Bishop Chris: Annual Review Debate — In CommitteeText is incorporated into the Bound VolumeBishop Chris: Annual Review Debate — In Committee[Sitting date: 28 April 2015. Volume:704;Page:2928. Text is incorporated into the Bound Volume.]CHRIS BISHOP (National):It is a pleasure to take a call on the Government’s 2013-14 financial statements. It is a pleasure to take a call because this is a Government that is moving New Zealand in the right direction. We are actually in a rather unique situation for New Zealand. New Zealand is growing at about 3 percent a year and we have inflation at about zero. That is actually extraordinary within past New Zealand history—to grow at a high rate without incurring inflation. What that means is that jobs are being created and New Zealand is getting ahead. More important New Zealanders are getting ahead because wages are rising faster than inflation. So it is a pleasure to take a call on this.I want to deal with two issues that have been raised by the Opposition in the debate so far. The first is about debt and the surplus. The second is about research and development. So firstly let us talk about Government debt. We heard from members opposite particularly Annette King about how the National Government is a woeful fiscal manager and how Labour was amazing and ran surpluses for 9 years etc. and there is a complaint about the surplus. We heard the same thing from Russel Norman. There are three things to say in response to that. The first is that the premise that the Labour Government was a wonderful fiscal manager is wrong because it was the Labour Party and the Labour Government that left New Zealand with never-ending Budget deficits—never-ending fiscal deficits—in 2008 when the National Government came to office. They often say: “Oh we ran nine surpluses.”—wrong. The 2008-09 Budget forecast a deficit of $3.9 billion. So it is just wrong for Labour to continually assert that it ran 9 years of surpluses.Between 2003 and 2008 Government spending increased 50 percent in 5 years—50 percent in 5 years. Interestingly the Salvation Army in 2008 said that there had been a lamentable lack of social progress despite the increase in Government spending. We have actually got that under control. Net debt was forecast to increase to 60 percent of GDP by the 2020s; we have got that down. The first thing to say is that the premise that the Labour Government was a great fiscal manager is wrong.Secondly over the last 7 years the Labour Party and members opposite have continually opposed every piece of fiscal restraint that this Government has implemented. As the Minister of Finance Mr English rightly pointed out Grant Robertson stands outside buildings protesting about things. Only a year ago Sue Moroney was going on about how it was a shocker that the Government cut Moroccan cooking course subsidies in her neck of the woods. Even Government cuts to Moroccan cooking those sorts of things—which I think all of us can agree should be paid for by people with their own money rather than the Government—they were opposed to.The third thing—listen up Annette listen up—is that the Labour Party actually encouraged more spending over the last 6 and 7 years particularly at the height of the global financial crisis. It was David Cunliffe who was the Opposition spokesperson on finance at that time who was going on about Keynesian deficit spending. We really had to you know throw everything we could at the global financial crisis and really ramp up Government spending! And now Opposition members have the temerity to come down to the Chamber and complain about debt. Well we have got debt under control. Net debt is forecast to peak at half the level it was going to peak at under a Labour Government and we are moving in a strong direction back to surplus.Another thing I want to point out is about research and development because we heard an actually quite considered speech from Russel Norman—an actually quite considered speech to be fair—but he made a wrong assertion. The assertion was that National has cut research and development spending and cut innovation funding. That is not true and I want to put on the record for the Committee that this Government has increased spending on research and development and innovation by a massive 70 percent in the last 7 years.Tim Macindoe: How much?CHRIS BISHOP: 70 percent. It was forecast to hit $1.5 billion by the 2015-16 year. In fact business expenditure on research and development is rising. It rose between 2010 and 2012. Do we want it to go up more? Of course we do. Do we want to see more businesses investing in research and development and innovation? Of course we do but we are definitely heading in the right direction and that is very important.I want to close by talking about our growth prospects because it is only economic growth that will lead to better lives for New Zealanders and particularly it is only economic growth that will help us deal with the most vulnerable in our communities. Treasury the Reserve Bank and other commentators are now saying that the speed limit of the New Zealand economy—the limit at which the economy can grow without incurring inflationary pressures—is actually a lot more than what we thought it was before. That is a testament to the hard work that we have done over the last 7 years.