1. Hon BILL ENGLISH (Deputy Leader—National) Link to this
to the Minister of Finance
Does he stand by his statement regarding Government spending and this year’s Budget that “We’ll be trying to keep … that very much under control because otherwise it starts to squeeze the capacity to do anything that is at all significant around the tax side.”; if not, why not?
Why did Labour decide to spend $600 million to pay for more jobs for diplomats on the day that 430 workers lost their jobs at Fisher and Paykel, when large-sized, low-quality Government spending is one reason why our manufacturers can no longer compete internationally?
Hon Dr MICHAEL CULLEN Link to this
I think it would be obvious to anybody that this decision was made before anyone in the Government knew of Fisher and Paykel’s intentions in that regard and of the sad loss of jobs at the Mosgiel plant. I say to the member that if he really believes that the small number of staff who serve our country overseas in diplomatic posts are the primary reason for the loss of jobs in Mosgiel then he really is completely away with the fairies.
Hon Mark GoscheHon Dr MICHAEL CULLEN Link to this
Recent Budgets have delivered substantial tax relief for families, business, and savers, including the Working for Families package, which will provide comfort for those people who have lost jobs in Mosgiel. We have invested heavily in infrastructure, including roading and public transport, to overcome a decade of neglect. All of these initiatives have been voted against by Mr English and the rest of the National Party.
Can the Minister confirm that one reason the Government did not know that these decisions were being made is that while the decisions were being made the leadership of the Labour Party was auditioning Ministers for the silly song contest or penning their next line of vitriol for the House instead of concentrating on the issues that matter to New Zealand, like whether workers can keep their jobs?
Hon Dr MICHAEL CULLEN Link to this
That really was an example of fake anger and fake sympathy for the people who have lost their jobs. The people in Mosgiel have been working in a plant where there is only 5 percent tariff protection against international competition from low-wage countries. The National Party once stood for an open and free economy. Manufacturing jobs of this sort have, sadly, been moving to Third World countries around the world for any number of years. Today’s announcement also included the closure of a plant in Brisbane, and the closure of major manufacturing capacity in California with a movement to Mexico, which was clearly driven by the North American Free Trade Agreement. None of that has anything to do with a short period of light-hearted entertainment at a Labour Party conference.
Has the Minister seen the comments by the chief executive of Fisher and Paykel: “We have been faced for many years with an extremely unhelpful exchange rate fuelled by high interest rates. Increasingly complex and costly compliance costs of manufacturing in our home countries have not assisted.”; and does he agree that the Labour Government has made a major contribution to high interest rates and complex and costly compliance costs for New Zealand manufacturers?
Hon Dr MICHAEL CULLEN Link to this
No, I do not. I notice that in fact Mr Bongard also tried to blame the Chinese free-trade agreement. That is extraordinary given that tariffs on Chinese goods entering New Zealand in the whiteware area are already down to 5 percent and are due to be phased out—
Hon Dr MICHAEL CULLEN Link to this
He is certainly wrong in that regard, yes. If the member seriously believes that that is the reason for this decision, why did his party welcome the New Zealand - China free-trade agreement and why did his party support removing tariffs throughout the 1990s?
Hon Phil GoffCan the Minister confirm that New Zealand, far from having high compliance costs, has consistently been recorded by World Bank surveys as being in the top two countries in the world in terms of ease of doing business, which is the opposite of what the member has just tried to allege?
Hon Dr MICHAEL CULLEN Link to this
That is certainly true. It is also true that every survey I have ever seen shows that the costs of doing business in New Zealand are lower than those in Australia. What is clearly true—[ Interruption] Well, in fact I can tell the member that a major business organisation in this country started doing a survey of the sort, and when the results showed that costs were higher in Australia, it ceased doing the survey and did not publish the results. I know that for a fact. The fact is that manufacturing these kinds of goods is cheaper in countries like China and Thailand, and we are not able to compete with them.
Rt Hon Winston Peters Link to this
Has the Minister received reports that in a speech delivered by the leader of the National Party last week, in which National outlined its priorities for foreign affairs, National repeated everything that is happening right now but failed to mention resourcing; and does he not agree that sinking lids and razor gangs are no way for this country to perform internationally if we are to be back in the First World?
Hon Dr MICHAEL CULLEN Link to this
If this country is to improve its connections with the rest of the world and improve its trade performance it will need more people carrying out those functions offshore. If the National Party is now saying we should not invest in that, it is simply saying it does not believe in expanding this country’s international economic performance.
Does the Minister recall telling the Labour Cabinet last year that if it overspent the 2007 Budget it would “lead to an interest rate response from the Reserve Bank, the exchange rate staying higher for longer, and a more pronounced economic slow-down”—that is what he said would happen if it overspent—and that Cabinet then went ahead and overspent by more than $1 billion, everything he predicted has actually happened, and 430 people lost their jobs because of higher interest rates, a higher exchange rate, and the pronounced economic slow-down that he predicted?
Hon Dr MICHAEL CULLEN Link to this
If the member cares to go down to Mosgiel and fire a few cheap shots in the factory I used to represent, he will find himself booed off the premises.
Rt Hon Winston Peters Link to this
Has the Minister received any reports suggesting that there are alternative economic policies in respect of helping Fisher and Paykel, and has he read the book The Hollow Men, which, in respect of the National Party’s treatment of these issues, says “you know when you’ve cracked it when you can feign sincerity.”—it was obviously written by Bill English?
Madam SPEAKERHon Dr MICHAEL CULLEN Link to this
I have seen those matters. Clearly what is required here is for New Zealand to continue to move its production upmarket to continue to increase its production of high-value-added goods, because it is the only way that we can succeed. I would be happy to talk to people about that, because the Engineering, Printing and Manufacturing Union, which is part of the Labour Party, in terms of affiliation—as the member likes to point out—has worked for a long-time with Fisher and Paykel at the Mosgiel plant to improve its production. Those workers are highly skilled workers, but the fact is that round the world those kinds of manufacturing plants are moving to Third World countries. What Mr English wants, of course, is us to have a low-wage economy so we can compete with Chinese manufacturers.
Does the Minister think that when the workers at Fisher and Paykel believed what Labour said about the jobs machine and economic transformation, they thought Labour meant that no wages were better than some?
Hon Dr MICHAEL CULLEN Link to this
What they will know is that in 1999, the then Government was planning to phase out completely the tariffs protecting those people, and this Government slowed down the phase-out of tariffs protecting their workers at the Mosgiel plant. If the member wants poor worker health and safety conditions, if the member wants low wages, and if the member wants exploitation of workers, that is not the way to compete to become a high-wage, successful economy.
Rodney HideIs the Minister aware of any item of extra spending that he has announced in any one of his Budgets that the National Party now opposes as it heads into this year’s election; if so, what is it?
Hon Dr MICHAEL CULLEN Link to this
No, I am not. I might note that when Mr English mentioned a $1 billion overrun in the initial Budget allocation, the primary reason for that was a cut in the corporate tax rate designed to help New Zealand businesses be more competitive with international businesses. The National Party voted against that corporate tax rate cut—I presume National members argue that corporate taxes should have been put up so that the Fisher and Paykel plant could remain open.