Groser Tim: Debate on Prime Minister’s Statement 
Groser Tim: Debate on Prime Minister’s Statement 
[Volume:670;Page:16531] 
Hon TIM GROSER (Minister of Trade) 
: 
 The gloves are starting to be taken off as we face up to the choice at the end of November. I have to say that the choice has become rather clearer a lot sooner than I would have expected. 
From the Government’s side the Prime Minister has laid out what we represent today for New Zealanders. Essentially the centrepiece from an economic perspective is to use his own words that we must move this economy away from debt-fuelled consumption. There are other ways of putting it but that is as good as any way one could find. What does that mean in practical terms? It means a number of different things. First of all it means continuing with what I would describe as a very moderate programme of fiscal consolidation. We know what happened with 9 years of Labour: core Crown expenditure went from $32 billion to $60 billion as truckloads of money were deposited outside Government agencies’ doors. We know that the average annual increase in core Government spending was $2.8 billion and we have tried to hold it to a tad under $1 billion. It is not an extreme position but fiscal consolidation is an absolutely central part of moving away from debt-fuelled consumption. 
Secondly we are trying to streamline the public services and although we will hear an enormous amount of rhetoric from other political parties on this issue it is actually entirely possible to do that while delivering better services to New Zealanders with fewer resources—not radically fewer resources but we are essentially seeking efficiency gains. In the last 9 years of the Labour Government the public sector was not asked seriously to face up to the need to produce more with either the same or slightly fewer resources. Seeking efficiency gains is the second objective. It is the way that we will try to move this economy away from debt-fuelled consumption. 
Thirdly we are absolutely 100 percent serious about not letting this very delicate international economic situation spook us. We are proceeding with further investment in the infrastructure of this country. We must invest in our own future in order to generate the growth that New Zealanders will need to pay for all the social services education and other things that we all want and value. Part of that process will involve in terms of capital expenditure looking a little more creatively at mixed-ownership models. Again we will hear from Labour for the next 10 months that we are selling off the family jewels and silver blah-blah-blah but that party is not listening to the conditions that the Prime Minister and Mr English have so very clearly laid out. We will retain 51 percent Government ownership of those assets and we will deliver good services. When Labour talks about electricity prices we are reminded that the average annual increase in electricity prices over the 9 years of the previous Government was 9 percent per annum. Yet Labour talks about the threat of electricity price rises. 
The next element carefully laid out in the Prime Minister’s speech on our programme for this year—a programme in which he said that 2011 must be the year for New Zealand—is that we will vigorously promote export growth. We have some advantages now of a very good pattern of trade opportunities. We have excellent commodity prices. Let us back ourselves. Let us back ourselves to shift more and more resources into the export side. As the Prime Minister pointed out when we look at the last 5 years of the Labour Government we see that not one new net job was added to either the efficient import-competing or export sectors. It was all in the consumption side of the economy fuelled by debt. 
The next element in our choice for New Zealanders is that we will continue—again in a very moderate and sensible way—to simplify which is the word I use the regulatory frameworks. Members heard the Prime Minister outline the key elements around more sophisticated work on the Resource Management Act and more flexible labour markets. This work will actually end up creating jobs for companies that need the flexibility to take the risk of employing people as they move forward in the uncertain environment that New Zealand along with all countries in the world faces. 
Finally I instance that we are about incentivising middle New Zealand. We are about creating a basis where middle New Zealanders can see a way forward for themselves and their families. Since September 2008 the average after-tax income of all New Zealanders on the average wage has increased by $64 per week which is a 16 percent increase. 
Hon Steve Chadwick 
: Rubbish! 
Hon TIM GROSER 
: The member should just look at the statistics. That is a 16 percent increase in the average after-tax salary. After taking away 6 percent in price increases it means that a Kiwi on the average wage is earning after tax 10 percent more today than they were in September 2008. That is on the Government side. 
I talked earlier about a rather clear choice that I think is emerging for the public to make in late November. So what does it look like on the Labour side? I was reading an offbeat article in the  
New Zealand Herald  
by Mr Brian Rudman. I was reading it carefully. I cannot say that I always agree with Mr Rudman but I thought he made a very interesting point. His thesis was sort of like this: the summer holidays are over it is back to work for everyone including the politicians and what is the first thing that the new white hope of the Labour Party Grant Robertson thinks would be a great idea to kick off the year with? It is to have a new holiday paid for by somebody else. 
The same debate is going on about the minimum wage. We have made a very modest adjustment that preserves the after-inflation current minimum wage. Labour wants to add $2 or something to it. 
We have to try to reduce this debate to the actual reality of New Zealand. By normal international standards we do not have many genuine small and medium enterprises; we have micro enterprises. According to one study I recall in 2005 86 percent of New Zealand enterprises consisted of 5 people or fewer. Grant Robertson is asking companies like that to pay for another day’s holiday and a massive increase in the minimum wage if they happen to be employing minimum wage workers which would immediately generate demands for relativity from the other workers they employ. How could anyone believe that our companies are in a position under the circumstances facing New Zealand along with all developed countries—this very uncertain international environment—to just sign a cheque with no consequences for the viability of either their company or continuing the employment of those people? I am just absolutely astonished by that. 
When we put those two examples in the current debate alongside Labour’s emerging programme what does it really add up to when stripped of all rhetoric? I think it is very clear what it adds up to. It is a policy of spending more Government money and taxing more. We have to ask ourselves what is going on here. If I look for example at the interim report of the Savings Working Group I find a couple of quotations that nail the underlying position that I think we as a country are facing. We can have different views on what adjectives to use about New Zealand. We can have different views about the specific policies that the interim report of the Savings Working Group chaired by Kerry McDonald puts forward. That is legitimate. But I do not understand how anyone could seriously have a different view about the underlying driver of what the group is talking about. I will give members a couple of quotations: “The bottom line is that New Zealanders collectively have been spending too much and saving too little … Its credit is about maxed out. It’s time to get real … we’ve had the fun the big spend-up … it’s time to pay and lay a more secure foundation for future sustainable wealth.” 
What is going on with Labour? Is that really a tax-and-spend policy? As the Prime Minister pointed out in his concluding comments it suggests Labour has learnt absolutely nothing from its last 9 years in Government. What is going on here? Is that seriously an alternative Government policy structure that it is asking New Zealanders to endorse at the end of November this year? One could provide different explanations but I am rather inclined to think that the real motive here is to avoid an electoral catastrophe. It is about shoring up the core vote to position itself for a possible win in 2014 not 2011.