Parker David: Financial Review Debate — In Committee 
Parker David: Financial Review Debate — In Committee 
[Volume:653;Page:2425] 
Hon DAVID PARKER (Labour) 
: 
 We heard the Hon Bill English launch into an attack on the previous Government accusing us of being scandal-ridden. This is from the Government that in the last week has had Dr Worth on the ropes for inappropriate behaviour as a Minister whilst in India in clear breach of the  
Cabinet Manual 
 which the Prime Minister and his Cabinet colleagues including the Hon Bill English are happy to look past. He should not come to us and accuse the Labour Party of being a scandal-ridden Government and then condone that sort of inappropriate behaviour in the National Government. 
I will refer to another comment made by the Minister in the chair Bill English. He said that he had inherited a terrible set of affairs from the outgoing Labour Government. Again there is rote learning going on in the National Government. It tries to pass this disease on to the media but the media are not buying it because they know it is not true. Not only does the media know it is not true but also the IMF has reinforced it just in the last 2 weeks. The IMF says in its macroeconomic outlook for New Zealand in its report dated 23 March 2009 that “New Zealand is in a better position than most advanced countries to face the global storm given its sound macroeconomic policies including a flexible exchange rate low level of public debt flexible labor markets and healthy banking sector.” 
Hon Parekura Horomia 
: Who said that? 
Hon DAVID PARKER 
: That is what the IMF says. It is completely different from what we heard from the Minister of Finance. 
Why would the Minister of Finance try to pull the wool over the eyes of people who are listening to this debate? Why would he be doing that? It is because he knows that he is now overseeing a structural deficit that he has caused that is his responsibility and that will be his legacy to this country. A structural deficit is what Mr English has caused through the National Government’s irresponsible tax cuts. These tax cuts are not only inappropriately directed mostly towards those who are already well off but also so extreme in their amount in out-years that New Zealand has been put into a structural deficit. 
The member says that we are already in deficit. Well a deficit in out-years was projected. It was not nearly as high as the one the member is projecting and that was after contributions are made to the superannuation fund. It is very important that we keep that up to fund superannuation to people in the future. Every time National members are in Government they cut contributions to the superannuation fund. What are they doing? They are cutting the ability of New Zealand Governments to fund superannuation in the future. Let us wait for the Budget; they will be cutting those contributions. They have cut the research and development tax credits so businesses will not grow as much. They have cut the KiwiSaver generosity so there will not be as much saving. As a consequence the economy will not grow as much. 
The worst thing of all is this structural deficit that National members have created. How are they going to mask it? Mark my words they will hide this structural deficit in the Budget in a number of ways. For a start they will stop the contributions to the superannuation fund which we know are necessary to maintain superannuation. They will also drag out money from the State-owned enterprises. We had Gerry Brownlee sounding off that electricity prices were too high. We had Bill English and his colleague Simon Power saying they wanted higher rates of dividend from the energy-related State-owned enterprises. How are they going to get that? They are going to borrow hundreds of millions of dollars if not billions through the energy-related State-owned enterprises which is a one-off payment that they will use to again hide from the public the structural deficit they have created. 
The structural deficit that was left by the National Government of Rob Muldoon had high levels of Government debt. The wise stewardship of Dr Cullen and the previous Labour Government got that debt down to very prudent levels—everyone agrees with that; even Mr English agrees with that. The IMF certainly agrees with it. But the National Government is blowing out a deficit. What does the IMF say? It says that the Government cannot bridge that gap with just decreases in expenditure which is the slash-and-cut policy we see coming. The IMF says that the Government must address the issue of revenue. That is saying in other words that it has to take in more tax. This is proof that National’s tax cuts in out-years are unaffordable. The IMF said in its report dated 23 March that although the focus of the consolidation should include the expenditure side “the size of the required adjustment is large and revenue measures will likely be needed to close the gap.” I say to Mr English that the National Government’s tax cuts are unaffordable.