Hon PHIL HEATLEY (Minister of Fisheries) : It is widely known now, because I hear it on the radio, through the television, and as I walk around the New Zealand community—including, not least of all, in the Whangarei electorate—that Budget 2009 as announced by the finance Minister, the Hon Bill English, takes steps to ensure that Kiwis are cushioned from the sharpest edges of the worst global recession since the 1930s. For some months now, it has been put into perspective how serious this recession is, and how deep it has become in some areas of the world—and is yet to become in New Zealand, as it runs its course.

As a Government that was coming into office, we were keenly aware that many New Zealanders and their families were exposed, and would continue to be exposed, to the effects of this recession. We did not want to see those families put under unnecessary pressure as a result of our actions. Rather, we wanted to see how we could cushion them as much as possible from the effects of the recession. That was why earlier this year, and again in this Budget, we decided that we would invest heavily in infrastructure.

The first tranche of that investment was the immediate infrastructure investment that we announced some months ago, firstly, into education, secondly, into transport, and, thirdly, into housing. In the Budget announcements last week, the Minister of Finance talked about the $323 million home insulation and clean-heating campaign, whereby we will see many thousands of New Zealanders insulate their homes better and heat them more effectively. Before that campaign was announced, some months ago the announcement of the $124 million investment into State housing was made, and $104 million of that was invested into the upgrading of State housing. The reason why we decided to invest heavily in State housing as a first tranche of infrastructure investment was that we realised that State housing has fallen into serious disrepair, and that many tenants are living in quite dreadful conditions. Many of the living conditions are not just untidy but also cold, damp, and unhealthy. It is our hope—and we are seeing that hope being borne out—that the $104 million investment will see more State houses that are insulated under the floor and in the ceiling, and more with clean and sensible heating.

On top of that upgrade is the boost to the net number of new State houses that are to be introduced in this current financial year. That number will rise to somewhere between 525 and 550. Well, some of those 525 to 550 new State houses in this financial year will come, of course, from the 69 houses announced in that infrastructure package. I was delighted to update the House by saying it looks as though we will be able get 86 extra State houses, making up the net figure of 525 to 550 new State houses in this financial year.

It was a delight to roll out an infrastructure package in housing to the State housing sector. We did it because of the seriously dilapidated state of the houses but also because, ultimately, the taxpayer owns State houses. We hold all the levers. The upgrades we did generally did not require a building consent, and therefore we were able to do them immediately. When one holds all the levers one can do it immediately, and that was the thinking behind that investment in State housing earlier this year.

Now we move to the Budget announcement, which the Minister of Finance made recently. With help from the Minister of Energy and Resources, Gerry Brownlee, we have a $300 million - plus home insulation and clean-heating campaign. I am pleased that we have moved our focus from the State housing sector to houses generally, and that we are including investment into privately owned accommodation. Many houses that were built pre-1978 or pre-2000 are not effectively insulated and effectively heated. Many of the people who live in those houses are from a lower socio-economic group in New Zealand society, and many of them are under huge pressure, especially those with larger families. To have warm, heated homes, where the electricity used for heating is not wasted through the ceilings or the floors, is very sensible, because those larger families in lower socio-economic situations cannot afford to pay the health bills. They cannot be expected to deal with the suffering that comes from the ill health that is constantly visited on a family because of the conditions they live in. So we are delighted—and I know the Prime Minister, John Key is delighted—to have announced the $323 million home insulation and clean-heating fund.

I also acknowledge the work of the Green Party towards seeing that particular proposal be put through the House. Both the Green Party and the Māori Party talked to me about housing issues and the issues of poor insulation and poor home heating, and I know there were many more in-depth conversations with the Minister of Energy and Resources, Gerry Brownlee, and, indeed, the Prime Minister himself. This is something that we are delighted to be able to do for New Zealand in this Budget. I thank the Māori Party and I thank the Green Party for their work.

Another example of infrastructure spending—and one could argue that it is in the transport area—is the $50 million investment into a national cycleway. This is an idea that the Prime Minister spoke about earlier this year, which Labour members mocked. Firstly, Labour mocked the $50 million cycleway as an idea. Labour said that putting $50 million into a national cycleway was a stupid idea. Secondly, once Labour members realised that New Zealanders actually thought that it was a good idea, they decided that they better not mock it as being a bad idea. Labour decided to mock the fact that it would ever happen; they said the Nats would never get $50 million to put into a cycleway. Well, guess what happened? We are putting that amount into a cycleway. [Interruption] So now the Labour members are all at sea, because as they shout to me from the other side of the House, they are reaching out for something else to mock when it comes to the national cycleway. John Key, the Prime Minister, has delivered $50 million to go towards the development of a national cycleway, which Labour members mocked as an idea. They mocked it by saying the money would never come, and they are now reaching for other reasons to mock it. What a disgrace!

Why is it that a National Government can not only increase the number of State houses but upgrade State houses, and better manage State houses, when one would expect a Labour Government to look after State house tenants? All that the previous Labour Government could do was increase the number of State houses and increase the number of people who were living in squalor. Why is it that a National Government can come up with a smart idea like a national cycleway and fund it in a recession, yet all that the previous Labour Government could do was pay lip-service to the Greens over 9 years and never deliver anything like that? Why is it that National can work with the Greens, the Māori Party, ACT, and United Future, when Labour can do none of that? That is the biggest surprise in this Budget: that during a recession the National Government is delivering more to Labour supporters than the members on the other side of the House ever did when they were in Government.

Hon ANNETTE KING (Deputy Leader—Labour) : Budget 2009, the Key-English Budget, gets a D. In fact, it gets three Ds: D for destructive, D for deceptive, and D for devious. That is what Key and English get: three Ds for Budget 2009. Mr English has dubbed his first Budget “The Road to Recovery”, and that is parroted by every Minister who answers a question in this House. Well, I have to quote old Rob Muldoon back to them today: if Mr English is the doctor of this recovery, then he is one of those doctors who make people sick. The road to recovery that he talks about is littered with boulders and potholes. In fact, there are great chunks of this road missing altogether. It is a road that thousands of New Zealanders will stumble and fall over in the next few years. They will be our kids and our grandkids, who have had their superannuation support kicked out from under them. They will be people who are already unemployed, who are about to be made unemployed, who have lost overtime, who have lost their part-time jobs, or who have lost one family income when they have relied on two.

Last night I saw the human face of unemployment when I was going home. I saw a woman sitting on her doorstep. She was crying. I said: “What is the matter?”. She said: “Today I lost my job. I don’t have any hope.” This Budget should have been about jobs for New Zealanders. That is what the Aussies are doing: providing jobs for their people. We are told that around 180,000 people will be out of work next year, and what do we get? We get a bicycle lane. That is what we get from this Budget, the so-called Budget for jobs. It is not a Budget for jobs; it is a rocky road for business. Businesses looked in this Budget for something that would help them to innovate, to create, to invest, and to employ. And what did they get? They got words, they got platitudes, and they got a failed Job Summit.

It is going to be a long, long road for students, because their scholarships have been cut and their training allowances have been cut. Courses have been belittled by the Minister of Finance saying that they are hobby classes. Since when has literacy and numeracy been a hobby? They are vital tools for people to be able to learn and to get a job. Reading and writing are basic skills that people need. They are now called hobby courses by the Minister. Courses that are aimed at lessening violence are now called hobby courses. Since when was a course on family violence a hobby course that one would go on? That is what we heard from the Minister of Finance.

This is not a road to recovery paved with prosperity; it is a road that is going nowhere, at all. It is a Budget of destruction, destroying KiwiSaver and systematically pulling it apart week by week. And what is it all about? It is about political jealousy. There is no other reason to destroy the only superannuation savings scheme we have in New Zealand for individuals. There has been no reason put forward for doing that. They have systematically pulled that scheme apart. They are pulling it apart for workers who had a chance—just a chance—to save for their retirement. They are destroying the New Zealand Superannuation Fund. They have suspended payments to it until 2020, or until we return to surpluses.

I have a question for the silent members opposite. Will they suspend tax cuts until 2020 as well? If National members are still in Government, will they suspend tax cuts until 2020, or until we get back into surplus, as well? Does the same argument not apply? If they cannot save for our kids’ superannuation, how can they afford to give tax cuts? Why would they borrow for tax cuts, but not borrow to put money into a superannuation fund? That fund is now going to be called the “English fund”. It is no longer the Cullen fund—that has been destroyed. The “English fund”, I tell the laughing member opposite, Paul Quinn, is fast becoming the English patient. That is what it is becoming.

The editorial today in the Dominion Post got it right when it said: “Last week’s suspension of contributions to the Cullen superannuation fund has made one unpalatable fact painfully clear. The age of eligibility for national superannuation is going to rise. That is not what the Government says. Both Prime Minister John Key and Finance Minister Bill English say NZ Super will continue to be paid at a minimum of 66 per cent of the average wage from the age of 65. But that is a fiction … The reason the scheme will have to change is that there is a $31 billion hole in the government accounts. That is the hole that will be created over the next decade as a result of the Government’s decision to ‘temporarily’ halt contributions …”.

This is a Budget of deception. The Government promised the people of New Zealand tax cuts in 2009. Tax cuts were a major plank. In fact, they were the only plank of the National Party’s election promises. National took all Labour’s policies and said “We’ll implement those.”, then said “But our major point of difference is the tax cuts that we can afford and we guarantee personally.” I have here the pledge card signed by John Key, National Party leader. It pledges tax cuts. The issue is not really whether National gives the tax cuts or cancels them. That is not the issue. We have now got down to the blatant deceit of National’s telling New Zealanders that the tax cuts were affordable and giving the personal guarantee that they were affordable. National knew that those tax cuts were not affordable last year before the election. It knew the tax cuts were not affordable when it legislated for them in December last year. But National kept the deception going. Now the matter has got down to one of integrity, sincerity, and honesty. That is what it has got down to. That is the bottom line for New Zealanders. In the end, people will say the Government should have cancelled the tax cuts for the rich. National did not do that; it gave the tax cuts to the rich. People will say the Government should not have continued with the tax cuts at this time, but will ask why the Government promised them when it knew it could not afford them.

National deceived the non-governmental organisations in New Zealand in respect of the Pathways to Partnership funding. Paula Bennett said the funding would be there for the non-governmental organisations. We now know where “there” is. “There” is not in National’s baselines or in the budgets of the non-governmental organisations; “there” is in Bill English’s contingency fund, which is able to be spent on anything he decides to spend it on. The Budget has deceived the non-governmental organisations. Why get rid of a scheme like the Enterprising Communities scheme? Why get rid of a scheme that is there to help people help themselves? That is the very thing Paula Bennett said she wanted to do. She said that we are strong only if we look after the most vulnerable, but that we need to encourage a level of self-responsibility and looking after ourselves. What about Te Whangai Trust? It was started by dairy farmers and aimed to give a hand up but not a handout. It employed 14 people. What happened to that trust in the Budget? It got the chop.

This Budget is devious because the Prime Minister talked big about what he had done for tourism and what he was going to do for tourism. He got headlines up and down New Zealand a few weeks ago about his commitment to tourism. What did National do to tourism? The Tourism New Zealand budget has been cut from $75 million to $69 million. Its budget is the lowest it has been in 5 years. The tourism budget is the budget of the Prime Minister, who gave a commitment to creating jobs in tourism. National has also cut home care to our elderly people. National has cut the funding for historic claims for people who were abused when they were in child welfare institutions.

I want to add one more D to the Ds I have given the Budget. It is dumb. It is a dumb Budget. The Budget was an opportunity to create employment, create training, and ensure that there was a future in innovation and research and development. Even a vision was possible. What did we get? We got a 40-minute grovelling explanation to Standard and Poor’s to ensure that it did not give us a downgrade. That was the only emphasis of this Budget. What a disgrace. What a shame for New Zealanders.

SUE BRADFORD (Green) : In his Budget address last week Prime Minister John Key spoke of the burden that recession places on unemployed people and their communities. He said: “We owe them every effort to create the opportunity for a new job.” He went on to say: “Protecting the most vulnerable is a priority.” I would like to know—and the previous speaker, Annette King, asked as well—how that squares with the revelation that as of this Budget the Government is cutting all funding for the Ministry of Social Development’s Enterprising Communities scheme. A few years back Labour disestablished the Community Employment Group, which was the last remaining part of the Government that supported capacity building and funding specifically directed to the community economic sector. One of the only remnants of the Community Employment Group’s work has been the Enterprising Communities programme, which was aimed at helping the marginalised and vulnerable into work.

Eighty projects are currently funded. The projects include schemes like Te Whangai Trust in Maramarua. The trust is a member of the Sustainable Business Network, and uses paid work schemes to develop local community support for unemployed people in its region. The trust employs 14 people, who grow native plants that they sell to local councils and to the Department of Conservation. The trust has excellent social as well as environmental credibility, and it is building the basis of a really good economic development programme in the heart of its community. Other examples include the apprenticeship support schemes that are run through the highly respected Mayors Task Force for Jobs, a trust employing intellectually impaired people, a group building biking and walking tracks in the Waikato, Māori tourism projects, and a prison fellowship scheme that helps unemployed ex-prisoners find work.

The economic and fiscal update attached to the Budget gives a range of scenarios for employment and unemployment prospects for New Zealand over the next few years. Options are given that range from best to worst-case scenarios. The most optimistic forecast shows the unemployment rate at 6.5 percent in 2010, at 5.9 percent in 2011, and at 5 percent in 2012. The downside forecast issued at the same time paints a very different picture, with predictions of an unemployment rate of 8.6 percent in 2010, of 9.5 percent in 2011, and of 8.3 percent in 2012. Economic forecasting, more than ever, seems little different from the ancient art of divining omens from animal entrails or the flights of birds, but all predictions in the Budget have in common the prediction that the unemployment rate is certainly expected to keep rising sharply over the next couple of years. Then, for some reason—and this is where the augury comes in—the assumption is also made that the recession will begin to come to an end at that point, and that by 2012 there will definitely be an upturn with a corollary drop in the unemployment rate.

What this is based on, in terms of economic, social, or political forecasting, I have no idea, as the evidence coming in from overseas leaves the impression that the recession we are looking at worldwide is one whose bottom has been far from reached and whose end is not in sight. Today General Motors entered bankruptcy. Yesterday I saw news that the state of California, once seen as one of the richest places in the world, and with a population of 37 million people, is planning to cut all cash assistance and a lot of health assistance for the 1.3 million residents currently on welfare. Once the job losses and poverty implications resulting from these two situations alone take effect, the compounding effects on the US, and subsequently the world, economy, will be staggering.

Lately I have not heard much chat from the Government, or anyone else, about the news last week that payouts to our farmers for milkfat solids have dropped to $4.55 a kilo, at the same time as their production costs have continued to increase. If this trend continues in the dairy sector, the implications for our economy are dire. In this context, it is therefore nothing short of alarming that the Government has seen fit in the Budget to withdraw funding for one of the only schemes available to help organisations to provide jobs to some of our most vulnerable unemployed people, while also providing social and environmental assistance to their communities.

At the same time, the Public Service Association estimates that the Government’s Budget reviews of the State sector have already meant about 1,470 job losses, making a nonsense of National’s pre-election promise to cap rather than to cut. Budget reviews and restructuring amid the mantra of lifting productivity are bound to lead to even more public servants being out of work in the months ahead. Meanwhile, we have former Secretary to the Treasury, Dr Graham Scott, earning a healthy $2,000 a day to work from home and advise Mr English where to find more job cuts in the public sector. It is instructive to compare Mr Scott’s rate of pay, not only with that of the public servants whose jobs he is doing away with but also with that of all the minimum-wage workers in the private sector who are currently having their hours, or even their jobs, slashed, when already they can barely survive on what they earn. There is a deep irony in the job losses currently impacting on the Ministry of Social Development and the Ministry of Economic Development. These are the very two agencies that should have the task of helping the individuals and the enterprises most affected by the recession.

On the local government front, we also face the situation in Auckland where John Banks has casually remarked that it is likely that 40 percent of the current council workforce, or some 2,700 workers, will be cut as a result of the transition to the super-city. This pronouncement has of course sent all local body workers in our area into a time of extreme insecurity about their futures.

The Budget contains no commitment at all to employment initiatives, apart from the downstream job maintenance and creation impacts of the home insulation scheme, which the Green Party certainly acknowledges. Beyond that shining example, however, little light is on the horizon for those who cannot find work at present, or for those who will, sadly, lose their jobs over the months and years ahead.

This Budget is sadly lacking in a number of related areas as well. In relation to housing, there is no sign of a policy initiative to address the core problems of rental housing costs rising faster than incomes, at the same time that homeownership remains out of the reach of as many people as ever. As already announced, although the funding for the Housing Innovation Fund has been lifted slightly, that has been done at the expense of a total loss of funding for many individual groups and projects in the community housing area, including its national organisation, Community Housing Aotearoa. We have just heard the Minister of Housing, Phil Heatley, tell us that the Government will build 550 State houses over the coming year. That is less than half of the number added last year under the previous Government. The Budget is bereft of any initiatives to address the current decline in construction activity and the skill retention problem resulting from construction workers going overseas. More money is being ploughed into income-related rents and accommodation supplements, but the Green Party would far rather see this money going into building more State houses faster, and into support for community sector social housing initiatives.

Although more money is going into improving aged-care facilities and increasing respite care, which are both badly needed, the Green Party also notes the lack of anything extra for children living in poverty. In whichever economic forecasts we look at, we see that the unemployment rate will rise, and with it the effect on the number of children being raised within our already very mean and lean benefit system. For example, nothing has been done to remove the iniquitous and discriminatory in-work payment, which provides children whose parents are fortunate enough to be in paid work with more State assistance than those whose parents are not in paid work. How ridiculous to think that some children need less support for food, clothing, and shelter than others! This Budget reflects the fact that National views our credit rating with Standard and Poor’s as being far more important than the welfare and well-being of low-income New Zealanders and their children.

Unemployment is somehow being seen as just another economic indicator rather than a reflection of individual suffering, and the disenfranchisement is disproportionately reflected in our Māori, Pacific Island, refugee, and migrant communities, and among older people, young people, and those with physical and mental impairments. There is no programme for jobs in this Budget, and no vision for jobs. Sitting back and hoping for the best is no answer. It did not work in the 1990s and it will not work now.

During the week before the Government’s Budget, the Green Party released our Green New Deal—the Green Stimulus Package, as a first step towards showing an alternative vision about the way that jobs could be maintained and created at the same time as meeting social and environmental needs. We would like to see $3.3 billion spent over the next 3 years on things like energy efficiency, public transport, protecting waterways, building a lot more State houses, investing in community sector housing and waste minimisation, and putting resources back into building capacity in the community economic sector. This kind of investment would prepare our country for a low-carbon and comparatively low-income future, which is what we all have to face up to now.

Hon KATE WILKINSON (Minister of Labour) : This is a good Budget. This is an A Budget. It is not a D Budget. This is a good Budget. It is a good, responsible, and balanced Budget. At least members on this side of the House know that the world economy has changed. In today’s economy this is a very good Budget. If it was not such a good Budget, we would not be reading accolades such as: “The financial aspects of today’s Budget are straightforward and responsible,” and “Deferring the tax cuts is the prudent thing to do.” The Budget has been labelled as “prudent and responsible in light of the extraordinary state of the world economy and the fiscal pressures facing the government.”; “The 2009 Budget is a first step on the long road to: repairing the damage of the economic mismanagement of recent years; raising the economy’s rate of productivity growth and correcting structural imbalances, and; achieving the government’s goal of closing the income gap with Australia”; and “Budget 2009 strikes a reasonable balance between delivering support in the economy’s hour of need, and being responsible about long term expenses and debt.” The accolades continue. “The Government has made good on an election promise for an additional $90 million over four years for the Aged Residential Care sector.” This was from HealthCare Providers. “The extra funding will go a long way towards the sector meeting the challenges it faces,”—and we are all going to be facing challenges. “Government has listened to sector priorities.”, health organisations said further, in welcoming the Budget’s announcements. “The government’s budget announcement of even better assistance with home insulation is great news”.

This is a good, balanced, and responsible Budget. At this stage I would like to say that I do not think we can underestimate the importance of our credit rating being improved. All Opposition members can do is mock it; they just mock it. They say “Oh, no. It’s not important.” But if we look at what Treasury has estimated a rating downgrade would have done, it would have pushed up the cost of borrowing for every family with a mortgage and every business by about 1.5 percent. It would have increased the cost of borrowing for New Zealand families, who are struggling enough out there, by 1.5 percent, and the Opposition mocks the credit rating. I think that is irresponsible. This Budget is responsible. I will give an example. Just to put it into perspective, a family with a $300,000 mortgage would be almost $100 a week worse off if our credit rating had been downgraded. A family with a $150,000 mortgage would have been almost $50 a week worse off with a credit rating downgrade. This Budget has increased our credit rating, and all Opposition members can do is mock it. This rating increase alone affects New Zealand families, it affects workers, and it affects businesses, and its impact should not be underestimated.

Opposition members mock the rating, and they scaremonger the Superannuation Fund. I would like to spend a bit of time talking about the Superannuation Fund contributions. We have been very clear that superannuation entitlements are not affected by Superannuation Fund contribution deferrals. We are maintaining entitlements. Our decision to defer payments into the Superannuation Fund will not affect superannuation entitlements. In fact, we could quote what Dr Michael Cullen said in October 2000. He said then: “It [the Superannuation Fund] will not have any direct impact on NZS entitlements.” Was he not so right? Perhaps the deputy leader of the Labour Party, Annette King, could take some credence from that, because she is making these scaremongering comments that the Government is destroying the fund. But Labour’s own genius of finance, Dr Michael Cullen, said: “It will not have any direct impact on NZS entitlements.” I tell Opposition members to get back in their seats, get over it, and work together so that we can get through this economic downturn together, for the benefit of all New Zealanders.

It would be utterly ridiculous to borrow money in order to continue making full contributions to the Superannuation Fund; utterly ridiculous. I will quote an excerpt from a television interview in which the Leader of the Opposition Mr Goff was being interviewed. The presenter says: “OK, but the idea of the Cullen fund was that you funded it out of surpluses. There are no surpluses, can’t be funded … Would you go out now and borrow money to invest? I’m not doing that, are you doing that?” Goff: “I tell you the very best time to invest is when the market is at the bottom, and you know that … that’s what you’ll be doing if you’ve got the cash to do it.” Presenter: If you’ve got the cash. We haven’t got the cash.” Goff says: “No, no.” Presenter: “That’s the key, we don’t have the cash.”

Why do we not have the cash? Because Labour squandered the surpluses over the last 9 years, squandered the opportunities, and we are left with trying to clean up the mess with a balanced, responsible, and fair Budget. We do not have the cash, because Labour spent it. Labour frittered it on courses that were of no value, and on projects that were of no value. Labour frittered it away, and now those members are complaining because we do not have the cash to keep funding the Superannuation Fund. Who is to blame? It is the Opposition.

Budget times create interesting days. In the Press recently there was an article by John Minto. Members in the House will realise that John Minto is not particularly a friend of National. Mr Minto very rarely speaks kindly of National. But even he agrees with the decision to halt Superannuation Fund payments. I will quote him, because this might be the only time that I quote him in this House and approve of what he is saying: “Halting contributions to the national superannuation fund is also a sensible move because national superannuation can and should be paid from taxation rather than relying on borrowing to invest in erratic markets to fund retirement incomes.” That is what John Minto said. This might be the only time that I say it, but John Minto makes sense. [Interruption] That is exactly right. Labour wants only to spend and spend. What amazes me is that every member on the Opposition front bench was here when Michael Cullen set up the fund, but they all seem to be suffering from a coordinated amnesia. Mr Goff and his deputy continue to harp on about piling borrowed money into the Superannuation Fund, despite the fact that Labour set it up to be funded by surpluses. National is not going to put pensions on the credit card. We are a responsible Government. What is most interesting about our credit card Opposition is that all they do is scaremonger and oppose for the sake of opposing. Those members have no vision, they have no ideas, and Labour does not have many seats in the House either, which is even better.

It might make a change if we looked at some of the positives in this Budget. Does Labour oppose the $900 million for justice initiatives aimed at improving public safety? Does Labour oppose that? The 600 more police on the streets by 2011; does Labour oppose that? The $182.5 million; does Labour oppose that? The 246 more probation officers, 29 front-line managers, and 26 psychologists to improve the quality of parole and home detention management, $255.9 million; 1,000 extra prison beds, $385.4 million; does Labour oppose that? No, Labour just wants to criticise the Superannuation Fund deferral contributions. Even Michael Cullen said that that fund was to be funded by surpluses, not by the Visa card. Does Labour oppose the health incentives; the $3 billion investment in health services? No, it does not. This includes $750 million in 2009-10; the improvement to district health board services, $2.1 billion; and the 800 more health professionals to increase elective surgery capacity, $70 million. Does Labour oppose that? Does Labour have anything positive to say about the great things that National is doing for this country? No. Labour members scaremonger, they have amnesia, and they are jealous and angry. I say that this is an A Budget, not a D Budget. It is a good, responsible Budget.

Hon RUTH DYSON (Labour—Port Hills) : The rumours circulating around Wellington that Paul Quinn has been giving Cabinet Ministers elocution lessons are clearly confirmed by the contribution from that member, Kate Wilkinson. The pressure is showing, even on that member, who is very well regarded in this House as being a timid little mouse. She very rarely makes a contribution, and when she does it is as brief as possible before she resumes her seat and nearly crawls under it so we cannot see her. But today she did the best imitation of Paul Quinn that I hope this House ever has to endure.

The expectations of New Zealanders for the Budget were not very high, because both John Key and Bill English had spent a lot of time talking it down. But one thing New Zealanders have a right to expect from their Government, regardless of which party is leading it, is the truth. New Zealanders were very badly let down by the deception in this Budget. It was a planned, knowing deception of New Zealanders, over something that was quite fundamental in the election campaign, not just last time but the time before. That deception was about tax cuts.

