Brash Don: Address in Reply 
Brash Don: Address in Reply 
[Volume:628;Page:107] 
Dr DON BRASH (Leader of the Opposition) 
: 
 I move  
That the following words be added to the address: and that it informs Her Excellency that this House has no confidence in the Labour - New Zealand First Government because it has no serious programme to secure rising incomes for all New Zealanders; because the Labour component of the Government has coasted over the last 6 years on the back of strong export prices and utterly failed to lay the foundations for reducing the gap between living standards on this side of the Tasman and those in Australia; because it fought a dishonest election campaign one that ransacked the public purse for irresponsible party purposes; because during that campaign it suppressed vital information about the financial consequences of its policies; and because it has trampled over all previous constitutional conventions in cobbling together a bizarre set of coalition arrangements that put personal ambitions well ahead of the national interest. 
 Last Tuesday Her Excellency was asked to read a profoundly uninspiring Speech from the Throne. The speech was full of good intentions and pious hopes. It tried to suggest that this “Labour - New Zealand First” Government actually cares about raising the living standards of all New Zealanders. There were lots of references to the importance of productivity and of transformation of the economy and of giving particular attention to a wide range of issues. The speech tried to suggest that the “Labour - New Zealand First” Government would like to see the gap between our living standards and those in Australia reduced. But we all know that that is empty rhetoric. 
Many people in this House remember Helen Clark just 6 years ago as Leader of the Opposition deploring the exodus of Kiwis to more prosperous countries and vowing that she was “not prepared to stand back and see the best and brightest of New Zealanders leave this country taking their ideas and their businesses with them.” Even more of us recall her stating in 2001 that her goal was to raise New Zealand’s living standards to the top half of the OECD within 10 years. She abandoned that task of course—no doubt because she could see that she had no chance whatsoever of achieving it. But in 2003 she still told Parliament that she was committed to raising New Zealand’s living standards to the top half of the OECD “over time”. Yet again this year she has made another vacuous statement that suggests she is serious about raising living standards. 
I guess the best way of judging whether her Government is serious about this important goal is to see what Labour has actually achieved in the last 6 years. Over the last 6 years as over the last 12 years total economic growth has been better than it was over the previous decade. Indeed over recent years total economic growth has even been slightly better than total economic growth in Australia. It sounds pretty good but it is not nearly as good as it sounds. As umpteen people have pointed out to the Government the reality is that this total economic growth was made up of a big increase in the employed labour force and some improvement in output per person or productivity. The increase in the employed labour force was in turn made up of a reduction in unemployment—which continues a trend that began in 1992—and an enormous surge in net immigration first in the mid-1990s and then again after September 11. 
I say to the Prime Minister that the worrying thing is that growth in output per person employed while markedly better than before the reforms of the 1980s and 1990s is still well below the OECD average. The Clark Government has done nothing to build on past productivity improvement. It has failed to fix the delays and obstacles in the Resource Management Act with the result that we have less investment in almost every industry than would be desirable. It has failed to fix the growing problems in the road network which results in hundreds more people dying and being injured on our roads than in countries with better roads such as Australia and the UK and hundreds of millions of dollars of additional cost arising from congestion. 
 It has utterly failed to deal adequately with the prospect of “brownouts” and blackouts despite the fact that the great bulk of the electricity generation sector and Transpower are owned by the Government itself. It has failed to take significant steps to ease the critical shortage of skilled workers and indeed the Clark Government capped funding for apprenticeship training and provided more than nine times as much funding to Te Wananga o Aotearoa as to the entire Modern Apprenticeships scheme. Though the business sector has been under very considerable pressure from the appreciation of the New Zealand dollar in recent years the Clark Government failed to ease the burden of compliance costs facing the business sector and in fact did not hesitate to dump additional costs on employers—thus further undermining their competitiveness—through amendments to the Holidays Act and the Employment Relations Act. 
Though the Government’s own advisers in Treasury have calculated in a paper written a year ago that a lower flatter income-tax structure could add between a half and 1 percent to our per capita growth rate—a phenomenally large gain that would see us begin to narrow the gap with Australia—the Government has totally failed to take the slightest notice of that advice. Indeed it has explicitly ruled out any change in personal taxation structures before a trivial adjustment in 2008. 
