General Debate

I move, That the House take note of miscellaneous business. I never thought I would say this, but I am missing Russel Norman. Russel Norman, not long gone to run Greenpeace, was a moderate, sane, predictable economic voice in this House—and does everyone not wish he was back, because look what is happening to the voice of the Opposition without the moderate, thoughtful, and considered views of Russel Norman.

What is happening? We are seeing that the Labour Party’s traditional reputation—which has been crafted with real effort by some admirably smart people over the last 20 or 30 years, as a moderate, predictable political party that in Government might have some concern for the incomes and assets of middle New Zealand and might behave in a way that was kind of predictable—is all unravelling. The obvious example is free trade—that is obvious. It is dispensing with 30 years of multi-party support for free-trade agreements, and, arguably, it was the party in Government that negotiated the biggest and best free-trade agreement, the free-trade agreement with China, which it is no longer proud of—either the agreement or the Chinese, for that matter.

So that is free trade, and you could kind of accept that—but interest rates; politicians stiff-arming banks and setting interest rates? New Zealand has tried this before. In fact, not only has it tried it before but it was the world leader in making sure it did not keep happening. Here is a simple question for the Leader of the Opposition: if the Reserve Bank increases the official cash rate—which might happen one day—would the Labour Party legislate for banks to pass that on to mortgage holders? You know, much as we all try to be rational politicians who take into account the longer view and all the facts, we know the answer to that question. Of course he would not. Politicians will only ever stiff-arm and legislate to get interest rates down. We tried that before. It almost wrecked the New Zealand economy.

So what is going on in the Labour Party? Have its members forgotten New Zealand’s economic history? Maybe they should consult Russel Norman. They seem to be consulting the Twittersphere that follows Bernie Sanders and Mr Corbyn. They seem to think that they are in economies that are stuffed. They seem to think they are in economies where there is mass disillusionment, where middle-class incomes have been dropping, where unemployment is high, and where public debt is huge. You could argue that is the case in some economies where there is now rampant left-wing populism, but it is not New Zealand—it is not New Zealand.

Whereas Russel at least was trying to save the planet, Labour members are on another planet, and it is not the same one. They are following policies that are coming from rampant left-wing populists and economies with characteristics that are nothing like ours. But the worst of it, of course, is that they think the New Zealand public do not know it is cheap, short-term politics. If the problem for Labour members was a lack of trust in their ability to run an economy 2 weeks ago, it has got a lot worse, because we have in the House a major party that wants to relive the nightmares of the 1980s and early 1990s, where all this was tried. It all failed, the pain was dreadful, and Grant Robertson wants to go there again.

That was the speech from the ostrich pit. This is a Minister of Finance who has wilfully and obediently turned his eye away from what is happening in New Zealand. He is an appalling Minister of Finance who has no answer to the reality of what is happening in New Zealand today. National members have hyped up the bubble. They have blown up the bubble as big as it can go. They have given all the signals to the farmers and the banks to throw money at the dairy sector. They give concessions on water, they give subsidies for water, and there is no involvement in managing the environment. They take credit for the low interest rate in spite of the fact that apparently the orthodoxy is that the Government has nothing to do with it. They have blown this bubble. This Government is responsible for more bubbles than the clown troupe of the Ringling Brothers Circus. If it is not the Auckland property bubble, it is the dairy farm price bubble. That is how this Government manages.

OK, so Audrey Young says we are the enemy of orthodoxy. Let me tell you about orthodoxy. Let me tell the Minister of Finance about orthodoxy. Here is the way it is meant to work. The reason we have a central bank called the Reserve Bank, the reason we have a thing called the official cash rate, is that when economic conditions demand it, the bank tweaks interest rates. It puts them up if it wants to dampen the economy; it puts them down if it wants a bit of stimulus.

Right now the Reserve Bank is telling the world and us that our economy is faltering and needs a bit of stimulus. It sent that signal last week, way ahead of expectations. It took it down a little bit because the economy needs a bit of help, the farmers are in trouble, working New Zealanders are in trouble, and the small business sector is in trouble.

But, of course, the Reserve Bank is not the one making the loans. It is the trading banks. It so happens that the overseas trading banks are the ones who get to make the decisions. So, then, what do you expect? The Reserve Bank puts the official cash rate down. The trading banks are expected to do their bit to help the economy. They have not done it. So the question then is: who runs the joint? Who runs the joint? Is it the overseas corporates that this Government has now surrendered us to or it is this Government?

Here is the next question. When the trading banks do not do as the Reserve Bank has asked to help stimulate the economy and help those in trouble, then the question goes on the Government: what are you going to do about it, and, most important, whose side are you on? Whose side are you on? Are you on the side of the overseas-owned corporates who are here to milk the New Zealand economy and get the maximum number of profits out of it, or are you on the side of the hard-working New Zealanders—those working in the factories who cannot get a decent pay rise, those working on the land, the farm owners, the sharemilkers, and the farm labourers, who are the first to lose their jobs when the dairy sector goes down.

