Copeland Gordon: Financial Review Debate — Procedure In Committee Speaker Recalled In Committee 
Copeland Gordon: Financial Review Debate — Procedure In Committee Speaker Recalled In Committee 
[Volume:616;Page:11847] 
GORDON COPELAND (United Future) 
: 
 I would like to pick up on a few matters related to Treasury and the financial statements of the New Zealand Government in the 2002-03 financial review. The first of those concerns Air New Zealand. The Finance and Expenditure Committee was advised by the Minister that the airline is likely to need substantial investment over the medium to long term. That being the case I suggest that at the time a request is formally lodged by the airline for new capital injection the Government seriously consider selling down part of its stake in the airline to mum and dad investors of New Zealand. That could include the Guardians of New Zealand Superannuation should it wish to take up that option. 
My second point relates to the recent announcement by the Reserve Bank of its impending approach to the House for a capital injection aimed at both strengthening its balance sheet and enabling it in tightly circumscribed conditions to intervene in the foreign exchange market. I have an open mind with regard to those proposals and look forward to receiving briefings and details in due course. I will view any such requests against the background of my desire to ensure that we continue to build New Zealand’s exporting capacity. 
For the rest I want to spend a few minutes talking about the Government’s fiscal management and the way in which it interacts with the growth of the New Zealand economy. Since we undertook the review the Government has announced its intention to proceed with a family assistance package in this year’s Budget which when fully implemented will cost around $1 billion per annum. For Rod Donald’s information it has gone up from the $500 million we were talking about at the time of the review to the new figure of $1 billion—double the amount. The Reserve Bank is relaxed about that fiscal stimulus and believes that it will act as a stabiliser given that economic growth is forecast to decline during the 2004-06 period. Indeed if it were not for the stimulus that will be provided by that package it is likely that we would be looking at a hard landing for the economy with a rapid decline in economic activity the emergence of growing unemployment and many other negative results. 
 However United Future believes that two further immediate steps could be taken. The first of those is the cancellation of GST on rates. That would cost around $250 million to $300 million—money that would then remain in the pockets of all New Zealand property owners be they residential or commercial. Sometimes the shape of fiscal stimulus is every bit as important as its quantum. It seems to us that no GST on rates is an idea whose time has come. Consider the benefit it would give all property owners including farmers who have been hit hard both by the rise and rise of the New Zealand dollar and by adverse weather conditions. 
Similarly United Future seeks a tax rebate for those many New Zealanders who regularly give time to voluntary work in New Zealand. When we think about it we can see that efficient and effective work undertaken by volunteers is the ultimate in productivity—the very thing that our economy so desperately needs. Accordingly we will continue to call on the Government to give those two ideas further in-depth consideration. 
For those who are a little bit confused about the effect of removing GST on rates ratepayers would have money left in their pockets as I have said. For those who are confused about the system it could be done through a zero rating mechanism. That is the clear intention of the policy which we are asking the Government to look at and to pursue. Indeed as I have said it would give every single property owner in this country an immediate lift in the amount of money that is left in his or her pocket. It is the kind of fiscal stimulus that is affordable for the country at this point in time and that would act as a stabiliser thus giving us a softer landing for the undoubted downturn that our economy is going to experience as we go through the next couple of years. 
I think it is important in this debate—given that we are looking at the whole question of the Government’s balance sheet—to give consideration to those kinds of points and to bring them solidly to the attention of the Minister of Finance. I will conclude with those few remarks and save the Committee a few moments.