Parker David: Estimates Debate — In Committee 
Parker David: Estimates Debate — In Committee 
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Hon DAVID PARKER (Labour) 
: 
 I rise to take call in respect of Vote Economic Development. 
Jo Goodhew 
: I raise a point of order Mr Chairperson. I seek clarification from you as to whether each speaker is able to take two calls in each one of the votes or just two in the debate. 
The CHAIRPERSON (Lindsay Tisch) 
: It is two per vote. 
Hon Steve Chadwick 
: I raise a point of order Mr Chairperson. Each time a member seeks clarification Labour is losing speaking time. I wonder whether the junior Government whip could clarify things with the Leader of the House. [ 
Interruption 
] 
The CHAIRPERSON (Lindsay Tisch) 
: The Minister knows he cannot interject when he is the Minister in the chair. We will leave it at that point. Anyone is entitled to raise a point of order. I hear what the member is saying but anyone is entitled to raise a point of order for clarification. I have ruled on this matter. 
Hon DAVID PARKER 
: The Government was elected on the promise that it would close the wage gap with Australia by 2025. We have been trying to get clarity as to some intermediate target because of course by 2025 not many of us who are currently in the House if any will be here. The current National-led Government will be long gone. There has never been a 15-year Government for as long as I have been alive and I do not think this Government will be a 15-year Government. There is nothing in the 2025 target that enables the Opposition or indeed members of the public to hold the Government to account. We want some intermediate targets and we have not had any. We have had an acknowledgment from the Minister for Economic Development that the Government does not have any intermediate targets and it is plain from the record that there are not any. 
I want to reflect a little more on the difference with Australia. At the moment the Nobel Laureate in economics Joseph Stiglitz is on a tour of Australia. It has been reported that he has been complimentary of the Australian response to the recession. I can understand why because Australia has done so much better in the recession than the National-led Government has done in New Zealand. Indeed the contrast between Australia and New Zealand is stark. Since the recession started the Australian stimulus package has been effective and unemployment has gone down. In New Zealand the stimulus package from the New Zealand Government did not work as effectively and unemployment has risen. In New Zealand wage growth has stalled. I think wage growth for the first 3 months of this year was virtually nil; it was a very very low rate anyway. In contrast wage growth in Australia is still reasonable. The wage gap between New Zealand and Australia contrary to Mr Brownlee’s assertion at question time today has actually increased not decreased. I am very very surprised that the Minister has not corrected that statement in the  
Hansard 
 record as yet. 
I could forgive the Minister if there was some measure by which he could assert the gap to be closing. There are three standard measures of the earnings gap between New Zealand and Australia. The first and most relevant is what people actually earn—their wages and salaries. That is what people understand when the Government says it will close the wage gap with Australia. It means that the gap will get smaller not bigger. If somehow salaries could be separated out and we could find out that that gap has closed then maybe that assertion could be made. But neither the wage gap nor the salary gap has closed. Of course during the period since National has been in office wage and salary growth in New Zealand has been lower than in Australia. On that measure the wage gap has not closed. That seems to me to be the end of it. 
We might ask about per capita GDP. If we measure that we see that the gap has got bigger not smaller. Gross domestic product has been increasing at a higher rate off a higher base in Australia than it has in New Zealand. On this measure the gap has also become wider. That is two out of two. 
What about if we take per person available to work? That is a wee bit different from the average wages for someone who is in full-time employment because it includes people who would like to work but cannot because they are unemployed. On that measure too the gap has become wider. Since National took office in New Zealand the unemployment rate has gone up in New Zealand and down in Australia. Again I would suggest that if we are assessing earnings per available worker then we see that the gap between New Zealand and Australia has grown larger. 
The Minister for Economic Development today in question time could not answer the question of what the wage gap between New Zealand and Australia is. He would not even give us a rough idea of the wage gap between New Zealand and Australia. I am surprised by that given that the central plank of National’s campaign at the last election was that the gap was too big and that National was going to narrow it and cause it to disappear by 2025. I am surprised that the Minister did not know even within a bull’s roar what the difference is. I am even more surprised that he thought the gap was getting smaller. 
Hon Gerry Brownlee 
: No better. 
Hon DAVID PARKER 
: No smaller. You said at question time that the gap was reducing. 
Hon Gerry Brownlee 
: He never said a word. 
Hon DAVID PARKER 
: Mr Brownlee said that. 
The CHAIRPERSON (Lindsay Tisch) 
: Can I just remind the Minister and Leader of the House that when one is the Minister sitting in the chair no interjections are permitted even though they may be humorous. This is not the place to interject from. 
Hon Gerry Brownlee 
: My sincere apologies. I was deeply provoked. 
The CHAIRPERSON (Lindsay Tisch) 
: And now the Minister is questioning me! 
Hon DAVID PARKER 
: It is not a matter of hilarity that the Minister for Economic Development does not know what the wage gap is between New Zealand and Australia when it was such a central plank for National at the last election. We can be pretty clear now that the Minister for Economic Development does not have a credible plan for bridging the gap with Australia. He does not know what that gap is and he does not know that it is going in the wrong direction rather than the right direction. 
The central plank of his economic development platform was a step change in mining in New Zealand. It was going to cause a step change in New Zealand’s economic fortunes but it has disappeared. It has evaporated. He was overruled by his Cabinet colleagues who in the end heard that what the Opposition was saying was right all along. It is inappropriate to mine in national parks. He has been forced to abandon mining in national parks and other schedule 4 lands and there is nothing to replace it. There is some good being done in respect of mineral exploration in other parts of New Zealand but that work was going on anyway. There has been no step change in that. The Minister might get to his feet and say that the Government is spending about $25 million on data acquisition in respect of gas and oil exploration. Well that is true. I ask what the previous Government spent on that. I think it was $22 million over a period of 4 or 5 years. From memory it was a very similar amount. No step change is coming from that. 
The reality is that Australia continues to march on ahead of New Zealand and the National Government is not taking any meaningful step towards bridging that gap. Indeed it is going in the wrong direction in respect of savings and investment and that is the big difference between the New Zealand and Australian economies. It is far more significant than the difference in mining. The Government has no plan to increase New Zealand’s savings or to increase the depth of our capital markets to catch up with Australia’s capital markets in a way that would enable us to have improvements in productivity such as Australia has had in recent years. Australia has better savings and more money to invest in its productive enterprises and therefore it is marching ahead of us at a time when National has been caught in the headlights. Joseph Stiglitz said that Australia has a good plan to get out of the recession or to avoid recession. However we have none.