A Parliamentary speech attacking the Labour Government's record over six years in office
I move that the following words be added to the Address: “and that it informs Her Excellency that this House has no confidence in the Labour-New Zealand First Government because it has no serious programme to secure rising incomes for all New Zealanders; because the Labour component of the Government has coasted over the last six years on the back of strong export prices, and utterly failed to lay the foundations for reducing the gap between living standards on this side of the Tasman and those in Australia; because it fought a dishonest election campaign, one that ransacked the public purse for irresponsible party purposes; because during that campaign it suppressed vital information about the financial consequences of its policies; and because it has trampled over all previous constitutional conventions in cobbling together a bizarre set of coalition arrangements that put personal ambitions well ahead of the national interest.”
Madame Speaker, last Tuesday, Her Excellency was asked to read a profoundly uninspiring speech from the Throne.
The speech was full of good intentions, and pious hopes. It tried to suggest that this Labour/New Zealand First Government actually cares about raising the living standards of all New Zealanders.
There were lots of references to the importance of productivity. Lots of references to the importance of “transformation” of the economy, and of giving “particular attention” to a wide range of issues.
The speech tried to suggest that the Labour/New Zealand First Government would like to see the gap between our living standards and those in Australia reduce.
But we all know that this is empty rhetoric. There are many people in this House who remember Helen Clark, just six years ago and then Opposition Leader, deploring the exodus of Kiwis to more prosperous countries and vowing that she was “not prepared to stand back and see the best and brightest of New Zealanders leave this country, taking their ideas and their businesses with them.”
Even more of us recall her statement in 2001 stating that her goal was to raise New Zealand’s living standards to the top half of the OECD within 10 years.
She abandoned that target a bit later, no doubt because she could see she had no chance whatsoever of achieving it, but still in 2003 told Parliament she was committed to raising New Zealand’s living standards to the top half of the OECD “over time”.
Yet again this year, another vacuous statement suggesting she is serious about raising living standards.
Well, I guess the best way of judging whether her Government is serious about this important goal is to see what Labour actually achieved in the last six years.
Over the last six years, as over the last 12 years, total economic growth has been better than it was over the previous decade. Indeed, over recent years, total economic growth has even been slightly better than total economic growth in Australia.
Sounds pretty good. But it’s not nearly as good as it sounds.
The reality is that, as umpteen people have pointed out to the Government, this total economic growth was made up of a big increase in the employed labour force and some improvement in output per person, or productivity.
The increase in the employed labour force was in turn made up of a reduction in unemployment, continuing a trend which began in 1992, and an enormous surge in net immigration, first in the mid-nineties and then again after September 11.
But the worrying thing is that growth in output per person employed, though markedly better than before the reforms of the eighties and early nineties, is still well below the OECD average.
And the Clark Government has done nothing to build on past productivity improvement.
It has failed to fix the delays and obstacles in the Resource Management Act, with the result that we have less investment in almost every industry than would be desirable.
It has failed to fix the growing problems in the road network, problems which result in hundreds more people dying and being injured on our roads than countries with better roads, like Australia and the United Kingdom, and hundreds of millions of dollars of additional cost arising from congestion.
It has utterly failed to deal adequately with the prospect of brown-outs and black-outs, despite the fact that the great bulk of the electricity generation industry and Transpower are owned by the government itself.
It has failed to take significant steps to ease the critical shortage of skilled workers, and indeed the Clark Government capped funding for apprenticeship training, and provided more than nine times as much funding to the Wananga o Aotearoa as to the entire modern apprenticeship scheme.
Though the business sector has been under very considerable pressure from the appreciation of the New Zealand dollar in recent years, the Clark Government failed to ease the burden of compliance costs facing the business sector, and in fact didn’t hesitate to dump additional costs on employers, thus further undermining their competitive position, through amendments to the Holidays Act and the Employment Relations Act.
Though the Government’s own advisers in Treasury have calculated in a paper written a year ago that a lower, flatter, income tax structure could add between ½% and 1% to our per capita growth rate – a phenomenally large gain, which would see us begin to narrow the gap with Australia – the Government has failed to take the slightest notice of this advice, and indeed has explicitly ruled out any change in the structure of personal taxation before a trivial adjustment in 2008.
The Clark Government has coasted along, enjoying the prosperity arising from excellent prices for meat and dairy exports on international markets and the boost to the housing market provided by a strong inflow of immigrants.
