General Debate

I move, That the House take note of miscellaneous business. I will use this call as an opportunity to take a general look at the trade debate in New Zealand to see where we stand. If we look at this debate from the perspective of what the Prime Minister has just said in relation to productivity, we see that it is absolutely clear that the only way through this is to increase our trade performance. Trade performance is linked intimately to productivity performance. It is a complicated issue about which comes first—higher productivity or exporting.

We know from our long experience of excellence in agriculture that once we get locked into a situation where not the New Zealand domestic market but the world market is the market of great concern, we are locked into a virtual circle of higher productivity increases, constant innovation, and world-class marketing. That means, frankly, a better future for New Zealand, with better paid jobs, which is why we have to move more and more space into that area in the years ahead.

The Prime Minister has put this very simply, in explaining the situation to New Zealanders: we will not get richer by selling to ourselves. We have taken, then, a whole suite of policy measures, many of them going well beyond what people traditionally conceive of as the trade debate, to try to move New Zealand, over a period of the next 5 to 10 years, into a better space. They are issues about regulatory reform and improving our infrastructure, and they even involve cleaning up the tail end of our education system. In the knowledge economy we are all living in nowadays, we cannot tolerate a situation where some 20 percent of New Zealanders are having 10 years of compulsory education and coming out functionally illiterate and innumerate.

There is a whole suite of policies, but given my responsibilities let me focus on the trade negotiations side. We have a situation that, if we look at it at the biggest level of aggregation, is truly fascinating. Basically, as others have put it, what is happening historically is that the world’s wealth is moving back fundamentally to where the most people in the world live. We are moving into a situation where I think that New Zealand is getting a real return from three decades of intensive attempts to try to integrate ourselves more into the Asian region, and this is fundamentally an Asian story. There are the two giant superpowers emerging. China, obviously, is well ahead of the other, India, and it is very important that we are able to position ourselves with these two great countries in the most appropriate way. I acknowledge the contribution the previous Government has made to this debate.

The basic reality is that about 70 percent of our exports are now in the Asia-Pacific region, and Mr Speaker himself made a contribution to that earlier in his own career. I see now that the Australian market is part of that same triangle. Australia takes 23 percent of our exports, which is about double the percentage of exports going to our second-largest export market, China. I think the reason why Australia escaped the recession is fundamentally that that country too has been able to link into the Asian growth story perhaps in an even more effective way than us. But the fact is that we are able to exploit these opportunities now, and we have an excellent framework for doing that. I think the chances are that we will make even more progress in the future than in the past.

We now have an excellent trade relationship with South-east Asia, and our exports to the ASEAN region are increasing at about the compound average rate of 11 percent per annum. The explosive growth in China is really exciting, and a huge fillip for us. I think about some of the debates we might have had about domestic policy settings 15 to 20 years ago—for example, the water debate in this country. A lot of people are quite rightly focusing on the need for us to use more efficiently the enormous amount of water that lands on New Zealand without actually contributing anything because it just runs straight off the land. If we asked anyone involved in New Zealand trade a decade ago whether it would make sense economically to invest a lot in better water infrastructure, I think the answer would have been “Well, probably not. We have enough trouble finding markets for our existing agriculture exports.” But the situation we face now is good, it is getting better, and it will involve many new opportunities and better paid jobs for all New Zealanders.

The Government confirmed in the House this afternoon in question time that the wage gap between New Zealand and Australian workers has widened significantly. We put up a figure provided by the Parliamentary Library to show that the wage gap between New Zealand workers and Australian workers had increased by over $50 a week. John Key came back with the best-massaged figures that he could find, and even his figures, tabled in the House on request, showed that the gap had risen by $23 per week for the average worker since the election. This is the same John Key who went to this country before the last election and promised that the fundamental purpose of his Government would be to close that wage gap. On his own admission today, he has failed.

Not only will those workers find that they are more than $50 a week further behind their Australian counterparts, but on 1 October this year each one of those workers will be paying 50 percent more in consumption tax than their Australian counterparts, despite the fact that Gerry Brownlee and John Key promised this country there would be no rise in GST. They broke that promise. They broke their word. For the sake of the next speaker, who will try to tell us that income tax has been cut, I say that that is true for Cabinet Ministers. They will be paying 33c in the dollar while their Australian counterparts are paying 45c. That is for Cabinet Ministers. Ordinary working New Zealanders on or below the average wage will continue to pay more tax than their Australian counterparts. New Zealanders have a widening gap with Australia in wages, pay 50 percent more in consumption tax, and still pay more in income tax than their Australian equivalents.

We have heard all sorts of rhetoric from National about how it was going to close the gap. Gerry Brownlee came into the House and said that he had had a great idea for a step change. The Government was going to dig up our national parks. What a shambles! That Minister was absolutely humiliated last week—absolutely humiliated. His job is under threat. Members should have no doubt that his job is under threat and he is an underperformer in that Cabinet. But there are a lot of those, which may help him.

