Norman Russel: Questions for Oral Answer — Questions to Ministers Questions to Members 
Text is incorporated into the Bound Volume 
Norman Russel: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Sitting date: 26 September 2012. Volume:684;Page:5649. Text is incorporated into the Bound Volume.] 
3. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Prime Minister 
: Does he have confidence in his Minister for Economic Development in light of the fact that there have been nearly 40000 net job losses in the manufacturing sector in the four years to June 2012? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes I do have confidence in the Minister for Economic Development. In fact having listened to his answers before I have even more confidence in him. But I would dispute the member’s use of statistics. According to the household labour force survey the number of people employed in the manufacturing sector has actually remained quite steady since the beginning of 2009 fluctuating between 245000 and 255000 people depending on the season. In fact over the last 2 years employment in manufacturing has actually gone up a little. It is true that in the past there has been a decline in manufacturing jobs in New Zealand. That decline was shameful and it happened between 2005 and 2008. 
Dr Russel Norman 
: Does he have confidence in his Minister when Statistics New Zealand figures show that nearly 100 skilled manufacturing workers are leaving this country every week annual exports of manufactured goods have fallen by nearly $2 billion or over 12 percent in the past 4 years and manufacturing’s contribution to economic output has fallen by nearly $3 billion or over 9 percent since 2008? 
Rt Hon JOHN KEY 
: I would dispute some of those facts but what I would say is I would go back to the most rigorous form of measuring employment in the economy and in relation to the manufacturing sector. That is the household labour force survey. It shows that in the time that we have been in office employment has been pretty static. As I say it has not moved enormously. What I would also say is this Government is actually trying to build competitiveness in the manufacturing sector. That is why we want to have 90-day probationary periods lower company taxes reform of research and development and the likes. And what I notice from that party is that time and again it resists all of those sensible changes to make New Zealand more competitive. So there is no point in crying wolf here in the Chamber and then going outside— 
Dr Russel Norman 
: I raise a point of order Mr Speaker. This is not about the Green Party’s policies. This was a very straight question to the Prime Minister. [ 
Interruption 
] 
Mr SPEAKER 
: Order! Members should not interject when a point of order is raised. The member in asking his question inserted quite a lot of information into his question that the Prime Minister has disputed. He is at liberty to do that. 
Dr Russel Norman 
: Are companies like Nuplex Industries wrong when they say that the overvalued dollar is a reason why they are cutting skilled manufacturing jobs; and are half of the exporters wrong when they say that the high and volatile currency is hurting their business and their sales overseas? 
Rt Hon JOHN KEY 
: There is no question that the high exchange rate is hurting some exporters—no question about that. The Government has been actually making the same position quite clear for some time. It is not universal because against the Australian dollar actually we have been very competitive. So if we are to follow what the Labour Party and the Greens want to do we will start printing money to get the exchange rate down. They had better go and tell every New Zealand pensioner what they think of that because that means high inflation and that means an erosion of their savings. If the member wants to be in a Government that prints money well that is an interesting way to go. It did not work that well for the Germans. 
Dr Russel Norman 
: When will the Government wake up to the fact that most of our trading partners are taking active steps to devalue their currencies which is hurting New Zealand’s exporters and manufacturers because they are actively intervening to lower their currencies and the fact that the Government’s policy of doing nothing around the currency is a recipe for more job losses and a hollowing out of New Zealand’s manufacturing capacity? 
Rt Hon JOHN KEY 
: I think what is true is that a lot of countries take different positions when it comes to exchange rate management. So when the member says countries are doing all sorts of different things to devalue their dollar well that would vary depending on who you are looking at. In the case of Australia yes Australia has sold Australian dollars and intervened in the exchange rates. In the Reserve Bank’s latest annual report if you have a look at it—I urge the member to go and have a look—have a look at what the market-to-market valuation of those sales are. When it comes to China it happens to have trillions of dollars in reserves and it is not a capital importer like New Zealand. If the member wants to go and have a look at Switzerland and see how successful it has been at defending the Swiss franc at 1.20 against the euro he is welcome to do that. All of these things are voodoo economics that do not work. 
