General Debate

I move, That the House take note of miscellaneous business. This House should note today the competent and consistent financial management of Prime Minister John Key and Deputy Prime Minister Bill English, which is serving New Zealand so well in such an uncertain global economic environment. This Government’s plan of reducing debt, of returning us to surplus within 3 years, of opening new markets and growing exports, of investing in infrastructure, of reducing compliance costs, and of getting a more efficient Public Service is all about building a faster-growing economy. It is the right plan at the right time. I could spend this entire speech just noting the raft of reforms we have made over the last 2½ years that are contributing to building a stronger economy.

More debt is the last thing New Zealand needs right now. We need look only at the dramas in countries like the United States and Greece to know that that is the wrong plan. The worry for New Zealand is our high levels of private debt. Private debt soared from $68 billion in 1999 to $175 billion in 2008. That is $107 billion in just 9 years—nearly $12 billion of extra private debt for every single year during Labour’s last period in Government. Our tax package was about changing incentives. Since that package took effect household debt has been going flat, and that is essential for New Zealand.

It is not just private debt that this Government has had to address. In 2008 Treasury advised the incoming Government that we were looking at a decade of deficits. But in every single Budget this Government has pulled that back. We are now on track to get New Zealand back into surplus within 3 years. Over the adjournment we have seen Labour launch its muddled economic plan, which can be described only as borrow, spend, and hope. There are two particular features of Labour’s economic plan that fall into my areas of responsibility, and that Labour does not want New Zealanders to know about. Its emissions trading scheme policy is banking on a $50 price of carbon as part of its policy for ramping up that scheme. Mr Cunliffe has confirmed that his numbers are based on a $50 carbon price from the beginning of 2013. That will mean a 15 percent increase in power prices. That will mean a price increase of 10c a litre on fuel. Yet those members have got the cheek to pretend they are concerned about the cost of living. That carbon price would add $450 a year, or $9 a week, to the living costs of New Zealand families. It would wipe out any benefit of the messy tax proposal to take GST off some foods. But Labour’s emissions trading scheme is only half the problem.

New Zealand now, more than at any other time, needs a strong exporting economy. That is why we are proud of the fact that Statistics New Zealand came out last week and said that in the last year there had been a 4.5 percent increase in New Zealand’s exports—something we should be proud of. The engine room of that growth is agriculture. Labour’s policy not only to put agriculture into the emissions trading scheme 2 years earlier than the current law but also to put it in on tougher terms than for any other trade-exposed industry is just bizarre. Labour will put a higher price for carbon on to farmers than there is on Methanex or the aluminium smelter. And those members plead—

💬 Hon David Parker: No, we’re not.

Yes, you are—absolutely you are.

I raise a point of order, Mr Speaker. The member’s first 5 minutes were not particularly exciting, and the half a minute he took after you rang the bell—

💬 Mr SPEAKER: I am not sure what the member’s intention was there. I think we will just forget about it.

This debate takes place against a background where this country, this year, will be in deficit of $16.8 billion—$16.8 billion. This country has been spending at the rate of $300 million a week more than it has been taking in. For a family of four, that is $300 a week. That is $300 a week for the average New Zealand family—a father, a mother, and two children. This Government has been borrowing $300 a week per family more than it takes in.

What an incredible irony for the Minister for Climate Change Issues to stand up and say that more debt is the last thing this country needs right now! He is suggesting that this National Government is concerned about debt, yet it is his Government that has presented a Budget to this Parliament showing that in the last year we spent $16.8 billion more than we took in, and in the current financial year we are looking at a deficit of just under $10 billion.

This debate takes place against a background of a debt crisis in the United States. The United States came to the brink of defaulting on its debt—to the brink of defaulting. We see in Europe an unfolding debt crisis. It is not just in Greece, Ireland, and Portugal, but in countries we once knew to be stable and strong, countries like Spain and Italy.

The ACT Party just recently sent out over 100,000 letters all around New Zealand, asking New Zealanders whether we should be following a policy of borrow and hope, or whether this Government should be living within its means. We got an overwhelming response. Thousands of New Zealanders returned the survey form to Parliament saying they totally rejected a policy of borrow and hope and that they supported a policy of getting the country back to living within its means.

The Minister talked about competent and consistent financial management. He talked about reducing debt. He talked about getting the country back into surplus. Well, I say to that Minister that if he was really concerned about reducing debt and about getting this country back into surplus, then this National Government would have taken a much closer look at its expenses. He referred to the emissions trading scheme. Few New Zealanders understand that Vote Climate Change has allocated some $2 billion of credits to foresters—$2 billion of credits to foresters. Some of those credits have been allocated to people who have pre-1990 forests and who are denied the chance to convert them to more productive use. Those people are suffering a real loss. Equally, there are people who have pre-1990 forests who can use that land only for forestry. They have suffered no loss and will be getting a windfall gain under his emissions trading scheme.

