General Debate

I move, That the House take note of miscellaneous business. Kiwis do not ask for a lot, but they expect two things from a Government. They expect the opportunity to find employment and they expect to have a living wage so that at the end of the week their bills do not exceed the income that they earn. I have to say that on both of those fundamentals, Kiwi workers have gone backwards, not forwards, over the last year under this Government.

I went back and checked what our Prime Minister and our Minister of Finance said about employment this time last year. They boasted about the track record of New Zealand and about the low unemployment, which was inherited from a Labour Government, in comparison to what was happening in Australia. I ask members to listen to this from John Key: “I do know that New Zealand’s unemployment rate is 5 percent, and we can contrast that with the rate in Australia, which is 5.7 percent,”. He said that showed that National was doing a good job of holding down the unemployment rate in New Zealand. Then Bill English went a step further than that. He said that New Zealand was doing much better because the Government had the fiscal stimulus right. He said: “our fiscal stimulus has kept our unemployment rate down to 5 percent. So which one is it: copy Australia’s plan and force up the unemployment rate up, or stick to our plan and keep the unemployment rate lower?”

The problem was that there was no plan in New Zealand. However, there was clearly an effective plan in Australia. Kevin Rudd had a good stimulus package going to the whole of Australia. Research and development there is up 25 percent, and money is being invested in skills and training. What are the figures today after those boastful claims from John Key and Bill English? Australian unemployment is down to 5.3 percent; New Zealand unemployment is up to 7.3 percent. For the first time in a decade, New Zealand unemployment is running higher than Australia’s. It is one-third higher than Australia’s. What did we do in New Zealand? We had a Job Summit. Do members remember the three big ideas? One was the cycleway. I ask Mr Brownlee how many jobs have been created in the last 14 months in the building of that cycleway since that Job Summit. Does Mr Brownlee know the answer? It is zero; no jobs have been created, despite the fact that our unemployment has risen to 168,000.

Then there was the big employment package in August, which was rushed through so that John Key could announce it to the National Party conference. We wanted to find out what the thinking was behind that employment package. Radio New Zealand put in an Official Information Act request, and for 9 months National refused to respond to it. Today the information was released and New Zealand can see why National tried to cover up the information. Treasury said that the scheme represented poor value for money. Treasury regarded the $120 million scheme as poor value and was unlikely to increase long-term jobs. The jobs that were created by the 6-month short-term subsidies to employers disappeared when the subsidies went. The big package in August was an absolute failure.

There are 72,000 young New Zealanders out of work. The Government spends more money, but what about the fact that 37 percent of our teenage Māori and Pasifika kids are out of work, not in training, and not in education? That figure of 37 percent is a disaster waiting to happen. We had the mega-mining plan that was going to create jobs, but suddenly the plan has become modest.

Phil Goff says that Kiwis do not ask for a lot or expect a lot. He would know that, because under 9 years of Labour Government they did not get a lot.

That is one of the things that have been turned around by this Government. In a couple of weeks’ time we will see Budget 2010, which will build on the marvellous results from 2009. When we came into Government we inherited an economy that was on the skids and a country that was already in recession. We took over from a Government that had been in office for 9 years, had built up debt, had built up expectations, but had left the kitty absolutely empty. That is what it did, and it did that at a time when it should have known that the country would be going through tough times because of a world recession. But instead of doom and gloom in the country, what actually happened last year was that a very straight course was run—something that Labour could never do. We went on a very straight course to make sure that as many Kiwis as possible stayed in jobs, and that as many people as possible stayed in work, so that they could in fact contribute to the economy and look after themselves. But what we had had under Labour was more borrowing—

💬 Hon David Cunliffe: Tell us about Savoy? She doesn’t like that. She doesn’t want to talk about Savoy.

Mr Cunliffe, who is very noisy today, has an answer for everything. His answer is to borrow, borrow, and borrow, and when that is finished to borrow a bit more. It used to be “tax and spend” under Labour; now it would be “borrow and spend”. That is what Mr Cunliffe says. He says that New Zealand does not have a debt problem. Unfortunately, we have a debt problem caused by Labour when it was in Government, because it never saved so that it could spend wisely and invest to help people get into their own businesses and keep their heads above water. Instead, all that the previous Labour Government ever did was spend, spend, and spend, then borrow—

💬 Hon David Cunliffe: It’s unravelling.

—I say to Mr Cunliffe—and borrow some more. Mr Cunliffe would like to see us like Japan. He would like to see us far into debt; that is what he wants. He is telling Bill English to borrow more and just put it on the card. Well, we all know about that, and we are looking forward to the payments on Mr Cunliffe’s cards becoming public in another month’s time. I say to Mr Cunliffe that I am really looking forward to that. I am looking forward to seeing what he was spending taxpayer dollars on; I have a lot to say about that. Mr Cunliffe does not like it when we talk about borrowing, does he? Not a lot! No, he does not like it.