What about the Job Summit? The Job Summit was to produce a whole lot more jobs, but what did we get? We got almost nothing—nothing. The Australians produce jobs; the Job Summit failed. Then, of course, there were the other bright ideas by John Key, such as New Zealand as a world financial services hub, and New Zealand partnered by the Chinese to deliver broadband. What happened to those ideas? Where have those ideas gone? They were gone by lunchtime. Then there was the 2025 Taskforce, which was supposed to close the gap. The day that its report was announced it was dumped in another shambles by this Government.

All of those things show that there is no plan. There is no plan to close the gap; the gap is widening. The Government has failed. Don Brash, the former National Party leader, said that. He said that on its current policy track, the Government will not close the gap. Then there is Alan Bollard; he is a neutral public servant. He said that that sort of posturing from the National Government was “unrealistic”. That was the politest word he could use.

The difference between Labour and the National Party is that Labour has a plan. We have a plan for skill training because we know that we need to upskill New Zealanders, their capacity, and their productivity. We will not be locking out 5,000 students from tertiary education, as this Government has over the last couple of weeks. We will not be running down the apprenticeship system, as National is again. Labour has a plan to invest in research and development because we know that we need a smart economy. Australia has increased investment in research and development by 25 percent; this Government cut the 15 percent tax credit for research and development. It dumped the $700 million Fast Forward fund. This Government has failed on every front. It has no plan. New Zealanders deserve better.

Labour members have a plan. Their plan is about what they will not do. Will they roll back the GST increases? No. Will they roll back the tax cuts? No. Will they roll back the changes to the Resource Management Act? No. Will they roll back the changes to the Building Act? No. Will they roll back all the roads that Steven Joyce has funded? No. Will they take out the insulation and clean heating that we are going to put into about 180,000 houses across the country, including 20,000 State houses so far? No. Will they take back the couple of hundred million dollars we have invested in schools in the last 18 months? No. In other words, Labour members will not reverse a single thing that National has done in the last 15 to 18 months. That is a wonderful test of what they really think about the policies that John Key has led forward so far.

John Key has put forward a growth enhancing tax system that rewards work, rewards effort, and rewards saving. He has put forward a depreciation regime whereby property investors can no longer claim depreciation to the extent that they could. I will tell the House what Labour members said when that depreciation regime came in for property investors. They said that it would put up rents and that people on lower incomes would suffer. Do members know what Labour’s answer to that was? It was a capital gains tax. Phil Goff will be campaigning on that at the next election, and I am looking forward to it. He believes that a capital gains tax will be the answer, and, apparently, that it will not put up the cost of rents for people on lower incomes. We look forward to that policy being rolled out next year for the next general election.

Our policies include better, smarter public services, lifting education and skills, and boosting infrastructure. As I have mentioned, we have increased funding for roads, State housing, housing generally with the Warm Up New Zealand package in terms of insulation and clean heating, and infrastructure investment into schools. These measures all stimulate the economy during a recession.

We are cutting red tape and regulation. As I say, we have made changes to the Resource Management Act. No one can experience that that change is necessary more than a marine farmer, and I will spend some time on that. The previous Government decided to choose marine farming as the horse it was going to flog. The first decision Labour made when it came into Government was to have a moratorium on new marine farms while it thought about solving the problem. The second thing it did with marine farming was pass a second bill to extend the moratorium. It was flogging a dead horse. First, Labour shot the horse, and it fell down. Then Labour put another bullet in the horse to make sure it was dead. Then Labour passed the marine farming reforms, which essentially prohibited marine farming in every area except for areas where the council designated marine farming could occur, and no council in the last 5 years has found any new marine farming space for aquaculturalists. In other words, Labour resurrected the horse—Phar Lap—and put it on sleeping pills. Labour shot the horse dead, resurrected the horse, and now it is on sleeping pills.

This Government, when it came into office, began the push of aquaculture reforms that will see the industry grow to be worth a billion dollars by 2025. I do not know why Labour members say that they have policy when their only policy is not to reverse everything that National has done and simply to introduce a capital gains tax at the next election.

If we were in Government one thing we would reverse is the movement of the wage gap with Australia, which is going the wrong way. We would try to reverse that.

💬 Nicky Wagner: You had 9 years.

Actually, if the member looks at the statistics, she will see that we reduced the wage gap. It is amateur hour at the moment on the Government benches. One mistake after another has been made by the Minister for Economic Development, and the Government’s poll-driven politics are coming apart at the seams.

What have we seen in the last 2 weeks? We have seen the Government at last being pilloried by the media for the vacuous nature of its promise to catch up with Australian wages by 2025. Why is it being pilloried? It is because all of a sudden—we have heard all of these metaphors relating to horses from the previous speaker, Phil Heatley—the stable is empty for the National Government when it comes to policy ideas that will bridge the wage gap between New Zealand and Australia.

