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Dr Nick Smith Nelson MP

23rd Annual Rotary Speech 24 January 2018

“Unfinished Business”

Election 2017 was a mixed blessing. I was delighted to be re-elected as Nelson’s MP. This community is a jewel and I feel enormously privileged to have the ongoing responsibility to champion its cause in Parliament.

But the election was also a disappointment. National secured more votes than it did in 2008, 2011 and 2014 and at 44.5% only half a per cent less than when first elected in 2008. It was an extraordinary election campaign and an unusual outcome.

The rollercoaster ride began with Meteria Tūrei’s extraordinary benefit fraud admission that initially saw Green’ support soar at Labour’s expense triggering a leadership change in Labour, then Meteria’s story unravelled and support surged back to Labour. It has been described by some commentators as a change of government by accident.

I am disappointed for New Zealand and Nelson because of the confidence I had in National’s programme but I am also philosophical about the loss. 

A healthy democracy needs changes of government although from National’s perspective not too often and not for too long. I also think it is exciting for a young woman to be Prime Minister and a mother to be. It continues New Zealand’s tradition of breaking down barriers to women’s role in society from when we were the first country to ensure women could vote and our first woman Prime Minister Jenny Shipley.

Many people have commented to me on the unusual outcome of the election with the largest party not being in Government. The new Government is quite legitimate, as the test is holding the confidence of the Parliament which Labour, NZ First and  the Greens have, but it is an unusual arrangement.

The big question on everybody’s minds is how stable the new government will be. It is unchartered waters and no one knows for sure. I give three perspectives.

Firstly, from a historic and international perspective, the prospects are not good. New Zealand following the 1911 and 1928 elections had the equivalent situation where the largest party in Parliament did not become the Government, but both failed and changed mid term.

Amongst the dozens of countries that have proportionate systems, there is the odd example of a Government being formed by a coalition of parties against a party winning such a high vote, but few survived a further election.  History tells us it is not a recipe for a long term stable government.

Secondly, a real problem for the new Government is the contradictory mandates the three parties have been elected on. On economic policy Labour and the Greens have advocated more tax while NZ First has promoted less. On welfare policy, NZ First has advocated work for the dole and tougher sanctions, while Labour and the Greens want sanctions softened. Labour and the Greens have advocated a more sympathetic foreign policy to Palestine where NZ First has been pro-Israel. 

Labour and the Greens criticized my new water standards as too soft whereas NZ First courted the farming vote saying they were too strict. The Greens promised reduced defence expenditure where NZ First argued for more. On Treaty and Māori issues, Labour and the Greens want Government policy to go further than under National, whereas NZ First wants to pull back. 

The tensions of this new Government’s muddled mandate will test its stability.

The third factor, though in their favour, is the strong economy and Government finances. The hardest part of Government is the difficult choices about what to fund and what not.  The Government has large surpluses so there are choices on what new services to fund – a far easier and more popular position than choosing what services to reduce or whom to tax more.

It is my view that this Government will go full term. The first year will be easy as there is loads of money to burn. Anything wrong can be hung on the previous government. The cracks will appear in years two and three as the differing policy positions have to be resolved and the three parties seek to reposition themselves for 2020.

There are two particular areas where I will be closely scrutinizing the Government’s record.

Housing was very challenging over recent years. My first problem was addressing the Christchurch earthquake aftermath where the loss of over 12,000 homes saw rents and house prices rise sharply. The second problem was the surge in population, particularly in Auckland, in response to New Zealand’s economic success and the inherent housing pressures this caused.

We had a very active reform programme making significant changes to policies like tax, accommodation supplements, social housing, building regulations, bank lending rules, and growing supply.

We freed up land supply, with initiatives like rewriting Auckland and Christchurch City plans, created Special Housing Areas, trebled the number of building apprenticeships, made significant changes to the Resource Management and Building Acts and helped Council’s fund housing infrastructure. 

