Nash Stuart: Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill — Second Reading In Committee Third Reading 
Nash Stuart: Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill — Second Reading In Committee Third Reading 
[Volume:666;Page:13379] 
STUART NASH (Labour) 
: 
 There is a saying that most people will know. It goes along the lines of “lies damned lies and statistics”. The economy grew by 25 percent under Labour so when the previous speaker John Hayes talked about John Key increasing wage growth I can tell that member that in the 9 years before the previous Labour Government came into office National had increased the minimum wage by $1—$1—over 9 years. Labour took the minimum wage from $7.50 an hour to $12.75— 
Mr DEPUTY SPEAKER 
: This is a second reading of a bill. I refer the member to Speakers’ rulings 105/5 106/1 and 106/2. Although one can mention what the Opposition has said in terms of the debate one cannot dwell on that at length. 
STUART NASH 
: When we look at New Zealand wages in comparison with those of Hong Kong we see that we are in fact quite a low-wage economy. The reason why we are when compared with Hong Kong and our other Asian neighbours is that the former National Government increased the minimum wage by only $1 over 9 years. 
If people had been living in Hong Kong there would have been a revolt—even in a country like Hong Kong. And there was; New Zealand elected a Labour Government that took the minimum wage from $7.50 an hour to $12.75 an hour. When National members talk about Mr Key and his active agenda in terms of going to Hong Kong I say that he has increased the minimum wage by only 50c an hour. If people are earning a million dollars a year—and about 350 people in New Zealand earn a million dollars a year—they are about to get another $1000 a week. But if people are on the median wage in Hawke’s Bay they will get only about $3 a week. That is a travesty. 
I stand in support of this Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill because bilateral trade agreements are vital to the country’s sustained economic development and growth. The previous speaker knows because he was involved in the trade game for a long time that every single free-trade agreement and closer economic partnership that has come before this House was negotiated by either Phil Goff or Jim Sutton. Labour started every single negotiation that has come through this House that we have passed into law. Mr Groser has taken the ball and dotted it down. He has received the final pass and crossed the try line just as that great Hawke’s Bay player Israel Dagg—great Magpie man that he is—did in the recent test against the Springboks. That is all that Mr Groser has done. Phil Goff and the previous Labour Government were the team that actually took the ball and ran with it. 
I will outline just two points. The first is the necessity of negotiating sound free-trade agreements. The second is the fact that this National Government is simply not doing enough to ensure that New Zealand companies can take advantage of new opportunities like the one we are passing into law tonight. Closer economic partnerships or CEPs as they are known are a vital part of New Zealand’s economic development policy. They break down tariff quotas and custom duties that restrict access and profitability for New Zealand exporters and importers. They will hopefully lead to increased imports and exports and to potential added wealth for both countries. New Zealand signed the closer economic partnership with Hong Kong on 29 March 2010 and this bill will implement that agreement. 
Hong Kong is currently our ninth-largest export destination accounting for $823 million last year in exports. New Zealand imported $199 million worth of merchandise goods from Hong Kong last year making Hong Kong the 31st largest source of imported goods. However let us put that into perspective. Hong Kong accounts for only 1.9 percent of New Zealand’s total exported goods and only 0.4 percent of our total imported goods. Therein lies the challenge to this economy going forward. New Zealand’s ninth-largest export destination accounts for only 1.9 percent of our total exported goods. If there were ever a case for global diversification those figures are it. There is a very strong argument for this type of free-trade agreement. It puts potential trading partners on the map and on the radar of New Zealand Trade and Enterprise as well as of potential exporters. Despite Hong Kong’s small size it is a market that is already rapidly expanding. Last year’s total exports increased by 33.6 percent compared with the figure for 2008. However total imports declined by 2.5 percent compared with the figure for 2008. 
The largest area of export growth by percentage was actually that of apples the value of which increased by 122 percent. It is good for the people of Hawke’s Bay considering that that province is “the fruit bowl of New Zealand”. Members can believe it or not but the product registering the second-highest percentage growth is offal which was up by 66 percent over that 2-year period. However the product of the largest value by far—by almost four times that of the next largest—is crustaceans. The value in 2009 was about NZ$200 million free on board. To put that into context sheepmeat exports were worth about $42 million. In terms of imports the largest area of imports is machinery parts which account for about $16 million worth but that dropped by about 15 percent. 
I note that the closer economic partnership does not provide Hong Kong investors with an exemption from New Zealand’s investment screening regime as set out in the Overseas Investment Act 2005. The Act requires overseas investors to apply to the Overseas Investment Office for consent to invest in New Zealand fishing quota sensitive land or business assets over $100 million. The screening threshold for Hong Kong however is $20 million which is well below the threshold of $100 million applicable to other overseas investors. New Zealand service exporters as was mentioned by my colleague the Hon Maryan Street have also secured strong future-proofing of their position in the Hong Kong market through the most favoured nation treatment and a ratchet clause. The most favoured nation treatment means that New Zealand exporters will automatically benefit from any preferential treatment that Hong Kong provides to future free-trade agreement partners subject to certain reservations and exceptions. The ratchet clause means that any future unilateral liberalisation undertaken by Hong Kong in certain sectors will be bound in and committed to New Zealand. 
My second point is the fact that this Government is simply not doing enough to ensure that New Zealand companies can take advantage of any new opportunities generated by this and other free-trade agreements and closer economic partnerships. Prime Minister Key came away from China and said that he wanted trade to that country doubled in 4 years’ time. Well the vast majority of us want the same. Increased sustainable trade is a necessity for New Zealand’s future economic growth and development but the difference between National’s approach to trade and Labour’s approach to trade is quite stark. Under trade Ministers the Hon Phil Goff and the Hon Jim Sutton Labour increased the budget for market development and access opportunities by millions in the knowledge that operating in a foreign environment like China requires very specific skills knowledge and support. 
I ask members to imagine going into a country like Hong Kong where the language the customs the laws the business practice etc. are completely different then take into account that 97 percent of New Zealand’s businesses are small to medium sized enterprises. This means that 97 percent of New Zealand businesses employ 19 people or fewer. They simply do not have the skills competencies or resources to employ a full-time international marketing or market development manager. Labour recognised this and built a support network around key markets to help businesses optimise their opportunities. National under Tim Groser and Gerry Brownlee has instead cut the budget. When questioned about this Mr Groser said: “Our plan is to do more with less.” That is not even a decent slogan—“more with less”—let alone a goal or a plan and it is certainly not a strategy. That is why I say that this Government is not doing enough to help the country and its companies to take advantage of this type of free-trade agreement. 
In conclusion I say that I support this bill. It is a Labour bill of course; it was negotiated by Phil Goff. It is another important step in the process of growing opportunities for New Zealand companies. However as I said that Government over there is simply not doing enough to allow New Zealand companies New Zealand businessmen and businesswomen to take advantage of this. One cannot do anything with a “more with less” strategy. This Government needs to engage more with the business community in terms of allowing these companies to take advantage of the opportunities generated by this agreement which was negotiated by the next Prime Minister of New Zealand the Hon Phil Goff. Thank you.