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PRESIDENT’S ADDRESS TO CONFERENCE – SATURDAY 7 AUGUST 2004
Home ownership – a fading dream. Student debt – a nightmare. Working longer for less – who has time to sleep? What’s changed? Nothing. Governments rise and fall, but our debts keep on rising.
A newly formed economic think-tank, The New Zealand Institute - published its first study recently. Many of you will have read it, or know about it, and it will come as no surprise to any of us that the study paints a bleak picture: Ordinary people can’t afford to own their own homes.
In a well-researched article in the Matamata Chronicle, Sheryn Clothier gives us an example of a situation that too many people find themselves in. The average household income in Matamata is $33,000. If the household has no hire purchase, no student loan and no credit card debt, qualifies for a 5% deposit and takes out a 30 year mortgage, the family may afford a $95,000 house.
Unfortunately, the average house price in Matamata is $180,000. Way out of reach. And it’s a rare household that operates without credit card or hire purchase debt. It’s not the “Civil Unions Bill” that threatens the family, it is the rising tide of debt that forces both parents out to work -longer hours for less money – while their children are put into day care. And with interest rates currently on the rise, even a $95,000 house is out of reach.
In a Listener editorial, Bruce Ansley puts it better than I can, and I quote: “The so-called New Zealand way of life is increasingly foreign to a growing number. When people are broke,” he writes, “they don’t feel they belong. They can’t buy a house, start a family, join the school board. They’re out of the club.”
The New Zealand Institute’s study found that 50% of the New Zealand population, the ‘bottom half’, owns less than 3% of the nation’s wealth. It’s not just Maori who feel disenfranchised. Fifty percent of New Zealanders are out of the club.
From small town newspapers to national publications, the word is out. The New Zealand economy is on a roll. On the front cover of that same Listener the headline blares: “The Hot Economy – Are You In?” Two pages after this lead story on our booming business, an article by Susan Buckland declares that ”One in three New Zealand children is trapped in poverty.”
According to the New Zealand Institute, 10% of New Zealanders own more than 50% of the nation’s wealth. There’s certainly a boom on, but only for those who are in the club. How can ordinary households, Maori and Pakeha, reclaim an ownership stake in their country? Apart from the Democrats, what party is willing to make any real changes?
In recent polls, there has been a virtual return to the two-party system. The minor parties only offer cloned policies of Labour or National. Most have sunk below the 5% waterline, drowning in their “same-old-same-old” rhetoric. Their continued existence relies on the personality profiles of their leaders, or the hammering of populist issues that simply trade on fear. They fail to offer solutions to the real problems facing New Zealand.
The recently formed Maori Party, is strongly different from Labour on the foreshore and seabed issue, but still has the difficult task of establishing a broad policy platform. Sadly, it will very likely emerge as yet another clone of economic orthodoxy.
None of the parties currently in Parliament can see beyond the orthodox. Rigid economic thinking only allows them to tinker with existing systems, putting band aids on gaping wounds, and sticking thumbs in dikes. They continue to regurgitate tried-and-failed policies, hoping by some miracle they will turn into tried-and-true. That will never happen.
Current economic thinking is that “growing the economy is good.” And the only way to grow the economy is to have access to investment capital, - ”which can only come from savings.” If Kiwis don’t save, then “we must borrow overseas” – savings from foreigners.
When the average savings rate in New Zealand was minus two percent, Jenny Shipley’s National Government was so concerned that millions were spent on an ad campaign in television and print to urge us to save more for our retirement. How effective was that? We now save at a rate of minus nine percent. A waste of time, energy and tax payer dollars trying to convince people to save money they don’t have.
The Democrats have some solutions that will work. One of these is using a “revolving credit facility” provided by our New Zealand-owned Reserve Bank. We simply draw down sufficient funds from the Reserve Bank to build houses, roading, water supplies, sewerage systems, or what ever our communities are short of.
Conditions will apply of course. Local bodies will need voter approval, environmental protection, the availability of materials and labour and an interest rate that means capital works are paid for once…and once only.
The amount of loan money in circulation will be regulated by the repayment factor that is, the term of the loan as opposed to the interest rate factor used currently. Instead of the wealth of this country being owned by a few, it will be owned by the majority. We will see it go to wages, lower rates, home ownership, local business. We can afford free health care, free education and a Universal Basic Income that will wipe out the shameful spectre of child poverty. People will have savings - instead of debt.
More than ever before, the time is right for the Democrat phoenix to rise from the ashes! Now, how the devil can we pull this off in 2005?
The strategy committee is still in the process of formulating specific plans, but there are some important elements that should underpin the campaign. I’d like to see people talking to people … as a core part of the campaign. Market research shows that the most effective advertising is word of mouth. Listening to the real problems of real people will also be essential for word of mouth campaigning to be effective.
We’ll need to take advantage of … new technologies. Our website will be a central engine of the campaign, with all other materials and advertising inviting voters to log on and have a look. Email networks are also a new way to reach people, an instant way to respond quickly to issues. Often messages are forwarded to others, and get broadcast ever wider.
To be effective, our resources must - target markets. With 50% of the population to choose from, it might seem we can’t miss. Within that 50% there are distinct groups who would directly benefit by our policies. Families, students, beneficiaries – the list goes on.
I would like to see a snappy, upbeat advertising campaign. We will need to get away from the usual stodgy political fare, if only to stand out from the crowd of parties seeking attention.
The last aspect, and to my mind the most important, is positivity. Positivity is the general tone I’d like to see prevail within the party. Just as important, positivity is a hard-nosed marketing tool.
You’ve all heard the one about the customer in the restaurant. If she has a good experience, she will go away and tell four people. If she has a bad experience, she will tell eleven people.
Every potential voter’s contact with a Democrat must be a positive one.
--Yes, we have the people.
--Yes, we have the policies.
--and yes, we can do it.
We have a dream of a positive future, and we can only communicate that dream if we ourselves are positive.
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