1. JOHN KEY (Leader of the Opposition) Link to this
to the Prime Minister
Does she stand by her statement last year, with respect to the economy, that “Our job in government has been to stop New Zealand running the race to the bottom, and to aim for the top.”?
Why, then, after 8 years of a Labour Government, has New Zealand fallen from being the 20th ranked economy out of 30 in the OECD to the 22nd—that is right, New Zealand has fallen two places in 8 years under Labour—and if that is a race for the top, is she a little bit confused about what is the top and what is the bottom?
Rt Hon HELEN CLARK Link to this
The OECD report points out that New Zealand for quite some years has been around 16 percent below the GDP per capita median for the OECD. I understand there is a little volatility around those ratings, not least because a country like Greece recalculated the size of its informal economy.
Tim BarnettHow do New Zealand’s employment growth rates compare with those elsewhere in the OECD, and how has that comparison changed over time?
Rt Hon HELEN CLARK Link to this
I appreciate that this is an answer the Opposition may not like, but the OECD does set out the figures for employment growth for New Zealand in relation to the OECD average. From 1991 to 1995 the figures show that our employment growth rate was below that of the OECD average, as it was from 1996 to 2000. Between 2001 and 2005 we grew over four times as fast as the OECD average in respect of employment growth.
What does the Prime Minister have to say to the 350 workers at Fisher and Paykel, who lost their jobs because of business conditions in New Zealand, other than what she said on breakfast TV on Monday, which amounted to: “Tough luck. That’s the way of the world. It’s a shame you made only washing machines rather than being a high-value, niche, innovative manufacturer.”?
Rt Hon HELEN CLARK Link to this
Of course, one of the key factors cited by Fisher and Paykel was that when its competitor—based in Australia—ceased manufacture, the company lost its preference in that market, and that was a critical point. Of course, 2 weeks ago the New Zealand dollar reached a quarter-century high against the US dollar, but so did the Australian dollar and so did the pound sterling. That causes manufacturers across those countries—and, I suggest, across a great deal of the Western World—to be looking at lower-cost processing. Our future in manufacturing is at the higher end.
Darren HughesHow do New Zealand’s growth rates compare with those in the OECD, and how has that comparison changed over time?
Rt Hon HELEN CLARK Link to this
Again, the OECD produces figures that the Opposition may not wish to hear, but those figures show that between 1991 and 1995 GDP growth per capita in the OECD outstripped New Zealand’s, as it did between 1996 and 2000. From 2001 to 2005 our growth rate was significantly above the OECD average. That means that if we could, on average, keep growing above the OECD growth rate, we would, of course, improve relative rankings.
Sue BradfordDoes the Prime Minister agree with Andrew Little, the Secretary of the New Zealand Amalgamated Engineering, Printing and Manufacturing Union, that manipulation of the cash rate is a “blunt tool” that is making it only harder for average New Zealanders to afford to house themselves and their families, while at the same time increasing our current account deficit and making it harder for manufacturers to export—and that means thousands of decent jobs are at risk; if she does agree with Mr Little, what other tools does she think may be useful to support New Zealand manufacturing?
Rt Hon HELEN CLARK Link to this
It is a “blunt tool”, but finding other tools that are useful has not proved easy. That is why the Government suggests that a select committee inquiry focused on monetary policy might have a role to play.
Does the Prime Minister anticipate more job losses in the months ahead, along the lines announced last week by Fisher and Paykel?
Rt Hon HELEN CLARK Link to this
Businesses will make their own choices, but I would put this issue in the context of the fact that over the past 6 years jobs in the manufacturing sector have risen by 14 percent. This is a dynamic sector.
Did the Prime Minister agree with the Real Estate Institute when it said last year that foreign investment in New Zealand real estate was on the rise; and would it not assist in the battle against inflation and take the heat out of the housing market if the Government acted to limit the sale of land and houses to New Zealand citizens and residents?
Rt Hon HELEN CLARK Link to this
The Government has, with reasonably broad support in the House and the community, put some more restraints on the kind of land that can be sold without permission through the Overseas Investment Commission and the relevant Ministers. But to put a stop on foreign investment in real estate would be going rather a lot of steps too far.
If the figures the Prime Minister quotes are all so good and New Zealand, relatively speaking, is doing so well, can she just explain one more time why New Zealand has fallen in its average per capita income from 20th place to 22nd place in the OECD, and does she still hold her goal of getting New Zealand into the top half of the OECD; if so, how long will it take to do so, given that it has taken her 8 years to take us down two places, let alone move up?
Rt Hon HELEN CLARK Link to this
I stress again that the OECD report points out that we have been about 16 percent below the median GDP per capita rates for quite a number of years. We are not falling significantly further at all, but in order to climb we need to keep growing above OECD averages consistently over time.
Keith LockeDoes the Prime Minister agree that Auckland’s public transport system won the race to the bottom when compared with other First World cities; and how will she respond to the nearly 4,000 Aucklanders who signed a petition presented to me in Parliament this morning calling for an urgent Government agreement on a passenger rail electrification timetable, and for funding to enable trains to be ordered? [ Interruption]
Madam SPEAKERYes, the member is right. That is an extraordinarily long bow given the primary question that was asked.
I raise a point of order, Madam Speaker. The question is on the economy and the race to the bottom. The passenger rail system in Auckland is very important to the Auckland economy—even the Prime Minister would recognise that.
Rt Hon HELEN CLARK Link to this
I do not disagree in substance with the general comment made by the member about the state of Auckland’s public transport system in the past. The Government has hugely increased spending on it. In respect of rail and electrification I believe that it is a matter of not if but when, and we envisage continuing to invest to improve Auckland’s public transport system.
If one of the solutions in making the economy more competitive is to cut the company tax rate, which we believe will be provided for in the Budget in a few weeks’ time, why has it taken the Government 8 years to suggest cutting the company tax rate when there has been more than ample opportunity through large surpluses to do so in the past?
Rt Hon HELEN CLARK Link to this
It will not have gone without notice that the Government has run quite a conservative fiscal policy, and that it likes to see where money is coming from before putting it into tax cuts and other spending. The Government will be delivering on a significant business tax package this year. I note that this was not something the National Party even bothered offering voters during the last election campaign.