McCully Murray: Budget Debate 
McCully Murray: Budget Debate 
[Volume:631;Page:3363] 
Hon MURRAY McCULLY (National—East Coast Bays) 
: 
 I thought that during the time I have been in this House I have heard pretty much every loopy idea available to mankind but today I have learnt something new. From listening to members of the Government I have heard that somehow it is patriotic for members of this House to sit back and do nothing as our nearest neighbour and largest trading partner strips this country of its capital strips this country of its skill base and sees our nation sink into oblivion. Somehow it is unpatriotic to point to the blindingly obvious fact that the Australian Budget brought down a couple of weeks ago is a huge wake-up call for all New Zealanders. 
I say to the members opposite who have loyally read out the research notes that have been distributed by the ninth floor of the Beehive that New Zealanders have passed judgment already on this Budget. New Zealanders from one end of the country to the other know that this Government has no answer at all to the big challenges confronting New Zealand in 2006. [ 
Interruption 
] I tell Mr Carter to enjoy his time as it is coming to an end. My colleague the Leader of the Opposition rightly referred to this Budget as the “Bondi Budget”. He correctly drew attention to the fact that in the last 6 years we have seen the gap between average after-tax income in Australia and average net income in New Zealand which was previously 20 percent move up to 33 percent—that is the advantage that Australia has over New Zealand. 
Let us look at a few simple facts. New Zealand is currently struggling to achieve growth of 1 percent and Australia’s growth is 3 percent and is probably headed for 4 percent this year. Australia has a free-trade deal with the United States that is now into the back end of its second year and New Zealand has none. If we look at those facts we can see that by the time we end up with a National Government in this country—in 2 years’ time—that gap could be well over 40 percent. That will present a real challenge to this country in terms of retaining its capital base and its skill base. 
I want to spend a few minutes of my time today talking about foreign affairs and defence because there are some interesting developments under way in this area—developments in which my colleagues and I have had some modest part to play. First of all I have taken the view since being appointed to take responsibility for these areas for the National Party that New Zealand is too small too geographically remote and too dependent upon international trade for its livelihood for us to afford the luxury of political bickering where the national interest is at stake. I have made it clear to members opposite to the Ministers who carry those responsibilities that this side of the House will work with them wherever possible to try to achieve the important goals that lie ahead for this country. Some Ministers have reciprocated that offer in very material ways. I see Mr Sutton is in the Chamber; I acknowledge that he is one of those Ministers as is his colleague Mr Goff. 
One of the most important foreign affairs objectives that New Zealand must seek to achieve in the next few years is the improvement of our relationship with the United States of America our second-largest trading partner. There is little point in dwelling on some of the detail of that relationship in the last decade or two. Much of it has been suboptimal and I think there is little value to be gained in focusing on that detail today. Suffice it to say that I think we have reached a point where there is an understanding and a growing realisation on both sides of the relationship that we need to do something quickly to improve the relationship and that both parties have to work harder at it than has been the case in the past. I believe there is growing appreciation—again on both sides—of the absurdity of two countries that share so much history and so many values finding it difficult to find points of agreement in many aspects of the relationship. 
Indeed in relation to the trading arrangements at the moment I am sure that some commentators on the international stage must shake their heads in wonderment as nations that have brought little to the table in terms of international affairs and nothing in particular to their relationship with the US are favoured with free-trade agreements with that country to their considerable advantage while New Zealand sits outside any such arrangement. That to me highlights in very stark terms the need for us to make some progress and to lose no time in seeking to make that progress. 
I emphasise that this is not a short-term project for this country and I think that Government Ministers will acknowledge that this project will take years not months. This project will not be completed within the term of this current Government which makes it important that there should be a degree of bipartisanship in terms of the way in which we move forward as far as it is possible to achieve that. That is why the National Party has made a commitment to work with the Government in a bipartisan way to move the New Zealand - US relationship ahead over time. That is why the leader of the National Party Dr Brash my colleague Mr Groser and I accompanied Ministers Goff and Cunliffe along with a group of very high-powered business leaders to the recent business partnership forum in Washington. We wanted to make it clear to the US administration and to the American people that the objective of improving the relationship is shared by both the Government in office in this country and the alternative Government of this country. I was delighted to be a part of that approach and—led by Dr Brash—to play the National Party’s role in that important mission. 
Today I want to reflect on just two or three specific areas of the relationship where I believe it is timely for us to move forward and where I see some glimmer of hope. First it is important that New Zealand should secure some relaxation of the current restrictions that apply to New Zealand servicemen training with their US counterparts. That matter was raised by Mr Goff when we were in Washington—and it is a point that has also been raised by the Leader of the Opposition—because the current arrangements simply do not reflect the quality of the relationship in some of the more difficult parts of the world. Sure there is provision for waivers of the presidential directive that was brought down 20 years ago and sure such waivers are given. But when we reflect on the fact that we are expected to fight alongside each other in the trouble spots of the world it seems silly that we are not able to train together more freely. I believe that in that respect the point made by Mr Goff and Dr Brash in Washington had some resonance and indeed I see that at least some goodwill is being brought to further consideration on that matter in Washington. 
Second we need to see the current restrictions on US technology and intelligence in terms of access for New Zealand forces—also a product of the presidential directive of 20 years ago—given some sort of review. The fact that the purchases of equipment that we make at the moment take place on a commercial basis rather than the advantageous terms of 20 years ago is a cost to this country but more important New Zealand needs to move as far as possible down the path of interoperability with the forces of Australia. That will be difficult—indeed some would say impossible—unless we can see further leeway through the removal of the restrictions that apply to our access to US technology and indeed US intelligence. 
It is also important that we should make further progress on the completion of a free-trade deal with the US. Every New Zealander will be richer as a consequence of our achieving that objective. I personally believe that it is a medium-term project not a short-term project but it is one on which we cannot afford to miss any opportunity. There is always the very long shot that some unfortunate developments in the US might result in that country seeing some advantage in picking up at short notice a New Zealand offer.