What about the contractors who ran out of work last season and now are desperate to find work this season? What about all those who are put out of work and whose livelihoods are under threat because of what is happening in the dairy sector? What about the hundred thousand small businesses that, as Mind Your Own Business has found, lose out as a consequence? What does the Government do? It stands on the sidelines. That is not orthodoxy. [Bell rung]

💬 Mr SPEAKER: I am sorry. I pushed the button by mistake. The member has another—

💬 Hon Members: More! More!

And there is more. But wait, there is more. National stands on the sidelines. Well, not a Labour Government. We stand on the side of those who are doing the work—those who are out there each day on the front line; the people at work. We stand on the side of the people doing the work on the land, in the factories, and in the shops; the people who deserve a better chance; the people who are getting nothing from this Government—not a single ounce of leadership when it is needed most.

Why do you not call together the banks, Fonterra, and the farmers and broker a deal and give people certainty, confidence, and a future? You cannot do it. You will not do it. You are too scared to do it, because you are not on the side of New Zealanders.

Well, the pressure is showing. The pressure is showing on Andrew Little. There is only so long you can deal with very, very low leadership ratings before you do wacky stuff. We saw it with Phil Goff. We saw it with David Shearer. We probably saw it quicker than we expected with David Cunliffe, to be fair. He sort of went straight to wacky from the word go. But here we are now dealing with Andrew Little. Yesterday he was ripping up 30 or 40 years of monetary policy that has encouraged investment and growth in this country, saying that he would be the one to set interest rates, because he is the one who would make sure that they would be passed on to New Zealanders. Today he is away again. Today he has got his person out bagging the New Zealand wine industry. So not content with being negative about some parts of the economy, the wine industry is the new one in his sights.

We have also had the bagging of the immigration sector generally. Andrew Little was out in Lower Hutt last week saying he was not convinced that it was a good idea having Chinese and Indians working and actually cooking food in Chinese and Indian restaurants. That would seem to be an outrage, and he thinks we should stop that, because, under his economy, we should not have immigration. We are looking here, I have to say, at possibly the angriest leader since one that we knew and loved in his day, who was Rob Muldoon—

💬 Hon David Parker: Crosby/Textor.

There is no such thing as Crosby/Textor. I would be worried about the Corbyn-Sanders consultancy, which you guys are actually subscribing to at the moment. You used to wind us up about Crosby/Textor. Well, I will tell you what: we never went to Corbyn-Sanders for our advice. And, if I were you, I would stop paying, because it is not working for them, and it sure as heck is not going to work for you over in the Labour Party.

The problem for the Labour Party is it has completely lost its way—completely lost its way—and over the last 7 years it has declared a huge range of crises in New Zealand and has presented panicky solutions that New Zealanders have looked at and said: “No, that’s just silly and panicky, and that actually, the settings are broadly right. Yes, we have challenges—countries always have challenges—but you take sensible, long-term approaches. Everybody knows there’s no such thing as a free lunch.” We all look overseas at countries where they pretend there are simple solutions, where the Government just moves the levers around—countries like Venezuela and Argentina where they actually go out there and they declare they know better than the world and they know that they can hold the world up and hold the sky up, even though things are changing around them. And that is the sort of policy that Andrew Little is now promoting. That is the level of desperation in the modern Labour Party. It has said: “We’re in trouble, we’re stuck on 30 percent, so we’re going to do wacky things that everybody knows don’t work, but we’re desperately going to try to peel some votes off the Russel-less Green Party and the New Zealand First Party.” Well, if that is the way the Labour Party is looking, middle New Zealand will turn their backs on it, because middle New Zealand knows that you cannot do crazy, silly economic things that do not actually solve any problems.

Yes, it is tough for the dairy industry right now. This Government knows it, because we have dairy farmers and processors in our ranks; we talk to them every day. They know it is tough; we know it is tough. We are working with them to do the things that can be sensibly done, but actually mucking up New Zealand’s banking sector right at the time when you want it to have confidence in the dairy farmers would be the silliest answer—the silliest answer—that you could come up with. That is the sort of rubbish that you expect from the New Zealand First Party, but you do not expect it from the largest Opposition party in Parliament—until you look across and you see that one of its most talented MPs is David Clark, and then you realise what you are dealing with, and that is the challenge for the Labour Party.

The reality is that sensible, conservative, fiscal, and macroeconomic policies have got this country delivering at a rate, in terms of growth and employment. Employment growth is in the top three in the OECD, which is actually the envy of most OECD countries since the global financial crisis. That does not mean that everything is perfect—challenges have to be dealt with—but tipping up the New Zealand economic framework to get a headline in the newspaper will be seen for the desperate, desperate act that it is.

I hope that I am able—after having heard the last three speakers—to turn to matters of more substance than of volume, as we have heard from the last few speakers.

The Prime Minister said yesterday that he had no idea about the number of farms, the number of rural retailers, and the number of small businesses that are at risk of going under during the current dairy downturn. He also said that he had no idea about the scale of the risk faced by either Fonterra or the financial sector, in terms of their exposure. This is against a background in which farm economist Peter Fraser has said that up to 25 percent of farms are at risk. The Reserve Bank has said that up to 44 percent of loans could become non-performing. Accounting software company Mind Your Own Business has said that 100,000 small businesses are looking at facing some real hardship as a result of this.

