Unfortunately it’s yet another tall tale from National.

This country desperately needs sustainable economic growth to create jobs and incomes, to give families hope, and to reverse the brain drain.

But after four long years of the John Key government there is still almost zero growth.

New Zealand is not doing well by international standards. Our annual GPD growth is lagging behind Australia, Brazil, Russia, Mexico, Germany, Turkey, Korea, Switzerland, Poland, Norway, Venezuela, Argentina, South Africa, Finland, Austria, Bolivia, Estonia, Iceland, Israel, Chile and many of the Asian economies.

Actually we’re going backwards because yesterday Statistics NZ said exports have plummeted by a horrific 17%. That’s a dire reflection on the government’s lack of a recovery plan, and it’s an indictment on economic development minister Steven Joyce’s $120 million of cuts to the economic development budget.

What about National’s other tired tall tale; the idea that growth will magically ramp up any minute now?

Well we’ve been hearing this nonsense for years. Last year English promised 3.2% growth, but Treasury says it’s probably been less than 1.6%.

Now the finance minister is promising we’ll have 2.6% growth in the next year – and he’ll conjure up billions to get rid of the deficit too.

The reality is Mr English can pick the pockets of every paperboy and papergirl in the country, he can raise the prescription charges, he can force the students out of their training, he can wave goodbye to thousands and thousands more kiwis at the departure lounge, he can cut and cut and cut.

But his tall tales still won’t be true and National will still be a zero government.

Over the next few weeks I will be blogging more on why National’s growth performance is inadequate, why their GDP forecasts are thus rosy and unreliable, why the Zero Budget provides zero hope of any improvement, and what some alternatives might look like.

It’s the day after the Budget and Parliament is sitting in urgency to debate new tax legislation. The Taxation (Budget Measures) Bill is apparently so important that National have:

• Deferred the main Budget Debate;
• Removed normal select committee review;
• Imposed a retrospective effect.

So what is this tax bill about?

Is it the secret “base broadening measures”; National’s supposed answer to Labour’s future focussed capital gains tax?

Is it the closing of the major loophole by which half of the wealthiest 100 New Zealanders avoid being on the top tax rate?

Is it reinstatement of the Labour Government’s research and development tax credits, the key tool which was stoking our businesses’ engines of innovation?

Er, no, no and no.

The centrepiece of this Bill is picking the pockets of paperboys and papergirls.  Urgently taxing toddlers, if you will.

It’s laughable that National’s top economic priority is retrospectively stealing the pocket money of 68,000 kids.

But it’s incredibly sad that this is what government in our beautiful country has come to.

National has wrecked New Zealand’s economy.  Just yesterday they unveiled a horrific 17% plunge in exports.  But instead of getting a real plan to deliver a brighter future they’re plotting to tax toddlers.

The zero Budget of 2012 is yet another wasted opportunity for a country desperate for change.  It’s an insult to ordinary Kiwis who are working harder and longer for less and less.  It’s a slap in the face to law abiding families and small business owners who pay their taxes, and who deserve to get ahead instead of being pickpocketed.

New Zealand is losing 1,000 Kiwis every single week.  That’s 50,000+ a year.

Unemployment is up by 50,000+ since National took office.  The number on benefits is up over 50,000 too.

A zero Budget means zero hope for them, and all New Zealanders.

It also means zero pocket money for paperboys and papergirls.

We will also find out who gets what, and whether National will continue its habit of favouring the very wealthy at the expense of the broader community with its unaffordable tax cuts.

New Zealand’s Budget debate will occur against the background of a fierce battle around austerity economics vs growth economics.

Here’s a selection of articles which undermine the zero National Government’s spin on zero Budgets:

1. The Economist says austerity Budgets in small countries, without fixing the broader international system problems, will simply undermine growth and jobs.
2. Nobel Prize winning economist Joseph Stiglitz argues European austerity Budgets fail both economic and social fairness tests, and can drive economies into double-dip recession.
3. The Financial Times balances this by noting small economies cannot simply spend their way out of a mess. Lax fiscal policy in small open economies can result in demand leaking offshore without resolving local structural problems.
4. Writing in The Guardian, Professor Mariana Mazzucato, says small states can help drive growth and jobs by investing in innovation and skills, reducing risk for private sector commercialisation and growth.
5. Will Hutton devastates the UK Conservatives’ zero Budget for their ignoring the role of the state in mitigating risk and creating jobs through driving innovation.

Tomorrow, National will argue that New Zealand needs a zero Budget.  Labour believes a zero Budget is what you get when you have zero growth in your economy, and zero plan for delivering the growth that’s needed to create jobs.

Responsible fiscal policy is important – Labour would always be careful and prudent with the state’s finances – but a zero Budget is not the only success test when you’re talking about the finances of a country that real people live in.

The articles show this is a global debate, not a local one.  New Zealanders need to understand the lessons of history, not repeat them.

This morning David Parker gave a speech where he clearly set out how a Labour government would be different.

