PM John Key's full speech to the West Auckland Business Club

Prime Minister John Key. Photo / Mark Mitchell

The leadership of New Zealand schools has been overhauled, with the Government creating new roles including 'executive principals' and 'expert teachers'. Read the full transcript of Prime Minister John Key's speech to the West Auckland Business Club below.

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Good morning. I hope you all had a good Christmas break and you're starting 2014 eager and energised.

I know I am.

And I know the Government is, because there are a lot of things to get done this year.

Later in the year there'll be an election, where I'll seek the support of New Zealanders to continue the direction this country is going in.

The economy is growing. More jobs are being created. Family incomes are rising. Crime is falling. More elective surgery is being done in public hospitals. Long-term welfare dependency is falling. And we're continuing to help families and older New Zealanders with generous income support.

As a country, we can keep going in this direction and continue to make gains, or we can change direction and go backwards.

And moving forwards is the only way to ensure we achieve the long-term growth that really changes New Zealand's fortunes and provides more opportunities for Kiwi families.

I can assure you I take nothing for granted when it comes to the election.

Each and every vote will have to be earned.

We have to work hard as a government, every day, to keep earning the trust and support of New Zealanders.

It may be election year but we won't be slowing down. There is far too much to be done.

MMP guarantees that every election is a tight contest.

We've shown we can deliver strong and stable government. We work with other parties for the good of the country, even when those parties have different policies.

That's what MMP requires.

I have always been optimistic about New Zealand.

As a country we have huge potential.

And as we begin 2014, things are really picking up.

The economy will grow strongly this year.

Our economic growth is forecast to be one of the highest in the developed world in 2014.

That means wages will keep growing, more jobs will be created and living standards will improve right across the country.

And it means we are catching up to other countries.

The Government will produce a budget surplus next year, when most other countries will still be in deficit and building up debt.

At the same time we are returning money to families and businesses through hundreds of millions of dollars of ACC levy reductions.

We have a business growth agenda with hundreds of initiatives to improve the productivity and competitiveness of the economy.

These range from negotiating free trade agreements, to boosting funding for business R&D, to rolling out ultra-fast broadband.

The Government's investment in infrastructure is bearing fruit as projects get off the ground and others are completed.

A lot of work, for example, will be done this year on the Waterview Connection in Auckland, which will transform the roading network in our biggest city. And this year construction will begin on the Kapiti Expressway and Wellington's long-awaited Transmission Gully project.

This summer is the most active season ever for oil and gas exploration, with the industry spending up to $750 million. At the same time, the Government is strengthening the regulations that govern drilling, particularly in deep water.

We have a big programme of work this year to increase the number of houses being built around the country so there are more opportunities for young families to own their own home.

We are working to deliver better public services for New Zealanders _ through the Police, courts, public hospitals, schools, tertiary training, and the many other ways that people and businesses deal with government.

Our approach is to put everyday New Zealanders at the heart of everything the Government does, so we organise services around them.

We now have more Police spending more time on the front line. We've introduced a range of measures to make communities safer, support victims, and rehabilitate offenders. Recorded crime is now at its lowest level in more than 30 years, with a 17 per cent drop over the past three years.

Over 40,000 more New Zealanders will get elective surgery this year than in 2008, and they will get that surgery faster. Almost all children under six can now go to the doctor after hours for free.

We are improving industry training and rebooting apprenticeships, and we're on track to get 14,000 additional new apprentices in New Zealand.

More people than ever are getting tertiary qualifications.

We're delivering significant reforms to the welfare system, with a far greater emphasis on work.

We're making progress in the big task of cleaning up waterways, and protecting and improving water quality right across New Zealand.

And we are continuing to support Cantabrians through the aftermath of the earthquakes and the rebuilding of their city.

Household incomes have been rising faster than the cost of living, right across the board, and income inequality has been declining. Despite what our political opponents try to claim, it is simply not true that the rich are getting richer and the poor are getting poorer.

We are a very steady, centre-right government with the interests of all New Zealanders at heart.

Our approach is always to take the public with us by clearly outlining our actions and priorities, and always keeping in mind why we are in government _ to make New Zealand a better place for Kiwis and their families.

So when I look forward to 2014, I do so with confidence and with optimism.

But that doesn't mean the job's done _ in fact it's just begun.

It's vitally important that over the next few years we continue to build on the hard-won gains we are making as a country.

That includes a huge improvement in managing the country's finances.

We have made careful savings, been disciplined with spending, and run the public sector far more efficiently.

That's a lot different than the previous government, which increased spending by 50 per cent in just five years. That spending helped push mortgage rates to almost 11 per cent and crippled the internationally competitive parts of the economy.

New Zealand can't afford that approach again.

The Government will get back to running surpluses next year. At first they will be very small but they will build up over time. There might be some room for modest spending or revenue initiatives, but the top priority has to be getting our debt down.

