Parker David: Appropriation (2008/09 Estimates) Bill — Third Reading Imprest Supply Debate 
Parker David: Appropriation (2008/09 Estimates) Bill — Third Reading Imprest Supply Debate 
[Volume:649;Page:17802] 
Hon DAVID PARKER (Minister of State Services) 
: 
 I begin by acknowledging some of the comments made by the previous speaker Russel Norman of the Greens. I agree with him that we need to spend more money on public transport and I thank him and his party for the support they have given to those measures. I think it is true that the Greens have been influential in ensuring that more of the land transport budget is spent on public transport. Although it might not be as much as the member wants it is a fifteenfold increase on where it was 9 years ago. It is a very substantial increase and we are starting to see results from that in Auckland in particular where improvements to the bus service on the Northern Busway and rail improvements are starting to bear fruit with increasing passenger numbers. This is good for people because it gives them affordable choices for getting to work and it also reduces the environmental impact on the planet. 
It is pleasing to see that other parties like New Zealand First are increasingly recognising the importance of public transport as evidenced by its support for these measures. Indeed the introduction of off-peak free travel for senior citizens who are using public transport was at the behest of New Zealand First. I think there is a growing consensus across the Government and within the Greens. I also note that the Maori Party is supportive of measures that reduce our reliance on fossil fuel modes of travel. 
I would like to talk more generally about infrastructure. There has been a lot of debate about infrastructure in the papers in the last week because National has proposed as one of its election planks the idea that we spend more on infrastructure. National members say that that is the reason why New Zealand should increase its borrowings as a percentage of GDP. National members pretend that the need to fund infrastructure would cause them to borrow more money but we know they would be borrowing for tax cuts. 
I thought I would illustrate why that is true but before doing so I thought we should remind ourselves of the lessons of history—lessons that most of us in the House remember. It was in fact a National Government under Sir Robert Muldoon that left this country on its knees virtually bankrupt. We had the highest Government debt to GDP ratio in the OECD. It was 60 percent of GDP. This meant that in those days $1 in $5 that was collected in tax was spent in interest. If the ship had not turned within a year or two it would have risen to $1 in $4 of all tax being collected being spent on interest. The predecessor to this Labour Government the previous Labour Government started to get that under control— 
Dr the Hon Lockwood Smith 
: No it increased debt hugely. 
Hon DAVID PARKER 
: No; as a percentage of GDP it got debt down. There was a short period following taking over from Mr Muldoon when of course it was impossible to turn that round overnight because we were left with the settings from the previous National Government which included an $8 billion Government deficit. An $8 billion deficit way back then was absolutely enormous; I think it was 6 percent of GDP in the last year of the Muldoon Government. It was just enormous. Subsequent Governments have brought that under control and we now have debt down to 18 percent of GDP. This Government has an ambition to keep it at 20 percent of GDP or below. National is going into the election campaign saying it will increase the debt and its excuse is that it will do so in order to pay for infrastructure. 
I thought I would give the House some information as to what in this Budget—and in recent Budgets—is going into infrastructure. We know there has been an unprecedented school building programme and it is about more that just new schools—and there have been plenty of those. Capital infrastructure in existing schools has had more spent on it in the last 10 years than has been spent on it for many decades and in this Budget it is projected to continue. 
In respect of hospitals it is the same. We have built new hospitals from Invercargill to Kaitaia and in many towns and cities in between. That has been funded while we have been reducing debt. 
Peter Brown 
: What about roads? 
Hon DAVID PARKER 
: Mr Brown asks about roads. In addition to having a fifteenfold increase in spending on public transport much of which has been spent on new infrastructure roading has had a significant increase in spending. I think there has been a doubling of the amount spent on new roads and there has been a very significant increase in spending on capital works generally in respect of roading. Again that has been funded without increasing debt. 
On the energy front transmission expenditure was running at an average of less than $50 million per annum under the National Government in the 1990s. It is now this year $450 million. It increases over the next couple of years to about $750 million in a year before dropping off a little bit but going forward it levels off at about $250 million to $300 million per annum. Again that is being done without increasing New Zealand’s debt levels. 
If we look at power generation we see that last year more than 500 megawatts of electricity were added to the system. That is more than 3 years’ demand growth. This year 400 megawatts of renewables alone are being built against demand growth of around 130 megawatts per annum and we are on our way to achieving our target of 90 percent renewals by 2025. There is an estimated 1400 megawatts of new capacity coming onto the system in the next 5 years and more than half of that is geothermal and just about all of it is renewables. Again the point is that all this extra infrastructure is being built without increasing Government debt. 
So I have covered education I have covered health I have covered transport and I have covered energy. In all those areas unprecedented new infrastructure is being built. and we are not increasing debt to do it. That proves beyond any doubt that a National Government would not be borrowing for infrastructure; it would be borrowing for tax cuts. In the process in order to achieve that it has to increase Government debt. Why a Government would do that at any time I do not know. It is not a good idea. Why a Government would do that now is particularly silly given the international financial situation and also given the high levels of private debt in New Zealand. We have high levels of private debt so why we would take a risk and add to that higher level of Government debt I do not know. 
An interesting question was raised in the House today by the Rt Hon Winston Peters. He asked what other conservative Government in the world would be talking about increasing debt levels at the moment. I thought about that question and I thought about the prime comparison I would make between Mr Key and the National Party and overseas conservative Governments. Who is doing that overseas? President George Bush in the United States is doing that. That is a country that has rapidly escalating differences between the rich and the poor and deteriorating social services for those who are most in need yet that is the model a National Government would adopt for New Zealand. It would borrow for tax cuts. It does not need to borrow for infrastructure; we are doing really well on infrastructure. 
What else would National do? It would have to stop putting away money for the superannuation fund that we need in order to fund superannuation for the increasing number of people who are reaching retirement age. The OECD has said that what we are doing now is the best practice in the world and that we should continue to do it. The National Government would stop putting sufficient money into that fund. Does it care about that? No the Opposition spokesman on finance was a Minister of Finance under the previous National Government when it cut the baseline for superannuation from 65 percent of the average wage for a married couple to 60 percent. It was letting the rate go down. National increased the rate of superannuation only three times in its 9 years in Government so the amount went back every year by the rate of inflation in those other years. That same person Mr Bill English is on the record a couple of years ago as saying that New Zealand’s superannuation is too generous—that we are too generous to our older people. He is on the record as saying that; there is no doubt that he said it. 
We need to be contesting the sincerity of people’s comments as we go into an election by judging what they have told people in recent years and what they did last time they were in Government. There is no need to borrow for tax cuts as National is proposing. It makes no economic sense. We do not need to do it for infrastructure reasons. The final comment I would make is we hear National saying it would change the Resource Management Act in its first 100 days in office. That entire infrastructure that I talked about has been built under the Resource Management Act and consented to under that Act—every bit of it! It either did not need a consent or it got one. I will leave the issue there.