Paul Quinn: Who hid the figures?

Hon RUTH DYSON: It was not just a deception by the person who is contributing, as usual far too loudly from someone’s else seat, despite the Standing Orders, despite being reminded about that constantly, and despite his whip sitting there knowing that his members are breaching the Standing Orders. It was not just the Government backbench who deceived the members of the New Zealand public; it was John Key himself in his personal commitments. I have a copy of them here: “John Key, National Party Leader”—choose a blighted future—“Party Vote National”. They state that National will: “… Strengthen the economy, increase after-tax incomes and ensure Kiwis can get ahead under their own steam by reducing personal taxes on 1 April 2009, 1 April 2010 and 1 April 2011.” That was a personal guarantee by John Key, leader of the National Party in Opposition, and in Government he passed that legislation under urgency prior to Christmas, in the full knowledge that that promise would be broken.

That is one of the most disappointing things. New Zealanders have a right to expect the truth from their Government, and they got a planned deception, a planned bribe, and an absolute broken promise. But there is another thing that I find very sad. In today’s answers from the Minister of Education during question time she gave us one of the saddest performances I have had to witness in my time in this House. Anne Tolley referred to literacy courses and domestic violence courses as hobbies. Since when has domestic violence been a hobby in New Zealand? Since when have good community organisations that are trying to support families to stop violence been referred to as running low-value hobby courses? Well, the answer was given today and confirmed in the House by the so-called Minister of Education. Today is a day of shame for this Parliament. It is a day of shame for New Zealand when we have a Minister referring not just to good community organisations but to a blight on our society—the issue of domestic violence—as a hobby.

New Zealanders expected from this Budget a vision and an action plan for the delivery of jobs—for creating jobs and supporting people to be able to stay in their jobs. What did we see? Exactly the opposite: not just no plan but job cuts, led by the Government, in the Public Service. That was another broken promise by National about it supporting front-line workers, as we knew there would be, which New Zealanders can now see coming into effect. In fact, just the day after the Budget, Air New Zealand—close colleagues of and advisers to the Prime Minister—said it would cut 80 jobs because of a lack of support from the Government in this critical area.

In the area of health we heard big trumpeting by the Minister of Health that the $750 million increase, which was already promised by Labour, was going to be confirmed by the National Government. But what we saw was not an investment in Vote Health where direct health services could be funded, but $100 million over 4 years, or $25 million per year, going into the new home insulation fund. That is a very good fund. The more warm, dry houses we have in New Zealand the better, but they should not come at the cost of health services. Throughout the country—for example, the district health boards in Otago in Southland, South Canterbury, Canterbury, Capital and Coast, Wanganui, and Tairāwhiti—we see on the public record planned cuts to existing health services so that the health system can put the money into the home insulation package, which the Government is now trumpeting as a great new initiative. When Tony Ryall visits rural Southland, Invercargill, Dunedin, and South Canterbury, how will he be able to say to the older people there that he has personally signed off an increase in the threshold that will allow “Mr Older Person in South Canterbury” to get into a rest home?

By the way, what has also been signed off by the Minister of Health is a cut in the eligibility for home support services. Older people in their homes who need a little bit of support to stay there safely will not get it, and if they need to get into a rest home they will find that the threshold is higher. Those are the cuts that have been signed off by the Minister of Health and are now being implemented by the district health boards.

Those are not the issues that are being communicated to the public by the Minister. He is hiding behind smoke and mirrors, but older people in our community know that what he says is not true. Older people in our community know that the promises made to them about their superannuation are not true, either. The member who just resumed her seat talked about the Superannuation Fund as if it was not an investment in superannuation payments in the future. That is the point of the Superannuation Fund, because we know there will be a huge increase in the percentage of New Zealanders who are entitled to get superannuation at the age of 65 over the next few years. It is a huge increase, as a percentage.

Jo Goodhew: When are we going to draw down on that fund? Go on, be honest.

Hon RUTH DYSON: Even Mrs Goodhew would be able to work this out: if a higher percentage of people over 65 are on superannuation, then a smaller percentage of people under 65 are paying taxes to fund the superannuation. Unless we have some money put aside to contribute to future superannuation investment, something has to go. Will the National Government pledge to cut the health budget? Will it pledge to cut the education budget? Will it pledge—heaven forbid—to halt the cycleway, which is the major investment in New Zealand infrastructure, or will it be honest with the public of New Zealand and say that unless we have some saving now for future contribution to New Zealand superannuation, it will not be affordable at 65, at the average income for a married couple, or 66 percent of the average wage?

The National Government needs to front up to that debate, because that is what New Zealanders are asking. How will we be able to afford New Zealand superannuation at the current age and at the current rate if we do not have any pre-funding? The other question that New Zealanders are asking is if it is good enough to defer superannuation contributions, if it is good enough to put the most vulnerable people at risk in terms of their financial security—people over 65 who are entirely dependent on superannuation—why was it not good enough to defer the huge amount of money that went into the top 3 percent of New Zealand income earners by way of tax cuts? If it is good enough to punish the most vulnerable—50 percent of those over 65 who are entirely dependent on New Zealand superannuation—why are the wealthiest in New Zealand not subject to those new regimes? I agree with Annette King: this Budget gets a D for deception. The National Party will pay the price.

Hon MAURICE WILLIAMSON (Minister for Building and Construction) : Some things in life really grate with people, and one of the things that grates with me is to have sat watching an economic cycle of nine of the best golden years the world economy has enjoyed and certainly New Zealand was bearing the fruits of that. But during those 9 years National was sitting in Opposition and watching what I think was a lot of the benefits of those golden years being squandered. Then, suddenly, we got our turn in the sun, suddenly we were elected to Government, but it happened at a time when, as everyone knows, the entire world’s economy had fallen into a complete abyss.

The Labour Party’s opposition to Bill English’s Budget can be summarised under about four headings, and if I am wrong I am happy for Labour members to contradict me. I will take each in turn. The first one is that those members attacked us for backtracking on our commitment to three tranches of tax cuts. I think that that is the first one I can talk about. Then I think they attacked us for stopping the contributions to the Cullen fund. And I think they attacked us with regard to a slash-and-burn Budget. I will deal with each and every one of those, because there is a lovely old Latin saying “contra vera nihil obstat”—against fact there is no argument.

So let us start with when National’s policies were being developed during the course of last year. Everyone will know that the campaign was well under way during the middle part of the year, so let us have a look at what came out from the Government. First of all, let us look at its forecast for the financial year that is about to start at the end of the month—the new financial year starting on 1 July. Let us have a look at what the Government told us would be the situation, but we must remember that that was the environment under which National was developing its policies.

Michael Cullen released his Budget on 22 May, and in that Budget he said that for the financial year about to start in a few weeks’ time there would be a surplus of 0.5 of 1 percent of GDP—a surplus, was what Michael Cullen said then. But that shows us how rapidly the world changed. I am not blaming Labour for that change; this is how rapidly the change came about. National put in a lot of its policy work. I can remember the policy formulation going on at that time, a year ago, in May of last year.

So let us now look at what happened. We were going forward, but there were some statements made by the Hon Dr Michael Cullen that I think are worth listening to. By September of last year, Labour finance Minister Michael Cullen thought the worst of the economic recession was probably over and that Labour’s tax cuts would help push the economy back into positive growth just as the voters head to the polls. How out of touch could anyone possibly be to say, on 12 September last year, that the recession was over and that we would be pushed into positive territory? Everyone knows that this recession still has a long way left to run.

We will move forward to 1 October, which was about 3 weeks later: “Labour finance Minister Michael Cullen is optimistic that Congress will ultimately approve a rescue plan.” The rescue plan was actually not for New Zealand; it was for America. “Cullen sees no need to urgently reorder Labour’s spending plans to take account of the deteriorating conditions.” So that was the finance Minister, who had all the detail and who knew the state of the economy, who was making those public statements.

Then came the pre-election fiscal update, which came out 5 days later, on 6 October, and we watched that with interest. Members should remember that we are now up to 6 October; the election is only 4 weeks away, at the beginning of November.

Chris Tremain: The critical bit.

Hon MAURICE WILLIAMSON: This is the critical document. I remind members that National’s policies had been out there, and we had been campaigning on them for months, so it was not as though we wrote the policy after the pre-election fiscal update. But the pre-election fiscal update was not even that bad. On 6 October we were told: “Well, yes, that 0.5 of 1 percent surplus that Michael Cullen said in the Budget back in May isn’t quite right. It is actually a deficit of 0.9 of 1 percent.” All right, I can tell the House that National members all looked around and said that that was going to make it tough but, still, we believed that what we had was affordable: we would cut our cloth accordingly; our election promises could stand. When the shadow finance Minister and the shadow Prime Minister—Bill English and John Key—were asked at the time, they said: “No. Our election promises are fully costed.”, and that even with the pre-election fiscal update as it stood on 6 October, we could make it work.

I want members now to listen to what happened when the December fiscal update came out, which was about 8 weeks after National was elected to Government, and Ministers were only just getting their feet under their desks. Then came the ultimate whammy: Treasury’s December fiscal update said we were to forget the half a percent surplus we had written our policy on. We were to forget the 0.9 of 1 percent deficit that we had campaigned on. Treasury told new National Ministers and the Prime Minister to listen up and listen clearly, because the best estimate was a deficit of 2.2 percent of GDP. That was a huge deficit—not a surplus but a deficit of 2.2 percent. But, wait, there is more! As Bill English was developing the Budget for this year, Treasury came with even more grim Reaper bad news, saying that the economic downturn around the world was even more serious, more severe, than anyone expected, and that when it had put out the Budget forecast on 28 May, the deficit—the deficit—was 4.4 percent of GDP. It had gone from a 0.5 of 1 percent surplus a year before, to a 4.4 percent deficit.

Labour says that we reneged on our promises. But, hang on, let us see whether there is any track record for this. I remember that in 2005 Michael Cullen brought in a minute tax cut. It was minuscule, but at least it was a tax cut. It was called the “chewing gum tax cut”. But straight after Labour was re-elected at the 2005 election, when fiscal conditions were not changing by the hour and when everything was stable, in surplus, and doing well, and when there was no reason for any change, Labour reneged on the tax cut and cancelled it for no reason. But now, when National is struggling with the world’s worst economic conditions in 60 years, and trying desperately to keep the ship afloat, it gets attacked by Labour for doing something that we basically had no alternative but to do, after Labour had done exactly the same thing at a time when it had every reason to have left tax cuts in place and not cancel them. I know there is a word that is not allowed to be used in this House, but it rhymes with Hippocratic oath, and a few other words along the way, and that is what I would call it.

By the way, there are some wonderful remedies for how we could fix the economy, from, I think, David Cunliffe. He was on the Q+A programme, and members should listen because it gets no better than this. Paul Holmes said to him: “If you were writing the Budget, as well you might have to be attacking health, education, and welfare, given the present circumstances, wouldn’t you?”. But, oh, members should listen to this little gem; this is a cracker. This is how David Cunliffe, the finance spokesperson for Labour, responded to how he would fix things: “Well, you know, I think the analogy here is with a bus going up a hill. It’s struggling with the gradient, and what National’s prepared to do is throw the passengers off. What we would do is drop a gear and power up the engine. And that’s the way to go.” What on earth does that mean? What in God’s name does that mean, if he is the finance spokesperson? Is he somehow going to drop a gear and power the bus up? There was not a word of what Labour would do with the deficit. There was not a word of what it would do with taxes. Do members know what that bus is? It is a blunderbuss. That is what that is; it is a blunderbuss, I tell Mr Cunliffe.

Now we come to the cracker of all the attacks—stopping contributions to the Superannuation Fund. I would like to do a straw poll around the House. How many people here, if their financial circumstances at home meant they were in deficit and short of money, would go out and borrow money on the market to invest in shares, at present? Who would do that? I want to know whether any members in this House, if they did not have the money or spare cash and if they were struggling to pay their home and household bills, would do that. Yet that is exactly what Labour is saying we should do. In fact, Phil Goff was caught on that one, because he could not finish his answer. When Paul Henry interviewed him on Breakfast, he asked: “Would you go out and borrow money now to invest, because I’m not doing that and I’m sure you’re not doing that?”. Phil Goff said: “Yes, but it’s a good time to be out there buying, because shares are cheap. Well, who knows, they might not get any cheaper.” When Paul Henry said: “But you haven’t got any money to do it, and you wouldn’t do it if you didn’t have any money.”, Phil Goff said: “Oh, no.”, and moved on to something else. This is a great Budget. I am proud of it, and I am proud of doing such a phenomenal job in such unbelievably difficult economic times.

SUE MORONEY (Labour) : For those watching, that contribution was a blow-by-blow account from Maurice Williamson of how the National Government knew it could not afford these tax cuts before it put them through under urgency in December. Maurice Williamson gave us the perfect blow-by-blow account of how the Government had before it in December the documentation that showed the economy was rapidly going downhill. Why did the Government have us here in the House in December? It had the House sitting under urgency to put through those tax cuts, the very same tax cuts for which we sat through under urgency last week to change.

I ask this question again, because I have not had an answer from anyone in the National Government: what is John Key’s signature worth these days? It is completely worthless. We know that even though, as Maurice Williamson just outlined for us, John Key knew how rapidly the economy was declining, and Bill English knew as well, they went ahead with those tax cuts when they knew they could not afford them. Worse than that, they went to an election on the back of those tax cut promises. They knew that they would not be able to afford those tax cuts, but they went ahead with them anyway. They thought that the good people of New Zealand would not know any better or any different, and that New Zealanders would trust and believe National because John Key gave a cast-iron guarantee. He put his signature on that guarantee and gave a personal commitment, and I will talk a little bit later about what John Key’s commitment is now worth in this House.

Budgets are all about priorities, and Budget 2009 tells us all about this National Government’s priorities. Even in difficult economic times, Governments have priorities and I think this Budget describes this Government’s priorities perfectly well. Here is a list of the things that the National Government says we can have in tough economic times, and the first is tax cuts for the rich. On 1 April 2009—that is right, this year—long after it had the information that Maurice Williamson detailed so carefully for us, the National Government went ahead with tax cuts so that a third of the cuts would go to the top 3 percent of earners in this country. Clearly, that is on the list of things that we can have under a National Government in tough economic times. We can give tax cuts for the rich. That is what the Government did on 1 April, proving that that is on its list of priorities. Here is another thing that we can have in tough economic times: we can increase funding for private schools. That is right; private schools, where the students come from families wealthy enough to pay fees for their education. That is on the list of things that a National Government can afford to increase. What else is on the list? I have a personal interest in looking at the racing portfolio. Putting aside all personal interests, of course, I had a look to see what had gone on there. Not one dollar was cut from the money put aside for people like me who can afford to own racehorses. That is another thing on the list that this National Government says we can have.

Paul Quinn: Should you be on this side of the House?

SUE MORONEY: No, I say to Paul Quinn. No, this is on Paul Quinn’s list of things that can be afforded in tough economic times: stakes money for people who are wealthy enough to afford to own racehorses. That is on the list of things a National Government says can be afforded in tough economic times.

Let us have a look at the things that are low priorities for the Government. This is the list of things that New Zealanders have to go without in tough economic times, even though the top 3 percent of earners can have tax cuts, racehorse-owners can keep their stakes money in place, and private schools can have increases in their funding. New Zealanders have to go without the security of their future superannuation payments. New Zealanders have to go without any skills training for the future, professional development for educators to improve the future for our children, and future investment in research and development.

Paul Quinn: Get it out, come on.

SUE MORONEY: That is what they have to go without, I say to Paul Quinn. Community organisations that look after the most vulnerable in our country also have to go without in these tough economic times. The money that the previous Labour Government had put aside for those organisations has been cut by this National Government. Job creation has not been a priority in this Budget, at all. That is the list of things that the National Government does not value, as opposed to the list of things it does value.

In the area of New Zealand I live in, the Waikato, the Budget has had a particular impact. The Waikato economy is in a great deal of trouble. Just prior to the National Government’s Budget 2009, there was an announcement of a significant downgrade in the Fonterra payment to dairy farmers. That is a big hit on the entire economy of New Zealand, but it has particular issues for the Waikato economy. I know that the people of the Waikato were really looking forward to and desperately needed something in this Budget that could get the economy going in the Waikato. What did they find? They found cuts to research and development funding for the food and pastoral sector. This Government took the knife to the very thing that could have stimulated the Waikato economy and cut funding to that area. There is no joy for the Waikato economy and there are no ideas for job creation for the Waikato in Budget 2009.

I turn my attention to the superannuation issue, because I think this is the most cynical part of the National Government’s Budget.

Paul Quinn: Which seat did you stand in Sue? Come on, I can’t hear.

SUE MORONEY: I know that Paul Quinn does not want to hear about superannuation because he has been sold the lie on this issue by his leadership. It is really interesting to look at the backbenchers like Paul Quinn in the National Government at the moment, because they are all looking a bit sick. They went out in the last election campaign and said that Labour was scaremongering by saying National would tamper with superannuation, and that it was wrong. How did those candidates know we were wrong? They went out to the electorate and said that John Key had given his personal commitment that he would resign if National tampered with superannuation in Government. That is what all National candidates were forced to go out and say on the election campaign trail.

Paul Quinn: No, no. He didn’t say that.

SUE MORONEY: They deny it now. Now they are saying they never said that, but I was in those election campaign forums when exactly that was said. National candidates said that if National tampered with superannuation in Government, their leader would resign. Now they are all feeling a bit sick, because they know that John Key’s signature is not worth the paper it is written on. They know that now, and they are all starting to look a bit sick because they have all put their personal credibility on the line. They have all gone out there and said: “We will not be tampering with superannuation. Don’t listen to Labour. They are scaremongering.” That is what they said just 6 months ago. Here they are saying it again today, accusing Labour of scaremongering when, quite clearly, the Government has a plan to take $37 billion out of the New Zealand Superannuation Fund to ensure that hole will be left there in that fund.

Somehow the Government thinks the New Zealand public is stupid enough to get the line it is spinning that the Government can under-fund the Superannuation Fund by $37 billion, but do not worry folks as it will not make a difference. No one believes that. The public knows that the $37 billion not going into that fund will make a difference. It does not make sense to say otherwise. The National Government backbenchers are looking pretty sick; they know John Key is selling them a line. He is telling them to just say that $37 billion does not make a difference, and to just trust him on this one. But they are starting to waver a bit, because they trusted John on this one. They trusted him when he put his signature down for those tax cuts they have now reneged on, and they have learnt a very sad lesson in their first 6 months in Government. They have learnt that they cannot trust their leader to stick to his word. Now they are being asked to go around the electorate and tell people that not putting $37 billion into the Superannuation Fund will not make any difference to the future funding of superannuation. Those backbenchers all know that cannot possibly be true, yet they will be forced to go out and say it is true.

I can tell that they are starting to wobble on this one, because they have already had to do a couple of big flip-flops. They had to do a flip-flop after David Bennett stood up in this House only about 3 months ago and said that tax cuts were the whole reason for the National Government’s being. It has reneged on that already, and it has sold out on superannuation. This is not the brighter future that the National Party promised the country; it is a bleaker future.

JO GOODHEW (National—Rangitata) : I begin by saying that if there has been any very sad lesson that National has learnt in the first 6 months of being on this side of the House, it is that we do not have as much time as I thought we might to clean up the mess that was left behind when Labour was chucked out on 8 November. The Opposition may wish we were wobbling, but I can tell those members that back in my home patch of Rangitata I am renewed in my vigour to achieve that.

Every day New Zealanders understand more what is happening and that Budget 2009 is a prudent Budget. I have been quoted in the Timaru Herald as calling it exactly that. They understand that there are some tough decisions to be made. They understand that, because they are making them daily in their own lives. Far from the previous Government’s approach of spending at will, promising at will, and never funding the promises, New Zealanders want to see a prudent Government that lives up to its promises where it is able to fund them. The Opposition forgets that all of the promises need to be able to be funded. It may be that all the scaremongering from the Opposition is for one reason and one reason alone: the Opposition is very keen for New Zealanders not to notice what is happening on its front bench. There is a huge struggle going on on its front bench. There are problems when the Leader of the Opposition is looking quite shambolic compared to some of those further along the benches who would clearly like to get the nod and have the numbers to become the Leader of the Opposition. All of this scaremongering—

Chris Tremain: Get the bus started.

JO GOODHEW: Yes, I wonder about that bus going up the hill. What about the wheels on the bus going round and round? Well, maybe the wheels of Labour’s Opposition leaders will be going round and round, and I wonder how many Opposition leaders we will see.

Budget 2009 is a Budget that lacks many of the aspect of the last 9 years of Budgets. Budget 2009 lacks the pretence of the last 9 years, the jargon of the last 9 years, the smoke and mirrors of the last 9 years, and the empty and unfunded promises that were a hallmark of the Clark-Cullen years. Budget 2009 is a Budget that tells it as it is. We can do that on this side of the House; I know the other side of the House is incapable of it. When newspaper headlines every day speak of rising unemployment, global uncertainty in financial markets, the likes of General Motors going into bankruptcy, and New Zealanders expressing uncertainty about their future employment security, what do we have from the Opposition benches? Borrow, borrow and spend, spend. On this side of the House the Minister of Finance set about giving New Zealanders a level of security that is as realistic as is possible right now. There is no pretence, no smoke and mirrors, and no unfunded promises. New Zealanders did not wake up the day after the Budget looking forward to grand promises that were empty. This Budget tells it as it is. The future is grim but it is doable.

The National-led Government is prepared to back New Zealanders to prepare to climb out of the recession, and it is preparing the way so that New Zealanders recognise the road out of the recession and to recovery. It is such a shame that one of the largest tasks facing this Government is to wind back the ill-disciplined State spending of the previous Government. In times of surplus, New Zealand was shockingly mediocre in its growth achievements when we were capable of so much more.

There are two areas I wish to discuss further in my address during the Budget debate today: the Community Response Fund, and older New Zealanders. The Community Response Fund is a short-term fund to support community-based critical social services providing support directly to families, children, young people, and older people. Therefore, that fund is very important in this time of financial uncertainty. Those services must be experiencing severe negative impacts from the economic downturn.

The fund has two objectives. The first is about financial crisis funding for providers of critical social services experiencing severe financial difficulties and those who are unable to maintain their services as a result of the impact of the economic downturn on their non-government funding. In my own patch, there are service providers such as the food bank, the Salvation Army, and budget advisory services that are certainly seeing an increase in the number of people passing through at the moment.

The second objective of this fund is demand funding for providers of critical social services with significantly increased demand for their services from families, children, young people, or older people as a result of the downturn. We are talking about $40 million in the first year and up to $64 million in the second year. It is not a small amount of money, and it will go out to those non-governmental organisations. The maximum amount of funding per application is $50,000. Again, it is not a small amount of funding. In exceptional cases, it could be up to $100,000. Those funds would be made available for 12 months. Any not-for-profit organisation that provides community-based critical social services for families, children, young people, or older people can apply for that money.

It is not about smoke and mirrors; it is about us understanding that it is tough out there. Therefore, we are making this funding available. The providers of these services will be dealing with child abuse and neglect, family violence, budget services, sexual violence services, and early intervention for vulnerable and at-risk children and families, families under stress, and vulnerable and at-risk young people and older people.

That leads me to the next part of my address. National has delivered on its election promise to give $90 million over 4 years to the aged-care sector. There will be improvements in respite care. There will be up to $18 million per year for wages for registered nurses in rest homes. The aged-care sector now has certainty that the increase to its funders—the district health boards, called the Future Funding Track—will be passed on. Lo and behold, my old union the New Zealand Nurses Organisation greeted that with open arms, congratulating the National Government on making the tough call to cancel tax cuts that were planned for next year. But giving money—

Moana Mackey: You should never have promised them!

JO GOODHEW: Oh, now we should never have announced them! Well now, that is an about-face. But did not the Opposition say that it also would be providing tax cuts? National has made good on its promise to aged care, and it has been well received by HealthCare Providers New Zealand. They said they were watching the Government very closely to see if it would deliver on its pre-election promises, and those commitments have been met. But wait; there is more good news for superannuitants. Unlike Labour, which only funded superannuation payments to 65 percent of the average after-tax wage, we have guaranteed 66 percent. It is locked in and it is here to stay at 66 percent of the average after-tax wage. That was not done by the Labour Government at the time.

Sue Moroney: Yes, it was!

JO GOODHEW: I tell that member to go and have another look. Labour did not fund it; it was another unfunded promise. But $18.127 million more is there for New Zealand superannuitants, and that money is locked in. We have the great Superannuation Fund scaremongering. The Labour Opposition is unprincipled. Those members rant about the Cullen fund, and they are scaring the living daylights out of older people. When will we draw down on this fund? Will it be next year, the following year, or in 10 years? Come on, those members need to get it right. The fund will not be drawn down on until 2031 at the earliest. We have time to grow out of this recession, to put money that is surplus into the fund, and to recover. Labour cannot bear the thought that National will lead New Zealand to recovery, but Budget 2009 gets us off to an extraordinarily good start.

CATHERINE DELAHUNTY (Green) : Tēnā koe, Mr Speaker. Tēnā koutou katoa. Last week I received my SIS file, which dates back to when I was a student activist within the high school system, aged 15 years old. It was a great reminder of those heady days in 1970 when we school students marched on Parliament, calling on a National Government to fund more teachers, smaller classes, and a better, more appropriate education system. My thanks go to the SIS for documenting that period of my life and keeping clippings that I had thrown away. It was a great reminder that the more things change, the more they stay the same.

