Parker David: Estimates Debate — In Committee 
Text is subject to correction 
Parker David: Estimates Debate — In Committee 
[Sitting date: 01 August 2012. Volume:682;Page:4195. Text is subject to correction.] 
Hon DAVID PARKER (Labour) 
: 
 I will respond to a couple of issues raised by the Minister in the chair the Minister of Finance. He asked why it is that we think New Zealanders can afford compulsory savings through a universal KiwiSaver scheme. The truth is New Zealand cannot afford to ignore these long-term problems. New Zealand has slid down the rankings of the international wealth tables over recent decades and although it is true that in the next few years there are a couple of countries that are going to pass us going down faster than we are—some of these European countries to which Bill English has referred—the truth is that the countries that have done better than us do better in labour productivity. They do better in labour productivity because they have the right tax signal into the economy and their precious investment capital goes into businesses based on the profitability of the investment rather than tax advice. And they do better in labour productivity because they have more money to invest in their economy because they save more.  
How is that paid for by low-income people? It is a very good question because low-income people spend everything they earn. That is why allied with our policy of a universal savings scheme we have a proposal to increase the minimum wage because an increase to the minimum wage is necessary in order to help those people save. Mr English you might laugh in the chair but you know one of the reasons why people head to Australia is that it has got a more competitive wage structure. That competitive wage structure is born of the universal savings scheme. New Zealand would be in a similar position if an earlier National Government under one of his predecessors the Rt Hon Robert Muldoon had not abandoned an earlier Labour universal savings scheme that was designed by Roger Douglas and put in place by Norman Kirk. That is how the contributory saving scheme would be introduced and as one of the New Zealand First contributors interjected there is a difference between a lump sum and a contribution over time even if the Minister of Finance does not get that distinction.  
We heard from Paul Goldsmith. Paul Goldsmith biographer of John Banks—another person who is very close to Mr Banks—said that it is a new recipe from Labour that we were in favour of returning to surplus by 2014-15. It is not. We campaigned upon it. We produced detailed fiscals at the time of the last election that are the most detailed that have ever been prepared by an Opposition—far more so than we had from National when it was in Opposition. Not only that but we actually properly costed what was happening with the State-owned enterprises; the Government did not. In fact the Government did not come clean on the fact that the State-owned enterprise sales were going to make the deficit worse by $100 million per annum until this year in this very Budget process in the pre-Budget fiscal update.  
Not only that but under Dr Cullen we did run nine surpluses in a row. In a time of plenty when a lot of Governments around the world were not putting away money for a rainy day New Zealand was. Every one of those Budget surpluses was opposed by Bill English—every one of them. Every one of those Budget surpluses was opposed by his finance spokesperson predecessor John Key and by his predecessor Don Brash. Every one of those Budget surpluses is absolutely essential if you are going to run Keynesian economics. There are lots of people now who favour a Keynesian approach in a recession and they are right. You have a danger of running into a deflationary spiral if you do not run a deficit and that is why I am not critical of Bill English for having run a deficit in the last couple of years. It was absolutely necessary. If you run surpluses for all those years then you have the worst recession around the world since the Great Depression. It is absolutely appropriate for the Government for a period to run a deficit in order to keep the economy moving. He has done that. We have not criticised that. We criticise the shape of it we criticise the fact that 40 percent of his income tax cuts went to the top 7 percent of people but we do not criticise the fact that there has been a deficit. New Zealand can afford that deficit for a period because for 9 years we—and indeed the prior National Government—ran surpluses during the good times so as to put money away for the tough times.  
In terms of welfare reform I am not going to put up with being lectured on welfare reform by a Government that says that it does not have to move on the age of eligibility for superannuation despite the fact that a million people within a decade and half—or a bit more than that—will be on superannuation and that by 2016 we will be spending more on superannuation than on the whole of Vote Education.