2. JOHN KEY (Leader of the Opposition) Link to this
to the Prime Minister
Does she stand by her reported statement in early 2000 that she was ashamed of the number of people leaving New Zealand to live in Australia?
Rt Hon HELEN CLARK (Prime Minister) Link to this
I am glad the member said “reported”, as I can find no such direct quote from me. I was, of course, extremely concerned at the time about the huge growth in the earnings gap between New Zealand and Australia in the 1990s—a 50 percent growth in the earnings gap. I note that it has not increased further since then, despite the minerals extraction boom in Australia.
If, as reported in both the Press and the Evening Post, the Prime Minister was ashamed about migration to Australia in 2000, how would she describe her feelings now, when net migration to Australia has risen to 28,000 people a year, which is the highest number for 20 years and triple what it was 4 years ago?
Rt Hon HELEN CLARK Link to this
I know there has been a major minerals extraction boom, which has sucked labour out of Australian states that do not have that boom, as well as out of New Zealand.
Tim BarnettRt Hon HELEN CLARK Link to this
There are housing affordability problems on both sides of the Tasman. Here, our Government is taking a lead on developments for affordable housing, like that in Hobsonville. I note that last year Mr Key described the Hobsonville project as being economic vandalism and likely to lead to a big ghetto in his electorate. This morning, on Radio New Zealand, he said he agreed with it. I guess he was just talking to a different audience from the one he tried to whip up in his own electorate.
R Doug WoolertonDoes the Prime Minister agree with Finlay Macdonald, who stated in the last Sunday Star Times that our declining wage and living standards relative to Australia’s are the legacy of “socio-economic vandalism” by both the Labour and National Governments through the 1980s and 1990s, and would she also agree that the great experiment in price stability run by those Governments has successfully created the desired low-inflation, low-wage, low-growth economy?
Rt Hon HELEN CLARK Link to this
While the Employment Contracts Act held sway in New Zealand in the 1990s, the average gap in real average earnings between New Zealand and Australia blew out from 19 percent to 28 percent. That gap has not widened since then, despite the huge minerals extraction boom in Australia.
Does the Prime Minister believe that when New Zealand loses 77,000 people a year under permanent long-term departures and replaces them with the same number of people coming in—or a few more—that is a “brain exchange”, as her other Ministers have put the case to be?
Rt Hon HELEN CLARK Link to this
The demography experts are telling us that New Zealand is the net gainer on skills through migration at this time.
Rt Hon Winston Peters Link to this
Can the Prime Minister confirm that between 1984 and 1996, when the great economic experiment was persisted with first by Douglas, then by Caygill and through to people like—I have forgotten already—Richardson and Birch, Australia’s economy leaped ahead in real terms by 27 percent; and why would people in New Zealand want a change back to that?
Rt Hon HELEN CLARK Link to this
I agree with the member that hard-line neo-liberal policies in this country did a lot of damage to wages and to the social fabric. That is why this Government has pursued a different course from that.
If the Prime Minister is convinced that we are gaining under this exercise of losing so many New Zealanders to Australia, has she noticed a study done by the Australian department of immigration that pointed out that New Zealand has the biggest brain drain in the OECD in terms of native-born, tertiary-trained people leaving this country, when 45 percent of New Zealanders living overseas have a university degree?
Rt Hon HELEN CLARK Link to this
No, I have not noted that, but I have noted one of our leading demography experts saying in response to that sort of wild claim made by Mr Key that claims of an Aussie brain drain from New Zealand are a myth.
Rt Hon Winston Peters Link to this
Can the Prime Minister recall the effect of the “mother of all Budgets” by Ruth Richardson, when—[ Interruption] I know it sounds terrible to members, because it is a home truth, is it not? I say to members I did not back it—quite the contrary. I was expelled from Cabinet because I did not back it. For the benefit of members who have been here for 5 minutes, I will give a bit of history—
Madam SPEAKERRt Hon Winston Peters Link to this
I am not history, sunshine. That member is. Can the Prime Minister recall the effect of the “mother of all Budgets” and what happened after it, when this country was forced into a recession?
Rt Hon HELEN CLARK Link to this
I recall the “mother of all Budgets” only too clearly. I recall that the effect within a short period of time was for unemployment in New Zealand under the National Government to go into double figures—for Maoridom, it went to 25 percent. I recall that people could not afford to live in their State house, I recall National charging people to go to the public hospital, and I recall the benefit cuts. I recall tremendous damage being done to the economic and social fabric of New Zealand, which is why National should never occupy the Treasury benches again.
What message does the Prime Minister have for New Zealand families who are seeing their children, their loved ones, and their friends departing New Zealand in record numbers to go to live in Australia, or does she think—judging by her answers this afternoon—that the message she is sending them is that that is OK, because they are the dumb ones?
Rt Hon HELEN CLARK Link to this
I know that Kiwis are entrepreneurial people who will do well anywhere they go in the world. I also know that New Zealand, which has one of the lowest rates of unemployment in the world and is seeking skilled people today, is a haven for high-skilled people from other countries. If Mr Key wants to say he does not welcome those people, I would like to hear him say that at the ethnic functions he turns up at all over Auckland.
Will the Prime Minister recognise that one of the major reasons why so many New Zealanders are leaving for Australia is that their wages are significantly higher than they would be in New Zealand, and that, in fact, over the last 5 years the Australian Government has cut taxes progressively every year, the Australian Government has used private sector capital to build infrastructure, and the Australian Government has been concerned about housing affordability; and is the trend she is noticing that over the last 5 years the Australian Government has done a pretty darn good job and after 9 years her Government has finally woken up to the fact that it has some problems?
Rt Hon HELEN CLARK Link to this
The only trend I have noticed is that the gap in real earnings between New Zealand and Australia blew out by 50 percent under a National Government and has not widened since. The other trend I have noted is for the Leader of the Opposition to get it wrong. This morning, on Morning Report, he said he was going to increase wages. When he was asked “How?”, he said “I am going to cut taxes.” Even Morning Report said “But, Mr Key, that is not increasing wages.”
On the basis of that I ask the Prime Minister whether, if someone earns $100,000 a year and his or her tax rate is 90 percent and then the person’s tax rate is cut to 10 percent under a National Government—where the person’s tax rate is lower than that under the Labour Government—that person has more after-tax wages?
Rt Hon HELEN CLARK Link to this
If the National Party’s policy is either for a 90 percent or for a 10 percent tax rate, I would like to hear more about it.