Groser Tim: Estimates Debate — In Committee 
Groser Tim: Estimates Debate — In Committee 
[Volume:640;Page:10401] 
TIM GROSER (National) 
: 
 I found it very interesting that Clayton Cosgrove in his presentation started to talk about Michael Cullen’s legacy. It is amazing what people under pressure reveal about their true thinking. What does the word “legacy” mean? When we start talking about people’s legacy we are talking about people who are on their way out—possibly literally as well as metaphorically. 
I want to take up the challenge that Mr Cosgrove put down and give my view of the Cullen legacy and I will refer to an earlier career that Michael Cullen had as an economic historian. As an economic historian Michael Cullen may well remember the methodology called thought experiments so I will put a thought experiment on the floor of the Chamber. I ask what Michael Cullen the economic historian would have made of Michael Cullen the Minister of Finance because that would be a very interesting subject for debate. I am probably not confident that such a separation is possible so I will give members what I think economic historians will make of Michael Cullen’s legacy as Minister of Finance. 
I think the main theme of Michael Cullen’s legacy—if I can use Clayton Cosgrove’s phrase—will be a story fundamentally about missed opportunities. There was a time when this Government inherited political power when we thought it might just build on the successes of the past. It had inherited an economy in which the unemployment rate had fallen progressively through the 1990s from about 11.5 percent to a little over 6 percent with a much more dramatic fall in Maori unemployment. It had seen double-digit inflation squeezed out of the economy and it had Government accounts that through a process of fiscal consolidation were in much better shape than previously. New Zealand was extremely well placed to build on that success and there was a moment in time when I and many other people with both a strong personal and professional interest thought that maybe this Government might just do it. 
But unfortunately that thought collapsed very quickly. It collapsed I thought finally during an argument between Dr John Hood and the Prime Minister. When faced with the idea of a target of getting New Zealand back into the top half of the OECD the Prime Minister backed off very very fast when she understood what the real political implications of following a wealth-creating growth-oriented programme would mean for this Labour Government. Instead Labour fell back to type and decided to sit in the sun and play the politics of redistribution. 
I would say we are seeing after 7 years of that the chickens come home to roost. We have seen cost increases spread imperceptibly at times but cumulatively throughout the economy a continual growth of low-quality Government expenditures in such areas as health a big-ticket item where there has been a $4 billion increase in funding and a 23 percent increase in the number of health administrators—adding what in terms of productivity and in terms of health outcomes? We have seen a continual increase in interest rates which are now considerably above other countries’ interest rates and we have seen a continuation of the New Zealand exodus as faced with a global job market New Zealanders are simply voting with their feet. I think those are some of the key elements in the legacy of Michael Cullen the Minister of Finance. It would be intriguing to know what an earlier and younger Michael Cullen as an economic historian might have made of what Mr Cosgrove calls Dr Cullen’s legacy. 
Most of all we have seen a slow-down in New Zealand’s productivity growth rate which in the long run is perhaps the most troublesome of all of the legacies of the reign of this Minister of Finance over—now—almost 2½ terms. We have seen total factor productivity growth halved—no it is down by more than a half; I think it has fallen to nearly one-third of its previous rate—and labour productivity growth halved if we compare the productivity growth rates from 1992 to 2000 with those of the last 6 years. 
In contrast the National Party offers New Zealand a focus on growth and a focus on tax reform not just as a one-off hit when forced by politics to go into that issue but also as a continual focus in order to maintain the competitiveness of the tax structures in this country. 
Vote agreed to.