Parker David: Estimates Debate — In Committee 
Parker David: Estimates Debate — In Committee 
[Volume:627;Page:21986] 
DAVID PARKER (Labour—Otago) 
: 
 I have two points to make before I start my intended speech. Firstly when Dr Bollard was questioned by the Finance and Expenditure Committee he was absolutely clear that if tax cuts were funded in part by borrowing more money and increasing Government debt then that would be absolutely inflationary. It is axiomatic that if borrowings are increased— 
John Key 
: Are you the world’s expert? 
DAVID PARKER 
: I was quoting Dr Bollard from a meeting that member was present at where Dr Bollard made it absolutely clear that if tax cuts were funded through borrowing—which will have to be done if the promises of tax cuts and spending bribes that National has made for this coming election come to fruition—then there is only one way that that equation can be made to work and that is through increasing Government debt. That is somewhere this Government will not go. 
It is not so long ago that this country had spiralling Government debt and when Government debt equalled 70 percent of GDP. 
Hon Dr Nick Smith 
: National fixed that. 
DAVID PARKER 
: No National actually caused that. That was Mr Muldoon. The member has a very short memory. 
John Key 
: What was the absolute level of debt? 
DAVID PARKER 
: The absolute level of debt is absolutely irrelevant. The relative level of debt was 70 percent of GDP. The importance of that is shown by the fact that $1 in $5 of tax that was collected by the then National Government was spent on interest. If the following Labour Government had not substantially restructured the economy that amount would have ballooned to $1 in $4 in 1-2 years. That is why it is important that debt goes down not up. When this Government came to power— 
Dail Jones 
: What was unemployment? 
DAVID PARKER 
: Unemployment was quite low in 1984 but that was on an unsustainable basis. Huge subsidies were afforded only because the Government was increasing Government debt at such a huge rate. 
In the meantime when this Government came to power Government debt had been reduced to 36 percent or 35 percent of GDP. It is now down to under 25 percent of GDP and we are determined to drive it slightly lower down towards 20 percent of GDP which we think is appropriate. Now $1 in $20 of tax is spent on interest rather than $1 in $5 so the taxes people pay can go towards health education superannuation law and order and the things that people in this country expect the Government to provide. 
During the period of this Government growth has also been impressive averaging 4 percent over recent years. That is higher than the OECD average of 2.5 percent higher than Australia’s rate and indeed the rate in the United States which our critics often compare us with. 
Earlier in this debate there was reference to a problem attracting nurses or a problem with the number of nurses at Auckland Hospital. One has to ask oneself why that is—why did nurses desert New Zealand in the 1990s for Australia? The answer is that Australia had better wages and conditions. Why has health expenditure gone up? Part of the reason is we have had to pay our nurses and doctors more in order to keep them in New Zealand. 
Our unemployment rate is 3.8 percent. That is not the tenth-lowest rate in the world—that would be pretty good. It is not the fifth-lowest or the fourth-lowest rate. It is the second-lowest rate in the developed world and that is something we should be proud of. The drop in Maori unemployment on a proportionate basis has been most impressive. In 1999 unemployment stood at 15 percent for Maori overall and 32 percent for young Maori. Overall that figure of 15 percent has dropped to 8.7 percent. It is close to half. That must bode well not just for Maori but also for our future prosperity as a nation and for our future social cohesion. 
There are 250000 more people in jobs than when we took office. In fact it is slightly more than that. One can say that pretty fast but that is more people than the combined populations of Cromwell Alexandra Dunedin Oamaru Queenstown Balclutha Gore and Invercargill—in fact it is more people than there are south of the Waitaki River. That is all people including retired people children and women looking after children who are not in the workforce. There are more people in extra new jobs in New Zealand in the last 6 years than there are people south of the Waitaki River. Let us look at the unemployment statistics for my own electorate.