Why is that? Mr Cunliffe is Phil Goff’s biggest enemy, and that is not just because he wants to be the leader of the party. It is because any thought of Mr Cunliffe being anywhere near Treasury would be enough to send Labour down to 18 percent in the polls, which is where it should be. Unfortunately, Mr Cunliffe is the Labour finance spokesperson, so about now Mr Goff must be wondering what he is doing.

In contrast to that, in Budget 2010 we will see some policies to lift New Zealand’s long-term economic performance—a performance that will continue to get better, time and time again. But it will not be an easy job. One of the things we are doing is bringing in more money from the back office into the front line, and we will see a readjustment in spending to make sure that that happens. That is something the Labour Government could never do. Labour’s idea of helping people was to build up the bureaucracy in Wellington and to forget about the people who paid the bills, but under National we will not see that.

💬 Hon David Cunliffe: But what are you doing?

Mr Cunliffe asks what we are doing. Well, in the corrections area, which was left in the most appalling mess by Phil Goff, we are doing a public-private partnership. We are leading the way and doing something that Labour never had the backbone to do, which was to invest in our own people to help them get ahead and bring the economy forward. Labour could not do that because its whole answer was “borrow and spend”. All Mr Cunliffe has to say is “borrow and spend”. We will be undertaking that partnership while maintaining firm control over the Government’s finances, and it is extremely important that we do so. It would be very, very difficult just to continue on as we are. We will make sure that we get better productivity. Under 9 years of Labour, during the best economic times the world has seen, we had 1.1 percent growth in productivity. That is what the Labour Government had, but unfortunately the legacy it left us was debt.

I raise a point of order, Mr Speaker. I just point out that I could barely hear the Minister in her speech. It was as if she were not even miked.

Before I call the next honourable member—

💬 Hon David Cunliffe: Go and fill up!

I say to the Hon David Cunliffe that the Speaker is not going to go and fill up. What is more, the member will not interject like that when I am on my feet. Interjections give this House some life, and it is important that this place is not boring, but I think the point that Dr Cam Calder has made is a fair one. The level of interjection that the Hon Judith Collins was having to try to speak through was pretty unreasonable. I ask members to be a little more reasonable.

We have just heard from Judith Collins—a Minister who has had a lot from taxpayers. She has had gallons and gallons of free petrol. She is now known as the biggest gas guzzler in the whole Parliament. I have to say that the gloss is going off this superficial Government very fast, indeed. I was very interested to read Colin Espiner’s column yesterday when he said: “In the life cycle of every administration, there’s a stage when it ‘tips’ …” and he asks about that because he thinks that perhaps things are about to change for the worse for this Government. I have to say to Colin, if he is listening, that he is dead right. People in New Zealand and serious commentators are waking up to the fact that they have a Government of spin, spin, spin. They have a Government of bluster and blatherskite. It is a Government of photo opportunities, whether its members are posing with babies or posing in a flak jacket in Bamian. Policies are pulled out of the hat to meet a media and photo opportunity.

Where have the enduring principles of the proud old National Party gone? They have been replaced by opportunism and poll-driven slogans. That is what we get from the Government of today: “ambitious for New Zealand” has become “ambiguous for New Zealand”. We were going to have a step change with a cycleway that has not produced a single job. We were going to catch up with Australia, but Australia’s unemployment is going down and our unemployment going up. And, guess what is happening: the New Zealanders who were all going to come home under John Key’s Government are all heading back across the Tasman. What we get from National members are big bang policy announcements so that they can keep up the old poll ratings, which they take every week. I believe that National members are the original poll-driven fruitcakes. Everything they do is based on a poll. Serious commentators are now asking: what does National stand for; where is the Government’s moral compass; what drives the Prime Minister; what is the plan; what is the step change; and where is the leadership?

Let us take just unemployment as an issue. Unemployment, when people’s jobs are taken from them and they are thrown on the scrap heap, is one of the most pernicious things we can have in society. Any serious Government would see what it could do to help those who are unemployed, particularly young people who are just starting out in life and want a job. All they have from this Government are publicity shots; unemployment has been nothing more than a plaything for this Government. It has not taken unemployment seriously. As Phil Goff said, it held a media-managed Job Summit. Everyone was to come to the summit and have a look at Mr Key as he announced major policies that would bring about a step change for New Zealand and jobs for everybody. I have to admit that it got him on television, but what have we ended up with? We had an unemployment rate that was the lowest in the OECD, below Australia’s, but it is now one of the highest at 7.3 percent—30 percent higher than Australia’s. Australia has created 215,000 jobs in 6 months.

What have we done? Sixty thousand Kiwis have lost their jobs. Of our young people, 72,000 of them are now unemployed. For 6 months Mr Key and his Cabinet did nothing, but on 1 August last year along came the National Party conference. A late Cabinet paper, of 29 July, was rushed through so John Key could make an announcement at the National Party conference. No wonder Treasury said the policy was poorly thought out, it was not going to achieve the goals, and, basically, it was a waste of money. Treasury has been proved correct. I ask National members opposite to have a look at the results of their policies, because they have not produced them for young New Zealanders. It is a crying shame to see what that Government is doing to so many young people in this country.

