Key John: Debate on Prime Minister’s Statement 
Key John: Debate on Prime Minister’s Statement 
[Volume:615;Page:10964] 
JOHN KEY (National—Helensville) 
: 
 One needs only to look into the eyes of a Labour Party MP at the moment to see the fear and nervousness. They have seen the polls they can smell the coffee and they know an obituary for washed-up Labour MPs when they read one in the newspaper. A few of them will be looking for a job soon. There is no doubt in my mind that they will be the “MP for No One” in an electorate yet to be discovered on Mars come 2005. 
But alas the looks of fear and nervousness are not isolated to the Labour Party and to Labour MPs. When one travels around the country one needs only to look into the eyes of business people to see that all is not well. However according to the Prime Minister’s statement to the House on Tuesday one could be left with a very different picture indeed. In fact the Government has been telling the people of New Zealand for the last 5 years that the economic policies of the National Government in the early 1990s and mid-1990s were a failure. They were very quick to claim victory for the economic conditions that have rained on their term in office since 1999. 
Now it certainly is true that New Zealand’s real economic growth rate of 4.4 percent last year was the highest in the OECD. It is true that New Zealand’s economic growth rate on a per capita basis touched about 2.4 percent over the last decade—enough to stop New Zealand from sliding down the OECD rankings. But what the Prime Minister forgot to tell the people in her statement on Tuesday was that not only does the Government have no plan whatsoever to get New Zealand into the top half of the OECD but that the real reasons for the stellar economic performance in the last 5 years have not been the Labour Government and its policies they have been a low Kiwi dollar high commodity prices high levels of immigration and dare I say it the economic reforms undertaken in the late 1980s and early 1990s in New Zealand. The growth of the last 5 years has not occurred because of this Government it has occurred in spite of this Government. 
Members should not just take my word for it. [ 
Interruption 
] The Associate Minister of Finance the Hon David Cunliffe is barking like a little puppy over there on the Government side. He should be reading his own ministry’s notes to him. He is embarrassed to tell the House that Treasury officials are constantly writing to the Minister of Finance the Hon Dr Michael Cullen and to himself berating them for their economic policies which are destined to see New Zealand never get back into the top half of the OECD. But why should we listen to the 300-strong economists who work for Treasury the Minister of Finance and the Associate Minister of Finance? Let us not take their word for it. Let us take the word of the OECD which in its annual report last year stated: “The necessary acceleration in New Zealand’s growth rate is still not in sight.” That is a dismal scorecard for what this Government has managed to achieve in the last 4 years. 
Dare I say it; the worm has turned fuelled by an exchange rate that topped 70c today that is on its way to breach the all-time post-float high of 72.5c and that is on its way to US75c or US80c; and with a Minister who had the audacity to come to the Finance and Expenditure Committee just 3 months ago when the exchange rate was 61c and tell the people of New Zealand he had options to control that exchange rate when he knew very well that he did not. What did he do? He came back to the House and back to the same committee 3 months on with his tail between his legs and he was a very sheepish Minister of Finance. He was embarrassed about his own advice that he had given to the people of New Zealand. He robbed those exporters of the opportunity to hedge their exchange rates. 
But members should not take my word for it Treasury’s word for it or the OECD’s word for it. Let us just go down the road to the Bank of New Zealand and hear what Tony Alexander the chief market economist is telling the dairy sector. He is saying: “Be careful because the payout for milk solids will be $2.50 in a year’s time.” That is half the payout from when this Government came into office. Jim Anderton runs around the country with his chequebook and parades up and down the provinces arguing that he has been the saviour for rural and provincial New Zealand. What an absolute joke! The real saviour of provincial New Zealand has been the low exchange rate and the high payout. Let us just see how strong rural and provincial New Zealand are when the Kiwi dollar is worth 80c and when the dairy payout is $2.50. Let us see whether the Labour Government will claim victory for that when it takes place next year. 
Winnie Laban said in her speech that we have the lowest unemployment rate. That is not true. Yesterday for the first time we saw an increase in the unemployment rate and that is the start of many such things to come. We already have 300000 New Zealanders of working age on a benefit. The Labour Government could not even get 300000 New Zealanders into a job despite the fact we have had the best economic conditions for quite some time. That number of unemployed people will grow under this Government. Many more Labour members will go from this House and join the dole queue. I cannot foresee any other particular career they would be naturally suited to but I am open to suggestions. 
The immigration that fuelled this strong domestic economy is on the way down. Net immigration numbers are on the way down. As the global economy picks up in the United States more trained and skilled New Zealanders will be lured to Australia to the US and to the UK. 
What is the real economic scorecard for this hopeless Labour Government which has claimed victory for things it has no control over—a low exchange rate and high commodity prices? What is the real scorecard? There have been 17 tax increases since Labour has been in office. What a robbing thieving Government it is. The tax take was $30 billion when it came into office in 1999. Government members do not like to hear that. It is $40 billion 4 years on. We have the highest nominal corporate tax rate in Asia-Pacific. Dr Cullen does not want to hear it. Labour has failed to negotiate a free-trade arrangement with the United States. It has proposed employment legislation that will bring back compulsory unionism. It has introduced 4 weeks’ holiday that will cost the country $1 billion and a Resource Management Act that is an absolute joke that spurns investment and growth in this country. There has been a complete failure to fix infrastructure an avalanche of red tape for small and medium businesses and an education system that breeds mediocrity. This is the reason why the OECD and Treasury are telling us that our country will not go back into the top half of the OECD. This Government is too busy doing the photo shoots doing the soft stuff and pandering to the unions. It is not prepared to tackle the real reasons. 
I hope that the Government will take some advice. I hope that the Government will realise that taxation is more than redistribution from the rich to the poor; it is about putting incentives into the economy. I hope this Government will realise that inflexible labour markets hurt the very people it is theoretically trying to protect. I hope Labour will get into the 21st century and bring private sector capital in for the provision of public assets. It is happening in every Labour administration in Australia. [ 
Interruption 
] The land transport legislation is absolutely hopeless. It is a joke. The Minister had to start new legislation before it hit the House. I know for a fact that David Cunliffe is personally embarrassed by it. It has been a dismal performance and the people of New Zealand are saddened by that. My prediction is that the economic conditions that will prevail in this country when we go to the polls in 2005 will send one very strong message—send those hopeless Labour MPs to the unemployment queue where they belong.