Norman Russel: Financial Review Debate — In Committee 
Text is incorporated into the Bound Volume 
Norman Russel: Financial Review Debate — In Committee 
[Sitting date: 12 March 2013. Volume:688;Page:8414. Text is incorporated into the Bound Volume.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 It is great to be speaking on the Government’s financial position because there has been quite a lot of debate about that today. I would particularly like to draw attention to the cost of the asset sales programme and the big impact that that is having on the Government’s books. According to Treasury the cost will be about $441 million over 5 years. That is the net cost and that is the result of the fact that the dividends or profits that the Government earns on these assets are much greater than the cost of debt which is being replaced by the sale of the assets. Treasury estimates that the net cost of the Government asset sales programme is $441 million. That is a giant hole in the Government’s books. When you add to that the $100 million that the Government is proposing to spend at least initially on the asset sales programme you end up with a $541 million hole in the Government books as a result of the Government asset sales programme. 
So the question to the Government is: with a half-billion-dollar hole in the Government’s books as a result of the asset sales programme what is it going to cut? Is it going to increase revenue or is it going to borrow more in order to cover this giant hole in the Government’s books? If your aim was to protect the Government’s finances then you would not go down this path because this path according to the Government’s own figures is going to cost at least $541 million. 
On top of that we have the share giveaway programme which at the moment is unquantified. If the Government persists in its share giveaway scheme it could cost tens of millions of dollars on top of that depending on how large it would be. It could be $100 million. We do not know because the Government has not announced what the programme looks like and also because the Government itself does not know what the uptake of the share giveaway or the loyalty bonus scheme will be. The question for the Government is why this is worth spending half a billion dollars on. Why is it worth half a billion dollars to go down this path? 
This comes against the background of the broader economic management of the Government which is very problematic. We have the current account deficit which is 5 percent and rising. When the Minister of Finance first came into office he talked a lot about rebalancing the New Zealand economy. By that he meant reducing the current account deficit amongst other things yet now we hear very little from the Government about rebalancing the economy because essentially it has failed. We have a 5 percent current account deficit and it is growing and projected to increase further down the track. That seems to me a fundamental failure for the Government in terms of the current account deficit. 
Hon Maurice Williamson 
: Can we turn it off? 
Dr RUSSEL NORMAN 
: The Government does not want to hear about this. The Government does not want to hear about this. It wants the sound system to be off but the reality is that when you look at the numbers the current account deficit is 5 percent and growing and is guaranteed to get worse under the current economic settings. Of course on top of that we have very high rates of unemployment under this Government. We have had the highest and second-highest rates of unemployment since National was last in Government—around 7 percent—and that itself is I think a real indication and really a fail mark in terms of the Government’s economic strategy broader than just the fiscal strategy. The Government has told us that it has 300 initiatives and so forth around its economic management—and good on it—but when it comes down to these macroeconomic indicators you would have to say that 4 years in you cannot blame the last Government for it. Four years in the Government itself has put itself in a big hole and has created the big problem—not to mention what I think is one of the underlying problems which is that the attempts with the Resource Management Act reforms and others to degrade the environment will undermine the long-term performance of the New Zealand economy. They will undermine the environmental capital on which we all depend for the long-term sustainability of the New Zealand economy. 
So it is not just the fiscal performance that is in trouble. It is not just the broader macroeconomic performance which when you look at the current account deficit you see is in trouble or the unemployment numbers; it is also the underlying environmental or natural capital on which our economy depends long term. And if we continue to degrade that natural capital as National is proposing to do then the long-term economic picture becomes very difficult as well. 
We have also been discussing the manufacturing inquiry and looking at what is happening in the manufacturing sector which we in the Greens believe is very important. We are very interested in the development of the green manufacturing sector in particular. We have seen the loss of 40000 jobs over 4 years. This is a long-term trend. It is not simply a result of what this Government has done. It is a long-term trend but under this Government it has continued to get worse. We think that what happens in manufacturing is important because it is a high-value sector and because it is critical that if we are to rebalance our economy the manufacturing sector performs as well not just the primary sector.