Smith Lockwood: Financial Review Debate 
Smith Lockwood: Financial Review Debate 
[Volume:607;Page:4160] 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 Members of the public who are listening to the debate this afternoon would have every reason to be totally confused as to what is going on. This afternoon we heard someone from the Green Party raving on about bacterial resistance to antibiotics we heard Paul Adams from United Future talking about marriage and we have just heard that extraordinary rave from the member for Waimakariri Clayton Cosgrove. I am sure my colleague Rodney Hide feels he has just been whacked with a wet bus ticket for all the impact that that rave from Clayton Cosgrove would have had. Clayton Cosgrove inherited the electorate of Waimakariri from the Rt Hon Mike Moore. Mike Moore had big shoes. 
Rodney Hide 
: And a big heart. 
Dr the Hon LOCKWOOD SMITH 
: He still has a big heart. Anyone from this Parliament who has enjoyed the hospitality of Mike and Yvonne Moore in Geneva will say that Mike Moore has a big heart. I know that Clayton Cosgrove has been in this place for only 5 minutes and he is a very junior member but I say to him that a little bit of intellectual integrity does go a long way. Some of what he has put to this House this afternoon showed a total lack of intellectual integrity—quite apart from a lack of discretion. 
The one thing on which I would agree with him is that he said this afternoon that what we have heard about in this debate and what we have seen recently is a stark differentiation between the Government and the Opposition. He is dead right. Let me say in this financial review debate why that difference is so stark. We heard the Minister who is ranked No. 3 in this Labour-led Government the Hon Jim Anderton say this afternoon—if I took him down correctly—that tax cuts for business were like giving a general subsidy for business. That is right at the heart of the difference between the Labour-led Government and the Opposition. We do not agree for one moment that tax cuts are the same as a general subsidy. Why? Because the money that businesses and individuals earn is their money and Governments take a certain amount off them in tax. But it is the money of the people of New Zealand; it is not Government money. 
That is a stark contrast between Labour and National. National believes that the people of this country earn their money. Sure we have to tax them to be able to provide the certain essential services Governments provide but it is the people’s money. It would not have been so bad if it were just Jim Anderton who said that. After all we all know that Jim Anderton is a bit on the outside. I do not want to be too unkind to Jim Anderton but he plays his little games around the regions handing out his little photo opportunity grants to businesses around the regions. It makes him feel good. It keeps him happy. We all realise that that is Jim Anderton so we would not be too worried about this view of business income being Government money. But I can say that none other than the Deputy Prime Minister Michael Cullen said almost exactly the same thing at the Finance and Expenditure Committee. He said that New Zealand business leaders were just like the Post Primary Teachers Association. They just want more money from the Government. He said that they want tax cuts which is the same thing as the Government paying them more. 
That is totally consistent with what Jim Anderton said in this Parliament this afternoon and it shows a huge contrast between the Labour-led Government and the Opposition. We believe that people’s money is their money and no Government should be so arrogant to think it is the Government’s money and that by cutting taxes the Government is subsidising the people of this country. That is just outrageous. So Clayton Cosgrove was dead right. There is a huge difference. We respect the hard-working people of this country; Labour does not. Under that Labour-led Government the country in the developed world that has achieved one of the biggest increases in taxation of working families has been New Zealand. In the whole of the developed world since it has been in office the only country to have increased the tax take more on working families has been the Czech Republic. The Labour-led Government of New Zealand has increased the tax impost on working families according to the OECD analysis more than any other country in the OECD other than the Czech Republic. 
We might say OK if we were maybe at the bottom end of the OECD in terms of tax impost on working families we could understand that but we do not rank at the bottom end of the OECD in terms of tax impost on working families. The income tax burden on working families in New Zealand ranks No. 6 in the developed world. If this Labour Government could achieve in economic growth what it achieves in imposing taxes on working families this country would be a lot better off. 
I want to focus on growth for a moment because when we were examining the financial reviews at the Finance and Expenditure Committee Treasury came along and said that one of the key priorities of this Government was growth. It is interesting because we had Helen Clark tell Parliament a couple of years back: “Vision is important. We can look ahead 10 years and see where we could be. If we embrace innovation wholeheartedly we could be in the top half of the OECD.” More recently the Prime Minister has actually denied ever making that statement—but it is on the record of the House that she made that statement to the House. 
Why has the Government backed off this growth goal? Treasury presented this goal to the Finance and Expenditure Committee as recently as the financial reviews conducted at the end of the last year back in early November—not very long ago. What has happened? All the advice this Government is receiving quite contrary to what Clayton Cosgrove said a few minutes ago shows that if the Government sticks with its current policies far from growing back into the top half of the OECD New Zealand is more likely to decline in our relative standard of living. 
I have right here the OECD’s most recent analysis of New Zealand for the period of this financial review. The report recommends first that if the Government is serious about growth it has to implement the recommendations of the ministerial review on compliance costs. What is the Government doing? It is ignoring it. The second thing the OECD analysis says is that the Government must proceed with the reforms of the Resource Management Act. What is the Government doing? It has basically gutted the legislation introduced by the last National Government to reform the Act. 
Then the OECD said that the Government must reduce the top personal tax rate down to the corporate rate and do something about effective marginal tax rates which are such a disincentive for people to raise themselves out of poverty. I know that John Tamihere is about to speak and I want him to tell us why this Government is so happy with an effective marginal tax rate of 100 percent on working families earning between $10000 and $15000 of income a year. That means that for every dollar our poorest working families earning between $10000 and $15000 a year earn John Tamihere’s Government takes the lot. The Government takes every single cent of every extra dollar that a working family with children earns above $10000 to $15000. It is no wonder we have people trapped in poverty under this Labour Government. 
The OECD says that the Government must do something about that. It must do something about reversing its decisions to remove the work test on benefits. It must do something about benefit reform this report states. It says that things like community work should be considered by the Government. It says that the income-related rents policy should be reviewed because it is trapping people in poverty. So many of the policies of this Government according to independent OECD analysis are not helping this country grow at all and that is why Helen Clark is backing off that growth goal so rapidly.