English Bill: General Debate 
English Bill: General Debate 
[Volume:671;Page:17540] 
Hon BILL ENGLISH (Deputy Prime Minister) 
: 
 I acknowledge the Greens’ principled stance on those issues alongside its principled stance on proposing an earthquake levy. The Greens create circumstances that embarrass Labour into stating some position on how it would pay for not just the earthquake but also the many other promises that it is now making. 
Many of us attended the Christchurch earthquake memorial service last week and I take this opportunity to acknowledge particularly the presence of the Australian Prime Minister the Australian Leader of the Opposition and the Australian Governor-General. It was a generous gesture on their part all three of them to do something that I understand they have not done before and that is to all leave the country at the same time to come to New Zealand without seeking necessarily the high profile that one would expect overseas leaders to seek. 
As the dust clears literally from the earthquake the impact of it on the economy and on the Government is also becoming a bit clearer. The Government is determined to continue with its longer-term programme to rebalance the economy. Although the earthquake is a significant setback it is not sufficient a knock to push us off course and at times like these we need to remind ourselves of just what that course is. As we talked about in question time the Government has set out to rebalance this economy with the assistance of New Zealand households and businesses who after all make the decisions that actually change the economy. We need to rebalance the economy because it got way out of balance. We had excessive consumption and we had a housing boom—both of which were funded by very rapid growth in debt particularly in the private sector. So in 2007 for instance total credit in this economy grew by something like 25 percent. This year it is growing by about 1 percent. 
New Zealanders have realised that excessive reliance on debt for a sense of wealth and well-being is not sustainable. The global financial crisis has brought that to a pretty sudden halt. At the same time we need to beef up the earning capacity of this economy. From 2004 onwards our export sector shrank by about 10 percent through to 2010 while our domestic and spending sectors grew by about 15 percent. The shrinkage of our export sector had meant that there would be no new jobs in the export sector for 10 years. All the new jobs that were created through the first decade of this century were in the non-tradable non-competitive sector dominated by Government and the extravagant management and wasteful spending of the previous Government. 
The final part of the tax package which comes into effect on 1 April this year is one way of helping to rebalance the economy and I think the tax package has had some effect. People are being more careful with their spending. They would have been anyway but the increase in GST has certainly created more of an incentive for them to be careful. We reduced the tax on income back in October but have now reduced the taxes on companies and on savings vehicles and have increased the taxation on housing. All of this is designed over the longer term not to put money in people’s pockets straight away although most New Zealanders are better off as a result of the tax changes but to push this economy in the direction of more saving more earning more exporting and more investing. 
The impact of the earthquake is quite significant and it will somewhat delay that process. But I do not think there is any debate really even from the Opposition about the direction of the plan this Government has for the economy. Opposition members may argue about bits and pieces but we are staying on track. We will absorb the impact of the earthquake and stick to the plan.