Smith Lockwood: Financial Review Debate — In Committee 
Smith Lockwood: Financial Review Debate — In Committee 
[Volume:646;Page:14997] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 The Labour list member Charles Chauvel who has just resumed his seat said in response to the challenge from my colleague Bill English about what the Government has to do in this time of real economic uncertainty—and I think I quote him correctly—“We have just got to keep the course steady.” Is that what the member said—“We have just got to keep the course steady.”? Well where has the course taken us so far? I will tell the Committee where it has taken us so far. It has taken us to a place that a few years ago we used to make jokes about—Tasmania. I bet Doug Woolerton can remember that. We used to make jokes about the standard of living in Tasmania. The joke is now on us. Tasmania has gone way ahead of us in terms of its standard of living. That is what “keeping the course steady” has done to Kiwis; it has taken us under a Labour Government to a standard of living way below that of Tasmania. The joke is now on New Zealand. 
I am now going to talk about the period under review—which is a bit of a novelty because Labour members did not even bother talking about it—and that is the last financial year. One of the damning indictments on the Labour Government in that period is its performance on productivity growth in this country. That is what the standard of living is determined by; without productivity growth we will not get an increasing standard of living. The Labour Government in that last period just like in all periods under it squandered so much opportunity. 
What has happened in terms of this country’s productivity? During the 1990s—and I have here the latest statistics which were released on 13 March—growth in our labour productivity was up between 2.5 and 3 percent. It was between 2.5 and 2.8 percent a year. What happened under Labour? It collapsed. The headline says “Labour productivity growth subdued since 2000”. That is when Labour came in. Since then our productivity growth has declined to just 1.1 percent which is less than half what it was in the 1990s. In the year under review labour productivity growth declined to 0.5 percent—almost nil. Multi-factor productivity growth which is equally important if not more important shows the same pattern. In fact in the year under review multi-factor productivity growth under this Labour Government was negative—minus 0.6 percent. 
It is no wonder our standard of living has fallen below that of Tasmania. When we do not have productivity growth we do not get wage growth without inflation. It is the most fundamental economic issue. If Labour thinks more of the same will deliver for New Zealanders it is wrong wrong wrong. Labour so far has delivered a lower standard of living relative to that of the rest of the world because it has collapsed productivity growth. 
We should not be surprised by that. Anyone who has been involved in business knows that under this Labour Government the tentacles of Government regulation now reach down to every aspect of business. It is fascinating to watch members of this Parliament coming to terms with the Electoral Finance Act because it is regulatory legislation. Members all around this Parliament are trying to make their way through the minefield of electoral legislation and regulation. I know that members on that side of the Chamber do not know what the hell to do in response. What I say to them is welcome to what they have done to other businesses welcome to what they have done to the housing and construction business welcome to what they have done to any developmental business. That is the kind of regulatory minefield that businesses have had to try to find their way through since 2000 since Labour introduced the Building Act and the Local Government Act and changed the Land Transport Act. All those pieces of legislation have added more regulation just like the Electoral Finance Act does. I say to those Labour members: “Welcome to the real world. The regulations that you have imposed on yourselves you’re struggling to comply with.” That is the problem: regulations are crippling this country. More of the same will see New Zealand go further and further down the tubes. 
Under the years of this Labour Government there has been a period of golden international economic weather. Since the Asian crisis of 1998 there has been a remarkable international economic environment. Labour has been happy to claim the credit for that. Let it now cope with the negative consequences of its poor management.