Bayly Andrew; Rurawhe AdrianANDREW BAYLY (National—Hunua): Thank you Mr Assistant Speaker and it's a pleasure to be talking on the MPS—the Monetary Policy Statement—because—Matt Doocey: Finally someone is. ANDREW BAYLY: Yes. It's nice that we actually talk about the Monetary Policy Statement which is of course a very important document issued by the Reserve Bank of New Zealand. That document together with the reports that we get from Treasury—Kiritapu Allan: The BPS. ANDREW BAYLY: The Budget Policy Statement (BPS). The issue around this is that it gives a clear view of what's happening with the economy. I've got to say increasingly I've got to look at the economy with some alarm because whilst the Government wants to talk about growing the economy and creating fairness the issue about this economy is that it's not actually growing as fast as it should. That is the travesty of what's going on. If you look back to the last three years of the National Government we were growing the economy at about 3.3 percent. That was driving forward and that's how we were starting to make sure that we were getting the money to be able to invest in the core services that we need in New Zealand. But the most worrying thing about this—the most worrying thing about this—is that since this Government has come into place it has slowly through its actions reduced the GDP growth rate in New Zealand. This is an issue of lost opportunity for New Zealand and that's the thing that's worrying me. I know the Government wants to sort of paper over it but actually even the Reserve Bank said in their report that there is a risk that growth and potential output is slowed by more than we assume contributing to a slowdown in GDP. To put that in context every 1 percent roughly is worth about a billion bucks in lost revenue to spend on hospitals to spend on education to spend on mental health and to actually do all the things that we want to do. Through this Government we are seeing not only a slowing GDP growth rate which is quite important but also what we are seeing is an increase in debt. I keep asking Mr Grant Robertson every time he comes to the Finance and Expenditure Committee what's happened to the GDP on a per capita basis and debt per capita and of course he's all gone silent on that over the last 14 months. So it's interesting. If you go to the latest financial statements of the Government of New Zealand the debt now has actually increased. In fact even in the last month from the December figure it went up by another $6 billion. So at the moment the debt is sitting at roughly—this is gross debt—about $68 billion and so what this actually means is that this Government is playing with mirrors. What it's doing is it's slowly running down the economy through lower growth rates—and I'll talk about that in a moment—but at the same time because it's getting short of money it's letting its debt increase. If you go back to even a couple of months before the debt was actually quite a bit lower in terms of its percentage. What this Government's not doing—even though they're trying to portray that they are—is actually saying they're reducing debt. They're not. Actually what they are doing in the sheer numbers in the amount of money that they've borrowed is actually increasing debt and they're trying to offset that by saying At a gross level it's OK. On the percentage level compared to GDP growth rate it's okay." Well actually what they are doing is using that debt figure as the area to let them expand to enable them to start to spend and fund some of the programmes we have heard talked about today. We have heard about the Provincial Growth Fund the 3 billion bucks that Shane Jones has got the billion bucks that got given to Winston Peters and all the other stuff—the student fees. What they are doing is basically playing with our future—playing with New Zealand's future—by actually increasing debt. Then at the same time what they've done in the last 16 months is raise tax by $2.6 billion and that is against the policy they talked about. Prior to being made the Government they campaigned on the fact that they wouldn't introduce any new taxes and now—now—they have already increased taxes by $2.6 million. Then of course we have got the whole issue around the capital gains tax. The whole thing about this is: "Shovel on another $2.6 billion of taxes on New Zealanders."—on ordinary New Zealanders—"That's not enough—that's not enough. Let's grow the debt as well. That's not enough. Let's talk about another tax." which is the capital gains tax. So that's all about just building up money so that you can spend your way out but the issue that I think we should be talking about is not the flabby spend that we hear every day from the Hon Shane Jones when he steps up to the mark and tries to defend yet another piece of flabby spend that's creating no jobs. We have gone silent on all that foreign affairs stuff that Winston Peters is doing around the Pacific and the new ambassadorship and consulate in Sweden—all that's been wasted. So what is happening is that we have got this economy that is just not going as well as it should. The other thing I heard today in question time is that we're out there doing trading arrangements. Grant Robertson talked about diversifying the economy—diversifying the economy. He talked about trying to get a relationship with the EU. Well I've got to say to Mr Grant Robertson that that has been in train for quite some time. It wasn't an initiative that was started by the Labour - New Zealand First Government; it's actually been in a long time. Trying to take credit for something that you haven't done is not a good thing. But the issue is: where are all the other trading relationships? The reason is we're not out there—we're not out there. We're going to talk about the relationship with China. We're not out there. We don't have a close enough relationship with them. What about the other fast-growing economies in the South Pacific? We do not seem to be out there because we don't have a Minister of trade out there away from New Zealand not in New Zealand. We don't have a Foreign Minister out travelling enough around the world creating new opportunities for businesses to be able to go and actually create and build and develop new markets around the world and all that stuff is helping to contribute towards our slowing economy. The other thing that's chilled the economic growth in New Zealand was the industrial relations. So all these things are building up—the industrial relations framework which employers are now starting to grapple with. Why does the Government set about demolishing the confidence of a New Zealand economy and particularly the people that own businesses and make the decisions about investing in new plant and stock and more importantly about employing new people? What we've seen with this Government is it set about almost destructively reducing that confidence. Ultimately it is those business owners that will make the decision to hire new people. Once you've got that—once you've got a growing economy; once you've got people employed—issues around social policy and all those other aspects start to fall away because people get paid well they get jobs that they can feel good about they have much better relationships and all their social outcomes are much more stronger. That's why it's absolutely essential that we have a Government that actually knows what it's doing but at the moment we don't. We have a Minister that is much more keen on pursuing Budgets that have nice intent but actually are they delivering the outcome for New Zealand? I've got to say to you that in my view they're not. It's not and we will increasingly see the outcomes of that over the next few months I think because the GDP rate in New Zealand is slowing and it's slowing dramatically. One of the issues for the Government is how it's going to fund its operations and continue to do that in the short term because they will not have the money. They're already about $700 million down on where they were budgeting probably about a year ago. That is a substantial cost and that will impact on the ability for all New Zealanders to be able to share the benefits of increasing spend because this Government is running slowly into a point where they can't do the type of expenditure they want. I just feel disappointed for New Zealand because this is a Government with in my view little ambition around how they want to drive a dynamic economy. They might be good on rhetoric but the ability to actually manage a dynamic economy to put the right frameworks in and to make sure that people feel that they can invest and do the hard work and take the risk that many have to do at a personal level—that bit is just missing. We're strong on rhetoric; we just don't seem to see any delivery on the actual outcomes. ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call. I call Dr Deborah Russell—five minutes."