The effects of the global economic recession have been felt around the world but not so much in this end of the world. In fact, this end of the world has actually been pretty lucky in the overall context of the world economic recession. It will come as a surprise to the members opposite to know that, in fact, New Zealand grew at a faster rate than Australia in the second half of 2009 on a per capita basis. That will come as a surprise to the Opposition, but it just goes to show that New Zealand is not doing too bad, but there is heaps more to do.

Here is another piece of news for the Opposition: Governments do not hold up the sky on their own; they can do things in the short-term—and this Government is—but, ultimately, it takes businesses in viable industries where New Zealand has a competitive advantage to create ongoing jobs. We do not magic them out of thin air, I say to Mr Cunliffe. That means having a tax system that, firstly, encourages people to work hard and get ahead. Budget 2010 will deliver that tax system for New Zealand.

It also means a regulatory environment that encourages industries to grow and add jobs, and to do that we have to have changes and we have to look at things that we can do to encourage industries. I talk of things like unlocking responsible mining opportunities for jobs, things like unlocking irrigation opportunities for jobs, things like unlocking opportunities for more aquaculture space, and things like allowing more productive heavy vehicles to transport our goods to market; all of which this Government is doing and most of which the Opposition opposes. Labour members say we do not do enough about jobs but they have no solutions, and all the time they hate the things that we are doing. They bleat on and on about job creation and growth but what did the previous Labour Government do to tackle any of these challenging things when it had the chance? It did nothing, and members opposite offer nothing now. They offer nothing to encourage industries to create growth.

In fact, their only solution is to saddle a struggling Crown company with a political decision to try to start a new industry when that company knows that commercially it does not make sense and has no comparative advantage. In fact, members opposite know that as well, because the previous Government had the opportunity to build trains in New Zealand but did not go ahead with it. But that is their only token suggestion.

This Government does assist; it is working hard and helps job creation by investing in infrastructure. We are doing that like nobody else.

💬 Hon David Cunliffe: Where is the broadband?

We are making massive investments. For example, we have invested massively in Transpower for electricity transmission, in roading with $11 billion for new State highway infrastructure in the next 10 years, and, yes, I say to Mr Cunliffe, in ultra-fast broadband. If Mr Cunliffe had left the sector in better shape, then we would not have to take the reasonable period of time we are to achieve that. Also we are making massive investment in education and skills. Labour members do not talk about this, but we have the largest number of places ever in New Zealand tertiary institutions this year.

But the biggest impact the Government can have on real growth is to control its own expenditure. Controlling Government expenditure keeps debt down, it keeps interest rates lower than they otherwise would be, and it keeps exchange rates under control. Labour members do not understand that; they actually want something done about exchange rates—they have been talking about it for a year now but they have no ideas.

One of the most important things that a Government can do to influence these things is through its Budgets and showing control of expenditure. That is what Budget 2010 will do. It will control expenditure, and it will give the opportunity for the private sector to grow because it will lower interest rates. The Opposition needs to learn to understand that, because frankly Mr Cunliffe does not. He claims there is no debt problem in New Zealand. He says that somehow we could just magic our way to success by borrowing more money. Well, that is a recipe for disaster, as the Minister of Finance pointed out yesterday. We already have large private sector debt. If we add large public sector debt on top of that, we will create a debt problem for New Zealand. Frankly, the Opposition does not understand that, and until it learns about that then the public of New Zealand will not trust Labour with the Treasury accounts again, because its only solution is to spend more money.

Labour members criticise every expenditure change made by this Government and have said they would keep all the expenditure. They would keep spending away and growing the Government’s side of the economy and shrinking the real side of the economy. We know what the outcome of that is; we know it is low growth rates, and we saw it between 2006 and 2008. Before the economic recession even began in the rest of the world, we saw low per capita growth—in fact, negative per capita growth in this country. So Budget 2010 will create many more jobs in New Zealand by controlling expenditure and investing in infrastructure.

We have heard from the “Minister for Faster Cheaper Broadband”, but not one inch has been laid on his watch. What is happening? Ordinary Kiwis are watching “Cruiser Collins” sucking off the teat of the taxpayer—100 bucks a week in petrol—at the same time that she gets a chauffeur-driven limousine. Bill English was double-dipping on the taxpayer, and is still pretending he lives in Dipton while drawing an accommodation supplement in Wellington. John Key stands up a trade mission in the Middle East, whose members paid $20,000 each to go with him, while he does flak-jacket photo opportunities in Afghanistan. Gerry Brownlee is the only one to get a run on the board this week for that Government. He managed to draw the biggest crowd in Auckland history and unite them against the Government. It was the biggest crowd in Auckland history for Gerry Brownlee.

While all of that is happening, what are ordinary Kiwis saying? I will read out a heartfelt plea from an ordinary Kiwi that I saw on a website: “Every time National gets in it costs me directly in the pocket, being an average Kiwi. Last time they were in there were calls ‘We need to tighten our belts’. Then things did get better under Labour, but again National are cutting things and costing me and mine in the pocket, using the same catchcry ‘Tighten the belts for the betterment of the country’. I suppose they mean things will get better for middle and lower Kiwis when Labour are back again.”