This Budget’s context is recession, and it is no good pretending that this Government—or any Government—has control over the global financial downturn. The only flexibility the Government has is in its response to the situation. It has responded by cutting aspects of education that are critical to the well-being of both people and the environment, and to the social well-being and future of Aotearoa. Of course, we cannot have everything we want in education, but the cutting is a clear indication of the Government’s values, priorities, and directions. The Post Primary Teachers Association rightly described the compulsory education sector section of the 2009 Budget as “smoke and mirrors”. To build some new schools is great, but any pay increases to keep up with the cost of living this year are undermined by the projected cuts to resourcing in 2010 to 2012, and by the lack of support for professional development in the compulsory sector, especially in early childhood education. The $35 million for private schools would be better spent on public school support staff for children with special needs. Those support staff are mainly women, and they do not even have pay equity. The unit that focused on pay equity has been axed, and the Pay and Employment Equity investigation, which identified the discrimination against women, has been cancelled. What is the effect of this cancellation on children with special needs?

We are going to spend an awful lot of money on literacy and numeracy, which is vital, but we could waste an awful lot if we do not take heed of the barriers to learning the basics, which this Budget fails to address. Children are coming to school hungry. Some of them are hearing and vision impaired, and, as the Education and Science Committee learnt today, many of these impairments are not being picked up by current screening methods. The Government has allocated $59 million to improve behavioural issues, but if we do not increase the benefit, and support parents, the children will not be in a fit state to learn. If social meltdown occurs in a New Zealand house because one parent has lost his or her job and the other one has cancer, or there is only one parent trying to pay a ridiculous electricity bill and he or she cannot pay the dog registration let alone feed the kids or the dog, the child of that family carries a heavy burden into the classroom on his or her small shoulders.

The Green Party also believes that the decisions on adult and community education show no understanding of the contribution of adult education to reintroducing people to learning. As Te Ururoa Flavell said yesterday in question time, PricewaterhouseCoopers did a study on the economic value of the adult and community education sector and found it was worth $6.3 million annually to the country. So how does an 80 percent cut assist us in a recession? It is vital that literacy programmes continue, but being a literate citizen is about so much more than going to an English class. Adult and community education provides incredible value for money, as second-time learners and migrant communities dip their toes into the shallow end of a pool of lifelong learning, which can lead to the most radical transformation of their lives and their communities. What is adult and community education all about? I say to the Minister of Education that, yes, it is about literacy, but it is also about weaving, car maintenance, sewing, and gardening. It is learning to dance with strangers. It is trying out a new type of cooking. If someone cannot weave or dance, or whatever it is he or she wants to learn—let alone cook Moroccan food—he or she needs this opportunity. It can be a totally transformative experience. And Moroccan food, which the Minister seems quite obsessed about, is actually very healthy and nutritious, and very affordable in the recession.

We can guarantee that attending adult learning classes will do something else for us: it will connect us back to our communities, it will give us practical skills, and it will encourage us to return to study when we have lost confidence in our ability to learn. Thousands and thousands of people—especially women, refugees and migrants, tangata whenua, Pasifika people, and people living with impairments—left school feeling like losers. Adult and community education is a bridge to recovery and participation, as well as to the possibility of employment. If there is no job to go to in a recession, what should people do? Should they watch rich people having fun on TV? Should they watch Parliament TV for information on how wise leaders are creating a sustainable future for them? Should they pray for a miracle? Perhaps they should go to cheap, high-quality education experiences in their local communities. The cannot any more.

Adult education includes high-quality Te Tiriti o Waitangi education, which is the single most effective tool for rebuilding harmony and a commitment to justice in Aotearoa. Most of us did not get Te Tiriti education in school, because we were all one people in those days! However, we did learn how to play stick games and sing waiata with appalling pronunciation, and I say that as one of the offenders. We all need this vital element of adult education. The wānanga and kura offer fantastic courses in te reo and the broader field of mātauranga Māori. These opportunities are not just good; they are a Treaty obligation for the Crown.

The 80 percent cut in schools-based adult education programmes will cost 200 people their jobs as coordinators, and more than 200 people part-time work as tutors. These people are mainly part-timers, which is how many of them create a patchwork of employment that allows them to pay the rent and feed their kids. When they lose jobs, their communities lose much more: they lose adult and community education itself.

Perhaps the most depressing and self-defeating cuts are in the environmental education field. The Government has given minimal funding to some of these programmes for the next 6 months, and it has cut all the funding for Education for Sustainability advisers, who have done vital work in the development and education of the curriculum around environmental issues. What has environmental education done for our nation and our children? Te Mātauranga Taiao is an expression of education for sustainability based on the recognition that we live in Aotearoa, and that a Māori view of sustainability needs to guide education programmes, our relationships, and our practices, when we attempt to inspire our young people to look after Papatūānuku and each other. The Education for Sustainability advisers gave holistic advice to schools, and Enviroschools helped to create participatory and practical leadership by children in terms of sustainability kaupapa. But now those advisers have lost their jobs, and the Enviroschools’ funding has been cut. They have 6 months in which to make up a plan and find a way to fund themselves after 2010. Yet Enviroschools, by anyone’s assessment, are a huge success story. Demand far exceeds supply, as schools queue up to join this wonderful programme. They have been so successful that their model has been exported to the other Trans-Pacific Strategic Economic Partnership Agreement countries, such as Chile and Singapore, with our people teaching the teachers in those countries how to develop environmental education programmes. Everybody loves them, so let us cut them to pieces!

I do not know what this Government thinks it is doing. All these education cuts are a form of sabotage to communities of lifelong learning, and they also sabotage communities themselves. Kia ora.

MOANA MACKEY (Labour) : I am happy to take a call in this Budget debate, but I do so with a sense of disappointment. This was a Budget that could have delivered a strategy for jobs for New Zealanders. This was a Budget that could have sought to protect the jobs out there that are under threat now, and to create new jobs. This was a Budget that, in some ways, could have seen our current economic conditions as being an opportunity as much as a difficulty. This was a Budget that failed on every single one of those points. Although the House may debate these things robustly from time to time, the fact is that at the end of the day everyone in here wants New Zealand to do well; no one in here likes to see pouring through his or her office doors the people who are losing their jobs, and who do not know why the Government is not doing anything to help them. We had really hoped that we would see a Budget that finally showed us this Government’s strategy for jobs in New Zealand, and we did not get that.

This Budget has almost become a Budget about the non - tax cuts. I pick up the point that my colleague Sue Moroney made when she spoke earlier, which was that Labour voted for the legislation to repeal National’s tax cuts because we are consistent. We said during the election campaign that they were unaffordable, and we were told we were scaremongering. After the election, when those tax cuts were being rammed through this House under urgency, we said that they were unaffordable, and we were told by National then that we were scaremongering. Five months later we found ourselves in this House under urgency again, putting through legislation to remove the tax cuts that we said were unaffordable. We were again told we were scaremongering because we said they were unaffordable.

National members might like to reflect that our issue is with the fact that National knew during the election campaign that it could not afford the tax cuts, but it promised them anyway because it wanted to win the election. We do not believe that that is the way a political party should conduct itself. We believe that political parties should be honest during a campaign and tell people what they can afford. We also believe that a Government should not make its No. 1 promise the first thing that it repeals within 5 months of enacting legislation on it.

The other big aspect of this Budget was the stopping of the contributions to the New Zealand Superannuation Fund. It is extraordinary that after listening to the National Government—especially the previous National speaker—it would seem that we did not realise that, apparently, money is not the issue when it comes to funding superannuation. National does not think it is the issue, at all. If we had known that the Government does not need money in order to fund superannuation, it would have been made a lot easier for us a long time ago!

I am afraid that I take issue with being lectured to by National about the rate of and age of entitlement to superannuation. I think that National needs to look very closely at its own recent history. Its own former Minister of Finance cut New Zealand superannuation, and when that member was in Opposition he said it was too generous. Now the National members get up to start lecturing us on how great New Zealand superannuation is. Well, we know that, because we always provided it and we never lowered the age of entitlement. We do not need to be lectured to by a party that has absolutely no track record on protecting superannuation. All that National has done is to find a back-door way to cut superannuation. It has said that the entitlement will continue, but, by the way, it will not pay for it any more. So for National members to sit there and tell us seriously that they are not cutting entitlements to superannuation in the future, despite the fact that they are cutting the funding for it, is completely ridiculous. Oh, Mr Quinn is very quiet now! The normally very verbal Mr Quinn is very quiet now. This issue will have a serious impact on local economies.

I want to pick up on the issue of Tairāwhiti Polytechnic, which has found out that it has had $2 million cut from its budget. Now, this polytechnic has undergone serious restructuring. It made a lot of hard calls, and had to make a lot of staff redundant whilst it streamlined what it did and decided how it would become relevant to the community and more viable. Tairāwhiti Polytechnic found out last week, with no warning, that $2 million was being cut from its budget. This is a small, provincial polytech in the Minister of Education’s own electorate. It is a small, rural polytechnic that is needed by its community and is now being made unviable. That is a legacy of this Budget.

In my remaining time I want to focus on two areas in particular. The first area that I want to focus on is housing. This really was a non-Budget for housing. The Minister of Housing’s own press release basically pointed out that there were some increases in the Housing Innovation Funding, and increases in the Rural Housing Programme, which are good Labour programmes. So we are glad to see that National has gone from opposing those programmes when it was in Opposition to supporting them now. That is fantastic. But where is the Gateway Housing scheme? Where is the centrepiece of the new Minister’s affordable housing plan? It is not there; it is not in the Budget.

I feel a little sorry for the Minister, Phil Heatley, on this issue. I have likened him to a cuckoo: he has been jumping around from nest to nest, claiming it as his own even though someone else had built it. He jumped on to the Residential Tenancies Amendment Bill and said it was his bill, even though Labour did all the work on it. He jumped over on to the Unit Titles Bill and said it was his bill.

Paul Quinn: You said this about 2 weeks ago!

MOANA MACKEY: It is because it is important, I say to Mr Quinn. Mr Heatley jumped on to that bill and said it was his bill, even though Labour did all the work on it. He jumped on to the Tāmaki Transformation Programme and said it was his programme, even though Labour did all the work on it.

I think Phil Heatley has been struggling to find a nest of his own. This Budget was very difficult for Phil Heatley. He talked about the State housing upgrades, but Bill English has taken the credit for that as the Minister for Infrastructure. So Phil Heatley had that little nest and he was supplanted in it by Bill English. Then Phil Heatley talked a little about the home insulation project, but the Green Party has jumped into that nest and taken that from him. So the only nest that was available to the new Minister was the Gateway Housing project. Where is it in this Budget? It is not there. The central plank of National’s affordable housing policy in the election campaign is not funded; it is not there.

While I am talking about the Tāmaki Transformation Programme, I must say we had a big song and dance by the Minister in the House in question time about the funding for that project. Where is that in the Budget? There is just a note saying that the Tāmaki Transformation Programme will be funded out of existing baselines, that it may need more money in the future, and that the Government does not know whether that programme will get it.

So the poor Minister of Housing, Mr Phil Heatley, is jumping from nest to nest, desperately trying to find something new that he can actually claim as his own, rather than just a reheated Labour policy that he has adopted because he cannot get any money to do anything else. This has been a sad Budget for housing.

I do want to point out to the Minister that he needs to be very careful when he jumps up and down and talks about Labour having been bad on housing. When it comes to State housing, he might want to go back and actually look at the deferred maintenance Budget that was there when Labour came into office, given that he has made such a big deal about deferred maintenance. When Labour previously came into Government, we inherited a huge deferred maintenance Budget. We inherited a State housing stock that was 14,000 State houses down from the number there had been, because the National Government had sold them.

Jo Goodhew: And you didn’t leave a deferred maintenance problem?

MOANA MACKEY: We inherited a huge deferred maintenance problem. We also inherited State housing tenants who were paying market rentals. I ask the member to remember that in the 1999 election campaign, because National had managed the recession so incredibly badly, we had to campaign on the basis of raising the top personal tax rate in order to be able to afford to do what we wanted to do. We had to come in and we had to do maintenance. We had to build houses, and we had to build in income-related State house rentals. I think the National Government might want to be very, very careful when it starts to throw rocks around on State housing, because what it may find is that we made great strides under the previous Government. Although I am pleased that like cuckoos in the nest, National members have jumped into our nest and adopted all our housing policies, we will be keeping a very close eye on them. They have been less than honest with the public.

I want to touch on the funding of research, science, and technology, because it was one of the really big losers in the Budget. Paul Quinn announced earlier that it has been allocated $750 million in the Budget. I do not know where he got that from, because we found out that despite the Government’s claims of there being substantial extra funding of $128 million, in fact the extra funding was only $25 million over 4 years. That does not even take into account the cutting of the Fast Forward Fund and the abolition of Labour’s research and development tax credits. Today the Minister got up and answered my questions in the House and kept mentioning the Marsden Fund, the health research fund, and the Crown Research Institute Capability Fund, all of which are good but all of which are being funded by cutting everything else in the science sector, and by cutting out the very policies that were going to enable our innovative companies to grow and enable our scientists to actually have long-term stable funding for the first time in this country. I remind members that the Prime Minister, John Key, pledged during the election campaign a guarantee to this sector of funding of $315 million over 3 years, to be paid for by the cutting of the research and development tax credit. Well, the sector has an extra $25 million allocated over 4 years. That is a broken promise to the science sector, to the research and development sector, and to all the innovative companies in New Zealand.

If we look at the Fast Forward Fund, we see that National’s replacement for it is a lot smaller than that fund was. The main point was that that fund provided long-term stable funding for the science sector. It knew that it had that money there—nearly a billion dollars from the Government, matched dollar for dollar by industry—to last for 10 to 15 years. It could not be touched by the Government; it could not be dipped into to pay for other things. Now the sector has to come cap in hand every year for a year-by-year appropriation, and what is the bet that next year the appropriation will not be there?

PAUL QUINN (National) : It gives me great pleasure to stand and address this House on Budget 2009. Without question, the Budget presented by the Minister of Finance last week is an outstanding Budget.

I want to take all my friends and colleagues in the Opposition back to the election. National was elected on a platform of aspiration, with a focus on jobs and growth. We were elected to encourage people to achieve their potential. We were elected to provide equal opportunity for all. We were elected to promote enterprise, and, most of all, we were elected to entrench sustainable growth. Those are the reasons we were elected.

We were elected in response to 9 years of largesse and extravagance by the previous administration. During the time of the previous administration, GDP growth, although it had increased by 3 to 4 percent on an annualised basis, was mostly driven by private consumption and Government expenditure. In the meantime, capital productivity, which is what real growth is driven by, decreased over the period of the last administration by 0.05 percent. Capital productivity went downwards every year. Why did that happen? That happened because, on the one hand, the previous administration spent 9 years ripping off the taxpayer and, on the other hand, it allowed and led an insatiable appetite for binge spending.

National has come in and taken office on a platform of aspiration, jobs, and growth. It based those assumptions on the promised surpluses in Government accounts as they were laid out prior to the election. As we know, of course, when we arrived in Government, we found that those surpluses were, in fact, fantasy. That pathway of moving from forecast surpluses to re-forecasts of deficits was very eloquently described by my colleague the Hon Maurice Williamson.

When we took office, instead of being able to establish a programme that would set about re-energising the country, we had to go back to basics. A starting point for that is a truism that my father, I am sure, would have taught one Parekura Horomia when he was in his primary school days at Rangitukia. The lesson my father would have given my friend and colleague Parekura Horomia comes from Charles Dickens’ famous book David Copperfield: “Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” That is where we are today. That lesson is no less true today than it was those many moons ago.

I am afraid that Parekura could not get that message through to the previous Labour Government. Over the last 5 years of that administration core Crown expenses increased by 49 percent and revenue increased by 25 percent. That Government was outspending the amount of money it was collecting by 100 percent. That was the parlous state that we took over.

Let me give the Opposition a little Economics 101 lesson. Growth, commonly measured in GDP terms, is equal to private consumption, Government expenditure, the trade balance, and investment. I have already canvassed the issue of investment. We had a deficit over 9 years of 0.5 percent on an annualised basis. That was not contributing much at all. Let us look at private consumption. Household debt rose, from $93 billion in 2000 to $168 billion by the year 2009. That left the debt of householders at 160 percent of their disposable income. The big issue with this debt is that most of it had gone either into housing or into imported consumables. That is the big issue, because we had no exports and no productivity driving exports to match the imports.

I now move to the current account deficit. In 1999 we had a deficit of $5 billion. By the time the previous Labour Government was chucked out of office, the current account deficit was $15 billion. We had gone from the previous pattern of cyclical movements to the situation where the current account deficit is structural. That is a fundamental reason that this Government, on coming into office, set out to turn things round.

My colleague the Hon Maurice Williamson has covered the issue of Government expenditure, so I will not canvass that. But when we talk about capital investment, let us reflect on what Labour did when it was last in Government. Members will remember the knowledge wave: economic transformation, growth, and innovation. If all those programmes were so successful and so good for the country, then how come productivity went down? Where are the fruits of all that propaganda? There are none. The bottom line is that under that party’s period in Government this country gorged itself on things that it could not afford, and that has set back this country by 20 years.

This Government has announced a number of key objectives in this Budget, which I am sure my friends and colleagues will cover over the next few days of this Budget debate, such as keeping the economy going, safeguarding entitlements—those will be spelt out, and some of them already have been—improving public services, keeping Government debt under control, lifting productivity, and improving New Zealand’s international competitiveness.

I will touch on a couple of things that seem to have occupied the minds of Opposition members. One is superannuation, and the fact that Labour members would borrow to maintain superannuation. The first thing is, as Dr Cullen has said, that superannuation is really just a cash-flow control issue. When we are in surplus, we will put cash away, and when we are in deficit, we will not do anything. Members opposite want to margin-trade away this country’s future.

The second thing I will talk about briefly is that members opposite have said that the ratings agencies are the same ratings agencies that gave ratings to Enron and so on. The point they have missed is that it is lenders who take guidance from the ratings agencies, not borrowers. Lenders want to know what the ratings agencies are saying about us. The fact is that to survive we will have to adjust our budget.

This is a Budget for the times. It is about getting our house in order. It is about eliminating waste. It is about value creation. It is about the road to recovery. It is about aspiration.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : A few minutes ago Jo Goodhew was scrounging around for some positive comments about the Budget—maybe from some community organisations—and she found a good one, she thought. It was from a union, no less; it was from the New Zealand Nurses Organisation. That organisation has congratulated the Government on making the tough call to cancel the tax cuts planned for next year. She crowed about the fact that the Nurses Organisation congratulated the Government on making that call. Well, too right the Government had to make that call.

When the tax cuts were being brought in, under urgency before Christmas, Labour opposed them. We knew then that they were not affordable. The Government knew then that they were not affordable, but it went ahead with them anyway. It was all smoke and mirrors. Government members said: “Look at us; we are doing what we promised. Just wait, though, till the 100 days of action are over. Just wait for what might come further down the road.”

It is all well and good to quote the Nurses Organisation, but Jo Goodhew got only as far as the first line. One would think that she might have dug a little bit deeper. The headline might just have given it away. It read: “Budget 2009: Tough Calls, Some Good, Some Bad”. Now, there was some more good stuff in the press release. It states: “NZNO welcomes the protected increases in Health.” We very much thank the Nurses Organisation for welcoming the maintenance of a Labour policy. The Government cast this Budget in such a bad light that the fact that it managed to simply maintain a Labour policy has people in the community throwing their arms up and saying: “Hallelujah! They haven’t started cuts on that bit anyway.”

But when we go deeper into the statement we see that it reads: “NZNO assesses this budget most for its likely impact on jobs.” The press release goes on to state: “NZNO is very concerned the large cuts announced in government departments’ spending will drive a continuing haemorrhage of jobs …‘If work being done is no longer deemed to be required, there are plenty of new challenges these skilled workers would be better applied to than throwing them onto the dole … We remain deeply concerned about the funding for residential age care … We are also unclear as to how the funding will be distributed and calculated,’ said Annals.” There were some good and some bad calls in the Budget.

Grant Robertson: Jo Goodhew didn’t read that out.

IAIN LEES-GALLOWAY: That is right. She completely missed that bit. She did not get past the first line. There were some good and some bad calls in the Budget.

Actually, it was about time the Nurses Organisation offered a fairly favourable press release for the Government, because just a few days earlier a press release reported that “The New Zealand Nurses Organisation (NZNO) expects Thursday’s Budget will focus on strengthening the economy and hopes it does so through a focus on jobs;”. Well, everybody was hoping there would be a focus on jobs, were they not? But it was completely lacking. It was completely missing.

Just a few days before that came a press release entitled: “Nurses Disappointed by Government’s Disregard for Fairness”, which was about the scrapping of the Pay and Employment Equity Unit. The Nurses Organisation had worked on very closely on that with the previous Government and had achieved some very useful, beneficial, and tangible results.

It is bad enough that this Budget is the Budget of broken promises. It is bad enough that John Key and Bill English told New Zealanders they could have their cake and eat it too. It is bad enough that John Key and Bill English said there would be tax cuts this year, next year, and the year after. It is bad enough that John Key went out and told Kiwis that National would not tamper with the superannuation scheme. It was his personal commitment that there would be no tampering with the superannuation scheme. It is bad enough that Bill English has committed intergenerational theft by gutting KiwiSaver and ruining of the superannuation scheme by getting rid of the payment to the fund formerly known as the Cullen fund.

But what is really deplorable about this Budget is the fact that it is completely devoid of any kind of vision for New Zealand. That is the worst kind of intergenerational theft. It is anti-aspirational. It is riddled with short-term, expedient thinking, and it was written by a Minister who, frankly, seems unnaturally comfortable with the idea that he will not be held accountable for its real effects on future generations of New Zealanders—not while he holds a ministerial warrant anyway.

There are people out there who do have a vision. In my home electorate of Palmerston North there are people who have a very strong vision of where they would like New Zealand to go. They want New Zealand to be a world leader in food technology and innovation that brings together private sector research, State-funded research, and academic food science experts from across the world. They want to be a magnet for economic development in this country. Those people have a vision of New Zealand as highly skilled and as a high-wage economy. They have a vision that research, science, and technology can be the driving force not only of New Zealand’s recovery from this recession but of genuinely sustainable improvement in living conditions for all New Zealanders. All they ask is that they be taken seriously.

But this Government, in this Budget, has shown that it does not take research, science, and technology seriously. It would like us to think so, but the truth is that research, science, and technology has been one of the very big losers in this Budget. To be fair, I note that there have been small increases in some areas, but those increases have been offset by massive funding cuts across the board.

The Government claims that, through substantial additional funding, this Budget recognises the critical role that science and technology play in the economic recovery. At best, that is misleading, and at worst—and it is a theme of this Budget—it is just plain dishonest. Although the Minister of Research, Science and Technology has trumpeted small increases in some areas, the real story consists of cuts in tertiary education, the abolition of Labour’s research and development tax credits, the gutting of the Fast Forward Fund, and the smallest increase in Vote Research, Science and Technology in years. The Minister claims substantial extra funding of $128 million, but in fact the Vote Research, Science and Technology funding has increased by only $25 million. That was paid for by slashing $630 million from the sector and by abolishing Labour’s research and development tax credits.

The Government has stripped more than $600 million in funding from the research, science, and technology sector, and it has the gall to call it an increase. This does not even taken into account the cuts to Labour’s Fast Forward Fund. In February National promised that its replacement for the Fast Forward Fund would be equal to or better than Labour’s, but the fund unveiled by National is not only worth $800 million less to the sector but also lacks one of the most critical aspects of Labour’s fund, which is long-term certainty of funding. Labour’s Fast Forward Fund guaranteed stable research funding for the food and pastoral sectors for the next 10 to 15 years. Under National’s poor imitation, this critical sector will have to queue, cap in hand, year after year to get its funding. That is not good enough, and it shows no vision whatsoever for a country that has a high-wage, high-earning, high living - standards economy.

This country needs jobs. As the Nurses Organisation pointed out, it needs good-quality jobs. The research, science, and technology sector has the potential to deliver good-quality jobs. When we develop new technologies we should not simply try to sell them off overseas. We, as a nation, should be trying to get in behind the people who develop new technologies, and we should be trying to keep here in New Zealand any manufacturing that comes out of new technologies. We cannot compete with China on quantity, but we can compete on quality.

Focusing on quality supports a high-wage economy. We need to support start-up companies so that new technology can be the harbinger of manufacturing opportunities. The period between the development of a new technology and taking it out to commercialisation is called the “Valley of Death”. Where in this Budget is the support for people who have created a new technology and want to take it out to commercialise it for the benefit of all Kiwis? There is no support in the Budget whatsoever. There is no vision.

When the economy inevitably turns round, New Zealand needs to be ready. We need new technologies, new products, and people with the skills to produce them. But there is no vision, and we will be left behind. Universities and polytechs have received, in real terms, a funding cut from this Budget, yet they are experiencing massive growth at the moment. People want to get into tertiary education. They would rather do that than line up in the dole queue. They want to get the skills they need in order be ready for the time when New Zealand is back on its feet and able to drive forward its economy.

This Government works on the basis of false dichotomies. It says, on the one hand, that there is not room for research, science, and development to the environment—

Mr DEPUTY SPEAKER: I am sorry to interrupt the member but his time has expired.

Hon ANNE TOLLEY (Minister of Education) : I am delighted and proud to stand in this House today as Minister of Education and to speak about the amazing Budget for education. Budget 2009 shows that this National-led Government is committed to investing in education because it provides the biggest-ever increase in education spend, despite severe economic restrictions in our economy. That is a real win for the sector and a real win for New Zealand. Of course, we all know how passionate our Prime Minister is about education, and about ensuring that every single New Zealand child gets an excellent education. He has made it a primary function of the Budget to deliver National’s vision for an excellent education system.

We believe that education is an investment in our future, and we want to stay focused on providing a quality education and training sector in order to ensure that New Zealand is positioned to take advantage of the economic recovery when it comes.

Sue Moroney: So why did you cut all the professional development programmes?

Hon ANNE TOLLEY: I remind Opposition members, who seem to be lacking in some numeracy skills, that this Vote Education spend increases the $10.5 billion that Labour outlined in 2008-09 to $10.8 billion in 2009-10. That is an increase in anyone’s numeracy language.

