Cunliffe David: Appropriation (2009/10 Supplementary Estimates) Bill Imprest Supply (First for 2010/11) Bill — Second Readings 
Cunliffe David: Appropriation (2009/10 Supplementary Estimates) Bill Imprest Supply (First for 2010/11) Bill — Second Readings 
[Volume:664;Page:11883] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I move  
That the words after “That” be omitted and the following substituted: “this House has no confidence in the National Government because these Supplementary Estimates fail to redress the underlying problems and omissions from Budget 2009 which remain uncorrected by Budget 2010 namely the triple deficit of grossly inadequate national savings made worse by the halving of KiwiSaver incentives and the indefinite deferral of New Zealand Superannuation pre-funding; a deep persistent and dangerous current account deficit driven by a growing net investment imbalance and a financial sector that is almost entirely foreign owned; and an innovation deficit made worse by scrapping the research and development tax credits and the Fast Forward Fund; resulting in increasing reliance on commodity trade that is highly exposed to price fluctuations. 
The supplementary estimates record changes in appropriations made during the previous fiscal year to ensure that all expenditure is transparent and all funds are appropriately dealt with. In other words they record changes to the direction of fiscal travel since the previous Budget was brought down. Accordingly we must look to the supplementary estimates to see whether any action was taken by the Government over the fiscal year following Budget 2009. 
One thing is also clear from the Imprest Supply (First for 2010/11) Bill which has been introduced without prior notice in this debate. That is that there is no mention of the Pacific Economic Development Agency which the Minister of Finance has said does not contain a guaranteed appropriation. Yet if it was not to have that appropriation we would expect to see that spelt out somewhere in this Imprest Supply Bill which it is not. The bill simply provides a blanket authority for all of the Budget lines set out in Budget 2010 which included an explicit appropriation for the friends of the National Party dressed up in a 57-word proposal under the name of the Pacific Economic Development Agency an agency that will come back to bite the Minister on many occasions. 
Budget 2009 was remarkable for what it did not do. After 9 long years in Opposition and the spur of the most significant international financial crisis since the Great Depression Bill English looked every bit like a deer caught in the headlights. Had it not been for Labour’s far-sighted and well-timed stimulus package in Budget 2008 the casualties of that road kill would have been tens of thousands more New Zealand jobs. 
Budget 2009 did precisely nothing to help New Zealand workers. It did nothing to address the rising costs of living such as the price of food power rents and rates and nothing to offset the loss of overtime wage rises forgone and businesses drying up due to a lack of domestic and export demand. It did nothing to heal the hurt of communities torn apart by massive lay-offs and plant closures. Indeed it made only one major decision which was to postpone—it said for a decade but in reality it was indefinitely—pre-funding of New Zealand superannuation. Having wrecked KiwiSaver and the research and development tax credits almost immediately on taking office in order to fund the previous round of upper-income tax cuts National did not even appear interested in a plan for jobs and incomes or in rebalancing this economy. Instead we were forced to watch while the so-called “do-fest” of the Job Summit produced a “cycleway to nowhere” and a 9-day working fortnight scheme that was so badly patronised by business that the Government itself canned it in the middle of a recession. 
While the Government was PR-spinning real New Zealanders were losing their jobs incomes and hopes. Unemployment rose from 3.4 percent under Labour to 7.1 percent and 60000 Kiwi breadwinners and families were robbed of their security and future. There are few social ills crueller than unemployment and New Zealanders deserved more than spin more than a so-called rolling maul of short-term responses. They deserved a real credible strategic plan to create and protect jobs and rebalance this economy. They did not get it in Budget 2009 and they do not have it in the supplementary estimates which are the subject of this debate. 
The interesting thing is that there is now broad agreement across the floor of the House that the New Zealand economy is grossly unbalanced and that urgent change is required. Even the Minister of Finance has described New Zealand’s net international liabilities as New Zealand’s greatest single vulnerability. The reality is that New Zealanders are beset by a triple deficit. We do not save enough to wean ourselves off an almost total reliance on foreign capital. As a result our net international indebtedness as the Minister has pointed out is approaching 100 percent of our gross domestic product. That is $40000 in round figures for every man woman and child in New Zealand. Every New Zealander owes $40000 each to foreign lenders while the Government does nothing about it. By far the majority of that debt is private debt not Government debt. So although fiscal prudence remains important no amount of trimming the Government’s sails by cutting night classes and accident compensation benefits will turn the boat round and solve the crisis which is the lack of private savings in this economy. National has produced no solutions to this crisis and indeed it has made it worse. 
New Zealand does not export enough to consistently close a yawning current account deficit which is forecast to blow out again from 3 percent to over 7 percent of GDP according to Treasury estimates. It makes no sense to sell public assets like Kiwibank or private assets like dairy farms simply to make up the difference because we are not paying our way as a nation. Selling our best assets means fewer income streams down the track and eventually a “doom loop” sets in when we become simply unable to catch up or to keep up. Opening up the Overseas Investment Commission to further liberalisation simply makes that matter worse. 
Thirdly New Zealand does not innovate enough to sustainably lift our productivity wages and international competitiveness. Instead under this Government we appear to be falling back on the age-old habit of being price-takers on a commodity price path that resembles the orbit of a yo-yo. Adding value to our extraordinary primary produce through the ingenuity of our farmers and scientists and enhancing our natural environment in doing so go hand in hand with improving the sustainability of our earnings and underpinning an outstanding quality of life. 
Accordingly what Labour was looking for in these supplementary estimates was the kind of plan that Labour would have put in place to improve savings exports and innovation and to rebalance this economy. Let us consider a couple of the key elements very briefly. Fact: Labour brought in KiwiSaver which meant that ordinary Kiwi workers could put in 4 percent of their wages and get 10 percent back as a total contribution to savings thereby allowing them to retire in security. National cut those benefits in half in its first few months in office. Why? That was to pay for tax cuts for upper-income earners. Fact: Labour pre-funded New Zealand superannuation so our old people could be secure in the dignity of their retirement. Fact: National has postponed indefinitely pre-funding superannuation because it did not have the responsibility to take a long-term view. Fact: National did nothing in Budget 2009 to turn round the savings gap. Fact: Labour will lead on savings by 2011 through new safe savings products that Kiwis can depend on by restoring and strengthening KiwiSaver and by immediately resuming pre-funding of New Zealand superannuation at a level we can afford. 
In respect of the current account deficit Labour recognises that existing monetary policy settings penalise exporters. One can expect further announcements from Labour on this in the coming weeks.