Cosgrove Clayton: Annual Review Debate — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Annual Review Debate — In Committee[Sitting date: 13 April 2016. Volume:713;Page:10487. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): I thank Minister English for his contribution. He talked about ambition and he talked about National’s commitment tobeing—as I think the election slogan was back in 2008—ambitious for New Zealand. I have to say to the Minister that it is hard for people to be ambitious about their own circumstances when real disposable income for people is decreasing.If you look out in the communities how do communities benchmark their take if you will on whether an economy is thriving for them? It is pretty simple. It is not loaded with economic terms and analysis for your average Kiwi battler out there or your average family;it is about whether that family and the breadwinners within that family feel they are getting ahead economically whether they feel they are getting a fair go whether they feel they can get ahead—not just make ends meet but actually have a little bit of their own surplus in their own domestic economy for the extras in life perhaps for their family—and whether it is getting financially tougher for them. I would argue that that is how your average Kiwi would measure and benchmark the progress of an economy and therefore the progress and quality of the economic stewardship of a Government.If you have a look at some of the statistics that have been produced independently and by the Government’s own agencies you are of course looking at per capita growth being flat. The only real growth really is off the back of (1) the earthquake and (2) population growth. If you look at exports as a percentage of GDP—there was a Government target which was trumpeted all around the country that the target for exports as a percentage of GDP was 40 percent. It started at 30 percent; it is now 27 to 28 percent and going backwards.As another benchmark or acid test for an economy if you look at per capita GDP last year it was 0.03 percent—0.03 percent. As I said real disposable income is heading south.Then the Minister talked about the wafer-thin surplus of $400 million. What he failed to mention of course is that if you look at the Earthquake Commission papers you will see that the $400 million so-called surplus is exactly the amount that the Earthquake Commission did not spend last year in Canterbury. You could argue whether the people of Canterbury of my province are getting as fair a go as they should. Are they benchmarking the quality of management of this economy based on that $400 million surplus which is exactly the same amount that the Earthquake Commission did not spend last year? That is the fact.In terms of being ambitious for New Zealanders I think that we would all agree cross-party that we would like to see Kiwis get ahead and that we want to see their ambitions achieved. Whether they live in the poorest of our communities or whether they live on the entrepreneurial side of the road if you will and have a bit extra to invest in business and to employ people we want to see Kiwis get ahead. We want them to do better than simply stretching their budget to breaking point to get the kids’ school shoes and to get a feed on the table—if that is as good as it gets for people then I would argue that that is not particularly ambitious. This of course is from an incoming National Government that inherited 9 long years of surplus which the Minister of Finance sort of parked in the back in the archive. In every year a Labour Government put a Budget together there was a surplus and not just an offset “rob Peter to pay Paul” one but a real one that grew every year.Hon Annette King: That’s why they appointed Michael Cullen to the bank.Hon CLAYTON COSGROVE: Well indeed. Those members showed their confidence in the financial stewardship of Sir Michael Cullen by appointing him to the only Kiwi-owned bank that we have which is Kiwibank. Mr Muller is nodding and he knows that is the truth. Michael Cullen was the Minister of Finance who delivered to the National Government and to Bill English zero Crown debt—zero. Not 1 percent but zero Crown debt.The National Government inherited a surplus and it inherited zero Crown debt and that I would argue would have provided a quite decent platform for a Government that was ambitious about our local communities and our Kiwis and that wanted to get people doing better than just trying to string it together to make ends meet.Yet that legacy I would argue has been squandered. You can say global financial crisis—I am sure the Minister would and to be fair to him there is a component of that. But we are through that and this Government has had options. God only knows had it inherited from Labour in 2008 a Budget of huge debt of huge deficit then goodness knows how it would have coped with that global financial crisis. I note that the Minister was honest enough many many years ago to say that that was the rainy day and acknowledged the fact that Michael Cullen and others had set up a situation a platform of zero Crown debt and 9 years of surpluses so that we could tough it out when the global financial crisis was put upon us through overseas influence.I would be interested in the Minister’s comments on those statistics that per capita growth is flat and that exports—particularly exports as a percentage of GDP—are nowhere near the ambitious target that the Government set. The target started at 30 percent aimed for 40 percent and now it is 27 to 28 percent and winding back. That was before the dairy crisis by the way—that was before the dairy crisis. I would be interested in the Minister’s comments in terms of the rationale of the plan and why that went awry or whether there is a strategy going forward given the dairy crisis and other international issues. What is the strategy to increase exports as a percentage of GDP to anywhere like that target of 40 percent? Likewise real disposable income—I would be interested in having the Minister talk to us about how he proposes to increase it or what the Government plan is to see it reversed from decreasing to increasing. Likewise I would be interested in his comment—I am sure it is one that is well rehearsed within the propaganda of the Beehive—as to how he justifies a surplus which he calls a real surplus of $400 million with an Earthquake Commission offset of spending that it did not make of an equivalent amount.As I said we all agree I think cross-party—the Greens the National Party—I think we all come into this place wanting to be ambitious for New Zealanders and wanting to do our best. We do disagree around the edges I think as to how we should get there.I come back to my original point. Mum and dad on Struggle Street Minister—I say through you Mr Chairman—are not going to sit there and read these weighty financial statements. They are not going to pick through them line by line. They are probably not as a priority concerned with the analysis of Treasury the Inland Revenue Department and independent economists. They will sit there at home on a Thursday after they get the pay coming in and say: “OK how do we make our household economy our household expenditure? How do we actually get through the next fortnight?”. That is how they will judge it. They will ask “Is it easier for us? Is it harder for us?” and for many many people in New Zealand it is a hard week-to-week fortnight-to-fortnight pay cheque - to - pay cheque war of attrition to get ahead. Kiwis want to get ahead and that is how they measure their ambitions and how they achieve those ambitions—through their week-to-week economies.I forget was it Muldoon or somebody else who said—or I think it might have been a couple of Ministers over there—that people would not understand the economy if they fell over it? People really do understand economies because they have to take money coming in and money going out and somehow make it balance. They do not do it through a Budget once a year; they do it every fortnight or every time they get their pay cheque. I would be interested in the Minister’s comments on that as we move through this debate.