Nash Stuart: Tariff (Malaysia Free Trade Agreement) Amendment Bill — First Reading 
Nash Stuart: Tariff (Malaysia Free Trade Agreement) Amendment Bill — First Reading 
[Volume:662;Page:10274] 
STUART NASH (Labour) 
: 
 I stand in support of the Tariff (Malaysia Free Trade Agreement) Amendment Bill in its first reading. This bill amends the Tariff Act 1988 in order to implement the New Zealand - Malaysia Free Trade Agreement which was signed in Kuala Lumpur in October last year. The bill’s amendments will allow transitional safeguard measures to be applied in appropriate circumstances to imports originating from Malaysia. Like all free-trade agreements ratified in this House during this Government’s term negotiations for this agreement were started by the previous Labour Government in this instance back in 2005 under the Hon Jim Sutton. They were carried out with diligence competence and leadership by the then Minister of Trade Phil Goff our next Prime Minister. It would be good if the National Government could give credit where it is due when it comes to these sorts of bipartisan matters concerning trade. 
This deal expands on the ASEAN-Australia-New Zealand Free Trade Agreement which was signed in February 2009. It cuts trade barriers between Malaysia and New Zealand more swiftly and to a greater extent than the ASEAN-Australia-New Zealand Free Trade Agreement does. This free-trade agreement underlines the close relationship that New Zealand has built with Malaysia over the decades. We hope it will provide a platform for even stronger ties. We have heard the statistics on the growth in trade between the two countries. We all know that if New Zealand is to develop sustainable economic growth then it must follow a policy of export-led growth it must work to foster an economic environment where key competencies around export strategy must be encouraged in any way shape or form and it must continue to foster develop and ratify key relationships with our major trading partners. 
Bill English has stated that his Government’s goal is to drive an export-led recovery. He said: “We’re looking for how to make sure we get a sustainable export-led recovery.” In my view three things are holding back companies in New Zealand from optimising their export growth and therefore New Zealand’s sustainable export growth and wealth creation. Bill English’s Government not only is doing nothing to address these but also is making them worse. Therefore this Government’s actions are increasingly suboptimising any chance New Zealand has of increasing economic growth through the further development of the export sector. The three things holding New Zealand companies back from optimising their export opportunities are a lack of affordable capital a lack of true export competency and an outdated monetary policy. Let me expand on these. 
First is the lack of affordable capital. Only around 10 percent of all business loans are unsecured. This means that around 90 percent of all business loans are secured against assets of the owner of the company—often the family house. This attitude to access to capital will never allow the country to address the issue that we overvalue capital and undervalue labour in this country. Basically this means that we prefer to employ cheap labour rather than spend money on capital in order to improve productivity. This issue has not been addressed by the current Government; rather it has worked against this principle in two ways. First research has shown that the higher the wage the more likely the company is to spend money on capital improvements. This does not— 
Dr Paul Hutchison 
: What are we talking about here? 
STUART NASH 
: This is very relevant because what I am— 
Mr DEPUTY SPEAKER 
: The member must relate it back to the free-trade agreement. I am happy that he use these issues but he must tie his first reading speech back to the substance of the bill. 
STUART NASH 
: This is a very good free-trade agreement as I have mentioned but one of the reasons it will not be optimised is that this Government has not addressed three issues. One issue that will ensure that this Government does not optimise it is the lack of access to affordable capital. As I will point out the higher the wages the more likely a company is to spend money on capital improvements. This does not lead to fewer jobs; rather it leads to greater efficiencies more jobs as companies grow and more important a greater propensity to scale up for export growth and in fact take advantage of this sort of free-trade agreement. 
The second thing that this Government has suggested it will do is sell Kiwibank. This is the Government-owned bank that was set up by the previous Labour-led Government— 
Mr DEPUTY SPEAKER 
: The member is well off the track. I have mentioned that we are talking about a free-trade agreement and he must talk about that. It is about relevancy. If the member does not talk about it I will terminate his speech. He can mention some things but he must tie them back to the substance of the bill. 
STUART NASH 
: Can I address that point of order? 
Mr DEPUTY SPEAKER 
: No. I have ruled and I am inviting you to continue. 
STUART NASH 
: OK. As we know we are a nation of small to medium sized enterprises. This means that 97 percent of New Zealand’s businesses consist of 19 members or fewer. When we are talking about a free-trade agreement we are talking about an ability for companies to scale up and meet export markets—to grow to a point where they can export. Very few of those 97 percent of companies can afford to employ a full-time international marketing or market development manager in Malaysia which is what this free-trade agreement is about let alone open an office in a foreign country like Malaysia where the language is different the legal system is different and the business culture is different which is what we are talking about in this free-trade agreement. We need an agency that is our ears and eyes in global markets. 
When we are talking about this free-trade agreement we come back to the very important point that the Minister who is responsible for New Zealand Trade and Enterprise cut $10 million from its operational budget in 2009. My question to the Government and to the Hon Gerry Brownlee is how they see New Zealand companies optimising their growth with this sort of free-trade agreement in place. I hate to think what Mr Brownlee will cut from this year’s budget. I asked the retiring chief executive officer of New Zealand Trade and Enterprise whether his organisation was New Zealand’s international marketing and market development organisation in places like Malaysia and his response was “If only.” 
The third point holding New Zealand’s economic development back in terms of our taking advantage of a free-trade agreement like the one between New Zealand and Malaysia is our current monetary policy. I would like to elaborate on this a little bit because it cuts right to the heart of what a free-trade agreement is about. The vast majority of trade between New Zealand and Malaysia is in US dollars. What tends to happen is we buy and sell in US dollars; therefore the cross rate is most important to companies that are doing this trade and are expected to take advantage of this free-trade agreement. I would like to again ask whether anyone in this House can tell me how a company can effectively forecast and business plan on the international market like the Malaysian market— 
Sitting suspended from 6 p.m. to 7.30 p.m.