Parker David: Financial Review Debate — In Committee 
Text is incorporated into the Bound Volume 
Parker David: Financial Review Debate — In Committee 
[Sitting date: 03 April 2012. Volume:679;Page:1618. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 That is the first 10-minute call I have heard from the Chair for a while. I take a call referring to page 376 of the reports of select committees on the financial reviews which does deal with Treasury and I am interested to hear from the Minister of Finance as to what his latest excuse is for the continual slide or lacklustre performance of the New Zealand economy. Indeed as the Finance and Expenditure Committee report says on the second page of its report in the year we are talking about the fiscal year ended 30 June 2011 New Zealand’s operating deficit before gains and losses increased from $12.1 billion in 2010-11 to $18.4 billion in the year ended 30 June 2011. It is no coincidence that during that year we also saw National abandoning its promises that it had taken to the electorate in 2008. It was at that stage talking about closing the wage gap with Australia which was one of its promises that it seems to have given up on. It was promising a step change in the economy. That has also disappeared from National’s language because of course every reference we hear to forecasts is that they go backwards rather than forwards. It seems to the Labour Opposition that it is now abundantly clear that the management of the economy by the National-led Government is not all that it cracks itself up to be.  
We heard—and I note that we can refer also to current events in this part of the debate—from Treasury recently that the tax revenue is nearly $1 billion below forecasts for this year as well. This year Treasury says it is because GST was down 4 percent largely because of earthquake-related GST refunds corporate tax was down 5 percent and the weak job market pushed direct-source tax revenue—that is PAYE and the like—down 3 percent. So we have a billion-dollar forecast hole—which is worse than it was just prior to the election in the pre-election fiscal update—just in the months since the election. So I think it is time for the Minister to say why on the basis of that he is ignoring the advice of his own department which has got some ideas as to how we might turn that round to improve the future of New Zealand by addressing some of the long-term problems.  
The briefing to the incoming Minister supported quite a few of the policies that the Labour Party took to the last election but that National still will not embrace including the need to have a neutral tax signal to the economy so that people are investing for the basis of the profitability of their investment and the success of the business which will grow our exports better than our current business model which is predicated too much on the speculative sector driven in part by the tax advantages that that sector has compared with other sectors of the economy.  
Another recommendation—we have the Government saying that it is going to get these budget things under control in part through welfare reform. Yet it is refusing to deal with the issue of the age of eligibility of superannuation. I would ask the Minister to concede that in the latest forecasts within 4 years we will be spending more on superannuation than we spend on the total of Vote Education—the total—that is preschool primary secondary tertiary and trades training. Yet the Minister says there is no need to change any of that. The Government pretends that its tinkering with the domestic purposes benefit and the unemployment benefit will do the trick. Yet within 4 years the Government’s own forecasts say it will be spending more on superannuation than the unemployment benefit—in fact 20 times the amount approximately.  
This Government will not pull some of the levers that are open to it to improve the economy. We have not rebalanced the economy. Treasury’s own forecasts show that within the forecast period the current account deficit gets worse. Every year we have a current account deficit. The difference between the cost of our imports and our interest bill and the value of our exports is bridged by more borrowing from overseas and every year the forecast has it getting worse from here so that according to Treasury by 2016 our current account deficit will be equal to 6.9 percent of our GDP and between now and then New Zealand will have borrowed an extra $50 billion from overseas— 
Rt Hon Winston Peters 
: Is that New Zealand? 
Hon DAVID PARKER 
: —that is New Zealand—and in addition to that we will have sold some of our assets.