Things just go from bad to worse for Bill English. Two weeks out from the Budget, the Government should be rolling in a string of positive press from its own pre-Budget announcements, but instead it is rolling in the muck of its own making. Things go from bad to worse. “Families paying more for their groceries”, “Wages stall”, “A third of young New Zealanders out of work”, and today we hear that the cycleway, which was the No. 1 job scheme, has created not one single job—zero, nada, zip, nothing. There was not one job from the No. 1 initiative of the Job Summit.

💬 Hon Ruth Dyson: That was the big deal.

That was the big deal.

What about the 9-day fortnight, the great job scheme? It was so bad that only 30 companies used it and the Government cancelled it in the middle of the recession. What about ordinary Kiwis who are worrying about paying the bills? They received about 1 percent in wage growth in the last year—1 percent—and that was before inflation. They are going backwards and they know it. They are worrying about paying the mortgage, worrying about putting food on the table, and worrying about their power prices going up. Meanwhile “Cruiser Collins” is looking for a gas station. It just is not right.

The tipping point has come, because New Zealanders now believe that this Government is more worried about its own popularity than about doing what is right for New Zealand and about having New Zealanders’ interests at heart, putting food on their table, and protecting their jobs. Here is the truth, here is the bottom line: this Government does not have a plan for the job of “Joe Average”.

The Government does not have a plan to grow this economy. It says that four things will do it—the four solutions. More jobs, it says, but that does not work because the gap with Australia is widening and our unemployment is now at a record high for the past 10 years. It would reform the tax system, but that means the “Joe Averages” will pay more for GST on everything they buy and the rich few will get a whopping big tax cut. That does not work.

The Government says there will be better delivery of public services. Well, we have not talked too much about that, so let us just go through a few broken promises. National promised that it would not cut services. What part of that promise has it broken so far? It has taken $49 million from road policing, there has been a 25 percent cut in teachers’ professional development, and it has taken $130 million over 4 years from adult education.

There are 250,000 Kiwis who have lost their night classes to save about $13 million a year, which is about one-third of the extra subsidy that those Tories gave to private schools. Quarter of a million ordinary Kiwis are missing out so that the Government can give a bonus to private schools, and that is wrong. Ordinary Kiwis know it is wrong. They think it stinks, and that is why the tipping point has come. The Government has taken $25 million over 4 years from curriculum development and school programmes in State schools, and $28 million from the training incentive allowance.

The upcoming Budget is what National will put forward for this country. We have a plan, despite what the previous speaker, David Cunliffe, alluded to. The plan will underline this Government’s credentials as a safe economic manager of this country. The plan will look to a tax system that is fairer across all sectors of the economy, and it will also produce a set of accounts that will read much better than those under the last Government, which were bleeding red before the economic recession hit this country. Unlike our counterparts across the Chamber, we will not have a borrowing programme that will lead us to the type of situation occurring in Greece and other countries across the world, which are experiencing severe financial distress.

The legacy the last Labour Government left us was one of stagnant growth, and one of economic growth that, year on year, was approximately 1 percent. One percent growth per year, year on year, during its administration is unacceptable. But growing at a rate of knots under the last Government was core Government bureaucracy. That was the biggest game in town under the last Government, and it is the game that this Government is committed to reining in. The other big legacy the last Labour Government left for us was a tradable sector that had been declining for 5 consecutive years. For 5 consecutive years the New Zealand export sector declined. We will not get out of this economic recession unless we expand the export sector, expand job opportunities within that sector, and expand the economy in terms of our external debt. Things will be grave economically if we are not prudent. Our external net debt is 90 percent of GDP. I repeat that: our external debt is 90 percent of GDP—one of the highest ratios in the Western hemisphere, one of the highest ratios among developed countries—and we have to stop it.

The last speaker asked about creating jobs. I heard from my friend Mr Quinn recently that a job is available: the job of Leader of the Opposition. Apparently a barbecue is going on this Friday night, but we do not know the location. We do not know whether it will be in Wainuiōmata, St Marys Bay, or up in Northland. [Interruption] Well, that riled them. Where is it? I hear it is in St Marys Bay. Members should bring their own lattes—BYO lattes. They do not eat sausages any more; they eat quiche at the barbecues. Labour members eat quiche at their barbecues.

💬 Hon Member: A new leader on Saturday morning.

We have heard right here in the Chamber that there will be a new leader on Saturday morning. As much as I admire my friend and colleague Mr Goff, who is MP of a neighbouring electorate and is a good electorate MP, I do not believe that the people of New Zealand look at Mr Goff and see the next leader of this country. Members on that side of the House have to think about where leadership comes from.

💬 Carol Beaumont: Why don’t you talk about jobs for New Zealanders?

They want to talk about the economy. It is about productive investment and savings. Only through investment, savings, and changing the structure of our economy will we get out of this recession.

💬 Stuart Nash: Where’s the plan?

I say to Mr Nash that the plan is quite clear, as he knows. The plan is quite clear: a fairer tax system, investment in innovation, and investment in jobs that matter to this country. We are also about saving.

