Key John: Financial Review Debate — In Committee 
Key John: Financial Review Debate — In Committee 
[Volume:630;Page:2415] 
JOHN KEY (National—Helensville) 
: 
 Let me start by saying that the financial statements in relation to the year ended 30 June 2005 will make a lot better reading than the financial statements for the year ended 30 June 2006. As we know this Government has presided over an economy it inherited—that it did absolutely nothing to create—and over the 6 years that it has had the economy under its control it has done nothing to improve it. It squandered the conditions and failed to pick up the most fundamental of challenges around our economy—the ability to make sure that New Zealand is competitive and goes forward with a spring in its step and the ability to cope with the down cycles that happen in every economic cycle. 
I contrast that performance with the performance in Australia. What I saw and what New Zealanders see every day in Australia is a Government committed to lowering taxes and the tax burden to pouring billions of dollars into infrastructure to welcoming the private sector to fixing tertiary education and to fixing outputs from skills. What have we seen from this Government? We have not seen a single private toll road constructed in New Zealand. The energy sector is in complete disarray. The Minister of Finance or the Minister for Tertiary Education—wearing one of his many other hats today—is finally coming out and recognising that there is a major blunder in the tertiary education sector. We had a growth rate that was zero for the 6 months of last year and is likely to be considerably poorer for the balance of this year. Yesterday Treasury told the country that growth would be weaker than it thought. All of this has come from a Government that has had all of the revenue in the world to do some decent things but has failed miserably. 
What is even worse and is probably even more alarming than that—and I know that it privately worries Dr Cullen a great deal—is a report in the “Business Herald” today about Fletcher Building one of the icons of the New Zealand business community that it is looking with its advisers Credit Suisse First Boston to move its head office to Australia. 
 New Zealanders might wonder why a company like Fletcher Building which has been very successful is considering joining many others like Lion Nathan and Nufarm that have picked up their head offices and moved them to Australia. Dr Cullen knows exactly the reason for companies doing that: our company tax rate is higher than the company tax rate in Australia. Our tax revenue is being hollowed out because Australian investors are snapping up New Zealand companies left right and centre. Those Australian shareholders want imputation credits and fully franked dividends. So a company like Fletcher Building which can be and has been a very successful company providing an enormous amount of ancillary business and growth in our economy is looking at moving to Australia when it should be staying in New Zealand. I say that move if nothing else is a sheer sign of this Government’s failure in the last 6 years. The fact that Fletcher Building is looking at moving its operation is clear and demonstrable evidence that this Government has failed in the last 6 years. That company is not alone; many other companies are doing the same thing. 
Today we came down to the House and we asked Michael Cullen the Minister of Finance the most simple question of all on the very same topic: does he support a business tax review that would be revenue neutral—that is one that he has to take from one hand and give to the other. We asked whether that was the reason he is exploring these crazy options such as a payroll tax and looking at all these unusual things. The Minister of Finance—the man who has said: “The fiscal buck stops with me.”—could not even get up in the House today and tell us whether the whole aim of the business tax review is to be fiscally neutral. 
When we asked him the question a couple of weeks ago he came out with what I thought was a pretty interesting answer. When I asked him whether the review would be fiscally neutral he said: “The review will determine what the review will do.” It was not one of Dr Cullen’s greatest lines I have to say. He is known for saying better one-liners than that. Even though I may not have agreed with the comment about the “ideological burp” at least it was half-amusing when he said it. He told us that the review will decide what the review will do—even though he told us that he actually decides whether these things happen and that the fiscal buck stops with him. 
Well the Minister of Finance is losing it because he does not even know whether he will still be the Minister of Finance when Budget 2007 and Budget 2008 roll around. I do not think Helen Clark was trying to give him the message publicly. Journalists asked me that question yesterday and I answered that it was a bit unkind to say Helen Clark was trying to move Michael Cullen on permanently—she just does not know whether he is coming or going.