Worse still is that the emissions trading scheme provides an incentive to go out and plant trees. It provides a one-off incentive of about 200 tonnes of carbon per hectare, or a subsidy of about $4,000 a hectare. That is sufficient for a forester to go out and buy high country land and plant trees. This Government is essentially giving away free forests, and the Minister knows about it.

So for National Ministers to stand up and pretend that they are concerned about the cost of living and the cost of debt and concerned about exports is a joke. There are many ways in which this Government could have reduced its expenditure to bring it within budget, just like New Zealand families have to do, but this Government has pursued a policy of borrow and hope. It may well come back to rue that day, particularly when we see the unfolding situation in both Europe and the United States.

Mr Smith said his package was about changing incentives. Yes, it was important to change incentives, but it would have been better still if the tax package had been about reducing taxes. It was not about reducing taxes; it was about improving incentives. Yes, improving incentives is important. It is important to reduce the marginal rate of tax. It is important to send that incentive. In that regard we congratulate National. The real issue is to have far greater controls on Government expenditure, to reduce expenditure, and to get debt under control. The ACT Party is committed to promoting policies that will do just that. Thank you.

It is not often that I have the opportunity to agree with the honourable member John Boscawen, who has just his resumed his seat, but I do on this point: New Zealand’s debt is too high, and borrowing an extra $380 million a week is irresponsible when the opportunity is here to consistently reduce that with sound tax reform that is backed by the authorities of the world economic system. A capital gains tax will fill in the largest tax loophole that is dragging this economy further into debt. The honourable member Dr Nick Smith sounded like a Tea Party Republican in his refusal to state the obvious: that the Government cannot get its way out of the mess that it has got the country into without addressing sensible tax reform. He also got our price of carbon wrong, but I will not go into that; it is a story for another day.

Yesterday Statistics New Zealand reaffirmed that New Zealanders earned, on average, only another 1.9 percent in their wages in the year to June, except for those on the rich list, who made a 20 percent gain—probably none of it taxed, because much of that was capital gain. Yesterday the truth stared us in the face. What is the National Government’s solution to that inequality and to the debt mountain? It is to sell off New Zealand’s precious public assets, sell our power companies, raise GST on everything, give the richest few a whopping tax cut, attack workers’ rights with the 90-day fire-at-will law, and drive down wage rates. Bill English thinks that is a great idea. Well, thank goodness there is now a clear alternative: a strategy based on sound tax policy and a fiscal balance that gets to surplus the same year as the Government’s Budget, and pays net debt to zero faster than the current Government does.

The Government is trying to brand Labour as tax and spend, while we are projecting zero net debt faster than the current Government’s own books.

💬 Hon David Parker: As we previously did.

That is why nobody is taking the National Government seriously. My colleague has said the truth: we did it previously in 2007-08. Net debt was zero under Labour; net debt was zero. The Government hates it. Net debt is now about 20 percent. The Government cannot get away from the truth: net debt was zero under Labour. Net debt will be zero again under Labour with the tax plan we have unveiled.

Let me just restate some of the important features of Labour’s proposed capital gains tax. It is a flat rate of 15 percent. It excludes the primary residence. Is that not interesting? The Prime Minister says this will have the country screaming backwards and that it is a dagger through the heart of capitalism, but on the other hand he says we already have a capital gains tax. Bill English says the capital gains tax is the right thing to do but it is just not comprehensive enough. But 31 out of 34 OECD countries have one, and only Japan puts the family home in. Labour will not put the family home in. Bill English wants to put the family home in. What side of the argument is the Government on?

Under Labour’s design the capital gains tax will be a flat 15 percent. It will cover only future gains; it will not be retrospective. It will not cover unrealised gains. It will be broad-based and fair to all, but it will not be intrusive and will not include personal property. It will not be an inheritance tax. It will not touch the Canterbury Earthquake Recovery Authority area for at least 5 years. The Kiwi CGT—capital gains tax—will be carefully designed by an expert tax panel like the tax panel the Government set up and then ignored. That tax panel all but recommended the capital gains tax that the Labour Opposition has had the courage and foresight to stand up and say this country needs.

There is another working group that the Government set up and then ignored: the Savings Working Group. Is it not interesting that the Prime Minister this week, frightened by the reception of Labour’s capital gains tax, has moved to cover his backside on savings and say we will have to do a green paper to try to resuscitate the Savings Working Group? It is too late. New Zealanders know that National has no credibility on savings. It cut superannuation and KiwiSaver incentives. It has no credibility.

We have just heard the most extraordinary claim from the Opposition spokesperson on finance, David Cunliffe. He got up and started his address by agreeing with the ACT Party that the Government was borrowing too much per month. This is the member who spent the whole of 2009 asking for more and more stimulus and more and more debt. He recklessly proposed that New Zealand go into massive additional debt during the largest recession that the world has seen in 70 years, and he has the gall to say we are borrowing too much money. This is quite an extraordinary about-face—quite an extraordinary about-face.