The result was growing the annual house build rate from 13,000 a year to over 31,000. The number of houses being built grew every year I was Minister by an average of 18%. I am doubtful it can be grown faster than this.

The policy was not only successful in getting more houses built but also in calming excessive house price inflation. 

I am particularly proud of the Kiwisaver Homestart scheme that we launched in 2014 to help first home buyers. We have helped 35,000 get into their first home, including a 1,000 people in Nelson and Tasman, and enabled access to over a billion dollars towards their deposit.

The test of the new Government’s housing policy will be whether it can grow the new home build rate faster than we achieved and deliver the promised 10,000 more per year than those already in the pipeline.

The second area of scrutiny I will be focused on is forestry.

The Speech from the Throne stated “This Government is committed to a new planting programme, planting 100 million trees a year to reach a billion more trees in 10 years.” That’s 300,000 trees a day.

They have also stated they will re-establish the New Zealand Forestry Service, an agency abolished by Labour in 1987 that used to employ over 7,000 staff in regional New Zealand.

The commitment is already in trouble.

Whereas in November they said a new planting programme of 100 million trees a year, and that it would create a billion more trees in 10 years they are now wanting to claim the existing 50 million trees planted each year for restocking.

Last Friday, Forestry Minister Shane Jones admitted total planting this year would not be much different to that achieved last year due to difficulty acquiring land and seedlings. And re-establishing the New Zealand Forestry Service is now looking like just rebranding and relocating the existing MPI forestry staff of about 60.

The problem for the new Government with their promise of 100,000 homes and a billion more trees is that they just pulled some big numbers out of thin air without doing any of the detailed work on what was achievable. My pick is that the Government will fail on both.

We are also in unchartered waters for National. Our Parliament has never had an opposition of 56 MPs. Our policies are not discredited given substantially more people voted for our programme than any other. Nor was the election a generational change given the average age of Bill English’s Cabinet was 51, little different to the new Coalition cabinet of 50. The number of women in Cabinet is also unchanged.

Nor does National face the classical leadership issues of a party after nine years in Government.  We went through a smooth leadership transition only 12 months ago and Bill more than proved his worth as Leader through the 2017 campaign.

There is a strong precedent in National’s history for a previous Deputy, who served briefly as PM, going on to become a long term Prime Minister.

Keith Holyoake, lost as PM in 1957 shortly after taking over from Syd Holland at a similar age to Bill but went on to be a very successful PM in 1960. 

There is an irony in our first few months in Opposition in that National is more optimistic and positive about the prospects of our country than the Government. 

Winston Peters in his decision to go with Labour and the Greens, talked of impending economic gloom. Inevitably, there will be a downturn at some stage – even a broken clock is right twice a day. The truth is that no Government in New Zealand history has inherited an economy in such good form.  Whether it be growth, employment, the Government’s surpluses, debt, terms of trade, inflation or export growth, New Zealand has rarely had so many indicators pointing in the right direction.

National will not oppose for the sake of opposing, but will dig in hard on Government policies that will put New Zealand’s hard work of the last decade at risk.

I have spoken of my optimism for New Zealand. I am even more optimistic about Nelson’s prospects.

We are an exporting region whose prospects depend on the four key sectors of horticulture, fishing, forestry and tourism. All are performing well.

This success is flowing into other sectors with record high building and retail activity. Our unemployment rate at just 2.2% is the lowest in New Zealand and amongst the lowest in the world. Nelson ranked number one and Tasman number two out of 16 regions in three of the last four quarterly reports on economic performance.

My optimism is not just on the economic front. This year Nelson will host the Black Caps, the Silver Ferns and the All Blacks. This has never happened before. We are footing it as a successful venue for New Zealand’s top sports and our teams like the Mako, Nelson United and Giants are well positioned in their national competitions.

There are six important projects coming to fruition this year of which our community and councils should be proud.