The Clark Government has coasted along enjoying the prosperity arising from excellent prices for meat and dairy exports on international markets and the boost to the housing market provided by a strong inflow of immigrants. But the end result has been profoundly disappointing. Figures released by the Government Statistician just last week suggest that productivity has actually been falling recently and is now at a 4-year low. In 1999 the gap between average after-tax wages in New Zealand and those in Australia was $5000 per annum. Five years later the gap had virtually doubled to $10000 a year. 
Is it any wonder that the exodus of New Zealanders to greener pastures abroad an exodus that Helen Clark pretended to be concerned about back in 1999 when she was in Opposition has been accelerating lately? Is it any wonder that a recent OECD study pointed out that New Zealand had a higher proportion of its tertiary-educated people living abroad than any other developed country? 
And what about the future? Well it would be nice to think that the pious hopes expressed in the Speech from the Throne would result in real action. But why should we expect that? Labour’s famous pre-election pledge card was devoid of any policy commitment that might have been expected to produce higher living standards— 
Hon Maurice Williamson 
: Is that the one paid for by the taxpayer? 
Dr DON BRASH 
: That is the one—with a single rather trivial exception of a commitment to fund just 5000 additional Modern Apprenticeships. All the other commitments on that pledge card were about redistributing income not about increasing it. 
But what about the infamous student loan bribe? Surely that might be regarded as a policy that might encourage growth and improve living standards—at least to the extent that it might encourage people with tertiary qualifications to stay in New Zealand; of course that is the argument that the Government used in the election campaign—but sadly no. That policy was a totally unprincipled election bribe devoid of any policy justification whatsoever. Fewer than 6 percent of those with student loans live overseas so the student loan bribe which was given at enormous cost to the ordinary hard-working New Zealand worker will have absolutely minimal impact on the number of graduates heading overseas. Michael Cullen confirmed just last week that the student loan bribe will require $2 billion to be written off the value of the existing student loan book and Treasury estimates of the future cost of the scheme run up to $1 billion per year. 
Under the “Labour - New Zealand First” Government we will see no acceleration in our growth no narrowing of the gap between living standards on this side of the Tasman and those in Australia no attempt to remedy the fact that New Zealanders earning less than $100000 a year pay more tax than do Australians in similar circumstances and no slow-down in the exodus of Kiwis to greener pastures abroad. Indeed if New Zealand incomes were to continue growing at the rate projected in the Government’s own Budget and if other OECD countries were to continue growing at their average rate over the last 20 years New Zealand average incomes would continue to fall relative to average OECD incomes. 
The same is true when New Zealand is compared with Australia. Over the last 10 years per capita incomes in New Zealand have grown more slowly than those in Australia so that far from catching Australia the gap between us has actually widened over the last decade. It would take a prodigious effort to match Australian incomes within 20 years and there is not the slightest indication that the “Labour - New Zealand First” Government will make that effort. Indeed every economic forecaster worth his or her salt is projecting at least 2 years of sub - 3 percent growth in the immediate future with some predicting that growth will be below 1.5 percent. And Michael Cullen far from trying to find ways to enable the economy to grow faster without inflation is busy trying to find ways of slowing it down. 
We cannot expect anything of value in a host of other areas of vital importance to New Zealanders either. Over the last few weeks we have seen example after example of the police failing to provide people in the community with the protection they have every right to expect. There are cases where victims of crime have identified the offender and have found his or her address only to be told that the police are too busy on other matters. We have had an admission that in the Auckland Police District one case in five is unassigned for investigation. We know because the Education Review Office has finally told us that far too many children leave school barely able to read and write or do basic arithmetic. But still the Government shows no sign of being willing to look hard at the way the current school system operates. 
We have hard-working dedicated teachers trapped in a highly centralised system where far too much detailed control over school operations is exercised by the Wellington bureaucracy. At the other extreme there is an extraordinary amount of waste and extravagance in the tertiary sector exemplified most starkly by Te Wananga o Aotearoa. It is a situation that has seen Government funding for that institution explode from $5 million in 1999 to $239 million in 2004 with widespread rumours of nepotism and legally dubious shortcuts. Yet the Minister’s only serious action so far has been to make a proposal to force the institution to reject a high proportion of its non-Maori students. Helen Clark has had to remove Steve Maharey from responsibility for tertiary education and ask Michael Cullen to fix the mess. But she has then given Mr Maharey the rest of the education sector to mess up. 
