Appropriation (1998/99 Estimates) Bill;

Imprest Supply (Second for 1998/99) Bill
Mr Speaker, I move that the Appropriation (1998/99 Estimates) Bill be now read a third time and that the Imprest Supply (Second for 1998/99) Bill be now read a second time.

Mr Speaker.

The National Bank says it all. In their latest survey optimists outweigh pessimists by 41% to 26%.

The gloom merchants, most of whom I see lined up opposite me, (some still wearing their best wedding bib and tucker after Sundays nuptials) will be disappointed by this news of course.

They run up and down the country decrying the state of the economy and ignoring reality.

That reality is New Zealand is on the edge of Asian turbulence.

Asia has a bad dose of the flu and we are feeling the affects of that.

That is why this Government has prudently managed the economy, including the $300 million deferral package announced last month designed to protect our operating surplus.

And we are still running a surplus, despite the dire predictions of the far right, and the far left, which if we are to believe the reports of the happy event on Sunday in Auckland, now includes the Labour Party.

Exports to the US and Europe are up substantially, as are exports into some parts of Asia - China and Singapore for instance.

Indeed, the Canterbury Manufacturers Association reports that "confidence is at its highest level in four months, there's a rise in the proportion of earnings coming from exports and more firms are benefiting from the drop in the exchange rate."

Exports from Canterbury manufacturers rose 26.6 percent in June - the fifth consecutive monthly rise.

As well, the proportion of total sales destined for export has recovered to 40 percent by value, which the Canterbury Manufacturers Federation describes as an "historically high level."

These sort of figures should be welcomed by everyone who has an interest in seeing New Zealand trading its way through to an even brighter future.

The key to economic growth lies in producing more and exporting more.

The current value of the dollar enables that to happen.

An export lead recovery is the way to go.

And for that reason, anyone who has a concern for the economic prosperity of this country must view with real concern, if not down right horror, the marriage of Labour and the Alliance.

The Alliance export policy is to actually EXPORT LESS!

Can you believe it - they want an export led recession!

I invite the opposition Finance Spokesman - for the moment anyway - to read the Alliance policy on exporting and monetary policy, and then to high tail it to his leader's office and tell her she has made a dreadful mistake.

And then to get himself up to my office for a chat about balanced, prudent, economic policy of the centre.

The coffee is on the boil, the biscuits are laid out Dr Cullen, and you are welcome anytime!

I do have some sympathy for Dr Cullen. He has struggled away for years in his Caucus, trying to be a voice of moderation, only to have his political career reach a low point on Sunday afternoon, being commanded by his Leader to stand at her side as she entered the lion's den, or is it the sheep's pen.

But we must never forget that Dr Cullen was in a Government that brought mismanagement of the economy, along with cronyism, to new highs.

Remember David Caygill's Budget which declared a surplus. The only problem was when you took away the mirrors - the economy was in worse shape than ever.

The Bank of New Zealand on its knees, while Labour continued to court big money to prop up its shaky hold on Government.

It is the responsibility of all in the Labour Party who believe in truth to publicly expose the hypocrisy of Helen Clark.

For our memories and those of the public are not that short.

Helen Clark speaks out against restructuring - and yet she was the one of those in the Labour Cabinet ripping the heart out of the nation.

She speaks now about her concern for essential services - look what she did to health!

She talks of others clinging to power when that is why she and Labour opposed MMP.

She clung to power by staying on the Front Bench of the 1980s Labour Government - and now she's trying to pretend she was not there.

If she had any principles, any integrity - she would have spoken out then - she would have left then.

She speaks of the Coalition not having public mandate - when the mandate was delivered by the people at the 1996 election - does she really have that little regard for democracy.

The fact is Mr Speaker, Labour lacks the confidence in its leadership to go it alone to next election.

Helen Clark says the country needs a fresh start. What is fresh and new about Helen Clark and the Labour front bench?

She speaks of MMP limiting government excesses - well why then was she against MMP? It just will not wash.

New Zealand First got rid of the old National Government as we said we would. What did Labour do but try to preserve the two party stranglehold, and she has the audacity to speak now of the public being let down.

I'll tell you who let them down shall I? The 80s Labour Government breaking election promises.

No wonder that now Helen Clark does not want a detailed Coalition Agreement - a manifesto that they would be held accountable to - just some weak and watered down arrangement - sort of like a commune marriage - come together every now and then before straying off to another tent for the night.

New Zealand First and National formed a coalition together for the sake of the country but never "reconciled" in the way Clark and Anderton did - that is sheer hypocrisy.

