Financial Review Debate — Ministry of Economic Development

I struggle to see why we should approve any funding for this Minister for the Ministry of Economic Development. I know that is a little harsh, and I do not really believe that, because there is some machinery of government work that the Ministry of Economic Development has to continue to do. But why we should give the Minister more money for the support that he receives in his office from the Ministry of Economic Development or for some of the other things that are funded through this Budget, I cannot see. We had a National Party that, when it came to office, said it would lead New Zealand to a brighter future. Do members remember that? National talked about a brighter future, and said its key to a brighter future was that it would develop the New Zealand economy so that it became more profitable.

One of the things that National kept saying to us was that it would bridge the wage gap with Australia. What has happened since? Has the wage gap grown, or has it decreased? It has gone up, and by a lot. The wage gap with Australia continues to grow. The Minister of Economic Development, during the year under financial review, was asked about that in Parliament. He turned up and was questioned as to whether the wage gap with Australia has gone up or down. He got the answer wrong; he did not even know. So then the big spin machine came out of the National Government, and the Prime Minister came to the Chamber the next day and tried to manipulate the figures by using some purchase price parity figures—figures adjusted for purchase price parity. He said that on that basis the wage gap had narrowed. But, of course, when we looked at that we found the Prime Minister was wrong, too. At the time TV3 accused the Prime Minister of being too slippery by half. It used the words “too slippery”.

On that measure, as a consequence of that, we have been trying to get the Minister of Economic Development at least to say what the milestones are, if that is the Government’s objective by 2025, by which time many members of this Parliament will, sadly, be dead, most of the sitting members will have retired, and no one from National will be accountable for the promise that it made. Given that it is a meaningless promise, and National does not even know where it is getting to halfway through that period, we have asked it to give us some milestones. We have asked National to give us something by which it will be held accountable. We asked whether it could at least agree that if by the next election the gap is still getting wider, it will have failed. National would not accept that as a target. So we asked it to promise that it would get the wage gap back to where it was when National started in office. It would not even agree to do that, so we have not been able to get any milestone by which the Government will be held accountable.

What other promises was the Government making at the time? It said it would cause a step change in the New Zealand economy. That was another of its promises. I cannot see any line item in the Budget that describes an initiative to get towards National’s step change in the New Zealand economy, because the Government has given up on that lingo too. That term has dropped out of the Government’s lexicon; we no longer hear Government members talking about a step change in the New Zealand economy.

I was really embarrassed at the other failure by the National Government to do what it promised to do to curb the flow of people to Australia. Why was I embarrassed? Because I am a member of Parliament who thinks we should not make promises to the electorate that we will not keep. Another of National’s promises was to stop the great flow of people from New Zealand to Australia. What has happened? Last year that flow was the highest that it has been in the last decade, bar one year. The figure is the second-highest in a decade. When Julia Gillard was here recently she said she liked having New Zealand as a provider of talented, well-educated people as a source of labour to make Australia’s economy grow. We are losing too many of our best, well-educated, and productive people to Australia.

What is the Minister for Economic Development doing in response to that? The answer is very little. During the year that is under review we saw the failed attempt to mine national parks. National said the big difference between New Zealand and Australia was mining, and it would mine New Zealand’s national parks and other schedule 4 areas. There was an outcry against that, as there ought to have been, partly because the Government was exaggerating the difference that mining those areas would make, and partly because doing that was just wrong in principle. In the end, in the face of public protest, the National Government backed down on that proposal, but it did not replace it with a new policy.

Now we have come to the Government’s third Budget and we have been told by Mr Bennett, one of the members for the Hamilton area, that the big thing in the Budget will be savings. National is finally admitting, after 2½ years in power, that one of the big differences between the New Zealand economy and the Australian economy is Australia’s depth of savings, and therefore the investment capital that is available to its enterprises to invest in more productive equipment and improve the productivity and competitiveness of its economy. Well, hello? That has been obvious for a number of years in the New Zealand economy. That National did not have a plan in that respect after its members had spent 9 years in Opposition is lamentable. Indeed, everything that the Government has done in respect of savings since then has been wrong.

When we were in Government we ran Budget surpluses, and that means public savings. When we were in Government we introduced the KiwiSaver scheme to encourage private savings. What did the National Government do? It undermined it. The third thing that we did whilst in Government was to establish what is known as the Cullen fund to, through public savings, help pre-fund superannuation, and by doing so increase the depth of our savings and investment in New Zealand. For National to say, after 2½ years in office, that the focus of the next Budget, in terms of economic development, will be savings is a sad indictment on the lack of a plan on the part of this Government. It obviously has an inadequate plan, so much so that the New Zealand Institute produced a report, which I thought was a very clever flick at the Government, stating that a goal is not a strategy. I think that might have been in reference to the Government’s 2025 goal of bridging the wage gap with Australia but having no strategy or accountability for milestones in the meantime.

