Tisch Lindsay: Debate on Prime Minister’s Statement 
Tisch Lindsay: Debate on Prime Minister’s Statement 
[Volume:637;Page:7378] 
LINDSAY TISCH (National—Piako) 
: 
 In last year’s Prime Minister’s statement the catchcry was “economic transformation”. This year the catchcry—or slogan if that is what we want to call it—is “sustainability”. I do not really know what that means but I do know that the performance of this Government over the last 12 months and in the first 2 days of this sitting year is such that the Government will not be sustainable or sustained. In fact the Government is terminal. 
I want to look first at some of the issues pertaining to economic transformation. In 2000 the Government said it wanted to have New Zealand back in the top half of the OECD. That was its aim for growth; that is what it was looking to do. Well the latest OECD data confirms that New Zealand is nowhere near the top of the OECD. In fact it has slipped from the No. 20 spot to No. 21. We are not in the top half; we are in the bottom third. We are not moving up; we are moving backwards. That is what is happening. So the Government can use rhetoric about how well things are going but when it comes down to growth and productivity and when we are compared with overseas countries—our competitors; those we have to compete with on the international stage—New Zealand is in fact going down. 
The OECD assessed our purchasing power the parity value of New Zealand’s real GDP per capita to be US$25300 in 2005. It assessed Spain at US$27300 and Greece—slightly below us—at US$23200. Finland occupied the mid-ranked position of 15th at US$31400. And where was our closest neighbour in all of this? The country with which we do most of our trade—and this is the reason so many New Zealanders are moving offshore to live in Australia—was ranked 11th. Where was New Zealand ranked? We were ranked at No. 20 and we are now at No. 21. 
In the Prime Minister’s speech she talked about a tax on waste. This Government has considered many taxes in the last 12 months. Do members remember the carbon tax? Do they remember the “fart tax”? The Government had to drop those. What about the deforestation tax that was discussed in question time today—the $13000 a hectare that landowners will have to pay in tax if they move out of forestry? 
The Government has the homeownership tax now. I want to make it very clear to colleagues and Government members that although the Minister of Finance has said that this tax will not proceed the genesis of this tax the thought and the media comment on it—that it should actually be considered—is very very dangerous. 
New Zealanders aspire to homeownership. This tax would add about $200 per month to the cost of a homeowner’s fixed-interest rate mortgage. It has been estimated that the tax would affect about 85 percent of those who have home mortgages. In fact 1.2 million people would be affected by this mortgage levy scheme. We aspire to homeownership; New Zealanders pride themselves on their quarter-acre paradise with a house—that is what they strive for. 
In a business context the tax has ramifications that members over there would not know about. Many small-business people use the equity in their homes to secure a business loan. They do not necessarily have equity in their businesses and in fact banks do not like to lend on plant equipment and goods. Banks like to have something more secure than that—they want land and buildings; they want a mortgage. They may well take a debenture over stock and plant but they look for something more substantive such as land and buildings. Small-business owners would be looking to achieve that security for working capital purposes—to be able to have the cash flow they need in their businesses. That is why homeownership is so important to small businesses. 
Yet what is this Government intending to do? Well it even thought of a mortgage levy of $202 per month which would put absolutely huge compliance costs on small businesses or homeowners compliance costs that would be very very difficult to sustain. The increase for someone with a fixed-rate mortgage of $150000 has been estimated to be $202 per month. We are very concerned about that and although the Government today has said that it will not do the scheme that it will backtrack—the Prime Minister said that the scheme was “dead in the water”—the very fact that it was actually debated that it had a genesis in the paper and that people have talked about it shows how ill-informed this Government is in trying to move New Zealanders forward in their growth and prosperity. 
Another point that my colleague Bob Clarkson is really concerned about is of course the cost of housing. If we look in today’s  
New Zealand Herald 
 we see the headline: “City house costs 85pc above Australia: study”. 
Hon Clayton Cosgrove 
: Oh that’s complete rubbish. You silly little man. 
LINDSAY TISCH 
: Well I did not write this. This was written by a  
New Zealand Herald  
reporter. And who is the person— 
Hon David Carter 
: That’s what they do. They attack the media all the time. 
LINDSAY TISCH 
: They are attacking the media. Just as they attack the media over comments in relation to the friction between the Prime Minister and the Minister of Finance now they want to go out and attack the media over making these sorts of statements. This Government is terminal; it is not sustainable—it is actually terminal.  
When we look at this article I have here we see that a former Labour MP is saying: “The proportion of families able to realise the classic New Zealand dream of home ownership is dropping dramatically.” Who said that? Richard Northey. He was a Labour member and he comes up with some reasons that the Government needs to look at. If the Government were to levy fixed rate mortgages I can tell members that it would get extremely difficult for those people who aspire to homeownership and even for those who already have homes. We are already seeing in some areas that as the market starts to deflate and as we start to see mortgagee sales the equity in many places is reduced substantially. 
Some of these members probably do not even realise what happened in the mid-1980s. The Government of that time which was a Labour Government introduced a scheme called the mortgage discounting scheme. I happened to be a farm appraiser for the Rural Bank at the time and we were valuing properties and giving farmers in the Waikato money to actually walk off their farms. That is the sort of problem that could be associated with this tax if the Government were to go ahead with the sort of nonsense being advocated now. 
I move to the Small Business Advisory Group a group that was set up under Minister Tamihere and that has continued. In its last report to the Government its rating of the Government’s performance was 5.8 percent. All those members on that committee have now been replaced; there is a new group of 12 members. What is most disturbing is that the group had previously up until now been apolitical. The people there had been representatives of their industries and trades. But now with the naming of the new members we see that a Council of Trade Unions representative has been appointed as a special adviser to the group. We say that that is wrong. If a trade union representative can be appointed why is there not a member from the Employers and Manufacturers Association or the Chamber of Commerce or Business New Zealand? The success of an advisory group must lie in those people having their independence; the group must be robust and transparent. 
We are seeing now that the Government moved because it did not like some of the recommendations that were made by the Small Business Advisory Group. It got a rating of only 5.8 percent. This Government has not helped business. This Government’s policy for growth and prosperity has not achieved anything. We will be watching very closely at Budget time because the Prime Minister’s statement has done absolutely nothing to instil confidence in the business sector. The Government is adding increased costs in compliance for all concerned.