Debate on Prime Minister’s Statement

Tuesday, February 16, 2016

STUART SMITH: I want to carry on with the same theme of trade that has been in the last few speeches, and I want to do it with an example of free trade.

Back in 1983 the Closer Economic Relations, or CER, agreement with Australia and New Zealand came into force, but prior to 1983 the wine industry was a totally domestic market - focused industry, protected in just about every way.

New Zealanders had no choice but to buy the wine that was produced in New Zealand. It was of quite inferior quality, but, actually, because it was protected, it really did not matter that much—they could sell it anyway.

So after 1983 the market was opened up. Australian wine was able to be purchased in New Zealand without the tariffs at a similar or even a cheaper price than New Zealand wine, and, lo and behold, it actually tasted better. It was what consumers wanted.

That left the wine industry high and dry. It led to a scheme—a vine-pull scheme—in which the Government paid industry to remove grapevines because it was simply economically unviable.

But that opportunity led to the wine industry becoming very customer focused and what is now a $1.5 billion export industry—from nothing to $1.5 billion. That is a significant shift in an industry’s focus, and that is because the industry was opened to competition and it embraced innovation. It planted grapevines that consumers wanted to buy.

That has enhanced our other trade opportunities around the world because people in the world now recognise that New Zealand can make high-quality consumer goods that are grown in New Zealand and branded to the very highest of levels.

So I put it to the people who oppose free-trade agreements to have a good look at CER and at the difference that it made to the wine industry and to other industries, but I know the wine industry quite well. It did make a significant difference, and we have to embrace change.

If we rail against it, it is natural for people to fear change. But change offers opportunity, and the opportunity for the wine industry is that it is now going forward towards $2 billion in exports by 2020. I think that even Frank Yukich, who planted the first commercial vineyard in Marlborough, could not have imagined how it transformed the regions around New Zealand, like Central Otago with its Pinot noir and Marlborough with its sauvignon blanc.

So I want to move on now to the flag. I have been in favour of the flag change right from the beginning. In fact, I have been wearing this badge since before the votes were counted.

It has been quite interesting to note that in the time up to Christmas, people did talk about it a bit, but after Christmas it has been phenomenal—the change in people’s attitude—and you can see that they have come along and they are actually embracing it.

I want to go back to the trade thing and draw a parallel with that, because in 1973, 10 years before Frank Yukich planted his grapevines in Marlborough, New Zealand’s trade with the UK was 26 percent of our exported goods. Today it is 3 percent.

The UK, as we know, entered the EU and it was very difficult for us to trade with it, or it was much less easy than it was before.

All of our ties over that time—like many New Zealanders, I have enjoyed my OE in the UK, as many of our colleagues across all sides of the House have done, but it is getting much harder for other Kiwis to do that now. The UK is doing what it needs to do, but it is also charging fees.

We as New Zealanders have a multicultural society now. I think we want a symbol that represents us and where we are today, and I believe that the current flag does not do that. The Union Jack does not really represent where we are. People fought and died for a choice, and I am going to be putting my choice forward.

It is quite interesting to note, in my view, that when people see the flag flying, they realise it is actually quite a stunning flag and it represents us.

So it is a great pleasure to have been able to speak in favour of the Prime Minister’s statement. I really look forward to hearing other contributions, and let us hope they are thoughtful. Thank you.