Let no one forget that the big mantra at the last election from the National Party was that it would close the wage gap between New Zealand and Australia. National members said that they would do it by 2025. We were always suspicious that that estimate was flaky, because in 2025 those members will no longer be in this House. They will no longer be in Government. In my lifetime there has never been a 15-year Government. In democracy there is a change inside of 15 years, so those members will not be here to be held accountable in 2025 as to whether they have achieved that target.

This country deserves milestones against which the Government can be judged. Do we have any? We have none that this Government will commit to. Gerry Brownlee even admitted at a select committee a few weeks ago that the Government has none and that it intends to have none. That is why the Opposition has been asking the Government what its plan is. We have heard all sorts of insignificant ideas that have come to nothing. Some of them are good, worthy things, such as a cycleway. Who disagrees with a cycleway? But it will not bridge the gap between New Zealand and Australia. Neither will the next cloud that the Prime Minister hops on. Let us not forget that it was his deputy leader, Bill English, who said that John Key is a man who hops from cloud to cloud. Bill English said that at a National Party conference. It was taped by someone, and, to his embarrassment, it was played back publicly. He said that John Key just flits from cloud to cloud, and we know that it is true.

John Key’s next idea after the Job Summit, which did not produce anything, was that we would somehow have Chinese investment in New Zealand broadband. We know that that will not happen. That will not happen. New Zealand has to pay for its own broadband. Even if the Chinese paid for it, we would be paying them the profit stream.

What was John Key’s next idea? We were to become a financial services hub for the world. The big difference between New Zealand and Australia is savings and depth of capital markets; it was never mining. Australia has far better savings than New Zealand and has bigger and deeper capital markets. If any country has the chance of being a financial services hub, it is Australia, not New Zealand. That is a great ambition, but when we asked the Minister for Economic Development whether he had brought forward any Cabinet papers, he said that Ministers are still talking about it—that is, there has been effectively no progress on that one, either.

Then we had the doozy of them all: the step change that was going to come from mining in national parks. Mr Brownlee was forced to back down on that. The Government did not just scale back that ambition; it abandoned it completely. Two points can be made in respect of that. It was never going to be the step change in the New Zealand economy. According to analysts, the difference between the New Zealand and the Australian economies that arises from mining is around 10 percent. He never had a plan for the other 90 percent, and he now does not even have a plan for that 10 percent. It is amateur hour.

Then Mr Brownlee came to question time. The Leader of the House was ill-prepared for questions. He could not answer the question as to what the gap is between New Zealand and Australian wages. He could not even estimate it, and he could not tell us whether it was going up or going down. Actually, he did tell us that. He told us that it was going down, when plainly it is going up. Even on the Government’s own massaged figures, where it adjusts the official statistics and tries to introduce purchase price parity, the gap has still gone up by 14 percent since the election. The reality is that, using official statistics, the gap has gone up by over $50 per week. It is amateur hour on the National benches.

Tēnā koe e te Mana Whakawā. I wish to begin my address this afternoon by outlining the good news. The goods news we are hearing from our constituents out in the real New Zealand is that they can see that New Zealand is pulling itself out of this recession, that there is hope, and that what National campaigned on—a brighter, more ambitious future for New Zealand—is certainly coming. Our six-point plan is our plan.

I will spend just a moment talking about the Hon Phil Goff and his effort in the general debate this afternoon. “Labour has a plan,” he said, “Labour has a plan.” Well, I will give him a hint. While he said that Labour had a plan, his whole front and middle bench looked down, because those members did not believe it, nor did New Zealand. Members can ask the pollsters. They can find out what New Zealanders are saying. Labour does not have a plan, and we certainly have not heard of a plan.

But in the meantime, this National Government gets on with the business of being the Government. We will have a growth-enhancing tax system and better, smarter public services, we are lifting education and skills, we are boosting infrastructure, we will have better business innovation and an ambitious trade agenda, and we are cutting red tape and regulations. That is a real plan. That is real action. That is this John Key - led National Government.

I will concentrate on two parts of the six-part plan. I will concentrate on better and smarter public services, and I will also mention how we are going about boosting infrastructure. We are getting more out of Government spending. We want to improve front-line services, rein in debt, and get the books back into surplus. Our most recent Budget showed that we are on track to do that 3 years faster than we said we could a year ago. That is good progress here in New Zealand.

We have capped the Public Service. It had become totally and utterly bloated under the previous Government. We have freed up $2 billion of low-priority spending in Budget 2009 in order to put it into front-line services in health, education, and law and order. We are seeing extra police in Counties-Manukau. We are putting more than half a billion dollars extra into health. We are seeing that almost as much again is being put into education, and New Zealanders know it. Those schools out there know that they have had a 4 percent increase in the operations grant. They are not telling the Government to take it back. They know that they are getting the concentration on the teachers, the nurses, the doctors, and the health professionals. That money is being spent on front-line services in New Zealand.