• We will create jobs by supporting our exporters to expand and earn more.
• We will help Kiwis to get the education and skills they need to seize the job opportunities of a 21st century economy.
• We will grow incomes by investing in science and innovation to create more high-wage businesses.
• We will make it easier for Kiwis to save for their first home and to build a retirement nest egg.

David’s speech points out that we need to significantly change how the New Zealand economy works in order to grow jobs and higher wages. It’s filled with detail (and even graphs!) – I highly recommend you take a read.

We’ve also put together this video to take a look at how National haven’t simply failed to deliver, they’ve also failed to meet their own low standards. I hope you enjoy it. Please share it around.

Labour is prepared to make the fundamental changes needed that National is ignoring.

Transcript below

KiwiRail, Railway Workshops—Minister’s Statements

12. CLARE CURRAN (Labour—Dunedin South) to the Minister of Finance: Does he stand by his statement to the Otago Daily Times on 21 April 2012 that he was not aware of KiwiRail’s decision to sell off the Dunedin Hillside workshop prior to the announcement?

Hon BILL ENGLISH Yes, I do. I understand that my office was notified later in the day, before the announcement. However, if the member is suggesting that the notification is important in the sense that either I or other Ministers would have intervened in the decision, then that expectation is incorrect. We would not have.

Clare Curran: Is he aware of the  no-surprises policy outlined in the   Owner’s Expectations Manual for State-Owned Enterprises, which states: “Under the ‘no surprises’ policy, shareholding Ministers expect to be informed well in advance of any material or significant events”; if so, given that the sale of Hillside is a significant event, how can he not have known that KiwiRail  was planning to sell up?

Hon BILL  ENGLISH: Well, I think I just gave the answer. Of course Ministers were aware that that was one of a number of things discussed, but I would have to say it was a small part of discussions with KiwiRail. The Government is investing $4.5 billion in a 10-year turn-round  programme with KiwiRail. We expect the board of KiwiRail to make sensible operational decisions to back up the investment of $4.5 billion in turning round KiwiRail. We do not expect to be part of every single decision involved.

Clare  Curran: If KiwiRail neglected to inform him and other shareholding Ministers well in advance of its intention to put the Hillside workshops up for sale, has he asked it to explain why it did not, given that it is a significant community event; and if he has not asked it, is he not then negligent in his duties as a shareholding Minister?

Hon BILL  ENGLISH: No. We were aware that the discussions had been going on about the Hillside workshops. In fact, anyone in New Zealand who can read a newspaper would know that that has been going on for a number of years. However, it is a matter for the board to make the decisions. As I have said, the Government has committed $4.5 billion to a 10-year turn-round plan, including an injection of $750 million. We do focus on whether the overall plan is on track, and we have done.

Clare  Curran: Does he support the KiwiRail decision to sell the Hillside workshops, and is it Government policy?

Hon BILL  ENGLISH: The Government policy is to try to turn KiwiRail into a viable commercial business, and the taxpayer is going to invest, one way or another, $4.5 billion in achieving that. That is the Government policy. In respect of the Hillside workshops—

Andrew Little : Why won’t you keep Kiwi jobs?

Hon BILL  ENGLISH: We cannot have it all ways. If we put in billions of dollars to upgrade the wagons and the locomotives so they are new, then they do not need nearly as much maintenance as when they were 50 years old. So by putting in a taxpayers’ investment to upgrade the gear, now we do not need the same maintenance capacity. The board has the responsibility of making those balanced decisions.

[continuation line: Michael Woodhouse: What reports …]

Michael l Woodhouse: What reports has he seen on the involvement of Ministers in respect of State-owned enterprise decisions?

Hon BILL  ENGLISH: The House might not be surprised to hear that an Acting Minister of Finance stated: “as a matter of policy the Minister of Finance, as shareholding Minister, does not intervene in the operational affairs of the airline.” That particular quote was from Trevor Mallard in respect of Air New Zealand, and I think it is a  longstanding practice that State-owned enterprise Ministers do not try to run these businesses.

Clare  Curran: Does his refusal to intervene in  KiwiRail’s decision to sell the Hillside workshop and its reluctance to repair the Gisborne to Napier rail line not prove that this Government does not give a damn about regional economic development?

Hon BILL  ENGLISH: I think that is an extravagant statement. In fact, the Government is investing—

Grant Robertson: You’re not saying it’s not true, though.

Hon BILL  ENGLISH: Well, it is an untrue statement. The Government is investing $4.5 billion in KiwiRail, and that is going to enhance the infrastructure right through New Zealand, including in Dunedin. We want to make this into a viable, reliable rail company. The plan is well under way, and we are reasonably optimistic that it can be achieved.

These personal views build on caucus discussions and our 2011 manifesto, and take on board feedback from party and business circles as I have been listening and engaging over the last few months.

This oped, published in the Herald on Friday, argues for lifting sustainable economic growth through a more ‘can do’, positive partnership with between government and business. It argues for a clear and credible strategy that integrates economy-wide, sector-driven and regional initiaitives. It warns of the dangers of the kind of one-off ‘deals’ with indvidual corporates now so typical of National.