And so the question is: is the Government in denial here? Is it in dairy denial? What is its strategy in the face of this, given the scale of what everybody, except the Government benches, seems to be saying represents a real threat to the New Zealand economy—and not just the dairy economy but the entire New Zealand economy? It does seem that the strategy is more of the same—to keep on doing more of the same, in the hope that it produces some kind of different result. Everything that the Government is doing appears to be continuing to contribute to increasing supply, at a time of record low prices. And, to me, that is absolutely bonkers.

The Government is in denial, and the denial is becoming dangerous to New Zealand. It is actually dangerous for farmers. It is also dangerous to our rivers, and it is dangerous to the New Zealand economy. You have to ask how low the dairy commodity price can fall before the Government decides that, maybe, a change of tack, a change of strategy, is somehow desirable.

At the heart of this are the irrigation projects that I referred to in oral questions today. The Government has made a number of assertions about these, which I would like to contest. It has said that these irrigation projects, with $400 million worth of Government funding available—there is actually more than that if you take into account the Irrigation Acceleration Fund. There is another $25 million there, and, possibly, even the use of some of the $100 million Fresh Start for Fresh Water Clean-up Fund, also for irrigation projects, to the tune of, essentially, nearly half a billion dollars of public money, devoted to or directed at increasing large-scale irrigation projects.

So the Government has said a number of things about these irrigation projects: first, that they are public infrastructure—that they are somehow like roads. Well, roads are things that pretty much everybody can use, and irrigation schemes are not. Irrigation schemes are able to be used pretty much only by the user, so the idea that they should be publicly subsidised rather than having a user-pays principle is somewhat ropey.

I do want to just reinforce the point that there are actually three different available funds here for irrigation. One is the $25 million Irrigation Acceleration Fund. There is the $400 million that has been tasked for Crown Irrigation Investments, and there is the Fresh Start for Fresh Water Clean-up Fund—$100 million there, as well. The Government has also said that in an effort to clean up our filthy rivers it is going to allow irrigation schemes to bid for some of that clean-up fund. Like I said before, I just think it is absolutely bonkers that you have got that level of public subsidy available for these incredibly risky schemes. If these projects are that good—if they are that economically powerful—then they should be able to stand on their own two feet.

The other thing the Government has said is that somehow these large-scale irrigation schemes are good for the environment—that they are good for our rivers. The only cases where that is true are for rivers that have been so damaged by the clear-felling of trees and by massive irrigation in the past that there are huge amounts of sediment and nutrients in those rivers. The rest of the time, all these schemes do is massive terraforming that converts land that is otherwise completely unsuitable to yet more dairy intensification. Of course, we know that that increases runoff into our rivers and contributes to the growing problem that we have there.

The assertion that the Government makes, that these schemes are somehow economically viable, that they are somehow environmentally good, is actually completely preposterous. They are bad for the environment, they are bad for the economy, and they are also, as it turns out, bad for farmers, because you have got farmers there, some of whom are on multigenerational lands, who are leveraged up to the hilt to pay these things back. So the Government’s argument is completely fallacious. Thank you.

Buildings has been called; the hammers and the nails are out as the building experts now move into Labour MPs’ offices to remove the photos of Michael Joseph Savage and put up large photos of Robert Muldoon. That is actually what we have seen in the last 24 hours as far as policies are concerned. For the Labour Party and its policy ideas, it is most certainly back to the 1970s. The Labour Party, as Rob Hosking said, “is positioning itself less like an alternative government and more like a protest movement.”, which is hardly surprising—and this is my own bit—when it is, of course, run by the unions. Banking experts are saying that Andrew Little has a “lack of understanding of how banks and the system works”, and this is the man who wants to tell us that he should actually be the one who is in control of this stuff.

💬 Hon David Parker: Why did the bubble get so big, Paula?

Even the Greens think it is silly, David Parker, even the Greens.

As the Greens—I think it quite interesting—try to be taken a bit more seriously and try to become a bit more mainstream so that they can move into that kind of centre vote area, it seems that Labour is actually heading in the opposite direction. It is trying to jump on the “take any issue and come up with something nutty to go alongside it”—and I guess it does think this is what New Zealand wants: its own version of Jeremy Corbyn. But it sounds more like Jerry Springer with the nutty stuff that is currently coming out of a party that had and was underpinned by values that it held true to.

Those members should be actually pretty shocked with themselves and what they have been coming out with more recently. They stand on one side of it and say that they want us to support dairy and farmers more—and I heard a point of order yesterday from David Clark telling us that they are pro - free trade—when, actually, their actions are the complete opposite. They will not constructively work with one of the biggest agreements that will make the biggest difference to our economy and real people in real jobs and how they can actually make a bit more money and take on some extra people and see those actual workers get higher wages due to businesses being more profitable. Those members speak out of one side of their mouths, but in their hearts and actually even in their heads they know it is not true. They are going for the Jerry Springer shock jock to try to get a bit of publicity, and I say to them in this debate that they are making utter fools of themselves in how they are doing it.

