Rt Hon John Key
2 July 2015 Speech Notes
Speech to Canterbury Employers’ Chamber of Commerce function
Good afternoon. Thank you Peter for that warm welcome and for the Chamber’s hosting of this event.
It’s good to see so many of you here today.
Can I start by acknowledging Mayor Lianne Dalziel and other local body representatives from around the region.
Just as central government has to make some tough decisions and trade-offs, so too do councils as we work together to rebuild this city.
Together, we’re making significant progress. Although, of course, there is still much to do.
I’d also like to acknowledge my ministerial colleagues Gerry Brownlee, Amy Adams and Nicky Wagner.
Gerry has provided strong leadership in overseeing what continues to be one of New Zealand’s largest and most complex undertakings.
Most recently he has been turning his mind to where we go following the expiry of the special earthquake recovery laws next April.
I’ll have some more to say about that in a few minutes.
As we’ve said before, the estimated cost of the rebuild is around $40 billion.
As a proportion of the economy, this makes it one of the most expensive natural disasters in the developed world.
So thanks to all of you here who have worked so hard since the first earthquake in September 2010.
I want to start today by talking about the economy and the significant contribution Canterbury makes to it.
A strong and growing economy allows us to provide essential public services like hospitals and schools, and support our most vulnerable families.
And a strong, growing economy supports more jobs and higher incomes.
For almost seven years now, the National-led Government has had a clear plan to build that kind of economy.
Since 2010, this plan has included considerable ongoing support for the people of Christchurch to rebuild this city.
Bill English’s seventh Budget in May set out the next steps in our plan.
It was delivered against the backdrop of solid economic growth, rising wages and more jobs.
For everyday New Zealanders, a growing economy is not about quarterly GDP numbers or whether we get back to surplus.
What really matters to families is the security provided by more jobs, higher incomes and opportunities to get ahead.
On these measures, New Zealand is making good progress.
For example, four years ago, the Treasury forecast there would be 171,000 new jobs across New Zealand by June 2015.
With three months of that forecast period still to be counted, some 194,000 new jobs have been created across the country.
So we’re 23,000 jobs ahead of forecast with three months to spare.
Almost 20 per cent of those new jobs over the past four years were created here in Canterbury.
This is down to our strong, growing economy and the confidence of New Zealand and Canterbury businesses to invest and hire more staff.
It’s just one sign that we’re heading in the right direction.
Another is the number of New Zealanders voting with their feet and either staying home or returning home from overseas.
This trend is particularly stark when we look at Trans-Tasman migration.
For the first time since 1991, the latest monthly data shows New Zealand has positive net migration from Australia. That’s quite a turnaround in just a few years.
I have no doubt it’s a vote of confidence in our economy and in our economic direction.
We’re making good progress, but our job is not done.
The Government is focused and energised. We have a busy work programme for the next few years to lock in our hard-won gains.
We need to continue encouraging investment and lifting our competitiveness.
That’s the best way to create new jobs and increase incomes.
And we cannot ignore a number of global risks.
They include falling dairy prices and little or slowing growth among some of our trading partners – including China.
As events in Greece this week show, economic problems in one country can quite quickly spill over into financial markets around the world.
New Zealand is not immune to these risks.
So the Government is focused firmly on increasing our resilience and building a strong platform for growth into the future.
We have a track record of providing New Zealanders with a steady and supportive hand during challenging times.
Moving forward, we’re backing New Zealanders with a responsible plan.
In particular, we have four main priorities:
• First - responsibly managing the Government’s finances, so your taxes are spent wisely on the services New Zealanders need.
• Second - building a more productive and competitive economy to support more jobs, raise incomes and build opportunities for Kiwi families.
• Third - delivering better public services so that schools better educate our young people, so our communities are safer and so families get the healthcare they need.
• And our final priority is continuing to support the rebuilding of Christchurch, so people here in Canterbury can fully enjoy life in this city.
Budget 2015 built on these priorities in a number of ways.
We provided considerable extra work incentives and support for the lowest-income families in New Zealand.
At the same time, we continued to control government spending and demand better results from that spending.
We allowed for further significant ACC levy reductions.
We strengthened tax rules on property investment.
We provided extra support for business R&D, science and innovation – alongside significant ongoing investment in roads and ultra-fast broadband.
We supported health and education with an extra investment of $2.4 billion over the next four years.
And we’ve provided a further $1 billion for the Canterbury rebuild, cementing the Government’s ongoing commitment to the recovery effort.
This takes the Government’s total contribution to the rebuild since 2010 to $16.5 billion.
Put all of this together, and this is a plan that’s working for New Zealand and New Zealanders.
As I mentioned, Canterbury continues to make a significant contribution to our growing economy.
