Jones Shane: Public Finance (Fiscal Responsibility) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Jones Shane: Public Finance (Fiscal Responsibility) Amendment Bill — First Reading 
[Sitting date: 04 December 2012. Volume:686;Page:7060. Text is incorporated into the Bound Volume.] 
Hon SHANE JONES (Labour) 
: 
 Mr Deputy Speaker tena koe. I stand along with my colleagues to say that we will support this bill the Public Finance (Fiscal Responsibility) Amendment Bill going to the Finance and Expenditure Committee. Unfortunately it is a pale imitation of what it could have been. But I want to direct our attention to an irony—and hopefully it will enjoy some serious consideration at the select committee because it actually does raise some grave issues. There is an irony that part of the bill’s architecture is designed to strengthen the connection between monetary policy and fiscal policy yet this is a Government that has taken a very laissez-faire approach to the relevance of monetary policy in the operation of the economy. 
I will come back to monetary policy but before I go much further the bill talks about managing the impacts of current policy on future generations. Nowhere is that more relevant than in dealing with the difficulty of New Zealand and its roughly 4.5 million people and an ageing population. It is an ageing population that is going to create a further burden on the ability of future taxpayers to meet not only the costs of the pension but also the medical costs—and they will grow—associated with our ageing population. I bear no ill will to anyone over the age of 65. Indeed we need to cherish that part of our legacy—that we have got respect and a willingness to care for those who leave the workforce. But unless a bill of this nature impels the Government of the day to take tough fiscal stances in relation to such an issue it is a sop. Unless we deal with the age of eligibility and unless we deal with the long-term costs of our current pension policy then we are creating a set of fiscal constraints and fiscal difficulties that future generations are going to struggle with. 
Therein lies a further conundrum within this bill. The people we are asking to bear the cost of our ageing population are the very ones in many respects who have been starved by the current Government’s approach to human capital formation education training and vocational development. When we talk about the efficient and effective usage and allocation of resources the bill is totally silent on how this Government is using the levers of fiscal policy to invest in the current generation of school leavers—the current generation of as we might say in Te Ao Maori the rangatahi—to ensure that they have actually got educational attributes applicable applied skills to meet the costs of this ageing grey bomb. We cannot actually overstate the importance of that challenge which is why despite the fact that from a machinery point of view we look forward to dealing with this bill in the relevant select committee we are disappointed that actually the bill is silent on such large challenges as the one I have briefly adumbrated. 
Monetary policy is now a key battleground. Unfortunately up and down the maraes the halls the villages the shopping malls etc. of Aotearoa it does not rate very highly. But the reality is that those of us who seek to influence and transform the nature of the trajectory that the country is on are going to delve deeply into the operation of monetary policy. So although the bill correctly acknowledges that the Reserve Bank has exclusive authority there the bill avoids making an improvement that my colleagues David Cunliffe David Parker and Clayton Cosgrove have reminded me about and that is too much power being in the hands of one individual. I believe that the current co-leader of the Green Party is entitled as a parliamentarian to express his exasperation and his views about the probity the independence etc. of the current Governor of the Reserve Bank. It is not a view that I have about that individual. Mr Norman is entitled to do that but the deeper problem is not to do with the independence of the personality; it is to do with the principles upon which that person is operating and this bill is spectacularly silent on how the current monetary policy operation is imperilling our ability to grow. 
The Government whilst it makes this sop to I guess one of its coalition partners misses an amazing opportunity to point out that unless you change the parameters unless you change the writ that the Reserve Bank is required to work to then you are going to straitjacket the ability of fiscal policy to play a more meaningful role because it is going to be conquered by an unnecessarily high dollar and also a very narrow set of monetary applications. This bill either avoids that or reflects the fact that it is not part of the belief system of the current Government. Government members are entitled to run the economy in that fashion. It is a type of operation that I thoroughly disagree with that we do not endorse but as much as it pains us they currently have the democratic authority to do that. It is only a shame that employees will be deemed to be superfluous businesses will fail and exports will diminish whilst they keep going on this irrelevant and most egregious course of action. 
In relation to the impact of fiscal policy in key social areas the bill needs to ensure that it does not constitutionally condemn one Parliament to unwisely follow the fiscal priorities and the fiscal strategic areas of interest that the current Government is pursuing. Rest assured that come 2014 there will be a happier mix of policies and there will be a more vibrant mix of ideas that will comprise fiscal policy on this side of the House. Although this bill does codify a set of standards that a future Government might need to observe this bill must not defeat the key constitutional principle that in our version of the Westminster parliamentary democracy one Parliament cannot bind a future Parliament because woe betide that we should be condemned to follow on what Bill English and his colleagues are doing at the moment. We see record numbers of young people with no hope in relation to the job market. I do not need to state again how many of us have watched fellow Kiwis disappear over to Australia. A fiscal policy has to ensure that they find a reason to continue to commit to their own country. They will do that if firms invest communities are vibrant and people have an economic purpose for wanting to continue to give to their own country and find a little bit of sunshine create a family and build a better place for their children. 
 This bill says nothing about that. All this bill really does is regurgitate a whole bunch of things that Treasury does on a regular basis. Much of it is arid and likely to be of no interest to the average voter. At one level it is facile but it does remind us that the stewards of the nation in terms of fiscal policy do need to have a set of transparent standards. But that fiscal policy has to be relevant to the economic and social challenges of the time. The current fiscal policy is not driving us in the wrong direction; it is driving our people out of New Zealand. It is driving out the very young men and women who are as the Aussies would call it tradies—those with valuable skills who are disappearing over there—whilst at the same time those who are left behind and want to acquire valuable skills are being starved out of opportunity and a place in our various tertiary institutions. 
Unfortunately the bill says nothing about that. The bill however does codify a set of principles and they flow in a direction that the majority of us see as being sensible. It is disappointing only that this bill is totally silent on the issues that count. However we look forward to dealing with the bill and those redoubtable souls who might find time to come and give us their views about this bill in the future. Thank you very much.