The most critical social need in New Zealand is to solve the crises which have developed in four critical areas of public policy-health, education, incomes and retirement.

Real expenditure on health care has risen by 100% in the last 30 years, yet people with heart conditions die waiting for treatment. Thousands say they cannot afford to see a GP. Despite continuous change, every report on the health care system in the last 20 years has found it to be in disastrous condition. Some say reform made matters worse, not better.

We have a state monopoly across most of the public health system. They provide what they like, and you take what you get. If the system fails you, that's your problem, not theirs. The only way out is to pay for the system that fails you, and private care as well. Until patients have more control of the public money being spent on them, they will not be in a position to command the respect of the public health system.

The inadequacies of our education system are notorious. For decades, 50% of New Zealand children failed School Certificate. The system, instead of facing the problem, buried it by dropping the standard, and allowing anybody passing a single subject to say they have School Cert.

Today's 15% unemployment rate among Maori and Pacific Islanders does not reflect a failure of the economy to create jobs. It results from the failure of the education system to give those people any skill marketable in the modern world. So their low self-esteem and alienation lead to drug abuse, crime, high youth suicide rates, bad parenting in the next generation and a vicious circle of disadvantage. We have a state monopoly in education. That's what it delivers.

They decide what they will provide, and you take what you get. If your child drops through the cracks, state schools see that as your problem, not theirs. Until parents have control of the funds being spent on their own children, and the power to enforce their personal choices, they will never be able to win the respect of the system.

Our incomes problem is just as fundamental. For 35 years, from 1950 to 1985, economic growth averaged 1.4% in this country, less than half the OECD average. Reform has since raised that figure to a 3% average for most of the 1990s. At that level, we have been matching the OECD, without catching back any of the losses of the previous generation.

As a result, hundreds of thousands of low and middle income Mew Zealanders find themselves running to stand still, as they struggle to improve their family incomes. For the same reason, it has been a perpetual struggle at government level to fund and deliver health and education services of competitive international quality for New Zealanders.

That problem is set to get worse rather than better. Although short-term growth indications are good, both the Treasury and the Reserve Bank have recently revised their estimate of New Zealand's sustainable rate of long-term growth down from 3% to 2.5%. Over 20 years, that would cost this country $26 billion in lost economic growth. We cannot, as a people, afford to tolerate such inadequate outcomes.

Over the next 20 years, as the population ages, the ratio of working taxpayers to those who live in retirement will double. Health care for elderly people costs eight times more than health care for working age people. The cost per worker of funding public superannuation and health care for those past working age will skyrocket. On present policies, the prospect is for much higher taxes and harsher rationing of public support.

New Zealand needs an answer that is fair to people in retirement now, future retirees, and to the present and future workforce who fund all state provision. National and the Alliance want a multi-party accord, but have no idea what policy to adopt. Labour intends to solve the problem by enlarging the role of the state, earmarking part of the current tax take, and setting it aside in the biggest state fund in New Zealand history.

You can expect Labour's answer, if implemented, to be massively inefficient. It will encourage future Governments to commit huge sums of forced public savings to inefficient politically driven investment. That approach will not prove sustainable. It does not merit the trust of retired people or the respect of the working population whose sacrifices would have to pay for it.

The state reserves the right, as and when it pleases, to alter what you pay in as a worker, and what you get out after you retire, without notice and without serious regard for the impact of those decisions on the hopes and plans you have been making for a lifetime.

ACT was founded to solve those problems. We had clear policies which did exactly that. We have worked through the detail of those policies at a rigorous and professional technical level. Their practicability was fully confirmed. Seven years later with Government expenditure up 8 billion dollars apart from interest costs we need to rework the programme. But the principle remains the same.

Give people back their share of what the Government is currently spending on state provision of health, education and welfare including superannuation, let them use that money to buy their own superannuation scheme, their own personal health insurance policy, and to pay the school of their personal choice. They will care more than government departments ever have about getting value for their own money, and their passion, backed by personal spending power, will transform health care, education and retirement incomes policy.

Over the past 50 years, a vast and growing number of Mew Zealanders have sunk into ever-increasing dependence on the state. It saps their morale and destroys their prospects. People need strong incentives to work, and greatly improved opportunities to save. Lower taxes will let workers keep far more of their earnings, and use them constructively. The state has played a key role over the last 50 years in killing off Maori initiative. Maori independence has been devastated in the past by badly designed assistance programmes.

For disadvantaged families, education, training, improved work opportunities and stronger incentives to join the workforce are, at the end of the day, the only way out of a blind-alley dependence on the state. The disadvantaged suffer most from the deficiencies of our education system, and its failures lock them into a lifetime of deprivation. They end up with more health problems than anyone else, and end up in retirement as the poorest people in the country. ACT policies would give disadvantaged people a new start in life.