Shall we move to the latest: that they should be now legislating for the banks to pass on interest rates? Like we hear all the time, it will of course be “We want to legislate for when they are going down and make sure that they are.”, but they will be the first to cry wolf when actually they reverse and rates are going up. They will not then want banks to be passing those costs on to good businesses and to see that level of competitiveness that gives us a banking system that stood up in the world’s biggest global financial crisis for decades. Our banking system actually stood up to that because of the robustness and because of its independence from politicians sticking their noses in and threatening to legislate. There has never been a clearer message to businesses, to dairy farmers, and to others that that—Mr Opposition over there—is not ready for Government or anywhere close to it.

At the end of the day, it is the values that underpin us and how we stick by them that dictate what our policies should be, and there is a real mismatch amongst the Labour caucus and its leadership at the moment—and may it forever reign, as far as I am concerned on this side of the House. We do not for one moment underestimate some of the effects that we are seeing of prices on our dairy farmers at the moment. We are putting more into supporting them. You are seeing $500,000 going to supporting the trusts and the counselling that needs to go on, trying to make sure that we see the things that are happening there. We also understand what it means to stand beside those dairy farmers and make sure that we have the right policies in place. If we have seen anything this year, it is the truth about what underpins the Labour Party, and when you dig deep, it is nothing.

I cannot help but smile. The stress test from the Reserve Bank has come out with the statement that “the banks could be left managing large amounts of land for years and have most of their profitability wiped out.” The image of bankers in a herringbone pit trying to get their money from the cow’s tits instead of the farmers’ bank accounts is just too good to be true.

How have we, how have the farmers, and how have the bankers got into this situation? Indeed, the stress test said that the banks could lose $3 billion. That seems like a lot of money when you say it slowly, but that is actually 9 months of the banks’ profits. When you look at it that way, the question is “Why not?”, because the farmers are losing years of profits in a situation that is dire for many of them. How did they get there is the question. Well, some might have been called greedy, but mostly they were ambitious and naive, hard-working Kiwis who wanted to get on and grow their business and grow the benefits for New Zealand.

They were told by Dairy New Zealand that they could increase productivity, that things are all good—Dairy New Zealand, subsidised by taxpayer funding, was pushing money down their throats to push more productivity. They were told by Fonterra that they had a triple “V” strategy: volume, value, and velocity. No one knows what it means, but it has got a great future, they were told. Then we had people saying things like “and in my view that is going to bottom out pretty soon and start going back the other way.” and “This is not based on hope. It was fundamentally based on a massive consumer demand.” That was in November 2014 from the Prime Minister. His constituents, those hard-working but naive farmers, believed him—they believed him. And the banks were happy to throw money down their throats, and the Prime Minister went around the world getting photos of Fonterra and its growth.

Now the farmers are asking: “How have we got here?”. The Prime Minister’s instincts are pretty simple, having been a trader: when things get bad, sell, sell, sell.

💬 Hon David Parker: Who to?

Well, the question is: whom to? Indeed, what I picked up today in the Farmers Weekly—indeed, it is in the property pull-out. Fancy that! This is the real-estate part of the farming magazines that is growing in size every single week as more and more properties come on to the market for a smaller pool of people who want to pay the money. There is, however, hope—from the Prime Minister I am sure—that overseas investors will walk in, step in, prop up property prices, and buy a huge portfolio of our farmland.

That is not something that Labour will stand by and let happen. We have said that we will put a line in the sand so that in the dire situations that the farmers face now, they must not be forced to sell out to foreign investors who are taking opportunities that should not be there. How have they got here? Where to now for our dairy industry? These stories have been out there around the wider arena. That was 2015—in August last year. Yet we had the Prime Minister and the Government completely in denial and continuing to fund irrigation and growth in dairy, and the Primary Growth Partnership for Dairy New Zealand. They were continually in denial of the reality that the world is awash with milk. You do not have to be a genius to work out that that was going to happen.

So what is National doing? The Prime Minister says: “Oh, support the Trans-Pacific Partnership (TPP) agreement—that is going to be the solution.” I quote John Wilson: “I am very disappointed that the deal falls far short of TPP’s original ambition”. It does very little for the dairy industry. The Prime Minister says: “Support the Resource Management Act reforms.” These are the reforms that will, effectively, turn good, productive land into house sites around Auckland. That is not good news for our dairy farming sector.

This Government, aided and abetted by the banks, has thrown money at naive, well-meaning, well-intended, and ambitious dairy farmers, and the debt levels are up to—I would guess—about $40 billion as of this day. The last calculation was $38 billion. I put it to the banks that it is time for them to take their losses. If it is $3 billion, then that is only 9 months’ profit. It is incumbent upon every one of us to support the good, hard-working people who have gone into dairy farming, who continue to create wealth for this country. We need to look after them and give them a fair go.