But I say to members opposite, who used to occupy the Government seats, that their pet projects have been cut. They should get used to it. When we looked at some of those pet projects, we decided many were photo opportunities for Ministers. They were opportunities for Ministers to go out and dish out some dollars. Members opposite had no priority; they put jargon out there. They had no cohesive strategy for addressing an increase in the level of student achievement. Just a week out from the election, the previous Labour Minister of Education, Chris Carter, signed a memorandum of agreement that promised to give funds to a group of educators in his own electorate. He promised them some funding; did he make sure that funding was available? He did not. Was that a responsible thing to do when it was so clear that the member would be going out of Government? No; that was duplicity. Labour promised things that those members not only knew they could not deliver but also made no attempt to deliver. The previous Minister for Tertiary Education went around the country with a pocket full of dollars, and $178 million was poured into propping up tertiary education institutions. They were propped up with little pots of money here and there, which kept them going but stopped them from making the sensible decisions that needed to be made. So it is time to get real. Members opposite must get used to their pet projects going. They must go because this Government has a vision for education.

Let me take a few minutes to outline our vision. We are absolutely committed to raising the literacy and numeracy achievement of young New Zealanders, because that is the foundation. If they do not learn to read, write and do maths, then they have no options in the rest of life. Our national standards, formative assessments, and reports to parents, showing where their children are achieving, where their strengths and weaknesses are, and how parents can get involved in that process, will help our teachers raise those literacy and numeracy standards. We are absolutely committed to increasing the number of students who leave the education system with qualifications. We must ensure that we have our young people engaged at school, which is why we have put more money into combating truancy. We must have children involved in school, which is why we are putting money into trade academies; we will get that interface between secondary, tertiary, and the workplace. We are determined to fund high-quality and relevant tertiary courses that create job opportunities and economic growth.

Members opposite have been carping on about early childhood education cuts. That is quite right. We have stopped the increase of ratios, because that would have cost $175 million and it would not have got one more child into early childhood education. Not one more child! In fact, it may well have seen centres close because there was such a shortage of teachers. The previous Government left office knowing that it had left an enormous shortage of early childhood teachers, so that centres were struggling to find staff. Centres would have closed if we had brought in those ratio changes.

We are meeting our promises to increase participation. We are expanding the eligibility of children able to participate in 20 hours’ early childhood education to those in playcentres and kōhanga reos. We are doing that because we trust parents. You see, the previous Government believed that only teachers could provide quality early childhood education. I say to members opposite to get out and look at what is happening in playcentres around the country. I say to them to go out and look at what is happening in kōhanga reos. Excellent education is happening in those institutions. We will provide 20 hours’ early childhood education to those children. We will also allow 5-year-olds who might not be ready to go to school on the day they turn 5 to stay on at early childhood education centres until they are ready to go to school. From July 2011 we will get rid of the 6-hour limit the previous Government used to try to tell parents the hours when they could use, or not use, early childhood services. We will get rid of that. So that is early childhood education; its cost is $70 million extra. We recognise parental choice and that there is more than one type of early childhood education.

In relation to schools, I tell the House that we have committed more than $500 million to expand and future-proof existing schools and to build new ones. I will talk a little bit about schooling in Upper Hutt. I went there and looked at the four schools that had had their capital funding frozen. I am not sure whether that was for 5 or 7 years; I know that to the schools it seemed like an enormously long time. They were not allowed to build any classrooms and they were not allowed to do any upgrades, while that previous Government messed around with a whole lot of proposals and promises, and delivered nothing. That previous Government promised those schools $90 million worth of funding for schooling, and delivered them $14 million worth of funding. But the first thing this National-led Government did was to say that we would put in $30 million. We are putting $30 million into those four schools. I can tell members that the boards of trustees of those schools are beavering away now with their plans to redevelop those schools. The previous Government was quite content to leave a whole cohort of children in mouldy, leaking, disreputable, old classrooms for their schooling. Labour members were quite comfortable in doing that, but now they have the temerity to stand in this House and complain when we cut some of their little pet projects.

What else are we doing? We are putting $51 million more into special education. I say to the spokesperson over there for tertiary education that we were faced with the decision to put $50-odd million extra into special education to look after those kids, as against putting $50 million into courses like growing plants in the wind, or making concrete shell mosaics. One person wrote to me and said that we were cutting funding for Scottish country dancing classes. Hey, look, I think it is great if people go to Scottish country dancing classes. I think it is fantastic. It is fantastic to learn how to grow plants in the wind. But why expect the taxpayer to fund those courses? Why should we expect taxpayers to fund those courses instead of supporting kids who need special education in our schools? I say there is no choice, so that is why those changes are being made.

We are putting $36 million into supporting the national standards. Up and down the country, principals and teachers have been saying to me that the previous Government rolled out initiatives. One principal said: “Every month I would come into my office and there would be another glossy brochure on my desk. It was something else I had to implement in my school.” Was there ever any funding with it? No! The only funding that was ever made available was contestable. It took pages and pages to apply for it, and it took hours and hours of resources. Then it had to be reported on. Well, this Government is putting into place national standards that will lift the levels of literacy and numeracy.

Dr RAJEN PRASAD (Labour) : I am pleased to take a call in this debate. It is my first speech on a Budget. When I read the Budget, what do I look for? I think that a Budget reflects the very soul of a Government. It certainly reflects its perspective. It reflects its values. It certainly reflects a Government’s analysis of what is happening in our society. It reflects its understanding of our history. It represents the kinds of solutions that the Government has in mind, and it reflects a number of things like that. So a Budget is an important thing. As I, for the first time, inquired into this Budget, I was looking for those kinds of things. What did I find? I knew that I was looking for the Government’s direction and its blueprint, and that I was looking for where the Government is heading and at its priorities.

One of the comments that we have heard from members, which emanates from this Budget—it is in the documents and has been used in the various debates—is the comment that the Government is eliminating low-quality spend. Government members have used those words time and time again. We would expect that the kinds of things that have been taken out must have been low-quality spend items. I am curious about what those low-quality spend items are. Who are the people behind them? What might be some of their experiences? When we do that kind of analysis and when we look at the details behind it, what do we find in the Budget? Like it or not, this is a Budget of failed promises. One simply has to admit that—not that Government members have been generous in doing so. It is a Budget with no real vision as to where the country might go to achieve the very goals that the Government at least espouses. But, probably most seriously for me, it is a lazy Budget, and I will explain that as I go. That is quite serious. I find, though, that what Governments do at times like these—times of stress, economic difficulties, and demands on the nation State—is to use that as an excuse to push through many of their own biases under the guise of changed circumstances. Therefore, it becomes an opportunity for the Government to push harder its ideological agenda that inevitably, for this Government, favours those in power and expects that by focusing attention in one particular area, the benefit will trickle down to the rest. Well, it will not.

This is a Budget of failed promises. Everybody has spoken about the cancellation of the tax cuts. Not that we have seen from members opposite a genuine apology, a genuine “sorry” to society, and a genuine statement to say: “Yes, we did get it wrong. We knew that circumstances were changing. We had all of the information.” But they got carried away, and they won an election on that issue, and now they should say they were wrong and they have to break that promise. Just let us acknowledge that. We have spoken enough about that.

Many of the promises that were made affect the lives of young people. I will talk about two or three of them. During the election campaign there was a plaintive call from Te Puna Whaiora, the children’s health camps. Here was a genuine request from one of the most effective organisations that I know of—I am reasonably well informed about it. It said: “We have a $5 million shortfall, and we need to address that.” Let me tell members opposite a little bit about Te Puna Whaiora, the children’s health camps. This, to my way of thinking—and we have analysed the details—is one of the most avant-garde programmes in the country looking after children who are under stress, for various reasons, and their families. Te Puna Whaiora makes a real difference in the lives of children and families when they enrol in its services. This organisation has been around for a very long time and is often forgotten, but the new leadership over the past 5 to 7 years has turned this organisation round to make it one of the leaders in this field. What do the results show? A decreased risk of poor physical and mental health, of poor educational outcomes at school, and of social exclusion. The organisation has decreased the risk of those things happening. It has decreased antisocial behaviour and criminal offending amongst those to whom it provides services. There is improvement in identity, confidence, positive self-image and self-control, increased social awareness, improved capacity for relationship building, enhanced life skills, increased individual and family protective factors, and a reduction in violent tendencies and antisocial behaviour. That is the organisation we are talking about. There was a plaintive cry during the election campaign, and one Ms Judith Collins said National would provide the $5 million when they were in Government. I read and read the Budget documents, but the organisation’s budget is exactly the same for this coming financial year as it was for the last one.

Behind that failed promise are thousands of people, many poor families, many communities working hard, and many professionals who put their professional lives on the line, day by day, to provide for those children and those families. Failed promises in a situation like that affect people’s lives. An amount of $5 million will not make one iota of difference to the tunnel or road that the Minister of Transport is building. The sooner he plants fewer trees, or whatever he has to do, the sooner he can take $5 million out of that budget and put it into Te Puna Whaiora and organisations like that. That would be leadership. That would be saying: “I’m not lazy. I will go and find the money.” The Government in this Budget has missed those kinds of opportunities. I find that very sad, because of the effect on the lives of the people behind those missed opportunities. It is no wonder people draw the conclusion that they cannot trust politicians and Governments when they make those kinds of promises during election campaigns. That indeed is destructive.

The second matter I will raise, which also affects the lives of many of our families time and time again, is one that all of us spoke about a lot during the election campaign. The National Party, now in Government, campaigned hard on the issue of family violence. We have been worried about this for a long time. Since 2004 the Taskforce for Action on Violence within Families has done an enormous amount of work on trying to address the problem. The most powerful programme developed from 2004, some way through the life of the last Government, was the Taskforce for Action on Violence within Families. It is New Zealand’s most powerful programme. It is well designed. It has been effective. It leads the It’s Not OK campaign at the present time. It is a multi-year programme. I know that it is struggling for a guarantee of resources. I have searched and searched the Budget documents, but the resources are not there. I say that the funding guaranteed for that programme is not there. If members think that it is there, let the next speaker get up and confirm that the funding is guaranteed and that the Taskforce for Action on Violence within Families will have the money it needs. It is much less than is required for building all of the other infrastructural developments that have been talked about. The Campaign for Action on Family Violence is important and ought to be supported.

If we look at research into New Zealand, we see that for the first time this country has the next generation of longitudinal studies, called Growing Up in New Zealand. The present Minister for Social Development and Employment knows nothing about the purpose of longitudinal studies or what they might produce, years down the track. We have to start the process now. But there is no guarantee of funding for that particular programme. If there is a guarantee, then let the next speaker stand up and say so. The study is designed to examine 7,200 families over the next 30 years, producing the data we need for the next round of social policy.

This Budget has no vision and failed promises. It is a lazy Budget. With just a little bit more attention the present Ministers could have ensured that the small amounts of money required would be made available. Not doing that means this is a lazy Budget. It is the people with the lives behind those failed promises who will experience their effects. Thank you.

Hon STEVEN JOYCE (Minister of Transport) : I have been in the House for about an hour now, and as I rise to speak in the debate I feel that we are operating in parallel universes. On this side of the House we have a Government that is facing up to the biggest world recession since the 1930s, and it is facing up to that in its Budget. It is focusing on prioritising spending that will help contribute to growing the New Zealand economy. There is an old-fashioned concept regarding jam today or more jam tomorrow, and this Government is focusing on securing more jam tomorrow. On the other side of the House we have what might be called a parallel universe, or perhaps a twilight zone, that is spending all its time crying that the Government is not spending enough money on pretty much anything.

One of the interesting things that really winds up those members is education. I do not know how many spokespeople on education Labour has; I think it is about 20. The arrogance oozes from them that another party besides the Labour Party could possibly have a different view from Labour on education expenditure, health expenditure, or social welfare expenditure—that a party could have the temerity to have an alternative viewpoint. That is reflected in the sheer number of spokespeople that Labour puts up.

I would like to talk about the postponing of contributions to the Superannuation Fund, because that has been one of biggest objections to the Budget raised by Labour speakers. Let us talk about that, because it is important that we all understand the reason. Opposition members are spending all their time trying to scare New Zealanders about retirement entitlements, but that is a famous Labour Party strategy: if one is losing the argument, scare the bejesus out of people. That is generally the approach it takes. If Labour is losing the argument, it just scares the hell out of everybody and thinks that things will be OK. Let us be clear: the Superannuation Fund is to help pay for superannuation from 2029 onwards—in 20 years’ time. It is a 70-year investment. The National Government says it will resume payments when the economy is back in surplus. That fund is designed to pay around 1 percent of superannuation in 2029, rising after that. We have said we will resume payments when we are back in surplus, but even if we were not—and we will be—a 10-year holiday would mean, at maximum, about a quarter to a third less money in the fund. A very quick back-of-the-envelope calculation shows that the fund will contribute around 8 percent of New Zealand’s superannuation payments from 2050, not 11 percent. That is the difference; that is what we are talking about. In 2050, even if we did not resume the contributions, it would contribute around 8 percent of New Zealand superannuation payments, not 11 percent.

If we postpone those contributions, what do we get? We get much less debt as a country in the short to medium term. We get a higher credit rating, which means lower interest rates than we would otherwise have had. It is as simple as that. It means a much greater ability to finance borrowing on the world markets not only for Government borrowing but also for private sector and household borrowing. People can pay their mortgages, businesses can grow and invest, and the Government can spend less of the country’s money on paying interest and more on the Government services we all need. In simple terms, the country grows faster. It becomes wealthier so it then pays more tax. Amongst other things, that means we can afford more superannuation.

That is called economics, and, sadly, Labour Party members do not understand it. They are completely bereft of that knowledge. They believe only in how to spend other people’s money. They cannot understand that the great pyramid scheme that has been the world economy in the last years has stopped, and the bill now has to be paid. They believe that money grows on trees. They believe in the money fairies at the bottom of the garden. Let us be clear: they do not want to get rid of any Government spending programmes. That has been the reality of their Budget debate speeches. They do not want any Government expenditure controls. They do not want any Government checks on the quality of expenditure. They attack this Government for getting in people to second-guess what money is spent on which programmes. They think it is awful to get people in to have a second look at what the Government is spending its money on. That is outrageous to the Labour Party, and it does not want to stop payments to the Superannuation Fund.

Members opposite are like the guy in his little red sports car racing towards a cliff, who sees the hazard of going over the edge of the cliff and tries to speed up. As the last election was approaching, like drunken sailors the Labour Government spent even more money. It bought the railways. That was a fine investment! It cost $690 million. Toll Holdings was the steal of the century. Labour then spent hundreds of millions more on the railways, and, as a result, today it is worth around $349 million. What a brilliant investment; what brilliant economic management! I say give those guys a tin medal.

Dr Rajen Prasad: What would you have done?

Hon STEVEN JOYCE: I tell you what; I would not have paid $690 million for the railways. That is for sure. Labour members proposed the idea of borrowing $2.8 billion to build a limited Waterview Connection tunnel; an idea that, incidentally, they still back. They went on about it; they were going to double-track the railroad north of Wellington, they were going to do this, they were going to do that. The world did drive off the edge of the economic cliff, actually. What are Labour members saying now? They are saying: “Drive faster; go even faster.” Their little red sports car is flying through the air towards impending economic doom, and they want to speed up. They are like Weimar Germany between the two world wars; they would have us all wandering around with huge amounts of money in wheelbarrows. They would have us keep all the Labour Government programmes, including the unfunded ones. They would have us keep borrowing for the Superannuation Fund, spending more on this, spending more on that, and keep borrowing for the Waterview Connection. Damn the torpedoes; who cares!

As a country, our debt will be high enough in 3 years’ time. Currently, we are heading towards around $50 billion once we net out the Superannuation Fund. That is a lot. But if we had a Labour Government and it kept to its spending ways, if it kept putting money in the Superannuation Fund over the next 3 years and built the “Waterview Fantasy Road”, then, without anything else, the debt would be getting closer to $70 billion with all the extra interest thrown in. Instead of curving down, our debt curve would be shooting through the roof. We cannot afford that. We simply cannot afford that as a country, and any suggestion that we can is a cruel hoax. We need a responsible Opposition. I say to members opposite by all means debate the priorities, by all means disagree with our priorities, but be intellectually honest, be genuine, and tell people what Labour would spend instead. Those members should not keep saying that nothing has changed. This global recession is the worst since the 1930s, so members opposite should have the decency to tell people what Labour would do instead.

I would like to put something on the record about the worst economic crisis this House has seen since the mid to late 1980s. That is what we are in right now. Most members were not here then.

Hon Darren Hughes: Have you got Melissa Lee’s phone number yet?

Hon STEVEN JOYCE: I think Darren was in short trousers back then. There are a couple of members on this side who were here. Of course, the honourable Leader of the Opposition was here, as were two senior members who sit on the cross benches most days, Jim Anderton and Roger Douglas. They were in the Labour Government of that time. From memory, Jim Anderton was one of New Zealand’s great future leaders, while Roger Douglas was Minister of Finance for 4 years in a Labour Government. I head down memory lane now because Sir Roger has taken to lecturing this Government about what a bunch of spendthrifts we are. The problem with that lecture is history. When Roger Douglas became Minister of Finance in 1984, Government spending was 37 percent of GDP. When he left 4 years later, it was 39 percent of GDP.

Hon Darren Hughes: He’s insulting everybody. This is how he treats his support partners.

Hon STEVEN JOYCE: My point is that it is virtually impossible, despite taking the axe to all the programmes that Labour had in the 1980s, to cut spending as a percent of GDP in an economic recession. But it is another thing entirely to have no responsible approach to it, to try to grow Government spending, and to try to spend one’s way out of a problem. The Labour Opposition is taking an irresponsible and visionless approach.

This Government is spending on education to tackle the long tail of underachievement, it is spending on broadband, it is spending on transport, it is trying to sort out the Resource Management Act, it is investing in the tradable sector by understanding that the private sector grows the New Zealand economy, it is investing in energy and resources, and is investing in growing the economy faster. That is what this Government is doing, that is what this Budget is doing, and everyone will hear a lot more about that in the next couple of years. We need to hear some intellectual honesty from the Opposition about what Labour would do instead. Thank you.

Hon STEVE CHADWICK (Labour) I am pleased to take a call, especially after that grey and gloomy address by a now senior Minister of Transport in the Government. That speech was quite depressing. I want to refer to the day we all came down to the House to hear the Budget. We were excited, actually. Even the Opposition tries to anticipate what is going to be in the Budget for the good and well-being of all New Zealanders. Well, it was a grey and gloomy Budget, just like the previous speech. We sat here and it felt almost surreal. The Budget was certainly unbelievably depressing. We thought we would hear promises about infrastructure spends that would create jobs, jobs, and more jobs. Yes, there is a political difference between us and the Government and that is exactly why Labour speakers are giving some intellectual honesty and rigour to the Budget debate today.

The Government does not seem to realise that the jobs picture becomes gloomier and gloomier every day. We are seeing the loss of 8,000 jobs every month, heading towards 180,000 unemployed by next year. That is a real concern. It is a real concern for the Opposition, especially for members who represent people out in the regions. One in 10 of those 180,000 people will be Māori, and what was in that Budget for Māori, other than a redistribution of funding from Te Puni Kōkiri and other Labour-led Government initiatives? Where was the one new big idea, the one exciting idea that would brand the first John Key - Bill English Budget as something different, something aspirational, something entrepreneurial? We did not see it.

We heard as we came to the House that the Government was suspending contributions to the Superannuation Fund. I am not surprised about that; John Key and Bill English always hated the Superannuation Fund. We are glad now to call it the “Big English Patient Fund”, because National has gutted the Superannuation Fund for real New Zealanders, who are facing the prospect in the next 3 years—as Government members sit there and laugh—of job losses.

We hear the rhetoric from the Minister for Social Development and Employment, such as: “We are all stepping up to soften the sharp edges of the recession.” But I ask with what? What did we see in the Budget that helps those who have lost their jobs? We saw nothing about helping new families and young New Zealand families into their first homes. We saw nothing about new housing spends—in fact, new funding for State housing builds will give us one new State house in every electorate. Big deal! That will not give a lot of people jobs. What has happened to the Skills Strategy? That was an answer, a blueprint answer, for investing in education, and for investing in skills-based training.

Hon Anne Tolley: It was no answer; it was full of fancy words.

Hon STEVE CHADWICK: We have the Minister of Education over there, who in our region has just cut $126,000 from construction trade training. Will that be the answer when the recession is over and we want to start infrastructure spending? They were young Māori on that construction trade training course, which is facing a $126,000 funding loss. So what has this Government done to protect jobs?

What about environmental protection? I was the previous Minister of Conservation, and I remember Nick Smith in the House day after day asking questions about an $8 million cut to Vote Conservation, and his saying how outrageous it was. But the line-by-line analysis from the new advisers to Ministers has cut, with the stroke of a pen, $54 million from Vote Conservation. Community groups, who love to get out there and match Department of Conservation jobs and expertise in the environment, are absolutely gutted by that cut. But what did we get that matched that $54 million cut in Vote Conservation? We got a $50 million cycleway. Fantastic! That is fantastic environmental protection.

I come from Rotorua, and the member for Rotorua, who during the election campaign said: “We’re just like Labour, plus tax cuts.”, gave us the biggest con we got, right through the election. At every public meeting he would say: “Mrs Chadwick has done a great job for Rotorua. I am going to do even better, and give you tax cuts.” But it was the biggest con in this election. Those National members read their lines. They all stood up and read their lines, and everybody thought “This is refreshing. We can have all those programmes that Labour has given, plus tax cuts.” Well, I know that in Rotorua when Jim Anderton started regional economic development, we were working on cycleways, and we were working on links, because we are a tourism town. But that is all we will get out of the $50 million cycleway, and there will be nothing for environmental protection. Tourists will be able to come and cycle down the road, but they will not see the benefits to the land we love, because of a huge slashing in conservation funding.

In the Budget we saw no innovation, we saw no bright ideas, and we certainly saw no protection for jobs—and so many jobs in Rotorua could have been green jobs. In fact, I went to the regional economic development summit and talked about pest eradication all around the central North Island. What a great opportunity for jobs! But we do not have that. We have had cuts to conservation but we have a cycleway, and that is meant to make us happy out in the regions.

I say that home insulation is part of the good, the bad, and the ugly in this debate. Home insulation is a great one. Labour shamed the Government, with the campaign we started during the election about the emissions trading scheme that was canned, into taking action on warm, dry homes for New Zealanders. At the Job Summit we held in Rotorua, I heard nothing from the member for Rotorua about home insulation. I heard nothing at all about green jobs and pest eradication and control. At meetings in our region with the mayors of the region, I did not hear the member mention that once. But the biggest con in our region was the con that people would get everything as well as tax cuts.

There are some good things in the Budget. I say “Well done!” to Tony Ryall for his little bit of funding for maternity services. I was the Associate Minister of Health who did 9 months’ work on a maternity action plan that the Minister has picked up but only partly funded. We funded up to 80 more midwife places. We did that last year, and we asked for more funding to go into the training of midwives as professionals. But what do we see? There is more funding for doctors. So how long will it be before we see those very doctors we are going to train up start to ask for co-payments? So access to affordable health care will go, and we will hear of midwives being told that they have to be employed by general practitioners. We wanted more home support for new mothers on discharge, increased access to well child providers, and more access to parenting classes.

I am going to go on to what is bad, and I think that one of the bad things is the creative accounting the Minister for Arts, Culture and Heritage has put into the arts budget. Do members remember that in 1999, $400 million went into the arts recovery package? The Minister for Arts, Culture and Heritage, Chris Finlayson, has announced there is $10.1 million of new funding for the arts. But where is that funding from? Let me tell members in the House today that he has cut $20 million from the Regional Museums Fund. So wonderful museums and galleries, like the gallery we have in Rotorua, or like Puke Ariki, will no longer be able to be developed around the regions because $20 million has gone from the Regional Museums Fund. Sorry, Nelson; sorry, Hawke’s Bay—they might have thought that their funding applications were in the stacker, but I tell them that the Budget line is a dash.

Another cut to the budget in the arts that is really sad is the funding for the development of the Buckle Street war memorial. That memorial is something that all New Zealanders really love. So what will we see? We will see a Minister going around now and opening monuments, but there will be no Buckle Street war museum. The money has gone for that. We will see monuments to arts, culture, and heritage from this Minister, but the arts will go from the recovery of 1999 to a total relapse. Communities and regions that had started to grow a real and genuine appreciation and valuing of arts and culture through the Regional Museums Fund will no longer be able to come to the Government to ask for matched funding for their new galleries or museums. I say shame on that Minister for announcing there was $10.1 million of new funding.

Hon GEORGINA TE HEUHEU (Minister for Courts) : I am very pleased and very proud to take a call in the 2009 Budget debate. It is the first Budget debate for the National-led Government, with many more to follow. This is the first Budget on the road to recovery, and I am very pleased to be here this afternoon and to be following my colleagues, like the Hon Anne Tolley, who outlined all the things we are going to do in education. In referring to education I will pick up on what the previous speaker, Steve Chadwick, said when raising the issue of young Māori without skills.

After 9 years of a Labour Government, we have inherited the long tail of underachievement. Shame on the previous Labour Government for not addressing the long tail of underachievement. The previous Labour Government had ballooning surpluses and strong economic growth, but what did it do? It squandered them. Yet that member has the cheek to talk about young Māori being under-skilled as if we were to blame for that. Well, we are not to blame for young Māori being under-skilled. We will not take the blame for that, but we will take the responsibility now for the long tail of underachievement that has been bequeathed to us by Labour.

I am very pleased to take a call, so let us go back to Budget 2009. Why am I pleased? There are two simple reasons. This Budget has been delivered in the most extraordinary circumstances—a global meltdown of a type not seen in over 60 years—but it is a great Budget. It is a thoughtful, considered Budget, the type of Budget one would expect from a National-led Government. I am very proud of the Hon Bill English for the work he has done to deliver a considered, thoughtful Budget.