Mr Brownlee has had to go away to perform duties in Christchurch post-earthquake. Good on him for doing that, and I wish him well in those efforts. We now have the Acting Minister for Economic Development present in the chair. We have asked him about his economic plan for lifting us out of the economic malaise that New Zealand is in. We are in a second recession—National’s recession. Over half of the latest re-estimation of Government revenue and economic growth was caused by factors other than the earthquake, yet National says the earthquake is the cause of all its problems. We have not heard from the Acting Minister one new idea—not one. We have rising unemployment, bigger gaps with Australia, and dropping tax revenue. The only way we will get out of this mess is through improved economic growth.

“Bomb cases”, as commentators have described them, such as the United States and the United Kingdom are bouncing out of recession, and what is happening in New Zealand? We are heading into a second recession. The economic malaise continues, and we have no alternative vision for growth being shown in New Zealand. Instead we have the Government saying it is all the fault of the earthquake. Of course the earthquake has made New Zealand’s problems worse, but it is not the underlying cause of the malaise. The underlying cause of the malaise—low growth in jobs and low economic growth—is mismanagement by the National Government.

I was not going to take a call, but a comment such as that from Mr David Parker, who has just resumed his seat, cannot go without being challenged. The first thing I will do is take an opportunity to remind the member that he has selective memory loss. Let us consider the early 2000s, when New Zealand had the best opportunity for economic growth that the globe had seen in Mr Parker’s lifetime. He has the audacity to say that Labour established a pattern of Budget surpluses, yet when Michael Cullen handed over the reins, he left us with a legacy of facing 10 years of Budget deficits. That was the legacy of the previous Labour Government.

The member further does not realise that having successfully won the election, we faced a global financial crisis—the biggest financial challenge the world had seen since the 1930s. The member may have also failed to notice two earthquakes that have devastated my home city and caused a loss of life. He then said he would take away my budget. I tell him that I was in Christchurch today when we announced another package to assist businesses in Christchurch. I want Mr Parker to stand and say in the Chamber today, for the benefit of those businesses, whether he and his Labour colleagues support that package for Christchurch businesses.

💬 Hon Annette King: Yes, of course we support it.

Oh, they now support it. So Labour members want to take my budget from me but also expect me to deliver support packages to Christchurch businesses to help them get through their economic crisis. It is no wonder Labour is struggling to poll over 20 percent. In fact the people who give Labour 20 percent support need to have a serious look at why they have bothered to support it.

I will give Mr Parker a lesson on the economic plan of this Government. We need to get our tax system sorted out, and we have moved to do that—but Labour opposed that measure. We established a substantial amount of investment in innovation, and, again, Labour opposed that.

💬 Hon David Parker: I raise a point of order, Mr Speaker. The debate is on the 2009-10 year, not the 2010-11 year. The Acting Minister seems to be confused about that. I ask that you bring him to order.

The CHAIRPERSON (Eric Roy): It is an interesting point of order. The debate is on the 2009-10 financial year and current operations. That does not mean that any member can get into the estimates. It covers current operations. I am listening carefully.

It is typical of Mr Parker to take such a frivolous point of order when he cannot win the debate while he is on his feet. This Government has a very established economic agenda, which was well and truly elaborated to Mr Parker when he worked on the financial review while sitting on the Commerce Committee as a freshman member. He ought to refresh his mind that the examination in that financial review was very much about what this Government was doing. There was a lot of mention of our broadband strategy. There were 10 years of neglect of ultra-fast broadband by Mr Parker and Ms King when they had a chance to do something about it. This Government has stumped up with a magnificent programme involving $1.5 billion plus an associated rural broadband package—

💬 Hon Annette King: Not 1 metre has been laid.

—and again Annette King continues to decry it. She cannot have it both ways.

💬 Hon Annette King: Yes, I can.

Only Ms King would try to have it both ways. Only she would try to go out to the public of New Zealand and acknowledge the good things we are doing, and then come into this House and try to argue against them. That sort of presentation to the public of New Zealand is exactly the reason that Labour continues to poll at around 20 percent, and I do not think it has much chance of lifting that between now and 26 November.

Report noted.

Ministry of Health