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Q+A: Transcript interview with David Parker

Published: 2:04PM Sunday May 27, 2012 Source: Q+A

PAUL HOLMES
Labours David Parker, the finance spokesman, is with me now. Good morning.

DAVID PARKER - Labours Finance Spokesman
Good morning.

PAUL 
What is your main reason for your objection to the budget?

DAVID 
That despite the penny pinching, it doesnt cure any of New Zealands fundamental problems. It doesnt 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 youre broke? It doesnt matter whos in power, the numbers are the same.

DAVID 
Oh look, there are at least four fundamental steps that wouldnt have cost the governments fiscal position anything. We need to adopt a capital gains tax as theyve got in Australia, so that people invest in businesses on the basis of the profitability of the investment rather than-

PAUL 
Yeah, but thats a long-term thing, isnt 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 youre earning $100 now, youd be earning $100 and 60 cents. How can you save on what we earn?

DAVID 
Well, thats one of the reasons why, if youre a low-income earner, you have to increase wages. Thats 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, thats two things. Whats 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. Thats more than preschool, primary, secondary, tertiary combined. We are actually getting to the point that through not addressing that issue were 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, isnt 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 theyre encouraged to invest in property and speculation because thats where the smart money goes because theres a tax bias, and until you address that tax bias, that fundamental problem wont be overcome.

PAUL 
Yeah, but how do you help the bloke whos trying to export offshore and doesnt quite have the capital to really do it in a significant way?

DAVID 
Well, thats where your compulsory savings are important, because-

PAUL 
How does that help?

DAVID 
Because then youre 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. Its starting to look - 53,000 last year. For Gods sake. Our best and our brightest and our most talented. The get-up-and-go people. Its 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 its Eden Park now.

PAUL 
I understand this. Its 53,000 now.

DAVID 
So its getting worse rather than better, thats the problem. The trend is that its getting worse.

PAUL 
OK, ideas to stop it.

DAVID 
Capital gains tax, improved savings. You know, on the savings front, were 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 were going to actually have to have a closed system that says once you get universal savings you actually cant take them with you to Australia. Weve got such a problem now between income differentials between New Zealand and Australia that were gonna have to do better. Were 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 governments failure to address the looming cost of super. As you point out, by 2015, supers 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 
Thats Labours policy still. Would Labour contemplate sitting down with National to conduct a dialogue on the-

DAVID 
Weve made that offer twice, and its been rejected. So yes, weve already done that.

PAUL 
But, I mean, in the end, youre not the Finance Minister. John Key is. He has to worry about Greece. You dont.

DAVID 
Well, actually, New Zealanders arent moving to Australia because of Greeces problems. Theyre moving because of New Zealands problems. Theres 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.

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