River Power share offer has been designed to achieve widespread New Zealand ownership. We envisage that, with the Government’s majority shareholding, total New Zealand ownership will be 85-90 per cent of the company after the share offer.

“From the Government’s perspective it makes sense to use this opportunity to reorganise the Government’s assets and redeploy capital to priority areas without having to borrow more.

“We intend to make it as easy as possible for New Zealanders to get access to information, register their interest and apply for Mighty River Power shares.”

Today Finance Minister Bill English and State Owned enterprises Minister Tony Ryall will officially launch the pre-registration period for New Zealanders who are interested in finding out more about the Mighty River Power share offer.

 . . . Mr English says the initial public offering of up to 49 per cent of the Government-owned power company is an opportunity for New Zealanders, including those who have not owned shares before, to invest in the stockmarket.

. . . Pre-registration will allow New Zealand retail investors who are interested in finding out more about Mighty River Power shares to register their interest.

“Tomorrow will also see the start of a substantial advertising and communications campaign covering television, print and online media which will raise awareness of the IPO, and tell people how to pre-register,” Mr English says.

“That campaign will include a strong investor education element for those unfamiliar with the sharemarket. We strongly recommend investors obtain their own independent financial advice”

Ministers also announced today that they expect that the share offer document will be lodged shortly after the pre-registration period ends and that there will be a three-week offer period.

At the end of that, the book-building process will take place before ministers decide on the share price and the allocation of shares. Those decisions will include how the shares will be allocated between New Zealanders and overseas shareholders.

The Government expects this process to be completed in mid-May.

The share offer had been designed to put New Zealanders first, Mr Ryall says.

“Mighty River Power will apply to be listed on the NZX main board. We expect that its primary stock exchange listing will be in New Zealand.

“We also expect it to have a secondary listing on the Australian Stock Exchange. There is nothing at all unusual about this – eight of the 10 largest New Zealand listed companies are already dual listed in Australia.

“There is a balance to be struck here. On the one hand, we have given New Zealanders an absolute commitment that Kiwis will be at the front of the queue for shares.

“On the other hand, we want to ensure there is enough tension in the share price for investors. A secondary listing in Australia will help to achieve that.

“Another point worth noting is that some Australian institutions, under their own investment mandates, would not be able to invest in Mighty River Power unless it was also listed in Australia.”

Mr Ryall says the website for pre-registration and for the share offer itself has been designed to restrict people from outside New Zealand from participating.

However, the IPO will be open to certain institutional offshore investors because that will help ensure New Zealand taxpayers get the best price for the shares being sold. Ministers expect around 85-90 per cent of shares to be held by New Zealanders after the share offer.

Other decisions confirmed today include:

• The minimum application for shares will be $1000, increasing in $100 increments.
• New Zealanders applying for up to $2000 worth of shares will not be scaled back if the IPO is over-subscribed.
• A loyalty bonus will apply for New Zealand retail investors who keep their shares for a minimum period. The terms of that bonus will be announced before the share offer opens.

I’m not purporting to be a financial advisor but I’ll be putting my money where my mouth is on this.

I think the partial sale will be good for the company, good for the country and good for all shareholders – the private ones who buy up to 49% of the shares which will be for sale and the government which will retain at least 51% of the shares.

Critisicm but no alternatives

The Opposition has been quick to criticise Hekia Parata’s proposals for education in Canterbury but have offered no alternatives.

Labour leader, David Shearer doesn’t even seem to understand the issue:

David Shearer: Does he not concede that closing schools in Christchurch following a natural disaster, where kids require and rely on stability and security from their schools, is manifestly different from closing schools under the Labour Government?

Rt Hon JOHN KEY: This is the logic that the Leader of the Opposition is wanting New Zealanders to believe: that on the back of a catastrophic earthquake in Christchurch that has dramatically changed the demographic patterns of where Cantabrians live, where there is huge damage to the schools involved and where the land is substantially damaged, nothing should happen. . .

Some schools have had extensive damage, others have lost large numbers of pupils.

