Cosgrove Clayton: Public Finance (Fiscal Responsibility) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Public Finance (Fiscal Responsibility) Amendment Bill — First Reading 
[Sitting date: 04 December 2012. Volume:686;Page:7051. Text is incorporated into the Bound Volume.] 
Hon CLAYTON COSGROVE (Labour) 
: 
 As my colleague David Parker said we will support this piece of legislation the Public Finance (Fiscal Responsibility) Amendment Bill going to the Finance and Expenditure Committee. 
It is noteworthy that this is the bill that rolled John Banks. That was John Banks’ former biographer—the man who is now writing his political obituary—who got up. He must have been part of the team to roll John Banks because of course John Banks wanted a fiscal cap that bound future Governments. Even the National Party—and I give some credit to Bill English—could not swallow that dead rat. 
Old “Brown Bag Banks” a man who at the start of the electoral cycle after the cup of tea and the election win was a person at the pinnacle of his powers—the pinnacle of his powers—pushed and demanded to be the Minister for Small Business and demanded that there be a fiscal cap in a piece of legislation like this and then came a gutzer. Of course that is why we call him “Brown Bag”. We know why “Brown Bag Banks” came a complete gutzer to the point where  
Trans Tasman 
—I think it was  
Trans Tasman 
—said the following: “Banks has overseen the complete destruction of ACT’s political brand taking over where Don Brash left off.” and “scandals and police investigations over donations have left his political reputation in tatters.” Things are so bad that “Even if National did not run against him in Epsom again he would still lose.” So what we know is that a cabbage could be painted blue and stand in Epsom—a cabbage off a cabbage boat—and it would take the Epsom seat. 
What I will say and commend National members for is that for once in their political lives they slithered out of the caucus room and made a decision. They said “No this is unconstitutional this is fiscally unpalatable this is morally wrong.” and they rolled “Brown Bag”. They rolled him—they rolled him. They slithered out of the caucus room and for once in their measly political lives this Government actually made a call and a decisive one. So on that basis we look at this bill. 
You would think listening to the Minister of Finance that this was some groundbreaking piece of legislation. In fact colleagues we have been here before in the law and order portfolio and in the health portfolio with announcement after announcement—and the housing portfolio—of groundbreaking legislative moves and reforms which when you read the legislation actually come to nothing. Let me read you if I might a sentence or two from the explanatory note on Part 1 of this bill where it says: “The Government must pursue its policy objectives in accordance with the principles of responsible fiscal management”. Right? Nobody would disagree with that. 
Hon Dr Nick Smith 
: Absolutely. 
Hon CLAYTON COSGROVE 
: Dr Smith says “absolutely”. I agree with him. I agree with him—“absolutely”. Nobody would disagree with that. Then it says: “The amendment”— 
David Bennett 
: Have you asked Russel? 
Hon CLAYTON COSGROVE 
: Settle down. Take a powder—take a powder. Your turn will come. “The amendment extends an existing principle of responsible fiscal management and adds”—here is the good bit—“3 new principles.” Wait for it. This is probably not a bad thing. This is probably a groundbreaking reform from this tinkering Government. But then you read it as my colleague David Parker did and the new principles are the following: first “formulating fiscal strategy with regard to its interaction with monetary policy”. Who would disagree with that? Not us. Not the communities. Not people—maybe John Banks would because he wanted something different. And then you try and match that principle with the practical groundwork and the practical actions of this tinkering Government. 
Of course it does not believe that there is a problem with our exchange rate. It does not believe that there is a problem or any need for change or reform of monetary policy. It does not believe as we do that we should change the structure of the Reserve Bank of New Zealand Act and the make-up of the board and should focus not only on inflation but also on the exchange rate as this party believes. The National Party believes as the Minister of Finance said before the Finance and Expenditure Committee that all is well that the IMF is wrong Treasury is wrong—everybody is wrong—and the Reserve Bank is wrong when all three say we are headed for the rocks with the current account deficit but that the finance Minister is right. We have got this wonderful principle that may well be chiselled on tablets of stone but actually if the bill is passed the Government does not believe the principle because it has not acted on it. It does not believe in the principle. This is a sap to buy off “Brown Bag Banks”. 
