Parker David: General Debate 
Parker David: General Debate 
[Volume:671;Page:17761] 
Hon DAVID PARKER (Labour) 
: 
 Tony Ryall was the second speaker from National we have heard in the general debate and neither of them referred to their management—or as we call it mismanagement—of the economy because the news is so bad. The National Government was elected on the promise to close the wage gap with Australia but it is growing. The National Government was elected on the promise of creating a stronger and brighter future for New Zealand but it has become dimmer. The National Government was elected on the promise to cause a step change in the New Zealand economy but we are in a second recession or close to that. The National Government is so fixated on Labour that it does not get on and manage the economy as it ought to. 
In the face of criticism that the National Government has fiddled while the economy has burnt National has now come back with a plan to sell part of the State-owned enterprises particularly part of the electricity-related State-owned enterprises. We heard the list from Tony Ryall and he still does not get it. The sale of Government-owned infrastructure assets with monopoly characteristics results in overseas ownership. The profits flow offshore and there are increased prices to the cost of consumers while the infrastructure is run down. That was the experience with Telecom and New Zealand Rail and that will be the experience in respect of the electricity companies if the Government sells them. They are two sides of the same coin. If the Government strengthens the private sector ethic in respect of those State-owned enterprises they will both cut costs and increase prices to the maximum. 
We know that the electricity market is uncompetitive. There were $4.3 billion of excess profits stripped out of it. The Commerce Commission found that out just after Labour left office when the commission reported back on the inquiry we had started. Since then the Government has done nothing and prices continue to go up. We have a flat economy. We have flat demand for electricity yet dividends go up and prices continue to go up. The sale of electricity State-owned enterprise interests will put up electricity prices. 
It is fair to question the economic mismanagement by the Government. The latest example we have is South Canterbury Finance. Yes it came into the guarantee scheme. No one is complaining that it came into the guarantee scheme. 
Paul Quinn 
: You put it there. 
Hon DAVID PARKER 
: No we did not. But then the liabilities grew by hundreds of millions of dollars because the Government let that risk grow despite the fact that it admits that it was warned by KordaMentha and others that the liabilities were growing and South Canterbury Finance was being mismanaged. Then when the issue came to a head the Government had the ability to make the losses lower than they have been. It could have put South Canterbury Finance into statutory management. Sandy Maier who did that for DFC was there to manage it. He could have done it as he did for DFC. Fran O’Sullivan has made that point and it is fair. Further than that the Government could have had the liabilities capped at about $500 million by accepting the offer from third parties to recapitalise South Canterbury Finance. But no Bill English and John Key knew better than to do that. 
What has been the outcome? It is $1.2 billion of losses instead of $500 million of losses. There should have been only $300 million of losses but the Government let the liability grow from the time that South Canterbury Finance came into the guarantee scheme until it went broke. Even putting that aside the Government caused an additional $500 million worth of losses. 
This Government has no plan. That is why we have an economic malaise. That is why we have unemployment going up. That is why we have a $16 billion deficit which is equivalent to 9 percent of GDP. The Government should not blame the deficit on the Christchurch earthquake. The Treasury re-estimation of the future economic progress of this country shows that more than half of the problems and deterioration— 
Hon David Cunliffe 
: Two-thirds. 
Hon DAVID PARKER 
: My colleague says it is two-thirds—arise from factors other than the earthquake. The earthquake is cover for the Government to blame everything on that. The global financial crisis is also blamed. Other countries like the USA and the United Kingdom are popping out of the recession when New Zealand is going back into a second one or is so close to doing it that it does not matter. We are in an economic malaise because the Government does not have a plan for the country. It knows about only one thing: tax cuts. Economic policy should be much broader than just tax cuts. Even in respect of the tax cuts the Government got it wrong because so much was directed to the same small proportion of our population who will get the money if they sell the State-owned enterprise shares.