We have moved a further $1.8 billion into front-line services in Budget 2010. Still we are managing to concentrate on making better use of the Public Service. We are reforming benefits by rebalancing obligations and support and by bringing a focus on to work, which is a focus that New Zealanders are more than welcoming. We are also tackling long-term welfare dependency, and we are reforming accident compensation so that it is affordable, sustainable, and fair. I can tell members that in answer to the surveys I sent out to my constituents, they have said: “Good on you, National Government. You are doing things that we really care about.”

We are boosting infrastructure. We are spending $10.7 billion over 10 years on new highways. Work on the Victoria Park tunnel began last November, a year ahead of schedule. I can only assume that those members over there wish they had managed something anywhere like that. Without extra funding, that project may never have got off the ground and neither would we have the jobs and other extra benefits that that project is bringing.

We have ultra-fast broadband. Do members know that there are dozens of schools in my electorate that are getting ultra-fast broadband? There is $300 million being spent on the Rural Broadband Initiative to ensure that those rural schools and communities have fast Internet access.

We are upgrading electricity transmission. We are investing $3.3 billion to help ensure the security of supply, and there is Transpower’s $672 million on the interisland electricity connection upgrade, which was kicked off in April this year. That is just the beginning.

There is Warm Up New Zealand: Heat Smart. We thought there would be maybe 27,000 participants in the first year, but we have had more than 50,000. There are a lot of good things going on in this National Government. To finish, I say ka mutu, ngā mihi.

Over 90 percent of crime worldwide is committed by people who are fuelled up on alcohol or other drugs, as are 80 percent of the child abuse and neglect cases. We ignore these figures at our peril. I wish to talk today about a small yet very, very significant step that New Zealand is about to take in the fight against drug-fuelled crime. Next month will see the establishment of a special circumstances court in Auckland, which is based on the drug court model used in parts of the United States and other countries. It is a model that has proven to be hugely successful in lowering the offending rate. The idea is simple enough: non-violent offenders, in exchange for a guilty plea, are sent to a drug rehabilitation programme, instead of to prison. If they successfully complete the treatment programme, their conviction may be dismissed. This is a separate initiative from drug treatment programmes in jail.

I have been quite surprised to learn, in researching this area, that compulsory treatment programmes, whether run outside or inside prisons, are very effective. Like many people, I thought that we can lead a horse to water, but we cannot make it drink. I had thought it was even more so in regard to drug programmes, and that those who do not go voluntarily do not get better, but apparently that is not so. There are drug courts in more than 20 countries, including Britain, France, and Canada. In the United States, there are more than 2,500 of them. As I have said, one would think that addicts who voluntarily undergo treatment, either outside or inside prison, would have a higher success rate than those who are forced to attend, but in fact the opposite is the case. The statistics all come out in favour of drug courts. The United States National Institute on Drug Abuse has reported studies that show that one year after treatment, people sentenced to court-mandated treatment reported much higher levels of abstinence and had far lower arrest rates than people who voluntarily entered rehabilitation after conviction. After 5 years, abstinence levels were similar for both groups, but the arrest rate was still much lower for those who had been forced to undergo treatment.

Drug courts have proven to be six times more effective in keeping people in treatment programmes long enough for them to get better. Here is the real killer: conservative estimates from meta-analyses—I am not entirely sure what they are, but apparently they are very impressive—have all concluded that drug courts significantly reduce crime: as much as 35 percent, when compared with the alternatives. Those are astonishing results.

Up until the present time New Zealand has had no adult drug courts, and only two for juveniles. Meanwhile, our prison population continues to climb and climb. I make no apology for supporting Government policies that have cracked down on gangs and drug dealers, and for being the architect behind the “three strikes” law, which will put more violent criminals behind bars for longer—no apologies, at all. Public safety requires that repeat violent offenders are prevented from causing harm, and prison is the right place for them. It is the right place for repeat offenders, violent thugs, high-end drug offenders, and our worst while-collar criminals. However, it is entirely the wrong place for non-violent, low-level offenders whose primary problems are mental health and addiction issues.

The Auckland-based special circumstances court is a joint project, run by the police, judiciary, mental health agencies, Housing New Zealand Corporation, and Ministry of Social Development. As the involvement of those participants would suggest, the style will be less in the mould of an adversarial court and more focused on finding the causes for, and solutions to, a person’s offending. Currently, the court’s budget is only enough to enable it to run for one day per month, processing 10 offenders in that time. It will make a world of difference for those 10, but that only scratches the surface of our problem. New Zealand needs to have more drug courts and more court-mandated treatment for non-violent offenders, and we will be lobbying the Government to ensure that there are more of them. Thank you.