David Cunliffe was also a member of the previous Government, which led the situation whereby New Zealand, through debt-fuelled consumption growth, had got its net debt up to the level of Portugal, Ireland, Greece, and Spain. We heard from him the most extraordinary series of statements. He is imagining the past and remembering the future.

Let us just sit down and look at the situation a little more calmly, with a little more accuracy. Every adult in this country who is interested enough in current affairs to turn on the television in the evening, or to turn on the radio and listen in the morning or the afternoon, will be well aware of what is going on internationally. Even if they take only one simple message from this still dangerous situation in the major centres of developed power on both sides of the Atlantic, the message they will be taking is this: fiscal prudence matters. Finally, we run the risk of running out of other people’s money.

💬 Hon David Cunliffe: Trust me, I’ll save Doha!

That is the message, I say to Mr Cunliffe. People are not listening to him; they will be listening to what he said and the policies he supported as a member of the previous Government. They will be making their decision in November. When they make that decision, they will remember exactly what National inherited in 2008.

Mr English, our Minister of Finance, has laid out the broad outlines of what National inherited. First of all, we inherited an economy that recorded less than 1 percent growth, on average, every year in the 3 years leading up to 2008. People will remember that not a single job had been added in the traded sector—the internationally competitive side of our economy—since 2004. Those are the facts that they will remember when they make their decision.

New Zealanders will remember that Crown expenditure mushroomed from $32 billion to $60 billion over 8 years. Those are facts. Then, in 2008, on top of what was really a completely failing policy, with productivity having tanked as well, Lehman Bros came along and caused this recession. We were then elected by the people of New Zealand, and Treasury told us what the real state of New Zealand was. We were looking, effectively, at permanent deficits for the next 10 years, a highly dangerous situation in any event but potentially lethal in the situation that we have been looking at internationally over the last 2 years, where people get very nervous about lending ever-increasing amounts of money to countries that do not have the elementary facts of economic life in the right space.

This is a situation that we are seeing played out right now internationally. Let us take the most extreme examples of Portugal, Ireland, Greece, and Spain. Bills are not being paid in Greece now for basic pharmaceuticals. We are seeing a situation where in the railways sector the wages exceeded the total revenue by something like 60 percent. So finally, in those extreme situations, we learn the hard way that we do run out of other people’s money. So National has set about changing the track, and that will frame the election debate in all aspects at the end of this year.

The Savings Working Group reported to the Government earlier this year. It stated that “the economy”—that is the New Zealand economy—“faces serious structural and other problems.” What structural problems was it referring to? Primarily, it was referring to the fact that we are not earning our way in the world. It was not so worried about Government debt; Government debt is bad, and under this Government it is worse than it was, because we have a $16 billion deficit. But the greater problem in New Zealand is that approximately 86 percent of New Zealand’s overseas debt is private. That amount is going up every year and is projected under the Government’s own Budget to go up every year, because every year from now the current account deficit gets worse and that hole is plugged by more borrowing from overseas, meaning that New Zealand gets poorer every year until the end of the Government’s projection period.

I am not talking about the Government deficit here; I am talking about the overall wealth of our nation, including both public and private debt. The Government’s own projection shows that at the end of its projection period, if New Zealand is unfortunate enough to have a National Government re-elected for another term, New Zealand will get poorer, and then in the next year it will get poorer, and in the next year it will get poorer still. That is why the Savings Working Group said New Zealand has structural working problems, and it is right. Treasury agrees. If we have a structural problem, we need a structural fix; we need to pull the levers that the Government can pull in order to get investment going into the right section of the economy—to grow the economy, to grow exports, to grow jobs, and to reduce debt.

Gareth Morgan said of the lack of a capital gains tax that it is “the biggest tax rort in the country and one that has cost us all dearly in terms of efficient allocation of capital, economic growth and employment.” Westpac chief economist Dominick Stephens said “New Zealanders are incentivised to borrow money to buy land rather than invest in productive assets.” He said that if we introduced a capital gains tax, then that incentive would be diminished, and there would be a greater incentive for people to save via bank deposits or productive business ownership.

He is not the only one who thinks that the Labour Party tax switch is a good idea. The New Zealand Manufacturers and Exporters Association says “The eradication of the capital gains tax harbour will help to lift productive investment. A more balanced tax system will see investment flow to the most intrinsically profitable areas of the economy, rather than those that are tax advantaged.” The Productive Economy Council said the same thing: “A capital gains tax sends the right signals for investors and means those choosing to take the path of unproductive property investment will have to pay their fair share of tax. While fairness in tax is good the real long-term benefit is the chance to get more of our limited capital invested in making New Zealand more, not less, competitive.”

