Debate on Prime Minister’s Statement

When the House adjourned at the end of last week I was saying that the programme we heard in the Prime Minister’s speech for getting New Zealand out of what is now widely recognised as a double-dip recession has two strands to it. The first strand is selling off the family silver but disguising it as being available to ordinary ma and pa investors, despite the fact that they are the very mums and dads who are trying to manage the Government’s increase in GST in order to put food on the table for their families. The second strand is to give the rich tax cuts, because somehow they will trickle down to the less well-off.

It is the same tired old National Party recipe we have heard for years from its members. Since the Government took office, 52,000 more people are out of a job. A tax cut is not a priority for those people; getting a job is their priority. So where are the jobs? We know that before the election in 2008 the current Prime Minister, or as he then was, the Leader of the Opposition, used to say frequently that he was ambitious for New Zealand. But in a recent FM radio interview at the end of January he was asked to name his top three priorities for New Zealand for 2011—his top three priorities. His first goal was for New Zealand to win the Rugby World Cup. Every New Zealander wants the All Blacks to win the Rugby World Cup, but I suggest that it will have more to do with Richie McCaw’s foot than it will have to do with John Key.

John Key then went on to say, as his second important goal for 2011, that there was something later on in the year—we were aware he was obviously referring to the election—that he wanted to win. We know that if he does not win the election, he is gone. He has already told us that if he does not win, he is throwing his toys out of the cot and he is gone. This is the amateur Prime Minister. He said he is not going to hang around as runner-up. He has got the T-shirt now and he will be off if he does not win the election. Where is the ambition for New Zealand?

John Key was asked to talk about three things that were priorities for him for 2011, and his third priority was to go to the royal wedding. Let us hope he has a nice frock. This is absolutely poverty-stricken. It is a complete waste of space for a Prime Minister who said he was ambitious for New Zealand, but, when confronted with the fact that people’s power prices are going up, food prices are going up, ACC levies are going up—quite unnecessarily in the latter case—petrol prices are going up, rents are going up, rates are going up, early childhood education costs are going up, and tertiary fees are going up, said he wants to go to the royal wedding.

There is nothing about the Government’s priorities that would indicate to any New Zealanders out there who are finding life difficult and who are finding it hard to make ends meet that the Prime Minister has their future, their well-being, and their prospects and the prospects of their children at heart. Thank you.

I think members of the House will agree that the Prime Minister gave a speech that set out a great plan of action for the next 12 months to 3 years of what this Government intends to do in order to continue building a better economy, better public services, and a stronger community in New Zealand.

There is no doubt that the Government inherited an economy in free fall, with no new jobs having been created in the export part of our economy—the productive part of our economy—for 3 or 4 years. Not one new job was created from exporting in 3 or 4 years. In fact, we lost jobs in the productive part of the New Zealand economy. It was the non-productive part of the economy, or the non-tradables sector, as the economists call it, that grew substantially. We had a large increase in the Public Service and in the number of jobs in real estate and property, but when it came to the productive base of the economy, the number of jobs fell, fell, fell by tens of thousands under the previous Government. That is what this Government inherited—a country whose engine, the export economy, had dropped to having about a fifth of the job creation that was needed.

💬 Hon Maryan Street: Lowest unemployment in the OECD.

The member opposite said we had the lowest unemployment. Well, when the country had had 7 or 8 years of great economic indicators driven by the world economy, of course there were opportunities for New Zealand. But when things tightened up, we started to see the fact that the previous Government was just a paper man.

The Prime Minister has set out some very clear expectations of what the Government and the community will seek to achieve over the next year. He talked about how we will help New Zealanders to have the skills that they need in order to participate in the global economy, with our strong focus on education and on supporting our schools and our teachers to implement national standards. If there was ever a time when the Opposition was out of touch with mainstream New Zealanders, it is now, with its backing of the isolated teachers unions against parents, who are in favour of knowing how well their kids are doing and who strongly support having national standards in literacy and numeracy. We heard from the Minister of Education today about the expanded opportunities in the Youth Guarantee scheme, which deals with those kids who do not fit into the usual secondary school system that we have in New Zealand. The Minister of Education has been around the country in the last week or so, opening a number of these trades academies, and we have made huge achievements there.

The Prime Minister talked about what we are doing to build better social services in New Zealand. One of our flagship programmes is Whānau Ora, which integrates health, welfare, and justice funding in order to have a real focus on what really matters for families and communities. Our Prime Minister also outlined, together with our Minister for Social Development and Employment, Paula Bennett, the special focus that we want to have this year on vulnerable children. We want to give Kiwi kids every opportunity to succeed, and we are dealing with that across a whole range of Government departments and services in the most comprehensive way. It is not a little slogan that is written up as a new direction but something that is tangible and is being delivered.