In every town and city in our country, people are getting more and more confused about what the Government is doing. They are asking me and my colleagues where this Government is going, where the vision is, and what the plan is. Well, our decisive Prime Minister, John Key, gives them an absolutely decisive answer. When he is asked that question, John Key says: “Well, yes, ah maybe, and no; no, yes, maybe.” He has absolutely no idea of where he is taking our country. He has no vision and no plan.

That is quite different from the John Key we had in Opposition, who gave a speech saying that National would give New Zealand a fresh start. He said that National in Government would be unrelenting in its quest to lift our economic growth rate and raise wage rates. Well, I think that the job of being the Prime Minister is harder than he ever thought it would be. It was easy for him to make those great commitments and outline a great vision when he was in Opposition, but since National has been in Government we have seen nothing at all except for great plans, then, oops, a U-turn; then another plan, and, oops, another U-turn, or great announcements and no action to follow.

As my colleague David Parker said, who could argue with the idea of a cycleway? John Key made an off-the-top-of-his-head comment at the Job Summit, where people from all around the country had given a commitment to work with the Government to get us through the recession, to make sure that fewer New Zealanders lost their jobs, and that more New Zealanders were able to be in paid employment. The only thing that came out of the summit was the cycleway, which has produced no jobs at all. What an embarrassment! At the Job Summit, key leaders from all around the country committed themselves to doing something together for New Zealand, and not one action came out of it.

What about the proposal to make New Zealand the Asia-Pacific hub for the financial services industry? That was another great idea coming out of the mouth of the Government. A proposal was due, we were told, in May. Now it is nearly August, and there is absolute silence from the Government. There is not even a whisper about the next great, bold initiative. Nothing else has come out from the Government.

The Don Brash - led initiative, the 2025 Taskforce, which said that the most important thing that the Government should do is to slash Government spending, blew its entire 3-year budget for meeting fees in just 1 year. Don Brash was preaching that the Public Service should cut back on excess and that the Government should cut its spending, but the task force spent its entire 3-year meeting fees budget in its first year.

Now we have resorted to that shining light from the back bench of Cabinet, Kate Wilkinson. She says that the best way to take New Zealand forward is to make sure that people can be sacked in the first 3 months of their employment without knowing why. It might be for a good reason or for a bad reason, but those people, regardless of what they did, deserve to know why they were sacked. Kate Wilkinson is taking away that very simple right, particularly from young New Zealand workers. How does that feel? When people go for their first job, they try really hard and they do not get everything right. Maurice Williamson is still trying really hard in his job. Clearly, he does not get everything right, but he deserves to be told so that he can improve, rather than just being sacked, as he was in the past, with very little idea about what he had done wrong. All New Zealand workers should have that basic right.

💬 Paul Quinn: Who got sacked?

I was not sacked, actually, I say to Mr Quinn.

The other bold initiative from the Government, which John Key and Gerry Brownlee paraded around the country, was that we would start mining in the schedule 4 land in our national parks. Now that plan has gone down the tubes, as well. There is no vision, no plan, and no future for New Zealand under this Government.

Tēnā koe e te Mana Whakawā. The Opposition members talked about a plan. That is rich coming from that side of the House. In the ebbing years of the late, unlamented Labour administration, the rudderless ship of State, crewed by a coalition of the unclean and the unwilling, was wallowing, becalmed in the doldrums of doubt, duplicity, and despair, its sails in tatters, hanging listlessly. Its bottom was befouled with the barnacles of indecision and the weeds of indolence, and its hull was riddled with the teredo worms of mischief, misdeeds, and malfeasance.

As the tide of public disenchantment grew and grew, and the spectre of imminent electoral defeat loomed on the horizon, confusion and hesitancy reigned. On the chart table, no course was outlined for innovation, economic prosperity, or growth. There was only a well-thumbed rutter of more and more ill-directed Government spending that saw the performance of our tradable sector—the sector that underpins New Zealand’s jobs and living standards—decline year after year, despite the best economic conditions in decades.

John Key’s National-led Government has careened the hull, replaced the rotting timbers, renewed the sails, and set a course towards a brighter future for all New Zealand. This is a principled, pragmatic Government that listens to New Zealanders and consistently delivers on our promises. We are committed to making New Zealand a better place and we are relentlessly focused on what matters to all New Zealanders. Our policies are designed to better educate our young people, and to make all New Zealanders safer, healthier, and wealthier. We will help New Zealanders become wealthier by removing the cloying embrace of the widespread red tape and regulation that burgeoned under the previous Government like mushrooms on a cowpat. We are encouraging better, smarter public services; lifting education and skills; boosting infrastructure; facilitating innovation in business; and pursuing an ambitious trade agenda led by our globally respected Minister of Trade, Tim Groser. We are tilting our tax system to reward personal effort and encourage savings and productive investment.