The second reason I am pleased is that most New Zealanders support us. They know, because they are feeling it, that we are in hard times, and the last thing that I think they would condemn us for is for having to make difficult choices. Yes, we have had to make difficult choices. We have had to defer our long-wished-for tax cuts. We did that willingly, though, because it was the right thing to do.

Hon Darren Hughes: Because the election’s over.

Hon GEORGINA TE HEUHEU: The Opposition would have us deliver those tax cuts. But why? Members opposite keep criticising us for deferring the tax cuts. Does the Labour Party not know that circumstances have changed?

The other thing we have done is resist the urge to borrow to pay for the Superannuation Fund. Labour would have us borrow to pay for it, but when one thinks about it one realises that that is not what New Zealand families would do. In these circumstances they would not borrow money to pay for the kinds of things that Labour would have us fund. Members opposite are being very dishonest and very stupid in panning us for giving those things away, for the time being only.

This Budget safeguards entitlements that are very important for pensioners, retired New Zealanders, students, and those families who are working. It also safeguards those other entitlements that people on low incomes or benefits are entitled to. Our Budget delivers extra public services, but, again, we have addressed in a very considered and thoughtful way the main areas of education, housing, and health, and of justice by delivering more police. We have also brought forward infrastructure spending for more roads, broadband, houses, and schools. They are important parts of the economic framework, and we need to get on with addressing those areas quickly. Our Minister for Infrastructure, who is also the Minister of Finance, is making sure that those programmes get under way quickly.

We are a Government that knows that it is important to bring Government debt under control. As I say, we had to make hard choices in order to do that, but we do not shirk that decision, because we know that New Zealanders, by and large, will support us in the approach we are taking. The Labour Opposition would have us continue to borrow to pay for things we cannot afford, because that was its mode of operation for 9 years. That approach is just not realistic. It is not what ordinary New Zealand families would do, and we will not do it either.

I refer now to some good news in the area of courts, for which I am responsible. In particular, I refer to this Government’s bolstering of court security. I am very pleased to be the Minister for Courts and to say that after the previous Labour Government turned down requests for a boost in court security, Budget 2009 will provide $9 million in operational funding and $800,000 in capital funding to upgrade court security over the next 4 years.

We are a Government that listens. We have listened to the concerns of judges and to the people who run the courts. The new funding will help improve safety for court users and staff, while maintaining public confidence in the justice system. Scanning and searching people as they enter courts is the single most effective way to reduce the risk of security incidents. As Labour members opposite know, those incidents increased over the 9 years Labour was in Government. In two recent Budgets, the previous Labour Government did not listen. It did not worry about the issue. It was not concerned for the safety of court users, judges, or any of those who come in and out of the courts. We have listened. We will bring in 30 more court security officers, who will be employed over the next 4 years, bringing the total number of court security officers to around 83 by 2013.

Additional security equipment will be purchased, including walk-through metal detectors, baggage scanners, radios, and closed-circuit television systems. Court security is an ongoing issue, and we will keep an eye on it. I am very mindful that safe courts are part of a fully functioning justice system. Court users and, particularly, victims are entitled to know that if they will be in and out of the courts, they will be safe.

The other initiative I refer to, because it is also good news, is that the Budget increases the capacity of the Auckland criminal courts. It provides $53 million in operational funding and $6 million in capital funding to increase criminal court capacity in Auckland over the next 4 years. Members of the Labour Opposition will know that court waiting-times and workloads in Auckland have increased dramatically over the past few years. The increase in funding delivered by the Budget will help courts keep up with the increasing number of criminal cases, which are forecast to rise by 7 percent annually. The Budget supports a wider programme of work that aims to improve court services in the Auckland region, including additional registry resources; eight community magistrates for criminal courts, which will free up District Court judges; and completion of a new complex for specialist courts and tribunals, which will free up space and judges for criminal cases in the Auckland District Court.

As I said, I am very proud to be part of this debate. I am very proud to see those court initiatives come in through the Budget. I say quickly that I am also pleased about what the Budget delivers for Pacific and Māori people. There is a huge emphasis on literacy and numeracy. I talked earlier about the long tail of underachievement that was bequeathed to us. Minister Tolley has made huge strides in ensuring that there will be a big emphasis on lifting achievement levels for young Māori and young Pacific people. They are the workforce of tomorrow, and they deserve better. They did not get that emphasis from the previous Labour Government, but they will get it from a National Government. Why? Because they are the future of this country, and we badly need them to be educated and skilled. Our boost in education funding, which I am very proud to support, and which Minister Tolley has worked very hard to achieve, will ensure that the prospects of those young people will be vastly improved over the next term and the terms to follow.

Sue Moroney: How old are they going to be when they can get superannuation?

Hon GEORGINA TE HEUHEU: That member over there can keep on talking about whatever she is saying, but her Government was scandalous in bequeathing to us that long tail of underachievement. We will address it. The last issue I refer to is Treaty settlements. We are making great strides in that area, as well. Thank you, Mr Deputy Speaker.

COLIN KING (National—Kaikōura) : It is a real pleasure to stand in the House during the debate on the Appropriation (2009/10) Estimates Bill, and to be able to listen to the motivating and inspiring speeches coming from Ministers on this side of the House. Budget 2009 certainly strikes the appropriate balance. It positions New Zealand nicely to take advantage of the future, improves New Zealanders’ aspirations, and situates us so that our economy is in good health. We have great confidence in New Zealanders and in their innovative natures. We expect the primary sector to be the means by which we are dragged out of this recession, and Budget 2009 will start us on the road to recovery.

Firstly, I congratulate the Minister of Finance, Bill English, on the sterling job he has done. I also congratulate the Prime Minister. They are proving to be stunning managers of the New Zealand economy. We take heart from that, and I know all New Zealanders do. Surely, at this particular time in the economic cycle, New Zealanders draw great comfort and confidence from the way in which they voted on 8 November 2008, thereby placing a National-led Government in power. It springs to my mind that the words of Abraham Lincoln are appropriate. Under Budget 2009 there is a far more aspirational and inspirational future. Abraham Lincoln said: “A Government should never do for people what people can do for themselves.” That is the very, very important difference between that lot and the present Government.

Having said that, I would now like to dwell for a few moments on the reckless behaviour of the Opposition. It has been elucidated from this side of the House how those members’ appetites for unrestrained spending has not abated. It defies their understanding that we are in the worst economic times in the last 70 years. They continue to be determined to spend like they did during the last 9 years and in the same wasteful fashion. That is reckless and irresponsible, and can only be described as credit card economics. When we start thinking about phrases that have been coined during this time, it is no wonder that the Leader of the Opposition has been labelled “Whack-it-on-the-bill-Phil” Goff.

Let us have a look at the extravagant and wasteful appetite of the Opposition. In the face of the worst economic times in 70 years, Damien O’Connor wants to spend another $5.5 million; Phil Goff wants to spend $20 billion; Moana Mackey and Jim Anderton want to spend another $800 million; Ruth Dyson wants to spend another $100 million; Sue Moroney wants to spend $285 million; Grant Robertson wants to spend $66 million more; Maryan Street wants to spend another $9 million; and, the doozy of them all, the big man in the front row, Parekura Horomia, assures us that Labour would spend more money over the next 4 years. That would never be described as credible; in fact, it is rather rich coming from that wasteful Opposition. Labour will be remembered for one thing, and one thing alone: wasting the best economic times of the last 30 years. That is a pretty serious legacy to be carrying around its neck.

This Budget puts us on the road to recovery. If there was ever a time where New Zealand needed a Government that had total financial literacy, it is now. That National-led Government is led by John Key. At this time I must acknowledge the wonderful support we get from the ACT Party, the Māori Party, and United Future, and that is representative of New Zealand.

I will now touch on some of the features that are the key points of Budget 2009. Let us talk about the home insulation programme. The campaign to fit out homes built before 2000 with insulation and clean-heating devices such as heat pumps will benefit 180,000 households. The grants will range from $1,800 to $3,000 if a person has a community services card. There is $323 million devoted to that campaign, and it is fully costed; something that lot over there failed to do, with their deceitful promises.

What are we doing in health? There are wonderful things for health in Budget 2009. We are improving district health board services, and that is what the public wants. We will fund 800 more health professional places, costing $70 million a year. We are improving maternity services, spending $103 million. We are upgrading the health infrastructure and constructing 20 new dedicated selective surgery theatres, at a cost of $245 million. That is what we are doing in health.

I will move on to education, the very foundation that allows people to aspire and achieve. We have targeted $1.68 billion, and a billion dollars of that amount is new spending. We are spending it to make sure teachers have decent classes to teach in. We are building new schools and modernising existing ones. We are spending $523 million. We are determined to do everything in our power to improve literacy and numeracy standards. We are introducing national standards that will report to parents in clear and understandable language, and we will identify those of our young people who need that extra support. We are spending $36 million on that. This is a wonderful initiative that will insulate New Zealanders going forward to read, write, and comprehend in such a way that they will be future-proofing themselves. Our next point in education is expanding the 20 hours’ free early childhood education and that is a wonderful initiative. We are appreciating the contribution of playcentres and kōhanga reo by spending $70 million.

There is so much to talk about and so much to be proud about in this Budget. There is a lot of inspiration, aspiration, and positiveness that is overwhelming in a time of world recession. When we look at the performance of the Opposition, we are left with the frustration of having experienced the wasting of the best economic times in 30 years. We had to endure low productivity or no productivity. The determination of this Government and Budget 2009 is to get New Zealand back on the road to recovery. Thank goodness we have an executive that is financially literate, we have a Minister of Finance called Bill English, and we have a Prime Minister called John Key. We are very fortunate.

It has been a privilege to touch on some of the cameos. There are so many other things in the Budget, like 600 more police on the beat by 2011. I commend the Budget to the House. I think the Minister of Finance has done a stunning job, and may we get many more of these Budgets. Thank you very much.

CHRIS TREMAIN (Junior Whip—National) : I raise a point of order, Mr Speaker. We have made good progress with the Budget debate this evening, and I seek leave for the House to rise early for the 6 p.m. dinner break, to return at 7.30 p.m.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there any objection? There is no objection.

• Sitting suspended from 5.57 p.m. to 7.30 p.m.

KELVIN DAVIS (Labour) : I wish to talk about the effects the Budget will have on the education and tourism portfolios, both of which I am a spokesperson for. As we all realise, education is the pathway to success. Success, or lack thereof, in the education system is a very good predictor of success in life and, in particular, in an individual’s search for meaningful employment. This Budget should have been about jobs. It is my observation that the Budget delivered last week will do little to create meaningful employment in the short term, mid term, or long term. Investment in education is a long-term investment in the future workforce.

When I look at the bottom line in the Vote Education section of the Estimates of Appropriations, I see that education spending has risen from $11.2 billion to $11.5 billion. That is an increase of over $300 million, so I congratulate the Minister of Education, Anne Tolley, on securing that extra investment in our children. However, taking a closer analysis of where the money is going, I believe that the Minister continues to miss the point in terms of what is important in education. She has put money into areas that are not the most effective or efficient in raising student achievement. I come from the position that the main purpose of the education system is to make students learn. Raising student achievement is the core business of schools and schooling, therefore funding needs to be directed to the areas of education that will make students learn as fast as possible. Almost every strategy makes students learn to some degree or another, therefore there is probably nothing in this Budget that will not make students learn. The question I ask the Minister of Education is whether she is convinced that the funding priorities in this Budget will make New Zealand school students learn to as high a level as possible, as quickly as possible.

The first things I looked for in the Vote Education appropriation were in the areas of teacher support, professional development, and community engagement. In the areas of support and resourcing for teachers—of expenditure on policies focused on supporting the work and capability of teachers—there was a $5 million cut. Instead of cutting the budget for supporting and improving teacher capability, we should increase it significantly. It is the ability of the teacher that determines how fast and how far students can learn. Until we in this Parliament really, truly understand that excellent teachers make a difference to student achievement, and until we invest in teachers instead of slashing support for them, we will struggle to improve the long tail of underachievement in New Zealand schools. I acknowledge the $7 million in funding that the Government has set aside for interventions with target student groups. I congratulate it on this allocation, but it is simply not enough. A good idea under-resourced is a bad idea. I know for certain that in the Northland area alone, $7 million would be consumed in just a matter of months in dealing with students with special needs, who require alternative education options, or who have participation issues.

I looked in the section of the Budget entitled “Support and Resources for the Community”. This section deals with policies and programmes focused on the community’s knowledge of and participation in the education system. Community engagement in the education system is vital. Research shows that parents who engage with schools and understand the language of the education system are better able to advocate for their children. Instead of a $400,000 cut to that budget, we need a substantial increase so that we can support Māori communities, in particular, to engage with their schools as equal partners. We all know that the tail of underachievers is made up mainly of Māori kids whom the system is failing, so why has funding not been increased to allow Māori communities to engage with their schools? As long as Māori parents see barriers to engaging with their children’s schools on what really counts—talking about achievement, teaching strategies, and the “What next?” steps in a child’s learning path—the tail of underachievement will persist. Unfortunately, too many schools believe that parental involvement means having parents come on school camps and drive kids to sports day. We need to change that misconception.

The section in the Budget entitled “Curriculum Support” deals with the purchase of supplementary educational programmes for schools and communities in order to ensure wider access to opportunities. That budget has been slashed from $70 million to $65.5 million. Teachers need curriculum support; they do not need that funding to be slashed. It was with despair that I read about the cuts to professional development. Professional development is exactly the area that resources should be going into, not coming out of. As I said earlier, this Budget should have been about job creation. With the slashes to Vote Education it is difficult to see that the education system is being supported to equip all New Zealand students to achieve successfully and to enable them to move from school into meaningful employment in years to come.

I am also the spokesperson for tourism. Tourism is New Zealand’s biggest export earner. One in ten New Zealanders derives an income from the tourism industry. It deserves greater support and funding. Tourism is vital to our economy. In order for the tourism industry to thrive, the Minister of Tourism, John Key, needed to put on his thinking cap and figure out a way to get more people into New Zealand, then to get them to spend more time here and to part with more money. For every $1 we spend on promoting ourselves in Australia, we get $26 back. In the UK we get back $11 for every $1 we spend on promotion, and in the United States we get back $16. The obvious solution is to increase and improve international awareness of New Zealand and of what we have to offer by way of our people, landscapes, activities, and culture. We have to pique the interest of potential tourists to New Zealand and then convert that interest into actual visits.

Instead, what did we get? A $50 million spend-up on what can only be described as a brain implosion but what National likes to call a cycleway. Do not get me wrong—I am a keen cyclist and see potential of sorts in a cycleway. But at a time when we are told that money is scarce, the Prime Minister has still managed to find a lazy $50 million to pour into his pet project. Instead, we should look to invest in the areas of tourism where we can get the best bang for our buck. With all due respect to the Prime Minister and to the minute he took to develop the idea, I think this is less of a bang and more like a clanger. But he had to front it to save face. This was not a decision made in the best interests of New Zealand or tourism. It was about saving the Prime Minister from political embarrassment. It was interesting to watch members opposite contort themselves as they justified the boss’s baby, when we all know that they all know that we all know that it is nothing more than a prime ministerial - sized folly.

I cannot see a cycleway being built for $50 million. A substantial amount of that $50 million will need to be put into construction; another substantial part into maintenance; another substantial part into promotion, both domestically and internationally; and another substantial part into developing the Internet and information technology capacity that will go alongside the cycleway, because the types of tourists likely to use the cycleway will be the little wealthier and more discerning travellers who will want to keep in touch with friends and family and maybe even do business along the way. There would be no better way to promote our beautiful country than by having an international tourist, sitting beside a lake with bush-clad hills and snow-covered mountains in the distance, make a video call on his or her laptop to friends, family, or clients back home. It would be free advertising. We are in danger of building a $50 million white elephant that no one knows about internationally, and with Air New Zealand’s recent cuts to a number of international routes, very few people will be able to get to it, in any case. The tourism industry has been short-changed not just by the $5 million cut to its total annual and permanent appropriations but also by the short-sighted and poorly conceived concept of a cycleway. The industry deserves better.

Hon JUDITH COLLINS (Minister of Police) : We are in the most trying of economic times, yet this Government—in particular, the Minister of Finance—has pulled a magnificent Budget out of extraordinarily difficult times. If ever we want to be reassured of that, we can consider the fact that Standard and Poor’s rating agency improved our credit rating, rather than took it down. There is a great deal of talk from the Opposition members, who are very, very knowledgable now but did not seem to know anything when they were in Government. They wanted to say that the rating would be dropped down, but no, it went up. For New Zealanders that means lower interest rates, and, more important, for businesses it means access to credit. In a little country like New Zealand in tough economic times, the concern is not just about the interest rates we pay; it is actually about being able to access credit. Businesses need credit. A business without credit is a business that is going bust. That is the very best measure out of this Budget—when it comes to keeping people employed, it is about keeping businesses going. We hear from Opposition members, and, of course, they do not appreciate any of that. There are so few of them who have had any experience at all in business or who have ever had to mortgage their house to set up their business. Actually, I cannot think of even one who has ever put anything on the line economically. I cannot think of any who have really risked it all for the dream of having their own business. No, it is not really something that they want to talk about.

Let me talk about the way that this Government has delivered $900 million extra into the justice area. Let me talk about the 600 extra front-line police officers that this Government is putting on the streets by the end of 2011. In particular, let me talk about Counties-Manukau, where I live. Yes, Mr Assistant-Speaker, I must say I am very interested in Counties-Manukau, but so should all of New Zealand be. For years—and I will not blame just the previous Government—Counties-Manukau has been under-resourced in terms of policing. For years, whenever there has been a major crime—and there have been many over the years—police from all over the country have had to be redeployed into Counties-Manukau. They have had to deal with murder scenes and all sorts of other crimes that have, unfortunately, hit us in that area, and that has stripped police out of other areas where they were needed. This Government listened. During the election campaign we said we would get 300 extra police into Counties-Manukau by the end of next year, and we are well on our way.

To those naysayers who said that it could not be done, that there would be problems recruiting, and police would not want to go there; I say that I was right and they were wrong. [Interruption] I was right. I said we would get them, and we are getting them. In fact, we now have people pretty much queuing up to come into the New Zealand police force, and the attrition rate is now the lowest it has ever been in recorded history. It is now 2 percent.

Charles Chauvel: That’s because there’s no jobs now!

Hon JUDITH COLLINS: Yes, the economy may have something to do with it. But I will tell Mr Chauvel that the other thing it has to do with is the fact that there is now a Minister of Police and a Government that back the New Zealand Police. Through thick and thin, through the hard times and the good times, we back the New Zealand Police—and the reason is that the New Zealand Police back us. They help keep us safe in New Zealand, and when I say “us” I do not mean the Government; I mean good, law-abiding Kiwis.

Unfortunately, the previous Government always felt a bit nervous about the police. That is why it never did the roll-out of the Tasers. That is why, unlike this Government, it did not give the police the $10 million for the roll-out of Tasers to our front-line officers, and boy, could they do with it! The previous Government did not roll-out digital radios for the New Zealand police. Oh no, the previous Government had to have all sorts of surveys about it. It had to have research, programmes, and everything else—everything else except digital radios. Members might ask why that is important. It is important because at the moment anybody can trot down to his or her local electronics shop and buy a police scanner. I am reliably informed that a former Minister of Police who happens to be in this House—not on this side, of course—actually does that now. He listens to the police scanner. Apparently, he is very excited about it all. He knows what the police are doing. People do that and criminals do that. Police go into gang headquarters, and what is on the table? Apart from the tinnies, and the methamphetamine, there are police scanners. That is the sort of issue that the police are dealing with. They are dealing with illegal boy-racers, but what are they dealing with as well? They are dealing with scanners. Wherever the police are going, these people get to know. That is because the previous Government never dealt with the technology issue. Instead all it wanted to do was bag the police and try to make them its own. The police have the support in this Budget from this Government.

Another area that has needed a lot of support is the corrections system, and, in particular, parole.

Hon Steve Chadwick: Tell us about family violence!

Hon JUDITH COLLINS: Well, actually, family violence went up 47 percent under that Government. So if I were Mrs Chadwick, I would keep quiet about it.

We have $385.4 million over the next 4 years to ensure that there are enough prison beds to cope with the rising prison population. All the mechanisms for that rising prison population, such as a lack of rehabilitation, were put in place under the previous Labour Government. What happened to rehabilitation under Labour? Well, not a lot. We have massive recidivism rates, particularly amongst Māori prisoners, and that is a shocking example of what the previous Labour Government did to Māori. Instead, this Government is doubling the number of rehabilitation places available. I hope that the other party over there will support that part of the Budget, because otherwise it will be voting against rehabilitation for prisoners. There is also $24 million in capital funding allocated for the design and planning of extra prison capacity in the upper North Island.

Hon Steve Chadwick: Double-bunking!

Hon JUDITH COLLINS: No, no, a new prison, I say to Mrs Chadwick, in the upper North Island. To deal with the immediate need that we have been left with by a very slack former corrections Minister, Phil Goff, we have to put $218.6 million in the operating fund, and $145.8 million capital funding to have double-bunking. Otherwise we will have to do what the Labour Government did, which was to stick people in prison vans and drive round and round Mount Eden while waiting for a bed. That is the best Labour could do.

Hon Member: Build universities not prisons!

Hon JUDITH COLLINS: And when Labour did build new prisons, what did it do? It spent $600,000 per bed at the Spring Hill Corrections Facility. It may as well have bought prisoners two houses each; that would be the same price.

For years the probation service has been put upon by the previous Government. The service has had to deal with increased numbers in the community, and it has been crying out for extra funding. We are injecting an extra $255.9 million into the probation service to address issues raised in the critical report by the Auditor-General. This is a report that the previous Government should have known about, because the report was happening under its watch. Yet it did so little. It put in about an extra 80 probation officers, but it needed an awful lot more than that.

We have seen from this Government a commitment to law and order—a safer New Zealand. We have seen a commitment to supporting our Department of Corrections officers, a commitment to supporting our parole officers, a commitment to supporting our probation officers, and a commitment to our New Zealand Police. That is because this Government is not politically correct. It is not afraid to say that some things are right and some things are wrong. This Government will not be building luxurious holiday homes for prisoners. I tell members to wait until they see what I have to unveil on this matter. I expect howls of abuse from Opposition members, because from their point of view, all they want to do is house people in lovely holiday homes so they can all feel good when they go and visit. There will not be any police scanners, either, for criminals.

Hon PANSY WONG (Minister for Ethnic Affairs) : I congratulate our Minister of Police, the Hon Judith Collins. With the support of our Prime Minister and the Minister of Finance she delivered on our election promise: 600 new police officers—300 of them for Manukau. I tell her that my constituents in Botany say: “Well done”. They can now rest easy knowing that we have a hard-working and effective Minister of Police. The previous Labour Minister of Police, the Hon Annette King, when faced with rising crime in Manukau, attributed it to the position of the sun and the moon. She thought it was the weather. Thank heavens we have the Hon Judith Collins as our Minister now! She champions victims’ rights. She stands on the side of our law-abiding citizens. I thank the Minister, and I say “Well done”. I send her the regards of the Botany community, because this hard-working MP went out there door-knocking, and they said: “Pansy Wong, good on the National Government for taking practical steps to look after New Zealand.”

Actually, New Zealanders out there are very realistic. They know that our country, like others in the world, is facing the worst economic recession in 60 years, since 1930. They are very realistic about what they believe the Government can do, and they understand that the National Government is doing its best under the capable leadership of the Hon John Key and the Hon Bill English. In such difficult conditions, they had to craft a Budget that balanced fiscal responsibility and other concerns. Like people in all households, the Government understands the importance of balancing the books. It is not into the slash-and-burn or borrow-and-hope approach of Labour. Labour was into borrowing and hoping that the weather would turn good.

It is a very responsible Budget, as my colleague the Hon Judith Collins just mentioned. How many Ministers of Finance can claim they have managed to deliver a Budget in the worst economic recession in 60 years and get an upgrade from Standard and Poor’s? Averting a downgrade means that an average household with a mortgage of $150,000 avoids paying an extra $50 a week in interest. I think that is fantastic.

I say that it is a privilege to be the Minister for Ethnic Affairs. For a start, one of the major concerns of the ethnic community was, like the rest of New Zealanders, law and order. The community told me that it is very pleased with not just our commitment to the police but also the introduction of legislation that gets tough on criminals. That is very good news for ethnic communities.

My vision for ethnic New Zealanders is for them to be confident, equal, and proud New Zealanders. I am pleased to say that the Office of Ethnic Affairs will continue with good programmes to ensure that those visions will be realised. The Office of Ethnic Affairs will run very successful leadership training programmes for our young ethnic New Zealanders. I have seen those young men and women participating in the workshops, and they are proud of their bicultural identity; it was fantastic. The office is also running workshops to train women in leadership. We also have a very good programme called Building Bridges, which enables people in the Muslim community to share their culture and enhance understanding between them and the wider community. That successful programme has now been extended to the African community.

Unemployment is the biggest blow to happen to any ethnic household during times of economic recession, as it is for all New Zealanders. The Government announced previously the ReStart package and the 9-working-day fortnight to ensure that ethnic New Zealanders are cushioned as much as possible from the sharp edges of unemployment. We have also hosted a renowned UK economist, Philippe Legrain. He came here and shared some powerful arguments about how diversity in the workforce helps the growth of business and helps individuals to prosper. When a workforce consists of people who have international networks, they are able to reach a growing customer base. New Zealand is getting increasingly multicultural, and that makes sense.

The other sensible thing that ethnic New Zealanders have praised the National-led Government for is the introduction of the 90-day trial period of employment. Ethnic New Zealanders welcome that and want it; they are very confident in their ability to prosper in jobs. But their problem has always been not getting that opportunity. The previous Labour Government made employment so tough, and made employment laws so unfriendly, that our small-business men and women were too worried to give new migrant workers that opportunity. Now migrants, new entrants to the workforce, and our ethnic communities everywhere have told me how wonderful it is to be given the opportunity to secure themselves a job. The National-led Government will continue to introduce initiatives to ensure ethnic New Zealanders find employment.

