Worth Richard: Estimates Debate — In Committee 
Worth Richard: Estimates Debate — In Committee 
[Volume:648;Page:17501] 
Dr RICHARD WORTH (National) 
: 
 The latest New Zealand Trade and Enterprise document—the statement of intent for 2008-11—which was fleetingly considered by the Commerce Committee in connection with these issues asserts in the foreword that the document supports achievement of the Government’s economic transformation priorities. In this short period that I have I will look at that phrase “economic transformation” because the phrase implies beneficial advances. Yet the reality is that the economy is characterised by a move into recession high interest rates high household costs a collapse in business confidence and a collapse in consumer confidence. That is writ large I would say by way of example in the massive failures in the finance company sector which seem set to continue. I note for example in the case of Hanover Finance that it has suspended repayments of principal and interest owed to 16500 investors in an amount of around $554 million. The total amount of investors’ funds tied up in 25 failed or stricken finance companies is about $3.3 billion. Some of those collapses suggest fraudulent activity. It is very interesting to see what the Government’s response is to that—that is primarily legislative. But I say that much more could be done. There needs to be a resourced investigation into delinquent and criminal activity. Fine the Minister has signed a new output agreement with the Securities Commission but there does not seem to be a will to bring those who have erred to justice. 
There is a second aspect to all of this and it is that there need to be changes to the High Court rules to enable class rather than representative actions. We are seeing that at the moment—arguably—in the case of the Feltex litigation where a number of lawyers acting for Feltex corporate interests are seeking to head off a representative action in a setting where Feltex shares were worth $254 million but that value was lost when the company went into receivership in 2006. That is why those on this side of the Chamber have been urging some more determined action in respect of delinquent and criminal activity and urging changes to the High Court rules—not directly within the Government’s control but something nevertheless in respect of which comment might be made to enable class rather than representative actions. It would be a tragedy I would say if those who are litigants and investors who face very substantial losses are not able to pursue those claims for technical reasons relating to limitations in the rules. 
Economic transformation under this Labour-led Government is sadly an exercise in cynicism and I would just like to offer the challenge: why do we not embark upon a programme of true economic transformation? Why do we not seize the agenda that the Labour-led Government identified on 6 March 2006 in a Cabinet minute as to what the core elements of economic transformation will be? 
Hon Damien O’Connor 
: What’s your policy? 
Dr RICHARD WORTH 
: I will come to that in a moment. We know economic transformation has failed under this Government. So what should those core elements be? That is what I am going to directly address now in response to the question that has been asked. I think there are probably five things. I am not sure whether I have the time to talk about them in anything other than a very broad way but they include the following things. First of all there needs to be an ongoing programme of personal tax cuts. The right incentives need to be put in place to encourage people to work save and get ahead. 
Hon Darren Hughes 
: Labour’s done that! 
Dr RICHARD WORTH 
: To the interjecting member I would just say that 39c in the dollar is not reflective of an ongoing programme of personal tax cuts. It is an important issue. Why? It is important because many business formations are not in a corporate structure. Many of them are unincorporated individual businesses. Second there needs to be discipline brought to Government spending. Members on the Government side know just what a hollow activity that has been by this Government.