Woolerton R Doug: Supplementary Estimates2006/07Appropriation (2006/07 Supplementary Estimates) Bill — Imprest Supply DebateImprest Supply (First for 2007/08) Bill 
Woolerton R Doug: Supplementary Estimates2006/07Appropriation (2006/07 Supplementary Estimates) Bill — Imprest Supply DebateImprest Supply (First for 2007/08) Bill 
[Volume:640;Page:10171] 
R DOUG WOOLERTON (NZ First) 
: 
 I am pleased to follow the Hon Steve Maharey because New Zealand First is concerned about exports and about exporters and we have been waiting to hear the National Party’s answer to these things. National members have talked about tax cuts too. But I think people should know and should understand quite clearly what the deal is when the National Party talks about tax cuts. The proof of the pudding is in the eating so they say. I think people should understand exactly when the last time was that a National Government gave a tax cut. 
I am not an expert on this sort of thing but I mentioned this to a Minister in the Labour Government the other day and he was not even alive when a National Government gave a tax cut the last time. That is fair dinkum. He said: “I was not alive in 1966.” and he is a Minister in the Labour Government today. That was the last time a National Government gave a tax cut. However I can say the last time National voted against a tax cut—I can say when that was. It was only a few weeks ago at the last Budget. New Zealand First voted for a tax cut for business and the National Party voted against it. 
New Zealand First is prepared to put its money where its mouth is. We are prepared to say that we want to do something for exporters. We want to help exporters and we want to help business. We are prepared to say that there is something missing in the mix that we want to fix. We are going to put a bill in the ballot as my leader mentioned publicly the other day. We believe that the Reserve Bank of New Zealand Act needs to be amended. It should not be done away with thrown in the rubbish bin or anything like that; it should be enhanced. We believe that the Reserve Bank of New Zealand Act needs to be enhanced by giving the governor the ability when he is setting the official cash rate or the interest rate as most people know it to consider what his increase—or decrease if it comes to that; we will look forward to that day—will do for the dollar in this country. We want to know what it will do for growth in this country and we want him to have to consider what it will do to employment and manufacturing and particularly because we are talking about it today to exports. 
At the present time he has just the one issue to concentrate on and that is keeping within the inflation band of 0 to 3 percent. That is not something that happens in very many places in the world because they have a broader view of these issues. It is something that goes back to the days of Ruth Richardson and Roger Douglas and those sorts of people. It may have been needed then. I did not think it was but it may have been needed then. But today we need to enhance the Reserve Bank of New Zealand Act so that the governor is required to take these other things into consideration when he sets the cash rate. 
I hail from the Waikato and as everybody knows the Waikato is the dairy land of New Zealand. We have recently been told some good news that next year we will be seeing an increased payout for the dairy farmers. One would have thought that the Government and the country would be delighted about this because we all know that it is our exports that set our standard of living and if there is an increase to the dairy farmers for their produce we would all be the beneficiaries of that. But no sadly the Governor of the Reserve Bank thought that this increase was one of many factors that would add to inflation. So recently just following the announcement of that price as it happened—probably coincidentally but it may not be—he said we would have to raise the interest rates or raise the official cash rate and that in turn raised the dollar. The net effect is that farmers will receive less than they otherwise would because of the governor’s action. 
We say that if he had to consider these other issues including what it would do to exporters vis-à-vis the farmers then he would think twice about stepping into the market quite so quickly. As anybody on the other side of the House will know if we raise the official cash rate the dollar follows and that affects our exporters. But what it means is that another flood of money comes into this country and again we are dealing with what trips off the tongue of Bill English and company—what they call the uridashi bonds the Japanese spare money. It comes over here because where they can get 1 percent interest or perhaps 2 percent if they are really really lucky they can come over here and get 8 percent or some discounted rate around that. 
So we are in a cycle that has no end unless it is to end in tears and we certainly do not want that. We believe that there is a solution. We believe that it does not have to turn the finance sector on its head. We believe that we have to enhance the Reserve Bank of New Zealand Act and we think that that is exactly what should be happening. If we are going to be serious about an export year and 2007 is Export Year we should also be serious about the environment in which our exporters have to carry out their business. It is simply not right that they have to face a dollar around the US75c or US76c mark. That is simply not sustainable for this country. 
We all know that a higher dollar means cheaper imports. We know conversely that a lower dollar means more expensive exports. But as in anybody’s household it is the amount of money that one earns compared with the amount of money spent on consumables that means how well off one is. In New Zealand because of this trade with the price of the dollar and with the exchange rate we are consistently year upon year compounding spending more than we earn. We believe that something needs to be done about it before it ends in tears. 
There was always the fundamental failing with people like Roger Douglas and Ruth Richardson because they were working to an ideological model—a model that was set in the absence of any reality for countries other than New Zealand. It was not set for New Zealand. Dr Cullen just the other day at the select committee suggested that this was a problem with housing. We agree with that but it is certainly a problem for our exporters. We have a way of fixing it. We believe that the Governor of the Reserve Bank should be required to take into account our dollar our growth our employment our manufacturing and our exports and we will have a far better balanced economy and money in our pockets. Thank you.