This region remains one of the country’s top performers, having posted 16 consecutive quarters of economic growth.
Canterbury contributes just over 13 per cent of New Zealand’s total GDP.
Its unemployment rate is the lowest in New Zealand at just 3.1 per cent.
Nearly 30,000 extra jobs have been created in the region over the last two years.
And the population of Greater Christchurch has now recovered to above where it was before the 2010 earthquake.
So the Crusaders might not have made the Super 15 playoffs this year. But Canterbury’s economy is certainly on a winning run.
As I’ve said, supporting Christchurch is one of the Government’s four main priorities.
Since the first earthquake in September 2010, we’ve backed Cantabrians in the initial response and now in the recovery and rebuild.
Working together, we’re making real progress.
While we would all like to see some things happen a bit faster, central and local government is investing tens of billions of dollars on behalf of taxpayers and ratepayers.
So we owe it to them to make considered decisions and to execute them well.
And let’s remember: this is a large and hugely complex undertaking.
Each time I return to Christchurch, I’m heartened by the progress I see across the city.
In recent months, I’ve had the privilege of opening a number of new facilities in and around the city.
They include Foodstuffs’ new South Island distribution centre, the Christchurch Polytech Institute of Technology, Tait Communications’ global headquarters and Plunket’s new Canterbury regional office.
And I turned the first sod for the new Russley Road interchange, which is part of a massive investment in upgrading the city’s roads.
Many more projects have been completed or are underway.
They are a tribute to everyone involved.
The scale of the anchor projects in central Christchurch is impressive.
The first stage of the Bus Interchange opened in late May and it’s making it easier for people to get around the city.
I’m looking forward to returning to the Justice and Emergency Precinct this afternoon and meeting some of the people who will work there.
The Precinct is well advanced and is on track to be completed late next year.
Christchurch has a reputation for embracing innovation and new technology. It’s good to see the Innovation Precinct becoming a popular address for innovative firms in this city.
A number of new and emerging businesses will be located in the GreenHouse hub within the precinct.
They will sit alongside the precinct’s anchor tenants Vodafone, Kathmandu and Wynyard Group, as well as Callaghan Innovation, New Zealand Trade and Enterprise and the ICT Graduate School.
Planning is also underway on two other landmark projects – the Convention Centre and the Metro Sports Facility.
There has been plenty of local debate about these projects.
But let me be clear: The Government is committed to delivering both of these facilities for the people of Christchurch.
Both are considerable investments.
So it’s essential that we all carefully consider design options and invest the substantial sums of money required wisely.
From the Government’s point of view, we’re committed to working with the council and other stakeholders to find solutions that work for both taxpayers and ratepayers.
That’s the approach we’ve taken with all investments in Christchurch.
When we’ve worked through that process, we look forward to providing an update in the coming months on the way forward for both the Convention Centre and the Sports facility.
As you will know, the Canterbury Earthquake Recovery Act and its associated powers expire in April next year.
The Government has two priorities as we move through this phase.
We will continue to support the people of Canterbury and honour our commitments to successfully complete the regeneration of the city.
At the same time, we will work closely with councils and other local stakeholders to progressively pass governance and management of the rebuild to the Canterbury community.
Meeting these objectives requires a careful balance.
So today I want to set out our proposed approach to these transition arrangements.
And I’ll give you some details about an exciting new residential precinct planned for the central city.
Earlier this year Gerry Brownlee established an Advisory Board, chaired by Dame Jenny Shipley, to provide advice on the transition plan.
I thank Dame Jenny and Board members for their thoughtful report, which we’re making public today.
It calls for a demonstrable step-change in local leadership and institutional performance over the next three to five years, as we move to the next stage of regeneration in Christchurch.
The report notes that ongoing central government support will be needed.
And it says we need to do more to give the private sector confidence to invest in central city developments.
After considering the Board’s recommendations and discussing options with the Council, the Cabinet this week agreed in principle to several aspects of the transition arrangements.
First, we will introduce new legislation later this year to replace the Canterbury Earthquake Recovery Act.
It will be called the Greater Christchurch Regeneration Bill.
We envisage the most directive powers under the current legislation will either expire or be amended to provide explicit roles for councils and, in certain cases, Ngai Tahu.
The new legislation will apply to a much smaller area and some core provisions will be updated. It will expire in five years.
There will be an opportunity for further engagement with strategic partners, including the City Council.
And there will be an opportunity for public feedback, including through Parliament’s select committee process.
We will work to pass the new legislation by March, in time for it to take effect in April.
The second part of the transition relates to winding up the Canterbury Earthquake Recovery Authority.
By next April, most of CERA’s functions will either end or be transferred to other government agencies.
A small set of key ongoing roles will be moved into a business unit within the Department of Prime Minister and Cabinet.