But the end result has been profoundly disappointing. Figures released by the Government Statistician just last week suggest that productivity has actually been falling recently, and is now at a four-year low.
In 1999, the gap between average after-tax wages in New Zealand and those in Australia was some $5,000 per annum. Five years later, the gap had virtually doubled to $10,000.
Earlier this year, the OECD grouped member countries into four groups with broadly similar levels of per capita income. We were grouped along with Slovenia, Hungary, Portugal and Malta as a “low-middle income country”, well below the group of “high-middle income countries” we like to think of ourselves as being similar to, like Australia, Canada and the United Kingdom.
Is it any wonder that the exodus of New Zealanders to greener pastures abroad, an exodus which Helen Clark pretended to care deeply about back in 1999 when she was in Opposition, has been accelerating lately?
Is it any wonder that a recent OECD study found that New Zealand had a higher proportion of its tertiary-educated people living abroad than any other developed country?
And what about the future? Well, it would be nice to think that the pious hopes expressed in the speech from the Throne would result in real action. But why should we expect that?
Labour’s famous pre-election “pledge card” was devoid of any policy commitment which might be expected to produce higher living standards, with the single rather trivial exception of a commitment to fund 5,000 additional modern apprenticeships. All the other commitments were about redistributing income, not about increasing it.
But what about the infamous student loan bribe? Surely that might be regarded as a policy which might encourage growth and improve living standards, at least to the extent that it might encourage people with tertiary qualifications to stay in New Zealand? Of course, that is the argument that the Government ran in the election campaign.
But sadly no. That policy was a totally unprincipled election bribe, devoid of any policy justification. Fewer than 6% of those with student loans live overseas, so the student loan bribe, given at enormous cost to ordinary hard-working New Zealanders, will have absolutely minimal impact on the number of graduates heading overseas.
Michael Cullen confirmed last week that the student loan bribe will require $2 billion to be written off the value of the existing student loan book, while estimates of the future cost of the scheme run up to $1 billion per year.
Under the Labour/New Zealand First Government, we will see no acceleration in our growth, no narrowing of the gap between living standards on this side of the Tasman and those on the other side, no attempt to remedy the fact that New Zealanders earning less than $100,000 annually pay more tax than do Australians in similar circumstances, no slow-down in the exodus of Kiwis to greener pastures abroad.
Indeed, if New Zealand incomes were to continue growing at the rate projected in the Budget, and other OECD countries were to continue growing at their average rate over the last 20 years, New Zealand average incomes would continue to fall relative to average OECD incomes.
The same is true vis-à-vis Australia. Over the last 10 years, per capita incomes in New Zealand have grown more slowly than in Australia, so that far from catching Australia the gap between us has actually widened over the last decade.
It would take a prodigious effort to match Australian income levels within 20 years, and there is not the slightest indication that the Labour/New Zealand First Government will make that effort.
Indeed, every economic forecaster worth his salt is projecting at least two years of sub-3% growth in the immediate future, with some predicting that growth will be below 2%. And Michael Cullen, far from trying to find ways of enabling the economy to grow faster without inflation, is busy trying to find ways of slowing it down!
We can’t expect to see anything of value in a host of other areas which are of vital importance to most New Zealanders either.
Over the last few weeks, we have seen example after example where the police have failed to provide the community with the protection we have every right to expect:
cases where victims of crimes have identified the offender and have found his address – only to be told the police are too busy on other matters;
we’ve heard an admission that in the Auckland police district one case in five is unassigned for investigation.
We know, because the Education Review Office itself has finally told us, that far too many children leave school barely able to read or write or do basic arithmetic. But still the Government shows no sign of being willing to look hard at the way the current school system operates. We have hard-working dedicated teachers trapped in a highly centralised system where there is far too much detailed control over school operations exercised by the Wellington bureaucracy.
And at the other extreme, we have an extraordinary amount of waste and extravagance in the tertiary sector, exemplified most starkly by the Wananga o Aotearoa – a situation which has seen government funding for this institution explode from $5 million in 1999 to $239 million in 2004, with widespread rumours of nepotism and legally dubious short-cuts, and the Minister’s only serious action so far has been a proposal to force the institution to eject a high proportion of their non-Maori students.
Helen Clark has had to remove Steve Maharey from responsibility for tertiary education and ask Michael Cullen to fix the mess – but has then given Mr. Maharey the rest of the education sector to mess up!
