General Debate

I move, That the House take note of miscellaneous business. There is no doubt that the vast majority of New Zealanders are better off for the tax switch that occurred on 1 October. More important than that, the tax switch on 1 October was never designed to be a lolly scramble; it was designed to change the incentives in this economy. Those incentives really did need to be changed. I will briefly outline why those incentives in this economy needed to be changed so much.

Since about 2004 this economy has been on a debt-fuelled consumption binge. In fact, we released some figures the other day that showed New Zealanders borrowed about $6 billion against their houses in 2007 and spent that on consumption. To a large extent, they were matching the behaviour of the Government of the day. It was running up Government spending at a very rapid rate through both increased transfers to New Zealand households and a massive explosion in the back-office bureaucracy of so many public services. Many New Zealanders thought that this sense of growth in the economy was sustainable, but, unfortunately, they have been proven wrong. Too many of them were in jobs that were reliant on debt-fuelled consumption through the housing market, through Government, and through the retail sector.

The effect of that over the period from about 2004-05 was that the export sector in New Zealand actually shrank. This great little trading nation managed to shrink its export sector during what was meant to be the best 10 years ever in Western economies. It is hard to understand how the economic management of the previous Government managed to do that. At the same time, not only did the previous Government shrink our export sector and, therefore, our earning capacity, but also it got to the point where it shrank after-tax wages in the best 10 years that the developed world has ever seen. That left a big mess. The New Zealand economy went into recession under Labour well before the global financial crisis, starting at the beginning of 2008. The Government changed with an economy in recession, household debt out of control, and inflation running at 5 percent.

The tax switch is designed to do something very simple: those things we want less of we are taxing more—that is, excessive consumption and housing speculation—and those things we want more of we are taxing less—that is, savings, investment, wages and income, and the proceeds of exports. The tax switch is one measure, but a very significant measure, in rebalancing this economy. No more can we have lolly scramble after lolly scramble where the Government throws money at households, covering up the underlying poor performance in the economy. When those households were getting their extra Working for Families, it meant they did not notice that their real after-tax wages were actually dropping. The tax switch is designed to change the incentives in the economy.

Over the next 4 or 5 years we will see this economy develop in significantly different ways from the last 10 years. The early signs are that the changes are making a difference to New Zealanders’ preferences. There has been a big swing round in savings behaviour, for instance, where New Zealanders are now being very careful with their spending, which is why things are flat for retailers. While they are doing that, they are paying off their credit cards, they are paying off their overdrafts, and they are paying down their mortgages. Those are all changes that needed to occur in this economy.

That was Bill English once again seeking to blame the failure of this National Government on his predecessor, Dr Michael Cullen. It is interesting, is it not? The man that they called a failure they have just appointed to head New Zealand’s most important State-owned enterprise, New Zealand Post—he is the man they called a failure. Listen to this, this is Bill English in the New Zealand Herald 18 December 2008: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook. In New Zealand”—it gets better—“we have room to respond. This is the rainy day that Government has been saving up for,”. Ten days into the National Government’s first term he was not talking about the National Government saving for the rainy day; it was the previous Labour Government, which belies the constant criticism that it was the Labour Government that had been reckless in debt. I recall Bill English time and again saying when he was in Opposition that we did not have a debt problem. Time and again he said that we did not have a debt problem. Of course we did not have a debt problem, because that Labour Government, when it was in office, put money aside so that we could come through this recession in better shape.

Last year John Key promised that New Zealand would be coming out of recession “aggressively”. That was said by John Key. He said we would be coming out of recession aggressively in 2010. It is now 2010. Have we come out of recession aggressively?

💬 Hon Members: No.

No. Alan Bollard told the Finance and Expenditure Committee this morning that New Zealand’s economy is very fragile.

Things are not getting better; they are getting worse. Unemployment is going up; it went up by 20,000 in the last quarter. Incomes are going down. The median income in this country fell, in the last year, for the first time in 12 years. John Key knew that, when he would not answer the question. The median income in New Zealand has fallen for the first time in 12 years but Mr Key says to New Zealanders that they are better off. It may be that the average New Zealander is out of touch, and that they think, mistakenly, that they are worse off. But John Key knows better than them. He says they are better off. I tell the House that the average New Zealander is not out of touch. John Key and Bill English are out of touch. Bill English says that he is better off, but of course he is better off. Every person on those two front Government benches—each earns more than a quarter of a million dollars a year—is better off by hundreds of dollars a week, but the constituents I represent in Mt Roskill are not better off. The person on the minimum wage, who got $3.08 a week from Mr English, is not better off. The money went on that Friday morning when they filled up the car with petrol. That is where their extra money went. The person on the average wage got $13.70 a week more, and a lot of families in Auckland who got $13.70 have seen their rent go up by $23 a week in the last year.