Another issue is access to health services. Our capable and effective Minister of Health, the Hon Tony Ryall, who, unlike the Minister of Health under the previous Labour Government, does not send new mothers with babies home with a food voucher, has secured more money to put into maternity services so that mothers have time to bond with their babies. We think it is a basic, fundamental right for young babies to have a head start instead of young mothers being sent home with a food voucher. Shame on Labour! That happened under the previous Labour Minister of Health, who said he was running the show.

I am glad that the Hon Tony Ryall is now running the Ministry of Health so well. As a result of the increased health funding in this Budget, ethnic New Zealanders will discuss how they can participate and take a more proactive role to ensure that services are more accessible to them. I travel throughout the country, not just in my Botany constituency, and ethnic New Zealanders believe that the National Government presented a very balanced and credible Budget.

SHANE ARDERN (National—Taranaki - King Country) : It is a pleasure to rise to speak following my very good colleague the Hon Pansy Wong. She is the first Asian MP in this Parliament. She is the Minister for Ethnic Affairs and is now the member for Botany as well. She is an excellent colleague and she gave an excellent contribution to this debate.

Since the last time we were involved in a Budget debate, world circumstances have changed enormously. I was shown some figures today by a director of Fonterra that would suggest that what is happening internationally is a sharper drop, from an economic point of view, than was the case in the 1930s Depression. We are facing a very serious recession, or depression—call it what you will. In the light of that, this Budget would have to be described as an excellent response. One of the things in the debate that has been interesting and that I heard on the car radio as I was coming back from that meeting is Labour members saying that National is pretending it did not know that the economic circumstances were as bad as they are. That is an interesting concept. In this country we have what is known as the Pre-election Economic and Fiscal Update—the pre-election opening of the books. The interesting thing about that part of the debate is that we did not know about the economic circumstances, because they were not stated in the Pre-election Economic and Fiscal Update. One has to ask why that is so. The law of the land states that the outgoing Government should declare the true state of the economy at the time it is going out of office, but the previous Labour Government did not do so. That is the first thing. The previous Labour Government kept that information from the public of New Zealand. It should be ashamed of that. This downturn is certainly unprecedented. Labour knew about it but did not share it with the incoming Government, so the surprises we have experienced since we have come into office are of no surprise to Labour.

The world economy has changed substantially, yet this Budget has still been able to put major investment into a whole range of areas. Let us have a look at some of those areas for a moment. For a start, one that is very dear to my heart is the investment in research and development in the primary sector: $190 million, going up to an average of $70 million per annum, matched by industry by the year 2012-13. That will be the single biggest investment we can make in this country to help lift it out of the current downturn that we face.

Hon Pete Hodgson: No, the single biggest investment was the one you ditched.

SHANE ARDERN: It is interesting to hear the former Minister interjecting from over there. He is the one who cut science money from the very area—from AgResearch—that would have benefited in regard to this debate now.

Hon Pete Hodgson: Did not.

SHANE ARDERN: The former Minister is telling me that that is not what happened?

Hon Pete Hodgson: Yes, I’m telling you that.

SHANE ARDERN: Well, I simply do not agree. The investment was cut during the term of the previous Labour Government, and right now we are seeing investment going back into that area. That will be the single biggest area of investment. Our biggest company in this country, Fonterra—a company that Labour likes to kick occasionally—will benefit enormously from that investment. The sector is offering to match that investment, along with a major number of other primary sector industries that are prepared to invest, including wool and arable production, horticulture, seafood, and forestry and wood products. All of those industries have indicated so far that they are prepared to step up to the plate and match Government investment, dollar for dollar, in that area.

Under the proposal the Minister has released, a panel of eminent persons will be appointed who will figure out where to invest the money. The faster that happens, I suggest to those listening, the better off New Zealand will be. This Budget has gone a long way towards starting to keep the economy going, amid what can only be described as global turmoil. New core spending of $2.9 billion in the Budget, combined with recent tax cuts, will support the economy. There is no question of that, because it is quality spending. It is not because we are throwing money at it or because we are putting it on the bill, like Labour did. Labour used to spend and hope, and borrow and hope. It is because the Budget is putting money into areas that will ensure that the economy can be strong going forward. At the same time it will assure those who may be a little concerned because they are on fixed incomes, like New Zealand superannuation recipients, that their superannuation will be maintained at 66 percent of the average wage, and ensure that Working for Families, which was introduced by the previous Government, is still there to encourage those who potentially are fearful of their future that there is a future in this country.

To improve public services, there is a $3 billion boost for health over 4 years that is focused on front-line services, not on bureaucrats. I have heard some figures—and I am sure the Opposition will refute them—such as 1,200 more people were included in bureaucratic procedures in health services over the 9 years of the previous Government. One has to ask how the previous Government could expect to get any return on health outcomes from putting so much investment into bureaucrats. For improvements to the Public Service, $1.68 billion has been put into education. No doubt there is not a member in the House who would not agree that education holds the key to success in any growing and dynamic economy, and $1.68 billion going into education is a very positive outcome from the Budget.

There will be 600 more police. Our Minister of Police spoke earlier on. One of the biggest issues coming out of the election was the fact that in the public’s perception law and order has deteriorated, and 600 new front-line police—particularly given the number we are proposing to put into South Auckland, which is the area of greatest concern—can only be described as a good thing. To listen to Opposition members, one would think some of this stuff was bad. The previous Labour Government has changed into an Opposition very well, I have to say. I have said it before; I think Labour is better at being an Opposition than it was at being a Government. Labour is better at being an Opposition than National was; I think we should admit that. Labour is far more negative in its approach than National ever was when in Opposition. Even in our darkest days we were never as negative as Labour is. It is just not in our nature to be so backward-looking. We just cannot do it; it does not work for us. We come from backgrounds where we look forward, and where the glass is half full, not half empty. Labour cannot help it. Even having 600 more police is being condemned by the Opposition. It defies logic.

At a glance, if one looks at the Budget initiatives one sees things like insulating houses. The Green Party proposed that initiative. The Green Party proposed that it was going to spend $1 billion on insulation—unfunded, of course, in the Budget lead-up—and on the upgrading of houses. It was unaffordable. That is the reality. There is not an economy for it. I do not think even Dr Michael Cullen, during the times of huge surpluses, could have afforded that initiative. But there is a positive in the initiative. One does not have to go very far to find out that the biggest effect on children doing well in society is their health and education, and one of the biggest governing factors in health is poor housing—cold, damp houses—for low socio-economic families. It is interesting; there has been debate about leaky houses over a period of time. A lot of that debate came about through systemic failure in the houses, and some of it came about because of the Green campaign against tanalised timber. Members will be well aware that the Greens said we cannot use arsenic-based preservatives in timber because it is bad for us. I will tell members what is bad for us. What is bad for us is a house that is damp, mouldy, and rotting because the timber was not tanalised or one that leaks. We need to be able to insulate and fix up some of our State houses. It is a disgrace that for 9 years under a Labour Government our State housing stock deteriorated to such a poor state.

Dr Jackie Blue: Slum landlords.

SHANE ARDERN: “Slum landlords” is the term my colleague uses. When I was a young sharemilker’s son we used to be envious of people who lived in State houses, because the State houses were better than the sharemilkers’ cottages. That is the reality. We were envious because State houses were well-built and well-kept homes. But under Labour they turned into a poorer state than the sharemilkers’ cottages.

All in all, the Budget is good for the New Zealand economy. Labour hates the Budget because it adopts a lot of what it would like to have done. This is a good day for New Zealand and it is a good Budget.

Hon DAMIEN O’CONNOR (Labour) : I am honoured to be back in the House again to make my “maiden speech” on this pathetic Budget. This is a dishonest Budget. It is the Standard and Poor’s Budget. It is the poor and standard Tory Budget; that is what it is. We found out that the election promises made on the hustings were not worth the paper they were written on. The cast-iron guarantees were the cast-off guarantees. Instead of personally guaranteeing policies, John Key was determined to cast them off as though New Zealanders will forget about them. Well, they will not, because we will keep reminding them.

It was a poor and a standard Tory Budget. In the 1970s Mr Muldoon came in and promised to give back the money from superannuation and to lower the age of entitlement. He promised that from age 60 onwards, for the rest of time, superannuation could be affordable. That was a lie. Then Jim Bolger came in in the 1990s and said that his Government would remove the surcharge on superannuation. Do members know what happened? In 1991 he increased it. That was lie. Now John Key has come in and said that National would keep superannuation; that was a lie. He said that National would deliver tax cuts; that was a lie. He said that National would cap the Public Service; that was a lie, too, as we are now starting to see.

There is a credibility issue creeping into the National Government at the moment. People do not believe the Government any more. As we see on this list of key commitments, John Key states: “I personally guarantee that we will:”, but people do not believe it any more. Nothing that John Key or the National Government says—

Hon Judith Collins: I raise a point of order, Mr Speaker. It is my understanding that it is unparliamentary to accuse members of lying. That member has constantly referred to a member lying.

The ASSISTANT SPEAKER (Eric Roy): The point of order raised by the member is actually the case. But the member who is on his feet has been referring more to inanimate objects than to individuals. Although there may be an oblique connection, I think that he has moved about as far down that line as he should go, and I ask him to get on with his speech.

Hon DAMIEN O’CONNOR: Thank you, Mr Assistant Speaker. I would not accuse a member of lying, but I say that this document is a lie, because it has not been delivered on.

Just as we saw dishonesty on the campaign trail in the promises of tax cuts that could not be delivered, we saw dishonesty in this House when the National Government pushed through tax cuts that it said it could afford, which it has now rescinded. We now have in the Budget a promise that, in spite of deferring for 10 years the contributions to superannuation of $2 million per year, that superannuation, at 66 percent of the average working wage, will be affordable into the future for people over 65. Well, it will not be affordable, as many, many commentators have said, because the National Government has cut the funding to allow that to happen.

It was a Standard and Poor’s Budget, because we saw manipulation in the 2 weeks leading up to the election, threatening this country with a reduction in the rating if we did not do the right thing in the Budget. It was a very good bit of public relations, I must say. Then, quite cynically, and literally 2 hours after the Budget had been delivered, the people from Standard and Poor’s came out saying that we have had an increase, a lift in the rating. Well, is that not wonderful? As a Fitch Ratings agency commentator said this morning, they must have been very fast readers or, indeed, they had early access to the Budget document. Did John Key go to Standard and Poor’s to negotiate an upgraded rating? I ask what he put on the table to give us an upgraded rating. If we are to believe that this is one of the worst international situations since the 1930s, then it would have been very brave of any ratings agencies to give us an increase in rating. Well, Standard and Poor’s did.

I put it to members that John Key put on the table asset sales and increased access to the privatisation of services in this country, and I bet he also put on the table the capital restructure of Fonterra, which will lead to the trading of Fonterra shares. Fonterra is the only international company this country owns. I bet John Key put it to them that there would be shares tradable on the NZX, where Henry van der Heyden just happens to be a director, and he is the chairman of Fonterra. I bet John Key put that offer on the table to give us an increased rating.

This has been a dishonest Budget for a number of reasons. It is a poor and standard Tory Budget. Why is it poor? Because it destroyed the New Zealand Superannuation Fund. It reduced research and development funding at the very time when we need to move this economy forward through innovation, and through research and development. We need to move ahead of the commodity trading that we have done quite successfully. We will continue to do that, but we need other components to our economy to insulate us against the ebbs and flows of commodity trading.

The Government cut funding for biosecurity. I ask what Mr Ardern says about that. The National Government, the so-called representative of the rural heartland, cut funding for biosecurity in the areas of surveillance and incursion response. Not only did the Government cut the ability for us to watch the borders but also, if something comes through, it has reduced the ability of the public servants in this country to respond. That is an outrage. It puts the very biological economy of this country at risk, and Mr Ardern knows that.

The Government cut funding to the Customs Service. It has done the same thing to those involved in surveillance, search, and containment, which are the things that protect our borders. The people who protect our borders have been undermined by this poor Budget. But one of the greatest embarrassments, surely, for any Prime Minister is what happened when he came in on his white horse as the new champion of the tourism industry. As my learned colleague Kelvin Davis said, one in 10 New Zealanders are employed in tourism. It is the single biggest exporter in this country. The industry asked that the Prime Minister be the Minister of Tourism, because the industry thought that it would deliver it nirvana. Well, it asked for more than a $30 million increase in market spend. What did it get? Zilch! Not only did Tourism New Zealand not get an increase but also it got a reduction, from $75 million down to $69 million.

That is an insult to the Prime Minister, because he had had his $50 million cycleway. It was negotiated—and hard-fought for, I would suggest—with the Minister of Finance, Bill English, who openly stated early on that he did not support that project. Well, I think it is a worthy concept. It deserves proper consideration, but I ask whether it deserves $50 million that would have been better spent in marketing New Zealand to the rest of the world. The industry does not lack for product. The industry does not lack product; what it lacks is an increasing number of people coming to this country to utilise the product that we already have, and the Prime Minister could not even get an additional dime for marketing New Zealand into the international market place.

Shane Ardern: How much subsidy do you reckon?

Hon DAMIEN O’CONNOR: That is an embarrassment, and the tourism industry has been so embarrassed that it has hardly commented on it, I say to Mr Ardern. The member knows that too.

The cycleway project was a classic Tory concept, because the National Government thought that the 180,000 people who are likely to be unemployed in this country within a few years would be out there with picks and shovels. We can just see it: Tory thinking, picks and shovels, making a cycleway from the top of the country. Well, it does not work like that, I tell Mr Key. It does not work like that, I tell Mr Ardern.

What we needed to see in this Budget was some vision. We needed support for research and development, not the slashed Fast Forward Fund that we had in reality, and Mr Ardern knows that. It was a standard Tory Budget, because it was dishonest. It promised tax cuts, and it never delivered. It killed KiwiSaver stone dead, and it effectively killed protection for superannuitants, for New Zealanders moving forward, because the $2 billion contribution per year has been cut for 10 years, and now many New Zealanders will be asking whether they will be secure in their retirement. Well, they will not be.

There was nothing, or very little, for rural communities—again, the heartland of Tory support in the past—in the Budget. Not only was the Fast Forward Fund slashed but also research and development credits, as those members announced, were slashed. All the people out there in rural New Zealand and in the primary sector with good ideas who were wanting to get out and export to the world had those credits taken from under them. They were outraged at the time. Nothing in this Budget put them back in place. The funding for adult education, the very thing that can help skills and support communities around this country, was slashed. The rural communities are up in arms. They will be knocking on Mr Ardern’s door and on the Prime Minister’s door. This poor and standard Tory Budget was an outrage. I know that in 3 years’ time people will remember this Budget and they will put Labour back into power.

Dr JACKIE BLUE (National) : My congratulations go to the Prime Minister, John Key, and the Minister of Finance, Bill English, on a balanced and measured Budget that will ensure New Zealand can make it through the recession. This recession has been the most serious that the world has experienced for more than 70 years. This Budget will keep the economy going amid the global and economic fall-out. There will be new core Crown spending of almost $3 billion, which together with the recent tax cuts will support our economy through these difficult times. This Budget will put New Zealand back on the road to recovery. This Budget has been universally welcomed by many groups. Auckland chamber of commerce chief executive officer Michael Barnett said: “Like any business when the market gets tight, we have to tighten our belts. We may not like it too much, but that’s the reality.” The Employers and Manufacturers Association called Budget 2009 “straightforward and responsible”. The Wellington Regional Chamber of Commerce labelled the Budget as “prudent and responsible in light of the extraordinary state of the world economy and the fiscal pressures facing the government”.

Budget 2009 is all about supporting jobs. This is through a $323 million home insulation clean-heating campaign, $50 million for a national cycleway, and a multibillion-dollar infrastructure boost. Budget 2009 locks in national superannuation at 66 percent of the average wage.

Hon Steve Chadwick: It’s a con.

Dr JACKIE BLUE: It is no con. Listen on, dear reader. Benefits, student support, and Working for Families are maintained at current levels. Budget 2009 improves public services with a $3 billion boost for health over 4 years, focused on front-line services, and $1.68 billion on education, to raise student achievement. Public safety will be improved. There will be 600 more front-line police and 246 more probation officers. Budget 2009 builds on productive infrastructure with a $290 million plan for the first tranche of the Government’s broadband plan. There will be $523 million to build new schools and upgrade existing ones, and an extra $1 billion over 3 years for the State highway network.

This is a Budget for the difficult times ahead. This Budget controls Government spending and debt. The Government is ensuring debt does not skyrocket out of control. The Government has had to make the hard calls, and it has done so. The Government has had to defer planned tax cuts, it has suspended automatic contributions to the New Zealand Superannuation Fund, and it will be slowing the pace of new Government spending. The Government has suspended automatic contributions to the New Zealand Superannuation Fund. The fund was originally set up to take Government surpluses and invest them. But guess what? There are no surpluses. If we were to make contributions, now we would have to fund them either by cutting back public services or by cutting back other income support entitlements. It is pretty much simple arithmetic. The only other option would be to borrow, and that would be like a household that had a big mortgage, an overdraft, and the car and the fridge on hire purchase, going to the bank and saying: “We want to borrow money and invest it in the sharemarket.” It does not make any sense.

Superannuation is paid out from general taxation at present, and the fund is a long-term investment vehicle set up to offset the cost of superannuation in 2030, when the bulge of the baby boomers will put more pressure on the general tax base. Even in these difficult times, the Government will be paying $250 million into the fund during the worst economic conditions the world has seen. Contributions will be reassessed on a year-by-year basis. When the Superannuation Fund was set up, there was legislation to allow for such a time when the Government of the day needed the option of having a holiday from making payments into the fund. This Government has taken that option. Borrowing to pay into the Superannuation Fund would be reckless, and makes no sense whatsoever. If we had to borrow to pay into the fund, New Zealand would have the expected downgrading in its credit rating. The impact of a downgrade would have the inevitable effect on taxpayers of an increase in interest rates. That would have had a detrimental effect and been a detrimental step to take. The Government moved decisively to avoid that.

Importantly, this Budget strengthens the economy for the future. It removes unnecessary regulation, so that business can thrive. It will invest more to lift the literacy and numeracy of young people, and it will create a more productive public sector.

I am particularly pleased at the announcements made in health. Despite the recession, Vote Health will continue to increase. Hospice funding will be boosted by $60 million over the next 4 years, increasing the average hospice funding provided by taxpayers to 70 percent. Prior to this, hospices had been provided with only 50 percent of the operational budget, and many had to fund-raise for the remainder, which was very difficult for the small hospices. New Zealand is the biggest exporter of doctors and nurses, and we have the highest percentage of foreign-trained doctors in any OECD country. There will be an extra $160 million over 4 years for the front-line health workforce. This equates to 60 new medical student training places in 2010, and there will be an extra 50 general practitioner training places by 2010 as well. Health sector infrastructure will be upgraded by $245 million, which includes a start to the construction of 20 new dedicated elective surgery theatres. There will be $70 million allocated to the 800 staff of these elective surgery super-centres. There will be $4 million allocated over 4 years to training health professionals in rural areas. These measures supplement our voluntary bonding policy for doctors, nurses, and midwives, who will get a student loan write-off if they agree to work in hard-to-staff areas.

Forty percent of new Government funding for Budget 2009 goes to health priorities. That is how much the Government cares about health. To meet the increased maternity service needs, there is additional funding of $103.5 million over 4 years to support services. There will be longer stays for new mothers in birthing facilities; an optional meeting at each trimester for at-risk mothers, attended by the pregnant woman, the general practitioner, and the lead maternity carer; obstetric training or refresher courses for general practitioners wishing to return to maternity care; the costs from the increase in the number of births each year will be met; and the PlunketLine 24-hour telephone advice service will be fully funded, as previously announced.

As part of Budget 2009, around $26 million of mental health money will be invested nationally over 4 years for the treatment of eating disorders. This investment will mean up to eight community residential beds in Auckland, four new dedicated beds at Starship Children’s Health, and expansions to Central Region Eating Disorder Services and the southern region’s community eating disorder service. Once the new services are fully staffed and operational, more families will be able to get New Zealand - based residential services, rather than going to Australia for treatment. Specialist eating disorder treatments need a highly skilled workforce, and some of this funding will be used for training and increasing the specialist workforce in this area. The home insulation programme will have many crossover benefits in health, as we know that respiratory disorders and cold, damp housing lead to poor health. That was a great initiative.

This is a Budget that, despite the economic times we are in, will get us through this recession and help New Zealanders. Thank you.

Hon GEORGE HAWKINS (Labour—Manurewa) : I stand to actually sing the praises of the National Government. I want to sing its praises. When members opposite came in here after the last election, they had the goodwill of the country, and everyone thought: “What a great job.” But it has turned sour. It has turned very, very sour. The troubles started with Melissa Lee. She was not in the Chamber on Budget day and did not know what was in the Budget.

Hon Members: She was here. You are wrong.

Hon GEORGE HAWKINS: Well, she might have been but she was not noticed. I think Jackie Blue would have made a better candidate for Mt Albert. Nevertheless, Melissa Lee did not know what was going on; she did not know what was in the Budget. She did not know whether there was going to be a tunnel over in Waterview. That was an absolute disgrace. So the wheels started to fall off. The honeymoon was over for the National Government. Not only did the wheels fall off; it came to a grinding halt.

When I was in Government, we had one issue on the go at any one time. Helen Clark was such a remarkable leader that she could handle that quite easily. But what does the National Government have? It has Melissa Lee in Mt Albert. It has unemployment going sky-high. It had promised tax cuts. We sat in this House on a Saturday debating them. The National Government was going to have its way; it was tax cuts for everyone.

Dr Rajen Prasad: 100 days of action.

Hon GEORGE HAWKINS: Yes, there were going to be 100 days of action, and everyone thought “Wonderful!”.

But what happened? Last week the Government brought in legislation that got rid of the tax cuts. When the Government brought in the tax cuts legislation, it knew that they were not affordable. It knew that. It builds people up, only to drop them down. We had people like John Key give his personal guarantee. Bill English sits next to him in the Chamber with a big smile, as he waits for his opportunity. He knows that it will come. He has the knife out, he has it sharpened, and he is looking at the back that it will go into. He is working on it; he is not in a hurry, but that is what is going to happen.

The Government has a long shadow over it. Although I do not want to talk about Richard Worth, that is just another problem for the Government to deal with. The Government has those sorts of problems to deal with, plus people are asking what will happen to their superannuation.

We remember the National Party of the 1990s, when its candidates on the hustings did not know their party’s policies. When that happens, people become unnerved. In respect of local government legislation, an area in which I have some interest, the House sat recently for quite some time, and a disorganised Government did not know how to get out of it, for quite some time. The Government now tries to sell to people the idea that they will have a say on local government reorganisation in Auckland but, in reality, Auckland was stolen from the people, without their say. It was absolutely bulldozed away from them. Did we hear National MPs who knew there was nothing in the Budget for local government reorganisation—not a cent—put amendments? In respect of the Franklin area, did Dr Paul Hutchison do anything? Did he raise any amendments to save Franklin? No, he did not. But he got together with its mayor, Mark Ball, and they wrote an article for the New Zealand Herald, in which they said—

Sandra Goudie: What’s that got to do with the Budget?

Hon GEORGE HAWKINS: It has a lot to do with the Budget, because someone has to pay for the reorganisation of local government in Auckland.

I know that Sandra Goudie wants to be a Minister outside Cabinet. She sees an opportunity, and she thinks that if she squawks enough, and Mr King thinks if he squawks enough, they might have a chance to become Ministers outside Cabinet. One does not have to be very good to hold that kind of position, I can tell them.

What happened about local government in Auckland? Local government was stolen from Aucklanders, but is there any money in the Budget for that reorganisation? No, there is not a cent. Who will pay for all of this? There is nothing in the Budget, so the ratepayers will pay. Did Judith Collins get up and try to save Papakura? No, she went to one meeting and she did not have much to say. When I visit that area I hear that the people are very, very disappointed. I think a lot of people would like to keep their old local authority area. It might be all right to provide 300 more cops in South Auckland but not to then steal the whole city of Auckland—steal the lot! People are very upset about that.

When people look at the Budget they will say they have been swindled—that is what they will say. It will be interesting next Tuesday night at the Papatoetoe Cosmopolitan Club where a public meeting will be held. Although the topic may be local government reorganisation, people will also ask questions about the Budget. People will ask about what has happened to their superannuation. They are absolutely confused about that. They are almost as confused as the National Government.

Everything was going smoothly for the Government. It was plain sailing and all of a sudden it ran out of sealed road and got on to a bumpy track. The measure of John Key’s prime ministership is how he handles it. I do not think he is doing very well.

Nathan Guy: Wind it up. Get to the point.

Hon GEORGE HAWKINS: A whole lot of National backbenchers want to become Ministers outside Cabinet. Who will take Richard Worth’s place? Well, if he goes from Parliament, it will be Cam Calder. He stood against me. He is a hard-working person. He was out there from March right through to election date, knocking on doors. I tell Rodney Hide that if Cam Calder gets the job, he will be knocking on Epsom doors. Rodney should be very worried, because not only will Auckland be stolen by the National-ACT coalition but also Rodney Hide’s seat will possibly disappear from ACT. Together with what happens in the Budget—

Sandra Goudie: How does that relate to the Budget?

Hon GEORGE HAWKINS: I went and told Rodney Hide today. Sandra Goudie wants to be a Minister outside Cabinet. Richard Worth’s body is not cold, and she wants the job. He has not even cleaned out the office, and she wants the job. The member for West Coast - Tasman is more deserving of it. That would be a good job for him. He has battled hard, but—

Sandra Goudie: What’s that got to do with the Budget?