The Labour Government enormously increased taxpayers’ funding of the healthcare system, but to what effect? Waiting lists are still appalling. Back in 1998, Annette King described having 96,000 people on waiting lists as “criminal”. Now there are some 180,000 either on a formal waiting list for surgery or waiting for assessment by a specialist.
And facilities for the elderly are under desperate financial pressure, with a clear need to provide additional funding if the sector is to survive. Most of the public believe the health system has deteriorated in the last six years, despite all the extra money thrown at it.
On racial issues, there is not the slightest sign that the Labour/New Zealand First Government will deal with the urgent need to ensure that all New Zealanders are treated equally under the law.
No wonder so many New Zealanders are deciding to leave.
Madame Speaker, the sentiments expressed in the speech from the Throne had a nice comfortable ring about them, but it has been obvious for a long time that this Prime Minister, this Government, can not be trusted.
There is in fact a fundamental lack of integrity in the Government.
Helen Clark was the person who confirmed a false accusation against her own Police Commissioner to a Sunday newspaper, and then pretended she had refused all comment. And gave one account of events in a signed affidavit and another in this House.
Helen Clark was the person who signed a painting that she had no part in painting, and then claimed she didn’t know her staff had had the offending artwork destroyed before the police were able to see it.
Helen Clark was the person who sped through South Canterbury at speeds up to 150 kph, and professed not to notice; the person who dropped five police officers and her driver into an expensive and stressful court case when she could have avoided the whole drama either by making it clear that she did not want her convoy to break the speed limit or by accepting responsibility for the speeding – which she could have done without fear of prosecution as she well knows.
Helen Clark was the person who pushed New Zealand into the Kyoto Protocol on the grounds that it was a virtuous thing to do, and moreover a highly profitable thing to do since New Zealand would enjoy more carbon credits than debits through the first commitment period – indeed, a net surplus of 55 million tonnes of carbon credits.
It was the same Helen Clark who supported Pete Hodgson when he dumped on private sector research suggesting that we might have not a surplus of 55 million tonnes of carbon credits but a debit balance of 7 million tonnes. Ridiculous! Too pessimistic, was the cry. But of course, as we now know, Helen Clark and Pete Hodgson were completely wrong: New Zealand does not have a surplus of 55 million tonnes of carbon credits, nor even a debit balance of 7 million tonnes, but rather a debit balance of an estimated 36 million tonnes. The difference will cost taxpayers in excess of $1 billion, all because of Helen Clark’s insistence that we become the only country in the southern hemisphere to ratify the Kyoto Protocol.
And what of that student loan bribe announced in the run-up to the election? That will initially cost $100 million a year, she and Trevor Mallard said, rising to a maximum of $300 million in due course.
Gee, that sounds much too low, suggested a bank economist. I think something closer to an annual cost of $1 billion, he suggested, with student debt rising by about $10 billion above what it would otherwise do over a period of years.
Again the poor man was ridiculed. Worse, when an economist from another bank came to his aid and suggested that he too thought the Government had substantially under-estimated the cost of the student loan bribe, both men were attacked.
On 2 August this year, I myself asked Helen Clark in this Chamber whether the Government had sought an estimate of the cost of the student loan bribe from Treasury. No, she assured this House. The student loan scheme was a Labour Party policy not a Government one.
And then it emerged that Treasury had done an estimate of the cost, but the Minister of Finance refused to release it. Only when my colleague John Key asked the Ombudsman to insist that the Government release the report two days before the election did the Government reluctantly comply. A Treasury estimate had been done, despite Helen Clark assuring the House that no estimate had been sought, and it broadly confirmed the cost estimates made by the two bank economists.
This was a disgraceful and dishonest performance on the part of Helen Clark.
Another disgraceful episode which was partially visible before the election, but which has become more clearly visible since the election, was the use of ministerial influence to secure entry for preferred immigrants. Would-be immigrants going through regular channels often have to wait, and wait, and wait – quite frankly, many have to wait for a quite unacceptable period.
Ah, but for those who know Taito Phillip Field, the wait can be miraculously shortened. I am not suggesting corruption here: I simply have no evidence to suggest that. But it surely creates a very unsavoury impression when ministers get involved in expediting many hundreds of immigration applications, especially if they are for people with whom they have had business dealings. Better by far to have an efficient Immigration Service, treating all applicants promptly and courteously on the basis of merit.