The Prime Minister talked about the price of fruit and vegetables. Do members know how much fruit and vegetables went up by in the September quarter? They went up by over 20 percent. I received a survey today that shows that two-thirds of New Zealand children are not getting the fruit and vegetables they need in their diet. If Mr English wants to do something for the ordinary New Zealander—not the person on the highest income—he should do something about cutting the price of the basic fruit and vegetables that our kids need but whose families do not have the income to choose to buy. It comes to a very sad state when yesterday the general manager of McDonald’s said that it was poor people in New Zealand who could afford bad food but could not afford good food. He was in favour of taking the GST off.

What a difference 2 years can make when a party is in Opposition! One of the differences it can make is a catastrophic, catatonic loss of collective memory on the part of the Opposition. It is almost as if Y2K, having missed its original date with destiny on 1 January 2000, found its way into Fraser House, the Labour Party headquarters in Willis Street, Wellington, and wiped clean the entire C drive of the Labour Party.

On the issue of rents, price increases, and real wages we have heard a tsunami of twaddle in the last 2 weeks, as Labour members reel from their collective memory loss. It is not as if 2008 is ancient history. Dan Carter in 2008 was the world’s best first five-eighth. He is still the world’s best first five-eighth today. Babies born in 2008 are still learning to walk and talk. I have two mokopuna to prove it. This is not ancient history.

Let us just try to recall where we were in 2008. First of all, in an utterly perverse way, New Zealand under Labour was, and I quote, “leading the world”. I call it the first-mover disadvantage, because under Labour this country had achieved the remarkable feat of being the only developed country in recession before the Lehman Brothers crisis sparked the global financial crisis. But that is not enough—no, no. On the issue of prices, which is what the debate has been about in the last few weeks, I note that Labour had inflation running at 5.1 percent. But, no, all of this has been utterly forgotten, even though we now have 1.5 percent inflation, which is less than one-third the level of inflation in the last year under Labour’s watch.

In the last couple of weeks we have seen, associated with that tsunami of twaddle, a lurch to the left.

💬 Hon Annette King: Oh no!

Well, is it a lurch to the left? It is a lurch to the left rhetorically, but is it a lurch substantively? Nobody knows. As we watch those members opposite butcher their way through various media interviews as they try to explain where they now stand, as opposed to their record in Government, we have to ask what this is about. I think it is very clear what this is about.

There is a very simple fact, and that is that we have a by-election coming up in Mana, and the one thing that the Labour Party cannot afford is a meltdown in its core party vote in Mana. This rhetorical lurch to the left, although I am sure it makes its core party faithful feel happy, makes it very difficult for the rest of New Zealand to work out what is rubbish and where the future thinking of the Labour Party is moving.

In all this there are four central realities. They are what is happening to real wages; what is happening to taxes, and therefore after-tax real wages; what is happening to prices; and what the Government is doing to compensate those at the bottom of the income levels. Let us look at this in terms of real wages.

We heard the reality from the Prime Minister earlier, during question time. There has been a 7 percent increase in real wages compared with minus 1 percent in the last 2 years—7 percent compared with minus 1 percent in the last 2 years. As for taxes, there has been a complex package of tax cuts compared with no tax cuts under Labour. There has been a cut in the company tax rate—it is now 28 percent—and that is designed to create opportunities for New Zealand businesses, 96 percent of which are small to medium sized enterprises, to employ more New Zealanders, create jobs, and create wealth for the future. Plus, there has been a serious reduction in the taxes applied to middle-income New Zealanders. I am extremely proud to be a member of this Government.

The Labour-led Opposition makes no apology for bringing forward policies that are in the interests of New Zealanders, and we make that promise to New Zealanders. That is what Phil Goff did in the weekend. He showed New Zealanders that he is willing to take decisions that are in the interests of all New Zealanders, and New Zealanders are starting to see that. They are contrasting that with this Government’s income tax cuts, which the previous speaker was trying to defend, 40 percent of which go to the top 10 percent of income earners and 70 percent of which go to the top one-third. That is the sort of unfairness that Labour stands against.

I want to talk about what has changed. What has changed is the substantial change in the world since the global financial crisis. What has changed in response from National to those major changes in the world since the global financial crisis?

💬 Hon Annette King: Nothing.

As Annette King says, nothing, or virtually nothing—nothing of substance. One thing that has become abundantly clear since the global financial crisis is that we have huge trade imbalances in the world. China, Germany, and a few other countries are running enormous trade surpluses, there are countries that have an enormous amount of spare cash, and other Western countries like New Zealand, various countries in Europe, and the United States are running big deficits. Our assets, if they are not properly controlled for the interests of New Zealanders, are at risk of being sold to overseas interests in a way that would undermine New Zealand’s productive base. That is why Labour says that the current paradigm is wrong.