We understand that a prime duty of a Government is to protect the most vulnerable. To do this and to deliver the world-class education, hospitals, and other public services that New Zealanders merit we have maintained an unrelenting focus on growing our economy and jobs. The previous Government’s efforts to grow the economy were notable by their scarcity and about as useful as a glockenspiel in a pipe band, or two left boots for Dan Carter—that is, not very useful.

Growing our economy and jobs whilst cushioning New Zealand from the harsh effects of the worst global economic crisis in decades has required discipline and fiscal probity. This Government has resisted calls to spend billions more in extra stimulus that would have left us with a hangover of higher debt, and would have led to a credit rating downgrade that would have hurt all New Zealanders through their home mortgage, interest rates, or business loans. This Government has the balance right, and New Zealand is better for it.

Economic growth is not just a theoretical construct; it impacts directly on people’s lives and means an increase in people’s income, which, in turn, gives them better choices, more security, and a higher standard of living. We have reshaped the mesh at multiple levels in many different areas to achieve a growing economy, safeguard existing jobs, and provide opportunities for new jobs.

Following our tax reforms from 1 October, almost three-quarters of taxpaying New Zealanders will pay only 17.5c for each dollar they earn. This lower tax rate rewards effort and gives New Zealanders an increased incentive to upskill and develop new products and services along the way, often creating new jobs for others to get ahead under their own steam. Lower personal taxes will provide an added reason for skilled people to remain in, or move to, New Zealand. Lower personal taxes will encourage savings, as people have higher after-tax incomes and pay less tax on their investment income.

Tēnā koe, Mr Speaker. On Monday I was contacted by a citrus grower in Gisborne who was annoyed that he was getting 70c a kilo for his lemons, and they were on sale at the local Pak ’N Save supermarket for $3.99 a kilo. That is a 570 percent difference between what he is getting for his lemons and what the supermarket is charging for them. He told me that he was getting $1.20 a kilo for his grapefruit, and they were retailing at the supermarket for $6.99. That is a 582 percent difference between what the grower gets and what the fruit is sold for. Another citrus grower who contacted me last week told me he was getting 60c a kilo for his lemons, and they are selling for $5.49 a kilo at his local supermarket. That is a 1,000 percent difference.

💬 Hon Maurice Williamson: Why does this member get all the citrus growers?

I say to Mr Williamson that even if he thinks this is irrelevant, I assure him that it is not irrelevant for ordinary New Zealanders. Even if we allow a generous 12 to 20 percent deduction for a wholesaler’s commission, that still leaves a whopping 500 to 900 percent supermarket mark-up on lemons and grapefruit.

When I recently released a survey of 75 growers, some commentators sought to justify these exorbitant margins on fruit and vegetables, by claiming that supermarkets have to transport the fresh produce and they have to store it. But, in fact, this is not the case. It is the growers who have to pay the costs of transporting their produce to the supermarket, the costs of storage, and most of the costs of promotions or specials for their produce. A 550 percent mark-up by supermarkets on lemons and grapefruit is exorbitant, whichever way we look at it. Frankly, it is obscene, especially when we consider that these extraordinary mark-ups on fresh fruit and vegetables, which of course are the very foods that we want people to eat, are putting them out of the reach of ordinary New Zealanders, and especially when we consider that supermarkets sell liquor so cheaply that they are literally luring teenagers and young people to purchase liquor. Therefore, they are contributing to our under-age drinking culture. Last night I was contacted by someone in the liquor industry who pointed out that 70 percent of beer and wine consumed in New Zealand is sold in supermarkets, and a lot of it is sold at below cost. My contact said that 2 weeks ago the local Countdown supermarket was selling a 24 pack of Tui Gold for $28.99, when the normal retail price is $42.69 and the cost price is $31. The supermarket was selling this liquor at well below the cost of production.

On the one hand, our supermarkets are making exorbitant margins on fruit and vegetables, yet they are routinely selling liquor at below cost and without any mark-up at all. In other words, their pricing policies are influencing our eating habits and the nation’s diet, but, unfortunately, in exactly the wrong direction. Supermarkets are encouraging New Zealanders to buy cheap alcohol and discouraging us from buying fresh produce. Rahui Katene has a member’s bill that would remove GST from the price of fruit and vegetables. Aside from the obvious question as to how we can be sure that supermarkets would pass on a reduction in GST to consumers, and not just pocket it themselves, the clear implication from my survey is that the supermarket margins, not GST, are the real reason for the high cost of fresh fruit and vegetables. If we are serious about trying to reduce the cost of fresh fruit and vegetables, which one would hope this Parliament is, we need to introduce the sorts of policies that the United Kingdom has, in the face of similarly exorbitant supermarket mark-ups, with a code of practice, an Ombudsman, and a Commerce Commission inquiry.