In the next session of this Parliament Mr English will present his second Budget of this term of office—the second of three Budgets, 1 short year away from the likely election. It is time to reflect on whether National is performing and keeping its promises. We have heard today Steven Joyce and, during question time, Bill English ranting unwisely that the prior Labour Government mismanaged the economy. I have The Economist magazine from this week in front of me—the world’s pre-eminent financial magazine. What is the front-page story? “Acropolis now: Europe’s debt crisis spins out of control”. It is not just Greece, not just Portugal, and not just Italy; it is all of those countries plus Great Britain and others, albeit to a lesser extent. All of those countries went and did what National members, when they were Opposition spokespeople, said New Zealand should do. At that time, John Key said that Labour should not be running those Budget surpluses and reducing Government debt; he wanted tax cuts for New Zealanders. After Bill English took over his position, he said exactly the same.

If we had made those decisions it would have left New Zealand in the same position as the countries that are highlighted in this week’s issue of The Economist magazine. New Zealand’s Government debt would be out of control. Instead, the Labour Government, against the strident opposition of the National Party, ran Budget surpluses until we had countercyclical tax cuts as we left office. Those Budget surpluses meant that we left Government debt low: gross Government debt at 17 percent of GDP, and net Government debt at close to 0 percent of GDP.

Instead, if we look at Italy, we see that Government debt is 116 percent of GDP—these are last year’s figures—and if we look at Great Britain, we see it is 68 percent of GDP but heading very fast towards 100 percent of GDP. We in this country experienced the mismanagement of the economy under the Rt Hon Sir Robert Muldoon, who left New Zealand’s debt at about 80 percent of GDP, so we know that it takes a whole generation to get it back under control. I am sick to death of National members crowing about economic mismanagement by the Labour Party when they know we did it right, and as a consequence we are not one of the countries that The Economist is listing under the headline “Acropolis now: Europe’s debt crisis spins out of control”. We left the books in good order.

I turn to the comparison with Australia. The National Government was elected on the promise that it was going to lift New Zealand’s fortunes and get back to the position of Australia. What is happening? The opposite: we are getting further apart. Unemployment is getting worse. You know, people always ask what the big difference is between New Zealand and Australia, and those members say it is mining. At one stage they were going to open up 467,000 hectares of national parks, which was going to get us to close to Australia. Well, they have whipped that plan back to 7,000 hectares, which is obviously not going to get us to catch up with Australia, and where is their plan?

National’s Minister for Economic Development, Gerry Brownlee, has no other plan. The big difference between New Zealand and Australia is Australia’s savings record, its access to capital, which gives it the money to invest in productive enterprise, to pay higher wages, to sell smarter products, and to have more manufacturing in its home country. But what does the National Government do? Well, it does what National Governments have always done. In 1975 a National Government cut the savings scheme that would have had New Zealand in the same position as that of Australia. That was a Labour Government scheme, designed by Roger Douglas and implemented by Norman Kirk. Since then, this National Government has done the same thing again with KiwiSaver. The difference is savings; National does not have a plan. The gaps between us and Australia are growing ever larger.

As a well-known political catchphrase goes, “It’s the economy, stupid.”, and I say that it is. Indeed, no amount of emotion, such as we have just heard expressed on the other side of the House, will make a difference to the hard facts. I am delighted to speak in today’s general debate, on the economy. The economy is the most fundamental part of Government, and the economy influences the standard of living of our population. The economy determines what we can afford to spend in the crucial areas of health, welfare, and education, and the economy is crucial for creating jobs and realising higher incomes.

Let us reflect for a moment and go back over some of our economic history, through the Holyoake years, the Kirk years, the Rowling years, the Muldoon years, the Lange, Palmer, and Moore years, the Bolger years, the Clark years, and now, at a time of economic renaissance, the Key years. I know, from my own experience in business and from listening to others, which of those periods was best for hard-working New Zealanders and their families, and it was not, is not, and never will be, the years during Labour’s tenure; Labour likes a welfare-dependent constituency.

Today I will talk about the progress we have made in resurrecting the economy after 9 years—9 long years—of economic mismanagement. I will talk about the steps we have undertaken to ensure that the edge has been taken off the recession—because it has been. I will talk about the policy direction in which we are moving forward in order to maximise our economic growth and productivity. We in National look to reward resourcefulness, to encourage enterprise, and to salute and celebrate success, and that is reflected in the economic decision-making of our team. First of all, I ask what kind of economy we inherited from the previous Labour Government. When we, the National-led Government came into office, New Zealand had already been in recession for most of the year. By the December 2008 fiscal update, net debt was soaring to be about 50 percent of GDP by 2023, and there were permanent deficits. It was obvious that this country needed some serious economic salvaging from the mess that Labour policies were largely responsible for.

We have acted quickly to cap the numbers in our core bureaucracy, with $2 billion being moved to front-line services. Another $1.8 billion will be redirected to Budget 2010. We have invested billions of dollars in critical infrastructure such as high-speed broadband, and we have implemented a $500 million relief package to make life simpler for small businesses. We have also simplified and streamlined the Resource Management Act.