Then we look at the second principle which is “formulating—” 
Hon David Parker 
: Clayton SOE sales. 
Hon CLAYTON COSGROVE 
: Oh and State-owned enterprise sales of course—State-owned enterprise sales. This is the Government that in the Pre-election Economic and Fiscal Update of course banked the revenue from the sale of assets which a year later have not been sold. It is going to be another 6 months or 12 months—or hopefully by the time we get to an election the Government is gone and it will not be able to do it. It banked the revenue from sales that have not happened but did not bank the loss in dividends. That is how honest the Government is about the fiscal measures and how fiscally responsible it is. 
Then we look at principle two: “formulating fiscal strategy with regard to its likely impact on present and future generations”. Well who again would argue with that? It is not a bad principle. But then you look at what the Government has done in respect of tinkering with KiwiSaver and undermining it. Then you look at its stance on compulsory superannuation. Then you look at its stance as my colleague David Parker said on the age of eligibility for New Zealand superannuation and again it denies there is a problem. It denies that future generations will be impacted on. It is all rosy out there for New Zealanders it says. So it is a great principle whittled into tablets of stone I am sure but this Government does not believe it because it will not act on it. 
Then we have the third one: “ensuring that the Crown’s resources are managed effectively and efficiently.” Well look at some of the programmes that have come a gutzer. There was the “Road to Nowhere” the cycleway which was supposed to generate hundreds if not thousands of jobs—gone. Mining of national parks a pipedream was stuffed up by this crew—gone. Then there was the financial centre of excellence or whatever it was called. That was going to be the next silver bullet. It did not happen—gone. No plan. 
What we have got here is a nice little political pamphlet which I have to say we do not disagree with in principle. These are sort of eminent principles and goals that Governments should follow. What I would put to the Government is simply this: why does it not follow them if it believes in them? It has had an adequate opportunity in respect of monetary policy superannuation and KiwiSaver etc. etc. etc. and it has done nothing because it believes that there is no problem with our economy no problem with 175000 people out of work no problem with 90000 young people not in education training or work—no problem at all. Everything is rosy and the people of New Zealand should be grateful for it. 
Well I say that if the Government believes in these principles—it is the Government’s bill after all and it has the numbers to pass it—then we await with interest to see whether it will actually act on those principles: safeguarding future generations monetary policy those key issues that will if dealt with appropriately effect Government policy. 
I have got to say when you are recasting history that I remember getting up as Associate Minister of Finance and making a speech about the surplus that Labour had—we had nine of them. I never thought in my 30 years in the Labour Party that I would stand in Parliament and be attacked by a National Party for not spending money for being frugal and for squirreling away the dollars for a rainy day. Bill English got up and said that we were mean that we were Scrooges that it was the “chewing gum Budget” and that we should spend the lot dish it out—that is what we should do. I never thought in my wildest dreams that I would be attacked by a National member for not spending the dough and for creating surpluses as our Government did but that is what the National Party did and now it recasts history. I just say to members over there let us compare 9 years of surpluses with National’s record—record borrowings and the second-worst current account deficit in the world which is soon to be the first the worst in the world. 
When we asked Bill English before the Finance and Expenditure Committee why he thought he was right and the IMF Treasury and the Reserve Bank were wrong in terms of forecasting how bad it would be his strategy was “I don’t think the rest of the world will allow our current account deficit to get really bad.” That is sort of like saying “Well eventually the bank manager will cut off the oxygen and stop lending us money.” That is basically what the strategy was from the financial guru the Minister of Finance: “The world won’t let us you know keep injecting the serum. They’ll stop it. They’ll cut the cable on us.” That is a wonderful strategy is it not to reassure the people of New Zealand? 
We will support this bill. We will support it but I say to the National Party that if you want to write a bill with some principle in it—after you have rolled “Brown Bag” John Banks—you have got to actually practically demonstrate that you are committed to the principles in the bill.