As a consequence of that, in part, we have comments like this from John Roughan at the New Zealand Herald. He wrote “Tax-free capital gains on property investment is the one crippling flaw remaining in our economy. Economists know it, accountants know it even if they don’t like it. Politicians of every party know it, though none have had the courage to do anything about it.” That is until Phil Goff and the Labour Party took this on. The Dominion Post said the same thing: “There is a gaping hole in the tax system. Different sources of income are taxed differently. Earn $50,000 by working 40 hours a week and you will be taxed at the going rate for income. Make a $50,000 profit on the sale of a rental property and you will not be taxed at all”. Even the National Business Review says “Capital gains and property taxes may be touchstone issues—because of the logic of taxing all income regardless of source”.

Pattrick Smellie pointed out that the poll of the Minister of Finance, Bill English, came out 88 percent in favour of our proposal. But still the rudderless National Government—without a plan for the economy—puts its head in the sand and accuses us of tax and spend. It cut one tax and increased another—and it is a tax switch. It says that when we cut one tax and increase another it is tax and spend. Patently it is not; this is a tax switch that enables 98 percent of New Zealanders to get an income tax cut, and enables us to pay off debt faster than the National Government was going to, and to return to surplus in the same year in which the National Government was going to. This is good policy. National is on the wrong side of this debate.

How predictable but utterly farcical it was that yet another Labour member would suggest this afternoon that only that discredited party has a coherent plan for restoring this nation’s health and securing long-term economic growth. Nothing could be further from the truth. Absolutely no one is fooled by the suggestion, and members opposite rightly look sheepish when they trot it out.

Mr Cunliffe’s prescription is a mixture of pie-in-the-sky unreality and head-in-the-sand ignorance of the challenges we face. Only that member could achieve such an anatomical absurdity. When Michael Cullen left office nearly 3 years ago he boasted that he was bequeathing a decade of deficits to his successors. After squandering a decade of the most favourable economic conditions that have existed in my lifetime, Labour’s legacy was to promote middle-class welfare, increase Government spending at twice the rate of revenue, encourage an explosion in bureaucracy at the expense of the delivery of front-line services, and make a raft of promises and commitments that it had neither the ability nor the intention to fund.

Despite the recession and the severity of the Canterbury earthquakes, in just under 3 years, under the stewardship of John Key and Bill English, we have improved the outlook markedly. The Minister for the Environment and the Minister of Trade have already highlighted most of those gains. Most of us agree that we want to attract talented expatriate New Zealanders home—[Interruption]—and when Mr Nash is offshore in the next 3 years he will probably be hoping we will find a way to bring him home, too. No one pretends that it is easy to achieve that, but nothing in Labour’s prescription announced to date will do anything but exacerbate the problem.

Which of these Labour policies will bring our talented young people home: more taxes for responsible investors?

💬 Hon Members: No!

Higher incomes that will hit those who are currently earning good incomes in New York, London, or Sydney?

💬 Hon Members: No!

The prospect of greater borrowing offshore and a bigger deficit compromising our international credit rating?

💬 Hon Members: No!

Or more Government spending on feel-good schemes while the debt reaches record levels and future generations are left to mop up?

💬 Hon Members: No!

Of course the answer is no. It is absolute madness. Distorting the tax system by introducing ineffective exemptions and layers of complexity will provide no significant benefits to taxpayers and consumers, but it will add greatly to the administrative costs of businesses and the bureaucracy of administering our tax system.

Although a number of people in my city would like to see more Government spending for a particular programme or pet project—and that is fair enough, we all would from time to time—not one of my constituents has told me that Labour’s prescription of new taxes, irresponsible spending, and more Government borrowing is the answer. Not one person has told me that. Only Labour members of the New Zealand Parliament can be oblivious to the international economic situation at present: the American debt crisis, and the experiences of Ireland, Greece, Portugal, and so on.

Fortunately, the New Zealand public are much more aware of those challenges and better informed about the National-led Government’s focused and effective programme to avoid those circumstances, which would be utterly devastating for our country. The choice for voters on 26 November will be between a Government that is well led by a Prime Minister who commands widespread respect and support for his vision, his talent, and his experience; and a divided and demoralised Opposition whose members stand behind their ineffective leader at the moment only because none of them wants to take on the poisoned chalice this close to the election.

There is no doubt that later this afternoon and tonight Labour members will again waste the time of the House with pointless contributions in support of one of their own measures that no party in this House opposes, as they have done on every members’ day for months. Those tactics speak volumes about their lack of focus and purpose, and their complete disconnection from the things that matter to New Zealand, and they illustrate the total lack of fitness of the Labour Opposition to return to Government.

Meanwhile, we on this side of the House have been applying ourselves to the issues that do matter to New Zealanders, with considerable success. In my electorate of Hamilton West, three-quarters of taxpayers now pay an income tax rate of no more than 17.5 percent. That is a fantastic result. We have seen 100,000 homes insulated so far under the Government’s efficiency programme—[Interruption]—not just in Hamilton but around the country. Around the country we have seen $1.4 billion spent on early childhood education—the highest spend ever.