💬 Hon Trevor Mallard: Who wrote this rubbish?

That Act is perhaps the most important legislation to date—and Mr Mallard knows that. The Local Government and Environment Committee, of which I am the chair, worked diligently and hard to ensure that the amendments would achieve the intentions of making it easier for businesses to grow, and of investing in and creating jobs, while protecting our environment. This, and the other changes we are embarking on, will be a great boon for our economy.

Let us think for a moment of the rural areas that we so much depend on for the revenue-earning capacity of our country. Let us look at West Coast-Tasman, an electorate of resilient, resourceful, and hard-working people, and an electorate that I am very, very proud to represent. The recession has been cushioned by the increase of jobs in mining, the very industry that Labour—mining is its own origins—now wishes to dismantle and to suffocate. The tourism industry, under the guidance of the Minister of Tourism, Prime Minister John Key, in the West Coast has actually increased during the recession, and it has increased substantially.

We have seen a stabilisation of agriculture and horticulture within the electorate. We are starting to see interesting changes. For example, I was doing a shop-by-shop visit the other day in Motueka, where the majority of retail businesses are doing very nicely, and where they are reporting that people are now coming over from Nelson to Motueka to shop for a greater range of goods and for price competitiveness.

Kia ora, Mr Speaker. Kia ora tātou katoa. On Saturday a friend of mine turned 50; Tau Henare wanted to say “Skunk, Happy Birthday!”. I thought I would dedicate this slot to recognising a son of Ngāti Āmaru, a committed supporter of the Kīngitanga, and a longstanding member of Black Power.

Martin Cooper was just a kid when Black Power was born here in Aotearoa. It was the voice of alienated and freshly urbanised Māori youth revelling in being outsiders and rejecting a mainstream society that was determined to crush the hopes of marginalised Māori youth. Like many other young Māori coping with adolescence, he was a handful. He was whāngaied out when he was young, eventually finding unconditional acceptance only with the Black Power whānau, during tough and dangerous times when he often ran foul of the law.

As he matured, his leadership qualities became increasingly apparent, and he soon began to respond to the inner voice that told him that he was Māori, and that the Black Power in Aotearoa was something that had to draw its values and beliefs from the teachings of his ancestors. Influenced by leaders like him, the often aimless and destructive gang runs were replaced by marae-based alcohol-free and drug-free wānanga, which led to Black Power taking a firm line against the then all-too-common practice of gang rape. That took courageous leadership from people like Martin. He has also been a driving force in the movement to stop the manufacture, distribution, and use of methamphetamine, which was the fulfilment of a promise made at the graveside of a much loved lost brother Hone Day.

His growth saw him move to Hamilton in pursuit of his reo, and he talks fondly of the whānau that took him in to teach him his mother tongue under the kaupapa of Te Ataarangi. The commitment and the dedication that had marked his time with the brotherhood showed results as he grew into his role as the speaker for his whānau. Martin’s involvement with waka huia is also one of long standing, enabling him to bring the discipline and power of kapahaka to the Black Power brotherhood. Again, he worked at it with the dedication and the passion that he gave to everything he did, promoting wānanga all around the motu, and dedicating his efforts to Ngāpō and Pīmia Wehi, whom today he proudly calls his mentors.

He has worked hard, demonstrating the value of hard slog and of earning a legitimate income, eventually taking up a job with the Group Employment Liaison Scheme and the Community Employment Group scheme, where he mentored me into my one and only Government job, and where he gave his all because the kaupapa of his work was giving back to the communities from which he came. This employment within the belly of the beast raised his consciousness about where the real decisions were being made, and about how, if he really wanted to influence the health and wealth of his people, he needed to be a policy maker and not just a policy statistic. That knowledge led to his undertaking, and being successful at, tertiary study, which reminds us all that the pursuit of knowledge is a lifelong obligation, and puts out the challenge again to the brotherhood that to learn is to grow.

In recent years Martin’s new-found knowledge, his growth, and his commitment to Māori development led to his getting involved with the Māori Party, where he quickly became a critical leader of Pita Sharples’ A-team, helping Pete to win in 2005, and taking up a formal role after the 2005 election—a position he still holds today. Again, he has demonstrated another route for young Māori warriors and another set of possibilities, created by his work ethic and his commitment to a kaupapa. His loyalty to his Kīngitanga is something he carries without much fuss. It is a role he accepts as part of his leadership within his whānau and his hapū, a commitment that is lifelong, and a belief that he carries in his heart wherever he goes. A proud son of Tainui, Martin is a fine ambassador for his people.

Today I acknowledge a brother of the Māori nation who has shown by his efforts that commitment, dedication, loyalty, and passion are talents that can take anyone to where they want to be. Martin Cooper is a leader in all that he has done and a role model for others to follow. Kia ora tātou katoa.