Would either have "reconciled" if it did not suit their political agenda? Jim Anderton's party is falling apart and Helen Clark's leadership is in question by her own party.

Clark says of course there are differences between parties but then points to expected differences between National and NZF as instability and a government in chaos.

She just does not understand MMP.

The fact is that Clark is seething with hatred against this Coalition Government because it is led by a woman Prime Minister - and that woman is not Helen Clark.

Helen Clark doubts our commitment to the Coalition Agreement, well we are proving her wrong every single day.

Our record of keeping our promises puts Clark and Labour to shame.

Labour have shown their unwillingness to change - they are still against MMP, and just like in the Coalition negotiations they are still only agreeing to a loose agreement with the Alliance. This is what torpedoed their chances in 1996, and will do so again at the next election.

Their loose Agreement with the Alliance means Labour can implement far right policies by getting support of parties like ACT. It means Labour will be dominant partner because Labour will get the support of centre right - not the Alliance. Do Jim Anderton and Sandra Lee realise this?

This is not what the public want.

They want a coalition partner that makes Labour or National change from National and Labour Governments that have gone before. That is why they wanted MMP.

On the other side we have the ACT party.

Now, when it comes to sound economic policy, when it comes to delivering a balanced budget, when it comes to a sound compromise, ACT makes even the Labour-Alliance coalition look moderate.

We should never forget what Douglas, Prebble and Shirley, in a former guise, and the entire front bench of the Labour Opposition (and, yes, Mr Anderton was there for a while to, sulking at the back of the Caucus room), did to communities right across New Zealand with their right wing policies.

The dollar was high, exports were down and hundreds of farmers were walking off the land, or having it sold from under them.

ACT have spent a lot of time recently promoting their so called roadshow to middle New Zealand.

But, as with most things about ACT - it is all a big have.

This is ACT's great inconsistency. They run up and down the country, in taxpayer funded mobile electorate offices, pretending to "take the pulse" of the nation, and then propose to slash areas of government expenditure like Health by 80 percent, Social Welfare by 30 percent, and Education by 60 percent.

The nation won't have a pulse left by the time they've finished.

Their economic policy is, in effect, nothing more than a nation-wide closing down sale and the bargain-hunters from aboard will be circling our small islands like hungry sharks.

So I say to those listening today, if you are concerned about hospital services or schools, it's no good telling ACT. Sure, they'll lend you their ears out here in the electorates, but back in Wellington their hands are busy sharpening the axe... and they're going to chop a hole right through the heart of this country.

Then they'll present that heart on a platter to their big business mates overseas, just like Douglas, Prebble and Shirley did when they were last in Government under Labour. They put on a feast for their mates while the lifeblood drained out of the hinterland into some other country on the other side of the world.

I wish the ACT party would just be consistent and honest for once. They should just do the honourable thing and stop wasting the taxpayer's money on all these expensive roadshows, where they get people's hopes up, knowing full well they're going to dash them on the unforgiving, desolate rocks of the New Right.

What is also alarming about ACT is that, despite all their big business help and financing, they are remarkably incompetent at basic economics.

It is simply alarming to consider the number of factual errors that Rodney Hide- Parliament's only "professional economist", according to him, anyway, has made as ACT's finance spokesman.

For instance, Rodney said in July that Government expenditure had increased $6 billion over the past five years, when in fact in nominal terms it had gone up by $2.9 billion, a mere $3 billion mistake.

Then him and his boss came out in July and lambasted the Government for "failing to find a use for $1.228 billion of promised coalition spending" - that is a direct quote.

In fact, a quick look at pages 139 to 153 of the 1998 Budget Economic and Fiscal Update, provided to all MPs, shows where $600 million of that money is to be spent this financial year and the remaining $628 million has been put aside for initiatives in the Government's third Budget.

So desperate are ACT to cut Government spending to the bone, that they have started imagining away whole chunks of expenditure.

The month before, Rodney claimed that "half a percent rise in interest rates increases the cost of an $80,000 mortgage by $80 per week". The correct figure is, of course, less than $8 - $7.69 to be exact.

This is not difficult economics Mr Speaker- this is very basic mathematics.

Later the same month he told the Finance and Expenditure Committee that the New Zealand dollar had fallen to 47 cents against the US dollar, sending journalists running. In fact it was 49 cents.

This House and this country must surely view with concern anyone who has even the remotest chance of being in charge of this nation's purse strings in the face of such basic blunders.