I think Tim Macindoe spoke for 5 minutes. I did not hear one word he said. I certainly did not hear anything about a plan. Well, no, there was one thing he said. He talked about my being overseas in the next 3 years. I think he meant when I am overseas as Labour’s Minister of Trade and, perhaps, Minister of Foreign Affairs. The member pre-empts what will happen in the next Labour Cabinet. I thank him very much for the vote of confidence.

I have seen the member Paul Quinn sit there and write out about 122 letters. Mr Speaker, can you please advise the honourable member that he has to sign only one letter of resignation and it will be accepted. He does not have to hand a letter of resignation to every single member, but I am sure that if he did, it would be accepted by the other 121 members in this House.

Tim Macindoe did say one thing that was very right. Mr Macindoe said that at this election the voters have a choice. To use Mr Key’s words, this election will be a mandate around the sale of State assets. That is what Mr Macindoe’s leader said. The people of New Zealand have two very clear choices. The Government’s plan is to sell State assets, our power companies, Air New Zealand, Kiwibank, etc. The choice is to sell those State assets or keep our assets in New Zealand ownership and have much-needed tax reform. The choice is to sell State assets and retain an unfair tax system, or have a fair tax reform and keep State assets.

The sale of State assets to foreign owners is not a plan for our future. It shows no vision, and it represents no plan. In fact, it is in the same league as mining our national parks. The only two plans the Government has come up with in 3 years are to sell State assets and mine national parks. The plan to mine national parks was rejected outright, and, as the Prime Minister said, the mandate around the sale of State assets will go the same way.

Let us be very clear about this: it will not be ma and pa investors who will own our power companies; it will be Australian pension funds, US investment partnerships, and the Chinese Government. I will tell members why. It is because the vast majority of ma and pa investors around this country are struggling at this point in time to put food on the table, petrol in the car, clothes on the kids’ backs; to service a mortgage; and to pay their power account. It just shows how out of touch the Minister of Finance in the National Government is if he believes that ma and pa investors can also afford to buy shares.

Let us be honest, Contact Energy is not owned by ma and pa New Zealand investors. Eighty percent of Contact Energy, which Mr English privatised in his previous stint as the Minister of Finance, is owned by 0.1 percent of the investors. That is $100 million of money that could be coming into the Government coffers but which now goes across to Australia.

Every single country in the OECD, except Switzerland and Turkey, has a capital gains tax. The OECD, the IMF, Treasury, the Government’s Savings Working Group, and Bill English have all said that New Zealand needs a capital gains tax. This is not rocket science. Fair and equitable tax policy and reform are necessary to ensure that all New Zealanders pay their fair share. The Government’s own Tax Working Group has said: “A capital gains tax is generally said to support the integrity of the tax system by reducing opportunities for tax planning and tax avoidance.” Robin Oliver, the recently retired but long-serving Deputy Commissioner of Policy Advice of the Inland Revenue Department, wrote: “The concept of a capital gain is not an economic concept; it is a concept from equity law.”

The voters of New Zealand have two choices: to sell our State assets and retain an unfair tax system, or have a fair tax system and retain our State assets. Thank you.

I am pleased to speak in this general debate. Over the last week many people have emailed me about the situation in the United States. I think that shows the grave situation we are seeing right around the world. In fact, I had the opportunity recently to hear a former Labour Prime Minister speak. That was Mr Blair. What became very clear from his speech was that the world has changed. He made the point that around the world, and particularly within the European Union, 21 out of 27 countries now have elected centre-right Governments. Why is that? It is because the policies of the past, the borrowing, the spend, the debt-ridden policies of the past, have not worked. The public are smart. They understand that that is not the direction that will take us out of this current crisis. That is why when I have been doorknocking, what has been amazing is that people are not even talking about Labour policies any more. A number of people have said to me: “We have stopped listening to Labour, because they have lost touch. They do not understand the reality of the situation.” Many people are saying to me that they do not listen to the Labour Party any more because there has been a basic failure to understand the gravity of the situation in this country and around the world.

I am very proud that at a time when we have had the largest global recession within a generation, and when we have been hit by one of the largest natural disasters in developed countries around the world, we have managed to turn round this decade of deficits, to see public debt go under 30 percent, and to see us come out of deficit within several years. Many people whom I know overseas have emailed me to say how lucky we are to be in this situation, when we look at countries like the United States. We have done that because we have had a very clear plan, and that plan has been about good fiscal economic management. It has been about good tax reform. It has been about investment in infrastructure, investment in transport, investment in our education system and in terms of capital infrastructure, and investment in broadband. It has been about a reduction in regulation. That has arisen from the reform of the Resource Management Act, the reform of the Building Act, and the reform of local government within Auckland. It might be boring to some people, but it has been successful. It has been successful in turning round a decade of deficit.