The Labour Government enormously increased taxpayers’ funding of the healthcare system—but to what effect? Waiting lists are still appalling. Back in 1998 Annette King described as criminal having 96000 people on waiting lists; now there are some 180000 people either on a formal waiting list or waiting for assessment by a specialist. 
On racial issues there is not the slightest sign that the “Labour - New Zealand First” Government will deal with the urgent need to ensure that all New Zealanders are treated equally under the law. It is no wonder that so many New Zealanders are deciding to leave. 
The sentiments expressed in the Speech from the Throne had a nice comfortable ring about them but it has been obvious for a long time that this Prime Minister this Government cannot be trusted. There is in fact a fundamental lack of integrity in the Government. Helen Clark was the person who confirmed a false accusation against her own police commissioner to a Sunday newspaper then pretended she had refused all comment. She gave one account of events in a signed affidavit then another in this House. Helen Clark was the person who signed a painting that she had no part in painting then claimed she did not know her staff had had the offending art work destroyed before the police were able to see it. Helen Clark was the person who sped through South Canterbury at speeds of up to 150 kilometres an hour and professed not to notice. She is the person who dropped five police officers and her driver into an expensive and stressful court case when she could have avoided the whole drama either by making it clear that she did not want her convoy to break the speed limit or by accepting responsibility for the speeding which she could have done without fear of prosecution as she knows. 
Helen Clark is the person who pushed New Zealand into the Kyoto Protocol on the grounds that it was a virtuous and moreover highly profitable thing to do as New Zealand would enjoy more carbon credits than debits through the first commitment period—indeed a net surplus of 55 million tonnes of carbon credits. It was the same Helen Clark who supported Pete Hodgson when he dumped on private sector research suggesting that we might have not a surplus of 55 million tonnes but a debit of 7 million tonnes. The cry was: “Ridiculous! Too pessimistic!”. But of course as we now know Helen Clark and Pete Hodgson were completely wrong: New Zealand does not have a surplus of 55 million tonnes nor even a debit balance of 7 million tonnes but rather a debit balance of an estimated 36 million tonnes. The difference will cost taxpayers in excess of $1 billion—all because of Helen Clark’s insistence that we become the only country in the southern hemisphere to ratify the Kyoto Protocol. 
What about the student loan bribe announced in the run-up to the election? Helen Clark and Trevor Mallard said that it would initially cost $100 million year rising to a maximum of $300 million in due course. A bank economist suggested: “Gee that sounds much too low. I think something closer to a billion-dollar cost is about right with student debt rising by about $10 billion above what it would otherwise be over a period of years.” Again the poor man was ridiculed. Worse when an economist from another bank came to his aid and suggested that he too thought the Government had substantially underestimated the cost of the student loan bribe both men were attacked. 
On 2 August this year I myself asked Helen Clark in this Chamber whether the Government had sought an estimate of the cost of the student loan bribe from Treasury. “No” she assured this House and she said that the student loan scheme was a Labour Party policy not a Government one. Then it emerged that Treasury had done an estimate of the cost but the Minister of Finance refused to release it. It was only when my colleague John Key asked the Ombudsman to insist that the Government release the report 2 days before the election that the Government reluctantly complied. A Treasury estimate had been done despite Helen Clark assuring the House that no estimate had been sought and it broadly confirmed the cost estimates made by the two bank economists. That was a disgraceful and dishonest performance on the part of Helen Clark. 
Another disgraceful episode that was partially visible before the election but which has become more clearly visible since the election was the use of ministerial influence to secure entry for preferred immigrants. Would-be immigrants going through regular channels often have to wait and wait and wait. Quite frankly many have to wait for an unacceptable period. But for those who know Taito Phillip Field the wait can be miraculously shortened. I am not suggesting corruption here—I simply have no evidence to suggest that—but it surely creates a very unsavoury impression when Ministers get involved in expediting many hundreds of immigration applications especially if they are for people with whom they have had business dealings. It is better by far to have an efficient Immigration Service treating all applicants promptly and courteously on the basis of merit. So a fundamental lack of integrity characterises this Government. 