First, we are delivering better support for children in State care. The outcomes and the problems of children in State care are not what you and I would want for these kids. Many of these kids have come from hard backgrounds and difficult lives, and the previous Government was happy for that to carry on. We do not want that to happen, and we are doing more to help the kids in State care. We also have a real focus on child abuse and on how we can fix that. Secondly, in the area of justice, we have a lot of work under way to protect kids from abuse. We will have tougher penalties for neglect, and we are helping those children who have to go to court as witnesses or victims.

In health we have the best immunisation rates that we have ever had. If we can give kids a healthy start in life, that really sets them up for their childhood and adult life. We have record levels of immunisation. You know, the previous Labour Government spent 9 years talking about closing the gaps between Māori and non-Māori; we have closed the gap on immunisation to the lowest level at which it has ever been. That is the fantastic work that has been going on in the health service. We are also improving maternity services and early parenthood services. We have a strong focus on trying to eradicate rheumatic fever from New Zealand, and we will be talking about that. There will be further announcements on that. A lot of investment is going into health. We are fixing the B4 School checks. That is all part of the special focus on vulnerable children. In education, of course, we are promoting participation in early childhood education and helping children to succeed at school.

But the times are tough. Everyone knows that the global financial crisis had a dramatic impact not only on our country’s tax base but also, internationally, on the demand from consumers overseas. The Government is seeking to protect and grow our public services with a strong investment in health and education, and it also has a strong commitment to improve the productive and export part of the economy. But here is what will put that at risk: extravagant spending promises from the party opposite, if it ever has the opportunity to be in Government again.

We know that over the last few short months, Labour has promised over $5 billion of extra spending—$5 billion of extra spending over the last few months. The tax-free threshold of $1.3 billion is just a huge and totally ill-thought-through pledge that will put up the taxes on middle-income New Zealanders. Taking GST off fresh fruit and vegetables will cost $250 million. Having no dividends from the State-owned power companies, which is one of Labour’s promises, will cost $700 million. Labour would restore all the changes we have made to early childhood education; that is another $400 million. Restoring the research and development tax credit would be another $330 million. Extending paid parental leave to 18 weeks is estimated to cost half a billion dollars, and Labour is promising that. Restoring capital contributions to the Superannuation Fund is another $2 billion cost that the party opposite has promised. It has promised to back-pay the disability support workers who did sleepovers. That is a $500 million promise, as well. Labour has promised to provide back-pay for 6 years in terms of the sleepovers case, plus to pay the workers in future for sleepovers. That is another $500 million promise.

That is a huge bill of over $5 billion that the Labour Opposition has promised to pay. The only good news is that Labour will never get the opportunity to have to keep any of those promises. But it is a very serious situation when the leading Opposition party in New Zealand does not accept that this is a time for financial discipline. This is not a time to start promising to spend huge amounts of money, when we know those promises simply cannot be delivered on.

The Prime Minister has set out an agenda. We will be working very hard to get the economy sorted, and to get it moving and providing benefits for New Zealanders. There are positive signs out there that the export economy is ramping up and providing more job opportunities, but after the last 9 or 10 years of the previous Government—and there was no job creation in the export sector in its last 3 or 4 years—the improvement is taking a lot longer than many people had expected.

This Government is also looking at how we can improve public services with the investment that we currently have. The New Zealand Government—under National, the Māori Party, ACT, and United Future—has put $1.2 billion extra into the public health service. We have sought to protect and grow the public health service. We are providing more than 400 extra operations a week in elective services for New Zealanders, which means that 400 extra Kiwis a week are receiving elective surgery. We are speeding up the emergency departments, so that people who turn up with their families when they feel vulnerable receive service much faster. We are also making a real commitment to make sure that we lift the performance in a whole lot of our preventive health areas, with more immunisations, more help for smokers, and a better focus on diabetes. All those services are important. We are also making a stronger investment in cardiac services, to make sure they work better for New Zealanders.

This is an exciting period in New Zealand: a time of challenge, given the difficult financial situation that we face. The Prime Minister has set out a clear agenda that focuses on what really matters to the New Zealand economy right now—that is, a focus on the export part of our economy, and on improved savings and investment so that we have the resources to back the productive part of the economy to enable it to create jobs and wealth for New Zealand. The responsibility of members on this side of the House is to make sure that we support that effort by the Prime Minister. We want to make sure that we can deliver the brighter future that New Zealanders are looking for.

The ASSISTANT SPEAKER (Hon Rick Barker): I call the Hon Trevor Mallard. There are fewer than 10 minutes remaining, and I will give the member a bell at 2 minutes.

Thank you, Mr Assistant Speaker. It is great to follow Tony Ryall. He has a reputation these days for being the choreographer to the Prime Minister. It was interesting to see that even he was bored during his own speech. He was not interested, and four Government members seemed to snooze off. It was not the Tony Ryall of old.