The Government has borrowed _ on behalf of New Zealanders _ around $50 billion over six years to get the country safely through a recession, the greatest financial crisis since the 1930s, and one of the most expensive natural disasters in history.

In better economic times we have to reduce that debt.

That will lift national savings, and help keep a lid on interest rate rises as the economy heats up.

We also have to lock in the improvements we are making to New Zealand's economic settings. And we have to lock in the progress we are making in delivering better public services.

Those changes will continue to serve the country well.

New Zealand now has the opportunity to significantly improve its economic fortunes and provide a better future for New Zealand families.

We can achieve the long-term lift in economic performance that this country has aspired to for so long, providing we keep to our steady and responsible programme.

The alternative to locking in our programme of change is to go off into left field. And I really do mean left field.

I'll give you an example. If Labour and the Greens ever got in they would be the only government in the world to want less competition in their electricity market.

Less competition means higher prices. In Ontario, where they have the closest thing to Labour's electricity proposal, electricity prices have gone up more than twice as fast as in New Zealand.

On top of that, Labour wants an emissions trading scheme that would put up household energy bills by $500 a year _ just like that.

They want people to work two more years before they can retire.

They want to reintroduce national awards like we had in the seventies _ so hello strikes and goodbye productivity.

They want to put up income taxes and introduce a new tax on all productive businesses and farms in the country.

When you look at it closely, the alternative prescription from Labour and the Greens is a combination of high spending, untried economic experiments and a lack of focus on what really matters.

It would be a huge step backward when the country is so obviously moving forward.

So this year I want people to think hard about where New Zealand is going, and how to keep us on the right track.

I want people to think about who can provide strong, stable government in what is still an uncertain world.

And I want people to think about whose judgement and integrity they can trust.

I have always been very clear that the biggest influence on my judgement, and the way I think about politics, has been my upbringing.

I came from a family that didn't have much. But I was able to do well and have a successful career.

That's partly because of the beliefs instilled in me at home _ to work hard and to aim high.

But equally important was the education I received at my local primary and high schools in Christchurch, and at Canterbury University.

That education opened the world to me.

So my upbringing and schooling shaped my views quite profoundly.

I believe people are ultimately responsible for their own lives and the well-being of their families.

But I also believe the Government should do what it can to provide children and young people with opportunities to succeed and do well, no matter what their family background or life circumstances.

That's why I have personally pushed through a number of policies for young people, including better mental health services, better trades training, greater support for teen parents, and breakfasts in schools.

I visit a lot of schools around the country, because they play a huge part in shaping the lives of our young people.

And I take my hat off to the teachers and principals across New Zealand who are making a real difference in lifting achievement.

A mountain of evidence shows that the quality of teaching _ inside the classroom _ is the biggest influence on kids' achievement.

I think everyone can remember the best and most inspirational teachers they had at school. I certainly can, and they made a big difference to my education.

The evidence also shows that, after teaching quality, the second biggest influence on achievement is school leadership.

To recognise this, we've introduced the Prime Minister's education awards for, among other things, excellence in teaching and school leadership.

That excellence is part of the reason our top students do as well as the best students anywhere in the world, and we should be rightly proud of that.

But we can't be complacent.

As I've said a number of times, far too many kids do poorly at school, and that's not something to be proud of.

New Zealand stands out among other countries for the wide gap we have between our top students and our lowest-performing students.

International studies also show that we are not keeping pace with achievement in other countries, particularly in maths and science. In fact, we have been on a gradual downward slide since the early 2000s.

In 2000, for example, our 15-year-olds were ranked fourth in the OECD's study for achievement in maths, with only Hong Kong, Japan and Korea ahead of us. Now we're ranked 23rd.

Today's 15-year-olds in New Zealand are performing worse, on average, than 15-year-olds in 2000.

That's despite a lot more money being spent on education.

So that has to be a call to action for all of us.

There's no doubt we have a good education system. But it's not as good as it could be. We need to make some changes.

For some time, the Government has been looking at what international research and evidence in education tells us, what the best performing countries are doing, what teachers and principals are saying they need, and what initiatives have been working here in New Zealand.

The first thing we did was start collecting better information, through national standards, because without good information everyone is simply stumbling around in the dark.

National standards have taken time to bed in, and we're working to improve the consistency of assessments. But the information they provide has been invaluable in determining where to put resources and effort to lift achievement.

Because lifting achievement, each year and in measurable steps, is the whole point of going to school.

So what's next?

Well, if teaching practice and school leadership are the most important factors for achievement, then it's obvious we need to strengthen the teaching profession and strengthen school leadership across the 50,000 teachers and 2,500 schools in New Zealand.

There are a number of things we want to do.

We want to keep top teachers in the classroom rather than having to go into management positions, or leave teaching altogether, to progress their careers. At the moment, our best teachers work their way up the career ladder by doing less teaching, and that shouldn't be the way it works.