The existing discretions for the Minister for Land Information to turn down land purchases are very large. I know because I was the prior Minister and I admit that I had the discretion to turn down more than I did. I was the Minister and I admit that I had wide discretion to turn down those sales, and, by and large, I did not. By and large, I did not and we were wrong; the discretions are too wide. The ministerial discretion needs to be narrowed so that land assets can be owned by New Zealanders for New Zealanders, so that those land assets are kept at prices that New Zealanders can afford, and so that there is a reason for young New Zealanders to stay in New Zealand, to work hard, and to save hard in the knowledge that if they do so successfully, they will be able to move from being a sharemilker to a farmer. They will be able to save and have a stake in the New Zealand economy. We do not want to live in the kind of country that National is happy to see develop, where New Zealanders increasingly have to inherit wealth or be overseas owners in order to buy our productive assets. This is partly an economic argument but is also an argument about the sort of country we want to live in.

I ask why the Government would want to have the right to sell infrastructure assets. We do not think that is in the interests of New Zealand; we say that the Minister should not have the discretion to sell infrastructure with monopoly characteristics to overseas buyers.

Government members do not know where they are. They said that Labour is Stalinist, but there has been no change. They said that they could not understand the strategic asset sense, but they have kept it. They were going to liberalise rules, but 18 months after taking office they have neither liberalised them nor, as they also said they would do, simplified them. The Government is on the wrong side of this debate. Labour will govern for the interests of all New Zealanders—the many, not the few. We do not want a country where only people who inherit wealth can afford to buy our productive assets; we want a country where those assets are priced for the benefit of New Zealanders, not for the interests of banks selling at mortgagee sale, and not for the interests of overseas owners.

This Government inherited a good financial position. It had some of the lowest Government debt in the world. Its income tax cuts have been so over the top that not only has it had to borrow for them but it has Government debt going up to high levels. The Government inherited that good position, but its debt position is getting substantially worse. The changes Labour proposes—and this is why the Government is so rattled—are ones that New Zealanders know are right.

I was not aware that the previous speaker had been Prime Minister at any stage, but it is now in Hansard so I congratulate the Hon David Parker if I missed that. I say to Mr Parker that the New Zealand financial crisis began 1 year before the global financial crisis. The global financial crisis made the economy, the status, and the conditions that this Government inherited even worse, but the recession in New Zealand started 1 year before the global financial crisis. As we know from 2005, in particular, the tradable sector of the New Zealand economy—the real economy; the bit that creates real jobs—has been in recession since about that time, and that recession is what this Government is all about changing.

On 1 October there were tax changes, when the biggest, the fairest, and the largest rebalance in 25 years of the New Zealand tax system kicked in for New Zealand PAYE taxpayers. On 1 October more money was left in the pockets, in the purses, and in the households of New Zealand families after-tax income. Yes, it is a tax switch, yes, it is a tax rebalance, and, yes, some things will go up. GST has gone up 2.5 percent and that was fully acknowledged all the way along—it is fiscally neutral, if members like to recall. But the balance has changed. Incentives have moved to saving and to stopping consumption—ongoing, outrageous consumption. I note that the Greens still vote against this, but we have put consumption taxes up in New Zealand and we have incentivised savings. We have put the cap on savings rates at 28 percent.

After 1 October, 72 percent of all taxpayers in New Zealand faced a tax rate of no higher than 17.5 percent. Superannuation has gone up $11 per week. We have addressed very well throughout this Parliament how this Government has compensated superannuitants and those on various benefits for the increase in GST. It has kicked in, and it has kicked in very, very well. As we learnt today, rating agencies around the globe have endorsed the actions and the policies of this current Government as we try to get this economy back on track after 9 long, wasted years, which were an absolute travesty. What does that mean? It means mortgage interest rates will stay lower for longer under this Government than they would have under the policies of the previous Labour Government.

Let us have a look at Labour’s track record, which my colleague alluded to previously. Its GST track record shows that it took GST from 0 percent to 10 percent and from 10 percent to 12.5 percent with no compensation. This National Government took it from 12.5 percent to 15 percent with compensation. Let us look at Labour’s inflation track record. When it left office there was 5.1 percent annual inflation—5.1 percent annual inflation. Do members remember the policy targets agreement, which the Opposition said was not working? It was supposed to cap inflation at 3 percent. In fact, it was well north of 3 percent for most of its tenure.

