Clark David: Debate on Budget Policy StatementText is incorporated into the Bound VolumeClark David: Debate on Budget Policy Statement[Sitting date: 09 March 2016. Volume:711;Page:9527. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): Chris Bishop the last member of Parliament who spoke is spouting the same lines that we have heard from this Government for 8 years. We are hearing the mantra but no one believes the mantra any more because it cannot back it up with evidence. This Government has borrowed more than Muldoon—the member referred to that and it is true—and that is because it has not managed the economy well. Sadly it has not done what is best for New Zealanders. It has not taken the opportunity to diversify the economy. It inherited zero net debt and now it is up to around $86 billion—$86 billion in debt. That is thousands of dollars for each and every New Zealander that the Government has borrowed. That is debt that will hang round the necks of future generations.The last Labour Government grew the economy. I was not there so I cannot claim credit for this but it grew the economy by 25 percent—25 percent—and that is by two different measures. I have done the analysis myself—25 percent—and that is a quarter bigger than it was before that Labour Government came in. It is possible to support health and social spending when you are growing the economy at that rate. Unfortunately this Government has had the worst economic record of any Government at all in the last 50 years. Inequalities are growing—inequalities are growing. The homeownership rate in New Zealand is the lowest it has been since 1951. Since 1951 the homeownership rate has not been so low in this country and it is little wonder that the OECD just over a year ago came out with a study that said that the New Zealand economy has been held back by 15 percent—a whole 15 percent—because of growing inequalities in this country over recent decades.Members opposite know very well what contemporary economists are saying—that indeed if you have all of your citizens contributing to the economy it grows. It is not rocket science. If you have kids going to school hungry they do not then turn up and learn at school. In fact they are more likely to end up in the justice system because they are antisocial because they believe society is against them. Well actually it probably is—it probably is—if they go to school hungry. Their opportunity to learn and contribute is inhibited by growing inequalities. We know also that when there are great inequalities people make choices that are about maximising their own lot rather than about contributing to society because they are worried about the prosperity and well-being of those around them. So they do not necessarily make the choice to follow career paths that are best for the wider society and that is disappointing.We also know on top of that that infrastructure spending gets neglected by Governments that are growing inequalities because the wealthy can afford the infrastructure they need through the private sector. And hang their heads they might—those members have all got their heads down. I can understand that because they know it is true. They know that inequalities are growing under this Government. We can look around the regions. Almost every region in New Zealand has an infrastructure for broadband below the national average. All of the regions have New Zealand Transport Agency spending below the national average. That Government is focused on building holiday highways in wealthy areas and it is not focused on what will actually grow the economy.The OECD—the West’s economic thinktank—says that investing in the regions is the way to grow the economy. That is where the big gains lie because you have got underutilised infrastructure. I bet that the member opposite for Waitaki appreciates that investment in her electorate would be a good thing but instead her Government is neglecting investment in the regions. It is cutting funding to hospitals. Her own local hospital is under threat for its funding and that is a shame in my view.The opportunity lies in the regions. Investment in the infrastructure in the regions has a more productive and larger return for less cost and still most of New Zealand live in the regions. We cannot afford a two-speed economy. Ask Aucklanders whether they want more people to move in there and most of them will say no.David Shearer: No.Dr DAVID CLARK: Actually there is one right behind me backing me up on that. That is because of overcapacity. The infrastructure is there in the regions and it is good for the whole economy if we invest in the regions and yet the Government continues to neglect them. This Government continues to neglect those regions. It ignores the OECD and ignores contemporary economists and instead it is focused on an ideological centralisation campaign that is straight out of a 1980s textbook and proven not to work. It is off-track and that will result of course—as we have seen—in increased borrowing in a sluggish economy and in a managed decline. Sadly that is what this Government is going to be known for when history reviews its progress. It started with such aspiration and promise and New Zealanders are now disappointed when