Key John: Imprest Supply Debate — Third Reading 
Key John: Imprest Supply Debate — Third Reading 
[Volume:628;Page:485] 
JOHN KEY (National—Helensville) 
: 
 I move  
That all the words after the word “That” be omitted and the following substituted: “the House declines to give a second reading to the bill because it has no confidence in this Labour minority Government since it has no conviction and purpose and is ignoring the economic challenges New Zealand faces; and calls on the Government to resign immediately.” 
It has not been a good week for the Government has it. It started as it normally does. Michael Cullen has had his normal regular weekly meltdown. He has been very unhappy. Pete Hodgson has proven to the public that he was not just a fool and out of his depth on climate control and climate change; he has moved nicely into the health portfolio and proven that he knows absolutely nothing about it too. Despite the fact that the Minister has all the officials at his disposal it took Tony Ryall on his own to prove that the Minister knows absolutely nothing. 
Gerry Brownlee 
: He’s suffering from Tamiflu. 
JOHN KEY 
: I think Pete Hodgson needs to take blood pressure control pills not Tamiflu. 
This Government is not on top of its game. Its members were tired and really lost for direction during the entire election campaign. Their only policy during the campaign was not to let National get on to the Treasury benches. They were devoid of ideas when they started their campaign and it is the same now. That is probably reflected in the fact that the  
Dominion Post  
took the opportunity this week to score Michael Cullen at zero out of 10 for his performance. I know that Michael Cullen is not very happy about that but the good news is he can only go up from zero. 
Very interestingly in the Speech from the Throne the Government stated once again that getting into the top half of the OECD was one of New Zealand’s primary goals. Well it is no wonder that the Government did not like it when Treasury in its briefing note to the incoming Minister made the point that for New Zealand to get into the top half of the OECD we would have to grow at a rate of around 4 percent. That is double the 2 percent growth rate that we have had. 
I took a moment to reflect on New Zealand’s position in the OECD. We are as members are probably aware 21st out of the 30 wealthy countries in the OECD. But that does not tell the story that is worth our having a discussion about today. We should look at New Zealand’s ranking in per capita terms in comparison with the world because it is not just the OECD that we need to think about. One of the things we note in this regard is that Australia is ranked as the 17th wealthiest country in the developed world—with average income at about $30000. I note that countries with a low tax regime which is advocated by Treasury—Ireland and Hong Kong—ranked well above Australia at fifth and ninth. Countries that have had the good sense to build offshore banking entities like Luxembourg Jersey and others rank well above us. So members can imagine my surprise when I took the opportunity to note that New Zealand is ranked 40th—and the Government says it wants to get New Zealand into the top half of the OECD! That sort of shocked me until I found out that we are behind the Falkland Islands which is 36th behind Liechtenstein behind Brunei and behind Spain. We are two places ahead of the Faeroe Islands which are coming our way three places ahead of Guam and four places ahead of Slovenia. So if anyone thinks this country is on the right path he or she need only look at the list. In fact we are further behind Australia than Puerto Rico is behind New Zealand. This country needs a change of Government. Another election cannot come soon enough. 
It is no wonder that the Government is a little down in the mouth this week. Not only are its Ministers performing extremely badly; poor Michael Cullen is Acting Prime Minister and when Helen Clark comes back to New Zealand Michael Cullen will become “Acting Minister of Finance” because he does not actually make any of the policies that go through the Government any more—he just parrots whatever Helen Clark tells him. 
When a couple of weeks ago Michael Cullen did get a chance to do a little meddling—and he quite enjoys that—he came out with a doozy: he intends to look at intervention in the housing market. New Zealanders will be concerned because most of us know that our most substantial asset is our house. I was a little bit surprised to find out that he said the terms and conditions for this review had been set by Mr Alan Bollard and Treasury. The only problem is that in 2004 Alan Bollard gave a speech where he detailed the exact same terms and references and he rejected them. He went through the list of things that Michael Cullen is asking him to report back on—he will report to Michael Cullen in just a few weeks’ time—and he rejected all of them. All of them were likely to send New Zealand in the wrong direction. Many of them had very large risks indeed and were likely to backfire. 
That is the economic leadership that is coming from this country. I think Michael Cullen is really lost for ideas in this economy and that is why he did not like it when Treasury came out and told him the way things were. That is why he did not like the way things were going. 
I want to make reference to the part about the growing State sector wages bill and the growing size of the State sector because if anything differentiated Labour and National in the last election it was this. National had a view that New Zealanders knew how they wanted to spend their money. National had a view that New Zealanders could get further ahead. National had a view that New Zealanders could build a strong economy. But Labour members do not have that view. That is how we saw it because after 5 years in office the Government has doubled the size of the State sector wages bill—from $2.2 billion to $4 billion in 5 years. I know that business confidence is at an 18-year low but that is not the case in Wellington and I will tell the House why: because it is the only part of the country that is growing above about 3 percent now and that is because the Government is fuelling the boom in Wellington. The Government is out there hiring people and paying them more than they would get in the private sector. 
All of that might be OK if we got value for money but Michael Cullen does not seem to be too worried about that. Treasury has a whole different view. The first thing it said was that for all of the bureaucrats and all of the money being spent there was not any information of note coming out of the State sector on how things were going and that what little information there was frequently gave Ministers and the public a surprise because they were surprised by such poor performance. 
So why is Michael Cullen intent on lifting Government spending to a level that it is way out of control and way beyond what this country can afford? Why is he prepared to do that? Because Michael Cullen thinks he knows best. That is the future for New Zealand under Michael Cullen. It is a future where he knows best a future where he realises that intervention in the housing market will be the best thing—in the same way as he told the country that intervention in the currency market would be such a good thing. We may remember that only about a year ago Michael Cullen convinced the Reserve Bank that it was a great idea to intervene in the currency market. 
Hon Maurice Williamson 
: How did that go? 
JOHN KEY 
: Well he gave the Reserve Bank billions of extra dollars and the moment he did so Alan Bollard got up and said that never in the 18 years since the currency had been floated had the bank used the exchange rate provisions. We have now had an all-time high for the New Zealand dollar—just under US75c—the export sector is on its knees and the intervention provision has never been used. And now Michael Cullen wants to intervene in the property market! That is the leadership coming out of the Labour Government. It is no great surprise at all that we are on an 18-year low for business confidence. 
The one thing that came out of this report loud and clear was that Treasury is under no illusion that growth will occur in New Zealand only when we have a competitive tax regime and only when we are prepared to give New Zealanders the right incentives to get ahead and the right belief that they can make a difference to their lives. 
Hon Pete Hodgson 
: We’re backing Bill! 
JOHN KEY 
: I say: “Take the Tamiflu Pete; you’ll do all right.” I assume he is on the list for Tamiflu. 
Treasury quite rightly pointed out that when New Zealanders face effective marginal tax rates of 60 70 and 80 percent they cannot get ahead in life and they cannot make a difference to their own lives. When they face those tax rates and are on less than the average wage they cannot get ahead. I am not surprised that business confidence is on a slow I am not surprised that Treasury has slated the policies of this Government and I am not surprised that this Government is down in the mouth and happy that an adjournment is coming next week. This Government performs worse and worse and it is desperate to head away with its tail between its legs. It is not enjoying its current position and its Ministers do not turn up in the House—there are only a couple of them here and their combined IQ is not very high. It is a tragedy that this country is looking to these people for leadership. It is no wonder that business confidence is on a slow. It is no wonder that this Government is falling in the polls. It is no wonder that it is all over for the Labour Party.