Leaving the schools open wouldn’t be in the best interests of the pupils nor would it be best use of public money.

The opposition might think damaged buildings and under utilised facilities isn’t a problem but the government does and has a $1 billion dollar programme of investment to solve it.

30 years of CER

CER, the Closer Economic Relationship between Australia and New Zealand is 30 years old and both countries are better for it.

Prime Minister John Key says Australia and New Zealand are two of the most integrated economies in the world and this weekend’s talks with Prime Minister Gillard have only strengthened that bond.

The two Prime Ministers are in Queenstown for the annual Australia-New Zealand Leaders’ meeting.

Prime Minister Key and Prime Minister Gillard acknowledged the 30th Anniversary of the Australia/New Zealand Closer Economic Relations Agreement (CER). 

CER is widely acknowledged as the vehicle which has seen successive governments on both sides of the Tasman progressively remove barriers to trade in goods, services and investment between the two countries. . .

CER in effect gives us a domestic market of 20 million extra people instead of just our own 4 million.

The population advantage isn’t so great for Australians but the open borders make travel easier and give businesses on both sides of the Tasman more opportunities. Consumers benefit from more choice and often lower prices and/or higher quality.

The relationship has had the odd strain. An example of this was the non-trade barriers Australia tried to impose on New Zealand apples.

However, the World Trade Organisation ruled in our favour – and Ms Gillard had to swallow that when she lost a bet with our Prime Minister:

Ms Gillard made a bet with New Zealand’s Prime Minister John Key on the outcome of the 2010 Rugby World Cup – a deal that would see the leader of whichever country lost eat an apple from the winning country.

Luckily for Mr Key, the All Blacks reigned supreme.

The bet was symbolic of the end of Australia’s 90-year ban on New Zealand apples, following a World Trade Organisation ruling that it must allow imports.

Ms Gillard finally honoured the bet during dinner with Mr Key, his wife Bronagh, and Ms Gillard’s partner Tim Mathieson in Queenstown, New Zealand, on Friday night.

“I’d have to say, of course, Australian apples are better,” Ms Gillard said.

She added that Mr Key had tried to serve her New Zealand apples on multiple occasions. . .

She would say that about the apples, but I don’t think all the consumers in her country would agree with her.

Herstory of Waitangi

Trans Tasman has suggests the history of the Treaty of Waitangi might be being re-written as a herstory:

There’s a generation of school kids growing up under the impression the Treaty of Waitangi was signed between Governor Hobson and Titewhai Harawira.

This is not so much an indictment on our school system: more on the way Harawira manages to plant herself at the epicentre of our annual national day.

It isn’t clear quite how this happened. True, she managed to make Helen Clark cry, and for some of us there’s always a hope Titewhai – who has become a sort of Kiwi version of a fierce Wodehousian aunt as imagined by one of the more bizarrely gothic Dutch painters – would have a similar impact one of Clark’s successors. There doesn’t seem much chance with the current lot.

If she were to try such a stunt today, John Key would either declare himself relaxed about it, or just have one of his memory lapses. Labour’s David Shearer probably would not notice, unless a staffer or his autocue told him about it. NZ First’s Winston Peters and Act’s John Banks would respond with inarticulate belligerence, and United Future’s Peter Dunne probably with a milder, if more articulate, form of same.

The only ones discombobulated would be Green co-leaders Russel Norman and Metiria Turei: they are more used to being part of protests than being on the receiving end of them.

So what does Waitangi Day, our national day, tell us about ourselves – you know, apart from the fact we are suckers for being bullied by stroppy old ladies?

Well, we’re still working on this treaty stuff, and we’re not very comfortable about the whole race issue. But also we’re not ignoring it and we’re kind of muddling our way through it all, if a little noisily and apologetically.

Apropos of understanding the history of the treaty, I have to confess that I went through school under the impression it ended the land wars.

It was only when I did a New Zealand history paper at university that I learned that wasn’t the case.

