Paul Holmes Interviews David Parker
 
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Q+A
 
PAUL HOLMES INTERVIEWS DAVID PARKER
 
 
PAUL HOLMES
                        Labour’s David Parker, the finance spokesman, is with me now. Good morning.
 
DAVID PARKER – Labour’s Finance Spokesman
                                    Good morning.
 
PAUL             What is your main reason for your objection to the budget?
 
DAVID           That despite the penny pinching, it doesn’t cure any of New Zealand’s fundamental problems. It doesn’t grow exports.
 
PAUL             What can do any of that? I mean, the budget seems to be generally accepted as boring, yes, but sensible. In other words, what can you do when you’re broke? It doesn’t matter who’s in power, the numbers are the same.
 
DAVID           Oh look, there are at least four fundamental steps that wouldn’t have cost the government’s fiscal position anything. We need to adopt a capital gains tax as they’ve got in Australia, so that people invest in businesses on the basis of the profitability of the investment rather than-
 
PAUL             Yeah, but that’s a long-term thing, isn’t it?
 
DAVID           No, it actually changes the investment signal the day you introduce it. The tax revenues are long term. The effects on the economy starts the day you do it. We need to improve savings the way they have in Australia. We need a universal KiwiSaver. We need a research and development-
 
PAUL             Stop there. How much more can you save? I mean, when National came in in 2008, if you’re earning $100 now, you’d be earning $100 and 60 cents. How can you save on what we earn?
 
DAVID           Well, that’s one of the reasons why, if you’re a low-income earner, you have to increase wages. That’s through a combination of a living wage-
 
PAUL             And how do you do that and get productivity and get businesses hiring people?
 
DAVID           Through savings. These things can all work together positively-
 
PAUL             All right, that’s two things. What’s your third?
 
DAVID           Research and development tax credit. We also need to be honest about the age of eligibility for superannuation. Within the forecast period of this budget, we spend more on superannuation than on the total of education. That’s more than preschool, primary, secondary, tertiary combined. We are actually getting to the point that through not addressing that issue we’re actually having intergenerational conflicts being set up.
 
PAUL             And somewhere in the middle of all that you mentioned exports, and of course that is our main thing, isn’t it? What do we do about increasing exports? What do you do, specifically?
 
DAVID           Specifically, you actually encourage people to invest in a business rather than because of the tax bias for speculation because you have a capital gains tax.
 
PAUL             Spell that out. How do you do that?
 
DAVID           Well, the capital gains tax-
 
PAUL             No, no, encourage people to invest in exports businesses.
 
DAVID           Well, at the moment they’re encouraged to invest in property and speculation because that’s where the smart money goes because there’s a tax bias, and until you address that tax bias, that fundamental problem won’t be overcome.
 
PAUL             Yeah, but how do you help the bloke who’s trying to export offshore and doesn’t quite have the capital to really do it in a significant way?
 
DAVID           Well, that’s where your compulsory savings are important, because-
 
PAUL             How does that help?
 
DAVID           Because then you’re in the same position as Australia - you have depth of capital available to the business. These are fundamental levers that the government has put beyond purview. All four of those things, which are the most four important things - and no one else can name a more important thing than any of them - and yet the government refuses to touch any of them. No wonder the wage gap with Australia continues to grow.
 
PAUL             Talk to me about Australia. It’s starting to look - 53,000 last year. For God’s sake. Our best and our brightest and our most talented. The get-up-and-go people. It’s starting to look like the Irish diaspora, not to be too dramatic about it. How seriously do you regard the exodus to Australia, and what do we do about it?
 
DAVID           Very serious. In fact, another comparison would be Mexico to the USA. I got criticised for making that comparison, but they suffer a similar problem - much wealthier country across the border sucking their best and brightest. It gets even worse in the future because of their better savings and better superannuation-
 
PAUL             Yeah, but, David, come on. It was happening- They were starting to- There was mass movement across to Australia when you guys were in power.
 
DAVID           Yeah.
 
PAUL             What do you do about it?
 
DAVID           Well, it was Westpac Stadium then. David Parker said it’s Eden Park now.
 
PAUL             I understand this. It’s 53,000 now.
 
DAVID           So it’s getting worse rather than better, that’s the problem. The trend is that it’s getting worse.
 
PAUL             OK, ideas to stop it.
 
DAVID           Capital gains tax, improved savings. You know, on the savings front, we’re gonna have to consider whether we make our savings sticky, rather than having open borders, people being able to take their savings pool with them to Australia. Someone suggested to me the other day - a senior business person - that we’re going to actually have to have a closed system that says once you get universal savings you actually can’t take them with you to Australia. We’ve got such a problem now between income differentials between New Zealand and Australia that we’re gonna have to do better. We’re actually also gonna have to move on inequality, Paul. You know, inequality in New Zealand is rising to atrocious levels, and a capital gains tax helps fix that as well.
 
PAUL             You are very- You are exercised by what you perceive to be the government’s failure to address the looming cost of super. As you point out, by 2015, super’s gonna cost more than education. But what do you do?
 
DAVID           2017, yeah
 
PAUL             Is your policy still to move to 67?
 
DAVID           Yes, it is, yeah.
 
PAUL             That’s Labour’s policy still. Would Labour contemplate sitting down with National to conduct a dialogue on the-
 
DAVID           We’ve made that offer twice, and it’s been rejected. So yes, we’ve already done that.
 
PAUL             But, I mean, in the end, you’re not the Finance Minister. John Key is. He has to worry about Greece. You don’t.
 
DAVID           Well, actually, New Zealanders aren’t moving to Australia because of Greece’s problems. They’re moving because of New Zealand’s problems. There’s a lot of focus on Europe, and Europe has problems. Outside of Europe, the world has grown at 1.5% per annum. Over that same period, New Zealand has grown less than 1% in three years, not per annum.
 
PAUL             Finance spokesman David Parker, thank you very much for your time.
 
DAVID           Thank you.

ENDS