 The first is the opening in February of our new cycling velodrome. This is the next chapter in the Saxton development that I have vigorously supported since standing in that field plotting a new regional sports complex with previous Mayors Peter Malone and Kerry Marshall nearly 30 years ago. Credit for this next stage goes to our two councils and Nelson’s cycling community.

I am also looking forward to the completion of the Nelson Council’s new Greenmeadows Centre due for opening in March. This new $6 million community facility recognises the growth in Stoke and is the first new civic facility in this area for decades. 

I am also excited about the completion of the upgrade and strengthening of the Nelson School of Music due for reopening in April. This project is a combined effort from the School itself, our two Councils, Government and the Rata Foundation. I set out an ambition 15 years ago in an earlier Rotary speech for Nelson to upgrade its three iconic and historic arts facilities – the Theatre Royal, the Suter and the School of Music and it will be wonderful to see this work complete.

A fourth crucial project for Nelson this year is the airport upgrade where the frames of the new terminal are just being erected. The new terminal will be opening in August albeit the whole project will take until 2019 to complete.

It is a brilliant design which will cope far better with the million plus passengers a year coming through our region, but also makes a statement to visitors on arrival of the sort of place and people we are.

I am also very excited about progress in restoring nature locally this year.

You may recall my 2014 Rotary speech launching the Battle for the Birds and the huge expansion in pest control operations in the Kahurangi National Park. A product of this work is that in September this year DOC will be re-introducing Takahe into the Gouland Downs and we will be the only place in the world where visitors can conveniently enjoy this stunning bird.

The Brook Waimarama Sanctuary, having successfully completed the fence in 2016 and the controversial pest control operation in 2017 can now look forward to re-introducing species back to Nelson like the kaka and kiwi.

The last initiative I’m hugely positive about for Nelson this year is the work and effort going into Nelson’s new hospice. This ambitious project reinforces Nelson’s character as a place that cares for its most vulnerable and will provide a far better facility for the patients, the nurses and volunteers that support this service. We need to continue to drive our community fundraising to see this project through to opening in October.

These half dozen projects show Nelson not only has a humming economy, but is investing in the sporting, cultural, environmental and community infrastructure to improve our quality of life.

The question is, what next?

The first is in respect of water.

Just as for New Zealand, water is a key part of Nelson’s natural environment and to our economy’s competitive advantage. Let me emphasise just how blessed New Zealand is with our fresh water resources. We have 145 million litres per person per year, the highest in the world with the exception of Iceland.

The reason we are so good at producing products like milk, meat and fruit is that each kilogram of these products requires hundreds of litres of water. However, we actually only use about 2% of the resource.

Our region is exceptionally blessed with both the quality and quantity of fresh water. Only the West Coast scores better.

We should be cautious of claiming this as a sign of better water management. It reflects our natural environment of a large area, much with a high rainfall, low population and large chunks of the Nelson region being in National Parks.  

We do though still have water issues and if we are serious about securing our economic and environmental future, we need to get on and address them.

The problem is that while everybody agrees on the need to clean up our rivers, few are prepared to take the hard decisions that will actually deliver.

Nelson’s biggest river quality problem is the Waimea.

Most summers, the flow is so low that we get nasty algal blooms. They stifle aquatic life, kill dogs and make the river unusable for recreation.

The National Policy requirements I introduced in 2011 put a legal obligation on Councils to lift the minimum flows so as to avoid these sort of algae problems and restore the ecological health of our rivers.

This can be achieved by either slashing water permits across the Waimea Catchment or building the Waimea Community Dam.

The implications of just cutting everybody’s water takes, urban and rural, are huge. It would mean hundreds of millions less for Nelson and New Zealand in horticultural exports.

It would put thousands of Nelson people out of work. It would also compromise our capacity to build more housing.

The work on the Waimea Community Dam has spanned more than a decade and I have worked hard to maximise the government support.

