So what do we do for this group as a matter of social policy?

At the moment, what we are not doing is the more important question. We are not even admitting they exist - and that seems to me to be a catastrophic lack of moral or even practical purpose.

Perhaps because the group is largely Polynesian and Maori we haven't dared confront the issue. We comfortable New Zealanders have this sense, as in a dream, of something chasing us, gaining on us, and we daren't look behind to see what it is.

When being chased in a dream I am advised that you should stop, turn around and face whatever is chasing you. You ask it to do small service and all the fear goes out of the situation. So it is in life. The first point of action is to stop and confront the problem.

Thus:

The incentives are all wrong. And while exceptional individuals may rise above the system, people will generally behave as the incentives drive them.

And let us embrace the fact that the DPB is the worst job creation scheme in the world.

Thirty years ago the illegitimacy rate was negligible (six percent for Maori, to be precise). This year the figure is seventy-eight percent. It is not widely known these days that eight out ten Maori babies are born out of marriage. The Statistics Department says it's a Maori cultural thing.

We all know this is not true. The reason is not cultural but economic. Maori girls leave school poorly equipped for the workplace. They lack confidence. Their school has not given them any skills that people want to pay for. The girls feel rejected, unwanted by the working world. They can't find a place in society or a role to play. So they get pregnant. They find the state a far better provider than their equally poorly skilled classmates. So they don't get married.

Many of these girls having children are hardly more than children themselves. And the problem is compounding. Children born to a solo mother are three times more likely to be solo parents themselves.

And the results are - crime, unemployment, poverty, drug abuse, violence, and mental illness. Maori are all over-represented in these categories and children from solo parent families are extraordinarily vulnerable to suffer these effects.

If money solves these problems New Zealand would be the safest and most successful country in the world. We've spent $171 billion on social welfare in the last twenty-five years and yet crime, violence, and poverty are all increasing.

I believe that the state has actually given up. Tired old parties and tired old politicians repeat themselves - and repeat their mistakes. I believe the reason they are continuing to pour money into social welfare is either because they can't be bothered to think about it or because they're ashamed that all their efforts have made things worse. Now Maori have more dysfunctional families than at any time in our history.

And the glaring fact about these dysfunctional families is not that they are Maori. It is how often they are solo parent families, with pathetically young mothers, hardly grown-up enough to look after themselves.

That is why the DPB for teenagers should be abolished. I am not saying we should do this retroactively. We can't leave young girls whom we have trapped in dependence in even worse circumstances.

Neither will we wash our hands of responsibility for unwanted pregnancy in teenage girls from extraordinary circumstances - rape, incest or suchlike.

But what we have to do is stop enticing more young girls or ever-younger girls into the same hopeless predicament. In practical terms we should say that in one year's time no young teenager getting pregnant would be eligible for the DPB. But those who already have the DPB get to keep it.

That's phasing out this damaging, demoralising, dangerous policy that has been the cause of so many problems in Maori people.

Now there may be parents out there who don't mind if their teenage daughter has a baby. In that case I totally support their right to arrange their family affairs as they want - but it is a private matter. If they want early grandchildren then they can support their child and their grandchild.

It is not a matter for the state.

They should take their child and grandchild back into their whanau - support and cherish and nurture them both.

But don't let the state do it - because the state doesn't care."

The second big issue New Zealand has to face is the question of retirement. How do we fund health and pensions 20 years from now?

Rather I want to show why it is:

• a problem

• how we can solve it

• how in solving it we can largely solve the problem I have already spoken about (welfare and its consequences).

Last week I was in Australia and this article appeared in the Financial Review:

Let me quote what Treasurer Peter Costello had to say: "Demography is destiny" as he warned that taxes would have to rise by up to 40% unless the economy grew more quickly to generate the income needed to fund the ageing population"

Australia have a problem and obviously so do we because our growth rate over time has been more inferior to theirs, our income less, and our pensions in relative terms, more generous.

Australia's projected increase in spending on age pensions to 2050 is 2% of GDP, New Zealand 6%. Their taxes could go up by 40%. New Zealand's, you guess.

Last weekend's Sunday Star highlighted New Zealand's problems under the heading:

"Frugal future: higher taxes, later retirement and lower pensions."

Included in The Periodic Report Group's 2003 report to Finance Minister Cullen had this to say:

"Healthcare costs will almost double to $13 billion, a jump from 6.3% of GDP to 11.1" and increase of 5%.

Add to this the fact that the cost of pensions will rise by 6% and you have a major problem.

What is ACT's response to this problem?

Currently, simply to sit on the fence. We used to have a policy called Compulsory Savings for everyone.

What happened to that policy? Our finance spokesperson Rodney Hide decided he could no longer support such an approach. In this view he was support by Ken Shirley with Richard sitting somewhere in the middle of two clear factions within caucus.

Rodney, and I quote him from last week's Sunday Star, seems to believe:

"A change to the pensions politicians receive might produce action"

Is this really where ACT's values stand today?

We need to get off the fence and decide once and for all - do we favour immediate tax cuts or a super policy which would lead to even lower taxes over time?

Both approaches have advantages, but for my part I favour the superannuation approach because I believe it would go a long way to solving the social crisis we face in New Zealand. It would also differentiate ACT from all the other political parties in New Zealand. We would clearly have our own niche in the political spectrum, and we need it badly.

Both can be made to easily fit within our "liberal vision".

Page 1   Page 2   Page 3   Page 4