Let us see what Mr Phil Goff and his fellow cosmonauts are up to at the moment. What are they suggesting? They are suggesting that we take GST off fruit and veges. Well, OK, let us have the discussion. But did members see Mr Goff on Q+A the other day? He was all over the place. Interestingly, the Leader of the Opposition hardly addressed his announcement on the weekend in his speech, but Mr Parker did. Let us have a look at the previous Labour Government’s sale of New Zealand land: 650,000 New Zealand hectares were sold. Six hundred and fifty thousand New Zealand hectares were sold under the previous Government; 20-odd thousand hectares have been sold under this Government. There was a real wage growth of 3 percent under the previous Government over 9 or 10 years—3 percent—and there has been a 9-ish percent growth under this Government after only 2 years.

Mr Speaker, I know you mentioned excessive clapping before, but I cannot hold myself back, because the good news just keeps on coming. This economy is moving away from a debt-funded consumption economy. On Q+A the other day, when Phil Goff was asked what he would do about the corporate tax, he had not even thought about it. He had not even thought about the implications of his announcement of the 25-percent threshold.

This Government is doing all it can to stop, to change course, and to arrest the juggernaut of debt, consumption, unfocused spending, and non-measurable outcomes of the previous Government. We have rebalanced the economy. We have put incentives back into this economy for families to make the decisions in their households to save, to pay off their mortgages, and to not increase debt. The macro statistics say it right now: “Good on you, New Zealand.” Those families are doing the right thing. It makes it hard right now, but they are doing the right thing for this economy in the medium to long term to remove their vulnerabilities. Thank you.

The Green Party strongly supports the Fairness at Work day of action and the hundreds to thousands of workers who took part in rallies right around New Zealand. For these workers there has been no good news—as the previous speaker, Craig Foss, said—only bad news. They have witnessed a sustained and deliberate attempt by the Government to undermine and weaken unions, to chip away at workers’ rights, and to tilt the playing field in favour of employers. They have witnessed a sustained attack on workers’ rights: putting restrictions on the access of workers to union advice and support, the totally absurd and unreasonable proposal that workers provide a sick note after 1 day’s absence, and the fire-at-will provisions, which will allow workers to be fired from their jobs without being given any reason.

All that these workers are demanding is fairness in the workplace and to be given basic protections, such as the right to appeal against unfair dismissal in the first 90 days of employment. How well I remember the front-page article in the Dominion Post about a woman with an unblemished employment record who left a well-paying job so that she could go to her dream job at Dunbar Sloane’s auction house. She worked like a galley slave for 2 weeks, and then received a letter saying that she had been fired summarily, with no explanation. That is what the workers were protesting about today.

I will illustrate the unfairness of the working conditions of so many New Zealand workers by looking at aged-care workers. I have been talking to them all around New Zealand as part of the 3-month Green and Labour Party investigation into aged care. Aged-care workers provide more than 90 percent of the care in the aged-care sector. They look after some of the oldest, most frail, and vulnerable New Zealanders, who have increasingly complex health needs, yet the average wage for caregivers is $14.40 an hour. Many are on the minimum wage, even after working for an employer for 10 years or more. That is grossly unfair.

The vast majority of caregivers are paid no overtime, no double time, and not even time and a half when they have to work at weekends and at night. That is grossly unfair. Caregivers doing exactly the same sort of work in public hospitals are paid double time when they work weekends and nights, but the majority of caregivers have no penal rates, at all. One employer, Oceania Group, which has agreed to some minimum penal rates, nevertheless requires workers to sign a document stating that if they work additional hours to the ones they are rostered on to, they must agree to be paid at ordinary rates and not get any overtime. That is grossly unfair.

There are no minimum staff to patient ratios in aged care, and the sector is so short-staffed that most aged-care workers are grossly overworked. Many look after 30 to 40 residents on their own on a shift. Many have to do clinical work that should be the domain of other workers, such as giving out complex medication such as morphine, yet they are paid a pittance.

Caregivers told us that they dread working the weekend shift because of the dangerous lack of staff. Some said the only way to care for residents safely in the weekends is to leave them in bed all weekend.

There are no minimum requirements for staff training for caregivers; only about 20 percent of the workforce has any training or qualifications. Many start work with no experience of working with older New Zealanders, and the only training they get is a quick walk around with the nurse. If they want to get training, most have to pay for it themselves, which is grossly unfair. They are seldom given any additional pay for the increased qualifications or experience that they accumulate, which is also grossly unfair.

We heard many shocking stories of abuse and neglect, but many of them were caused really by the shortage of staff in the sector. We were told about residents who become incontinent because there literally are not enough staff on duty to toilet residents regularly. That is shocking. We were told of residents who lose their mobility because there are not enough staff to walk them regularly. That is shocking. We were told that many residents get left in front of the television all day or in bed all weekend because there are no staff to care for them properly. Many are put on antipsychotic medication to sedate them and make them more manageable.