Looking forward

I started picking out highlights from the speech by Prime Minister John Key at Waitangi yesterday morning.

There were so many, I decided it was better to copy it all:

E nga Rangatira

E tau nei ki Waitangi

Tena koutou

Te hunga mate ki te hunga mate

Te hunga ora ki te hunga ora

No reira

Tena tatau katoa

There is no occasion on which the weight of New Zealand’s history is felt in quite the same way as it is here in Waitangi on Waitangi Day.

Anzac Day is also special but it reflects a different part of the New Zealand story. Waitangi Day is unique. It is marked across an emotional spectrum that ranges from great passion among some of those gathered here, to indifference from those Kiwis whose sole interest in the day is encompassed by the weather forecast.

From time to time, governments and others have tried to engender a greater sense of national participation around this day. It would be good to see but I’m not sure that we can or should try to force it. We are not by nature a nation of flag-wavers.

We come together here each year to commemorate the signing of the Treaty and, increasingly, people are using the occasion to look forward rather than back.

Mostly, we have the Treaty settlement process to thank for that. By and large the argument that the settlements are justified, necessary, and both morally and legally the right thing to do, was won long ago.

This Government has kept its promise to increase the pace of those settlements. That has required commitment, judgement and balance from all sides.

The first negotiation began under a National government and National has a very good record of progressing settlements. The latest figures provided to me by the Treaty Negotiations Minister Chris Finlayson show that since the historic claims settlement process began, a total of 59 Deeds of Settlement have been signed between the Crown and iwi.

Of those, 44 were signed by National governments and 33 of them by my government in its first four years in office. That’s a huge advance over the pace that was prevailing when we came in. At that time, it was calculated that if settlements continued at the rate at which they were then occurring – which was 1.6 settlements a year  –  we’d still be signing them in 2048.

We have given priority to the settlement process because it is in everyone’s interests to get the job done.

Within each of those iwi that has settled, a new generation has been freed from carrying the legacy which has been handed down for, in many cases, more than 100 years.

For them, the energy, time and resources that have previously gone in to seeking redress for past injustices now becomes available for taking advantage of future opportunities.

Nowhere is that potential more obvious than here in the North.

This region has a rich culture, a great climate and beautiful coastlines but unemployment is a challenge and people, particularly young people, need more job opportunities. The Government is putting in a lot of effort, including improving road links with the rest of the country and encouraging exploration for oil, gas and minerals.

However, the biggest stimulus on the horizon will come when Treaty settlements are reached on all the claims here, financially empowering iwi and injecting several hundred million dollars into the local economy.

The Crown is keen to see progress in that regard but first some of the groups involved need to resolve the last remaining difficulties which stand in the way of the final settlements being signed.

Can I encourage them to do so, because investing in growth will make the most difference to improving job prospects in Northland.

Around the country, iwi and hapu are finding out what they can achieve post-settlement and the future for them is exciting.

To assist Maori in reaping the most from their own assets, some of you will be aware that Chris Finlayson has commissioned an expert panel to review Te Ture Whenua Maori Act. Nationally there are about 27,000 blocks of Maori land, covering about 1.42 million hectares. Together, they comprise about 5 per cent of New Zealand’s entire land mass and a higher proportion – about 10-12 per cent – of the North Island.

Legislation which governs these blocks is restrictive and it’s estimated that about 80 per cent of the land is undeveloped or underperforming. If its potential could be unlocked – and if that is what its owners choose – imagine how much more wealth and how many more jobs and opportunities could be generated.

Apart from land, compared with some other countries New Zealand also has an abundant supply of water. It is just one of the natural resources which the Crown has the role and responsibility of managing on behalf of all New Zealanders, for the good of all New Zealanders.

Not all iwi leaders may agree with the Government’s approach on all the issues around resource management and of course those discussions will continue.

But I think we do agree that we all have a responsibility to future generations to use resources sustainably and wisely to help build New Zealand’s wealth now and for future generations.

All in all, iwi authorities have good reasons to feel very optimistic about the changing environment in which they operate.

