Financial Review Debate — Ministry of Economic Development (continued)

It is a pleasure to resume this call for the economic development section of the Appropriation (2010/11 Financial Review) Bill. For the sake of every New Zealand child growing up and wanting to work in a good job in New Zealand, for the sake of the grandparents hoping to see their children grow up here, for the sake of every Christchurch family and business waiting to see decisive action to lead the rebuild of Christchurch, and for the sake of those patriotic businesses that have not yet sold up or been shipped out, may the Government please, please get a real plan to grow this economy. A real plan has strategy, it shows a future state and a plan to get there, it has performance measures, and it tracks progress towards that. There is nothing—nothing—in the record of the Ministry of Economic Development that indicates that such a plan has yet been effected by this Government.

I must, however, praise the ministry for this: its briefing to its incoming Minister has made very clear that a reliance on the negative politics of free markets, hoping that cutting, selling, deregulating, and tax cutting our way out of the hole will work is, in the ministry’s words, in no way sufficient in a small and remote economy. What it says, quite rightly, is that a much more ambitious plan is required. It must be common ground that a real plan does not rely on light-handed free markets where they are dysfunctional, that neo-liberalism gave us the great financial crisis, and that austerity economics is giving us a long recession to follow. A real plan does not imagine that balancing the Government’s books at the expense of businesses or the economy’s books is a way to get us out of the hole. As my colleague David Parker has said, a billion-dollar Budget hole is a sure sign that the plan is not working.

In the absence of a credible, obvious, clear economic strategy, something that would guide the actions of Ministers in a transparent and credible way, what we see from the Minister for Economic Development and the Prime Minister is a habit now of being involved in one-off questionable deals lacking transparent processes for some of the largest, most powerful corporates in New Zealand: Skycity Casino—currently under way—MediaWorks, Warner Bros, selling the telecommunications company law to split Telecom, and now the Dotcom scandal.

This Government is showing all the signs of being a tired, ragged, third-term Government on its way to collapse. Will it last to the election? Yes, you are looking like a third-term Government only 3 months into your second, Mr Foss. “I can count to three”, says the Minister of Commerce—wonderful! It is good that he is holding up three fingers. It looks like a third-term Government even though it is a second-term Government, and that is the point.

Third-term Governments sometimes looks ragged, they sometimes do deals with their mates, they run out of steam, and they do not have a clear plan, and this Government has got there in record time. It has got there in record time. It might be funny if it were not for the fact that it will impact the lives, the careers, the incomes, and the families of real New Zealanders—the 1,000-plus a week who are voting with their feet because they know that their opportunities are more limited here than they are across the Ditch, the ones who listened to John Key 3 and a bit years ago when he told them that if he was elected the gap with Australia would be closed and the brain drain would be stopped. Well, it has got worse. It has got worse. It is time for a plan, time for some strong Government action to get the economy moving, and time for growth and economic development before it is too late.

If that was a leadership bid by Mr Cunliffe, it was certainly a third-rate effort. I am quite happy to talk to that member about the economic plan of this Government, because this Government is absolutely focused on getting the economy performing. We need to do that for the benefit of our children, and I need to remind the member that as a former Associate Minister of Finance he is responsible for the mess that this National Government inherited at the end of 2008, when for over 9 years his Government had lived through the most benign economic conditions that I have probably seen in a lifetime and it had squandered every opportunity.

💬 Hon Trevor Mallard: I raise a point of order, Mr Chairperson. I just ask you to ask the speaker to come back to the debate, which is a financial review of a particular year and going forward. It does not go back that far.

The CHAIRPERSON (Lindsay Tisch): I am very mindful of comments, and I am listening very carefully.

I am happy to outline for that member the economic plan of this Government. He should know it; it is mentioned time and time again in the House. But I am only too happy to outline the plan for him.