He is known around Wellington these days as the “Minister for Redundancy and Consultancy”. He is causing redundancies all over Wellington. Some very good payments are occurring. Wellington unemployment rates are up. In the last 3 months the rate of increase was twice that of any other area in the country—twice! But there is a group that is doing very well under that Minister, and that is the consultants. The consultants are doing really well. It is the National Party approach: fire the public servants, give them redundancy, hire about half of them back at about twice their previous wages, and end up with none of the corporate knowledge.

It is really interesting that Julia Gillard, as part of her preliminary comments as she was coming to New Zealand, indicated that she saw New Zealand as a source of skilled migrants. That is a sad situation for New Zealand to be in, to have our nearest neighbour seeing us not as a partner, not as an equal, but as a place where Australia can have its training needs met by our employers and by our institutions, which train staff who then go off overseas. The trouble is that, at the moment, she is right. All of us know of friends, family, constituents, and people who live in our area who are upping stakes and going to Australia because that is where they can get a job and that is where they can have a reasonable standard of living. Their standard of living there is 1½ times, in real terms, what they can get in New Zealand. And the situation is getting worse, because our wages in real terms are going down, while Australian wages in real terms are going up.

We have heard Bill English talk about his “mom”—his mixed-ownership model. I think a lot of members on this side of the House are trying to work out what the “dad” would be. Would it be “disastrous asset ditching”, or “dog’s addition to Dipton”? There are a number of ways to describe it. I thought the Leader of the Opposition hit the nail on the head today when he asked a question that Bill English, on behalf of the Prime Minister, could not answer. He asked why one would give up an asset that is returning 15 percent and costing only 6 percent. Why would one give it up?

💬 Hon Bill English: Labour wants to buy the stock market.

The member says it is a risky investment. Well, I tell him that I do not think Kiwis who over the years have paid their taxes to build dams around the country, as occurred under the NZED—the New Zealand Electricity Department—would regard it as a risky investment. I agree that there are some questions about their valuation, and I noticed that, when he came to the Finance and Expenditure Committee, he thought they were overvalued. That is an interesting approach, because they are valued on the same basis as private sector companies are.

I would have thought that if a Minister was trying to hock off assets, saying that they would go cheaper would hardly be the responsible approach to take. But that is the approach that Mr English is taking. I am not suggesting that we go out and gamble on the stock market; I am suggesting that we do not sell the things that people have paid for, for years and years—they have paid for them in their power prices, and they have paid for them in their taxes. But he wants to sell them off, and he wants to pay off debt and end up with a minus 9 percent return on it. That is what he wants. The return is 9 percent less, which is the difference between 15 and 6, I tell Craig Foss. That is the difference. The 10-year bill rate is 5.5 or 6 percent. The average return for the last 5 years has been 15 percent, but Mr English wants to sell those assets. I think it is about the level of economics we had back in the period just after he was Leader of the Opposition, or maybe while he was still Leader of the Opposition, and when Don Brash was suggesting that we should all sell our houses and rent them. That is the sort of approach. Mr English wants New Zealand to divest itself of assets and send them offshore—to send the ownership of those assets offshore. He wants to sell our power companies to Australians, to Chinese, and to Americans, yet we have paid for those power companies for years and years.

Today in the House Simon Power, who is meant to be the Minister for State Owned Enterprises, indicated his ignorance in saying that no one could buy a cornerstone investment in a State-owned enterprise under his scheme, because they could not be able to get 51 percent of shares. Well, I tell him that he should go back up to his room and have a chat with the three or four people in his office who understand a little bit more than a country lawyer about the way stock markets work. They will tell him that although there are a range of definitions, there is not much doubt that a 2 to 15 percent investment is regarded as a cornerstone investment, and owners of those investments have rights that can block the majority shareholder from doing what it wants to do, even when it is in the interests of the country.

I will leave one comment from a discussion I had yesterday with a cleaner. She and her husband are both cleaners, and they were just absolutely rapt at the idea they would both get $10 a week—$1,000 a year for a poor family—because of the Labour policy that people will not pay tax on their first $5,000 of taxable income.

💬 Hon Bill English: Tell them the truth—they wouldn’t.

But Mr English does not like paying cleaners very much. He does not like paying them, except if they live in his house—no, not his house, but the house he was leasing from a trust of which he was a beneficiary. It was not his house; it was a house he was leasing from the trust of which he was a beneficiary. Bill English is someone who has no credibility. He is making a fool of the Government, and the end of the year cannot come soon enough.

I raise a point of order, Mr Speaker. It is a matter of clarification about the rules on this vote. I think we are all aware that enough Māori Party members are in the House for a vote of five. Is this an indication that Mr Harawira’s vote should be given separately?

The ASSISTANT SPEAKER (Hon Rick Barker): No; the member cannot use a point of order for that. It is entirely up to a party how it casts its votes and how many votes it casts. The one thing it cannot do is cast more votes than it has as its number of allocated seats. But parties can, if they so choose, cast fewer, for reasons that remain reasons for that party.