It is highly relevant that the Leader of the Opposition and the deputy leader of the Labour Party have presided over two of New Zealand’s worst economic disasters. Those leaders have been around for many decades. I can think of the years between 1984 and 1989 when their Government left New Zealand technically bankrupt. But the other highly relevant point is that when Labour’s new blood, its new finance spokesperson, the Hon David Cunliffe—man of the people; member for New Lynn but resident of St Marys Bay—went on study leave in Tokyo the other day, Labour’s polling suddenly went up. When he came back, 2 to 3 weeks later, Labour’s polling went down again, and did so from a very low base, I must say. This just absolutely points out what a bad situation Labour is in—what a shocking situation it is in. First, Labour has a leader and deputy leader who have presided over New Zealand’s worst economic disasters. Secondly, when the brand new blood went out of the country, Labour made a bit of a recovery in the polls. But that has not lasted. No, Labour has gone straight back down, into the depths of despair, which is its true place.

However, it is important to remember back to those absolutely disastrous years of 1984 to 1989, when Phil Goff and the Hon Annette King were there. New Zealand was technically bankrupt at the end of that time. Interest rates were up to a massive, whopping 22 percent. Farmers had to leave their farms, at the end of Labour’s legacy. Inflation was up to 6 or 7 percent, and unemployment was generally at 11 percent, but for Māori it was 22 percent and for Pacific Islanders it was 33 percent.

💬 Stuart Nash: You’ve got it wrong.

I can hear Mr Nash saying that that is wrong. He has forgotten just how bad Labour’s legacy was back then, in the 1980s.

But let us have a look at what happened between 2008 and 2009, because in many respects that time was just about as bad. That was a possible golden era for New Zealand, but the Labour Government blew it—it absolutely blew it. In fact, Labour had the gall, in its very last Budget, to spend up $10 billion in the hope that it could win back a few votes. Labour left the cupboard bare. Labour had the gall, in the knowledge that an economic recession was on its way, to leave New Zealand’s cupboard absolutely bare.

Let us have a look at some of the figures. There was falling economic growth: minus 0.2 percent annual GDP growth in the December quarter of 2008-09, down from 3.2 percent. But it is worse than that. When Labour came into power in 1999, economic growth in the last quarter of the National Government was 4.6 percent. But growth rocketed the wrong way, down to minus 2 percent, at the end of 9 long years of Labour. There was rising unemployment, at 4.6 percent in the December quarter of 2008-09, which was up from 3.4 percent in 2007-08. It was reminiscent of that decade before, when Labour let New Zealand down so badly. There was high inflation, 3.4 percent annual CPI growth, a $16.1 billion current account deficit, and annual productivity growth that was only 1.1 percent, between 2000 and 2008.

I can think of just how bad it was in the health field. A Treasury report pointed out that there was no productivity growth in the health sector over those years when Labour invested or spent—misspent—an extra $6 billion a year. Labour invested $6 billion a year, but for no extra elective surgery. Yet in the last year National has been proud to announce that 11,800 new elective procedures are being done per year. It has been a magnificent time for this National Government.

What a rewrite of history that was. I think the previous speaker, Paul Hutchison, is mixed up with Muldoon. At the end of the Muldoon era we were in such trouble that public servants had to go out and put stuff on their credit cards, we were so hard up. As for Ruth Richardson—goodness me! It took until New Zealand had a Labour Government to get unemployment down to the level it was at previously. What a rewrite of history.

I would like to start with a very short quiz. Who said: “National is not going to raise GST.”?

💬 Hon Trevor Mallard: John Key.

Right; it was John Key. The people of New Zealand voted for no increase in GST, because this is what John Key explicitly told them: “National is not going to raise GST.” Mr Key and Mr English are National members, and they are going to raise GST. It annoys the hell out of New Zealanders that these senior politicians could be so disingenuous as to promise one thing and deliver another. The Prime Minister promised no GST increases, yet New Zealanders will get them. That is simply not fair. That is called a broken promise. My question is: why would we raise GST? That is a rhetorical question, because there is no right answer.

Let me give members the facts. Mr Key and Mr English have said that New Zealand taxes consumption at a relatively low rate. The coverage of our GST system is comprehensive, from avocados to zinc and everything in between. As a result, New Zealand has the sixth-highest level of general consumption taxation as a proportion of GST out of the 30 OECD countries. The OECD stated in its 2000 edition of revenue statistics: “There has not been any general trend in OECD countries from direct to indirect taxation. Over the past forty years, the general trend away from indirect taxes has been so strong that only six countries—Luxembourg, Mexico, the Netherlands, New Zealand, Poland and the Slovak Republic—escaped it.” In fact, only Iceland, Ireland, Portugal, and the Slovak Republic had a higher percentage of the total tax take from consumption taxes. We have a comprehensive GST system. I ask the Māori Party members whether they will support a Budget and a Government that increases the rate of GST, when they have a member’s bill proposing to cut GST on food. Where does the Māori Party stand on the issue of a general increase in GST? I say to Rahui Katene to stand by her principles and to not support this Budget of broken promises.