The Iwi Leaders Group and the Maori Party are part of this constructive mindset. We don’t always agree on everything, but we do have a shared sense of purpose, and we have mutual respect.

In particular, the Maori Party deserves credit for taking on the responsibility that is required to be part of a government. We’ve seen since MMP was first introduced that it’s never easy being a small party in a government arrangement but let me assure you it is far, far more influential than being a small party in Opposition.

In Opposition you make headlines that last for a day; in government you make policies that endure for a generation.

The Maori Party has brought an important dimension to this Government. It is one of the reasons why we have a positive and forward-looking relationship between Iwi and the Crown.  I have no doubt that we New Zealanders are better off because of it.

The strength of that relationship has helped in the Treaty settlement process. The advances there mean that some great success stories are emerging from those who see the post-settlement environment as a chance to get on with the exciting, challenging and ultimately satisfying business of running their affairs in their own rohe.

Suddenly, they have a new leverage and a new status. Major players in both the private and public sectors want to form relationships with iwi authorities. Their investment decisions have the  potential to create wealth, jobs and opportunity not only for whanau, hapu,  iwi and their local communities, but also for other New Zealanders and for the wider economy.

That is exactly how it should be and I’m sure we’re going to see more of it.

But while the outlook for Maori and Maori-Crown relations are mostly positive, there remains a small but vocal few who are sometimes apparently unable or unwilling to see the world through any lens other than that of Maori disadvantage.

They seem from their public demeanour to be permanently aggrieved, and rarely constructive.

Those headline-seekers know they will get much more attention by being flamboyant and negative than they will by being considered and positive.

The problem is that sometimes their diversions – including here at Waitangi – are not only distracting, but they can contribute to putting at risk the  public consensus  that exists towards the process of settling legitimate Maori grievances.

It is that consensus that also allows us, in government, to be innovative about ideas that, for example, might lift Maori educational achievement and economic participation.

Public goodwill should not be taken for granted.

It needs to be treated with respect. It is short-sighted and counter-productive of activists to use tactics and language which have the effect of eroding public support for initiatives aimed at turning around the very situation that the activists are complaining about.

All of us are aware that there are many Maori who are not doing as well as they could. You can see it in some of our classrooms and in some of our homes. At its worst you see it on some of our streets and certainly in our prisons.

This audience will know that, regardless of ethnicity, young people with higher educational qualifications generally end up with better incomes through their working lives. They also engage more in society, report greater life satisfaction and have better health and a greater sense of security.

There are always exceptions but over and over again, analysis shows that the better your education and qualifications, the higher your standard of living and the better the chances of good outcomes for your children.

The problem is that proportionately fewer Maori than non-Maori achieve that.

And, as the recently-announced Maori economic development plan notes, barriers to education represent a significant cost, not just to individuals, but to their whanau and society as a whole.

In improving achievement levels, the greatest gains stand to be made in our homes where the influence on children plays such a significant part in determining their life outcomes.

Iwi authorities, corporations, philanthropists, businesses, charities and individuals, as well, of course, as school communities themselves, are also supporting different initiatives.

Not-for-profits and universities are also involved in making a difference. This is as it should be because the Government, despite of course being the biggest and most influential agent in delivering education, does not always have all the answers. The problem should be owned by the whole community.

It is not easy to turn around educational and social disadvantage. If it was, and the solutions were up to the government alone, then of course we would already have done whatever it took.

But although this underachievement is large and worrying, it is starting to turn around. More Maori are in tertiary training and there are more Maori who are successful professionals than ever before.

Maori achievement rates for NCEA Level Two or above have gone from just 44 per cent in 2009 to 51 per cent in 2011. That lift is welcome but when you look at the overall achievement rate for Level Two of 74.3 per cent, we can see that for Maori in particular, there is a long way to go.

My Government aims to have 85 per cent of 18-year-olds achieving NCEA Level Two by 2017. To reach that target, we need around 3650 more pupils to pass and that includes around 2420 more Maori. This is one of 10 key results challenges that we have set the public service to achieve within the next five years.