This will ensure the Government maintains effective oversight of Christchurch recovery issues.
So the Department of Prime Minister and Cabinet will provide overall coordination, monitoring and advice on future use of the red zone.
The Ministry of Business, Innovation and Employment will lead the residential rebuild, procurement and oversight of the public sector rebuild.
The Ministry of Health and Land Information New Zealand will pick up other operational functions.
The Advisory Board noted the recovery of the central city is at a critical point and requires a step-change in approach.
The Government agrees.
We also agree with the Board that the anchor projects and precincts must be completed in a timely and effective manner – and with greater commercial discipline.
So the third aspect of the transition is setting up a new entity, which we propose to call Regenerate Christchurch.
The Earthquake Recovery Minister will work closely with the Mayor, the City Council and officials on how this new organisation will operate.
We expect it will work along the lines of an urban development authority.
It will deliver on both the Government’s and City Council’s objectives for the central city.
We will work together to establish its objectives, functions, funding and powers – along with the appointment of a board.
This will involve looking at a possible integration with Development Christchurch – the Council’s new development authority.
Following this consultation, the Minister will report back to Cabinet by the end of August with more detailed proposals.
Over the next few years, responsibility for regenerating the central city will transfer progressively to the City Council.
It’s in line with the Advisory Board’s view that central government should continue to be aligned closely with the City Council to ensure that regeneration of the central city is successful.
The final aspect of the transition arrangements will be the Minister’s notification and release today of the draft Transition Recovery Plan prepared by CERA.
There will be around one month for public comments and submissions.
CERA is issuing details of these transition proposals this afternoon and the Minister will consider a final plan later this year.
Taken together, I believe these proposals will allow the Government to continue working constructively with the City Council and others in Christchurch on the next stages of the rebuild.
As Prime Minister, I’m committed to ensuring that happens.
Looking forward, it’s also important that people are attracted back into central Christchurch to live and work.
I was not surprised to learn that the number of people living in the central city fell by more than a third between the 2006 and 2013 census counts.
The strong message from major developers and business owners is that a successful residential precinct is essential for further investment in retail and other projects.
It’s hard to argue with them.
So today I can also confirm that Fletcher Residential has been selected as the Government’s preferred development partner for a new $800 million residential precinct in central Christchurch.
The East and North Frame Residential Precinct will provide around 940 new townhouses and apartments to accommodate up to 2,200 residents.
And there will be space for small-scale commercial activities to support the residential community.
For its part, the Government will sell seven hectares of land between Manchester and Madras Streets, from the river down to Lichfield Street, along with a small block in the North Frame.
Fletchers will progressively purchase blocks of land as the residential development is constructed and sold.
Construction will be spread over eight or nine years, and we expect the first homes to be completed within 18 months of a development agreement being signed.
We anticipate that will happen by the end of November this year.
Fletchers will be responsible for designing, building and selling the completed development, subject to minimum requirements agreed with the Government.
The townhouses and apartments are likely to be priced at between $400,000 and $900,000, but this will be for Fletchers to determine.
When finished, the new precinct is expected to increase the inner city population by around 45 per cent.
In turn, it will support the Government’s investment in other anchor projects and further stimulate private sector development.
So looking ahead, I’m really confident about the future of Christchurch and the next stages of its rejuvenation.
I understand that many of you are frustrated that some things are not happening as fast as you would like.
However, I’m confident the changes I’ve announced today will help speed things up.
From the Government’s perspective, there is no question about our ongoing commitment to the people and communities of this city and this region.
We’re committed to continue working constructively with local councils, the business community and other groups to ensure we all get the best outcome possible.
New Zealand needs Christchurch and Canterbury to be doing well.
I hope the announcements I’ve made today will provide further certainty about how we can ensure that happens.
The Draft Transitional Plan can be downloaded here
Main proposals are as follows:
• Proposal – Responsibility for regeneration functions carried out by CERA will transfer to a new entity, possibly named Regenerate Christchurch, which would be jointly developed and designed with Christchurch City Council.
• Proposal – Overall leadership and coordination of the recovery will be the responsibility of local institutions, primarily local authorities and Te Rūnanga o Ngāi Tahu.
• Proposal – Support for community-led recovery activities that focus on community resilience will be the responsibility of local authorities (Christchurch City Council, Waimakariri District Council and Selwyn District Council) for their respective communities.
• New arrangements – CERA’s residential rebuild work will transfer to the Ministry of Business, Innovation and Employment.
• New arrangements – CERA’s responsibility for demolitions and clearances will transfer to Land Information New Zealand.
• New arrangements – The Ministry of Business, Innovation and Employment will lead work on monitoring procurement of the public sector rebuild.