Groser Tim: Budget Debate 
Groser Tim: Budget Debate 
[Volume:647;Page:16475] 
TIM GROSER (National) 
: 
 I think that New Zealanders understand and I am almost certain that the Government understands that the debate taking place not just here but in the media and around the country—in bars and everywhere else that New Zealanders get together to speak about matters political from time to time—is a debate not about just one single Budget; it is a debate about a Budget that this third-term Labour Government has made on behalf of New Zealand in the context of 9 years of a set of political choices. 
Had the Labour Government in its first couple of Budgets come out with a $16 a week tax cut for the average Kiwi most Kiwis would have said: “Fair enough. It’s a good start. Let’s see where we can move from there.” But after 9 years I do not believe that it is accurate even to call this measure a tax cut. I believe that it is a tax adjustment for the wonderful phenomenon known amongst economists as fiscal drag—an adjustment for inflation. After 9 years I do not think there is a lot of generosity out there in New Zealand over a $16 a week tax cut for the average New Zealand worker. I do not think there is a lot of generosity of spirit at all when we look at the tax cut in this context. 
Was it not great when the good times rolled? Was it not great when things were just trucking along in New Zealand when we had the highest terms of trade for a quarter of a century and when inflation peaked at 14 percent in 1991? Inflation had tracked right down to about 2 percent by the turn of this century. Unemployment had tracked down from around 11 percent to about 6 percent and in the first few years of the Labour Government it was set to go down further—because the roots of good policy are always laid many years in advance. Was it not good when interest rates were lower for the average Kiwi family? The average family is now struggling to make ends meet as their mortgage bears the brunt. Was it not great when interest rates were around 6 percent at the start of this 9-year period? 
These factors were fuelling the surplus. I have to give the Hon Dr Cullen an AA+ for his intriguing efforts to deny the reality of that surplus for about 7 years. It was a remarkable performance when everybody else could see it except Dr Cullen. These factors fuelled large structural surpluses which gave this Government the opportunity to actually build on the successes and to take this country forward. 
Yeah it was great when the good times were rolling but members all know that we are now looking at tough times and that there are literally people out there in Struggle Street who are asking what has happened to those good times. What has happened to the opportunities to take New Zealand forward that those good times offered? I think the answer for those people is essentially a political choice that the Labour Government made quite early on. I saw it at the Catching the Knowledge Wave conference which I know from having been involved in it in a minor way was set up to provide the political vocabulary for Prime Minister Helen Clark and her Ministers and to provide them with ideas about how to take this country forward. 
But as members of the Government well know the Labour Party had been torn asunder politically in the previous decade. There were 17 Alliance members of Parliament. You would know Mr Assistant Speaker—you were here at the time. Probably one-third of the Labour caucus was more inclined towards the Alliance MPs and the Government of the day—Helen Clark’s Government—made a conscious political choice that if it came down to a choice between advancing policies that would help to move New Zealand forward or advancing policies that would help to solidify the Labour Government’s political interests it would choose to solidify the political interests of the Labour Government. 
And that has been the story. That is why Prime Minister Helen Clark dropped the chairman of the conference Dr John Hood right in the proverbial. I saw it happen. When she looked at the agenda of that very interesting event in New Zealand’s political and economic history and then looked across at the tattered situation of the Labour Party in the 1990s she made a choice. And now we are seeing the effects of that choice. We see that choice in favour of Labour’s political interests in not just this Budget but the Electoral Finance Act and a series of ancillary decisions made around us. It is all explained by the same dynamic down to the point where I have to ask a disturbing question. Is this Government as it retreats poisoning the well? Is this Government as it retreats poisoning the well for those who follow? 
If we sit down and look at the decision to renationalise the railways I think we realise that that disturbing question has to be raised. There are a number of different aspects to it and one is the price. Even this Budget starts a process whereby Treasury bound by the Fiscal Responsibility Act and bound by its commitment to accounting practice has to start marking down the value of the assets to their actual market value. We already know that that is one part of it. 
For those New Zealanders who are not aware of what the phrase “my Helen Clark moment” means in relation to the price of the railways let me quickly rehearse it. It is actually an Australian joke—it is a bit like our Tui ads—that refers to a particular event. The Australian who cleaned up with the bonus from Dr Cullen of $250 million more than what the asset was worth—it was at least that; we do not know quite what the figure is—referred to a “Helen Clark moment”. This was of course a reference to I believe Rupert Murdoch referring to his “Packer moment” when he sold one of the television channels—I think it was Channel 9 but I am not sure about that—to Packer for a $1 billion or thereabouts. When Kerry Packer got into financial trouble Rupert Murdoch bought it back again for I think a quarter of a billion dollars or something close to that—a quarter of the price—and in public he referred to it as his “Packer moment”. We have to understand the significance of the quotation from the Australian company that the sale was “my Helen Clark moment”. 
There is the price issue but also there is a whole set of management issues. One of the things that I find really intriguing around the nationalisation of the railways given what we know about the rorts of the past when they were under State control was the extraordinary relative silence of the union movement. It was quite extraordinary. By the way I think it was very very wise to be quiet. In fact I would liken it to the prudent silence of someone in a small country town who has just won Lotto. It is very prudent to remain quiet about winning Lotto in a situation like that. The unions know what the nationalisation implies; they can see an opportunity. If National is the Government they might find they have a stiffer time of it. 
We then look at the tax cuts— 
Jill Pettis 
: What does that mean Tim? 
TIM GROSER 
: It means that we will defend the taxpayers’ interests. We then look at the tax cuts not simply in terms of the issue I have been discussing—whether they were a good investment by the average voter who voted for Labour over a 3-year period—but also in regard to their economic effects. Thank you.