Cunliffe David: Public Finance (Fiscal Responsibility) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeCunliffe David: Public Finance (Fiscal Responsibility) Amendment Bill — Second Reading[Sitting date: 25 June 2013. Volume:691;Page:11258. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):The deep and abiding irony of being lectured to by the National Party about the quality of one’s coalition partners! The Public Finance (Fiscal Responsibility) Amendment Bill arose out of a misbegotten promise from that lot of deficit-mongers to John Banks. The reason that he will not be here to prop it up is that he could well be in prison for lying about getting campaign donations from one Kim Dotcom. And as if life is not full enough of rich and enduring irony one of National’s other coalition partners the Hon Peter Dunne—perhaps slightly more honourable than the Hon John Banks—is not going to be here because he leaked the paper about Kim Dotcom. That has seen him lose his ministerial post—indirectly perhaps—lose his party’s status and just possibly lose his seat in the House. So imagine being told by that economic genius the member who has just resumed his seat David Bennett that Labour has got a problem with its coalition partners. I will take Russel Norman and the Greens any day of the week over the motley crew that that bunch of deficit-mongers has assembled over the years.Labour does not support this bill because it is not a bill about fiscal prudence. We have a proud record in fiscal prudence. We have never run a deficit in a decade; National has never run a surplus New Zealand. This is a bill about who gets what. This is a bill that entrenches the primacy of monetarism over fiscal balance by making fiscal policy subservient to monetary policy. It is a bill that locks in low tax rates for the rich and erroneous GST for the poor by emphasising the “stability” of tax rates. It is a bill that does nothing to fix National’s behaviour in giving away superannuation and making intergenerational theft worse. It is a bill that does nothing to fix the savings gap—the build-up of total international debt that makes New Zealand’s current account deficit worse than Greece’s.So what would it take to have a real approach to fiscal responsibility? Upon which pillars does Labour’s proud record of never having run a fiscal deficit rest? It is very simple—firstly genuine prudent fiscal policy. Labour knows how to run a prudent book; National would not know a surplus if it fell over one. In this year’s Budget National had to manufacture tax spikes to get within a bull’s roar. It had to put off $200million of spending it had previously committed to—not perhaps wrong in itself but added up with the other assumptions it is absolutely ludicrous. It had to get its little filthy fingers in New Zealanders’ back pockets by hanging on to its overwrought ACC surpluses. It had to put up petrol excise. Only having done all of that and more could it claw its way to a tiny little paper-thin imaginary $75 million “surplus”.And all the while New Zealand’s total international debt rose and rose and rose and our current account rose and rose and rose because no one has explained to Bill English that it is not just his job to manage the Government’s books; it is his job to oversee the country’s books. New Zealanders do not look to their Government just to balance its accounts at the expense of their accounts; they expect a good Government to be there for them and to grow the pie for everybody not operate for its benefit against New Zealanders’ benefit.You cannot drive a fiscal surplus without having an economic surplus. That means having an economic growth plan founded on pro-growth tax reform strong savings policy sustainable superannuation and real growth strategy right down to the regions and sectors. National has none of that. Its recipe has been putting off superannuation contributions giving filthy tax cuts to its filthy rich mates putting GST up for everybody else and having an absence of economic strategy when it comes to growing the economy. It is shameful.Look at those members. I hope the TV cameras pan and you will see them all hanging their heads and shuffling their feet. Paul Goldsmith the new chairperson of the Finance and Expenditure Committee knows jolly well we are right. He is shuffling his feet.Maggie Barry: No wonder your own party—Hon DAVID CUNLIFFE: Now in putative protest Maggie Barry rises to her highest decitone. It is a sad and motley crew over the way.This bill introduces some very unfortunate biases—biases that lock in who gets what biases that actually ruin our history of bipartisanship on fiscal responsibility in favour of a creeping bias for the rich. Here it is—here it is. Present and future generations National talks about but it is the party that has dissed New Zealand superannuation. It makes fiscal policy subservient to monetary policy because this bill requires the writers of fiscal policy to have regard to monetary policy but not the other way around.What would be wrong with the Reserve Bank and also those folks at Treasury who think about monetary issues actually having regard to fiscal settings and doing it? The answer at the Finance and Expenditure Committee was: “Well you know monetary policy is completely delegated it’s completely hands-off.” Well no it is not. There is a thing called the policy targets agreement which is written by the Minister of Finance. He calls the Governor of the Reserve Bank over for an explanation of how he is actually delivering on that. It is not completely delegated; it is—or should be—responsibly delegated. The Reserve Bank of New Zealand Act itself is a creature of the Government of the day and the Government of the day retains overall responsibility for monetary policy.Government members do not like it. They do not like it because they know they are up an economic backwater without a paddle. They are staring at their fourth deficit Budget in a row and their fifth next year. It will be their fifth straight deficit in a row but Labour had nine straight surpluses—nine straight fiscal surpluses—and a higher growth rate. Here is an enduring politics of New Zealand economics. If you take a 30-year history of data and compare economic growth under Labour Governments with economic growth under National Governments guess which comes out higher? Labour by over 0.5 percent per annum has a higher economic growth rate record than occurred under National Governments. As if that were not rich enough there is another lovelystatistic that goes with it that despite that sometimes business confidence is higher under National. That is because it is purely tribal and because certain wealthy members of the community are able to rip off the system under National and feather their own nests. New Zealanders have had enough of it.We need to measure this bill by what is not in it as well as by what things are wrong in it. Here are some things that sadly are not in it. There is no reference in the bill to total national savings or total national debt only reference to Government savings. But Government debt makes up only 15 percent of New Zealand’s total national debt. The other 85 percent is private debt and the bill ignores it. One cannot make sense of national debt without considering private debt. You know it was not long ago that Bill English talked about rebalancing the economy. He does not now because the economy is getting less and less balanced. Its current account deficit is growing its savings gap is worsening and households are borrowing again as banks are pushing their risky money on people chasing a runaway housing market. Is it any wonder that National is going back to the same old same old approach of hands-off and hoping letting the economic car go up and down the rollercoaster and seeing where it ends up?Passing sham bills like this one will do nothing to cover for National’s lack of an economic plan. It does not matter how many glossy brochures Steven Joyce fires out the back door of the Ministry of Business Innovation and Employment—Dr David Clark: The worst economic record in 50 years.Hon DAVID CUNLIFFE: The worst economic record in how many years Dr Clark?Dr David Clark: In 50 years.Hon DAVID CUNLIFFE: In 50 years. It has been said so often it must be true. This is a sad bill. It is a sham. It is a waste of a good history of bipartisan cooperation.