Over the last few days, we have heard from the leader of the Labour Party that he intends to actually manage interest rates by setting interest rates in New Zealand. Today he did not resile from that position. He came into this House and defended it in the general debate. Even if he knew he was wrong yesterday, he had his chance to move away from it today, but he did not, because the Labour Party genuinely believes that it can charge and determine what interest rates would be in New Zealand. That is economic lunacy. That is the Labour Party gone wild.

The Labour Party is a party that has no understanding of economics. It has no understanding of how interest rates are set, and it is a party that looks for pure political hits and has no compassion and understanding of what it is talking about. Let us look at other countries that do such things. Look at the incidence of where there is no independence in this area: Bahamas, Barbados, Jamaica, and Turkmenistan are the countries that the Labour Party would want to be in with. That is the kind of economic plan that the Labour Party intends to follow.

It is not only the Labour Party with setting interest rates. We know that the New Zealand First Party wants to control exchange rates as well. Align that with the Labour Party and its interest rate controls and we go back to a situation many decades ago that has been seen to fail in the economic history of this country and any other country.

The Opposition will say that there is dairy bubble that has suddenly arisen on this Government. That is simply not true. If anyone looks back, they will find that the greatest percentage in increase in dairy farm debt occurred under the Labour Government. That was when the conversions happened in the South Island; that was when the greatest increase in dairy debt came. It was under Labour, not under National. So do not blame the Government for the individual choices that farmers have made and are dealing with at this stage.

What we do need is a Government that delivers a strong economic base; a Government that delivers an economy that is open, free, and can deliver low interest rates and a strong base for our financial sector to be secure so that people can actually get money lent to them. We do not need a Government that goes out and makes rash promises around education policy that would add billions of dollars on to the Government expenditure, therefore increasing Government debt and therefore increasing interest rates that farmers would have to deal with. We do not need a Government that would not support farmers in the areas of policy that we can help them with, such as trade, such as the Resource Management Act, such as water, such as immigration, and things like that that they actually need.

Farmers listening to this need to think what Labour would deliver. Labour would deliver an economy where it controls interest rates. How is it going to set those interest rates? What is going to be the appropriate interest rate? How is it going to make sure banks actually do those interest rates? What would it do as its sanctions if banks did not follow those interest rates? What would be the consequences for farmers if they had secured long-term debt under other interest rates? All those questions can never be answered by the Labour Party members because they do not understand fundamental economics and how interest rates are set and how the money markets work.

The second thing Labour would do, other than setting your interest rates, is that it would be trying to set your exchange rate in conjunction with the New Zealand First Party. How would it set the exchange rate, where would it set it, and how is it going to make sure that that happens? The Labour Party members cannot answer those questions, even though that is its policy, effectively. The next thing Labour would do would be to deliver a very poor economic situation for New Zealanders, where banks would not want to invest in this country. The biggest dilemma for New Zealand dairy farmers would actually be the supply of capital coming into this country. Those banks would not supply capital to the New Zealand market, because they would fear what a Labour Government would do to the rules and regulations around the use of money in this country. That would dictate that there would be less capital there, and that would be a big hindrance on New Zealand farmers and all New Zealand businesses.

We know what Labour would do to farmers: it would destroy farming in New Zealand, it would create an economic environment that would be against farmers, and it would have dire consequences on an industry that is battling with international prices. Do not listen to the Labour Party members’ rhetoric, do not listen to those far-out promises of setting interest rates that are not realistic. Look at the equation: you have got the equation of the Bernie Sanders Labour Party, you add that with the Trump New Zealand First Party and you come up with a reasonable Green Party in the end. That is what the Opposition looks like to New Zealand farmers. Thank you.

Tēnā koe, Mr Speaker. Tēnā koutou e Te Whare. The environment, under this Government, is a nice-to-have: something for the privateers and the corporates to sponsor to make them look good. The environment, under this Government, is a contradiction. We have polluted the rivers—they are not swimmable—but the Government insists that its collaboration strategy is working. If commodity prices had not collapsed, the Government’s treacherous strategy of “drill it, mine it, frack it, and milk it” might have succeeded for some people. But, actually, what it has done is polluted 62 percent of our rivers.

The environment is a space where 6 million cows and half a billion dollars’ worth of subsidised irrigation gets to make use of rivers, justified by the faux arguments that river flows do not need to vary. Whatever, Mr Key—the man who thinks that rivers are just wasted if they flow out to sea. A bit of fencing around the nitrate-contaminated waters will be seen as the solution and the window dressing when that 62 percent of rivers remain unswimmable under this Government. But not to worry, the children of the wealthy can be taken on recreational visits to clean rivers, while the children of the poor sit by dirty drains, listening to the stories of their grandparents about what a swimmable river used to be like. Fish in our rivers—ever heard of them? Anyone seen a native fish in a river lately? Not likely. What we have, instead, is rivers choked with cow urine, seasonal algae blooms, human waste, and invisible chemicals, many of which have yet to be identified.