But worse still, is the complete disgrace that ACT leader Mr Prebble made of himself concerning that most excellent of Budget initiatives - the peoples float of Auckland International Airport.

I want to quote something from a commentator in the National Business Review, concerning Mr Prebble's behaviour:

"By botching his homework and indulging in populist posturing Prebble has ???.risked damaging not only the float but the image of New Zealand's capital markets in the eyes of overseas investors".

And this was the usually rabid ACT supporting NBR.

And they have the audacity to critcise this Government's handling of the economy.

Mr Speaker, the fact is that this Government has presented two Budgets delivering social and economic packages that actually do the unthinkable in political terms - deliver on promises

Despite what the Round Table-ACT-Doug Myers cartel go around telling their dwindling band of worshippers, this Government has managed the economy very well indeed through some quite rough weather.

Indeed, if you examine the last 18 months of economic management by this Coalition Government, there has been much to make business cheer:

an export friendly dollar
lower interest rates
less Government debt as a percentage of GDP
low inflation
ongoing micro-economic reform.
But also, we have balanced the needs of business with the needs of other New Zealanders.

That is why in this Budget, which this Bill sees through its final stages, and in last years Budget, we have committed more to essential social services like health and education and to things that matter to real New Zealanders, such as more police on the beat.

ACT of course, cannot come to grips with the fact that we are delivering on the social policy side of the ledger, while still keeping the economic side in the black.

They are desperate for us to run a deficit, so they can say "we told you so". Because, as it currently stands, ACT are deeply embarrassed by the fact that this Coalition is running the economy very well indeed. Their message about social spending being bad for the country has proven to be a lie - albeit one beloved by the right wing theorists.

The economy is in remarkably good shape - despite the Asian crisis and the tough year that farming has had and is still having. We are faring better than many thought.

If Asia had not caught the flu and the weather had been better (all things that ACT believe Treasury and myself have control over, which is flattering, if inaccurate) we would have had growth rates of 4 percent.

Of course, as a little boat in a large and often stormy economic sea, New Zealand can not be complacent and we are not being - we are operating a prudent, sound economic policy, while still reforming in areas such as Producer Board reform, the ACC, and parallel importing, where the consumer will be the real winner.

This Budget, like its predecessor, continues to deliver on our programme.
Appropriation (1998/99 Estimates) Bill;
Imprest Supply (Second for 1998/99) Bill
Mr Speaker, I move that the Appropriation (1998/99 Estimates) Bill be now read a third time and that the Imprest Supply (Second for 1998/99) Bill be now read a second time.

Mr Speaker.

The National Bank says it all. In their latest survey optimists outweigh pessimists by 41% to 26%.

The gloom merchants, most of whom I see lined up opposite me, (some still wearing their best wedding bib and tucker after Sundays nuptials) will be disappointed by this news of course.

They run up and down the country decrying the state of the economy and ignoring reality.

That reality is New Zealand is on the edge of Asian turbulence.

Asia has a bad dose of the flu and we are feeling the affects of that.

That is why this Government has prudently managed the economy, including the $300 million deferral package announced last month designed to protect our operating surplus.

And we are still running a surplus, despite the dire predictions of the far right, and the far left, which if we are to believe the reports of the happy event on Sunday in Auckland, now includes the Labour Party.

Exports to the US and Europe are up substantially, as are exports into some parts of Asia - China and Singapore for instance.

Indeed, the Canterbury Manufacturers Association reports that "confidence is at its highest level in four months, there's a rise in the proportion of earnings coming from exports and more firms are benefiting from the drop in the exchange rate."

Exports from Canterbury manufacturers rose 26.6 percent in June - the fifth consecutive monthly rise.

As well, the proportion of total sales destined for export has recovered to 40 percent by value, which the Canterbury Manufacturers Federation describes as an "historically high level."

These sort of figures should be welcomed by everyone who has an interest in seeing New Zealand trading its way through to an even brighter future.

The key to economic growth lies in producing more and exporting more.

The current value of the dollar enables that to happen.

An export lead recovery is the way to go.

And for that reason, anyone who has a concern for the economic prosperity of this country must view with real concern, if not down right horror, the marriage of Labour and the Alliance.

The Alliance export policy is to actually EXPORT LESS!

Can you believe it - they want an export led recession!

I invite the opposition Finance Spokesman - for the moment anyway - to read the Alliance policy on exporting and monetary policy, and then to high tail it to his leader's office and tell her she has made a dreadful mistake.

And then to get himself up to my office for a chat about balanced, prudent, economic policy of the centre.

