Copeland Gordon: Appropriation (2003/04 Estimates) Bill — Third Reading Imprest Supply Debate 
Copeland Gordon: Appropriation (2003/04 Estimates) Bill — Third Reading Imprest Supply Debate 
[Volume:610;Page:7681] 
GORDON COPELAND (United Future) 
: 
 During my contribution to an earlier of Appropriation and Imprest Supply bills for 2003-04 I was subject to an unrelenting stream of interjections and interruptions from the honourable member Rodney Hide. As far as I could work out his concern was that when I pointed out a number of ways in which I believed this year’s Budget could have been improved he was quizzing me continually about why in those circumstances I and United Future would be voting in favour of the bills. I think I owe him an answer to that and it is simply this: we have signed a confidence and supply agreement with the Labour-Progressive Government. 
Should Rodney Hide then ask me why we entered into such agreement again my answer is very straightforward: that is precisely the mandate we sought and received from the voters of this country. During the election campaign we clearly signalled that we would be prepared to work with the largest party elected by the voters in the interests of creating certainty and stability for New Zealand society and the economy. Let me tell members that United Future has no intention of welshing either on the mandate it has been given by the voters of New Zealand or on our confidence and supply agreement with the Government. Accordingly we will continue to support the Government on those issues right through until the 2005 election. It is about time that MMP was made to work properly. 
 The honourable Rodney Hide’s barrage of comment and interjection while I was speaking brought to mind the picture of a bull terrier that when confronted with 119 large trees decided to dedicate 3 years of its life to barking up every single one of them in the hope that somewhere up amongst the branches there may be a Dr Michael Cullen a Clayton Cosgrove a David Parker or a Janet Mackey who could become unnerved enough to lose his or her grip and fall out of the tree. Well I tell Mr Hide that I have not seen anyone fall out yet nor do I expect that to happen before 2005. But far be it from me to discourage him. 
Dr Muriel Newman 
: I raise a point of order Madam Speaker. I think that the member in his speech is being extremely unparliamentary with regard to one of our colleagues and I think he should be asked to withdraw and apologise. 
Madam DEPUTY SPEAKER 
: There was nothing unparliamentary there. 
GORDON COPELAND 
: I hope that spurious point of order does not reduce my speaking time. I really do not want to discourage or to pour scorn on Mr Hide’s hopes in that regard. 
I want now to go back to the appropriations and imprest supply bills. I have already signalled that I believe Dr Cullen would have been wise to adjust the tax brackets for inflation. That would have moved the upper limit for the 19.5 percent rate of taxation from $38000 to $42000 and the threshold for the start of the 39 percent rate from $60000 to $65000. It would have yielded all taxpayers a gain in take-home pay of between $1.16 and $16.50 a week. It would have given the economy a $400 million fiscal stimulus at precisely the point where growth is on the way down having fallen significantly from last year’s 4.4 percent to a forecast of just 2.2 percent for this year. 
In the absence of any fiscal stimulus we are left to rely solely on monetary policy for growth. I do not believe that on its own it will get the job done. Daily now in our newspapers we see people from many sectors of the economy from manufacturers to farmers asking the Reserve Bank governor to fix the dramatic slow-down in value resulting from the high exchange rate of the Kiwi dollar via monetary policy. But the reality is that monetary policy on its own cannot do that. For that reason in my opinion we need both monetary and fiscal policy to kick in at this time and to work in tandem so as to stimulate the New Zealand economy in the interests of both minimising the downturn and turning the growth curve upwards again as quickly as possible. Once again I remind Dr Cullen that it is not too late to take that action. Were he to bring a short bill to the House to increase the tax brackets in the way that has been proposed by United Future I am sure he would have the immediate support of all parties and enormous support from New Zealand taxpayers. 
United Future would also like to see the company taxation rate reduced to 30c in the dollar. By my calculations that would cost about $500 million. Again it would give a much-needed boost to the business sector stimulate the economy and increase economic growth. 