As I said before, when we look at what Labour is proposing, people have stopped listening. The reason they have stopped listening is when we look at the capital gains tax package. It suggests going from four to six tax rates for income tax, different differentials around GST for different types of food, and a gap of 11 percent between the company tax rate and the top personal tax rate. The capital gains tax package is riddled with exemptions that are not about good economic management. They are about politics. The fact is that Labour’s package is an absolute dog’s breakfast, and everybody knows it. People are saying to me that they have stopped listening to Labour because the policies of the past, which are to borrow more, get the country into more debt, have higher spending, and crippling debt for this country are not what they want. That is why, right around the world, we are seeing centre-right Governments being elected. People understand that Labour policies are not the solution to this current crisis. New Zealanders are saying to me that they want good economic management, they want to continue the plan that sees investment in our infrastructure, including our schools, our broadband, and our transport—yes, including over a billion dollars for the electrification of rail in Auckland, and including billions of dollars of investment in our roads of national significance.

People are realising that during the “noughties”, where Labour is still stuck in this time warp, there was a real lack of investment in this country. Investment is not necessarily sexy and members might consider it to be boring, but it is working. A process and a plan that sees a reduction in regulation through building reform, through Resource Management Act reform, and through low tax rates is actually seeing our country one of only several countries in the OECD to come out of deficit. That is something we are very proud of, and it is something we will be campaigning on. We will be going to the New Zealand public to say that during the largest global recession, and at a time when a massive event occurred in Christchurch, we will be taking this country into surplus, and that is something we are very proud of. We look forward to 26 November.

For the small number of Kiwis listening to the debate, I say that that was the member for Auckland Central, who is soon to be extinct as a consequence of poorly understanding the challenges in her very small, geographically located area. It is an area full of people who want to see genuine solutions to Auckland’s congestion and transport problems. Every time Nikki Kaye speaks, what she says is inversely related to what they want, which is why they are all flying to our side of the House.

Let me come back to the theme of this debate. I do not know why that member is so negative about the “noughties”. I quite enjoyed that time myself. That was the time when the Helen Clark Government maintained an inordinate amount of expenditure in key areas to do with social assets, revived the prospects of the roading system, and introduced the hypothecation and put it into law, which is something that National was incapable of doing during those bleak times of Bill English and Jim Bolger, who now earns his living, perversely enough, working with my own tribe, Ngāpuhi. He can pull a rabbit out of the hat, unlike Hone Harawira, who seems to be sending Ngāpuhi further and further into the wilderness, and quite apart from the Māori Party, which is killing off kōhanga reo, but that is another matter.

What I want to talk about, which is what Kiwis are interested in, is growth and jobs. It is a very educational experience to move into the part of Tāmaki Makaurau otherwise known as Manurewa and Ōtara and see that there is a search party for the current member, Dr Pita Sharples, whose address can be found in the lost and found of the local community papers, because he is never there. He has, along with his senior colleagues in National, no remedy for growth and jobs. That is why the policies introduced and being promoted on a regular basis by my senior colleagues—that is, the tax switch—would enable us to reduce the impost of tax on the first $5,000 a Kiwi earns, through Labour. We would reduce it so it is a tax-free threshold. Why is that good? That is good because it reduces the administrative burden for students, part-time workers, and people in small-time businesses. They know that there will be less drama in giving a job to people in that category.

How will we do that? We will introduce an element of fairness or, dare I say, equity so that those Kiwis who have done very well and who have amassed assets make a modest contribution as a consequence of the capital rise in their assets. That rise has little to do with the obligations of the investment they put in to run the operation of their enterprise. A host of other countries have this tax, and they are doing a hell of a lot better than Kiwis are. It is not unreasonable that those of us who have the pleasure of owning an asset or three should make a contribution of this nature, so that those who are at the level where the more vulnerable members of the community are found can be assisted.

I come back to the very barren view offered by the Minister of Finance today about what National will do. As I have said before, I accept that there is a case for investment portals and investment opportunities, but we do not accept that the only way we can enjoy investment opportunities in New Zealand is by serving them up through the privatisation of our publicly owned energy companies. They will be surrendered not to mums and dads, not to the Kiwis who are enjoying the opportunity of a bit of investment, but to foreign investors. That is a very good public policy issue, and an item of intense public interest.

At what point will we stop worsening the tide of discontent associated with our current account deficit? At what point will we say: “Let’s use these assets and harness the development capacity to transform our own economy.”? Let us not surrender the direction, the strategic overview, of those assets to people who do not have a long-term invested commitment to the underlying structure of our economy. We want to effect a change through the retention of the ownership of those assets, harnessing their potential and, ensuring that they play a transformational role in our economy, not watch them wither away whilst they serve the dictates and the imperatives of overseas investors who, as we learnt with Telecom, are interested only in gouging, stripping, and taking away the largesse to meet the expectations of shareholders, who will not live here, and who will not have a vested interest in the overarching national interest.