It is nearly 2 weeks since across-the-board personal tax cuts kicked in, and by now people in my electorate, the electorate of Waitaki, and right across the country earning a salary or wage are noticing a boost in their pay packet. And they are telling me about it. They are coming into my office in Ōāmaru and telling me about the increase they are experiencing in their wage packets. I can tell members that they are pretty happy about it.

People in my electorate are noticing a real lift in their income. We said we would do that—the National Government said it would do that—and we delivered. Even taking the rise in GST into account, the average family in the Waitaki electorate and throughout New Zealand is about $25 a week better off than they were before 1 October. That is more money for the average family to save, and more money for the average family to put against their mortgage, if they have one, or against their debt and the average family is doing just that.

But the 1 October tax cuts did not benefit just the average family; people on the average wage are almost $15 a week better off, and that includes the increase in GST. Those people also are using that extra money in their pockets to save, to pay off their mortgages, and to pay off their debt. People on superannuation, people receiving Working for Families, and those people on benefits had an increase of 2.02 percent to compensate for the rise in GST. National campaigned on that, and it delivered.

The tax cuts are part of the Government’s major reform of the tax system, which will tilt the economy towards productive investments, savings, and exports, which is of particular interest and importance to my electorate. The reform will tilt the economy away from the consumption, borrowing, and unsustainable Government spending that was the very hallmark of the big tax, big spend Labour Government that New Zealand endured for 9 long years.

The National Government is proving itself to be a good economic manager. Against the backdrop of the worst global recession since the 1930s, it has maintained benefits, maintained student support, maintained Working for Families, and locked in national superannuation at 66 percent of the after-tax average wage. National promised those things, and the National-led Government has delivered.

The Government remains focused squarely on building a sustainable long-term recovery. The recovery will be built on export and investment, and not on the debt and spending we saw over the last decade under the unlamented previous Labour Government.

So what is Labour’s track record? Phil Goff is just plain wrong in saying that New Zealanders were better off under Labour. In the few years running up to 2008, the rate of inflation was regularly above 3 percent, and it peaked at 5.1 percent in the year to September 2008.

💬 Hon David Cunliffe: Oh, yes!

Those Labour members do not like it. They do not like hearing those figures, but those are the figures.

💬 David Bennett: Tell us again.

The member would like to hear the figures again, so I will tell him. In the few years running up to 2008, under Labour inflation was regularly above 3 percent, and it peaked at 5.1 percent in the year to September 2008 with no compensation to anybody.

Annual inflation to September this year was 1.5 percent under the National-led Government. When Labour left office, the economy was deep in recession and the annual rate of inflation was 5.1 percent. There was no compensation for anyone and real after-tax wages were falling. In fact, they fell by 1 percent in those 2 years, while overall food prices jumped by 15 percent and house rents went up by 6 percent.

This Government is out of touch. It actually thinks that things are getting better for ordinary Kiwi families. It thinks that wages are going up, but Statistics New Zealand does not. Statistics New Zealand has told us that median wages fell $9 a week to June last year—$9 a week. That is enough to make a difference in most working families’ budgets, but it is not enough for those National members. They live in a different New Zealand. They live in the New Zealand of cocktail parties, European cars, and money trading. [Interruption] I drive a Toyota Prius—there you go.

The Government is so out of touch that it is crowing about inflation. Its best line is that in the middle of a global recession, it managed to get inflation down. I want to imagine for a moment the scene in the Beehive when Bill English called in the spin doctors. There is no good news. Unemployment is above 6 percent and is heading for 7 percent. Growth is going backwards, according to the New Zealand Institute of Economic Research. Manufacturing collapsed by 26 percent in the last quarter. Confidence is down and business investment is negative. What can they do? Wayne Eagleson said they should say they are waiting for summer. John Key comes in and says that his sense is that they—meaning the peasants—will feel a little better now that summer is coming. Well, that did not work. That was a joke that got laughed at in the media, as it should have done.

In came “Captain Panic Pants”, who said they should make up some numbers and tell people that they are better off. So National took the GDP statistics and claimed credit for Labour’s 2008 tax cuts. It used a different series of data from Statistics New Zealand, divided it by the square root of Bill English’s housing allowance, and came up with some shonky numbers. It did that just to try to convince ordinary Kiwi families that they were better off. But the numbers do not lie. The median income earner, the bloke or blokess in the middle, went back nine bucks a week, end of story. And that was before inflation.

