Smith Lockwood: General Debate 
Smith Lockwood: General Debate 
[Volume:639;Page:9051] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Just in case anyone missed it that speaker was the Hon Steve Maharey. He has a kind of reverse Midas touch that guy. Everything Midas touched turned to gold; everything Maharey touches turns to— 
Hon Maurice Williamson 
: Don’t say it; it’s rude. 
Dr the Hon LOCKWOOD SMITH 
: OK I will not say it because it is rude. If we look what he did to tertiary education we see he stuffed it—and I shudder to think about what he is going to do now to the school system as the Minister of Education. In listening to his contribution just now did we hear him say he cares about the fact that Australians after the Australian Budget are now to receive more after-tax income? Since Labour has been in office here in New Zealand the average Australian’s income has gone up by almost twice as much as the average New Zealander’s. The average Australian’s after-tax income has gone up by 33.6 percent since Labour has been in office here while the average after-tax income in New Zealand has gone up by 18.9 percent. 
What is happening to the exodus from New Zealand to Australia? Is it going up or going down? Would David Benson-Pope like to tell us that? I bet he would not because it is going up hugely. Just a couple of years ago the net exodus was under 10000 New Zealanders a year and last year it was 22000—a net exodus of 22000 of our good Kiwis who went off to Australia. Does anyone blame them for going there when after-tax incomes in Australia are going up more and more relative to those in New Zealand because of the inept economic management of this Labour Government? New Zealand is not a worse dumber place than Australia; it is a better place than Australia. It is just that the appallingly bad economic management of this Labour Government is killing New Zealanders. There is no opportunity here. That is why they are going to Australia. 
Dr Cullen is now so absolutely devoid of economic nous that he has given up; he has now asked the Finance and Expenditure Committee to give him advice on how to manage the economy. There is a serious problem. If one looks at what is going on right now in New Zealand’s economy one sees that we are towards the bottom of a growth cycle. Economic growth in the last year was under 2 percent—under 2 percent in real GDP growth. We are towards the bottom of a growth cycle yet capacity utilisation in our economy is very high. That means we cannot get higher growth without inflation. The Reserve Bank knows that so under the Labour Government’s policies the Reserve bank is having to tighten monetary policy. It is putting interest rates up and of course the exchange rate is going up as international money seeks higher yields and our exporters are haemorrhaging. Dr Cullen has no idea how to fix that up. He wants the Finance and Expenditure Committee to give him some answers to that problem which he has created through his inept management. 
I was at a seminar at Treasury just 8 days ago. The New Zealand Treasury put on a seminar which was presented under the auspices of Treasury by Dr Roderick Deane. They presented us with some data about what has been happening to productivity growth in New Zealand under this Labour Government. During the 1990s—during the term of the last National Government—from 1992 to 2000 productivity growth was at 2.3 percent per year. Since Labour has been in office from 2000 to 2006 it has dropped to only one-third of that level of productivity growth—down to 0.7 percent. This year the latest data on productivity growth has it down at 0.4 percent—almost zero. That is one of the biggest problems that Dr Cullen faces. What has Dr Cullen done to this economy to so screw it that under his and this Government’s policies productivity growth has dropped from 2 percent annually—which is not too bad; under that we would see New Zealanders’ incomes start to go back up towards the OECD average—to productivity growth of 0.4 percent which is almost zero? 
The causes of the decline in productivity growth that we were presented with at that seminar at Treasury were clear. There is an excessive regulatory burden. Business New Zealand tells us there have been more than 2000 extra regulations since Labour has been in office. The regulations are such that the building of houses is now starting to fall behind demand. So not surprisingly house prices are going up. There is infrastructure inadequacy. When it takes one-third more trucks and drivers to get the same product to the market one has real problems. This Government has real economic problems.