Clark David: Budget DebateText is incorporated into the Bound VolumeClark David: Budget Debate[Sitting date: 28 May 2013. Volume:690;Page:10419. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): Kia ora.The ASSISTANT SPEAKER (H V Ross Robertson): Talofa lava.Dr DAVID CLARK: Talofa lava. Well what a lot of rhetoric we have just heard. I do not think even Shane Ardern the member himself believes much of it. He might well believe that his Government has spent money in certain areas but he knows very very well that its record of job creation is so poor that it is an embarrassment—it is an embarrassment around this House.He wanted to raise the issue of Labour’s track record and I will happily raise that issue again. Under the Labour Governments since the War we have had a 3.7 percent average growth rate. Under National it has been 2.9 percent. There is a considerabledifference between those two numbers in real terms for real New Zealanders. Labour grows the economy consistently. National stalls it. Under this Government real wages have dropped—real wages have dropped median wages. The New Zealander “Joe New Zealander” is really feeling the pinch and it is as a result of the policies of this Government.Let us go back to the 2010 tax cuts. Forty percent of the value of those tax cuts went to the top 10 percent of people—40 percent went to the top 10 percent. The bottom 20 percent of people got just 2 percent of the value of those tax cuts. That is typical of this Government. This Budget does nothing to change that picture. The rich are getting richer and the poor are getting poorer. This is a Government that is creating a two-speed economy with a bigger gap between the haves and the have-nots.This Budget if it does anything to raise average wages has attempted to do it one Mighty River Power director at a time. That is the way this Government approaches it. It looks out for those who have vested interests and those who are its mates. It looks to transfer some money to them but the average New Zealander “Joe Normal” is struggling. The average New Zealander can no longer dream of owning their own house. The average New Zealander can no longer dream of having a decent job because this Government is destroying those jobs it is creating unemployment and it is driving wages down in real terms.This Government has created the worst current account deficit in the developed world.Hon Dr Nick Smith: No. Look at your own record.Dr DAVID CLARK: Mr Smith disputes that but this Government has created the worst current account deficit in the developed world. It is worse than Greece’s. It is worse than Greece’s the IMF tells us. This Government has brought about a credit downgrade. It has had New Zealand’s credit downgraded. Kiwibank is on notice now. This Government does not know how to manage an economy and that is the real shame. This Budget was another opportunity to address the structural issues in New Zealand. Those opportunities are flying by and with them New Zealand’s chances of raising its place in the world of creating a better standard of living for its citizens. This Government is taking the country backwards. Let us remind ourselves that this Government is the Government with the worst economic record of any Government in this country in the last 50 years. This Government’s only idea is to sell off the best revenue-generating assets. That is its only vision for this economy.Labour would do things differently. We have announced our NZ Power policy. That would bring businesses’ power bills down by 5 to 7 percent. It would put an extra $200 or $300 in Kiwis’ pockets. It is a sensible policy. It is a policy that is about taking New Zealand forward. We would put in affordable housing. We would create 10000 new houses over the next 10 years and that too would create jobs. Not only would it make an affordable house an affordable dream for New Zealanders it also would create jobs.Let us remind ourselves that these things that we have now—these situations where housing is unaffordable and power prices keep going up—are things that can be fixed. We know from Professor Wolak’s report that there was $4.2 billion worth of price gouging in the New Zealand energy market between 2001 and 2007—$4.2 billion worth of price gouging. We have been told by academics and we have been told by those who have researched this that this is a pattern in New Zealand and that the market does not work. When a recession hits and the rest of the world’s power prices go down they go up in New Zealand. Something is wrong here and it can be fixed. We know that markets are good when they do the bidding of the people—of the citizens. When the markets do not do the bidding of the citizens they make terrible masters and this needs to be corrected through effective regulation so that businesses can thrive and citizenscan thrive. There is a problem here that needs to fixed. This Government is sitting on its hands and not doing anything about it.I have just returned from a trip to the United States. It was a tremendous privilege to go on this trip. I went with the Eisenhower Fellowship. President Eisenhower created as his legacy an international exchange. Many Presidents have created large libraries in their own states but President Eisenhower wanted an international exchange. I have been a fortunate beneficiary of this. It has been a terrific learning experience. One of the lessons I brought back is about the importance of fairness as a cultural value in New Zealand. New Zealanders believe in fairness. They believe everybody should have the opportunity to get ahead; it is part of what makes New Zealand a great place to live. Sir Paul Callaghan used to talk about the importance of New Zealand being a place where talent wants to live as part of a strategy for economic growth. This growing gap between rich and poor in New Zealand drives us in the opposite direction I am afraid. This undermines our reputation for fairness. People want to come back to New Zealand once they have had overseas experience because they want to go to a hospital where they do not have to bring out a cheque book. They want access to justice for all citizens so that there is a sense of fairness in society. They want to know that they can get a great education at their local schools. We want to live in a fair society.What is also true is that people in other countries admire this sense of fairness that New Zealand has. It is part of what gives us a privileged place in international trade negotiations. People want to hear New Zealand’s voice because we speak impartially we speak independently and we speak about fairness. This Budget which drives this two-speed economy that the Government has been creating goes further toward undermining this international reputation for fairness. It is not good for us as a people it is not good for our citizens and it is also not good for our country. It undermines the reputation we have that gives us that privileged place at the international trade negotiation table. We need to be at that table if our economy is going to grow. We need to be at that table because we want to be a part of those discussions.The Government’s mates are jacking things up. We know that the casinos are getting extra funding we know that Goldman Sachs is profiting from the sale of assets and we know that the wealthiest New Zealanders have had those tax cuts. This is not the recipe for a fairer society. This is not a recipe for the kind of society we want to live in and that actually most of the world aspires to live in. We have the largest gap between rich and poor in this country that we have had since records have existed. We are becoming an economy of the haves and have-nots.Thirty thousand jobs were lost last year and 1000 people in my home city moved from Dunedin to Australia permanently because of the policies of this Government. We have had a 10 percent drop in the last 4 years in non - primary sector manufacturing in this country. The policies of this Government have been undermining our exporters. When I left New Zealand Mighty River Power was 100 percent Kiwi-owned. Now 49 percent of Mighty River Power is owned by just 2.5 percent of New Zealanders. This is a two-speed economy where some Kiwis are getting ahead and some are being left behind.We need a Government that is prepared to bring in pro-growth tax reform. We need to take out the investment distortion that pushes money towards properties creates housing bubbles and creates people farming for capital gains rather than for profitability. We need tax reform that makes our country more profitable. We need tax reform that promotes research and development. We need universal KiwiSaver so that we are more like Australia which has $1.3 trillion in savings. Its savings regime brings back its own financial markets expertise from overseas. When its young people gooverseas they have something to come back to because they have a successful industry there.New Zealand unfortunately has suffered under National Governments that have not had a long-term vision. They have focused on the short term they have focused on making sure that their mates are looked after and the rest of New Zealand are missing out. They are not interested in creating a society for all of us; they are interested only in a few of their mates. That is why this Budget is a terrible Budget which does nothing that is in the interest of ordinary New Zealanders and I think this is a Budget that needs to be condemned.