Worth Richard: Budget Debate 
Worth Richard: Budget Debate 
[Volume:647;Page:16395] 
Dr RICHARD WORTH (National) 
: 
 We have just heard the deputy leader of New Zealand First offer what seemed to me to be an incredible number of brickbats and very few bouquets to this Government in the context of the Appropriation (2008/09 Estimates) Bill. I would just like to frame the debate for a moment in the way the honourable member started out because the issue here is a debate on an amendment that “this House has no confidence in the Government led by Helen Clark because New Zealanders have had to wait far too long to see any changes to personal tax thresholds or any lowering of personal tax rates and”—I emphasise the next few words—“over nine Budgets this Government has presided over a decline in New Zealand’s standard of living compared to the rest of the world.” 
I think a good starting point is really to ask the question about what we should hold a Government accountable for. The answer would seem obvious: it is whether it is achieving the goal that it has stated to be its “top priority”. The current Government has been unequivocal about its top priority goal. It wants to get New Zealand back into the top half of the OECD income range. Prime Minister Clark reaffirmed that goal in Parliament earlier this year. The Minister of Finance Michael Cullen has said that the Government needs to achieve 4 percent-plus annual growth in real GDP on a sustained basis to achieve it. The goal is important. The goal is achievable. Economic growth or more precisely growth in real per capita incomes means the difference between hardship and a comfortable standard of living for many. Over the past 20 years Ireland and now Australia have lifted themselves from below average OECD income levels to well into the top half of the range. So measured against this top-priority goal the Budget is an admission of failure. Indeed the goal is not even mentioned. 
It is not difficult to understand why the economy’s average growth rate is falling not rising. Over the so-called forecast period the next 4 years annual growth in real GDP is expected to average only 2.5 percent. Well at that anaemic rate New Zealand will be lucky not to fall further down the OECD income ladder and the income gap with Australia will almost certainly widen. 
So what should the Budget have done? I do not think that is a very difficult question to answer at all. I would say there should have been four core elements on which the Government should have focused and did not. The first was an ongoing credible programme of personal tax cuts. There is a real need to put the right incentives in place to encourage people to work save and get ahead under their own steam. If we can boost after-tax wages that will clearly help stem the flow of New Zealanders overseas. No one in the Government can be proud of those exodus figures. They are simply appalling. We have to set in place strategies that will enable New Zealand to keep the skilled workers we need to grow our economy and to improve our public services. 
The second thing we have to do is to bring discipline to Government spending. The third thing we have to do is that there needs to be an unwavering focus on lifting education standards. The fourth thing we have to do—and I would just like to speak about this in the balance of the time available in the context of my responsibilities as Opposition spokesman on economic development—is we need to boost infrastructure to help the country grow. 
Hon Trevor Mallard 
: Seriously? 
Dr RICHARD WORTH 
: Mr Mallard has just intervened to say “Seriously?”. He clearly believes we do not have to boost infrastructure to help the country grow. 
Hon Trevor Mallard 
: That’s not true. 
Dr RICHARD WORTH 
: He now says that it is not true. That is what he said a moment ago. Well I would just like to mention for a moment the $1.5 billion plan to bring ultra-fast broadband to businesses schools hospitals and homes. Does he not think that is necessary? It seems not. Does he not think it is necessary to substantially boost investment in roads electricity and water? Apparently he does not. 
I would like to make a comment just on infrastructure in the context of public-private partnerships because some recent work has been done—some lessons that I think are very relevant learnt in the United Kingdom. This Labour-led Government has always fiddled around the edges of public-private partnerships until quite recently. In February this year the Government put the issue back on the agenda when Dr Cullen and Annette King announced that a steering committee was to be established to investigate the possibility of using a public-private partnership to develop the Waterview Connection in Auckland. It is a $2 billion tunnel project which will complete the western ring route. 
If one looks at the experience in the United Kingdom there has been substantial experience of a good nature with such arrangements. Initially the focus in the UK as it seems this Government might be contemplating here in a very minor way was on the construction phase: on getting something built on time and for a reasonable sum of money. But the focus has now shifted and a lot of projects have become operational now. It is interesting just to look at the numbers that have emerged from a survey carried out by Her Majesty’s Treasury and Partnerships UK which is actually a public-private partnership. They found three things just briefly. First they found that public sector contract managers reported that 96 percent of projects were performing at least satisfactorily and 66 percent to a very good or good standard. The second finding was that 83 percent of contracts were described as always or almost always accurately specifying the services required. The third finding was that 97 percent of public sector contract managers rated the relationship with their private sector counterpart as satisfactory or better and 72 percent rated it as good or very good. 
I would like to say something about New Zealand Trade and Enterprise because that seems to be an organisation that is very like the curate’s egg: good in part and bad in part. There are opportunities that New Zealand Trade and Enterprise seizes on that are great initiatives. There are other initiatives that it seems sadly to ignore that have I would say undoubted merit. I would just like to talk about one of those for a moment. I do so conscious of the fact there has been a change at the top of the organisation. The new chairman Jon Mayson is very well regarded and of course Tim Gibson is the chief executive and continues to do a good job. But I would like to talk about the failure of the “Buy New Zealand Made” programme and to note that something happened in Los Angeles— 
Hon Trevor Mallard 
: That’s not a New Zealand Trade and Enterprise programme. Get it right for a change. 
Dr RICHARD WORTH 
: Mr Mallard should just pause for a moment and be patient. All will be revealed. In Los Angeles on Waitangi Day in 2007 more than 1000 Kiwis joined together to build New Zealand’s biggest business card—a 100-metre long sand sculpture of the silver fern. 
Hon Trevor Mallard 
: Which year? 
Dr RICHARD WORTH 
: 2007 Mr Mallard. 
Pansy Wong 
: Last year. 
Dr RICHARD WORTH 
: And that was last year in case the Minister has forgotten. What this is all about is that we can properly move from “Buy New Zealand Made” to what is proposed here: it is a brand identity change to “Made from New Zealand”. The Minister may never have heard of it. “Made from New Zealand” is a deliberately wide-ranging descriptor that goes way way beyond the Buy Kiwi Made campaign. The Buy Kiwi Made campaign is no longer relevant to a significant number of New Zealand businesses that have elected to adopt business models that take part of their supply chain offshore—for example iconic brands like Icebreaker Swanndri Karen Walker and Wattie’s as well as hundreds of smaller enterprises that have developed intellectual property in New Zealand but manufacture or are fully based overseas. 
The result of all that is that many companies now have an identity crisis when it comes to leveraging off the value that being from New Zealand represents. There is an initiative to be further developed in conjunction with New Zealand Trade and Enterprise that could produce huge gains for the country. At the moment it seems that the organisation has insufficient interest.