Parker David: Debate on Prime Minister’s Statement 
Parker David: Debate on Prime Minister’s Statement 
[Volume:606;Page:3400] 
DAVID PARKER (NZ Labour—Otago) 
: 
 I rise to speak in support of the Prime Minister’s statement. I want to focus a little on contrasting the economic policies of Labour with those of National and ACT. ACT’s economic policy is as flawed as National’s but given recent events concerning allegations of improper conduct by ACT MPs concerning the Pipi Foundation and trust monies perhaps we should not be surprised. What has been the ACT party’s response to its links with the Pipi Foundation? Obfuscation! At one stage it tried to blame Labour. Its latest “Act” has been to “Hide” by proposing an alias. That is right—a new name. What is it? It is “ACT” aka “The Liberals”. Using an alias like “The Liberals” to describe ACT is an oxymoron as I think it is defined in grammatical terms. I am sure that most of us could think of a lot more appropriate names for ACT but “The Liberals” just does not do it for me Mr Franks. In the spirit of the new parliamentary year I will give him a few ideas that came to my mind. Perhaps it could be the “Economic Jihad” or how about the “Ruth Richardson Front”? The “Fundamentalist Foundation” has a bit of a ring about it. I did give some fleeting thought to the “Neoclassical Revivalists” because that conveys some of the fundamentalist act of faith that is behind the party’s neoclassical economics. I am sure that lots of others will have better ideas than me but please spare us “The Liberals”! In the context of ACT that has more spin than any World Cup bowler.  
New Zealand is a better place than it was 4 years ago and the Prime Minister’s opening statement to Parliament can give our people confidence that we will continue to advance as a nation. Underpinning New Zealand’s progress has been the philosophy that underpins the economic decisions of the Labour-led Government. Social democracy which we favour is built on a sound philosophical framework. The Labour Party believes that a moderate and responsible Government like ours helps build a prosperous and fair economy. Its social-democratic economic policy can be defined both by what it is and what it is not. It is not a controlled command economy à la the failed far-left economies like North Korea nor is it the highly regulated protectionist economy that failed in the late 1970s and 1980s. Equally it is not the fundamentalist neoclassical economy still favoured by ACT and National. In most overseas countries the ideology of fundamentalist neoclassic economics is seen as flawed. Our own New Zealand experience of the adverse human and economic consequences of that austere misguided neoclassical fundamentalism is one of the reasons I became active in the Labour Party 6 years ago. The National and ACT parties’ continued obsession with squeezing inflation no matter what the economic and social cost relied upon a simplistic economic model altogether too narrow to make good sense.  
What about National and ACT? Have they moved on? No—never! They will die in the ditches. They cling to the purity of their simplistic neoclassical views. They still think that issues of distribution and efficiency can be separated. They do not care if there is great disparity in income and wealth. They say and act as if it does not matter. They do not think it has any effect on the overall performance of the economy but we know it does. Contrast that with the philosophy of the Labour Party’s economic policies. We think social cohesiveness and equality of opportunity are important to economic prosperity and to personal security. We think the failed neoclassical policies that widened the gap of wealth and income between New Zealanders undermine the economy and threaten the prosperity of us all. We say that their policies were one of the reasons behind the poor performance of the New Zealand economy before we took over.  
That does not mean that Labour wants all New Zealanders to be the same. We do celebrate success. We want innovation. We do not say that all is perfect in New Zealand—and it never will be. We do need to improve our savings and our investment. We have a very poor savings record. We do need to improve the lot of low-income families and children. But New Zealand is a better place than it has been for a while and it is certainly better than it was 3½ or 4 years ago when Labour took over. Paid employment is the most effective way of ensuring a decent income and the equitable sharing of work and wealth.  
New Zealand’s labour force participation rates are high yet our unemployment rates are low. They have dropped very significantly to below 5 percent. That is the ninth lowest in the OECD. That is wonderful. Public debt is decreasing the Budget is well controlled and the future looks pretty good—especially when we compare ourselves with many of the overseas economies that we traditionally compare ourselves with. Yet in this debate we have heard ACT and National complaining that New Zealand’s economic performance under Labour is poor. That is nonsense. Growth is strong. 
Stephen Franks 
: Don’t go too far. 
DAVID PARKER 
: Gross domestic product—and Mr Franks will like this—is at an all-time high. ACT and National trot out their tired old comparisons of our wealth and income compared with Australia yet they continue to deny the obvious. One of the main reasons that Australia surged ahead of New Zealand in the late 1990s was that it was running a pragmatic economic policy when New Zealand was strangling its productive sectors with its radical imposition of neoclassical economics. 
Stephen Franks 
: Dig a new hole. 
DAVID PARKER 
: Mr Franks says dig a new hole but what would ACT and National do? Their prescription is their old bitter and destructive medicine. The recent winner of the Nobel Prize in economics is a guy called Joseph Stiglitz. For those who care to read he has shown quite compellingly that the neoclassical economic model favoured by Dr Brash and Mr Hide is quite flawed. The assumptions that are necessary to make neoclassical economic models work are just so simplistic and wrong. When the more complex dynamics of a real economy are factored in the neoclassical model fails. One of the examples used by Mr Stiglitz is how the IMF’s neoclassical response to Asian economic problems in the 1990s exacerbated rather than helped those problems. Most reputable commentators now agree with that analysis yet New Zealanders—under National and the then Reserve Bank Governor Don Brash—suffered the same malaise. Unduly harsh monetary policy strangled our economy quite unnecessarily yet that old IMF dogma that neoclassical fundamentalism is still the dogma of National and ACT. New Zealand’s economy has been unleashed from the National Party’s straightjacket but given half a chance Don Brash and Rodney Hide would put the straightjacket back on and pull it in another notch. Most New Zealanders know that would hurt. The so-called Washington consensus of neoclassical theories which are still favoured by National and ACT have as little international support these days as Washington’s threatened unilateral war against Iraq.  
I will turn to that issue briefly because once again ACT has got it completely wrong. Labour along with most European countries is correct. The consequences of war against Iraq include as we all know dead and severely maimed innocent people. I am one of those who thinks that the invasion of Kuwait set up a circumstance that justified a war. I also think that there would have been justification at that time for going all the way to Baghdad but the decision was made not to go there. A decade has passed since then. Although Iraq’s subsequent breaches of UN resolutions are terrible they do not justify a unilateral response on the part of the United States. I compliment both the Rt Hon Helen Clark and the Hon Phil Goff on their sound leadership on this issue because I feel confident that the course they have plotted is the right one.  
I also endorse Peter Dunne’s comments in relation to Israel. I am opposed to the Israeli responses to Palestinian grievances. The continued occupation of large parts of the West Bank by illegal Israeli settlements is not justified; nor are their provocative and destructive incursions into the Gaza Strip. That in turn does not justify the suicide bombing by Palestinians but I hope that the international community will bring increased pressure both on Israel and on the US financiers to curb Israeli excesses and allow the establishment of a Palestinian state.