This speech, delivered today to a meeting hosted by the New Lynn Women’s Branch of the NZLP, goes back to first principles. It argues that, post GFC, the “invisible hand” of neoliberal economics has failed, that New Zealand cannot cut or sell our way out of a hole, and that Labour must therefore present a clear alternative economic approach to the current government based on our own enduring values.

Hope you enjoy them.

I don’t think it’s any surprise to anyone that I’ve come out fighting over the extraordinary, but probably predictable decision by Kiwirail to put the Hillside workshops up for sale. In Saturday’s Otago Daily Times I was quite forthright in expressing my views. I used some rather unladylike language and had to ring my mum the day before to warn her.

I stand by what I said. I think the government (and Kiwirail) have pissed on Dunedin. I think many Dunedin-ites agree. Saturday’s ODT editorial seems to agree too though in more polite terms.

I think that the only way we’re going to sort things is for Dunedin people to take control ourselves. And to have a future Labour government backing rail.

I’ll do my best to help find a buyer for Hillside. I’ll continue to take the fight to parliament and I’ll remain a thorn in the side of this government and the local National List MP Michael Woodhouse who has seriously let down the people of Dunedin in the pursuit of his own career. I’ll advocate for the need for and the importance of this industry to remain in public hands, and indeed to just bloody remain in our country.

When I took this job on I understood that there are times when sticking up for your city is more important than towing toeing a party line that you don’t agree with and which is going to hurt your city. It’s a judgement to be rarely exercised. Sometimes the greater good is more important than a local issue. But every MP should have the right and the responsibility to stand up for their city. This was one of those times. Woodhouse didn’t even think about it.

He blocked a select committee hearing on the petition signed last year by nearly 14,000 people (mostly from Dunedin) calling on the government to save the Hillside and Woburn (Hutt) workshops. He has never been held accountable for refusing to allow the people of Dunedin, the Hillside workers and their union to have a say before a parliamentary committee. He should be.

His government is negligent, disingenuous and downright liars about their responsibilities for Kiwirail and its decision and their knowledge of those decisions. As my colleague David Parker has said; if the KiwiRail board had made the same announcement without telling a Labour government, the board would have been sacked. It is just nonsense and untrue for shareholding Ministers to say they didn’t know Kiwirail’s direction and decisions. And it is very clear that they don’t oppose Kiwirail’s decision to sell Hillside.

There’s more at stake than the nearly 130 jobs, the loss of wages, taxes, skills and the more than 137 year history of a competent and valued rail manufacturing plant to the city of Dunedin. There are more than 70 engineering businesses clustered around Hillside. It’s the backbone of our city. It’s becoming more high tech. It’s a hugely important part of our local and regional economy.

This government doesn’t give a stuff. They allowed (and encouraged) it to be run down and now it’s being sold because Kiwirail says it’s not viable. Kiwirail deliberately made it unviable.

I ask you this. How is that that contracts have been handed to the Chinese to build rail wagons that are dubious in quality, when those same wagons could have been built here? They may have cost a bit more, but the workmanship would have been assured, the maintenance would have been less and have been more easily accomplished, and the people who built the wagons would have been earning decent wages and paying taxes in the New Zealand economy.

Kiwirail, and the government, has blocked any independent scrutiny of the dodgy process in awarding those contracts to China North Rail and the quality issues associated with the Chinese wagons. It’s time for some sunlight on both.

It is not false economy to manufacture in your own country. It’s our productive economy. I’d stand up for manufacturing jobs any day against paying for more pokie machines that create immeasurable social harm and are part of a mates deal to an organisation that will profit, might create a few more service economy jobs, but is unlikely add much more real value to our economy.

And I reckon that’s worth sticking up for.

…the frank admiration across the Tasman for English’s economic policies is something that has not been displayed by Australian power-brokers since this country was in the grip of Rogernomics and Bill Birch’s labour market reforms.

Bad comparison Fran. Who in their right mind would want to own up to admiring the dreadful Bill Birch’s Employment Contracts Act or the damage inflicted by Roger Douglas?

And then today the Dom Post reports that Australian firms are moving jobs to New Zealand, attracted by our low wages and more “flexible” labour rights.

Hundreds of Australian jobs have been shifted to New Zealand as producers there try to avoid the impact of high wages, a soaring dollar and restrictive labour laws.

Supermarket giant Woolworths is the latest to transfer jobs across the Tasman, shifting 40 contact centre jobs to Auckland this week.

Imperial Tobacco has also said it will move cigarette manufacturing from Sydney to New Zealand.

As David Parker says, there are record numbers of Kiwis leaving for Australia. They are not going so they can work in call centres or cigarette-making factories.

“National made closing the wage gap a key election pledge in 2008. It now wants to attract investment to New Zealand on the basis of cheap wages.

Heinz Wattie has already ditched 300 jobs across Australia and supposedly was bringing them to New Zealand.

But not for good New Zealand jobs. These days, a Heinz Watties worker is just as likely to end up being employed by Allied Workforce – a temporary labour hire contractor, and be paid minimum wage – doing the same job directly employed and unionised workers used to do for a whole lot less.

Perhaps the brighter future we were promised involves rolling ciggies for Australia?

It certainly seems to involve low wages.