they see Budgets that are focused on managed decline.The next Labour Government will restore the Kiwi Dream. It will enable ordinary Kiwis to get ahead. We will make sure that ordinary Kiwis can earn decent wages again. We will be focused on diversifying the economy on generating higher incomes and on generating jobs. We are the party that is looking at the future of work because we are forward-looking. We are an intergenerational party. We are not interested in short-term returns. We are interested in what is good for New Zealand in the longer term.Those people opposite are more interested it seems in getting re-elected. They borrow. They borrow for pet projects like holiday highways and they neglect the basic infrastructure that we need as a country—the broadband implementation and so on—to get ahead. They are behind the eight ball and history will find that to be true.We back an economy that works for all of us but those members are distracted as well—I guess that is the other point I would like to make. We have seen it in the Ministry of Business Innovation and Employment today. Minister Joyce confessed that he had known about payroll issues that have been specifically brought up since last October and when asked about the 2010 review he fudged an answer. These issues that the ministry has with its payroll have been known about for a very long time. The private sector knows about it. There are payroll companies that advertise as their point of difference that they are compliant with the law. There are payroll companies that advertise as their point of difference that they are compliant with the law and the Holidays Act. This Government has known about the issue.In fact most Government departments have been compliant on Holidays Act payments. Only Mr Joyce’s agency which is responsible for overseeing the implementation of the Holidays Act has failed and also the police. The police have already addressed their issue. Mr Joyce is dragging his toes again and that sends an obvious signal to the wider public sector that it should not have to fix up its problems either. But this is of Mr Joyce’s making because this should have been fixed early. National has been in Government for 8 years and yet it is dealing with the distraction of payrolls within Government departments that do not even pay their employees what they deserve.This is going to be an issue that is worth tens of millions of dollars—and is likely to be hundreds of millions of dollars—to New Zealanders. They have been denied the correct back-pay for Holidays Act entitlements. That is the kind of issue the Government ends up dealing with because it is not focused on what matters to ordinary New Zealanders. It ends up fixing problems and not looking to the future and looking to how it can grow the economy like the last Labour Government did.Labour has forward-looking policies. We will back the Kiwi Dream. We will back New Zealanders who want to get opportunities through the tertiary education sector. We will provide fees-free post-secondary education for 3 years. A plan has been laid out to achieve that. It is an affordable one.Alastair Scott: Tax and borrow—that’s the way.Dr DAVID CLARK: The member opposite brings up tax. His Government has borrowed—has borrowed—$86 billion as I said earlier. I find it deeply ironic. It borrowed $86 billion to fund the 2010 tax package which gave a huge tax break to the top 1 percent while ordinary Kiwis got a smaller tax break which was more than swallowed up in a GST increase of 15 percent. That was a broken promise from Mr Key. Those members are focused on making sure the 1 percent are looked after and again and again and again the rest of New Zealand is neglected and that unfortunately is also those in the middle.This Government is distracted. We know it is focused on hair straighteners barbecue sundecks and Christmas parties with blow-up sheep. It is focused on doing deals with Skycity that the Auditor-General called neither transparent nor even-handed. It is distracted by all of these issues and not focused on the future.Research and development tax credits—around the world they are the gold standard for encouraging innovation. What is the Government doing about that? Absolutely nothing. There is silence from the other side.What is the Government doing about curbing property speculation? Well we have just seen with the Trans-Pacific Partnership agreement that the Government did not even ask for non-resident foreign buyers to be banned from buying houses as a right for future Governments to legislate about. Singapore Australia Viet Nam and plenty of other countries asked to look after their own economic interests. This lot were asleep at the wheel.So it is blatantly obvious that those members are focused on sorting out the problems that they have. They have got some trouble within their own ranks and some disagreements. They are starting to position because they know that Mr Key’s popularity is fading and they are not a Government focused on the future. A Labour Government will ensure that the Kiwi Dream is restored that people can own their own homes once more and that New Zealand preserves its sovereign right and acts in the interests of ordinary New Zealanders not just the 1 percent.