Parker David: Debate on Prime Minister’s Statement 
Parker David: Debate on Prime Minister’s Statement 
[Volume:670;Page:16516] 
Hon DAVID PARKER (Labour) 
: 
 That was not a great speech made by Mr Brownlee who is also the Leader of the House but at least it was better than John Key’s speech. John Key’s speech had very very little substance on the economic plan for this country because in reality John Key’s Government does not have an economic plan for this country. It has only one policy: tax cuts weighted to the rich. 
We heard today how the battle lines will be drawn for the election. The theme we have heard from Mr Key—and repeated no doubt by arrangement by the ACT contribution from Rodney Hide by United Future’s contribution from Peter Dunne and again by Gerry Brownlee—was the accusation that a Labour-led Government would be fiscally irresponsible and that Phil Goff would borrow and spend. That is the rhetoric they used but New Zealanders will not be fooled by it. They know that in Phil Goff they have a man who has been in 15 Budgets as a Minister in Labour-led Governments and that he of all people cannot be accused of being fiscally irresponsible. Mr Goff is not a spendthrift in either his public life as a 15-year - Cabinet Minister or his private life. That rhetoric will not run. Phil Goff— 
Hon Trevor Mallard 
: It’s the opposite. 
Hon DAVID PARKER 
: That is right; some people might say the opposite. He is not a spendthrift. He would never put this country’s finances at risk and neither would Labour. Let no one be fooled by National’s rhetoric to the contrary. 
It is because of the prudence of the previous Labour Governments that New Zealand’s Government debt was reduced between 2000 and 2008 or else we would be in the position of Greece we would be in the position of Portugal and we would be in the position of Great Britain and Italy where there is high Government debt. But New Zealand does not have high Government debt because the last Labour Government reduced Government debt. Who opposed those Budgets? National! Every one of those Budgets where the Labour Governments ran Budget surpluses was criticised by the National Opposition. They were criticised by Bill English who said that Labour was being greedy and for it not to run Budget surpluses but to give more tax cuts. If Labour had done that we would have further fuelled inflation debt and the asset bubbles that New Zealand and the rest of the Western World was experiencing at the time. 
It was National members who called for irresponsible Budget tax cuts that would have reduced those surpluses. It was National when it was in power under Muldoon that left New Zealand with staggering levels of Government debt. It is National that this time has put through unaffordable tax cuts weighted to the top 10 percent of earners which means that the Government is borrowing billions of dollars every year. As a consequence Government debt is rising under National. 
Members do not just have to believe me on that because I have here an article from the  
New Zealand Herald  
of 18 December 2008. That is about a month after the 2008 election. We have Bill English who is quoted here in an article from the  
New Zealand Herald  
by Audrey Young: “Bill English had to swallow the proverbial dead rat this morning and effectively acknowledge that Michael Cullen had done something right in his stewardship of the Government’s finances in the past nine years. Having condemned his predecessor for many years for paying off debt too quickly English said: ‘I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook. … In New Zealand we have room to respond. This is the rainy day that Government has been saving up for.’” But that was not his Government; it was the prior Labour Government. We were the ones who ran surpluses and reduced debts. He told that to reporters and it was reported in the  
New Zealand Herald  
on 18 December 2008. He could also have said that his incoming Government inherited either the lowest or second-lowest rate of unemployment in the world. 
It is once again a National Government whose poor economic performance—with 42 percent of income tax cuts going to the top 10 percent of earners—has contributed to a large deficit and a stagnating economy. As I have said previously the current Government has only one major plank to its policy: tax cuts for those who already earn the most. That is what the Government believes in but plainly its plan has failed. The economy has stalled and deficits have grown. There is little good news in terms of exports. The current accounts deficit is projected by Treasury to widen to over 6 percent of GDP again. 
Having undermined the country’s finances the National Government is now trying to convince us that the last card in its hand that it wants to play is right which is the one that Gerry Brownlee spent some time on. He said that New Zealand should now sell the family silver or borrow against it. The Government is proposing that we flog off schools into public-private partnerships. Schools have always been run on the Government balance sheet because Governments do it cheaper than if they are leased from the private sector. Now the Government is coming out and saying that we should flog off half of the State-owned electricity enterprises and we had the audacity of Gerry Brownlee in pretending that that would not result in an increase in electricity prices. Who believes that the profit motivation to maximise price will overcome? We know that those markets are not properly competitive. We have had reports from the Commerce Commission to that very effect within just the last couple of years. People should make no mistake: Labour will be highlighting the fact that if the National Government gets its way returns to the Treasury benches and flogs off those State-owned enterprises electricity prices will go up. 
We are 2½ years into this Government—2½ years. The economy is stagnating and it is time to ask whether the Government is performing. How should we judge that? Well we should judge that upon the promises it made when it was elected. First off was to narrow the wage gap with Australia. Is it doing that? Of course it is not. The Government is exposed on that promise. It has become a meaningless promise that the Government cannot be judged on by any milestone. Next the Government promised an aggressive recovery from recession. Are we getting that? 
Hon Members 
: No! 
Hon DAVID PARKER 
: No. Then it said that it was going to have a step change in the New Zealand economy but that phrase has disappeared from Government members’ lexicon. They do not even talk about that now. They have even taken it off their publications. If we look back a few months we see that National sought a step change in the economy but if we look at its current plans we see that that phrase is nowhere to be seen. National has given up on its rhetoric about a step change. 
Last year some of the commentators at the Labour Party conference said they thought that the next election might be about economic policy and they are absolutely right. They will see a difference between National and Labour because Labour believes in truly resetting the economy on an export focus. You know the National Government’s Tax Working Group actually got close to ring-fencing losses. It is pretty evident from its papers that some people in National thought that that was necessary because we over-invest in the speculative economy but National could not do it. It could not bring itself to ring-fence losses. It left the tax preference in favour of that $200 billion of private residential rental investment which returns nothing to the taxpayer; those investors offset their losses against other losses. Even worse than that the Government misdirected precious investment funds that should be going into the export economy into residential property. 
Already this year Labour has announced more economic policy than National. Last year we announced changes to monetary policy to help things for exporters and we will see that through if we get elected. This year we have already had two major announcements. The first was in respect of the ring-fencing of losses. There has been a lot of emphasis on how that will pay for a tax-free zone for every New Zealander and that is good but for me the second most important part of that is that it resets the investment signal in New Zealand so that some of that $200 billion that is presently in residential rental investment will be redirected to investment in the export economy. We can make a difference to growing this economy by growing exports and by giving the right signals through the tax system. It will not be by continuing to prefer the interests of a small financial elite who own more than their share of property and use that tax advantage to offset losses against their other income. Most importantly that tax advantage drags money away from the export sector where it is best invested for new jobs and higher incomes. 
The other announcement that Phil Goff made was that we need a research and development tax credit. We all know that. Everyone else in the OECD has one except for New Zealand. We even had one in New Zealand for a brief time under the previous Labour Government but then the National Government axed it. Now of course research and development investment increasingly happens in Australia where there are deeper capital markets and research and development tax credits. So belatedly what is our Government’s response? It is another committee on savings. After 2½ years we need a proactive Government. We need a Government that will help New Zealanders to save more to invest in the export sector and to become wealthier. 
There is no doubt that there is very little substance in the National Government’s economic philosophy; it is tax cuts tax cuts and tax cuts. That is all it has. It has nothing to grow the economy. The cupboard is now so bare that the Government is going to flog off State-owned enterprises and increase electricity prices.