Nash Stuart: Annual Review Debate — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Annual Review Debate — In Committee[Sitting date: 28 April 2015. Volume:704;Page:2932. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier):You know that a Government member is in real trouble when he gets a call to speak for another 5 minutes and he sits down because he has just got nothing to say. There is nothing to say. He has run out steam like the Government over there. He was in full flight and then suddenly “Pffft!” and he is down. Well Jami-Lee Ross that is what the people of New Zealand are seeing at the moment. Let me just correct you on a couple of points Mr Ross.First and foremost the member talked about debt. Let me just inform you that the last Labour Government got gross debt down from 40 percent of GDP to 18 percent of GDP. I am sure the member knows how much the net debt was when the last Labour Government left office. Let me inform him. It was down to zero. Net debt at the moment is $56 billion and gross debt is $80 billion. That is 40 percent of GDP. When banks go out and talk to households about economic wealth and when you read books about how to grow rich and all that sort of stuff they say: “Get your debt down.” What this Government has done is blow debt out and what it is going to take yet again is another Labour Government coming in and managing the economy in a way that gets the debt down—yet again like we did last time. It is always the way.The one thing I would like to say is that the major difference I see between the National Government and a Labour Government is that National believes that if you leave it to the market it will have the solutions—that the Government has no role to play; leave it to the market. The Government has left it to the market and what have we seen? We have seen that since 2007 according to the Reserve Bank Auckland house prices have increased by 60 percent—by 60 percent. In fact the growth in GDP per capita is below the national average. So if that member believes that this economy—this country—is doing well because house prices have just got out of control in one city and wages have been kept down then his definition of success is completely different from our definition of success. And it is completely different I think from the vast majority of New Zealanders’ definition of success.We cannot have an economy that relies on booming house prices. In fact when the Governor of the Reserve Bank spoke to us at the Finance and Expenditure Committee he actually said that this is a two-speed economy. It is a two-speed economy. You have got Auckland and you have got the rest of New Zealand and that is simply not healthy for the rest of the country. As a provincial MP I see it. And when I hear a member stand up and talk about our rock-star economy I say that the people of Hawke’s Bay for example—the people of Napier who bought tickets to this—are not feeling the love. Auckland is doing well; the rest of New Zealand is not doing well. I am sure the members on that side know this by what happened in Northland. Winston Peter’s message was to send the Government a message and it did.The thing that surprises me—the thing that really surprises me—is that the Government was sent a message. I was quite interested to see how it was going to react to that message and whether it was going to say: “Well goodness me we have neglected the regions. Let’s change the rhetoric and let’s get out there and let’s start empowering those in the provinces.” But the Government has not changed. It just has not changed. The Government believes it has got it right—let the market control the variables and everything will be OK. Well Labour does not believe that. Labour believes that the Government has a role to play in driving economic growth. That is why the people of New Zealand are going to see some very innovative policies come out for the 2017 election which are going to make sure that every single New Zealander shares in the economic success of our country because you cannot have an economy that is based simply on Auckland house prices.The previous member Jami-Lee Ross also spoke about interest rates. He talked about it as good news. The problem we have got—and I think it is acknowledged by a lot of people—is that we are not that productive in this country. Part of the problem we have got is that the cost of capital in New Zealand is significantly higher than it is for a lot of our global competitors. So in order for our companies to invest in plant machinery that is going to improve productivity and allow them to take their products to the world they have got to borrow at 6 or 8 or 9 percent whereas our global competitors can borrow at 1 or 2 percent. That is putting us at an immediate disadvantage. We have got to do something about this if we really want to take on the world in a global way and be competitive.Hon Paul Goldsmith: What do you suggest?STUART NASH: Just employing a whole lot more people might have good short-term labour market outcomes but it does not have great long-term productivity outcomes. We have got to get the cost of money down and the easiest way to do it—the Minister sitting beside the chair says: “What do you suggest?”.