We are absolutely committed to get this economy going, so that we do create more jobs. But every time we come up with a proposal, that member and his caucus object to it. We are absolutely focused on balancing the books. That Opposition has one solution, and that is to borrow more money and pass more debt on to the next generation. Well, that is unacceptable to me as a Minister of this John Key - led Government. This Government has an absolute commitment to the rebuild of Christchurch, something we incessantly see the Labour Party members objecting to. But there is a great opportunity for economic development in Christchurch, and I am proud of this Government’s commitment to Christchurch and that rebuild.

That member talks about the ability to get the economy going and to get jobs in this country. Well, I want to speak to one particular initiative that will deliver a lot of jobs to New Zealand. That is around the Skycity deal, which has been the subject of a lot of press in the last few days. That member, in his contribution a minute ago, referred to it as questionable and lacking in transparency. Well, when I was Acting Minister for Economic Development last year, I had the ability to well and truly be involved in the process. What the Government did was call for particular proposals. From memory, there were five. One stood out that was totally different to all the others. Skycity was prepared to deliver the convention centre to Auckland, something that the Auckland City mayor is calling for, but the difference between the Skycity bid and all the others was that it did not expect the Government to pay for it. It did not expect the Government to pay for it.

This convention centre has the potential to deliver not hundreds of jobs but, over time, thousands of jobs to the Auckland economy, and thousands of jobs to New Zealand. Mr Cunliffe shakes his head. Mr Cunliffe shakes his head. That is how bereft of economic ideas that man is, when he says that a national convention centre able to take that number of delegates and able to bring that number of people into New Zealand would not create jobs. That is economically naive, Mr Cunliffe.

It will require us to address some issues around gaming machines, but if we see the overall number of gaming machines decline from 25,000 in the Auckland region when that member was a Minister in the Labour Government to around 18,000, we are achieving a significant reduction. So I fully support what John Key as the Prime Minister is doing to develop this. It is a $350 million investment into the Auckland economy. That is just the construction cost, and it will deliver jobs. And I say to Mr Cunliffe that if he thinks we can rebuild the economy from the mess that that Labour Government left at the end of 2008—if he thinks we can rebuild the economy and deliver sustained growth to New Zealand and sustained jobs to New Zealanders—and expect the Opposition to vote against every initiative we come up with, then it is no wonder Mr Shearer languishes in the polls, and it is no wonder the Labour Opposition languishes in the polls. Mr Cunliffe might have come out with a major speech over the last couple of days acknowledging that his Government got it wrong, but what he should do is not object to every proposal that this Government has to really get the economy going.

We are not objecting to every proposal; we are just objecting to the shonky ones—the shonky ones. That is what we are objecting to. And this hokey-pokey deal, Mr Carter, is one of those shonky deals that we are opposing. Let us just take a look at this particular deal, because I am really pleased that you have brought it up. We are looking at increasing the number of pokies in Skycity by 500, pulling $42 million a year out of the pockets of ordinary New Zealanders—New Zealanders who cannot afford to give up that sort of money. That is what we are doing here—$42 million. That is how we are going to subsidise this big convention centre.

But there are two things that really upset me about this—two things. One is how we are going to do that. Well, we are going to change our law. We are just going to change our law to enable Skycity to bump up the number of pokie machines, increase the number of gaming tables, and increase the length of its gambling licence. Let us look at the maths of this—$42 million a year. Look at how much the convention centre will cost—$300 million - ish. After 7 years, Skycity will have paid it all off. And then it will have another 13 or 14 years of $42 million - plus a year that it can pull out of the economy. That is good business—that is really good business! Skycity is not looking at this as a way of being able to have a convention centre; it is a way of being able to increase its gambling take. Ultimately, it is a gambling organisation. And what is this Government going to do? This Government is going to give Skycity the opportunity, by changing the law of New Zealand, to enable it to pull massive amounts of profits out of ordinary New Zealanders’ pockets, and of those people who are using those pokies, 40-plus percent of them have got a gambling problem—40-plus percent of them.

