Worth Richard: Budget Debate 
Worth Richard: Budget Debate 
[Volume:639;Page:9643] 
Dr RICHARD WORTH (National) 
: 
 The previous speaker Maryan Street has spent valuable time—some 10 minutes perhaps—criticising the Opposition. What I would like to do in the 10 minutes I have allotted is to focus on some of the critical issues. 
This debate is grandly called the Appropriation (2007/08 Estimates) Bill but it is more colloquially known as the Budget debate. The issue for us here tonight is encapsulated in the amendment on the Order Paper which is that “this House has no confidence in the Government led by Helen Clark because it has presided over a decline in New Zealand’s competitiveness and has failed after eight budgets to deliver a meaningful reduction in taxes for New Zealand workers.” There are two aspects to that amendment: “presided over a decline in New Zealand’s competitiveness”—and it has; our competitiveness has plunged—and “has failed after eight budgets to deliver a meaningful reduction in taxes for New Zealand workers.” That was the subject of the previous speaker’s comments. 
So the issue for debate tonight is that the Government has taken a deliberate ideological position that is hugely damaging to New Zealand’s interests. I just start by saying that Labour has had 8 years in which to lift productivity and expand the capacity of the economy to grow but sadly it has squandered that opportunity. Why has it done that? Well for reasons that other speakers have given New Zealand has fallen down the OECD rankings from 20th place to 22nd. I thought for a moment that the Hon Damien O’Connor in the interjection he was trying to make would assert that our position had improved but it has not. It is a matter of record that it has not improved. We have gone from 20th to 22nd place. Portugal Hungary and the Czech Republic are our competitors. I simply note that in the document that I now hold up the statement of intent of the Ministry of Economic Development the ministry admits and asserts that that is exactly so. The report states: “New Zealand still ranks 22nd in income per capita at US$25950 13 places behind Australia at US$34200.” The commentators who have written this material say: “If New Zealand is to catch up with other countries the economy must perform better still sustaining growth rates at high levels over the next one to two decades …”. 
As others have also said tonight labour productivity has fallen to historically low levels. Labour productivity has more than halved since this Government came into office. But there are other points. Pansy Wong made the comment that because of inflation more people are paying the top tax rate than ever before. The Budget shows that 15 percent of income earners—and that is 456000 people—now pay the top income tax rate of 39 percent. Those members opposite will remember Dr Cullen assuring the nation that only 5 percent of income earners would pay that rate. 
Christopher Finlayson 
: Darren was not even born. 
Dr RICHARD WORTH 
: No the young junior whip was not even born then. Labour has spent eight Budgets doing nothing to address this insidious rise in taxation. 
But I will go on from there and make a further point that I think is significant in the context of what we all want or should want which is a better New Zealand—a New Zealand that is measured not only in terms of GDP growth but also in terms of that indicator that is much more difficult to identify which is quality of life. The reality that this Government seems not prepared to accept is that choices made in the Government’s approach to business assistance to export market development to research and development to education to capital markets to infrastructure to trade policy and to migration can very significantly influence the pace and direction of economic development. Why is the Government not prepared to accept the reality of that observation? 
One of the Government’s objectives is to increase the internationalisation of New Zealand business. I want to talk about that from a very practical perspective for a few moments and to establish two broad propositions. The first is that there is a lack of depth in important parts of New Zealand’s financial markets. In part this is an issue relating to the Government’s responsibilities as an immigration policy maker. There is a flight which we have heard about for the last many months of New Zealanders to Australia. I accept that a proportion of those players going to Australia are perhaps people who are not in what might be called the “top drawer”. But that said a huge number of those people who are going to Australia are people whom we desperately need. They are people who are skilled in business they are people who are skilled in the provision of welfare services they are people who are skilled in the provision of public services and they are people who are skilled in the trades—they are people whom we need. 
I will comment for a moment on this immigration aspect. In terms of policy we have established a number of immigration categories—and I see Dr Choudhary nodding wisely as I make these comments. This might be an issue on which even he would agree. One of those categories is the business investor category. We have set a whole lot of hurdles around this category which makes it almost impossible for people whom we want with skills that we want to come to New Zealand. One of those issues touches on the English language test. A second issue touches on the capital requirements and the deployment of capital when those migrants seek to access New Zealand. 
I am certain—and I am watching Dr Choudhary and I see the nods that now come frequently as I make these comments—that we need to get on and deal with that issue because with this outflow of talent we cannot replicate that talent from our existing base. We have to take a really hard look at our immigration strategies. The second broad proposition that I would like to advance relates to the context of economic development—I cannot really hear fortunately the comments that are coming by way of interjection from the young whip; I am sure he thinks they are meaningful but the members on his side of the House seem to gain no confidence from them—and that is the seemingly risk-averse stance of New Zealand Trade and Enterprise. It is a stance that is reflected in a number of ways. 
I ask members to look at the Budget and make a judgment. We all know in the context of increasing exports how critical networks are. This Government could have done so much more to strengthen networks around the world which would be significant in what is a critical year for us—Export Year. Let me give members an example. I happen to know a guy who makes the world’s seatbelts. He is Italian. He makes those seatbelts in two locations: a factory in Flanders and a factory in China. Miles of seatbelts are made in a day. He has a New Zealand passport. These are interesting circumstances; he is an Italian with a New Zealand passport. He stands ready to enable New Zealand business to access those networks. Is the Government interested in him delivering what he can deliver? Absolutely not. He said that he would like to be an ambassador for New Zealand in the context of being an honorary trade consul; he is not asking to be paid. He is there to help us. Are we interested? No. Why are we not interested? There is an ideological problem sitting there; a view that somehow free service is maybe not good service. That is just one illustration. The second thing I would say is that hugely different from Austrade New Zealand Trade and Enterprise is simply not prepared to have its input skill and contribution measured.