Prebble Richard: Debate on Budget Policy Statement 
Prebble Richard: Debate on Budget Policy Statement 
[Volume:623;Page:18890] 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise on behalf of the ACT party to speak to the Budget Policy Statement— 
Rt Hon Winston Peters 
: Leadership bid! 
Hon RICHARD PREBBLE 
: I say to the member who just interjected that no I do not intend to follow his lead in this matter. I think this is an important debate in which we ought to debate the budgetary policies of the Government. Whether the right honourable gentleman wears pyjamas or some other MP wears pyjamas is really totally irrelevant and I do not want to go there. 
Just before I do start speaking about the economy let me with the indulgence of the House make one comment. I think it is appropriate as this is the Speaker’s last day—I understand he will resign at midnight—to record that fact in the House and to record that he has been a generally popular Speaker and we wish him well. No doubt—at a later stage I understand because he is moving to another higher position—we will give him a warm tribute. But I think we should record in  
Hansard 
 today the fact that this is the last day as Speaker of the Rt Hon Jonathan Hunt. 
I turn to the Budget Policy Statement. Mr Anderton gave a typical Government speech when—if I am paraphrasing it correctly—he basically claimed that the Government had found a terrible economic situation on coming to office and had produced some sort of economic miracle and greatly improved growth. Indeed we hear that speech time and time again from Government members. They have the view that if they repeat a statement often enough it must be true. If only that were so. Of course our Prime Minister always talks about the wonderful growth this Government has achieved in contrast to—as she phrases it—“the failed policies of the past”. 
Well I draw members’ attention to the fact that on page 12 of the Budget Policy Statement the Hon Dr Michael Cullen the Minister of Finance states: “I accept overall responsibility for the integrity of the disclosures ...”. He is saying that what is written there is true. I ask members opposite whether they know what the growth rate per annum has been in the last 5 years. That is interesting; none of them seem to be offering an answer. The answer is actually contained in the first paragraph on page 13 which says that in the last 5 years the 5 years during which Labour has been in office we have had—and I quote exactly—“annual growth averaging 3.7% per annum…”. 
Rodney Hide 
: That’s not bad. 
Hon RICHARD PREBBLE 
: Well it is not bad but that is the economic miracle—that is the extra growth that the Government says it should be re-elected on. We then have to ask what the terrible growth referred to by Mr Anderton was. 
Rodney Hide 
: It must have been bad. 
Hon RICHARD PREBBLE 
: It must have been bad. And what was the growth rate under the “failed policies of the past”? What was it in the previous 5 years? We only have to go to page 18 to see—and I repeat that Dr Cullen has signed a statement saying that these figures are correct—that average growth has been 3.7 percent per annum since 1993. In other words— 
Rodney Hide 
: It’s the same number. 
Hon RICHARD PREBBLE 
: I thank Mr Hide; that is why he is the ACT leader. Growth has actually not increased—not even by a fraction—under the Labour Government. 
Dr Brash in what I thought was an appropriate speech on the Budget Policy Statement also pointed this out. He went further and made some other comparisons. In the last 5 years we have had the most favourable terms of trade in my lifetime—and I understand that by the end of the month I will be father of the House. There have never been more favourable terms of trade. The Minister of Finance told the Finance and Expenditure Committee and the House that the Government thought that the terms of trade may have undergone a structural change. What he is referring to is that for 100 years successive New Zealand Governments have had to face the fact that the terms of trade for an agricultural exporting nation got worse on average year after year. In the last 5 years for the first time in 100 years the terms of trade got better. Yet despite that fact when we read this document we see that Labour could not improve the growth rate by one iota. Given the fact the circumstances have improved in relative terms things have actually got worse. 
Members might say that that is a party political statement so I will go back to the Budget Policy Statement to see what the Minister of Finance has signed off as his view of what the outlook for the economy really is. No doubt this is why he has not participated so far in this debate—because it would pour a bit of cold water on the Government’s party line. I will quote from page 24 of this document: “This slowdown results in almost a halving of the growth rate to 2.4% for the year to March 2006.” So the Government is saying that as a result of the policies contained in the Budget Policy Statement the growth that has been going on for 10 years will now come to a halt. I would be interested to hear from Government members whom they intend to blame for that. 
I will try to give the Government an indication of how badly it has performed—and the Rt Hon Winston Peters can feel good about this if he likes. The period in which there was 3.7 percent growth covered not only the National Government but also the time that Mr Peters was Treasurer. It even covered the Asian financial meltdown and the period when many parts of New Zealand had the worst drought for 20 years. Yet this Government with favourable climatic conditions and favourable terms of trade has not increased growth at all. 
But it is worse than that because the Government told us that its objective was to get New Zealand into the top half of the OECD. Dr Cullen told the Finance and Expenditure Committee that there was a problem with that. He has just discovered that the country ahead of us in the OECD Italy is quite a lot wealthier and that our progression might take a while. Well of course it will take an enormous length of time because it has been accepted that if we want to rise up the ranks over time we need a growth rate that is better than 3.7 percent. 
This is the position that the ACT party puts to the Government: things are getting worse and I invite Government members to say why. I will give them what I think are two reasons why that is happening. One reason is tax. Yes the tax in New Zealand has gone up. On the same day that we had the Budget Policy Statement debated in the Finance and Expenditure Committee a Treasury document was tabled which stated that if we continued with a 15c tax rate for income up to $9500 then lowered all income tax to 21 percent it would cost $5 billion. The document then stated that that would improve growth by between 1 and 1.5 percent. To give members an idea of the impact that would have the Business Roundtable made the interesting statement that if the United States had grown at 1 percent less than it did from 1870 to 1980 then it would be no wealthier than Mexico. A 1 percent improvement in growth is huge. Treasury basically said that if the Government adopted ACT party policy it would be fair it would be progressive and we could afford it. 
The second matter I will draw to the attention of the Government is the sheer number of regulations and laws that this Government keeps on passing and imposing upon business. If it wants to know the reason why it has not been able to increase the growth rate that was achieved by Winston Peters it should realise that it is because of a combination of things: too much red tape too many regulations too many laws and taxes that are too high.