We on this side of the House believe in a Government committed to a more patriotic approach and more focused on domestic strength, ensuring that the structure of our economy continues to support exports.

When the National-led Government came into power wanting to build a brighter future for all New Zealanders, this country was already in recession. Well before the global financial crisis hit us, the pre-election fiscal update told us that we were faced with never-ending deficits, preceded by a 50 percent increase in core Government spending under the previous regime.

The tradable sector—that part that our exporters and other companies have to compete with in the international market—was only about 30 percent of the economy. Since 2004 it had flat-lined. That is the part of the economy that earns us our wealth. The part of the economy that spends our wealth, the non-tradable sector, was about 70 percent of the economy. It does not take much to see the disparity and the imbalance that grew under the auspices of the previous Government. This imbalance has accelerated since 2004, when the tradable sector went into recession.

We have taken responsible decisions to restrict the build-up in Government debt and get Government spending and finances under control. Because of the sense of the New Zealand public, Kiwis are backing National’s action plan for the economy. They know we are responsible managers. We have only to look at the latest poll from Fairfax Media and Research International, which shows that 49 percent of voters think National has the best plan to fix the economy. That is well ahead of Labour, which is on 17 percent.

The news gets even worse for Labour, with only 48 percent of its supporters backing its plan to fix the economy. The Government is delivering its economic agenda based on a six-point plan to boost growth and create high-value jobs over the next 3 to 5 years. We are supporting better science, innovation, and trade; removing red tape and unnecessary regulation; delivering better, smarter public services; investing in productive infrastructure; and lifting education and skills, and we have created a growth-enhancing tax system.

Think of a supermarket. Historically New Zealand has been very good at producing the items sold around the outside edge of the store: meat, fruit, and dairy products. The future of our industries, particularly in the food and beverage sectors, is to move a big chunk of our activities into the centre of the supermarket by making value-added processed and packaged goods. The food and beverages sector of the economy remains the linchpin of our prosperity, generating $27 billion in 2009, or over half of our export earnings from merchandise traded annually. That sector, directly or indirectly, employs one in five of the working population. This is why we support the agricultural sector of our economy. It is such a generator of wealth, jobs, prosperity, and growth for New Zealanders. In 2010 our exports to China rose a staggering 33 percent to $4.8 billion.

We have introduced the biggest reform of the tax system in 25 years. It rewards work and savings, discourages borrowings and consumption, and significantly tightens tax rules on property speculation. Each year an extra $850 million is coming in through tighter tax rules on property speculation. We have rebalanced the tax burden. Treasury has done the calculations. It states that the entire tax package presented by the National Government, as we heard the Prime Minister say today, is effectively neutral in terms of distribution.

In respect of GST, let us not forget that the last time GST was increased was in 1989 by the then Labour Government. GST went from 10 percent to 12.5 percent. The only difference between then and now is that that Labour Government, of which Phil Goff was a member, did not compensate New Zealanders with a tax cut at the same time. That Government just took without giving back. Guess what? Labour is on the take again.

We have turned back 2008 forecasts of never-ending deficits and soaring debt by setting a path back to surplus by 2014-15, a year earlier than projected.

In the 1980s and 1990s New Zealand experienced a wave of change underpinned by the boneheaded idea that if Government took a hands-off attitude towards more or less everything, free-market competition between unregulated companies would somehow magically produce the best outcomes for everyone. The theory was applied not only to goods and services but also to whole industries and areas of core public services such as electricity generation, health, and education. One of the casualties of this enthusiasm for deregulation was leaky homes. Ordinary people became the victims of corner-cutting and butt-covering by all those who could now get away with it. The same thing happened with finance companies, and another casualty has been safety in underground mines.

In 1992 the Government threw away the prescriptive mine safety rules that had been built up by the experience of many years underground. These rules were eventually replaced by requirements that mining companies take those safety measures that they found to be “practicable”. The idea of practicability has embedded in it the idea of affordability, because a company that cannot afford a particular safety measure will find it not to be practicable, with the result being that different mines end up with different safety standards.

At the same time, the triangle of safety—where companies, workers, and the Government all have appointees with particular responsibility for ensuring safety—was demolished by the abolition first of all of check inspectors, and then by the dismantling of the Government’s mines inspectorate. Thus the National Government in the 1990s first of all radically weakened the rules for underground mine safety, then dismantled the structures to monitor and enforce compliance. Sadly, none of these changes were reversed by Labour in its 9 years of Government. Throughout all that time experts warned that that erosion of safety would result in the loss of life. It did so in 2006 and again last year.

From my kitchen window I look out at the Paparoas, where 29 men still lie. Every day that I am home I am reminded of my commitment that those men’s remains be brought back to their families, that the investigation of their deaths sees justice done, and that systems are reconstructed to protect all other underground miners from avoidable risk.