Our Government committed $1 million to investigation, $7 million as a grant, $10 million in an interest free loan to the Council and a further $22 million in a concessionary loan to Waimea Irrigators, a total of $40 million of the project cost.

The new Government has said it will honour these commitments, but is ending support for irrigation infrastructure.

My challenge this year is to persuade the Tasman and Nelson Councils to see this project through.

The biggest argument over the dam is not over its need, but how the cost is spread.

There is no perfect answer to this but the current model developed by the Tasman Council has everyone stretched and about equally grumpy.  I think it is as fair as any shared project can be.

Let me address three common questions.

Why not just have everyone build home storm water storage tanks? 

The answer is that it is much more expensive. Water storage is an area where size does matter.

The Waimea Community Dam is costing about $5 per cubic metre for storage – typical home storage tanks cost over $250 per cubic metre or fifty times as much.

Secondly I am asked why Nelson rate payers should contribute to which there are three good reasons.

Firstly, Nelson secures part of its town water supply from the Roding that feeds into the Waimea. It must either reduce its take or contribute towards the storage to solve the minimum flow problem.

Secondly, over a thousand Nelson city south residents and businesses get their water from the Tasman District Council supplies from the Waimea.

The third reason is we need to take a regional perspective.

The TDC contributes to important regional facilities in Nelson like the Suter Art Gallery, School of Music and Saxton facilities. The benefits will actually be greater for Nelson City ratepayers than those contributing from Golden Bay or Motueka. 

The third question is why are taxpayers and ratepayers contributing to the dam?

The biggest benefit is environmental in lifting the minimum flows in the Waimea River by five-fold. It is not reasonable that the cost of this falls on orchardists. It is a community good.

I am full of praise for the careful, systematic and robust process the TDC has run in getting this project this far forward and 2018 will be a great year if they can strap down the finances and get construction underway. I will be doing all I can to support them.

This brings me to the second key issue for our region, of transport. The strong growth in population, tourism and exports is putting our roading infrastructure under pressure with increased congestion and fatal accidents.

Anybody who has tried getting along SH 6 around Rocks Road this month would have noticed the deterioration from last January. There have been many days when traffic is stalled to a crawl from Haven Road to Tahunanui.

Today NZTA announced six months of road works on Rocks and Haven Roads with traffic periodically reduced to a single lane and the agency recommending traffic use Waimea Road.

This just highlights the need for increased capacity, Roads always need repair and with no free board in the system, such works will cause huge delays and frustration for Nelson motorists.

The problem for Nelson’s transport issues under the new Coalition Government is that Labour, the Greens and NZ First agree on what they are against, but not on what they are for.

National had a definitive policy of investing the $135 million in Nelson’s Southern Link and beginning construction in this term of Parliament. Opposition parties were vague and disjointed.

To recite their stated positions.

The Labour candidate told the Nelson Transport election forum next door at the Boat House that they accepted Nelson had a congestion problem but opposed the link and wanted a committee formed to investigate alternatives.

These included   

  • Increased public transport
  • A tunnel through the Port Hills
  • A land port in Richmond with barging to Port Nelson
  • The three laning of Rocks and Waimea Roads.

At the Nelson Greypower meeting, Jacinda Adern recommitted Labour to further investigations

The Green Party’s position announced by co-leader James Shaw in Nelson was not only to oppose the Southern Link but promise a $23 million 3 metre wide walkway and cycleway on the seaward side of Rocks Road.

This is typical of the Greens impracticality. You cannot safely accommodate such a pathway alongside 3,000 trucks and 14,000 cars a day in this space. I am all for a walking and cycling boulevard along Rocks Road, but you have to address the question of where to accommodate the state highway freight and vehicles.

NZ First policy was also to oppose the road. They also want to double the size of New Zealand’s forests but have given no thought as to how to get the forest products to port.  Their solution was that the Government should take the lead on local transport solutions from locally elected mayors and councils. This is ironic when our local Mayor and the majority of our Council were elected on a clear mandate of progressing the Link. Consistency of policy has never been NZ First’s strength.

