Parker David: Financial Review Debate — In Committee 
Text is incorporated into the Bound Volume 
Parker David: Financial Review Debate — In Committee 
[Sitting date: 12 March 2013. Volume:688;Page:8413. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 The Finance and Expenditure Committee report details that this year net Crown debt is increasing substantially as it says from $40 billion 20.3 percent of GDP to $50.7 billion 24.8 percent of GDP. This shows that Government debt is still rising sharply as we go into the fourth—coming up fifth—year of this National Government. 
The Labour Party has not been critical of the fact that the Government has been running a deficit post the global financial crisis. Indeed one of the reasons why the Government can do that relatively comfortably compared with other parts of the world is that it inherited Government debt that was amongst the lowest in the developed world from the outgoing Labour Government. Indeed gross debt had been reduced from about 40 percent of GDP to 18 percent of GDP and net debt was down to virtually zero. 
What we do say though is that the financial review of Treasury and of the Financial Statements of the Government shows that the Government has not met the undertakings it made to the electorate when it was elected in 2008 and I want to comment on a couple of those. First of all we had the promise of the Government that it was going to rebalance the economy towards exports. It was going to grow exports from approximately 30 percent of GDP to 40 percent of GDP. National came to Government when exports were virtually 30 percent of GDP and they are still virtually 30 percent of GDP having gone up or down in any 1 year by 1 or 2 percent but not having moved from the underlying position of 30 percent of GDP. There goes a failure. 
We also had the Government saying that it was going to close the wage gap with Australia. We know that it has been refusing to agree to any sort of milestone by which it can be judged on this because its performance on that is even worse than it is on exports. Not only has it not improved the position; it has actually gone backwards so much so now that the gap between New Zealand wages for a median wage earner in New Zealand and an Australian on the median wage is $180 per week using the purchase price parity measure that the Prime Minister and the Minister of Finance have both previously said they prefer. For a median wage earner in Australia adjusted for New Zealand spending the wage is $1067 per week. For New Zealand it is now $887—a gap of $180 per week. That is an increase during the term of this Government of $60 per week—$60 per week worse rather than getting better. No wonder record numbers of people have left for Australia. It has now reached the point that an Australian working 4 days can earn the equivalent of what we earn in New Zealand whereas a New Zealander has to work 5 days. So there goes another symbol of the failure of the economic policy of this Government. 
I raise a point of order Mr Chairperson. Am I to use that microphone so I can be heard externally? Because if it is just internally— 
The CHAIRPERSON (Lindsay Tisch) 
: Yes—no it is externally. 
Hon DAVID PARKER 
: Externally? OK. 
The CHAIRPERSON (Lindsay Tisch) 
: Unfortunately we are still having problems with that. 
Hon DAVID PARKER 
: Right. Is this on? How do I tell? 
The CHAIRPERSON (Lindsay Tisch) 
: It should already be on—just try. 
Hon DAVID PARKER 
: It is going? Yes—OK. Thank you. In addition to other problems that we have in the New Zealand economy the fact that the economy has not rebalanced towards export-led growth is evident not just from the failure to grow exports as a percentage of GDP but from the perennial current account deficit. New Zealand maintains a current account deficit that according to the IMF this year will be the second-worst in the developed world at an astounding $10 billion. That $10 billion external deficit is funded either by selling more previously New Zealand - owned assets to overseas buyers or by borrowing from overseas. As a consequence New Zealand’s balance sheet if you like as a country gets worse as we are hollowed out as an economy owing more to overseas and with more of New Zealand’s assets being owned by overseas people. Treasury and the Reserve Bank forecast this as continuing to increase to about 6.7 percent of GDP in 2016. 
The Government turns round and says: “Well look this is not as bad as it was during the heady days of the 2000s.” It is true that in two of those years it got higher than that. That was not a good result. The problem for the Government is that it promised to fix it yet it refused to pull the levers of power that would enable it to do so. The lack of economic policy from this Government to make a true difference can be simply evidenced from the fact that its biggest economic policy for this term is the sale of minority interests—up to 49 percent—in State-owned enterprises.