The coffee is on the boil, the biscuits are laid out Dr Cullen, and you are welcome anytime!

I do have some sympathy for Dr Cullen. He has struggled away for years in his Caucus, trying to be a voice of moderation, only to have his political career reach a low point on Sunday afternoon, being commanded by his Leader to stand at her side as she entered the lion's den, or is it the sheep's pen.

But we must never forget that Dr Cullen was in a Government that brought mismanagement of the economy, along with cronyism, to new highs.

Remember David Caygill's Budget which declared a surplus. The only problem was when you took away the mirrors - the economy was in worse shape than ever.

The Bank of New Zealand on its knees, while Labour continued to court big money to prop up its shaky hold on Government.

It is the responsibility of all in the Labour Party who believe in truth to publicly expose the hypocrisy of Helen Clark.

For our memories and those of the public are not that short.

Helen Clark speaks out against restructuring - and yet she was the one of those in the Labour Cabinet ripping the heart out of the nation.

She speaks now about her concern for essential services - look what she did to health!

She talks of others clinging to power when that is why she and Labour opposed MMP.

She clung to power by staying on the Front Bench of the 1980s Labour Government - and now she's trying to pretend she was not there.

If she had any principles, any integrity - she would have spoken out then - she would have left then.

She speaks of the Coalition not having public mandate - when the mandate was delivered by the people at the 1996 election - does she really have that little regard for democracy.

The fact is Mr Speaker, Labour lacks the confidence in its leadership to go it alone to next election.

Helen Clark says the country needs a fresh start. What is fresh and new about Helen Clark and the Labour front bench?

She speaks of MMP limiting government excesses - well why then was she against MMP? It just will not wash.

New Zealand First got rid of the old National Government as we said we would. What did Labour do but try to preserve the two party stranglehold, and she has the audacity to speak now of the public being let down.

I'll tell you who let them down shall I? The 80s Labour Government breaking election promises.

No wonder that now Helen Clark does not want a detailed Coalition Agreement - a manifesto that they would be held accountable to - just some weak and watered down arrangement - sort of like a commune marriage - come together every now and then before straying off to another tent for the night.

New Zealand First and National formed a coalition together for the sake of the country but never "reconciled" in the way Clark and Anderton did - that is sheer hypocrisy.

Would either have "reconciled" if it did not suit their political agenda? Jim Anderton's party is falling apart and Helen Clark's leadership is in question by her own party.

Clark says of course there are differences between parties but then points to expected differences between National and NZF as instability and a government in chaos.

She just does not understand MMP.

The fact is that Clark is seething with hatred against this Coalition Government because it is led by a woman Prime Minister - and that woman is not Helen Clark.

Helen Clark doubts our commitment to the Coalition Agreement, well we are proving her wrong every single day.

Our record of keeping our promises puts Clark and Labour to shame.

Labour have shown their unwillingness to change - they are still against MMP, and just like in the Coalition negotiations they are still only agreeing to a loose agreement with the Alliance. This is what torpedoed their chances in 1996, and will do so again at the next election.

Their loose Agreement with the Alliance means Labour can implement far right policies by getting support of parties like ACT. It means Labour will be dominant partner because Labour will get the support of centre right - not the Alliance. Do Jim Anderton and Sandra Lee realise this?

This is not what the public want.

They want a coalition partner that makes Labour or National change from National and Labour Governments that have gone before. That is why they wanted MMP.

On the other side we have the ACT party.

Now, when it comes to sound economic policy, when it comes to delivering a balanced budget, when it comes to a sound compromise, ACT makes even the Labour-Alliance coalition look moderate.

We should never forget what Douglas, Prebble and Shirley, in a former guise, and the entire front bench of the Labour Opposition (and, yes, Mr Anderton was there for a while to, sulking at the back of the Caucus room), did to communities right across New Zealand with their right wing policies.

The dollar was high, exports were down and hundreds of farmers were walking off the land, or having it sold from under them.

ACT have spent a lot of time recently promoting their so called roadshow to middle New Zealand.

But, as with most things about ACT - it is all a big have.

This is ACT's great inconsistency. They run up and down the country, in taxpayer funded mobile electorate offices, pretending to "take the pulse" of the nation, and then propose to slash areas of government expenditure like Health by 80 percent, Social Welfare by 30 percent, and Education by 60 percent.

The nation won't have a pulse left by the time they've finished.

Their economic policy is, in effect, nothing more than a nation-wide closing down sale and the bargain-hunters from aboard will be circling our small islands like hungry sharks.

