Parker David: Public Finance (Fiscal Responsibility) Amendment Bill — In Committee Third ReadingText is incorporated into the Bound VolumeParker David: Public Finance (Fiscal Responsibility) Amendment Bill — In Committee Third Reading[Sitting date: 27 August 2013. Volume:693;Page:12896. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Labour): The issues that David Clark who has just taken his seat referred to were all relevant but I want to hear from the Minister in the chair the Minster for the Community and Voluntary Sector why it is that she thinks this bill the Public Finance (Fiscal Responsibility) Amendment Bill has the credibility to introduce a provision that says in clause 4 new paragraph (g) of section 26G(1): “when formulating fiscal strategy having regard to its likely impact on present and future generations;”.First point: is the Minister saying that her Government until now has not done that? Because if she is saying that well that shows you what an irresponsible Governmentthis is. Secondly if she is saying it has already done it does that not show that this legislation is meaningless? Thirdly if you want an example of irresponsible failing to take into account the effects between generations look no further than the Government’s head-in-the-sand attitude in respect of the age of eligibility for superannuation. The cost has gone from $7 billion to $10 billion per annum since 2008 till this year. That is more than the cost of education within the next—Paul Goldsmith: What are you going to do about it?Hon DAVID PARKER: We are going to increase the age of eligibility to 67 over time.Paul Goldsmith: It doesn’t solve the problem.Hon DAVID PARKER: It does not solve the problem says Mr Goldsmith another Luddite on the other side. What an absurd statement that actually increasing the age of eligibility does not have a substantial effect on the fiscal consequences further down—Paul Goldsmith: Look at the Treasury report.Hon DAVID PARKER: I have read the Treasury long-term report and it says that if the age of eligibility is not put up then unless Mr Goldsmith cuts other services he would have to increase GST from 15 percent per annum to 17 percent per annum. That is what the Treasury report says Mr Goldsmith. So that is the first point to be made.The second point is that it is very very interesting that the genesis of this bill was with the confidence and supply agreement with Mr Banks. I want Mr Banks to take a call to explain how he has got any credibility on fiscal sustainability. When he was last Mayor of Auckland City he tripled council debt—tripled council debt when he was last Mayor of Auckland City. That is quite apart from the extra debt that was taken on as part of the formation of the so-called super-city. A fiscal cap is a nonsense. The Christchurch earthquakes showed that if you had a fiscal cap the Government could not have paid for the rebuild or part of the substantial cost of the rebuild in Christchurch because of a fiscal cap in legislation—what a nonsense. What a nonsense.We have seen the effect of that on things like education services in California. It once had amongst the best State-based education systems in the United States. It had a fiscal cap and as a consequence it could not keep increasing spending for education in the way it needed to and indeed it had to cut its spending on education because it spent so much money on prisons. As a consequence the Californian State-based education system is a shadow of its former self. That is the sort of policy that we get from the ACT Party—ill-thought-out and it would take this country backwards even faster than this current National Government is.The third point I want to make is that in respect of this sort of legislation there should be agreement across the major parties if it is possible. We asked for some pretty minor concessions in respect of this. We thought that the wording around monetary policy was one-sided and showed how ridiculous it has become that Treasury and the Government think that the only thing that is relevant in respect of monetary policy is what the Reserve Bank does. We said: “Well that’s ridiculous.” We think that there are obviously parts of monetary policy that are delegated to the independent Reserve Bank and they should be but there are other parts relating to monetary policy including policy advice that the Government should get from Treasury—Dr David Clark: They don’t believe in contestable advice.Hon DAVID PARKER: Well that might be the case Dr Clark. I cannot understand the Government’s unwillingness at a time when monetary policy is in a state of flux around the world with these enormous trade surpluses in some countries and big trade deficits and current account deficits like New Zealand has—currently the worst in the developed world. Yet the Government will not conceive that in respect of fiscalresponsibility you have to have an eye on that as well because fiscal settings do affect monetary policy and trade balances. But the Government refuses to agree.The second area where we thought we should be making an amendment if the Government wanted cross-party accord on this was something like the Australian equivalent legislation which refers to adequate national savings. Of course New Zealand has nationaldissavings through our current account deficit—the worst in the developed world. So I would like the Minister to respond as to why those issues could not be accommodated.