I happen to be very opposed to pokies, as is Mr Banks, by the way. Mr Banks spoke openly and outwardly against pokie machines. Mrs Collins over here spoke out against the monopoly that Skycity might have, and what are we doing? Well, actually, we were handing a monopoly over to Skycity because the sinking-lid policy that the Minister of Justice talks about does not actually apply to Skycity; it applies to all of the pokie machines that are out there in the suburbs. This Minister has the audacity to stand up and talk about a sinking-lid policy out there in the suburbs. How did that sinking-lid policy come about? Well, actually, we changed the Gambling Act. Oh, that is great. Who voted for that? Actually, the Labour Government voted for that. What did National do? It voted against it. But now it is convenient to say that this sinking-lid policy is a great thing because, ultimately, we will end up with fewer pokies. But what it will mean is that we end up with more pokie machines in Skycity and fewer out there in the suburbs, where they are actually contributing to community events and community facilities. So what an extraordinarily audacious and amazing plan that this Government has come up with: increasing the number of pokies in Skycity!

But there is more to this deal. The way this plan was put together is that of the five companies that tendered for this, Skycity got a wink and a nod and a dinner with the Prime Minister, and it got across the line. The others did not. I was speaking with Vector the other day and they said: “Gee, we wouldn’t have actually minded a bit of a conversation with the Prime Minister. We might have been able to have come up with a deal that would not involve putting pokie machines up as payment for a convention centre.”

This Minister talks about a great deal. This is not a great deal; this is social harm in Auckland. This is about $42 million a year being pulled out by Skycity and this is about a shonky deal that did not give the same opportunities to every other company that had the opportunity to put up a tender. What if they had had the opportunity to sit down with the Prime Minister and say: “I think we can do a deal here.”? What about Infratil? If Infratil had the ability to sit down with the Minister it may have had a different deal, but that did not actually eventuate.

I am going to attempt to explain to Mr Shearer again the necessity for New Zealand to have a national convention centre. Mr Shearer needs to realise that these things have been a huge success and have had a huge economic impact in any country that has been able to create one. That is the first point. The second point that Mr Shearer needs to understand is that these businesses do not make money on their own—these businesses do not make money on their own. So the Government went through a very transparent process—

💬 Jacinda Ardern: Oh!

The Helen Clark aspirant there keeps yelling at me, but the Government went through a very transparent process, and the difference between this proposal and the other four is that one was proposing to build the national convention centre without expecting the Government to pay $350 million.

There are three options here. One is that you decide not to have a national convention centre, in which case it costs nobody any money. The second option is that you allow the Government to build it, and put up $350 million. Well, this Government has not got a spare $350 million. From Labour’s record over the previous decade, it would just borrow $350 million, and it could not care less about the ability to pay it back. Well, that is not what the National Government is prepared to do.

💬 Hon Phil Goff: National’s borrowed $300 million a week.

The third option, Mr Goff, was to see whether somebody else would do it. What we found of the five proposals was that only one was prepared to do it, and it was asking for things like an extension to its current licence. It was asking for an increase in gaming tables. Mr Shearer quotes a figure of 500. Those negotiations are still ongoing; he is making it up, Mr Faafoi—he is making the figure up.

The important thing for me is that this will bring 1,000 new jobs during its construction—1,000 new jobs. How many times do we hear Jacinda Ardern saying that there are no jobs? Well, if you do not create economic opportunity and economic activity, Jacinda Ardern—I know this is hard for you to understand—there will not be jobs. There will be 1,000 new jobs while they build it, and then there are 800 jobs while they run it, bringing hundreds of millions of dollars into the Auckland economy.

💬 Kris Faafoi: Who for?

Who for? For the New Zealand economy, Mr Faafoi. These international visitors will likely travel on Air New Zealand. They will likely dine out in some of the restaurants in Auckland. They will likely travel to places like Queenstown, Mr Faafoi. That is what international conference delegates do. That is why it delivers economic opportunity.

I know that it is difficult for this Labour Opposition to understand anything about the economy. Labour left it in a mess. This Government is absolutely determined that we will not leave the economy in a mess. We are determined to lift the economy. We are determined to balance the books, and we are determined to deliver jobs so that young New Zealanders will see this truly as a land of opportunity.

Report noted.

Ministry of Justice