Parker David: Supplementary Estimates — Imprest Supply Debate 
Parker David: Supplementary Estimates — Imprest Supply Debate 
[Volume:618;Page:13798] 
DAVID PARKER (Labour—Otago) 
: 
 I rise to speak in support of the Appropriation (2003/04 Supplementary Estimates) Bill. This is a time when we are meant to be talking mainly about money because it is when the Government’s finances are under scrutiny. Appropriation is the statutory mechanism by which Parliament authorises the Government to spend money and to incur expenses and liabilities. If the supplementary estimates bill is not passed then the Government cannot do that legally. Other than appropriations that are authorised by permanent legislative authority—and those are pretty minor—the permanent appropriations are contained in the estimates which we debated a couple of weeks ago and in the supplementary estimates which we are dealing with today. 
The reason why we are not hearing much talk about the supplementary estimates in terms of their numbers is that they look so good. The Opposition is not focusing on those because the fundamentals of the economy and the Government’s books are things to be proud of. 
If we look back to the mid-1980s when debt was the equivalent of about 70 percent of the gross domestic product (GDP) and when one dollar in five was spent on interest we can think about which party was responsible for government then and it was National. In the years since then through some good work of the Labour Government—and I have to acknowledge in some part of the National Government in the 1990s—Government debt has decreased. By the time the previous National Government left office the debt was still at 35.6 percent of GDP but this very good Labour Government has reduced debt to under 25 percent of GDP. The supplementary estimates show that that trend is continuing. Indeed one of the standout facts is that following this bill being passed Government debt will still have decreased over the last year by $2 billion to be under 25 percent of GDP. So we are now in the position when rather than one in five dollars being spent on interest only one in 20 dollars is being spent on interest. 
Against that background one would wonder what complaints would be heard from the Opposition. Well one of the things that has had some circulation in my electorate is a little leaflet dropped by the ACT party which is talking about a $6 billion surplus and saying that that is justification for some great tax cut. Well let us analyse that a little bit further because the Budget and the supplementary estimates both show that that cut cannot be made without either a significant cut in Government services or an increase in Government debt back up towards the high levels we had under Mr Muldoon—or probably both. 
The operating balance excluding revaluations and accounting changes is one measure of the surplus. It is true that there is such an operating balance of about $6 billion but that $6 billion is not there to be spent. If that $6 billion were to be spent without significant cuts to either health or education services which along with superannuation are the two big spending items of Government then Government debt would have increased in the last year by $4 billion and would increase in the coming year by about $6 billion. So New Zealand’s debt position would remarkably go against the trend that we have managed to achieve over the last 10 to 15 years and debt would start to climb again. That is not desirable. 
What the ACT party ignores is that from that $6 billion surplus things have to be funded. ACT might argue that the New Zealand Superannuation pre-funding is unnecessary but if it were not being funded then ACT would have to put more money away for reducing Government debt in order to be in a position to be able to fund the bulge of superannuation when it came along. 
But let us put aside superannuation and think about what else is funded out of that surplus. There are a lot of other capital costs that have to be funded. Some of the big-ticket items include things such as making funds available for the new prisons that Mr Franks from his last speech obviously would like to see built to accommodate longer and longer prison sentences. The cost of those new prisons is already significant. About $400 million I think from memory is being put towards those in the coming year. That sum comes out of money after the operating balance excluding revaluations and accounting changes is calculated. Mr Franks would not be able to do that if he were spending his so-called $6 billion surplus. 
Other things that are funded include capital injections into the areas of health and housing to build hospitals and houses. Other things are the funding of student loans and the purchase of assets for defence equipment such as the new vehicles needed by the Army and the new vessels needed for the Navy. 
In terms of the criticisms we hear from Dr Brash his criticism of the Budget last year was the same thing he parroted out again this year—that the Budget would not narrow the large gap that has arisen between the living standards of New Zealanders and Australians. 
Hon David Carter 
: That’s right. 
DAVID PARKER 
: Yes that is what he said. 
Hon David Carter 
: It’s the biggest issue this country faces. 
DAVID PARKER 
: Well it is interesting when the Opposition quotes that gap—and I will use the exact words Dr Brash used in a  
Dominion Post  
article. He said that the growth we have now is at “… too slow a growth rate to narrow the large gap in living standards between New Zealand and Australia that emerged during the seventies and eighties.” Well it is very strange that in this year he actually talks about the 1970s and 1980s but forgets about the 1990s so I went and had a look at the statistics. This is something I have said before but obviously Dr Brash is not listening because he still parrots his misguided view of history. In the 1980s the decade of Labour Australia started that decade as No. 10 in the OECD on per capita earnings and New Zealand was No. 18. By the end of that decade it is true that New Zealand had gone back one place to the 19th position but Australia had charged back six places. 
Mark Peck 
: What? 
DAVID PARKER 
: Six places back compared with New Zealand’s one place. Well that is hardly a criticism of Labour in its decade. If we look at the next decade of the 1990s we see that New Zealand went backwards from position 19 to position 20 when Australia went forward by four places. 
Mark Peck 
: New Zealand went back? 
DAVID PARKER 
: New Zealand went back; Australia went forward and that was the decade of the 1990s. 
Hon George Hawkins 
: Who was in Government? 
DAVID PARKER 
: The National Party was the Government—and who the Governor of the Reserve Bank was is another question. 
Mark Peck 
: Who was it? 
DAVID PARKER 
: Dr Don Brash. So his answer for everything which is “austerity austerity and more austerity; cut services cut everything” does not make the nation wealthier. 
We heard a couple of months ago that the National Party was saying “Fund on the basis of need not race.” That is what this latest Budget does. When it comes around to doing something on the basis of need as does this current Budget which focuses on working families and improving their disposable incomes National says: “No. Don’t do it.” and votes against it. New Zealand First votes in favour of it United Future votes in favour of it the Greens vote in favour of it Labour votes in favour of it the Progressives vote for it but who votes against it? National does. It pretends it would fund on the basis of need but that fiction is not carried out. 
I will quote some other statistics in support of that. Between 1986 and 1998 the families in the bottom five deciles went backwards in terms of real income. Not just the bottom 10 percent not just the bottom 20 percent not just the bottom 30 percent not just the bottom 40 percent but half 50 percent of New Zealand families went backwards in terms of their real disposable incomes. That happened primarily under the decade of National being in charge of the Treasury benches when Dr Brash was in charge of monetary policy and had his foot on the throat of the New Zealand economy. 
Mark Peck 
: Did it trickle down? 
DAVID PARKER 
: It did not trickle down; it trickled out of the pockets of the bottom 50 percent of New Zealanders and into the pockets of the top 50 percent. I am actually a member of the top 50 percent of New Zealanders by income. I believe in capitalism. I am a businessman. I like to see people profit but I like to see everyone profit—not just the top 50 percent. Where did all the profit go? It was not just concentrated in the pockets of the top 50 percent of New Zealanders. That sounds pretty extreme in itself and it was by international standards; but when the bottom 50 percent was going down and the 40 percent ahead of them were staying pretty static over that same period the top 10 percent were increasing their disposable household incomes by 41 percent. Against that background our statement in the Budget was that we think the focus should be on improving the incomes of low to middle income families with children. That view is one that every party in this Parliament except National and ACT feels it can support. When the electorate looks at the leaders of those two parties Dr Brash and Mr Hide—the kind face of New Zealand politics?—it can see through them. It knows that the prescription of those two leaders should they ever get into power is more austerity and less wealth for the bulk of the population and gains for a very small minority at the top.