The spin doctors came in and said they should crow about inflation and tell people that at least they fixed that one. There is a problem with that conquering of inflation in the middle of a recession. It is a shame about the 160,000 unemployed. It is a shame that growth was only 0.2 percent in the last quarter. It is a shame that Alan Bollard called the recovery fragile. It is a shame that New Zealanders have not felt the recovery in a supermarket queue near them. It is a shame that we have had 1.1 percent inflation in the last quarter alone, and that is before Bill English’s 2.5 percent GST increase and the 5.9 percent inflation that Treasury says we can look forward to next year. Will this Government give ordinary New Zealanders in the middle of the income curve a 5.9 percent pay increase next year, just to keep even? I do not think so. Wages are predicted to grow only 2 percent. Kiwis will be worse off and they know it.

That is why they are pleased that Labour is taking a bold new direction in policy. We reject the politics of laissez-faire. We reject the idea that the Government can have no role in making conditions better for ordinary people. We reject the idea that we should be selling off our farmland, acre by acre and farm by farm, to those who are enjoying surpluses while we cannot. We want Kiwi sharemilkers to be able to own the farms that they are milking on. We want New Zealanders to own their own homes, not to be forced to sell to foreign buyers. That Government is out of touch. It is a one-term National Government

If that was the bold new direction of Labour Party policy, then we will be the Government for a very long time to come. The previous speaker, David Cunliffe, thinks he will be the leader of that party, but he was the fourth speaker from Labour. He was the fourth cab off the rank today. He talked about median incomes. Labour has gone around and tried to find a statistic that suited it, but that member does not even know what the median is. It is not the middle. The middle is not the median; the average is the middle. I tell that member to get his facts right.

We need to look at this in a constructive way. This country is going forward by setting a positive direction. We can sit out there and try to tell New Zealanders what to do, as the Labour Party does by saying that fruit and vegetables should be at certain prices or that we cannot sell any land to overseas buyers. However, Labour sold land historically at such huge rates that no other country would even contemplate. New Zealand has a choice. It can either be dictated to by some people sitting on that side of the House, or it can give the people of New Zealand the tools to make their own future. That is what we are doing. We trust our people and we believe in them. By giving them a taxation system that will encourage them to take risks, to work hard, and to be successful, they will, in turn, grow themselves and grow the country.

That is the political dimension that this House represents. On one side, it is telling the people what to do, making decisions for them, and saying that we know what is best. On the other side, it is empowering people to give them the ability to make the best of their opportunities, and giving them the skills, strength, and opportunity to do so. That is what we have done with the tax changes. Those changes are about empowering New Zealanders. They show New Zealanders that if they get an education, get a good job, stay in this country, and make it work, they will get the rewards. That is the whole point. On the other side of the equation, those members want to tell us what we can do. They try to keep everybody equal and not give us that ability to actually succeed.

We have no problem sending out the right incentives and signals. We do not need an economy based on consumption and on trying to get by, year by year or election to election, as Labour did when it was in Government. We want an economy that is long term, that grows, that is successful—

💬 Dr Cam Calder: Healthy.

—and that is healthy and strong. That is what we will deliver through these tax changes.

When we look at the situation Labour left this country in, we see it left us in recession before the rest of the world. It left us with huge inflation rates. It left us with a situation where the Government was going into debt before the recession hit around the world. It did not leave this country strong. It did not leave this country viable to go through what happened. Imagine what would have happened if Labour had been in power in the last 2 years and had had to make decisions in some tough times. It would have been an absolute disaster for this country.

We have been fortunate that we have made the right calls, we have listened to what the right things are for our people, and we have made the right decisions for this country. When we look at those tax changes we see that they will make New Zealanders better off. They are about the long-term gain, and they are about providing those signals and incentives.

I ask members to look at some of the expenses and price changes on comparable goods over the time that Labour was in Government compared with prices under National. Overall, the inflation rate for the 2 years from 2006 to 2008 was 7 percent.

💬 Dr Cam Calder: How much?

Seven percent. National’s average inflation rate is 3 percent, in tougher, tougher times. We have kept inflation down and we have kept interest rates down, so that New Zealanders can progress and go ahead.

But what is this? Labour members always talk about how vulnerable people are at risk because the big, bad Tories are increasing the prices of food; that is what they always say. Well, food prices under Labour increased by 15 percent in those 2 years—15 percent. Under National, prices have increased by only 5 percent. National has delivered one-third of the increase that Labour did. We have looked after the vulnerable people. We have looked after those who do not have the income levels that one would expect or want in this country, and we have given those people the chance to survive in these very difficult times.

There is an old expression: “Lies, lies and statistics”, and I think we have heard some statistics that fit into the third category of that expression. The member who has just resumed his seat, David Bennett, said, for example, that average inflation was 7 percent over 2 years. He was trying to imply that that was average annual inflation, but it was not. It was 2 years’ inflation, rather than an average. He got that wrong. But, then, he is consistent with the approach that Bill English has been taking on wages.

