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DELIVERING QUALITY ECONOMIC AND SOCIAL POLICY Let me move on now specifically into the area of policy. Economic gain is the only sustainable way to improved social achievement, and social achievement is the only way to achieve sustained economic gain. They sustain each other, creating a virtuous upward spiral. The key principles are: An internationally competitive economy that offers every able, willing New Zealander opportunity, incentive and rising income A society that puts people ahead of institutions, and gives the individual improved scope for personal choice wherever possible An education system that prepares all our children for a role in a successful competitive economy in the 21st century Fair access to a health system that treats the individual promptly, instead of queuing people for 2 years or more Welfare systems designed to help the disadvantaged to become successful, self-reliant citizens who contribute to society A community that values people, regardless of race or sex, for their human needs, potential, achievement and contribution A country where people feel secure in their own achievement, in the community, and secure in the promise of a better future. Strategic Goals for Economic and Social Gain The policy priorities for ongoing social and economic gain are: Improve the incentives for people to use their opportunities and advance themselves by their own effort Use fair competition as a fundamentally important tool for improving fairness across the community and at all levels Widen opportunities for choice at all levels, but especially and particularly for disadvantaged people Improve job market opportunities for everyone, but particularly for the disadvantaged. Remove privilege and other obstacles to opportunity for self improvement on a fair basis of making an effort Ensure that those who genuinely need Government assistance are Government's top priority ahead of those who do not Reduce poverty traps and welfare traps to open the way for the disadvantaged to make effective use of opportunities Wherever people have the capacity, base assistance on the principle of helping them back onto their own feet Policy Background New Zealand is running well behind its OECD Partners Its relative standard of living has been falling since 1957 and will continue to fall unless dramatic economic and social reform is introduced. The changes made between 1984 and early 1988 and again in 1991 gave New Zealand a chance of catching up but the problems created by Labour in 1989 and 1990 and the refusal of National after 1991 to follow through has meant that New Zealand is once again in decline. The policies that Labour and Alliance have already introduced and wi11 continue to introduce, will only speed up the decline. By the end of the year 2002, only dramatic but sensible economic and social changes will work. Catching up will take decades, unless a circuit breaker is found. That circuit breaker could be immigration but only if the economic and social climate is right. New Zealand could tender up to 8,000 places a year sharing the proceeds equally with every New Zealander of working age for the purpose of a suitable retirement superannuation scheme. Role of the Labour Market Progress will be limited if governments and the public misunderstand the labour market. Skill and productivity are the ticket to higher wages for working people. They make wage gains affordable without placing employers in a position where they cannot compete. We need to understand that people with low skills and productivity won't get jobs at all if we force employers in a competitive market to pay them above the level of their productivity. Pay will necessarily be in line with the contribution people make. A labour market organised on those principles will help people find their way into the best work they are able to do, find jobs over time for virtually everyone who is willing to work and pay them at rates which are in line with the value of their contribution. People who stay on a benefit are going to be poor for life. Employment, even at a low initial pay rate, is the first rung on the ladder of advancement, and one of the best means available to acquire the improved skill necessary to achieve promotion to higher pay rates. Getting the Best out of a Mixed Economy To make progress, governments have to concentrate on what they do best, and ensure that the private sector does the same. We will not, however, succeed in lifting New Zealand's economic and social performance until we understand the role of government in a constructive partnership with the public. The energy of nations does not come from their governments. It comes from the inborn human drive of people as individuals to improve life for themselves, the people they love, and the community around them. What makes a country buzz is the energy of tens of thousands of people, all cooperating and competing to their own separate agendas, to achieve their own personal goals. Urged on by their hopes and aspirations, people naturally reach out for new knowledge and skill. They work productively, make discoveries, compete, cooperate, invest, found firms, trade, form voluntary associations-and they also elect governments. Those activities are the natural outcome of the normal processes of human development. Squalling infants grow into competent adults setting goals for themselves. They bring up a new generation and make their own unique contribution to society. New Zealand has always been a mixed economy, even in areas such as public health. Investment based on private sector confidence makes a key contribution to progress. Good Government / Bad Government Bad government, at its worst, ignores the goals people naturally set for themselves, and imposes alien objectives on them. People lose the benefit of their own energy. They feel enslaved. They end up so demotivated that whole nations can scarcely feed themselves. Outcomes of that kind until recently dominated the scene in Russia and Eastern Europe. Good government, by contrast, encourages individuals to pursue personal goals because it recognises that effort as the source of the energy that drives social and economic progress. 1t offers a framework of law within which individual effort to achieve personal goals at the same time necessarily contributes something valued by other people. Good government aims to protect its citizens against personal catastrophe without eliminating risk, challenge or personal responsibility. 1t takes over where parenting left off and has the same aim-to equip people to take a growing responsibility for their lives. People respond to that with a sense of liberation. Because their effort serves others as well as themselves, they enjoy a sense of achievement, personal security, self-worth and belonging that cannot be won any other way. They feel that they have a stake in a worthwhile society. Good governments, like good parents, know that personal security does not depend on having somebody to look after you forever. Those who say the state should "take care of the disadvantaged have got their human values back to front. Real care gets as many people as possible on to their own feet as fast as possible, looking after themselves. |