Parker David: General Debate 
Parker David: General Debate 
[Volume:652;Page:1415] 
Hon DAVID PARKER (Labour) 
: 
 I have a message for the National Government and I think the media is also ready to deliver the message. The message is that it is time to stop trying to rewrite history. For the last 100 days the greatest consistency of message that we have seen from National members is in their attempts to rewrite history to insinuate that the Labour-led Government was a poor manager of the economy and that it left the economy of New Zealand on its knees and in a poor state of affairs. That is patently not so. 
At the meeting of the Finance and Expenditure Committee today I thought we saw Bill English getting over himself in acknowledging that he has inherited low unemployment. Indeed he compared New Zealand’s low unemployment of 4 percent with some overseas countries that he said have now entered double-digit inflation. He acknowledged that the Government debt he inherited was now at 18 percent of GDP and he contrasted that with many overseas countries. Many OECD countries are now facing budget deficits but the difference between those countries and New Zealand is that they have been running budget deficits even during boom times and as a consequence already have quite high levels of Government debt. He even acknowledged that in the past 6 years or so New Zealand has had high rates of economic growth. Those were his words—“high rates of economic growth”—not mine. 
I was somewhat surprised when Bill English came into the House for the general debate and reverted to the line he has been trying to parlay around New Zealand for most of the last 100 days which is that the National-led Government has inherited a difficult set of affairs. Patently the National Government is trying to paint a false picture that portrays the outgoing Labour Government as irresponsible managers of the economy and falsely suggests that because of the last Government the National Government has inherited a difficult set of cards to play with and therefore should be excused for underperformance in its term of Government. National members want to be able to come to the next election and say that “It was all the previous Government’s fault it’s all been very hard we’ve done as well as we can and give us another chance.” The reality is that the Government inherited low debt of under 20 percent of GDP compared with 38 percent of GDP when Labour took Government. It also inherited the lowest unemployment rate in the world over the last couple of years swapping that position with South Korea and even now sitting at only 4 percent unemployment far lower than the 7.3 percent unemployment inherited by the last Labour Government from the then National Government. 
National members talk of the Government’s stimulus package and vaunt it as some incredible achievement on their part. The extra amount that the Government is spending on infrastructure is a mere fraction of the increase on infrastructure spending made under the last Labour Government. When the last National Government left office it was spending 1 percent of GDP on transport investment. When the Labour Government left office that was already up to 1.6 percent of GDP—an increase of more than 50 percent. To put it in dollar terms the per annum amount spent on transport and communication by the Government was just over a billion dollars in 1999; it is now $3.5 billion. The major part of that spending was in roading expense. If we look at electricity infrastructure we see that transmission expenditure under the last National Government was running at about $50 million per annum. It was up to $500 million per annum under the last Labour Government yet the National Government heralds an extra one-off $100 million of expenditure it is bringing forward as the answer. 
The last thing I say in my limited time relates to the balance of payments deficit that Mr English referred to. He complained that the deficit is a large amount and that it should have been lower. It was his party that said we should not run surpluses. It was his party that said we should have tax cuts that would have further fed consumption further fed the property bubble further worsened the balance of payments position and further created inflationary pressures that would have increased interest rates. For him to turn up and say the balance of payments problem is a legacy that was the fault of Labour is not wholly truthful. There are huge imbalances in world trade at the moment. There have been for a number of years; there are huge surpluses in countries like China and deficits in the USA and in New Zealand. National’s prescription in recent years would have made that worse not better. Mr English should not try to rewrite history. He has inherited a good set of fiscal positions.