Parker David; Tolley AnneANNUAL REVIEW DEBATEIn CommitteeDebate resumed from 3 April on the Appropriation (2016/17 Confirmation and Validation) Bill.External Sector (continued)Hon DAVID PARKER (Minister for Trade and Export Growth): I rise to talk to the external votes. Of course trade is one of the areas that's covered by this appropriation and as Minister for Trade and Export Growth I'm keenly interested in the Estimates. The sad reality is that the last Government oversaw an objective for nine years which was to lift exports from 30 percent of GDP to 40 percent of GDP. After nine years of their attempts they managed to drop exports to 27 percent of GDP and to the end of the forecast period they didn't even get back to the 30 percent of GDP that they started at during their term of government. Sir that shows I think—Madam sorry. Madam that shows that—Mr Brownlee's appearance has obviously confused me. That shows the failure of the economic policy of the last Government in a very very important way.I think everyone in New Zealand knows that in order to pay for our mobile phones for our computers for some of the medicines we import for our cars—for a lot of the things that we rely upon for a good standard of living—we've got to sell a lot of things to the rest of the world. What we export to the world is largely a determinant of what it is that we can afford to import and therefore goes to the quality of living and to the debt levels that we carry with the rest of the world. The last Government thought that they had the policy package to remedy what they said when they came to office was a dismal export performance and then took it backwards. I think that we now know that their policy prescription was wrong.I want to talk to two aspects of it. One is the important work that the Minister of Finance is leading. That is the subject of an inquiry led by former Minister of Finance Sir Michael Cullen. That inquiry is looking at what we need to do to change the tax signal in New Zealand. I'm acutely interested in their recommendations because I know that the Minister of Finance and I both share the view that one of the problems that we have in New Zealand is that we misallocate capital too much of which goes into speculative investment classes and not enough goes into the productive sectors that we need to expand.Now the Government has got a number of measures to address that in addition to the tax inquiry but I suspect that when we look back on history of this period of government the work that Sir Michael Cullen is doing will be amongst the most important—Hon Maggie Barry: Urgh!Hon DAVID PARKER: —in terms of growing the strength of the economy. I heard Maggie Barry groan there; well you know the flip side of the under-investment in productivity—because although the last Government said that they had a high growth rate their last growth rate was effectively based on more inputs of people more power more cows more people and more tourists. When you adjust growth rates for population growth per capita growth rates in New Zealand for some time now have only been about 1 percent per annum. We're not going to remedy that unless we invest more as a country in growing new points of comparative advantage with the rest of the world so that we can grow the diversity of our exports as well as spread the breadth of the markets into whom we sell those goods and services. In addition to that the work that's been led by Dr Megan Woods in respect of the research and development tax credit will also assist.In the time I've got left I want to make reference to free-trade agreements. Free-trade agreements were oversold by the last Government as being the key to export growth. We already have the best trade agreement in the world with Australia one of the best free-trade agreements in the world in terms of our arrangements with China and despite those agreements we've had dropping exports. It proves the point that important though free-trade agreements are they are not the key to export growth; that lies in better economic settings that drive financial capital and then the people follow the money and put their efforts into growing new points of advantage.Having said that we are proud to have got the Comprehensive and Progressive Trans-Pacific Partnership across the line to have rebuilt public support by trade by protecting New Zealanders from some of the excesses of globalisation including by restricting who buys our homes.Hon Mark Mitchell: Madam Chair. [Interruption]CHAIRPERSON (Hon Anne Tolley): I call Mark Mitchell. I'm sorry; I'm on several things at the moment.