Parker David: Mixed Ownership Model Bill — Second Reading 
Text is incorporated into the Bound Volume 
Parker David: Mixed Ownership Model Bill — Second Reading 
[Sitting date: 14 June 2012. Volume:680;Page:3004. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 The first thing I will say to the prior speaker Craig Foss is that we in the Labour Party do not take advice on fiscal responsibility from the National Party. During the last Labour Government Government debt was reduced from 38 percent gross to 17 percent gross and net debt went down to 0 percent—it went down to 0 percent. And every one of those Budget surpluses that Labour ran in a time of surplus was opposed by National. When John Key was finance spokesperson he opposed them. When Don Brash was finance spokesperson he opposed them. And when Bill English was finance spokesperson he opposed them. Those are the reasons that New Zealand has got low levels of private debt now.  
We have a few Keynesians in the National Government now but we never have proper Keynesians over there who put money away in a time of plenty in order to keep the economy going when times are tough like they are now. We hear comparisons to Greece—what a nonsense! New Zealand is not even in the position of Greece. It never has been. Maybe it would have been if National had been in charge of the Treasury benches and we had not run Budget surpluses during the 2000s. But Labour did and as a consequence even now New Zealand has amongst the lowest rate of Government debt in the Western World.  
This Parliament is faced with this legislation as being the biggest part of the Government’s economic agenda for our country. This is on the very day that the Reserve Bank downgraded New Zealand’s growth forecasts. New Zealand’s growth forecasts are so bad that New Zealanders are leaving for Australia at the rate of 1000 people a week. And they are not leaving because of Greece’s problems; they are leaving because of New Zealand’s problems. In fact the Reserve Bank today told us that the average growth rate of New Zealand’s 16 largest trading partners this year is three times New Zealand’s growth rate. It predicts our growth rate is going to be 1.1 percent— 
Paul Goldsmith 
: Because it’s China. 
Hon DAVID PARKER 
: —and it says that for the rest of the world for the 16 largest trading partners—it does include China. It includes Australia. These people are our trading partners. Greece is an irrelevance to us in the sense of trade flows. The growth rate of our trading partners is three times that of New Zealand. At the same time the Reserve Bank said that New Zealand’s productivity growth rate is being pruned back. That is even worse news for New Zealand—that we will not have as much growth as we thought we would in the future because our productivity is growing at such a miserably low rate.  
We even had the Minister of Finance concede at the Finance and Expenditure Committee yesterday that New Zealand’s economy has not rebalanced and it will not rebalance even by 2016. We hear talk about government debt. Between last year and 2016 New Zealand’s net international liabilities—that is what we owe net in the world—will go up from $130 billion to $200 billion. Just about all of it is private debt.  
This Government is so out of touch with New Zealand that it thinks that the major part of its economic strategy should be changing who owns what already exists. That is what this legislation is about. It is changing who owns these power companies. It is not increasing the output of those power companies. It is not increasing New Zealand’s export earnings. It is changing who owns what already exists which does nothing to grow the economic output of New Zealand.  
We heard the Prime Minister give a speech just before the election and he called it “sticking with a plan that’s working”—sticking with a plan that is working. 
Hon Dr Nick Smith 
: It is absolutely. 
Hon DAVID PARKER 
: He has it endorsed by Dr Nick Smith the ACC bomb. National’s plan is not working. Growth forecasts keep getting put down. The only thing that goes up is the current account deficit and net international liabilities. This is the central part of the National Government’s economic agenda for this 3-year term and it is wrong. Even if it was right it would not grow our exports and it would not improve the productivity of the New Zealand economy.  
I want to come back to the question of mandate. The National Government claims a mandate. National and Treasury under the governance of this Government—National last time and this time—abused the fiscal responsibility provisions in the Public Finance Act by booking the proceeds of sale from these State-owned enterprises and not accounting for the loss of profits that they suffer when part of those assets is sold to a new owner. How bad is that! Treasury was the lapdog of the National Party. When we estimated those losses of dividends the Government used Treasury to criticise our estimation of those revenue losses and it claims that it has a mandate!  
What National told people at the election was that the pre-election fiscal update was accurate when it was not and it was not until we had dug down into this and the pre-Budget fiscal forecast came out that it finally acknowledged that this increases the government deficit by $100 million per annum—$94 million to be accurate but it goes up thereafter. The government deficit is $100 million per annum worse off because National is selling these assets and it is obvious that the Crown’s cost of funds is less than the return on these assets and less than the rate of the return that it will sell these assets for. So this is lunacy. It increases the government deficit. It increases asset inequality. Is the same range of people who are taxpayers going to end up owning these assets? No. Predominantly they will be owned by the people whom the National Government gave most of its income tax cuts to 40 percent of which went to the top 10 percent of the people. 
Hon Clayton Cosgrove 
: And offshore. 
Hon DAVID PARKER 
: And offshore owners? Well we are told in the model that 30 percent of the shares being sold will be ending up in overseas ownership—30 percent of these New Zealand assets. According to that these shares will end up in overseas ownership and that will over time increase New Zealand’s worst problem which is our current account deficit.  
What else does this legislation do? It increases power prices.  
We have had an atrocious process around this legislation. This legislation was reported back to this House 5 weeks ahead of when it was due to be reported back. 
Paul Goldsmith 
: We’re very efficient. 
Hon DAVID PARKER 
: “Very efficient” we hear from the member who wants to be the member for Epsom—the man who supports John Banks another former National Party man and a fiscally irresponsible man who tripled council debt when he was the last mayor with the Auckland City Council. And when that man Paul Goldsmith was a councillor he had a terrible risk of local government debt increasing under his watch too.  
What happened in respect of power prices is that we heard from submitters that the average price for a domestic consumer of electricity when they are getting their power from a State-owned enterprise is $265 less per annum if they are getting it from a State-owned enterprise than if they are getting it from a private sector competitor. So we wanted to ask officials whether that information which was derived by Molly Melhuish in Grey Power and supported by Geoff Bertram an economist at Victoria University was correct because Treasury never addressed it in its departmental report because it was not suitable to their case. So the Opposition members went along to the select committee and said: “Please we want advice as to whether that calculation of the price being lower through the SOEs is accurate.” Do you know what? The National Party blocked it. The National Party blocked it. National members did not want to hear the answer to that. Look at them—all their heads are down because they know that is true.  
Hon Dr Nick Smith 
: Not true. 
Hon DAVID PARKER 
: That is absolutely true. Nick Smith came along and said: “Oh that’s about Comalco.” He does not understand that Comalco is not a residential consumer. This was residential prices and they would not let us do that.  
We had queries about whether the effect of free-trade agreements would mean—because we have not got a very competitive electricity market in New Zealand—that if a future Government regulated the price of electricity it would infringe our trade agreements and allow the overseas buyers who will have bought these shares to take the New Zealand Government to court and for international trade bodies to claim their losses. We wanted to get that advice from Treasury. Were we allowed to? We got the first superficial advice. We needed to drill down to the next layer to answer the specific question that I have put and the Government blocked us from asking the question 3 weeks ahead of when this legislation was due to be reported— 
Hon Member 
: Five. 
Hon DAVID PARKER 
: Sorry it was 5 weeks ahead of when this legislation was due to be reported back.  
This legislation will increase power prices increase asset inequality increase the government deficit increase the current account deficit and leave New Zealand worse off. This Government has no adequate plan for the economy.