Nobody is clear on which of these three differing policies is now Government policy.

The three parties choose to play a short term game of exploiting localised opposition to the Southern Link but without a credible alternative. This will not cut the mustard in Government nor for them long term politically in Nelson.

All the projections show increased population, increased freight volumes and increased traffic. Our current problems are only going to get worse.

The new Government needs to clearly state its transport plans for Nelson. I have no fear of them investigating the four options mentioned in the campaign.  

The Council has tried expanding bus services but has recently pulled back through a lack of patronage. Buses will always be part of the solution but they are as affected by inadequate roading infrastructure and congestion as much as any other road user.

The tunnel option is prohibitively expensive.

The Richmond land port option with barging to Port Nelson ignores the impracticality of double handling freight.

Adding new lanes onto Waimea and Rocks Roads would be even more damaging to local communities and the environment than the Southern Link and provides only a temporary solution.       

Giving space to do this work is not giving up on my advocacy for the Southern Link.

The advantage of having these options further investigated is that it will enable them to be eliminated as unviable rather than being dangled in front of the community as some sort of easy alternative solution.  

Opponents of the Southern Link also need to stop using out of date air quality data. It is true that in the early 2000s the Victory area had appalling air quality with it breaching standards over 80 times a year. This problem has been resolved with the data now showing exceedances down to only one a year. The air quality impacts of roading has been hugely curtailed by the tough new standards I helped put in place for petrol, diesel and vehicle exhaust systems that reduce the amount of pollution from vehicles by 90%. The growth in electric vehicles will also help. Air quality is no longer a valid reason for blocking the Southern Link.   

I appreciate the frustration of Southern Link supporters following the change of Government. For the last decade they had a supportive Government, but a majority of Council in opposition. We elect a Council strongly in favour in 2016, get a commitment from National to proceed in 2017 and then the Government switches. I have every confidence the forces of local and central Government will align in time simply because the problem is not going away.

NZTA has concluded that the Link is the right answer long term but not until 15 years’ time in 2033. So the debate with Wellington officials is not if, but when.

I am proud of National’s track record in getting the Stoke Bypass built in 2002 and the Ruby Bay Bypass in 2012.

Our record nationally over the last decade is of a party that has invested heavily in transport infrastructure with billions of dollars going to projects in Auckland, Hamilton, Tauranga, Kapiti, Wellington Kaikōura and Christchurch.

Transmission Gully in Wellington is a good example of a project NZTA had out in the never never but which National brought forward and is now being built. We are the infrastructure party and Nelson’s best hope for the Southern Link.

I intend continuing to play this issue with a straight bat, giving the new Government a fair go but focussed on Nelson’s long term needs.

I will be holding the Government to account to deliver on its commitment to investigate the alternatives. I will be submitting and encouraging others to do likewise on the Nelson draft Regional Land Transport Plan continuing to promote the Southern Link. I will continue my work with organisations like the AA, Road Transport Association, Progress Nelson, Chamber, EDA and local communities on advocating why it is the only credible way forward. 

The fundamental question the new Government must answer and answer soon, is this.

$100 million is taken in petrol taxes and road user charges each year from Nelson and Tasman. Our vehicle fleet in my time as MP from 1990 has grown from 50,000 to 100,000 and is expected to grow by over 3,000 vehicles a year for these next three years to 110,000.

What significant new investments will they be making in our roading network over the next three years to match this growth? If the answer is none, they should be honest and say so.  

The third significant issue I want to highlight are opportunities with our fishing industry.

We are home to New Zealand’s largest fishing fleet and thousands of jobs rest on its continued success. The decision of Sealords to procure a new vessel with an additional 200 jobs due for commissioning in April is a product of our Government’s steps requiring a New Zealandisation of the fleet.

