Worth Richard: Financial Review Debate — In Committee 
Worth Richard: Financial Review Debate — In Committee 
[Volume:646;Page:15018] 
Dr RICHARD WORTH (National) 
: 
 It is a privilege to speak on this Appropriation (2006/07 Financial Review) Bill. I am speaking about the Ministry of Economic Development with particular reference to schedule 2 which shows a shocking overexpenditure in non-departmental output expenses so we should not take too seriously the comments of the previous speaker. 
This is a very challenging time for New Zealand. The Government has run out of luck and it is crippled by its ideological commitment to policies that are simply not grounded in reality. Interest rates under Labour are at a 10-year high. We have the second-highest interest rates in the whole of the OECD. The Reserve Bank confirmed only a couple of weeks ago that interest rates will be staying higher for longer and that food petrol and electricity prices will be going higher this year. 
The Reserve Bank said that Government spending has been growing twice as fast as the economy. Last year every time the bank raised interest rates it said that loose Government spending was a factor. Look at how it is hitting New Zealanders. The average floating mortgage rate was 7.04 percent in December 1999. In December 2007 it was 10.44 percent. That is another $133 a week on mortgage payments on a $250000 mortgage. 
Economic development covers a very wide sweep of activity. Of course the role of a Government may be interventionist or it may be facilitative. It may be concerned in that latter case with setting the frameworks. 
I was interested that at the financial review of the New Zealand Trade and Enterprise entity held before the Commerce Committee the chairman of the New Zealand Trade and Enterprise structure spoke about tough international trading conditions high energy prices skill shortages and a flat and competitive domestic market combined with things like high exchange rates and high interest rates. He made the point so easy to make that we are in a challenging environment. We need skill and competence to be brought to the table. But sadly this Government is dominated by policy writers and analysts. 
The figures that have emerged in the last few days are sobering to put it at its lowest level. Treasury reports show that between 2000 and 2006 employment in Government departments that mainly provide services grew by 34 percent while employment in policy departments including the Ministry of Economic Development grew by 72 percent. That is a stupendous increase. To get a picture of the whole State sector we need to look at survey data from the quarterly employment survey which shows that since 2000 the number of bureaucrats has grown from 26200 to 36000. In addition Treasury reports show that between 2000 and 2006 personnel costs for Government departments that mainly provide services grew by 69 percent while in policy departments these costs grew by 142 percent. 
I would like to make three short comments about New Zealand Trade and Enterprise that directly arise from this bill. It is time that New Zealand Trade and Enterprise focused on proper systems of measurement so that it can truly determine what gains spring from its activities. Second there are highly complex funding systems within New Zealand Trade and Enterprise—in fact they are labyrinthine. They need to be simplified so that those who can access those funds can do so with a degree of confidence that the system will not be bogged down in bureaucratic red tape. Third New Zealand Trade and Enterprise needs to focus more on the less critical aspects of its activity and move away from those activities. 
We are witnesses at the moment to an extremely disturbing set of events in the financial sector. These events are both bizarre and worrying. They touch on finance and investment company collapses. 
Report noted.