So I say to those listening today, if you are concerned about hospital services or schools, it's no good telling ACT. Sure, they'll lend you their ears out here in the electorates, but back in Wellington their hands are busy sharpening the axe... and they're going to chop a hole right through the heart of this country.

Then they'll present that heart on a platter to their big business mates overseas, just like Douglas, Prebble and Shirley did when they were last in Government under Labour. They put on a feast for their mates while the lifeblood drained out of the hinterland into some other country on the other side of the world.

I wish the ACT party would just be consistent and honest for once. They should just do the honourable thing and stop wasting the taxpayer's money on all these expensive roadshows, where they get people's hopes up, knowing full well they're going to dash them on the unforgiving, desolate rocks of the New Right.

What is also alarming about ACT is that, despite all their big business help and financing, they are remarkably incompetent at basic economics.

It is simply alarming to consider the number of factual errors that Rodney Hide- Parliament's only "professional economist", according to him, anyway, has made as ACT's finance spokesman.

For instance, Rodney said in July that Government expenditure had increased $6 billion over the past five years, when in fact in nominal terms it had gone up by $2.9 billion, a mere $3 billion mistake.

Then him and his boss came out in July and lambasted the Government for "failing to find a use for $1.228 billion of promised coalition spending" - that is a direct quote.

In fact, a quick look at pages 139 to 153 of the 1998 Budget Economic and Fiscal Update, provided to all MPs, shows where $600 million of that money is to be spent this financial year and the remaining $628 million has been put aside for initiatives in the Government's third Budget.

So desperate are ACT to cut Government spending to the bone, that they have started imagining away whole chunks of expenditure.

The month before, Rodney claimed that "half a percent rise in interest rates increases the cost of an $80,000 mortgage by $80 per week". The correct figure is, of course, less than $8 - $7.69 to be exact.

This is not difficult economics Mr Speaker- this is very basic mathematics.

Later the same month he told the Finance and Expenditure Committee that the New Zealand dollar had fallen to 47 cents against the US dollar, sending journalists running. In fact it was 49 cents.

This House and this country must surely view with concern anyone who has even the remotest chance of being in charge of this nation's purse strings in the face of such basic blunders.

But worse still, is the complete disgrace that ACT leader Mr Prebble made of himself concerning that most excellent of Budget initiatives - the peoples float of Auckland International Airport.

I want to quote something from a commentator in the National Business Review, concerning Mr Prebble's behaviour:

"By botching his homework and indulging in populist posturing Prebble has ???.risked damaging not only the float but the image of New Zealand's capital markets in the eyes of overseas investors".

And this was the usually rabid ACT supporting NBR.

And they have the audacity to critcise this Government's handling of the economy.

Mr Speaker, the fact is that this Government has presented two Budgets delivering social and economic packages that actually do the unthinkable in political terms - deliver on promises

Despite what the Round Table-ACT-Doug Myers cartel go around telling their dwindling band of worshippers, this Government has managed the economy very well indeed through some quite rough weather.

Indeed, if you examine the last 18 months of economic management by this Coalition Government, there has been much to make business cheer:

an export friendly dollar
lower interest rates
less Government debt as a percentage of GDP
low inflation
ongoing micro-economic reform.
But also, we have balanced the needs of business with the needs of other New Zealanders.

That is why in this Budget, which this Bill sees through its final stages, and in last years Budget, we have committed more to essential social services like health and education and to things that matter to real New Zealanders, such as more police on the beat.

ACT of course, cannot come to grips with the fact that we are delivering on the social policy side of the ledger, while still keeping the economic side in the black.

They are desperate for us to run a deficit, so they can say "we told you so". Because, as it currently stands, ACT are deeply embarrassed by the fact that this Coalition is running the economy very well indeed. Their message about social spending being bad for the country has proven to be a lie - albeit one beloved by the right wing theorists.

The economy is in remarkably good shape - despite the Asian crisis and the tough year that farming has had and is still having. We are faring better than many thought.

If Asia had not caught the flu and the weather had been better (all things that ACT believe Treasury and myself have control over, which is flattering, if inaccurate) we would have had growth rates of 4 percent.

Of course, as a little boat in a large and often stormy economic sea, New Zealand can not be complacent and we are not being - we are operating a prudent, sound economic policy, while still reforming in areas such as Producer Board reform, the ACC, and parallel importing, where the consumer will be the real winner.

This Budget, like its predecessor, continues to deliver on our programme.