We know what we need to do, our data shows where we need to do it and the point of making this one of the priority targets is to ensure it actually happens.

Turning around the current waste of human potential would do more for Maori and for New Zealand than probably any other single change. We want to see it happen not because the statistics would be more flattering – though of course they would be – but because we want meaningful improvements in people’s lives and especially in the lives of those who face the greatest challenges.

We need a unity of purpose in giving this issue the priority it warrants.

It’s not only about young people. Under-educated kids grow up to become under-educated parents who may be trapped in low-income jobs or have periods of unemployment, which in turn feed the cycle of benefit dependency. We have 220,000 children living in homes where the main income is a benefit.

It doesn’t have to be like this. And of course, for most Maori it’s not.  Most Maori, like most non-Maori, are getting along just fine. But among those New Zealanders who don’t do so well, Maori are over-represented. That’s what we want to change.

I am confident that we can and will do it but it requires a combined effort.

I believe that the problems that divide us can become the problems that unite us.

One of my privileges as Prime Minister is to be invited from time to time to look at programmes aimed at helping young people lift their game and expand their view of what’s possible in today’s world.

I visited one such project last October when I went to the United Maori Mission’s hostel which lies within the zone for Auckland Grammar School.

The United Maori Mission has boys from 21 different iwi, along with some Pasifika boys, in its In Zone Project. When the Mission goes out to interview applicants,  its director Terrance Wallace says he’s looking for those who are motivated but the deal-breaker in selection is that the boys must be willing to give back to the school and, in time, to the communities they come from.

Terrance becomes the legal caregiver of 50 teenage boys. I can say that some days having one teenage son seems like a trial. But 50!

The hostel is run like a whanau environment and there’s a zero tolerance policy on drugs and alcohol.

Importantly, both Terrance and the school say that there is no lowering of academic standards to accommodate the hostel boys, or any other pupils. Programmes like the In Zone Project are about genuinely improving the boys’ education in order to meet the standards, not about lowering the standards to meet the boys. Ultimately, that would serve no-one’s interests, least of all the pupils.

When I visited, some of the boys spoke about this life-changing opportunity they had. It was moving to listen to them.

One was a boy from South Auckland whose mother had begun to worry about some of the influences on him. She and her husband looked at the cost of private schooling and knew they couldn’t afford it. But she heard about the In Zone Project, checked it out and now her son goes to school at Grammar where he’s thriving.

I met another boy at the hostel from a remote community who was adopted at birth by his neighbours. Like many of the boys at the hostel, he struggled with homesickness when he arrived. Actually, I also know that sometimes parents find the adjustment just as difficult as their sons. Anyway, he persevered and this year he’s back at school, having moved up a class based on his results last year.

These two boys have very different life stories but they also have some things in common. Each of them has people at home who support them and, young as the boys are, they understand the value of education.

They welcome the opportunity to compete and co-operate with other boys who are aiming high, are engaged and are committed to trying to do their best.

Who can ask more of kids than that?

All New Zealand kids have access to high-quality education but some of them require extra support so they can make the most of school, and so that school can make the most of them. That’s the gap that the In Zone Project and the I Have a Dream Charitable Trust and other similar intensive programmes are trying to fill.

So when I think of education, I think of the kids in these programmes but also of all the kids out there who are notgetting this kind of individual attention and support, though all of them of course have the best efforts of their teachers and schools on a daily basis.

Mostly, I think of how great it will be when we do better at realising the human potential that this country has available.

And finally, on this day in particular, I think too of the chiefs who signed the Treaty, including many who were sceptical and reluctant but did so because they saw in a partnership with the Crown, new opportunities for their people.

More than 170 years later, the challenge for Maori and non-Maori is to continue to commit ourselves to achieving  that equal opportunity, and to maximising its advantages for the good of individuals, whanau, hapu and iwi and, ultimately, for  all New Zealand society.

The Government has certainly made that commitment.