Bill English has been focusing on average earnings, and if he was straightforward that would be fine. But he is pretending that average earnings for New Zealanders are going up. But they are going up only for some of the people who have jobs, and 61,000 fewer people have jobs than had jobs in the period he is referring to. So when 61,000 fewer people have jobs, including a disproportionate number of young people—Mr Assistant Speaker, the member Sandra Goudie appears to be having a fit. Is she all right?

💬 Sandra Goudie: I’m just amused.

Sorry; I seriously thought there was a problem.

💬 Dr Cam Calder: I think she’s fine.

OK, that is good. She is normal.

I go back to the fact that Bill English refuses to acknowledge that so many New Zealanders have lost their jobs. People who lose their jobs tend to be lower-income New Zealanders, which artificially inflates the averages for those who are left in work. But even with that, over the last year, using the latest figures available, the median person who is employed has had a wage cut—not a real wage cut, but an actual wage cut—of $9, and that is something that should be causing a lot of anxiety in the Government.

The previous speaker, Mr Bennett from Hamilton, bemoaned the state the economy was in when National took over. I quote for him what Bill English said on 18 December 2008, as he released the state of the economy and the forecast—it would be the half-year economic update, I presume. At that time Bill English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook. We have room to respond. This is the rainy day that Government has been saving up for.” That is what he told reporters.

I agreed with Audrey Young when she said that Bill English was swallowing a dead rat, because he had said for a number of years that New Zealand was paying off its debt too quickly, and that there should be tax cuts instead of that debt being paid off. But it was good that for at least 5 minutes in 2008, Bill English recognised the truth of the situation.

I would like to make reference to the policy announcements and the developments in terms of overseas ownership of land in New Zealand. I acknowledge some of the comments that have been made by members opposite. The Labour Government did sell off more land than it should have.

💬 David Bennett: 600 million dollars!

We were wrong in that area. I do not think that the figure the member is using is entirely accurate. It is certainly not accurate in a net term, because quite a few of those sales were sales from, for example, the United States to Canadians.

💬 Hon Dr Wayne Mapp: No, those were net payments.

Sorry; I accept the Minister’s word that that amount was net, and that means that we were even more wrong than I was prepared to admit. We made mistakes in that area, and that has hurt. It has hurt the ability of young sharemilkers to get on to the land, because it has artificially inflated prices. It has hurt us in our balance of payments in that a whole lot of money from those profits has gone offshore.

One of the great things about question time, and the importance of question time, is the way in which we can observe the Prime Minister educating the members of the Opposition, because we need to continue to educate them about the real management of fiscal policy. It seems to be difficult to get through to them, but we are doing our very best. Of course, “Mr Goff-father” was nearly apoplectic about having to swallow some of that information, because he was finding it difficult to understand, I am sure. I was also intrigued by one of the previous speakers. He talked about a bold new direction, and I find that it is interesting to have a bold new direction from the Opposition, with talk of taxes going up, more spending, and policy that we discovered in the House during question time was taken directly from existing legislation. That is rather extraordinary: a whole new, strange way of developing policy from existing law.

This Government remains focused squarely on building a sustainable, long-term recovery, and I think that is what New Zealanders want to see: something that is really solid, and steady as she goes. They do not want to have any major surprises; they just want to see us get through these tough times. They have been tough times, and I think we all recognise that. The recession is one of the worst recessions since the Great Depression. I think that National’s position is exactly the right position that the New Zealand people want to see the Government take for a solid, focused recovery and a sustainable long-term recovery. It is going to be patchy at times. There is an uncertain global environment, and a need for businesses and households to look at and start to address their debt, build on exports and investment, and look at saving rather than spending. I think that the New Zealand public have embraced that and the New Zealand people have embraced that, and that is where they want to see us go. Really, it is the only way that we can go, because it is the only way by which we are going to provide jobs well into the future. So we have to build that recovery steadily. That in turn will build incomes steadily, and that is how we will be able to afford all the services that the New Zealand people expect.

I pay a huge tribute to Prime Minister John Key and finance Minister Bill English for doing such an outstanding job in that regard, because it has not been easy. This is quite a juggling act, and something that we have been incredibly proud of. We are proud to be part of such a strong Government. It is not just a matter of shrugging off a global recession, because the challenges we face are pretty difficult. We have had a long session under Labour that made the problem much more difficult than it needed to be. Turning that round will require a relentless, long-term focus and commitment, and we are certainly committed to that.

What is the only way forward? The only way forward is to grow New Zealand’s economy through considered, consistent reform and change.