We need to realise this full potential of our wild fishery, but also recognise the greatest opportunities in future lie in farmed fish.

I am tremendously proud of the contribution King Salmon makes to the Nelson and Marlborough economies. Not only does this company employ over 300 people, but they help build our brand as a region that produces fine foods as well as fine wines.

Aquaculture is a rapidly evolving industry and there is now more farmed fish consumed in the world than wild fish.

The problem for King Salmon is that the farms they operate in the Sounds are now known not to be ideally located. The best locations are sites with deep, cold, high flows of ocean water.

Our Government pragmatically provided for a special process for enabling King Salmon to shift a number of farms in the Sounds to better localities.

No more areas of fish cages was to be allowed, but the outcome was better locations with a lower impact and far greater production.

A positive outcome would result in increased production worth over $50 million a year to the local economy and hundreds more jobs.

An independent Panel heard submissions on the farm switch proposal last year, and a decision is now awaited from the Minister of Fisheries. It is crucial for the future of aquaculture that the Minister backs this proposal.

I will also be looking for other opportunities to expand Nelson’s aquaculture industries. The work being done on alternative species at Cawthron and Plant and Food is tremendously exciting. We have new space finally becoming available in Golden Bay and Tasman Bays after 20 years of legal argument.          

The last issue I want to put on Nelson’s agenda is the required major upgrade of our Hospital.

My speech to Rotary last year was focussed on the new national laws and regulations I put in place to better manage seismic risks.

These new laws put an increased focus on the seismic strength of our emergency facilities and particularly our hospitals.

Nelson is fortunate not to have experienced a major earthquake like Napier or Christchurch in our 175 year history. The quakes in Murchison in 1928, Inangahua in 1968 and Kaikōura in 2016 were not sufficiently close to test our resilience. But we need to be upfront that we run a similar level of risk to Christchurch and Napier and that there is a high probability of a major shake sometime in the next century.

We are making some progress. In the last year, we have seen the Tratherns building in Trafalgar Street come down and be replaced by a classy new two storey complex. The historic National Insurance building in Hardy Street that is home to Lambrettas Café has been strengthened with Government help. I am also working with the Nelson Cathedral on the much needed strengthening for this iconic building.

No building though is as important to be fully functioning following a major quake than our hospital. The key buildings, particularly the Percy Burnett and the George Manson block, do not meet the high new standards required of such facilities.

The District Health Board has commissioned major new reports from engineers on the hospital due for completion next month. This will help inform the major redevelopment project for Nelson Hospital.

It is not just important that our hospital is upgraded for seismic resistance but it also needs to cope with our growing population and the ever changing demands of modern medicine.

This is a huge project for your region with an initial budget estimate of $150 million. A realistic timetable for construction beginning is 2020. The DHB has a huge amount of work ahead of it in developing the right sort of hospital facilities to serve out region for the next half century.

It is crucial we get it right. Nelson has a high standard of health services, mainly because we have been better able to attract top specialists and other health professionals than other provincial hospitals. A well designed facility is pivotal to maintaining this.

There needs to be a close consultation with our health professionals and community. Managing major hospital upgrades are highly complicated in that you also have to maintain a high level of health care service throughout the multi-year rebuild. My interest will be in keeping pressure on the health board and government to keep the project moving forward and to ensure it is the sort of health facility that can provide first class service for our population into the future.

I conclude in saying opposition is not my preferred role, but it does have its upsides.

The first is I am relieved not to be in government with New Zealand First.

The three years from 96 – 99 was the worst of my nine terms in Parliament and I would much rather we concluded our term in Government as we did in 2017, proud of our record, than with the acrimony and disarray of 1999.

It is also great to have more time in Nelson and for Nelson, time to listen, time to read, and time with my precious family.

I wish you the very best for 2018 and I look forward to working with you on ensuring Nelson’s continued success.

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