I would like to ask Mr Key and Mr English whether they have read the research from a conservative UK thinktank that found that increases in consumption tax, like GST, would be more damaging to economic growth than increases in base income tax. I would also like to ask the Minister of Finance what he will say to the 19 percent of small to medium sized enterprises surveyed by the New Zealand Herald who believe that any increase in GST will seriously reduce sales, while another 41 percent think it will have a minor impact; that is, 60 percent of businesses polled by the New Zealand Herald believe that an increase in GST will hurt their business. Of those companies, just over 56 percent of them were opposed to any increase in GST, and, of those, 32 percent were strongly opposed to an increase in GST. Not only are the people of this country opposed to an increase in GST but also over half the businesses are, too.

In another scary piece of information for Kiwis, the polling went on to state: “While all firms plan to review their prices, 34.9 per cent envisage an increase of more than the GST increase of 2.5 per cent and 10.8 percent plan an increase of more than 5 per cent.” Mark my words: if the Government thought that this would be a nice and simple transition, it is being naive. What will the Government do to ensure New Zealanders are not ripped off? I will tell members what—nothing. Do members know why? It is because unless someone earns above the top marginal tax rate, the Government does not care. We have seen that proven in the House today when the Government said that it would not back Darien Fenton’s redundancy bill. That is the law in Australia. We keep comparing ourselves with Australia. Well, if we want to compare ourselves with Australia, then the Government should back Ms Fenton’s bill.

Tēnā koe, Mr Assistant Speaker. I will start my contribution this afternoon by inviting the Opposition members to join us on this planet. So far this afternoon we have heard a reinvention of the his-and-her-story of the time when members on that side of the House were in Government. The previous Labour Government left a legacy of red ink to us—red ink. We had falling economic growth, with a 0.2 percent increase in annual GDP in the 2008-09 December year, which was down from 3.2 percent. We found that members opposite specialised in plummeting figures rather than in rising ones. The exception to that was the unemployment rate, which was 4.6 percent in the 2008-09 December quarter. It had gone up from 3.4 percent. Under Labour we had high inflation, a 3.4 percent annual consumer price index—

💬 Hon Darren Hughes: What is it now?

I will get to that. If that member would just still his impatient heart, I will get to where we are on that. We had a rising current account deficit under Labour. It was around 9 percent of GDP or $16.1 billion for the year ended December 2008, having gone up from $14.4 billion. Annual productivity growth was only 1.1 percent. What a significant achievement that was by the previous Labour Government between 2000 and 2008!

But members can rest assured that this Government has a plan. The National members have a plan. This plan brought us into Government in 2008 and saw us delivering a Budget in 2009 that redirected $2 billion worth of low-value expenditure, all of which had been brought in by Labour. Now we have a plan for 2010. New Zealanders are asking whether they should have Labour, which is a spend, spend, spend type of administration—

💬 Peseta Sam Lotu-Iiga: Borrow, borrow.

—I have not even got to the borrowing and taxing side of it yet—or whether they should have the preparation for future growth that this Government is interested in, where numbers in the core bureaucracy are capped, $2 billion is to be moved to front-line public services over the next 4 years, and another $1.8 billion will be found in Budget 2010.

New Zealanders can ask whether they should have the Labour approach to life, which is to borrow, borrow, borrow, when on the other hand they could have the National approach to life, where billions of extra dollars are invested in critical infrastructure—

💬 Hon Trevor Mallard: This is a disgrace. This member shouldn’t talk on that topic.

—that member might care to listen, instead of shouting his frenetic statements, which nobody is interested in—including the national grid and broadband. That infrastructure investment directly supports thousands of jobs in our communities and contributes to a stronger economy. They might ask whether they want the Labour approach, which is to tax, tax, tax, or on the other hand whether they prefer the National approach, which is to invest in a $500 million relief package to help simplify things for small businesses, which members on this side of the House understand are what will help to grow the economy in order for us to have a sustainable tax base.

Do we want the Labour approach to life, which is to spend, borrow, spend, tax, spend, and borrow—and so the refrain goes on—or do we want an approach that sees the Resource Management Act simplified so that more people can get into business, more development can occur, and more jobs can be made available? Do we want an approach where we undertake major reviews and action follows them, unlike the approach of the Labour members, which was to have reviews and consult people to death when they were in Government, so that people suffered from consultation fatigue? That is the opposite of what members of the National Government do, because we take action on the things that we undertake to do. That is the kind of plan that members on this side of the House have.

Budget 2010 will see us lift New Zealand’s long-term economic performance, because we are interested not in the short-term frippery that characterised members opposite when they were previously in Government, but in long-term, sustainable economic performance. Budget 2010 will outline broad-based reform of the taxation system, so that it becomes fairer, leaves the vast majority of households better off, and supports faster growth. Budget 2010 will move taxpayers’ money to high-priority public services, spending significantly more on health and education. As we speak, the Minister of Health has just announced a new bowel cancer-screening test. That is yet another contribution to sustainable, long-term health in our community.

We have a plan. We have a Budget that is good for the economy and for New Zealand families. We invite members on that side of the House to join us on this planet, where we are ambitious for New Zealand and have a plan to support those ambitions. Kia ora.

The debate having concluded, the motion lapsed.