No one owns water, says the Government. Meanwhile, while it parrots this, bottled water is being sold to countries like China and being exported from the Hawke’s Bay. People spend $3 on this bottle of water while these companies export free water and pay nothing except a few bucks for a resource consent. The catchments of sacred and iconic springs at Porotī and Waikoropupū are now up for grabs for export—tangata whenua kaitiakitanga rights ignored and trampled on.

The environment is a nice-to-have. The emergency aid ships are ploughing their way to drowning Pacific atolls and cyclone terror descends on the Pacific, but how about some real action and commitment on issues such as water and climate change? The environment, in a Government with strong, green, progressive leadership will not be a nice-to-have, because it is the economy, it is the community, and it is the future. It is the source of everything we need as well as everything we produce. It is the only stability in this crazy world of greed: good soil, clean water, clean air, and clean energy.

We have the chance in this country to pull back from the brink of our self-sabotage. We can have a leadership role by committing to clean and swimmable rivers. It is what everyone wants for their kids, except, apparently, this Government: rivers, not drains. We can have great farming models that sustain farming communities, not boom-and-bust monocultures of milk powder export to lactose-intolerant populations who now have the technology that we taught them to make their own milk powder.

A strong, Green voice in Government would value Te Tiriti o Waitangi and put quality water at the heart of all negotiations for allocation as well as use. We would believe the freshwater scientists—actually believe what they tell us—when they say it is a crisis of multiple stressors on lakes and rivers, including nitrate pollution at unprecedented levels and temperatures of 30 degrees, which have never been recorded before in some of our waterways and lakes. We would stop the dairy conversions because it makes sense. Landcorp Farming Ltd gets it; Tourism New Zealand gets it.

Rivers can be swimmable for our mokopuna. I do not know about you but I have had enough of this sign: the sign that says “this river is too sick to swim in” is all over this country. It is in media alerts every single day. Rivers are there for our mokopuna. We can have swimmable rivers; we can have clean water—we just have to commit to a goal and work towards it. But this Government has walked away from that responsibility. Swimmable rivers are our future, not this disgrace. Kia ora tātou katoa.

It has been a sad 7 years for the Labour Party, but yesterday marked the nadir of its trashing of its proud economic record—forgetting the lessons of history and trashing a once-proud economic legacy. Yesterday was the day that the Labour Party jumped the shark. Yesterday was the day that marked the absolute culmination of its return to the politics of nostalgia, a return to the halcyon days of the 1970s. Well, actually, the 1970s were not a great time in New Zealand, and it took the Labour Party and a Labour Government to sort it out.

I want to briefly canvass the three areas in which Labour is trashing its legacy. Firstly, let us talk about trade and openness to the world. It was the Labour Government of the 1980s that slashed tariffs and that courageously ended all State support for our farming sector. It was a Labour Government—the fifth Labour Government—that signed the China free-trade agreement. Why? Because it knew then, as it does not know now, that New Zealand’s competitiveness and New Zealand’s future prosperity depend on our engagement with the outside world, of selling more to the world, and being connected to the global economy.

Now what do we find? We find a Labour Party that is fundamentally opposed to the Trans-Pacific Partnership (TPP) agreement, which it started when it was in Government, which Phil Goff and Helen Clark kick-started on the eve of the 2008 election campaign and trumpeted during the campaign as one of their signal economic achievements. Well, now we find the Labour Party—with the honourable exception of Phil Goff, who, because he is running for the Auckland mayoralty, is somehow allowed to support the TPP agreement. Even though we know that David Shearer and other MPs inside the Labour caucus also support it, now we find the party position is that it is opposed to the TPP agreement. There is not a Labour Party leader still alive who does not back TPP: Helen Clark, Phil Goff, Mike Moore—all these leaders, who knew that New Zealand’s future depended on being connected to the world, backed the TPP agreement, apart from the modern-day Labour caucus.

Recently, we find Labour descending into gutter politics. Firstly, we had Phil Twyford’s disgraceful smear campaign last year against people with Chinese-sounding names, using Rob Salmond’s Bayesian analysis to somehow justify it. And today we have Andrew Little going out to the Hutt and criticising ethnic restaurants, talking about how: “I’m not sure if we should have Indian and Chinese restaurants. Perhaps we could source the domestic labour from New Zealand to make Chinese and Indian food.” This is, as Phil Quin, the Labour activist, said on Twitter, a regressive and depressing view of New Zealand.

Let us talk about monetary policy. In the 1980s the Labour Government established an independent Reserve Bank, one of Labour’s proudest achievements. Why? To take interest rate decisions and monetary policy out of the hands of politicians. Now what do we have? We have Andrew Little brain-farting his way to Parliament, talking about how we have to put the control of interest rates back into the hands of politicians. Pressured into it by the media, he suddenly decided to announce that the Labour Party will, if necessary, legislate for interest rates to be decided by politicians.

This is a recipe for disaster. It was a recipe for disaster in the 1970s, and it will be in 2016, or 2027, or whenever the Labour Party happens to get back into Government. This is something that the Labour Party is going to come to regret. We know that Labour is nervous about this, because all the Labour Party MPs got sent an email from their leader’s office, saying to them: “Don’t meet with any banks or the Bankers’ Association without running it past us first.” So we know that they are pretty embarrassed about this and they are leaking like a sieve.

