Shearer David: Debate on Prime Minister’s Statement 
Shearer David: Debate on Prime Minister’s Statement 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
DAVID SHEARER (Labour—Mt Albert) 
: 
 That speech from Dr Paul Hutchison was 10 minutes of my life that I will not get back. It is not often that I agree with Sir Roger Douglas but his analysis of this economy as bleak was exactly on the button. His leader’s belief that the economy is broke is exactly right as well. Rodney Hide agreed that he needed to be with a National-led Government even though the Government had broken the economy for his own political survival and that of his party. His party agreed with him so wholeheartedly that one of them even stood up afterwards and gave him some applause. 
This country is going backwards and it is not good enough. We deserve a lot better. I remember that last year—and this has been said before in this House—John Key said we were aggressively coming out of recession. In the Budget John Key talked about a step change but this time he said that there could be days when it is a step forward and half a step backward. That is a step change John Key - style. He got it round the wrong way. What he really meant to say was that some days there will be half a step forward and a full step backwards because that is where the economy is going. That is what a step change means to this Government. 
We are an increasingly unequal society. I was amazed in the House today when the Minister of Finance said that somehow as a result of his tax switch we were not a more unequal society. Those people earning $1 million a year get a $1000 a week wage increase and those people on the median wage get $15 a week. That means that the person earning $1 million gets $52000 a year and the other person gets $850 a year—not even 1 week’s increase—and somehow that will not make us a more unequal society. 
Hon Dr Nick Smith 
: How much are you going to put up tax? 
DAVID SHEARER 
: The analysis I say to Dr Smith is fine but people listening to it will say that that analysis is simply mumbo-jumbo. Quite frankly it is simply mumbo-jumbo. We are becoming a more unequal society. The policies of this Government are making it that and inequality is an unhealthy situation for this country. We deserve better but this country is going backwards. 
Then we talk about the aspiration to catch up with Australia. It used to be a goal then it became an aspiration but it was not mentioned in John Key’s speech this time around. It is not really an aspiration; it is more an aspirator—a machine that sucks fluid out of the body only this time it is Australia sucking our best brains and our best talent out of New Zealand. That is what aspirational means for the National Government. That is what aspirational means. Then the Government has the audacity to turn round and tell Labour members that somehow our economic policies are all wrong. 
Let us look at some of the economic policies that Australia has put in place. In Australia the upper tax limit kicks in for those on $180000 at 45 percent. We are talking about raising the upper tax limit. Is that radical? The Australians have exactly the same thing; Australia has no tax under $6000. We are talking about bringing it in under $5000—is that radical? We are aspiring to be as rich as Australia but we do not want to take on any of its policies. Here is another one: Australia has a capital gains tax. This Government ruled out capital gains for the Tax Working Group when it came to put provisions into its report. So what are we going to do? We are looking at ring-fencing the losses on property. Then the big kicker of the lot—and the Minister of Science and Innovation as the portfolio is now called is in the House—scrapped the 15 percent tax credit on research and development. 
I will tell members what happened: we put the tax credit in place here. What did the Australians do? As soon as the Labor Government got into power in Australia it came over here copied the tax credit in its entirety and put it in place in Australia. What did we do? I will tell members what we did: we put in vouchers and grants to replace it. Dr Mapp and even his adviser Professor Gluckman—the real Minister of Science and Innovation—told me that the policy is grossly oversubscribed; there has been such a great take-up. Of course there is a great take-up. There is $2 million for those companies out there to get from the Government. What company is going to be stupid enough to say no? The big question is how many of those companies out there did not get the grants and vouchers that they would have been eligible for under the tax credit. That is stifling the very growth accelerators that this country needs. 
I tell members that all of those things are in place in Australia and are working well and this country wants to be like Australia. The  
New Zealand Herald  
noted in its editorial yesterday morning that there was a 16 percent increase in people going to Australia. This Government campaigned in 2008 on stopping that flow and last year it was 16 percent higher than in 2009. That is a testimonial of the failure of this Government in respect of the economy. People are going over because Australia is sucking them there because of the things it can provide. Their policies are the very economic policies being proposed by this side of the House for when we come into Government later this year. 
This country is going backwards it is stuffed and we are not going anywhere. What is the answer? When Kathryn Ryan interviewed John Key on Radio New Zealand he gave the example of Asia—a high tech high-growth economy roaring ahead and with manufacturing and all of those things roaring ahead. He said that we could supply them with food. Is that not visionary! Is it not extraordinarily visionary that after all of this time after 9 years in Opposition and in 2 years in Government the only vision we have for New Zealand’s future is to supply Asia which used to be behind us—well behind us—with food? That is extraordinary. 
We need in addition to our primary products a high-growth a high-value a high-tech and a green economy that will keep our children and our young people here and stop them moving to Australia. That is not to say that our primary products are not important but we have to do a lot more to make sure that that happens. That means changing many things in the science and innovation area. Dr Mapp knows that although he changed the name from the Ministry of Research Science and Technology to the Ministry of Science and Innovation it is only a name. It was heralded as a step change in science and innovation when it is simply a 5 percent increase and a whole lot of welfare to corporates who are just shifting—and I know this because some of them told me—a lot of their expenditure from the research and development that they are doing to buy all the other bits and pieces. Then they go along to Dr Mapp and apply for the vouchers and grants that will give them the money to replace them. That is exactly what they are doing. Talk about rorting! My God I cannot believe that this Government is so naive not to see what is happening. 
If Dr Mapp wants to see real step change I tell him to have a look at Finland or Denmark which he quotes prolifically in every single speech he gives. But this Government is not doing anything like Denmark did. I say to Dr Mapp that if he is going to quote Denmark then how about backing it up with a bit of action? He is not getting anywhere close to what the Scandinavian countries are doing. They have 3 percent of GDP expenditure on research and development and we have something like 1.25 percent.