Parker David: Budget Debate 
Parker David: Budget Debate 
[Volume:608;Page:5870] 
DAVID PARKER (NZ Labour—Otago) 
: 
 Budget time is the time when we get to look at the Government’s accounts and reflect on whether the Government is managing the economy and its finances wisely. This year we are in the happy position of being able to report a $4 billion surplus before capital obligations. Those capital obligations include $1.8 billion being put into the Superannuation Fund in order to sustainably fund superannuation well into the future. That has been achieved leaving a surplus of $1.4 billion after those adjustments are made and that is after substantial extra money going where taxpayers want to see that money focused. 
Health is getting an extra $737 million which is an increase in funding of 9 percent—a very real increase that is well above inflation. Education is getting another $481 million which is a 6 percent increase and which is again ahead of inflation. Enterprise industry and regional development support are getting an increase of $76 million which is off a fairly low base and which represents a 43 percent increase in funding. That has been done in an economic climate where our economy is growing at amongst the fastest rate in the OECD with 4 percent growth. Unemployment is very low despite our labour force participation rate being at an all-time high. At around 5 percent it is again one of the lowest in the OECD. Our Crown debt levels are at the lowest since Treasury began collecting data in 1971. When the accounts were taken over from National by the Labour-led Government gross debt was at 36.8 percent of gross domestic product (GDP). Over the next year or two it will go down to 23 percent of GDP which is a substantial decrease. Net debt will drop even further to 14 percent of GDP. 
Against that background one wonders what Dr Brash and the National Party would be saying. I looked with some interest at what Dr Brash was reported as saying in the  
Dominion Post 
 last Thursday 15 May. I was intrigued by this quote: “Growth is too low to narrow the large gap in the living standards between New Zealand and Australia that emerged during the 1970s and 1980s.” I thought my goodness it is strange for Dr Brash to forget about the decade that we have had since then. Maybe there is a reason for that selective quoting of statistics. So I got out the figures and they make for interesting reading. In 1980 New Zealand was ranked 18th on per capita GDP in the OECD countries and Australia was 10th. The decade of the 1980s was mainly Labour-led. In that decade New Zealand dropped back one placing from 18th to 19th while the Australians dropped back six places. It seems to me that Labour did not do a bad job compared with Australia back in that decade. Then I looked at the next decade and I wondered why Dr Brash had not mentioned it. From 1990 – 2000 it was the National decade in which National effected its “wonderful” fundamentalist policy that is still so favoured by Dr Brash and Mr Hide—or Dr Jekyll and Mr Hyde as some of us like to refer to them. In that decade New Zealand started at 19th and dropped back one place to 20th. In the same period Australia went from 16th up to 12th—they went up four places and we went back one. It is no wonder Dr Brash does not refer to that decade—it is the decade of incompetence. 
In most overseas countries the ideology of fundamentalist neo-classical economics is seen as flawed. Our own New Zealand experience of the adverse human and economic consequences of the austere misguided neo-classical fundamentalism was one of the reasons that I became active in the Labour Party and one of the reasons Dr Brash became active in the National Party; because he still believes in it. 
R Doug Woolerton 
: The only good thing you have done is kick Gavan Herlihy out. 
DAVID PARKER 
: That is a very kind comment from the member. National and ACT’s continued obsession with austerity and neo-classical fundamentalist monetary policy no matter what the economic and social cost relied upon a simplistic economic model that was altogether too narrow to make common sense. But have they moved on? No they have not. 
Peter Brown 
: Have you? 
DAVID PARKER 
: Yes Labour has moved on and that is why the member has seen the economy improve and why the country is in such a healthy Budget position. But have National and ACT moved on? No—never. They cling to the purity of their simplistic neo-classical views. They still think that issues of distribution and efficiency can be separated. They do not care if there is a great disparity between the income and wealth of the haves and the have-nots. They say it does not matter. They say that the economy performs just as well even with those disparities. Well we disagree. Our philosophy is that social cohesiveness and equality of opportunity are important to economic prosperity and to personal security. We think the failed neo-classical policies that widened the gap between wealth and income in New Zealand undermined security and threatened the economy to the detriment of us all. We say that their policies—which Dr Brash would return us to tomorrow—were one of the main reasons behind the poor performance of the New Zealand economy compared with Australia. 
I reiterate that that poor performance was in the decade between 1990 and 2000 when National was in Government and that is the reason that we went backwards as compared with Australia. That is also the reason we are now going forward as compared with the rest of the world. We recognised that mistake and we are changing it. What did we inherit when the Labour Government first got back in? We inherited those austere policies and the consequences of them. We had virtually no apprentices. This Budget increases the funding for the Modern Apprenticeships scheme. We had a youth suicide rate that was very high because of the hopelessness with which young people entering the workforce viewed their prospects. I think that was a major part of the hopelessness of youth at the time. This Budget funds a policy that over the next few years will see everyone of school-leaving age either moving into employment or moving into post-school education. Those young people will have hope and we will have a better and more skilled workforce. 
We had superannuation that was increasingly under threat as to its sustainability. After the last few Budgets we have a long-term sustainable superannuation position largely because of the contributions that will be made this year and in the future of about $1.8 billion which will go to help fund future superannuation. 
Peter Brown 
: Where are you going to invest all that? 
DAVID PARKER 
: We invest in people. Where will the Superannuation Fund invest? The Superannuation Fund will invest in a range of investments in New Zealand and overseas so as to protect the fund for the future and to sustain superannuation for our superannuitants. 
Notwithstanding the healthy surplus we have managed to find an extra $167 million to fund an additional 774 teachers in our schools which is over and above those required for roll growth. As I have said we have reduced debt we have funded Modern Apprenticeships and we have funded training for everyone 15-19 years of age—as long as they are in further training or education and not on the dole. 
Lindsay Tisch 
: You’re on page 7. 
DAVID PARKER 
: I am on page 7 am I? It is true that I have lost my page. In closing I reinforce my encouragement to listeners to think again about the selective quoting of statistics that Dr Brash would visit upon us in quoting the statistics from the 1970s and 1980s but ignoring the 1990s when it all went so horribly wrong.