It is also a Government mired in contradiction. It depends on a confidence and supply agreement from New Zealand First led by Winston Peters. New Zealand First is the party that Helen Clark once described as “the coalition partner from hell like a parasite which feeds on its host and in the end becomes indistinguishable from it”. 
John Key 
: Who wrote that? 
Dr DON BRASH 
: Helen Clark wrote that. Now she has made Winston Peters the Minister of Foreign Affairs. But despite the fact that the portfolio of foreign affairs impinges on many aspects of Government policy Mr Peters is of course outside Cabinet and would prefer to sit with the Opposition in the House. He in fact sits as far away from Helen Clark as Jeanette Fitzsimons does from me. How utterly bizarre is that! When he is at the APEC meeting this week as the Minister of Foreign Affairs he may be asked about his attitude to a free-trade deal with China. He will presumably have to say that while as leader of New Zealand First he is utterly opposed to such a deal as the Minister of Foreign Affairs he supports it—shades of Gilbert and Sullivan! 
Of course we all know that just 2 months ago he pledged not to accept the perks and baubles of office at all. He has tried to pretend that he was forced to accept one bauble—for himself of course—because the country would otherwise have been forced back to the polls. What utter nonsense! He could have chosen to support Labour with a confidence and supply agreement without a ministerial portfolio. He chose to accept one bauble for himself. Indeed according to some accounts he actually asked for such a bauble. Now he is the Minister of Foreign Affairs—a portfolio he is totally unsuited for. He has regularly insulted the citizens of many of the countries in our region and although the leaders of those countries are far too polite to tell him so to his face most of them doubtless regard him with disdain. 
Anyway Winston Peters now sits with the Government even though he reserves the right to attack the Government in many areas and most of his parliamentary colleagues would no doubt also prefer to be sitting with the Opposition. They may well consider moving quickly before the party-hopping legislation is reinstated—this time I understand with a new name: the “Winston Peters Party Stabilisation Bill”; although I have heard rumours that it may be renamed the “Save Winston’s Lack of Integrity (Baubles) Bill”. 
If we look further into the future what can we see? There is no serious commitment to raising living standards; no sign of any attempt to restore incentives to ordinary New Zealanders to get ahead under their own steam; no sign of a serious attempt to improve the quality of our schools or the efficiency of our hospitals; and no sign of getting serious about crime prevention or ensuring that all New Zealanders regardless of race are equal before the law. There is just lots of talk about productivity about transformation and about paying particular attention to issues that should have been dealt with over the last 6 years. 
In the last few weeks the “Labour - New Zealand First” Government has announced a razor gang to cut Government spending so that the Government can afford all the bribes dished out during the election campaign. Helen Clark and Michael Cullen suggested that had National won we would have had to cut Government spending. Well Labour won narrowly and what did we see? We saw Labour cut Government spending. Helen Clark and Michael Cullen also tried to frighten voters with the idea that had National won the election interest rates on home mortgages would have gone up. Well Labour won narrowly and what did we see? The Reserve Bank has already increased interest rates once since the election and comments by Dr Bollard strongly suggest he will increase them again next month. Indeed some observers believe that they may have to be increased substantially more over the next 6 months while Michael Cullen hints darkly that he is looking for other ways to discourage banks from lending and people from spending. So once again Labour is seen to have been thoroughly dishonest. 
The National Party’s vision for New Zealand’s future is of a country where living standards are not just improving in absolute terms but are also improving relative to those in Australia and other countries to which New Zealanders can readily move. We would bring that about by removing the obstacles to people getting ahead under their own steam; by reducing tax rates so that people who earn money get to keep more of it; by restoring incentives; by ensuring a reliable and reasonably priced supply of energy; and by ensuring we have an adequate transport infrastructure wherever that is needed. But we also have a strong commitment to those things that have in the past made New Zealand a great country to grow up in such as a good education system; a reliable health-care system; support for those who need support; a safe community; a country of clean air and clean water; a country where everybody is equal before the law regardless of race; and a commitment to those values that made New Zealand a country worth living in; a country where families matter; where the Government believes that people know how to spend their money better than the Government does and know how to live their lives better than the Government does. In a Parliament almost equally divided between the parties supporting the Government and those opposed to it the National Party will be using every opportunity to advance those values and the policies consistent with those values.