Dr Russel Norman 
: I seek leave to table a paper from JBWere from the director of the investment strategy group Bernard Doyle which states that New Zealand is out on its own in running orthodox monetary policy. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table a paper from the IMF chief economist who says that the days of simply targeting inflation with monetary policy are over. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
Dr Russel Norman 
: How long does this Government think it can keep playing by the rules of 1980s neo-liberalism—the rules so loved of currency speculators—when the rest of the world is adopting modern policies to develop their economies and create manufacturing jobs? 
Rt Hon JOHN KEY 
: As I say this is a Government that is working hard to create manufacturing jobs. I would have strong issue— 
Hon Member 
: How? 
Rt Hon JOHN KEY 
: Well at least we were not the Government that was collapsing between 2005 and 2008. I would add that I have real issue with the characterisation that the member has that somehow New Zealand’s monetary policy is out of whack with that of other countries. Charles Chauvel chaired the Finance and Expenditure Committee as part of the old Government in 2008 and what it found was we had world’s best practice—world’s best practice. Then there are 20 other countries that have a very similar approach to inflation targeting as we do including all the majors. And the only change that has seriously ever come up with all the reviews—and there has been four of them from memory—about monetary policy in New Zealand has been the view that is held by some people that there should be a committee deciding about the exchange rate rather than a single person in the form of the governor. That is it. There is nothing very odd about the way New Zealand manages monetary policy. 
Dr Russel Norman 
: As the rest of the world moves beyond our rather outdated monetary policy framework and the IMF—the International Monetary Fund—has recommended moving beyond this simplistic and outdated monetary policy that he has does he plan that New Zealand will be the last Government standing on the planet that remains a devotee of the neo-liberal religion or will we adopt modern monetary policy? 
Rt Hon JOHN KEY 
: Firstly I reject the proposition that it is outdated. Secondly I think we need to understand what the member is telling the House just in case he ever gets anywhere near an opportunity to implement things. So he wants to actively intervene in the exchange rate to get it down. That is what he is telling New Zealanders. Well by the way while he wants to talk about people who are involved in the currency market yep when I went into the currency market the US dollar was 320 yen approximately; today it is 80. The Japanese Government has lost billions and billions and billions of dollars intervening the whole way down and that pattern is pretty much the same across every reserve bank. If the member wants to print money and have rounds of quantitative easing which is what the Americans and the Europeans are doing fair enough but just understand what the economic implication of that is and that is basically much higher inflation— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The Prime Minister has been allowed to do this not just today but on previous days: to suggest that Opposition parties want to print money. 
Mr SPEAKER 
: Order! This is not remotely a point of order. The member wishes to debate an issue. He will sit down. The member will resume his seat. That is not remotely a point of order. The member is trying to use—[ 
Interruption 
] The member—[ 
Interruption 
] Order! The House will come to order. The member will get control of himself. The member was seeking to debate what the Prime Minister had said by way of a point of order. That is totally outside the Standing Orders and the member knows that. I allowed the Prime Minister to go on a little longer because the question was a little longer but I think it was a sufficient answer in the end. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Speakers have long ruled that Ministers are not allowed to make up policies for other parties— 
Mr SPEAKER 
: Order! That is enough of this. The Prime Minister did not allege. The Prime Minister—if the member checks back on the Prime Minister’s answer—said “if” people want to do things not that they were proposing to do things. The Prime Minister was quite careful. If I heard him correctly he said that if the member and parties want to print money for example this will be the consequence. He was quite careful in his language. 
Hon David Parker 
: I raise a point of order Mr Speaker. My recollection is that he said that if the member got close to the Treasury benches then he would. That was his assertion. 
Mr SPEAKER 
: We are not going to take this matter further. The member has a further supplementary question should he wish to use it. 
Dr Russel Norman 
: Did he or his Minister for Economic Development instruct the National Party members of the Finance and Expenditure Committee to block an inquiry into the crisis in manufacturing or is the National Party attitude of doing nothing so deeply imbedded that they just did it for themselves? 
Rt Hon JOHN KEY 
: Well I certainly did not instruct them but this is an instruction I would like to give: why does this House not get behind and clear away all of the objections and let us have the Denniston mine operating so those miners on the West Coast can have a job. But no the Green Party is all— 
Mr SPEAKER 
: Order! Now the Prime Minister is accusing—[ 
Interruption 
] Order! I am on my feet. Now the Prime Minister is accusing another party of certain things.