Hon GEORGE HAWKINS: It has to do with the administration of the Government as a whole, and it is in a terrible mess.

Sandra Goudie: What appropriation is that under?

Hon GEORGE HAWKINS: It is a thing called the Budget. That member, who is squawking as loudly as she can, might have to give way to Tau Henare, who might get there before her. Will Tau Henare get there ahead of her? That is what the talk going on in the National Party is all about — and I see that Mr King has his hand up.

SANDRA GOUDIE (National—Coromandel) : Thank goodness for John Key and Bill English! I am sure that the New Zealand public fully appreciate them and fully welcome the fact that they are in charge, they are at the helm, in these tough economic times.

Helen Clark and Michael Cullen duped the country by proclaiming themselves to be competent, conservative managers of the economy. In reality, they benefited from a strong period of economic growth, yet they did nothing to get New Zealand on a really good, solid footing to take people forward, or to buffer them during these poor economic times that we are now experiencing. In fact, they took people backwards; they squandered those good economic years. We only have to look at what Roger Kerr said in some of his statements. He said that the New Zealand economy actually entered into a recession in early 2008, and that that was largely as a result of the economic mismanagement of the Clark-Cullen years. We all know it. The New Zealand public knows it. They knew that when this National Government took office, we would find the finance books in an absolute mess. Yes, we knew that we would find them in a mess, but we did not know that they would be in such an appalling state. Why did we not? Because the Labour Government did not tell the full story before the election. It misled the New Zealand public over the real state of the books. New Zealand has a Public Finance Act, but what did those members do? They fudged the books; they did not show New Zealanders the reality. I tell the House that I would not put any of those Opposition members in charge of a piggy bank. They have no idea of how to manage money, at all.

I will mention just one or two other points that Roger Kerr made. He said that between 2000 and 2008, economy-wide, labour productivity in New Zealand grew by an average of only 1.3 percent per year, which was the lowest of any growth cycle going back to the Muldoon years. And that was during the term of a Labour Government. For 9 long years it achieved virtually nothing. It stripped the coffers and left the cupboard bare. So before New Zealand was affected by the worldwide recession it was in its own, created by the Clark-Cullen leadership.

The second point is that central government spending grew by nearly 50 percent in the 5 years ended June 2009, which crowded out the private sector and put sustained pressure on monetary policy. The previous Labour Government members just could not help themselves. They just spent, spent, and spent taxpayers’ hard-earned money, and that was all they could do. Right now, that is all they continue to want to do. That is all “Whack-it-on-the-bill-Phil” wants to do. He just wants to increase that indebtedness and put the bill back on to the taxpayers.

The third point is that the economy’s decline in international competitiveness has contributed to our current account deficit being at near-record high levels. That did not help, either. But we can bet our bottom dollar that it all started with the Clark-Cullen mismanagement of taxpayers’ money, which moved us into a recession earlier in 2008 than was necessary. With prudent financial management, our economy would have been in a much better position than it is now. I say, once again, thank goodness for John Key and Bill English, who are helping to get New Zealand on to the road of recovery, after 9 long years of lost opportunity.

I have just dropped some papers, but I want to raise some other points from the bit of lost paper I dropped, because—

Hon David Carter: There’s lots of good points there.

SANDRA GOUDIE: Yes, absolutely. The world economy has changed since the last election. Superannuation entitlements are not affected by the Government’s deferral of payments to the Superannuation Fund, as Labour would have people believe. I tell members of the House that the Labour members just love scaremongering. They just adore scaremongering, not only in the House but out there in the community. They just spin it like you would not believe, and tell stories that are just blatant mistruths about the actual state of play.

I have to really question whether they have even read the Budget. After listening to the previous speaker, George Hawkins, we would have to wonder, because so little of the actual Budget was referred to. At times Labour has claimed that National should have known that the economic situation was as severe as it had become. Well, if those Labour members were not going to front up as to what the actual state of the books was, how could anybody have known? So that is one of the falsehoods they continue to put forward.

National’s election promises were fully costed and fully funded, based on the information available from Labour when it was in Government. But what was the problem there? For goodness’ sake! Those Labour members did not think to give us all the information that was available, so of course the New Zealand public were misled. The National Government’s tax package was reworked and re-costed, precisely because of the new information that came to hand at the time we took office. Dates and numbers show that the economy deteriorated far more rapidly than anyone was able to perceive, which greatly affected the Government’s accounts and financial position.

The previous Labour Minister of Finance, Michael Cullen—I am not even sure if Labour has a finance spokesperson right now, to be quite honest—said on 12 September 2008 that he thought that the worst of the economic recession was probably over, and that Labour’s tax cuts would help to push the economy back into positive growth, just as voters headed to the polls. Yet quotes from Phil Goff that said that, no, Labour would not give tax cuts. So there was a little bit of confusion about what Labour’s own policy was. At that time the Labour Minister of Finance said that New Zealand was over the worst of the economic recession. I mean, how dumb could that be? That is totally dumb—totally dumb—and he was the Minister of Finance at the time. I do not think that the perception that the Opposition gives can lead us to any other adjectival phrase other than their continuing to be dumb.

I absolutely adore roads, and I love infrastructure, so I am delighted that this Budget gives such a huge boost to our infrastructure. National was elected on a platform to unclog the country’s economic arteries, and this Budget is an important step in that direction. We have increased the capital spending allowance from $900 million to $1.45 billion, to invest in schools, telecommunications, roads, and hospitals.

That is the first part of a planned $7.5 billion boost for infrastructure over the next 5 years. Capital spending allowances will be $1.45 billion a year for 4 years, and will rise to $1.65 billion in the year 2013-14. These figures show the country that it is on the road to recovery, and that National is working towards that recovery. We are doing that in a really solid, consistent, and thought-out way. We will not fall into the trap of spending willy-nilly, which Labour members consistently seem to find themselves in. “Whack-it-on-the-bill-Phil” illustrates the attitude the Opposition has to Budget expenditure. We are looking to boost public services, and there is $3 billion for health over 4 years, which will focus on front-line services. This money is about front-line services. I do not know whether the Opposition actually understands that concept.

The Budget will provide 600 more police, and 246 more probation workers, to improve public safety. We have an excellent Minister of Police and Minister of Corrections in Judith Collins. She is doing an outstanding job, and has probably made more of a difference in terms of law and order over the last 6 months than the last Government did over 9 years.

DARIEN FENTON (Labour) : I am pleased to have an opportunity to speak on the National-ACT Government’s first Budget. I am particularly pleased to follow the member Sandra Goudie who has just resumed her seat, the next Minister outside Cabinet in the National Government. The Government is getting quite desperate when its members have to quote Roger Kerr of the Business Roundtable. There really is some desperation there.

This is a low-road Budget. It is a Budget that takes a low road to the future because it fails to invest in people and in jobs. It takes the low road because it fails to develop the innovation, skills, and training that will give us a stronger economy in the future. It takes the low road because it undermines the future well-being of New Zealanders by creating a $37 billion hole in the future funding of our superannuation. It takes the low road because the National Government has already broken a key election promise to cut taxes, even though National made that promise when it knew that the economic storm was worsening.

This Government did have a choice. There is another way to meet the challenges of the global economic crisis and the challenges that are facing New Zealand, and that is to take the high road. What does that mean? Well, on the high road, Governments invest in jobs by providing education, training, and opportunities for advancement in skills. Governments provide those opportunities to everyone and ensure that no one is left behind. The hundreds of thousands of working people in New Zealand who are reeling from the economic crisis need immediate action with an economic recovery package that invests in preserving essential services, in infrastructure, and in human services to create jobs.

We were looking for an economic recovery package that reaches those people most in need, and makes our economy work for everyone, not just those at the top. A decent, quality economic recovery plan would save and create jobs by building the critical public services that we all count on to keep our communities safe and healthy, especially in health care, social services, education, and public transport. New Zealand needed the Budget to cushion the pain that was felt by the hundreds of thousands of people who have lost or are in danger of losing their jobs, and by the working families in New Zealand who are struggling to get by. New Zealand needed a Budget that would strengthen our economic competitiveness and put us on an environmentally sustainable path, with investments that would reshape our energy and science sectors.

This is a Budget that no one can have confidence in. It fails every New Zealander, and puts New Zealand back on the race to the bottom. I believe that Budgets should be about people, not money. Unfortunately, listening to the National Government, one would not think that was so. There have been significant cuts in this Budget, and those Budget cuts will hit those who can least afford it. My question is who will pay for this Budget. I suggest that the 97 percent of New Zealanders who received no tax relief in the April tax cuts will pay, as will the 1,250 workers who are joining the dole queues each week, the 179,000 workers who will be unemployed in the next 2 years, and the workers who are already having their hours cut, and their overtime pay slashed, and are seeing “take it or leave it” bargaining back on the table.

The future superannuitants who are relying on support from the New Zealand Superannuation Fund at age 65 will also pay, along with older people whose lives will be put at risk because of cuts to home care. I have absolutely no confidence that the extra money put in aged residential care will be targeted at the low-paid workers who actually provide the care. Others who will pay for this Budget include women who are expected to put aside their campaign for justice and pay equity; the public sector workers and their families; and the 1,500 people who have already lost their jobs, with many more to come.

Health and education workers, who will receive no pay increases for the next 3 years, will also pay, along with school support workers, who have just been offered a zero percent pay increase for the next 3 years, even though their pay rates start at just $12.94 per hour. These people will pay, along with the workers who will be sacked or made redundant without notice or compensation, and without adequate support to see them through the tough times. People who rely on public transport to get around will also pay, along with the workers, the disabled, and those who believe that alternatives to roads are better options than ever-increasing tarmac.

Another group that will pay are those people who rely on community programmes such as the Enterprising Communities scheme, which was axed from the Budget with no reason given. Many, many people relied on that good programme, which had good results. Also paying will be the communities that rely on public and community social services that are now at risk from the deep cuts ahead, and, of course, even more cuts are likely in Rodney Hide’s new Auckland. The young people and workers who seek to upskill, and who will find training almost impossible to access under this Budget, will pay. The 757,792 State school pupils will pay so that the parents of the 31,000 children who attend private schools can pay lower fees. People will have to pay more for their doctors, as noted in the New Zealand Herald today. These are the people who will pay for this Budget. They are the real people whom National never listens to or talks to.

I heard the Minister of Labour, Kate Wilkinson, shrieking her way through her contribution this afternoon. My question to that Minister is where are her initiatives in this Budget to fulfil the Government’s supposed goals of lifting productivity and closing the income gap between New Zealand and Australia. The National Government keeps talking about these things but it has no idea about how it intends to achieve them. One has only to look at some of the comments of the Government’s senior Ministers to understand what they think. The Hon Dr Nick Smith, a National Government Minister, was lauding the productivity levels of his Government in the 1990s in the House the other day, when he and his party were raging against the proposition that would have increased the minimum wage for the lowest-paid contractors. If that is any indication of how this Government thinks productivity levels can be improved, I am really worried. It is easy to increase productivity with higher unemployment and lower wages. The previous National Government proved that in the 1990s, yet when we look at this Budget, we see that the Government’s projections over the longer term indicate no improvements to productivity. It flattens out to 1.5 percent in 2014, which is the same level that National members have been whinging about recently, and were whinging about before the election. As for closing the income gap with Australia, well, that is a laugh.

The Minister of Labour has failed to advocate for workers in business. Other Governments have devised a range of aggressive programmes to counter the worst of the crisis, but ours has come up with a thin collection of bits and pieces. The only idea we have heard from that Minister is to cut the rights of workers, first under the 90-day probationary period legislation, and now she is on to the Holidays Act. Then she will be further eroding workers’ rights in the Employment Relations Act. She has dumped pay equity funding. What a successful Budget round that Minister has had in her first term!

I particularly want to deplore the scrapping of the previous Labour Government’s investment in the New Zealand Skills Strategy, which was work that was carefully crafted by the Council of Trade Unions, Business New Zealand, and the Industry Training Federation in partnership with the Government. Significant increases in labour productivity will depend on improving literacy, language, and numeracy skills, on raising the value and quality of work, and on the development of management and leadership capability. The New Zealand Skills Strategy was about addressing the issue of workers who are already in the workforce and who will still be there in 2020. Quite frankly, I do not think the National Government gets it, so it dumps the only programme that might have delivered real skills in the future. In fact, I note that the word “skills” did not appear once in the Budget speech, which is amazing.

National has also cut programmes to help its friends in business through the current crisis. Why was it necessary to cut $101 million over 4 years from New Zealand Trade and Enterprise’s market development fund?

This Budget is dishonest. It will fail to revive our failing economy and make it stronger and fairer for the future. We have nothing to look forward to in the next 2 years of this Government, and I say with great disappointment and great foreboding that life will get very, very hard for New Zealanders.

Hon TONY RYALL (Minister of Health) : Being in Opposition provides some opportunities for some members, and I have heard so much from the previous speaker, Darien Fenton, in the last 6 months. In the previous 3 years or so, I never heard a peep from her in respect of Taito Phillip Field or the Electoral Finance Act, but we now hear a lot from her. It is usually that old-fashioned Labour stuff we heard in the 1970s.

I will talk about this Budget, because I think New Zealanders recognise that this Budget is a conservative Budget appropriate for the times. It recognises that the economic situation in New Zealand continues to worsen. Although we can be hopeful that the recovery is around the corner, with international signs of recovery, we should still prepare for difficult times, and the Budget was prepared in that context.

Before the election, the Labour Government was told there was a $3.5 billion surplus; 6 months after the election, we now have an $8 billion deficit. Not only do we have an $8 billion deficit but also we are in a decade of deficits, with massive increasing national debt. But against that backdrop, in this conservative Budget, which is appropriate for the times, the Government has delivered improvements in public services and the services it provides the community.

I certainly think that New Zealanders are very pleased with the Government’s $323 million investment in home insulation. It will insulate 180,000 homes. New Zealanders will be offered up to $3,000, depending on the circumstances, to improve the heating of their homes. It is a winning initiative enjoying very popular support around the country. The health sector has contributed $100 million towards the $323 million for home insulation. One of the best investments we can make in the public health service is in insulating homes for New Zealanders, because that will really help with respiratory disease, and will help families have healthier kids. Sadly, because the health sector contributed $100 million to this scheme, the Labour Party said it was not good—because that $100 million had been cut from the health budget. Did members read that? That is what the Labour Party said. Ruth Dyson said that the home insulation project was a $100 million cut out of the health service. That $100 million will make a real difference to the 180,000 households in New Zealand that will have warmer homes. Ruth Dyson may not know this, because her Government never thought respiratory disease was an issue, but respiratory disease—asthma and all those problems—are big issues in New Zealand. Respiratory disease was never a health priority under a Labour Government—never once. But this project will provide home insulation to 180,000 homes, many of which are occupied by the most hard-up New Zealanders. It is a winning initiative that will dramatically improve public health.

This Government also delivered $750 million this year to improve the public health service with new initiatives to provide New Zealanders with improved services. Not only have we put over $100 million into improving maternity service for New Zealanders but also we are providing longer stays in maternity facilities, and seeking greater cooperation between general practitioners and midwives with the concept of trimester meetings between the two professions and mothers-to-be. We are also looking at additional services for Well Child, and, as members know, we have funded PlunketLine as per our election promise.

The Government also put $60 million into providing support to New Zealand’s hospices, achieving what the previous Government had promised, whereby 70 percent of total funding for hospices is publicly funded. The best the previous Government achieved was 50 percent; this investment from the National Government brings hospices’ public funding to 70 percent. It is a vital community service under considerable pressure because of the difficulty with fund-raising in the economic slowdown. We think that support will give hospices the opportunity not only to provide more service but also to provide more competitive salaries for the many nurses who work in hospices around the country.

Speaking of the contribution that our nurses make around New Zealand, I know that National Party members are very pleased with the significant investment that has been made in aged care in this Budget. Not only have we provided for the 3 percent increase in aged residential care subsidies but also we have put an extra $18 million a year into aged residential care to provide better nursing quality and supervision. That money will provide nurses who work in rest homes with much more competitive salaries because they face competition from the district health board sector, which pays considerably more to nurses in that sector.

We also know that district health boards will receive $2.1 billion over the next 4 years. That is $530 million a year going into our district health boards to provide much-needed services for New Zealanders. That funding includes an additional $40 million or so to improve access to medicines in New Zealand. This part of the Budget has not had the public awareness it should have had. We know that a lot of modern medicines subsidised in Australia are not subsidised here in New Zealand. It is a fact that, per head of population, funding for medicines dropped every year under the previous Government. We are now on a path to restore that funding so that it meets growth per head of population. Additional funding will go into medicines and that will improve access for New Zealanders. We know that the Prime Minister funded Herceptin for New Zealand women so that they can now get the standard of care.

Hon Steve Chadwick: What about growth hormones?

Hon TONY RYALL: Mrs Chadwick was in the Labour Government for 9 years, and it never did a thing about it! Now she asks us what we are doing about that issue. I tell Mrs Chadwick that we are doing more than she ever did on that issue. We are putting $40 million into medicines, the biggest increase for years in the funding of community medicines, and it is being delivered by a Government in tough economic times.

The biggest issue in health we face today is the workforce, the workforce, the workforce. We have huge shortages in many of our medical professions. There has been real pressure on nursing, although a little bit of pressure has come off with the recession. But there are also pressures in midwifery. This Government is acting on that. We started a voluntary bonding initiative, which has been wildly successful, and we encourage young graduates in medicine, nursing, and, particularly, midwifery to work in hard-to-staff areas. We think these initiatives are very positive and we are getting a huge reaction to them. The Government also provided additional training places in the midwifery colleges, and additional money to encourage rural midwives to continue training new graduate midwives in rural areas, and to give those graduates an incentive to stay longer in those rural areas.

This Government is delivering in the health sector in tough economic times. Half of all new spending in this Budget is on health, because our Prime Minister, John Key, who is providing superb leadership for New Zealand, and our Minister of Finance, Bill English, know that public health is fundamental to our nation. They are determined that we continue to invest strongly in our public health services so that they are there for New Zealanders when they need them. This Government is determined to improve access to many of the key areas highlighted in our new health targets in our letter of expectation to district heath boards. We back that up with $750 million of new initiatives in the health sector, including a significant contribution to the home insulation project, which the Prime Minister announced, which will make a real difference to the health of many young New Zealanders and many of our most impoverished households. This project has the total support of the Government and its coalition partners. If we can make those homes warmer, then we will deal with some of the disease, the respiratory problems, and the challenges faced by many families in a most difficult financial situation. That is certainly what this Budget is about. It is a conservative Budget providing the best for New Zealanders.

CAROL BEAUMONT (Labour) : I follow on from our fine deputy leader, Annette King, who talked earlier about this Budget being a D-grade Budget. It certainly is a D-grade Budget; it is a Budget based on deceiving New Zealanders.

The tax cuts that were personally guaranteed by John Key have, of course, been deferred. We support the cancelling of those cuts; we knew they were unaffordable. They were unaffordable when they were promised, they were unaffordable when they were rammed through under urgency in December, and they were unaffordable when they were implemented in April. Who benefited from those April tax cuts? It was the top 3 percent of earners, who took a full third of the available money. Those cuts were not fair, and they did not show good economic management. They were not stimulatory, and they removed $800 million from Government income. I could call that economic vandalism, actually. The crime was not in cancelling those tax cuts, but in the deception that created a tax cut plan that was known to be unaffordable.

We also have the social vandalism of a decade of deferral of contributions to the New Zealand Superannuation Fund. National has never been committed to national superannuation, and it has shown its true colours here. National does not believe in universal superannuation, despite John Key’s guarantees. We all know how good John Key’s guarantees are, do we not? Not only has National gutted KiwiSaver as part of its 100 days of action but it has now gutted superannuation, as well.

I want to focus on the areas of education and skills. For someone who was ambitious for New Zealand, John Key lacks any ambition in the area of skills development. Focusing on education and skills is particularly important at a time of economic hardship, and, in doing so, economic and social benefits will accrue to individuals, families, businesses, and the economy. Money spent on education and skills is an investment in our people, in our economy, and in our future. It cannot be treated just as a cost. Some of the cuts to education in the Budget are the worst sorts of short-sighted and damaging actions that could be taken in the current economic environment. Schools Plus has been scrapped. It was supposed to be universal, but it has been replaced by five trades academies. Who knows what is happening with the Youth Guarantee?

Savage cuts have been made to adult and community education. I have found the comments on this issue made by the Minister of Education, Anne Tolley, to be absolutely appalling. The Minister talked about mosaics and Moroccan cooking. Actually, there is nothing wrong with those things in and of themselves, but there are a whole lot of very, very important issues for people, including their level of computer skill and literacy, and their ability to challenge domestic violence. Adult education is a means of accessible learning. Obviously, the Minister has a complete lack of understanding of the area of adult education. Some of the most important things about adult learning are that it has to be relevant, it has to be interesting, and it has to attract people, especially people who have not previously done well in the education system. In fact, there is a whole body of knowledge about literacy learning and embedding that in relevant courses where a person’s interest lies. The dismissive comments made by the Minister about adult and community education were a disgrace.

Step Up Scholarships, which were tertiary awards that specifically targeted students from lower-income families—have been scrapped. Longstanding youth training programmes in areas such as skills enhancement are gone. These programmes targeted young people, often Māori and Pacific Islanders who had not done well at school, in order to raise their education and skills training levels and to help prepare their way into tertiary education. Industry training bodies, apprenticeships, and tertiary institutions all face real funding cuts under this Budget. The Budget has been described by commentators in the sector as a body blow to tertiary education.

In the compulsory education sector I note that private schools, which educate fewer than 4 percent of New Zealand children, have received $35 million in additional funding, whereas the other 96 percent of children received an additional $320 million. Three times more additional funding has gone into private schools than into public schools. The Minister of Labour, Kate Wilkinson, quoted John Minto; it was quite an unlikely quote from her, I thought. I read the article from which the quote was taken and felt that John Minto made a very interesting point about education, which was the main point of the article: “This is a disgrace especially when one considers the biggest problem facing education is the long tail of underachievement at schools in our low-income areas.”

It is not only what is in the Budget that I want to talk about but what is not in the Budget. What specific skills and education initiatives have been put in place to assist those who have lost their jobs or are at risk of losing them? The lack of a plan around jobs and around investing in people is the truly shocking aspect of this Budget. As Rod Oram said, National will not commit to skills training, and the Budget has starved the tertiary sector. The derisory increase in the tertiary budget will mean less money for teaching salaries and less money for the surge of students who will try to register because they cannot find jobs. In the last quarter 24,000 jobs were lost, with the number of people who are not in the workforce rising to over 1 million. Some of those at greatest risk are those with low or narrowly focused skill levels. Sadly, Māori, Pacific Islanders, and young people are over-represented in those areas. Māori unemployment has gone up from 9.8 percent to 11.9 percent, and Pacific Island unemployment has jumped from 8.7 percent to 13.1 percent. These figures represent people; they are not just statistics. Where is the hope for those people? Where is the plan?

New Zealand has major skills deficits, and technical and literacy skills are two of the key areas. Forty-three percent of adults have literacy skills below the level needed to participate fully in a knowledge economy. A Government with vision would invest substantial resources in training people in order to upskill our workforce. Paying unemployed people to train is a positive investment in the future. Working with businesses, to help them retain workers while they are being upskilled, has a range of benefits. If we significantly upskilled our workforce, we would be positioned to transform our economy by lifting productivity, and by having the people with the skills we need in the areas of the economy we need to grow. This will ensure that New Zealand is ready to respond to the economic upswing that will take place.

Investing in skills and education for people brings many benefits to the individual. These benefits include job opportunities, job security, improved income, greater job satisfaction, and greater ability to participate in the wider community. There are similar benefits to families, but also in terms of increased family income and having parents who can better support their children’s learning. There are benefits to businesses, including having greater productivity. There are benefits to the economy, including having greater productivity, a higher GDP, more innovation, and more ability to transform it. There are benefits to our society if we lift income, such as having improved health outcomes, social cohesion, and reduced crime. These are all potential benefits. But we are real laggards in this area. The investment made by similar countries—Australia, the US, and the UK—in skills development, as part of their economic stimulus packages, is far greater than ours.

The Government is not only lacking in ambition and vision; it is arrogant. It is failing to pick up the very positive policy initiatives of the previous Labour Government in this area: Schools Plus, the Skills Strategy, and the retraining allowance for those who are made redundant or who had been in their jobs for 5 years or more. A number of specific areas could have been considered in this Budget, such as increasing equivalent full-time student volumes, providing subsidies for fees, and providing training allowances. The Government could have looked at some short-term variations in the area of industry training, by lowering the industry co-payment requirement or, in some cases, by raising the standard training measure levels.

From those on the other side of the House there is a whole lot of rhetoric about productivity. We know there is a need to do something. We need to make major structural changes to our economy in order to improve our productivity. One of those structural problems is the skills deficit. It impacts strongly on workplace productivity, yet this Budget is silent in the area of skills. As my colleague Darien Fenton said, it is not even mentioned. This Government talks a lot about lifting productivity, yet it is doing little in the vitally important area of skills development.

As well as focusing on skills development, we need to focus on skills utilisation. This means that people need jobs. They need to be able to put those skills into effect. As already mentioned, this Budget has no plan for jobs. Focusing on skills utilisation also means that businesses and the Government must resist the desire to lower wages and conditions of employment.

Hon Dr NICK SMITH (Minister for the Environment) : I rise to congratulate the Minister of Finance on delivering a very balanced and sensible Budget in extremely difficult times. I take my opportunity to talk about how this Budget is a road to recovery for an economy that is on its back. I want to talk about the important investments in infrastructure. And I want to talk quite specifically about some of the environmental issues that are key to this Budget. I also want to give a little bit of a Nelson flavour, and to show why this Budget is not just good news for New Zealand but good news for Nelson.

