Worth Richard: Budget Debate 
Worth Richard: Budget Debate 
[Volume:631;Page:3367] 
Dr RICHARD WORTH (National) 
: 
 On 14 February 2006 the beginning of this parliamentary year the Prime Minister made her statement and in the context of a very political speech she said: “An economic transformation has always been central to this Government’s economic policy.” Well the quintessence of transformation is a concept of sudden and dramatic change and presumably the Prime Minister had it in mind that such an economic transformation would be beneficial to the country would be worthwhile and would bring benefits. The Minister of Finance however would not see economic transformation as containing any element of dramatic change. He has made it clear that for him the most effective way to bring about economic transformation is by what could be called “glacial incrementalism”. 
The Budget of 2006 despite the rhetoric of the previous speaker hardly showed courage or imagination. If economic transformation was to be its watchword then it failed utterly. Looking back at the period of the Labour Government it is no wonder so many people feel only a sense of dismay. Let me take three examples in the short time I have available through the time frame of this Government that demonstrate in a clear way incompetence loss and poor judgment. The first example is the proposal by Singapore Airlines to take a 49 percent share in Air New Zealand. That proposal required Cabinet approval. Running an airline is a very fraught business. It is well illustrated by the fact that all the major United States airlines with the possible exception of Southwest Airlines are in chapter 11. It is a state of managed bankruptcy under American law. 
The New Zealand Cabinet was then and is now a Cabinet wholly lacking in business skills and experience. In fact the only person in the current Cabinet with business skill and experience is Mr Sutton a farmer. Its members simply could not assess the merits of the proposal. They could not see the business case so of course they rejected it. We as taxpayers fronted up with $885 million in October 2001. We invested a further $150 million in 2004 as part of a rights issue and significantly more money will be required if the Government remains determined to compete on the international aviation stage in a business environment that is very hard and very ruthless. 
Let us take a second example. This Government has been extraordinarily lucky and I believe that its luck is about to run out. The speed at which New Zealand is being transformed into a branch office of Australia is truly frightening. One commentator has said: “If we are not to become a nation of store persons and shop assistants sales managers and tourist guides then we need to get a much firmer grip on our economic destiny.” 
I am not sure whether members opposite know this but 600 people each week leave New Zealand to settle permanently in Australia. That is a staggering loss of resource for many of those people who are our best and brightest—tradesmen tradeswomen and professional people. We can ill afford to lose them yet the Government seems to be complacent about that loss. As we all know and as we are constantly reminded the gap between Australian and New Zealand incomes continues to widen dramatically. Why is it that when Dover Samuels retires from Parliament he is going to go we know where—Australia? We are simply not prepared to confront the challenges of an ageing and diminishing skills base. 
I believe that the ideological differences between National and Labour are stark as this Budget has demonstrated. The world competitiveness scoreboard for 2006 which was released earlier this month on 11 May has New Zealand’s placing falling from 16th to 22nd. Meanwhile Australia has risen from ninth place to sixth place. The scoreboard itself ranks the competitiveness of 61 national and regional economies based on 312 criteria. The section on New Zealand lists the challenges facing the country as including these things: encouraging skilled migrants; ensuring secure and affordable energy and water; improving workplace productivity management and business capability; and reducing compliance costs. What does the Budget do about that? Sadly not very much at all. National believes that the strong fiscal surpluses provide the basis for significant tax cuts and that the ideology of the Labour Government is enabling Australia—our biggest competitor for skills and capital—to charge further ahead. 
At the moment members may be aware that the Government is carrying out a review of the Immigration Act. That is great but sadly it seems very reluctant to critically consider changes to the migrant categories. There is a requirement that those in the business investor category have a sound knowledge of English generally to the standard of the old University Entrance qualification. I am not arguing the case that skilled migrants do not require good English but in this category—the business-investor category—that is quite different. A well-designed business investor programme would bring significant capital flows to New Zealand and business investors are of course well able to afford staff to assist them in their daily lives in New Zealand. Let us just remember for a moment that Samuel Goldwyn who emigrated from Poland to New York and went on to create the fabulous film studio MGM knew nothing of English when he left Poland. 
I conclude with a final example. In the last few days we have seen the disgraceful illustration of the Minister of Communications commenting about the prospects of Telecom and saying that that company might have to cut its dividend payout to fund increased investment. That statement was instrumental in wiping $157 million off Telecom’s market capitalisation. 
Jill Pettis 
: Telecom shares have gone up. 
Dr RICHARD WORTH 
: Jill Pettis responds by saying that the share price has gone up. That naively is similarly what the Prime Minister said yesterday. It may be that the share price of Telecom is trading at higher levels now than it was before the comments were made but what Jill Pettis overlooks is that for those who sold because the Minister made those comments their losses have been truly significant. It is no wonder that a stench is forming around this Government. It is such a tragedy that when there was the opportunity to do good in this Budget the Government has done bad.