I would like to say too that I agree with Peter Brown when he talks about doing something to boost our exports. I have in mind here particularly exports that add value—for example processed wood as compared with exported logs. I have already put a suggestion to Dr Cullen that he looks for example at maybe making exported logs subject to GST and processed timber not subject to GST as it is at the moment in order to put us on to the path towards adding the value that we so desperately need to have if we are to see our economy grow. 
I would like to comment a little on some of the items that are included in the imprest supply bill. I note that it seeks authority in relation to Air New Zealand’s equity for $150 million—although perhaps a decision in that regard will be delayed until the Commerce Commission has made its final ruling in relation to the Air New Zealand - Qantas alliance. I think though that the Government should also give careful consideration to whether it may be a better strategy to reduce its shareholding stake in Air New Zealand via a rights issue available to members of the New Zealand public. Mum and dad investors would I am sure appreciate the opportunity to take up a stake in our national airline. As far as I know there is no good reason in terms of international or bilateral agreements or otherwise for the Government itself to maintain an 82.5 percent shareholding in the airline. Why not reduce that in tranches if necessary to say 51 percent? 
I would also like to refer to the question of investment in what the new No. 2 bill describes as a capital allowance—an injection of capital for rail. When the first imprest supply bill was in the House we were talking about a deal with Tranz Rail. Of course since that has happened the deal has now shifted to one between the Government and Toll Holdings. That in turn is now somewhat up in the air and it is unclear whether Toll Holdings will be successful in gaining control of Tranz Rail. In any event one way or another the Government looks set to re-acquire ownership of the rail track throughout New Zealand and is accepting responsibility for its ongoing maintenance. 
My information is that the rail track has a long tail of deferred and expensive maintenance. I think it is clear that from the date of its privatisation—and probably before then—until now little has been put back into the maintenance of both the track itself and the associated infrastructure in terms of bridges tunnels stations and the like. It has all been pitifully run down pretty much to Third World standards by a group of shareholders who were intent on stripping every available cent out of the company to put into their own pockets. I spent the earlier part of my career working for large corporations and I support wholeheartedly private enterprise in every way. However it must be admitted that asset stripping represents the ugly and in my view the unethical face of capitalism. 
In any event I urge the Government now to proceed with caution. If I were in the shoes of the Minister of Finance and the Minister of Transport before committing the hundreds of millions of dollars needed to replace bridges rail tracks etc. I would do my sums carefully so as to establish whether rail will remain a cost-effective means of transportation on a line by line and on an area by area basis. I suspect that in a number of areas of both the North and South Islands rail may not be the best and most economical mode of transport over the medium and longer term. If that is the case I believe the Government needs to discipline itself and if necessary to make the hard decisions that would be involved in closing down uneconomic or redundant railway lines. I think that work must be done. I believe that the Government has to rely on much more than simply the ideology of Jeanette Fitzsimons and the Green Party in basically saying that rail is a good thing. The situation is not as simple as that. We should not invest any taxpayers’ money without competent analysis and a commercial justification. 
I want also to touch on another important area that I believe needs to be addressed during this debate. I refer here to the question of skilled labour shortages in the New Zealand labour force which are now a major restraint on our growth. Many of those shortages appear to relate to what may be called the manually skilled section of the workforce. The Government needs immediately through the Department of Labour to undertake an in-depth study of New Zealand firms to establish precisely the extent of those skill shortages by category and by the ages of the people who are needed to undertake the work. I mention age because the chief executive officer of Positively Business Wellington tells me that shortages in a number of areas are occurring as people retire and there is no one available to take their place. A comprehensive well-researched database would therefore assist the Government both in terms of retaining older workers and the like and also of endeavouring to fill those shortages and to fill them quickly through immigration. 
Diesel mechanics are a case in point. Apparently we are short of them but there is a cohort of South African diesel mechanics who would be very keen to migrate to New Zealand. In that regard the Government’s new immigration bill is a welcome step forward. As Minister Lianne Dalziel has said it is a step away from bringing people with academic qualifications into the country simply to drive taxis in Auckland. It is much better to bring in suitably qualified immigrants to plug the gaps in Wellington Southland Taranaki etc.