Goldsmith Paul: Financial Review Debate — In Committee 
Goldsmith Paul: Financial Review Debate — In Committee 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 I am very pleased to be able to speak on the Appropriation (2010/11 Financial Review) Bill for the year coming up to 2011 and a remarkable year it was. Who would have thought that this country would be borrowing $18 billion in a deficit for that year? I spent a lot of time researching the New Zealand economy over the years back in the 1970s and 1980s when Winston Peters the previous speaker was in Parliament—way back then when we had deficits. I never thought we would have the same size and significant deficits again. Yet here we are.  
Why did we get in this situation? Well firstly obviously the global financial crisis has hit a number of countries around the world and economies have been knocked sideways by that and are having to stimulate their economy. Secondly we have been hit by the earthquake in Christchurch which we all know was one of the most substantial natural events in the modern economy in a developed economy. But finally the main reason that we have had this large deficit also has been the settings inherited from the Labour Government in 2008 when National inherited an economy pregnant with 10 years of deficits on the books. The Labour Party had abandoned discipline in the last 3 years particularly of Government. It had turned the taps of spending on and left this Government with 10 years of prospective deficits that we had to rein in. So there is no easy task for this Government in trying to restore some order to the books and that is what the last 3 years have all been about. We need to pay our way.  
It is not written in stone that this country will always be a rich country. It is not given to us as of right. It is not something that will happen automatically. Every generation in every year has to go out and earn it and we will earn that only if we have an economy that is dynamic where people want to save. You do not get a dynamic economy when the Government is soaking up all the capital and all the resources and that is why it is so essential that we bring down the deficit as quickly as we can and why I am pleased to be part of a party that has a clear plan to get back to surplus by the 2014-15 year. It is not going to be easy. It is difficult. It is much harder to turn off the tap than it is to turn on the tap but I am sure we will be getting there soon. 
I was glad that Mr Peters referred to the IMF in his speech because the IMF did have something very relevant to say. It said: “In our view [the Government has struck] the right balance between the need to limit public debt increases while containing any adverse impact on economic growth during the recovery.” So in other words in what is a very difficult environment this Government not only has struck a good balance between the need to maintain the dynamism of the economy through spending but also is setting a clear path so we can get back to a more sustainable position.  
We cannot continue to keep borrowing billions on volatile global markets as we have done for the last couple of years. We have been privileged in the sense that we have had relatively low Government debt levels over the last couple of decades and that has given us the room that we have to move in the last couple of years but we cannot keep on doing that indefinitely. So the figures and the plans that the Government has to get back into order quicker rather than later are well worthwhile.  
Finally before I finish I just want to talk about why the economy is so important. We hear particularly from the Greens that somehow all this focus on economic growth is materialism gone mad and misplaced. But the reality is that constantly we hear talk about people going to Australia. Why do the people want to go to Australia? Often they want to live in dynamic exciting economies and cities with the opportunity to do well.  
What I am in politics for and what we are all here in politics for is to do what we can to create that dynamic environment and that requires a strong economy. It means not saying no to every opportunity that comes our way as a country. It is being open to making use of our resources. It is being open to understanding the needs. It is actually private enterprise that creates wealth. It is people risking their livelihoods and their own capital to create jobs and to create products that people want to voluntarily buy on the markets not things that the Government does that makes all the difference.