Shaw James: Estimates Debate — In CommitteeText is incorporated into the Bound VolumeShaw James: Estimates Debate — In Committee[Sitting date: 28 July 2015. Volume:707;Page:5396. Text is incorporated into the Bound Volume.]JAMES SHAW (Co-Leader—Green): I would like to take a call in relation to Vote Finance appropriations initially. I just wanted to agree with some of the comments that were made by Grant Robertson earlier in the evening when he said that his sense was that looking at the appropriations it demonstrates really a lack of vision on behalf of the Government in relation to how to create a sustainable long-term economy. When this Government was campaigning for office in the mid to late 2000s it talked about trying to create an economy that was built on savings and investment rather than on debt consumption and spending. What has happened over the course of this Government is that the economy has actually become more about speculation than about investment despite a number of things that the Government has been spending money on to try to nudge it in a different direction.One example of that is the research and development grants which have kind of shuffled money around in terms of how we try to encourage innovation. We did some research recently that showed that despite everything the Government has been doing in that area New Zealand’s spending—not the Government’s but New Zealand’s—on research and development and innovation is about the same now as it was in 2008. In other words we have been trying to do some different things and yet we are getting nowhere which in my view looks very similar to the Government’s approach on a number of fronts which is to be seen to be doing something without actually doing anything at all.There has been a real failure to diversify the economy and this has left us of course very exposed. I will also reference the 13 percent fall in the global dairy trade option prices recently which has left the economy very exposed. I just want to call out Steven Joyce on this issue who when we recently questioned him in the House on the risk to the New Zealand economy from the fall in dairy option prices said: “Oh well don’t worry about it—dairy is only 5 percent of our overall economy. It doesn’t really matter.” Of course it might be 5 percent of the overall economy but it is about 40 percent of our exports. I completely agree with Todd McClay who said earlier that we do not get wealthy by trading with ourselves. So the fact that dairy is such a massive portion of our export market is really important. When you try to minimise the fall in dairy prices on the basis of the overall economy rather than the trading economy that is being completely disingenuous. When dairy struggles so does the rest of New Zealand because so much of the domestic economy is actually built around providing products and services to the dairy industry.The other thing that that comment really shows is a sort of callous approach actually to a core National Party constituency which is the rural and farming community. The sheer numbers of farmers who are leveraged up to and past the hilt is now at the point where huge numbers of them are actually at risk having gone through the process of making those conversions so that the price that they are getting at the gate means that they are barely covering the cost of production let alone servicing their debt. I know that the Government says that the price will recover fairly quickly but actually there have been some big shifts in the global market. The Americans for example have changed the way that they subsidise their own farmers which is encouraging huge amounts of production in the American market causing a glut. So I think there is actually some risk that prices are going to stay low and as low as they are if not even lower for quite some time. So this does present a real risk to our economy.Successive Governments—not just the current Government but previous Governments—have failed to address property speculation which has got worse and worse to the point that since 2009 Auckland property prices have gone up 79 percent which is pretty staggering. I accept the Government’s argument that there is a supply side problem. Obviously people do not speculate when there is a glut; they speculate on the basis that there is not that much supply. But it is also a demand side problem. There is both a supply side problem and a demand side problem. Because of this Government and—