Smith Lockwood: Debate on Budget Policy Statement 
Smith Lockwood: Debate on Budget Policy Statement 
[Volume:606;Page:4014] 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 Page 1 of the Budget Policy Statement sets out the Government’s priorities. The very first priority on page 1 is “Increasing our sustainable rate of economic growth”. There is nothing wrong with that priority. It makes a lot of sense. The only problem is: who can deliver it? I think most members of this Parliament would accept that only business can deliver an increase in our sustainable growth. I think that most people unless they are communists would accept that it is not Governments that deliver economic growth; it is business. So if we accept that argument—that it is business—we need to take some notice of what business says. Business leaders came to the Finance and Expenditure Committee and told us that they agreed with that goal that priority but they said that current policies are not consistent with it. Other business leaders said that there is no sign of policies to support that priority. That is what business is telling us. 
This Labour Government says that growth is its priority and we have just heard Jim Anderton rabbiting on about how his policies in partnership with business are going to deliver it. So how come business people come to the select committee and say: “Your policies won’t deliver it.”? Clearly this Labour Government is not listening. One business leader told the select committee that it seems that their submissions go down a black hole. Last year I remember that Business New Zealand came to the select committee also on the Budget Policy Statement a year ago and said and I quote it exactly: “No other Government on this planet serious about growth is implementing these policies.” This Labour Government can ignore that if it likes. It can say: “Oh well the people who come along to the select committee do not represent New Zealand business.” Business New Zealand represents something like 70000 businesses and I do not know how many tens of thousands Federated Farmers represents. The Business Roundtable certainly represents most of the bigger businesses. 
The  
New Zealand Herald 
 conducted a survey of 120 chief executives of business late last year. Of that 120 three thought that this Labour Government had a credible long-term growth strategy—three out of 120! Yet Jim Anderton says we should be applauding the Government for its growth policies. Business in New Zealand does not believe that the Government has a credible growth strategy. Treasury does not believe that the Government has a credible growth strategy. Treasury’s projections in this Budget Policy Statement show economic growth declining over the next decade not going up. 
The business sector told the select committee that if this Government wants to increase our sustainable growth rate it has to do something about reducing the Government’s spending ratio. Business pointed out that no country of a kind similar to New Zealand has ever sustained 4 percent growth while carrying a tax burden like New Zealand currently carries. No country of our kind has ever done it. But Dr Michael Cullen is far more clever than the collective wisdom of the world! Dr Cullen thinks he can defy gravity. In fact at the select committee Dr Cullen was questioned about not just that concern but other concerns that were expressed—the need to reduce the regulatory burden on New Zealand businesses and the need to reduce compliance costs. Business New Zealand pointed out to the select committee that as it looks ahead it sees that Government policies just next year are going to impose an additional $43000 in compliance costs on the average New Zealand business. 
Do members know what Dr Cullen said to the select committee when he was confronted with those concerns? I quote from the report of the Finance and Expenditure Committee of March 2003. Dr Cullen said: “It is important to recognise that Business New Zealand is an interested pressure group just like the PPTA or any other organisation. Their job is to say ‘Our group should get more money. You have set the law in such a way that it completely fails us.’ In the same way that the PPTA tell us that we do not pay them enough money Business New Zealand say that in effect we do not pay them enough money by way of lowering their taxation.” I am quoting directly from page 18 of the select committee report. 
Let us put aside his insult to Business New Zealand by saying that it is like the PPTA. That quote from Dr Cullen shows that he thinks all business income in New Zealand is Government money. He and his Labour Party mates think that the amount of money they do not take off by way of taxation is Government payment to business. I quote him directly. He said: “Business New Zealand say that in effect we do not pay them enough money by way of lowering their taxation.” It speaks volumes when the Minister of Finance says that we do not pay them enough money by way of lowering their taxation. Dr Cullen thinks that all the money in the economy is owned by the Government and that the Government deigns to leave some of it with business and not tax it all. 
This Government is a bunch of unreconstructed socialists. They know the rhetoric. Dr Cullen and Helen Clark have been around this place for a long time. They know the rhetoric to give the impression the perception that they are business friendly and pro-business. Dr Cullen’s statement speaks volumes. He thinks that lowering taxation is the same as the Government paying businesses. It is not just New Zealand businesses that say that the policies are not going to raise our rate of growth. The most recent OECD analysis on the New Zealand economy says that the Labour Government’s policies are not helpful to growth. 
So how can Cullen Anderton and the like stand in this Parliament and try to tell us that their partnerships with business will increase our sustainable rate of growth? I suppose that Dr Cullen that smart alec thinks he knows better than the whole OECD. That brilliant former history lecturer knows better than all the OECD economists! It is interesting that Dr Cullen has said that New Zealand’s tax burden is not that high. In fact he claimed that most of the OECD countries carry a higher tax burden. I draw to his attention the latest addition of  
The Economist 
. It shows a table that relates to the direct tax burden on industrial workers with a family. Do members know where New Zealand ranks in the OECD for direct tax burden on working families? It is one area where we do rank in the top half of the OECD. We are sixth highest in the OECD for direct tax burden on working families and under Labour it has gone up. It has gone up more than any other country in the OECD other than the Czech Republic. 
Labour members think that sending Jim Anderton around the country for his little photo opportunity on grant handouts will increase our sustainable rate of growth and Dr Cullen talks about improving our investment agencies to attract more investment. That is like trying to make NZL82 go faster by changing the uniforms of the crew. 
The “third wayism” crap from this Government to quote John Tamihere is just that. The Government is trying to hoodwink New Zealanders. It is trying to hide its socialist redistributive anti-growth policies and dress them up in the fancy jargon of partnership. John Tamihere sitting opposite knows that it is just “third way-ism” “State-ism” garbage that is damaging not just to the future growth of New Zealand but to Maori as well. That is why Helen Clark is now trying to distance herself from the growth goal.