Helen Clark: We need higher productivity, ... investment and skills

The Parliamentary year begins with key speeches by Prime Minister Helen Clark and Opposition Leader Don Brash. Below is an edited transcript of Helen Clark's speech:

Our policy programme balances economic and social policy.

We need a strong economy to deliver the living standards, the services, and the quality of life which the citizens of our first world country expect, deserve, and are prepared to work for.
Now it is time to move to the next level in the economic transformation agenda.

Our country needs more globally competitive firms.

We need higher productivity, business investment, and skills levels, and more innovation in the economy.

We need to remove the infrastructure constraints which hold back world class performance in Auckland, our only city of international scale, while ensuring our regions continue to thrive.

And we need to work closely with business, workers' representatives, educators, scientists, regions, and communities to lift our level of ambition about what can be achieved for our country, and lift our nation's economic performance further. In Maoridom, the Hui Taumata has pointed the way ahead.

This year the Government will be working to advance all these objectives.

The top priorities include the major review of the structure of business taxation. Proposals are being prepared for public consultation in the middle of the year. They will be aimed at encouraging business growth and productivity.

We will also be taking a fresh look at regulatory frameworks.

It has become very clear that new initiatives are needed to get faster internet access and at more competitive prices: our connection speed offerings are on average still too slow.

While recent announcements of price reductions and other changes are welcome, the Government will be addressing the relevant policy, legislative, and regulatory settings as a matter of urgency.

We will also continue to boost science and research funding; place renewed focus on export potential, leading up to the Export Year in 2007; and continue to roll out major infrastructure programmes in energy and transport.

Meeting New Zealand's Kyoto commitments and maintaining the integrity of our environment are also part of the economic transformation agenda. The old polluting ways won't do.

President Bush, in his State of the Union address this year said that the United States must end its addiction to oil. We too must be at the forefront of the new, cleaner technologies and biofuels, and of sustainable development.

Decisions were taken last year on lifting the value of spending on tertiary education and skills and cutting out the opportunities for wasteful spending on poor quality courses inherent in the old funding system. Further initiatives will be taken this year to ensure spending lines up well with New Zealand's economic and social needs.

And we will continue to give top priority to our trade policy agenda of opening up markets for New Zealand.

The second major priority area for the Government this year and this term is ensuring that families, young and old, are able to be secure and have the opportunity to reach their full potential.

April 1 this year will see: A big extension to Working for Families with 60,000 more families becoming eligible.

An increase in the rate of New Zealand Superannuation has been negotiated with New Zealand First, as part of the confidence and supply agreement, to boost senior citizens' living standards.

No interest will be payable on student loans for those staying in New Zealand.

Other initiatives coming into force include big improvements in the rates rebate scheme, extending lower doctors' fees and prescription fees through the primary health organisations to 45-64-year-olds, and further extending paid parental leave.

This year the Government will also be working to get in place the planned improvements in access to early childhood education and childcare, with the 20 hours free for three and four-year-olds due to take effect in 2007. The following year, new teacher-child ratios of 1:15 in new entrant classes are planned for introduction.

This year the legislation setting up KiwiSaver will be before Parliament. The new scheme encourages savings for retirement and for first home ownership.

The Government will also be developing policy on shared equity initiatives to help first home buyers, drawing on the United Kingdom experience.

In health, there are important targets to meet in the delivery of orthopaedic and cataract surgery, and work to be done on lifting productivity across the sector. Again the United Kingdom experience on targets and contracting may be useful.

Labour has targeted child health initiatives in its election policy across well child, hearing, and pre-school checks. We will be looking for fresh policy on child obesity - our rates are disturbing, and will deliver poor health long term to many of our people at a very high cost to the taxpayer.

This year has been designated the Year of the Veteran, and events will be held around New Zealand to honour our veterans and their service to our country.

Work will be done by the Government and New Zealand First on the development of a Seniors Card.

In the justice and security area we will begin the build-up towards the 1000 more police promised for this term.

The economic and social policy successes of the past six years have been a source of pride to many New Zealanders. Indeed it's hard to build a strong, proud nation without having economic and social success.

But there's much more New Zealanders take pride in.

We celebrate our sporting and cultural successes, our creativity and unique heritage, our cosmopolitan lifestyles and great outdoors, and our ability to live largely at peace with each other in our multicultural society.

There is an evolving New Zealand way of doing things, and a stronger New Zealand identity is emerging. It's important to develop that distinctive style, identity, and set of community values. As a government we will continue to prioritise policies which contribute to a strong sense of national identity.

New Zealand in 2006 is in many ways a work in progress. Our country is on a journey away from the old economy to a new one; improving the health, education levels, and living standards of all our people and the services which support our needs; and building a nation from an increasingly diverse population.

I look forward to the challenges and opportunities 2006 will bring, and to working with all parties supporting or involved with the Government to take New Zealand ahead.