The price of fruit and vegetables has increased by 28 percent over the past decade, yet most of the growers whom I spoke to said they were getting the same price for their fruit and vegetables as they were getting 10 or 15 years ago. Where has that 28 percent price increase gone? Has it gone into the coffers of the supermarkets? The local citrus grower whom I talked to on Monday mentioned that he had made a loss of $50,000 last year.

I am not sure where to start in this general debate. We have heard about the price of lemons and barnacle-clad ships of State, so we might as well start talking about some of the contributions from members on the other side of the House. It is awful—awful—to see one washed-up former Minister after another, from a party that was in power for 9 years, stand up to try to defend the indefensible, and try to talk about the total vacuum in respect of their policy going forward. Labour had 9 long years in Government and has had 15 months in Opposition, and it still has nothing to offer.

Let us talk about what the John Key - led Government has done. Firstly, let us start with the upcoming proposed, and now legislated for, tax cuts that every Kiwi in New Zealand will enjoy. The average wage earner will be $15 a week better off as a result of those announcements—$15 a week. When we go into electorates like the Taranaki - King Country electorate, where families are at the lower socio-economic end of the income bracket, $15 a week is a substantial amount. Of course, it is $15 for individuals, and per household it is expected to be $25 a week. Individuals and households will be the beneficiaries of those tax cuts.

When we look at what is happening with the top tax rates, we will see much greater enthusiasm from people who are at the higher end of the income bracket but who want to live in New Zealand, have family ties in New Zealand, and can lead the economy going forward. They want to live here instead of moving away to Australia, where circumstances have been much better for them until now.

Company tax is of substantial benefit to New Zealand. Most of the companies in Taranaki - King Country are very small. There are a number of large companies, but the majority of them are small companies. That includes farmers and the trusts that go with farming, and companies around farming enterprises. They will be the beneficiaries of the cut in the company tax rate. When we look at what those incentives will do, in terms of lifting economic growth, and compare that with what we have had over the last 9 years of a Labour-led Government, then clearly we see there is a parting of the ways. Clearly, there will be an increase in where New Zealand can go with that.

It was clearly time that the barnacle-clad ship of State, led by the previous Labour Government, ran on to the rocks—and surely it did. I heard one of my colleagues earlier use an analogy with horses, and from what I am hearing from those washed-up former Ministers over there, they are clearly flogging a dead horse. It is dead, it is gone, and it will never return; long may that be the case.

Agriculture will be the leader in this economic growth. The Primary Growth Partnership that was announced earlier by this Government—a $140 million-a-year investment in Government industry partnerships—is the flagship for moving the agricultural sector out of what has been basically a commodity provider into a value-added producer. That is nowhere more to be seen than in the research I see going on with the merino industry. The wool industry has been on the rocks for a long time. The industry used to be worth over a billion dollars, and now it is down to about $500 million. But that is with the exception of fine wools and the Icebreaker brand, which is the shining light within the industry. To give that industry the ability now to figure out a way, or research how, to produce fine meat from the merino breed will be a wonderful step forward for the meat and wool industry of New Zealand. It is very heartening to see that it has partnered with the Primary Growth Partnership in a $45 million investment into looking at ways to do that. This Government is forward-looking and progressive.

💬 Mr SPEAKER: I call the Hon Shane Jones.

💬 Paul Quinn: Ha, ha!

I te tuatahi e te Māngai o te Whare, tēnā koe i roto i tēnei wā o te reo Māori, te wā i whakaritea ai, e whakapūmautia ai tō tātou reo Māori hei reo motuhake mō Aotearoa. E ngā mema o te Whare, tēnā koutou, tēnā tātou, kia ora tātou katoa.

[Firstly, Mr Speaker of the House, I extend greetings to you in this time that has been set aside to celebrate the Māori language as an official language for New Zealand. To the members of the House, greetings to you, greetings to you and greetings to us all.]

Yes, the locomotive is back on the track, and I assure Mr Quinn that road kill is at the upper part of my mind. This is the time, in the middle of the 3-year cycle, when we expect to see and to hear what the framework or the narrative put forward by the Prime Minister is for our country. But what people up and down the country are actually observing is that there is an absence of boldness, an absence of courage, and a fascination with visiting grandeur on small, petty things. There is an inverse relationship. The Government chooses small initiatives that will not create wealth and are unrelated to jobs, but, with the Government’s co-conspirators in the media, it talks up a story as if there is a narrative behind this Prime Minister. There is nothing.

As he eats, morning and day, he sups like a fruitcake, poll-driven leader. Everything that this leader takes as a sense of direction for the future is taken from polls. There is no underlying commitment as to what do we do to not only educate our children but also to ensure that families do not go to bed worried about Baycorp, worried about creditors, and worried about bills from schools. Why is there no sense of passion and belonging that people can see in the face of this Prime Minister? They cannot see that, and it is because despite his sunny disposition he spent too long out of our country, and he has not grown or lived through the organic changes that have got us to where we are today.