We want to support a culture of collaboration within and across schools. That means the really good principals and teachers spending a lot more time sharing what they know, and how they work, with other principals and other teachers.

We want the best teachers and principals to lead a step change in achievement and we are going to pay them more to get it.

So today I am announcing four new roles for principals and teachers in New Zealand schools, and investing an extra $359 million into teaching and school leadership over the next four years.

These are changes that will benefit kids across New Zealand, because high-quality teaching leads to better achievement at school.

The first new role is an Executive Principal.

Executive Principals will be the top principals from across the country.

They will provide leadership across communities of schools, supporting other principals to raise student achievement.

We envisage there will be around 250 Executive Principals, or about one for every 10 schools, on average.

An Executive Principal will remain in charge of their own school but be released for two days a week to work across a grouping of schools, which will include primary and secondary schools.

Executive Principals will have a proven track record in raising achievement and they will pass on their knowledge and expertise to other principals.

They will be appointed by an external panel, for up to four years. Executive Principals will be paid an annual allowance of $40,000 on top of their existing salary, and they will be judged on their results.

So that's the first new role.

The second is a similar sort of position, again working across a group of schools, but at the teacher level.

These teachers we are calling Expert Teachers, and we intend to establish around 1,000 of these new positions.

Expert Teachers will have a proven track record in raising the performance of their students, particularly in maths, science, technology and literacy.

Expert Teachers will be based in their usual school, but will be released for two days a week to work across their school grouping, under the guidance of their Executive Principal.

They will get alongside other teachers, working with them to develop and improve classroom practice and raise student achievement.

Executive Principals will oversee the appointment of Expert Teachers and the appointment will be for up to four years. They will be paid an annual allowance of $20,000 on top of their usual salary.

Executive Principals and Expert Teachers will drive a whole new level of collaboration between schools and between teachers, with best practice becoming widespread across school communities.

The third new role we are going to introduce is for the top teachers in schools.

We want the best teachers to be recognised for improving student achievement and to act, in a formal sense, as role models for other teachers.

So we are going to introduce a new role _ a Lead Teacher. There will be around 5,000 Lead Teacher positions across the country.

Lead Teachers will be high-performing teachers who can demonstrate the best classroom practice.

Their classrooms will be open to other teachers almost all the time, so teachers can observe and discuss classroom practice with a model professional.

Lead Teachers will be paid an annual allowance of $10,000 on top of their existing salary. That allowance is in recognition of their status and their new responsibility in helping other teachers to raise achievement.

These new roles of Expert Teachers and Lead Teachers means more good teachers will stay in a teaching role, because they can see a career path that keeps them in the classroom where they are so effective. And that has huge benefits for the children they teach.

We are going to give extra funding to schools so teachers can take time out of their normal classroom to work with Expert Teachers and Lead Teachers.

And we are also going to establish a $10 million fund for schools and teachers to develop and research effective teaching practice in areas such as writing, maths, science and digital literacy.

The final change I want to announce today is that we are also going to better match up schools that are really struggling, with really excellent principals.

To do this we are going to establish a new role of Change Principal.

Change Principals will be top principals who are paid an additional allowance of $50,000 a year to go to a struggling school and turn it around.

Around 20 Change Principals will be appointed each year, for up to five years.

At the moment, the incentive is for principals to go to larger schools, where the salary is higher, rather than to schools that are the most challenging.

We are going to change that.

So those are the four new roles we are creating _ Executive Principals, Change Principals, Expert Teachers and Lead Teachers.

With all these new roles there are details to fill in and employment implications for teachers. The next step is to sit down over the next few months with representatives of the education profession, including unions, to further develop these proposals.

That process might result in some changes to the details of the policy, but our intent is clear. We want to recognise excellent teachers and principals, keep good teachers in the classroom, and share expertise across schools and amongst teachers.

And we intend to introduce the new principal and teaching roles from next year.

We plan to spend an extra $359 million over the next four years to fund these proposals, with the full-year cost rising to more than $150 million a year by the end of that period.

That's because we are prepared to invest in long-term policies that lift achievement.

In the end, these initiatives are about kids.

High-quality teaching leads to better achievement at school _ the evidence is overwhelming.

And doing better at school has a profound impact on the lives of young New Zealanders _ economically, of course, but also in terms of their ability to participate in society and contribute to their families and communities.

As you can see, we've got plenty on, and plenty of new ideas to keep pushing the country forward.

New Zealand is heading in the right direction.

The Government's economic programme is laying the foundations for a stronger economy, sustainable jobs and higher incomes.

We are making real progress in delivering better public services for New Zealanders and getting on top of issues like crime and welfare dependency.

And as you can see today, we have big plans for education.

It's important we continue to lock in and protect the gains we've made and keep making progress.

That takes constant hard work, oversight and judgement.

It takes a team working together and all heading in the same direction.

And it takes a government that is united, focused and energised.

Ladies and gentlemen, that's what I can promise New Zealand in 2014.

Thank you.