Parker David: Debate on Budget Policy Statement 
Parker David: Debate on Budget Policy Statement 
[Volume:615;Page:11538] 
DAVID PARKER (Labour—Otago) 
: 
 I will gladly deal with economic matters in this speech. It seems strange to me that National often ignores the economy and chooses to attack the Government on race issues instead. I reflect on why that is. Why is it that the self-appointed economic guru Dr Brash seldom deals with matters of our economy? Why is that? It is because I know this House knows and most of the public know that our economy is performing well. Dr Brash knows that our economy is prospering under the wise stewardship of this Government. I am not one of those people who say we do not face challenges. We are facing challenges as a consequence of the drop in the exchange rate of the US dollar. The US dollar has been plummeting and that does make the situation difficult for exporters. We acknowledge that. [ 
Interruption 
] The fact that it is the US dollar that is plummeting is obvious to those people like Mr Key who wish to take an interest in the matter. The exchange rate of the New Zealand dollar has not increased as steeply against either the euro or the British pound as it has against the US dollar. So the challenge posed by the exchange rate of our dollar is real but it has not hurt significant parts of the economy such as inbound tourism for example which is one of the strongest contributors to our economy now. Inbound tourism is at record numbers. 
Why is it that Dr Brash does not focus on the economy but instead attacks the Government on race issues? It is because our economy under the wise stewardship of Dr Cullen has become one of the strongest in the OECD. We run a Budget surplus. We prudently collect more from taxes than we spend—that is a good idea is it not; no one could disagree with that—and that is even after we put away about $2 billion per annum to fund future superannuation payments. We have even been able to reduce Government debt while doing that. Gross Government debt was 36 percent of gross domestic product (GDP) when we took over in 1999. It is now down to 28 percent of GDP and still dropping. The Budget Policy Statement shows that it is projected to drop to close to 20 percent of GDP over the forecast period. The projection for net debt is even better but does Dr Brash talk about that? No he does not because it is factual and it is good news. 
What about unemployment? Does Dr Brash talk about that? Not much. Unemployment has dropped to less than 5 percent of the workforce. Does he celebrate that? Our unemployment rate is the lowest in 16 years and is one of the best in the OECD. Does Dr Brash give us any credit for that? No he does not. What about economic growth? In recent years the growth rate in New Zealand has been amongst the best in the OECD. 
John Key 
: Relative. 
DAVID PARKER 
: Relative to the rest of the OECD. Is that not good enough for the member? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I am sorry to interrupt the member. While interjections are permitted I cannot let members drown out the speaker. I can hardly hear him. I refer members to Speaker’s ruling 56/1. Interjections should be rare reasonable and relevant. They should not be like a running commentary and that is what we are getting at the moment. 
Rodney Hide 
: I raise a point of order Mr Speaker. I accept fully your ruling but I think also that the member should be discussing the Budget Policy Statement and not speaking entirely about Dr Don Brash. I know that he and the Government are running scared particularly in Otago about the success of the National Party but we are here to hear about the Budget Policy Statement and not what a great job Don Brash is doing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the member for that. 
DAVID PARKER 
: It is interesting that when the facts are put before Parliament there is a harangue from the Opposition benches as those members try to drown out the simple facts recorded in the Budget Policy Statement. In terms of growth we heard Mr Prebble tell us before that the Budget Policy Statement projected growth of 1.5 percent per annum. I say to Mr Prebble that that is wrong. I point him to table 1.1 on page 15 of the December Economic and Fiscal Update. Mr Prebble did not actually have to read very far through the document to get the right figures. He obviously did not bother to do that and he made up a figure. He says the figure is 1.5 percent. The projection is 2.8 percent for this year rising to 3.4 percent in 2006 and 2007 and 3 percent in 2008. The figure of 1.5 percent does not appear. I am looking at table 1.1 on page 15. 