Before I do that, I challenge members opposite on a few of the points that they have raised. I will respond to Carol Beaumont, who spoke with passion about education issues. This Budget spends more money on education over the next financial year then was spent on it in any year in this country’s history, and for a Government to deliver that in the worst economic downturn since the Great Depression shows the level of commitment from this Government to skills development.

I challenge three particular messages that have come from Phil Goff, the Leader of the Opposition. He said—and I was gobsmacked to hear this—in his response to the Budget: “Stuff the rating agencies.” He may as well have said: “Stuff New Zealand.” This country depends on overseas capital to drive our economy. The price of that capital is determined by interest rates. Mr Goff was saying that interest rates do not matter. Treasury has said that a credit downgrade would cost New Zealanders an extra $600 million per year. I say to those who are concerned about jobs that interest rates matter. If there is a business out there wanting to invest and employ people, the cost of capital is absolutely pivotal to the creation of those jobs. That is why I say to members opposite that you are economically illiterate when you cannot make the connection between a credit rating, interest rates, and jobs.

Hon Steve Chadwick: I raise a point of order, Mr Speaker. I am sure that you are not economically illiterate, as the member alluded to.

Hon Dr NICK SMITH: Let me be very explicit. I apologise, Mr Assistant Speaker Barker. I was referring to the Leader of the Opposition and Labour members being economically illiterate by saying “Stuff the rating agencies.” but also saying that, somehow, they care about jobs. I say that jobs matter. One of the best paths to jobs is New Zealand being able to attract capital, and that statement from Mr Goff was truly ignorant.

Then there was an even more irresponsible statement from Mr Goff. He said that for one in five New Zealanders retiring in the next two decades there will be no superannuation. The finance spokesperson for the Labour Party went even further. He said that New Zealand superannuation is dead, dead, dead. That is nothing less than irresponsible scaremongering by a desperate Opposition. What has the Opposition come to when it will scare our elderly with any sort of rhetoric about an issue as important as New Zealand superannuation? It will stoop as low as taking superannuation down that track.

Let me simply tell members opposite how to improve security. I will quote Susan St John, who is hardly a friend of the New Zealand National Party. She said: “I think the Government’s very much in the short term done the right thing by not paying into the Superannuation Fund from money that it would have to borrow”. The Retirement Commissioner, the independent person who has the responsibility for retirement income, went even further in supporting what the Government has done in this regard.

I challenge the members opposite, who say they want to maintain the Government’s contribution to the Superannuation Fund: would they cut Government expenditure by $8 billion or would they borrow? Those are the choices; they really are the choices. Is any member in this House seriously suggesting that there should be a cut in Government expenditure of $6 billion to $8 billion in a year in which the economy is on its back? I do not think that any member is seriously suggesting that that is the right approach in this part of the recession. The only alternative is to borrow. Well, I would like the next speaker for the Labour Party to answer this question. If we borrow $2 billion to put in the Superannuation Fund, how does that improve one iota the security of superannuation in 20 or 30 years’ time? In 20 or 30 years’ time, yes, there is $2 billion worth of investment, but there is an extra $2 billion of debt. The truth is that the security of superannuation will not have improved one iota. I plead with members opposite to stop scaring our elderly population with their ridiculous claims that somehow superannuation is at risk.

Hon Maryan Street: It’s the baby boomers!

Hon Dr NICK SMITH: Then, I say to Maryan Street, there is the third statement by Mr Goff, which was truly ridiculous. He said that Labour had left the economy in great shape. I think that will go down in history as one of the great porkies of all time. Even before the election, Treasury’s pre-election fiscal update showed 10 years of deficits. I ask members opposite—who are concerned about unemployment—when unemployment started to go up. Actually, unemployment started to go up 18 months prior to the general election. Where were all the speeches from Labour members concerned about unemployment, when it started to go up 18 months ago? I think there is one figure that says it all, and it is this: over the last 5 years, Government spending increased by 49 percent, and, during the same period, the economy grew by 24 percent. Members opposite do not understand that only in the good times do Governments get to spend more and more. Thank goodness we have a National Government that understands the need to make choices in difficult times.

Hon Steve Chadwick: The biggest porkie! Tax cuts guaranteed for all the country!

Hon Dr NICK SMITH: I challenge Steve Chadwick to explain why, during Labour’s term, Government spending increased by 49 percent and the economy and tax revenue grew by only 24 percent.

This is a Budget that delivers on home insulation. It is a Budget that delivers for hospices. It delivers on the Government’s commitments about Herceptin. It delivers on trade academies. It delivers for special education, an area badly neglected by the previous Government. It delivers on youth guarantees. It is a good Budget, a conservative Budget for our time.

CARMEL SEPULONI (Labour) : There are so many disappointments in this recently announced Budget, but none more disappointing than those that so blatantly let down the most vulnerable of all New Zealanders. A friend of mine recently contacted me and pointed out that a very few may have benefited from this 2009 Budget. Fortunately, she said, some had their backers, but clearly we did not have ours. I have been bombarded with emails and phone calls from members of the Pacific community who are in complete and utter disbelief at the fact that there is virtually no mention of the word “Pacific” throughout this Budget. I find that really strange, given that during the election campaign last year we had to endure images of John Key walking around South Auckland’s schools, trying to court our Pacific communities. He was out there with our high-profile Pacific community members, saying that he had aspirations for all New Zealanders, then made no mention of the Pacific in the 2009 Budget.

Already Pacific people have topped the charts for the highest level of unemployment. We are sitting on a rate of 13.1 percent—more than that of Pākehā, of Māori, or of any other group in this country. Our Pacific demographic is young, and with youth being highly at risk during an economic downturn like the one we are experiencing at the moment, Pacific people are hit even harder. Common sense tells me, and tells almost everyone I know, that during a time when there are significantly fewer job opportunities, a concerted effort has to be put into investing in upskilling and training. Unfortunately, this National Government seems to be seriously lacking in that common sense. I quote a friend: “Statistics show that Pacific peoples have been the ones most likely to lose their jobs in a recession. Our youth demographic stats show that Pacific kids are going to be entering the labour market in huge numbers. As the National Party cuts super contributions, increasingly this demographic—more than half of whom are being raised in households that meet the criteria of hardship or severe hardship, and whose people are losing their jobs in this recession—will be responsible for mobilising the economy and keeping the aging baby boomers afloat.” Is there any consideration for that? Not at all! There is no consideration when opportunities to train and upskill have been taken away from youth and taken away from Pacific people.

What are some of the things that this Budget has delivered for those who will struggle to find employment, and who are maybe contemplating taking up some study? There is a $9 million cut to the CPI adjustment for industry training funding, which means there will be less funding than before, in real terms, thus denying people the opportunities to upskill and work their way, and the country’s way, out of a recession. There are cutbacks to specific long-standing youth training programmes such as Skill Enhancement, Youth Training, and Nga Kaiarakati Pathfinders, which are all programmes that I have been told were put into place during the last recession. Whom will this affect? It will affect youth in general, but, let us not kid ourselves: Māori and Pacific youth will be disproportionately affected.

What else have we seen? We have seen the savaging of adult and community education funding, which provided courses through schools and community groups to assist people to get back into learning, but which is now denying those wishing to improve themselves the opportunities to get ahead. We have also seen small but completely unnecessary cuts to Māori and Pacific scholarships. By cutting all of the things that I have just mentioned, the National Government has taken a cheap shot against people who cannot protest easily. It leaves our people sitting at the bottom of the jobless, unskilled heap. It makes Anne Tolley’s rhetoric about education being a ladder of opportunity another myth. She seems to be walking around with this ladder under her arm and refusing to put it down for the most vulnerable in our communities to climb.

Invisibility in this Budget has been the key theme in relation to the Pacific community. It is interesting, though, that the Pacific gained a large mention with regard to overseas aid, but not for any positive reason. In fact—surprise, surprise—it was the complete opposite. Our aid programmes in the Pacific will be cut by $1.94 million over the next 3 years. Does this National Government not understand that we are renowned for our efforts not only within our own country but across this region? Is this National Government so narrow-minded that it cannot see that an investment in our region is an investment well worth making? While the bilateral and multilateral agencies across the world seem to be moving into our region and strategically courting our Pacific neighbours, is this National Government reducing our support for them? Perhaps the National Government needs to take heed of the words of the recently passed Tongan scholar, Professor Epeli Hau‘ofa, who said: “Let us not be defined by the smallness of our islands, but by the vastness of our ocean.” I tell National members to take heed of those words, because National’s small-mindedness will do only a disservice to New Zealand.

As the associate spokesperson on tertiary education, and also on social development, one decision that has really frustrated me is the National Government’s decision to cut severely the training incentive allowance. That allowance provides sole parents on benefits with financial support towards transport, childcare, and/or fees associated with training. During a time when the Government should be providing incentives for New Zealanders to upskill and train, it has slashed an existing incentive that provides some financial support for sole parents to undertake study. The changes outlined in the National Government’s 2009 Budget highlight changes in the eligibility criteria for sole parents to access the training incentive allowance. The intention now is to allow sole parents who are studying to get the training incentive allowance only when they are training in courses at level 4 or below. What message is the Government sending out? It is saying that single parents should not do diplomas or degrees; it does not want them to get ahead too quickly. They should just do courses at level 4 or below. That will result in a $3,670,000 cut to the allowance in this financial year, and an $8,700,000 cut in total by 2013.

Interestingly, prior to that announcement I had been looking into the issue. It is feasible to suggest that at the time the training incentive allowance was implemented in 1983, no thought was given to the correlation between the educational attainment of parents—particularly mothers—and the subsequent educational achievement of their children. However, research has proven the importance of education for sole parents, particularly mothers. Education enables them to increase their earning potential and thus improve their families’ standard of living. In addition, their education has a significant effect on that of the next generation. With all of this in mind, what sense does it make to take away this incentive for sole parents to train? Sole parent families are evident across all ethnic groups and age groups, but the reality is that Māori and Pacific people have higher rates of sole parent families. In addition to a higher rate of sole parent families, Māori and Pacific people have a lower rate of post-school qualification achievement. As a Pacific person and a sole parent, I cannot help but feel irritated by that type of decision.

We are bombarded day after day with images of negativity surrounding our youth, our educational achievement and our circumstances. Yet rather than seek to invest in our people, decisions have been made by this Government that contribute only to perpetuating the challenges we are faced with. What has happened to the National Government’s rhetoric about aspirations for all New Zealanders? The rhetoric can hardly be seen as true when the Government is pulling the carpet out from under some of the most vulnerable members of society by removing incentives that were put into place to ease the financial burden and help us to get ahead. In today’s economic climate, competition for jobs means that qualifications are more important than ever. Sole parents are already at a disadvantage. Their earning ability is constrained by factors such as childcare, negative stereotyping by employers, and a limit to the hours they can work, all of which often steer them towards low-skilled and low-paying occupations. Given that higher qualifications increase employment opportunities and earning potential, and impact positively on children’s educational achievements, the enabling of beneficiaries to attain qualifications should remain a priority of this Government. Furthermore, the attainment of tertiary qualifications—in particular, university degrees—should be further encouraged. The wider-based education and more adaptable skill sets associated with university study mean that in the long term a university degree will be more advantageous to a beneficiary than any other form of training.

It is decisions like this one—the slashing of the training incentive allowance—that wreak havoc with those already facing challenges, and with the children we are working hard to raise. During a time of recession we do not need to have additional obstacles thrown at our most vulnerable. The repercussions of these types of decisions are felt not only by the sole parents who will no longer be eligible for just over $3,000 a year of support towards transport, childcare, and/or fees, but also by their children. Perhaps the National Government does not consider this to be a large amount of money, but I can testify to the fact—and I am sure that other sole parents can also testify—that it contributes hugely when we are full-time students trying to raise children by ourselves. The best way to end this speech is by asking the National Government: where is the vision? Where are the aspirations for all New Zealanders? We on this side of the House cannot see them, and nor can everyone who has been in contact with me.

Hon DAVID CARTER (Minister of Agriculture) : As the National Ministers assembled back here in the latter part of January after the Christmas break, and started work on progressing Budget 2009, we were increasingly aware that this Budget was going to be a difficult Budget. We had the revelation of declining tax revenues. We had revelation after revelation of unfunded commitments made by the previous Government, which we had to face. It was inevitable that the process involved in making a Budget to meet ever-increasing global financial conditions was going to be a difficult one. But I think that if members on the other side of the House wanted to be upfront and honest, they would agree with most of the commentators I have read, throughout the media, that Budget 2009 will be recognised as a turning point for this country.

We have now seen a decade of the previous Government’s excessive, very poor-quality, and reckless spending. The previous Labour Government spent and spent in an attempt to buy election after election. I thank God that the New Zealand voting public finally woke up, at election 2008, to the situation of Labour going out, scratching any itch, and being prepared to solve the matter by giving it more money. But the situation was finally recognised for what it was worth by the voting public of New Zealand. That previous Labour Government had no interest, at all, in the long-term prosperity of New Zealand. That is why so many young and talented New Zealanders left in their tens of thousands over the last decade. They knew that the situation the previous Government was coping in was about nothing but naked self-interest and about Labour staying in Government. Thank God the New Zealand voting public finally woke up!

After the Budget was delivered in the Chamber last Thursday, I have to say I witnessed the most desperate speech by the Leader of the Opposition, Mr Goff, that I have ever heard him deliver. People have been phoning my office, asking whether the man was well. His speech was unbelievable, and the defining comment for me was when he said, either in all honesty or in total ignorance, that he thought Labour had left this economy in good shape. That is what he said. But I well remember seeing Dr Cullen on TV the night he was forced by legislation to deliver the Pre-election Economic and Fiscal Update. Dr Cullen stood before the TV cameras and gloated. He gloated that he had left this country with a legacy of 10 years of deficit. That happened because the Government had been prepared to spend recklessly.

So what do we face? These figures sum it all up: over the last 5 years the previous Labour Government increased Government expenditure by 49 percent. At the same time, tax revenue grew by 25 percent. Anybody with an ounce of economic literacy should have been able to see that that was leading to a deficit situation. That is what National faced when it came into Government.

Hon Maryan Street: And what did the National Party want to do? They wanted to spend it on tax cuts.

Hon DAVID CARTER: The member Maryan Street yells out, asking what National was going to do. It was going to come in and instil some fiscal discipline back into the Government, so that over a period of time we would get debt back under control, we would build an economy that was sustainable and delivered real prosperity for New Zealanders, and we would address the flow of New Zealanders who were leaving the country by their tens of thousands because they had no hope in this country under a Labour administration. That is the scene this Budget has been set around.

Ever since October the world has been approaching a recession. That recession has got worse since the election. It is all very well for Labour to criticise National for cancelling the tax cuts, but every poll I have seen taken of the public of New Zealand shows that at least 70 percent of New Zealanders agree that in view of the declining economic conditions, we made the right decision. Seventy percent of New Zealanders agree, but the Labour Opposition is still so out of touch with New Zealanders. I guess that every Opposition takes a while to adjust to its position in life, but we would have expected that by now the Labour Opposition would start to realise that it is completely out of sync with what most New Zealanders are saying.

Mr Phil Goff’s comment that we did not have to worry about Standard and Poor’s rating again shows complete economic illiteracy. We heard my colleague Nick Smith talk about a figure whereby if we had not succeeded in convincing Standard and Poor’s that we were prepared to be serious about the gap, the debt track, that that previous Labour administration had left us with, there would have been a rating downgrade. There would have been $600 million extra paid by New Zealanders, not only by businesses but also by people like me and other New Zealanders with a household mortgage. They would have paid more, and considerably more, if we had not been prepared to present a Budget that showed that we were concerned about the ever-increasing debt level, and that we were concerned about what we would potentially hand on to the next generation of New Zealanders. That is why this Budget has been so widely acclaimed by most commentators—with the exception, I might add, of every Labour member and Rod Oram, but that would not surprise too many people. There has been a very careful balance between continuing to invest—and there has been a substantial amount of investment—and continuing to control our debt.

In my portfolio areas I have been concentrating on making sure I can address what I see as a very serious lack of investment in the primary sector by consecutive Governments. This economy is built on primary production. For a long period of time we have achieved dramatic productivity increases on farms like mine and that of my colleague Nathan Guy. But if we are truly honest about those productivity increases we have had over recent years, we acknowledge that most of the research work was done probably 20 or even 30 years ago in places like Massey University and Lincoln University. It was something that seriously had to be addressed.

I pay credit to Mr Jim Anderton, because he saw this deficit of investment in the primary sector, and he attempted to set up a programme called Fast Forward. He was right in recognising that we had a deficit of investment that had been going on for decades. He was right to involve a programme with co-investment from industry. But where he was in absolute fairyland was with his notion of creating a fund of $700 million that would magically grow to $2 billion while being drawn down on over the next 15 years. No one understood the voodoo economics of Mr Anderton, so I was determined to deliver something better. I have achieved that. The Primary Growth Partnership is substantially bigger than Fast Forward would ever have been.

Hon Maryan Street: That is nowhere near remotely true.

Hon DAVID CARTER: Let me give the member the figures. Mr Anderton said Fast Forward would deliver $700 million in 15 years. The member can work it out for herself from the Budget document. This programme will deliver $1 billion in 15 years. Even Maryan Street can understand that $1 billion is bigger than $700 million. Well, we would hope that she would be able to understand that.

Hon Dr Nick Smith: No, I wouldn’t count on it.

Hon DAVID CARTER: Well, it is not too much to ask, is it? I know that we have a literacy problem in this country, but if Maryan Street cannot understand that $1 billion is bigger than $700 million, then I hope that she never becomes finance spokesperson for the Labour Party.

This Budget has finally rebalanced the excessive spending of the previous Labour Government. It does have debt increasing, and I do not want to see that debt increase any more than it has to, because I am concerned about my kids finding a future in this country. Every bit of debt we build up now has to be paid back by somebody. I want to make this country attractive enough for my kids to want to live here, and that is what drives me here in Parliament. It is what drives me to make sure that I fulfil my election commitment to get out there and build up a really credible fund around primary sector investment. The Primary Growth Partnership has done that. It has received acclaim from every major organisation involved in the primary sector, and I am personally very proud of it.

TIM MACINDOE (National—Hamilton West) : Along with my colleagues on this side of the House, I pay a very warm tribute to the Hon Bill English for producing a prudent, principled, and responsible Budget in the most difficult economic circumstances imaginable. Tonight we have listened to Labour members resort to talking in this debate about everything they can think of but the Budget. Damien O’Connor was pretending that he was delivering his maiden speech in Parliament, but he delivered lines that were so clichéd and corny that even his colleagues were wincing as he did so. George Hawkins rose to say he wanted to sing the praises of the National Government, which I thought would be good. And then he did so, as he proceeded to tell us why all of the members who have been on this side of the House tonight are fit for ministerial office, and all the members over there agreed that indeed we are. Finally, Carmel Sepuloni attacked the Prime Minister for spending time with Pasifika communities. I tell Ms Sepuloni that she may not like that, but the Pasifika communities do, and they welcome the Prime Minister every time he spends time amongst them. But none of those members have focused on the core messages of the Budget. As the Minister of Agriculture has just pointed out, some of those messages should leave those members hanging their heads in shame.

Let me fill in some of the gaps for the benefit of the Labour members. I am delighted to support a Budget that not only is right for the times but also demonstrates how responsible and appropriate the National-led Government’s measures have been since it took office just 7 or 8 months ago, in the midst of the worst economic conditions faced in more than a generation. Labour members know deep down that that is true.

Hon Steve Chadwick: Ha!

TIM MACINDOE: Let us go back to some of the sobering messages, I say to Ms Chadwick, that New Zealanders recognise, and that even Labour members, when they are away from this Chamber and behind closed doors, do recognise when they are forced to. Those messages have made preparing this Budget a challenge, and they really demonstrate what a great job the Minister of Finance has done. Let me remind members of some of the figures that he pointed out in his speech on Budget day. In the 5 years to 2009, core Crown expenditure will have increased by 49 percent, and in the same period of time the tax take will have risen by only 25 percent. The nominal economy will have grown by only 25 percent.

Anybody with even the most rudimentary understanding of economics knows that we cannot carry on like that. No household could carry on like that; no individual could carry on like that. In fact, only a New Zealand Labour Government could believe that we can carry on like that.

Hon Steve Chadwick: Why did the Government promise tax cuts in October?

TIM MACINDOE: I say to Ms Chadwick that Labour created this mess. The previous Labour Government created this mess. It may not be responsible for the global recession, but it is responsible for the mess that National has inherited.

Hon Steve Chadwick: I am asking about tax cuts for the wealthy.

TIM MACINDOE: Now we have members like Ms Chadwick yapping from the sidelines, with disingenuous criticism of National’s decisions. Those decisions reflect our responsibilities and our determination to clean up the mess that Labour created, and to create the conditions that are conducive to economic recovery. I say “Good on John Key, and good on Bill English and the other Cabinet members, for facing up to that responsibility.” New Zealand could not have continued down the path that Labour was taking it.

Hon Steve Chadwick: Oh rubbish! Tax cuts for the rich only.

TIM MACINDOE: Allowing debt to accumulate, I say to Ms Chadwick, would be the surest way to put in jeopardy the social services that that member constantly harps on about.

We have shown our commitment to the district health boards and to core health spending. We have shown our commitment to the sectors of education that are absolutely crucial, through a Budget that is responsible and focuses on those important areas.

Hon Steve Chadwick: Tell us about health camps.

TIM MACINDOE: We have a message from a cracked record coming from the member on the other side of the Chamber. Ms Chadwick is struggling to identify the measures in the Budget that she disagrees with. When we scratch beneath the surface of these Labour members, we find that they will admit that we got the core decisions absolutely right. They squeal about cuts because they want to ignore the achievement of a Government that has safeguarded the interests of the most vulnerable people in our society. This is a Budget from a Government that is focused on retaining and creating jobs. This Government has increased its spending—let us hear that again; this Government has increased its spending—on essential social services, and has directed it to the front line, to the services that are most important. That will make a positive difference—

Hon Steve Chadwick: Rubbish!

TIM MACINDOE: Mrs Chadwick calls out “Rubbish!”, but let me remind her that her Government created an explosion in bureaucracy that saw all sorts of money being spent in the back room, while at the same time we had hospital waiting lists growing out of control. We had emergency departments that could not cope. We had our medical staff fleeing the country, because the previous Labour Government could not see what needed to be done in order to create the conditions that would actually keep those people here.

So we are focusing on turning those things around. We are retaining and valuing our medical staff. We are getting the major infrastructure projects under way that will create jobs and unblock the things that are holding our economy back. We are building schools and maintaining schools that were falling down under the previous Labour Government. We are increasing the resources that are provided for children with special needs, and for the wonderful teachers who do such a great job of nurturing and guiding them. Those teachers have some of the hardest work to do in the education system. I say “Good on Bill English and good on Anne Tolley.” They are ensuring those teachers get recognition and get the resources they need in order to do their very important job.

We have locked in superannuation, and I want to repeat that message. The House will be rising soon, so I want anybody who is listening to this debate on the radio or watching it on TV to be reminded of the fact that superannuation is secure under this Government, and that all other important entitlements are also locked in. I say “Shame on the Labour members for trying to create the impression that that is not the case!”. They know that what they are saying is not true. Our superannuitants, and those who are close to superannuation age, need to have security about superannuation, and they are getting that under the National Government.

When members opposite talk about cuts being made in the Budget, let us remember that core Crown expenditure, excluding finance costs, is actually projected to rise by $3 billion in the year to June 2010, despite the decade of deficits that we now face after Labour squandered many years of surpluses and demonstrated its economic illiteracy by allowing low-quality Government spending to spiral out of control, at twice the rate of New Zealanders’ ability to generate revenue. Thank goodness that Labour was finally swept away at the election last year.

The Minister of Finance, Bill English, has established clear priorities, and my constituents in Hamilton West were telling me all last weekend, from the moment that the Budget was delivered, that he has got them absolutely right. As the Minister of Agriculture has said, more than 70 percent of New Zealanders, in every poll taken since the tax cuts were deferred, have said this is a good Government that is delivering a responsible Budget and we got it right. The Budget outlines the first steps on the long road towards raising productivity, lifting our economic performance, and closing the income gap with Australia. Let us remind ourselves that world growth has weakened considerably: it is at its worst level for three generations. Our major trading partners are struggling to buy our products. Even our major trading partner, Australia, has an economy that is contracting. Overall, the OECD forecasts that GDP in its member countries will drop by 4.3 percent this year alone. That is a devastating position to be in. This is an incredibly challenging circumstance for our Government, but we have risen to the challenge and we have produced a Budget that creates the pathway to recovery.

Ultimately—and Labour members need to remind themselves of this—better productivity growth is the only way to create jobs and sustain the high living standards that we all aspire to have here in New Zealand. The economic slow-down started in Labour’s term of office, and it was a product, in large measure, of Labour’s irresponsibility in spending more, borrowing more, and ensuring that we all saved less. Yet we hear members like Carol Beaumont suggest that the tax cuts that came into force in April were not stimulatory. Well, she should look at the retail sales figures. Of course we know that things are down, but without those tax cuts they would be down a lot more. That is why tax cuts are stimulatory and why they are deferred, not cancelled. They will be restored when the economic conditions are right.

I also want to focus on the fact that Carol Beaumont deplored the Government’s honouring of its commitment to fund private schools. I remind her that the parents who pay school fees to independent schools contribute as much to the Government through the GST they pay on those fees as the schools receive from them in funding.

Carol Beaumont: Is it fair that they got three times the funding?

TIM MACINDOE: Of course it is fair, because those parents are already paying through their taxes for the State system, and they pay for their children as well. So the member should put her prejudices back in the box and actually thank those parents for their public spirit.

Carol Beaumont: Is that fair?

TIM MACINDOE: It is absolutely fair, and it is very important to recognise the fact that every one of the schools that is forced to integrate—and I understand that a number of them are looking at integration, because they are facing tough times as well—will be a major drain on the New Zealand economy.

• Debate interrupted.