We heard today a great use of the word “gap”. Well, of course, the previous Labour Government in our time sought to address many of the gaps between Pasifika, tangata whenua, and the rest of society. We had today from Gerry Brownlee a dissertation on the “gap”. The gap that needs to be lessened is the one in his head; the one in his head, because it was vacuous and it was devoid of any confidence or any answer that tells an exporter, a firm, an investor, or a schoolteacher what our country is actually doing under that Minister’s leadership and the Prime Minister’s leadership on the economic front.

H V Ross Robertson: Nothing.

It is beyond nothing; it is actually a hoax. There is this great strategy of focusing on marginal issues, admittedly aided by the media, and turning it into wallpaper so that the underlying emptiness is plastered over. That is catching up with them, and it is why they lost their courage in relation to delivering a strong message against poor drinking habits and reducing carnage on the roads.

There is also another reason why—and the previous speaker from Taranaki, Shane Ardern, knows it—there is no leadership in the rural sector. The reason that the institutions pertaining to the rural sector are in disarray is that there is an absence of leadership or willingness on that side of the House to step up to the plate and rationalise those sectors in such a way that New Zealand Inc does not suffer any longer.

Our well-being does not depend on the rhetoric of the Prime Minister; it depends on bold policies that move us from our historical sources of earnings with clever technology, and a willingness on the part of the Crown to invest real money with people who are prepared to take a risk and be entrepreneurial. But what we actually have is this total unwillingness to spend any political capital. Up and down the country people ask why is it that this Government came in with such an enormous level of support but has done nothing with it. The Government is determined to try to squeeze, through more miserable policies, a greater level of sweat out of people who cannot afford to live on their current earnings, etc. That is miserable, it is sad, and it is an indictment on the current Government and the Prime Minister.

I am sure that New Zealanders out there who have been listening to and watching these proceedings must be wondering whether that is it. They must be wondering whether that is all that the Opposition—the Labour Party, which was in Government for 9 years—has to offer in the great debate as to the economic future of New Zealand.

I suppose that New Zealanders could take one or two things from this debate. The first is that they have had reaffirmed in their minds just how irrelevant the Green Party is to any debate on the future economic direction of New Zealand, although we already knew that. The second thing they would have taken out of the debate is that the Labour Party has absolutely nothing to offer this country. The speakers opposite did not, for one moment, begin to acknowledge the serious, deep economic problems that they left this country with when they were thrown out of office in 2008. Not for one moment did that party acknowledge that fact. Not for one moment has that party acknowledged the broad, wide, all-embracing approach that this Government is taking to moving New Zealand forward, to moving us out of the stultifying, going-nowhere attitude that held us back for so long. The contrast between that party and this Government could not be more marked.

As far back as 2002 there were no net new jobs in either agriculture or manufacturing in New Zealand—

💬 Dr Cam Calder: Since when?

Since 2002—unbelievable! Labour tried to hide that fact by building up the Government sector. Let me tell the House what did grow under Labour from 2002 onwards, until the great day in 2008 when the people of New Zealand threw Labour out of office. This is what grew: first and foremost, the size of the Government grew. This Government is committed to cutting back the role of the Government and the State, and to putting taxpayers’ resources into areas where they are most needed and will be most productive. Taxes rose under Labour. Many of us well remember the rush that the previous Labour Government had in 2000 to put up the taxes of the people—

💬 Chris Tremain: The top marginal tax rate.

ALLAN PEACHEY:—at a time when the Government did not even need the money, and we remember that much of that money was squandered. Red tape is another thing that the Labour Government specialised in, and which this Government is cutting away.

Illiteracy rates rose under the previous Labour Government. As early as 2005 that Government was being warned that a fifth of our children were not learning to read, write, or do mathematics. That Government was being warned about that as early as 2005. Frankly, if the previous Labour speaker, Mr Jones, wants to do something useful with his spare time, he might like to pop out to the lobby and have a look at a few Hansard volumes. I would suggest that he start at November 2005, December 2005, and the early months of 2006. In the index he should look up the name “Maharey” and acquaint himself, and share with his colleagues, the spin that Mr Maharey put on that figure of over a fifth of New Zealand children not learning to read and write. The first explanation was that no, that was not how the situation was at all, and it was actually a statement that a fifth of New Zealand children were not reaching their potential. Well, that did not wash, so then he tried to float the figure of 11 percent of children not learning to read and write. That did not wash either, if for no other reason than that he was contradicting what his own officials were saying to him.

At long last New Zealand has a Government that is determined to get to grips with the poor literacy and numeracy rates of this country, and that effort will underpin the economic recovery of this country. The effort of putting in trades academies, of widening the educational opportunity for children, and of tightening up on the standards for entry to university will pay off for the economy of this country.

The debate having concluded, the motion lapsed.