Thirdly, let us talk about tertiary policy. Phil Goff sits over there. Phil Goff was the Labour Party leader who introduced student fees. The other day I went back and looked up the education amendment legislation of 1988. Why was Phil Goff, and the fourth Labour Government, introducing student fees, which were the precursor to the student loan scheme? Why? Because he wanted to broaden access to tertiary education. He wanted to increase participation. He wanted more people to go to university. Great policy, and the student loan scheme is one of the most progressive, forward-thinking, and equitable public policy schemes ever devised by any New Zealand Government.

But now what do we have? We have Andrew Little, Chris Hipkins, and Grant Robertson returning to their roots and doing what they do best, which is going back to student unionism and pumping up more money for student support. It is ineffective, it will be inequitable, and it will not work. This is a Labour Party that is stuck in the politics of nostalgia and wants to take New Zealand back to the 1970s, not forward.

It is really interesting, is it not? I want to start by acknowledging the passing last week of one Helen Skurr from Oxford in the Waimakariri electorate. Helen Skurr supported myself and Winston Peters and New Zealand First for 22 years, as a founding member. But Helen Skurr was also a lady of the land, a farming wife, a farmer herself; someone who operated with her husband and managed Mt White Station many, many years ago, back in the hard times, and later on ran their farm in Oxford.

She would be appalled, as a long-term National Party voter for many, many years, to hear the answers to questions in respect of the plight of the dairy industry and farmers who are facing the wall right now. It just astonishes me. I can accept that the Green Party has had this thing about dairy farmers for a long time, and it is hard to ignore their reasoning. I can accept that the Labour Party does not particularly like farmers because most tended to vote National. But that is changing—changing big time.

💬 David Bennett: Oh!

I know—because of the reception that Minister Nathan Guy got when he turned up to the rural and provincial local government conference just recently. He was told bluntly by former card-carrying members of the National Party that farmers believe this Government is totally out of touch. I have to say—what does it take? There are 100,000 businesses, a million people, in New Zealand, who depend on the farming sector for their income.

We have a farmer in the Wairarapa right now—and there are more cases lined up. We are trying to work on this, and the Prime Minister says: “Don’t come in crying crocodile tears. Give us some solutions.” Well, New Zealand First has offered a solution to assist with the plight of the dairy farmers—of all farmers. It is our farming debt remediation bill, and what is the Government’s answer? It will not support it—does not require it. Well, let me tell you that we are working on a case right now and we will be working on more, because they are coming down the line. Farmers are being liquidated, being wound up, and evicted from their properties. We know that for every farmer who goes out the back door, for every bank that recovers its money, there is a raft of unsecured creditors: silage contractors, fencers, people who do the irrigation, people who put in the water reticulation, people who drill the wells, and trucking companies. These people are unsecured creditors throughout rural New Zealand, and they will be hit and they will lay off staff.

What has National said? That the wine industry is doing well—Mr Scott may say that, being an investor in the wine industry himself—and the kiwifruit industry is doing well. That is fine, but what about the dairy farmers who were the champions of this Government’s economic recovery? I call National now—and people are calling National this out in the rural communities—fair-weather friends. They are there to trumpet the gains and the successes and the employment when it is all going well, but when it turns to custard and goes down to $3.90 and further, what do Government members say? They say: “It’s not a concern. We’ve stress tested, and it’s going to be fine.”

Well, we heard a story of a milk tanker driver who pulled up at a dairy unit just recently—a week ago. He pulled up outside to load up the milk, and spray painted on it were some words that I will not put in here. I will abbreviate them and say that this farmer had had a gutsful of Fonterra. When the driver went inside the dairy shed, he found this farmer hanging from the rafters. That is not the first suicide that tanker driver has come across, and there is more coming.

What is this Government doing? Nothing. We have offered a solution—a farm debt remediation bill. Let us put it though the House. Let us help these people in need. Let us stop the banks ripping them off at 9 percent interest and then hitting them again at 22 percent on their credit cards when they try to buy their groceries and buy clothes for their kids, because their farms are running at a loss. Let us do something other than sit on our hands, National, and do nothing, while more and more farmers commit suicide and while their families are torn apart. But I guess you just do not want to, do you.

Yesterday Mr Little once again demonstrated that he thinks New Zealanders are idiots, that Kiwis do not know how to manage their affairs, that we all need his superior wisdom and knowledge. The sanctimonious attitude of the Labour Party is alive and well. He thinks that he knows how to determine interest rates, and he will strong arm and legislate to ensure that. Apparently he has more knowledge of interest rates and markets than the collective wisdom of the banks, the lenders, the borrowers, the businessmen and businesswomen, and the farmers. Clearly, he has no understanding of how the interest rate markets work. He obviously did not consult Grant Robertson or Mr Parker, or his commodity-trading colleague Stuart Nash, who have some familiarity with the market place.