So a fundamental lack of integrity characterises this Government.
It’s also a Government mired in contradiction. It depends on a confidence and supply agreement from New Zealand First, led by Winston Peters.
New Zealand First is the party which Helen Clark once described as the “coalition partner from hell”, “like a parasite, which feeds on its host and in the end becomes indistinguishable from it”.
Now she has made Winston Peters Minister of Foreign Affairs, but despite the fact that the portfolio of Foreign Affairs impinges on many aspects of government policy, Mr. Peters is outside Cabinet and would prefer to be sitting on the Opposition side of the House! He is in fact sitting as far away from Helen Clark as Jeannette Fitzsimmons is from me! How utterly bizarre is that?
When he is at the APEC meeting this week as Minister of Foreign Affairs, he may be asked about his attitude to a free trade deal with China. He will presumably have to say that, while as Leader of New Zealand First he is utterly opposed to such a deal, as Minister of Foreign Affairs he supports it!
Of course, we all know that just two months ago he pledged not to accept the perks and baubles of office at all. He has tried to pretend that he was forced to accept one bauble, for himself of course, because otherwise the country would have been forced back to the polls. What utter nonsense! He could have chosen to support Labour with a confidence and supply agreement without a ministerial portfolio. He chose to accept one bauble for himself, and indeed according to some accounts actually asked for such a bauble.
And now he is Minister of Foreign Affairs, a portfolio he is totally unsuited for. He has regularly insulted the citizens of many of the countries in our region and, although the leaders of those countries are too polite to tell him so to his face, most of them doubtless regard him with disdain.
Anyway, now Winston Peters sits with the Government even though he reserves the right to attack the Government in many areas and most of his Parliamentary colleagues would no doubt also prefer to be sitting with the Opposition. They may well consider moving quickly, before the Party-hopping legislation is reinstated – this time, I understand, with a new name, the Winston Peters Party Stabilisation Bill, although I have heard rumours that it may be re-named the Save Winston’s (Lack of Integrity) Baubles Bill.
Looking further into the future, what can we see?
No serious commitment to raising living standards. No sign of any attempt to restore incentives to ordinary New Zealanders to get ahead from their own efforts. No sign of a serious attempt to improve the quality of our schools, or the efficiency of our hospitals. No sign of getting serious about crime prevention, or of ensuring that all New Zealanders, regardless of race, are equal before the law.
Just lots of talk about productivity, about transformation, about paying particular attention to issues which should have been dealt with over the last six years.
In the last few weeks, the Labour/New Zealand First Government has announced a razor gang to cut government spending so that the Government can afford all the bribes dished out during the election campaign. Helen Clark and Michael Cullen suggested that, had National won, we would have had to cut government spending. Well, Labour won, narrowly, and what do we see? Labour cutting government spending!
Helen Clark and Michael Cullen also tried to frighten voters with the idea that, had National won the election, interest rates on home mortgages would go up. Well, Labour won, narrowly, and what do we see? The Reserve Bank has already increased interest rates once since the election, and comments by Dr Bollard strongly suggest that he will increase them again next month. Indeed, some observers believe he will need to increase them substantially more over the next six months, while Michael Cullen hints darkly that he is looking for other tools to discourage banks from lending and people from spending.
So once again, Labour is seen to have been thoroughly dishonest.
Madame Speaker, the National Party’s vision for New Zealand’s future is of a country where living standards are not just improving in absolute terms, but are improving relative to those in Australia and other countries to which New Zealanders can readily move.
And we would do that by removing the obstacles to people getting ahead under their own steam, by reducing tax rates and leaving more money in the hands of those who earn it, by restoring incentives, by ensuring a reliable and reasonably priced supply of energy, and by ensuring that we have an adequate transport infrastructure wherever that is needed.
But we also have a strong commitment to those things which have in the past made New Zealand a great country to grow up in – a good education system, a reliable healthcare system, support for those who need support, a safe community, a country of clean air and clean water, a country where everybody is equal before the law, regardless of race.
And a commitment to those values which made New Zealand a country worth living in – a country where families matter, where the government believes that people know how to spend their money better than the government does, and know how to live their lives better than the government does.
And, in a Parliament almost exactly divided between the parties supporting the Government and those opposed to it, the National Party will be using every opportunity to advance those values, and policies consistent with those values.
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