💬 Hon Trevor Mallard: Who wrote this rubbish?

I would not like to take anything from Mr Mallard, so I will not mention that he has just admitted, during question time, that he made mistakes in the last term of Parliament. The previous Labour Government allowed more sales of New Zealand land to overseas owners than ever in the history of New Zealand, as I understand it.

More broadly, we have built our economic plan around six policy drivers. The plan is to strengthen our taxation system and—

💬 Hon Trevor Mallard: Who wrote this rubbish?

I say to Mr Mallard that we are taking a moment to further educate the Opposition because members opposite have difficulty in understanding and embracing the plan. It is to strengthen our taxation system; deliver better, smarter public services; reform regulation; improve education and skills, and that is something, of course, that we are trying to impart to the Opposition, particularly at question time; foster business innovation and trade; and invest in productive infrastructure. May I say that the contractors are doing a magnificent job on the Kōpū Bridge, which is coming in under budget and ahead of time. It is just awesome to see that happening, and the bulk of the New Zealand public are embracing it hugely.

There has been a lot of third-party comment on the direction in which this Government is taking New Zealand.

Kia ora, Mr Assistant Speaker Roy. On a completely different note, I would like to talk about how coming into Parliament means different things for different people. For some it is a family thing: their uncle was a politician, and they want to be a politician. For others it is a career choice, with good money and good perks. For some it is passion for a political belief: a union background, the free market, love of the environment, or Māori issues. For others it is an honest and conscious decision to be of service to the public. Some people come via the party route—party activist, branch chairman, electorate secretary, national council member, member of Parliament. And a lot come straight out of the real world—thankfully.

My own entry into Parliament came off the back of a massive protest march that I led from Te Rerenga Wairua to the steps of Parliament itself in 2004. That protest was a huge outpouring of Māori anger at Labour’s theft of the foreshore and seabed in the Foreshore and Seabed Bill, and a conscious Māori decision to say that no longer will we accept being on the backbenches of a party that had taken Māori for granted for far too long.

As an activist, I felt a little at odds with my role in Parliament and, indeed, my role in the newly formed Māori Party. It took a while before I came to terms with what that role should be. I have been an activist most of my adult life, a strong believer in the rights of Māori, and a strong supporter of the rights of indigenous people all over the world, and I like to think I am a person who is prepared to take a stand against injustice as well. That does not make me anything special—others who have been through this place, and a lot more who would not even bother coming to Parliament, have done far greater things than I have—but it does define who I am. In those early days I nearly lost touch with that background, but as different issues came up and I became more confident about speaking in the House, I soon realised that it was that activist background and the things I had learnt on the streets that guided my thinking on what I should be saying in here. When I balanced that background with the kaupapa of the Māori Party—mana atua, mana whenua, mana tūpuna, whanaungatanga, kotahitanga, manaakitanga, rangatiratanga, kaitiakitanga, and te reo—I realised that those activist instincts, that natural inclination to be staunch on Māori rights, was right for me, both in and out of Parliament. I realised that my role in Parliament was to continue that activist tradition, to push boundaries, to challenge accepted opinion, and at all times to push the Māori view of the world.

That decision to stand up for Māori rights has often gotten me into trouble with Parliament, with the media, with a whole heap of Pākehā people, and occasionally with my own party leadership. It has given me cause to ask myself whether I should just quieten down, play the game by the rules, talk like a robot, not make waves, not push boundaries, not upset people, and basically act like a good MP. But the question I keep coming back to is: why should I? If I go quiet, who carries the Māori flag in Parliament? Who pushes the Māori issues to the edge? Who speaks for the hearts and minds of the ordinary Māori? And who says it exactly how they mean it? I am not trying to big-note myself here, but that is just how it is. That is my role; that is my role in Parliament.

One of my early mentors once said to me that the role of the activist and the aim of protest was to wake people up, to force them to think, and to make them ask why people do things in a certain way, in a different way. That role is as important to me in 2010 as it was when I first heard about it nearly 40 years ago. I know that it does not endear me to those who would rather have us be seen but not heard, I know that it will not score me any points with the political leaders around this place, and I know that it means a lot of doors will be slammed in my face around here, some by my enemies and some by my friends. But at the end of the day, when we wake up in the morning it is not the rest of Parliament we see in the mirror, and it is not even our own party colleagues; it is ourselves. If we are not first honest to who we are, then we are just dancing to some other bugger’s tune.

I am happy with my life. I am proud to represent the people of Tai Tokerau, I am proud to be a member of the Māori Party, and I have no plans to buckle under to those who seek to shut me up. Kia ora tātou.

The debate having concluded, the motion lapsed.