I have worked and traded in the interest rate markets for more than 10 years, in Wellington, London, and Tokyo. Interest rate cuts by a central bank can have a number of consequences. They can drop by the same amount as the cut, as Mr Little is advocating. They can drop by more than the interest rate cut, because the interest rate cut is seen as bad news and so people begin to flatten the yield curve. Interest rate cuts can kick off a whole series of expectations of lower rates. Thirdly, interest rates can actually rise on the back of an interest rate cut, and that is because the cut is seen as a stimulant to the economy. So people build in further interest rate rises as the economy is expected to improve, and the currency, of course, will also appreciate if the expectation is there that that interest rate cut is a good thing for the economy. Or the rates may not move at all after an interest rate cut in the official cash rate, and that is because the markets fully expect, and have built in, that inevitable and fully expected interest rate cut. So there may not be any consequential movement in rates post an official cash rate cut.

Mr Little’s policy of strong arming the banks demonstrates, first of all, that he thinks he knows best and that we, the general public, including farmers, small-business people, are just idiots. Secondly, it demonstrates his lack of understanding of the economy and how it works. He has no understanding of the interaction between official cash rate cuts, interest rate curves, and foreign exchange levels. Thirdly, it has demonstrated that he has not communicated with his own caucus, because I know that in that caucus there is some knowledge of markets, interest rates, and foreign exchange.

His plan to interfere with interest rates, which is a global market, is a very poorly thought-out piece of policy. Telling banks, business people, farmers, and homeowners that he knows best demonstrates once again the sanctimonious attitude that pervades throughout the Labour Party. Next thing you know, they are going to tell us what sorts of lightbulbs to put in our sockets, or maybe what sized shower heads to put in our showers. [Interruption] Well, that is the attitude that comes from that side of the House and, as we know, that is exactly what has come before.

We need to let New Zealanders decide for themselves which bank to borrow from, for what term, and for what amount. Consumer power is far more important and far more effective to achieving competitive and efficient market place prices. If Mr Little really wants to support farmers, exporters, and small-business people, instead of interfering with international markets, which he has no understanding of, I suggest he supports irrigation projects to increase economic benefit, environmental benefit, and social benefit. I suggest he votes in support of the Trans-Pacific Partnership to allow greater access to our markets for those farmers and our exporters, and I suggest he supports the Resource Management Act reforms to minimise bureaucracy, which are on the table. Does Mr Little really support New Zealanders, as he claims? No, he does not.

I have got a question to pose to the member who has just resumed his seat, Alistair Scott, and his colleagues: is it acceptable to them that overseas-owned banks take about $90 million a week profit from New Zealand and take it overseas, at the same time that it is estimated that 25 percent of our dairy farmers could go under? Is that an acceptable situation? Is it acceptable that the livelihoods of about 100,000 small businesses that are dependent on the flow-on income that they receive from dairy farmers and other farmers are at risk? Is that all right? Again, no answer from the National Party. Because that is what New Zealanders are currently being told is happening in our economy. When the official cash rate is lowered and the banks do not pass it on, questions should be asked about the flow-on effect of that on those 100,000 small businesses and the estimated 25 percent of dairy farmers whose livelihoods are at risk.

That is what Andrew Little and Labour were asking for—for the National Party, for John Key and the Government, to stand up for New Zealanders. To stand up for New Zealanders and say: “These are good, hard-working people. Their livelihoods are at risk because of circumstances outside their control.” But the Government said nothing—they should do nothing and say nothing. It is not good enough for the Government of our country. We are a nation that is dependent on small businesses. We have become increasingly and foolishly, in my view, dependent on dairy farming—that was too big a risk, and now that is coming back to bite us. The Government’s response is that we should support the Trans-Pacific Partnership (TPP)—which, clearly, is doing nothing for dairy farming anyway—and that we should support changes to the Resource Management Act, so that further damage can be done to our environment.

Where are the brains of Government members? That is a question I have often asked when I have listened to them during question time, and even more so during their speeches. They have completely lost touch with New Zealanders, and lost any aspiration for New Zealanders for the future. I actually do not think that New Zealanders have aspirations that we should discard. I think our aspirations have always been pretty consistent: to have a home, to have a job, to have a fair society, to have safety, to have something to look forward to. Remember Norman Kirk’s words? Those words are as true now as they ever were. Those aspirations form the value of New Zealand society, and it is those aspirations that are being taken away from good, hard-working New Zealanders while the National Government stands by and says: “Do nothing.”

I want a society where we do care about each other, where we do think that it is a credible aspiration—and one that the Government should support—to have a home, to have a job with a fair income, to have a safe community, and to have something to look forward to. Those are the aspirations that I was brought up on, and I think I had a good family who raised my siblings and me. We always knew that we would have a secure home, that we would have an income through my father’s job, and that we would have something to look forward to in the future. Work hard, get ahead—those are the aspirations that a Labour-led Government will support New Zealanders to have again. Those are the values that have formed the basis of our society. Those are the values and aspirations that have been thrown away by an arrogant and out-of-touch Government led by John Key.

The debate having concluded, the motion lapsed.