Mr Prebble’s making up of figures is comparable to Dr Brash’s selective memory when quoting historical figures. Dr Brash keeps going on about how a gap has arisen between the fortunes of New Zealand and Australia in OECD per capita GDP figures. He has talked about the gap and last year—and I have mentioned this before—around the time of the Budget he said: “The rate of growth was too slow to narrow the large gap in living standards between New Zealand and Australia that emerged during the 1970s and 1980s.” Those are his words not mine and I am quoting from an article that he authored in the  
Dominion Post 
. The reality is that Dr Brash misses out the 1990s which is pretty strange. When one is looking back from the year 2004 it is pretty strange to look at the 1970s and 1980s but to forget about the 1990s. The reason Dr Brash does that is that the statistics do not make out his case; they show the opposite of that. In the 1980s Australia was ranked 10thin the OECD’s per capita rankings and New Zealand was ranked at 18. At the end of that decade under the wise stewardship of Labour New Zealand had gone back one place and Australia had charged back six places. During the 1990s the decade of Dr Brash’s stewardship of the Reserve Bank and of the National Party’s stewardship of the Government Australia went forward four places while New Zealand went back one place. It is no wonder that Dr Brash ignores the 1990s. 
In the Labour Party we have a different philosophy from that of National and ACT. We think that issues of income distribution and economic efficiency cannot be separated. The National and ACT members do not care whether there is a great disparity between high-income earners and low-income earners. We do care about that. That is a matter of basic philosophy where we differ from National and ACT. We do not think that the economy performs as well when there are those great income disparities. We think that social cohesiveness and equality of opportunity are important to our overall economic prosperity and to our personal security. If we share income around we all prosper. If we concentrate income and wealth as National and ACT did in the 1990s and would do again the top 10 percent prospers but the economy as a whole suffers. That is why we focus on need not privilege and why the Budget will again do that this year. It will focus on need not privilege. What would National and ACT members on the Opposition side of the House do if they became the Government? They are saying they would have one standard of citizenship but we all know that they really mean tax cuts for the rich. 
In contrast with National and ACT Labour believes in policy that is based on needs not privilege. If we look at what is signalled in this Budget Policy Statement we can see we are seeing that through because of the increased support that is signalled this year for the likes of family support. We will actually be giving an effective tax break to low to middle income families. That is where a responsible Government should apply the Budget surplus and that is where it will be applied because we focus on needs not on privilege and tax cuts for the rich. 
I will deal with another issue that Pansy Wong has just referred to and that is the concern about compliance costs. Compliance costs have been a thorny old issue that National members have rattled on about for the last 2 or 3 years. But again on that issue they have been shown to overplay their hand. Survey after survey by international bodies that are independent of New Zealand and recognised for their rigour all say that New Zealand runs a very unregulated low - compliance cost economy. The latest survey out this week is the World Bank survey. It is a survey of 130 countries—not one or two. Now where does New Zealand rank in compliance costs in those 130 countries? 
Judith Collins 
: That’s historical. 
DAVID PARKER 
: Oh that is historical I hear. Well we are not getting any assistance from the Opposition benches now. Where were we ranked? No. 1. We had the lowest compliance costs of those 130 countries. Was that a one-off freak event? No it was not. The  
Wall Street Journal  
recently commissioned a similar study. What was the answer in that study? Again New Zealand was right up there at the top with one of the lowest levels of regulation and compliance costs. One would think members on the Opposition side of the House would celebrate that. No they do not; they try to deny reality. Just as they try to ignore the reality of the 1990s when under their stewardship the gap arose between Australia’s and New Zealand’s well-being and wealth they now try to say that those international surveys are rubbish. 
The electorate is on to National and ACT. How do I know that? I had a letter given to me recently by a concerned constituent. National had written to the person to beg for money as usual. The letter states that National has plans to tackle areas like reducing the gap in living standards between New Zealand and Australia. The constituent sent that letter to me because that person was aware of how misleading that statement was. That gap arose under National because of National’s policies and we will fix it.