I sat in on several days of the Royal Commission on the Pike River Coal Mine Tragedy during the first phase. The royal commission heard about some of this, and about some of the practical implications. Evidence was given about woeful gas management in the Pike River mine, a chief executive officer who had not seen the plan of the mine, and concerns from the chief executive officer about inexperienced and unqualified staff. The royal commission also heard about the astonishing lack of provision for escape from the mine, with Mines Rescue having warned the company that the emergency exit was effectively unusable in a fire, and men were encouraged instead to use the fresh air base in the mine, which had a capacity of just 20 men. It also heard concerns from Pike River Coal that New Zealand mine safety standards fall well short of their Australian counterparts, and about the company’s concern that New Zealand had just two mines inspectors for the entire country, with that number now down to one. The royal commission also heard the concern that a recently appointed inspector with electrical safety responsibility in mines had no experience of electrical work in underground mines.

It is not good enough. We need change, we need it now, and John Key’s Government must step up to the plate and deliver it, either by itself or in collaboration with other parties. The Green Party stands ready to play our part in improving mine safety right now. There is no case to wait for the royal commission to report, as men go underground every day, right now, into environments that we know are not as safe as they could and should be.

I will pick up on the point made by the Green MP Kevin Hague about mine safety. I thought it was an indictment on the Government that the royal commission was told that they have pay and provisions for four mine safety inspectors, yet they have only one inspector employed. That means there are three vacancies. I think the current regime of mine safety is inadequate, anyway, but to have an inadequate system of mine safety understaffed—to be at 25 percent of capacity when men are working underground in an incredibly dangerous environment—is wrong; it is utterly wrong. I think the Minister of Labour, who currently says she will not be doing anything until the royal commissioner reports, should act immediately and instruct her department to engage the other mines inspectors and have them on the payroll checking these people.

I cannot think of a more dangerous environment to work in than to be underground. As the public of New Zealand have learnt, the men who perished at Pike River were over 2.5 kilometres from fresh air and sunlight, and 2.5 kilometres is a long, long way. It is a long way when workers are in the heart of a coalmine, underground in stone. Those conditions to put people in are very difficult and dangerous. Mine safety is inadequate, and I think the Government has an obligation—a duty—to do something immediately.

I will also pick up on the comments made by National members in relation to the general debate. We heard Tim Groser talk about deficits. I remind Tim Groser that for every year that the Labour Government was in office we ran a surplus. Every year we ran a surplus, and we paid back most of the previous National Government’s credit card bill. When the Labour Government came into office New Zealand was getting close to having 40 percent of debt in relation to GDP, but when we left office it was below 20 percent. The Labour Government left New Zealand in a very good space. The OECD report showed that New Zealand was an outlier in terms of having incredibly low Government debt. We had unusually low Government debt—an outlier—that was the state of affairs when Labour left office. Every year we had surplus after surplus after surplus. The only people who decried that surplus were over there. Bill English was constantly saying we should have tax cuts and give it all away—“Give it all away!”, he said.

Now that National is in office New Zealand has nothing but debt. We have gone from a $7 billion surplus to a $15 billion deficit. What is ambiguous about that? We have gone from a $7 billion surplus under Labour to a $15 billion debt under National. I would say that that is very poor management. What is the plan to get us out of it? What we have had is a tax switch. A tax switch, excuse me, is a switch in taxes between the poor and the wealthy. Let us get this clear: GST is a regressive tax in anybody’s measure. It affects the poor more than the rich, because when poor people go and get 10 litres of fuel for their cars they pay exactly the same amount of tax on that as rich people. There is no difference, except that poor people have less money. National uses percentages for everything, but let us get this clear: 10 percent of an elephant is more than 10 percent of a mouse. When it comes to working people, they get the mouse’s salary. When the Government increases GST on working people’s costs to 15 percent, the costs for those people go up dramatically. But a 15 percent GST increase on fuel makes little or no difference at all for rich people; they cannot see the effect of it. The fact is that poor people in New Zealand are now much poorer.

National does not want to talk about the poor, but let us talk about the real poor, the unemployed. Unemployment in this country has gone up under National, and the biggest shame that National has is the amount of youth unemployment. The youth of this day are being left high and dry, dispirited, and with no hope of a job under National. The National Government has no plans. National members talk loud and long about increasing the amount of trade training, but the fact is that the amount that National is spending on trade training is less than it was when Labour left office. It is less that it was when Labour left office. We have a huge amount of work to be done in rebuilding Christchurch and fixing leaky homes, but the number of young people we are training in apprenticeships for the building industry is fewer than it was 3 years ago. That is an appalling state of affairs. We could be giving our young people skills and job opportunities but we are not, because this National Government is devoid of vision and devoid of commitment to helping young people.

The debate having concluded, the motion lapsed.