Imprest Supply Debate
Hon BILL ENGLISH (Minister of Finance)
: I move,
That the Appropriation (2011/12 Supplementary Estimates) Bill and the Imprest Supply (First for 2012/13) Bill be now read a second time. This supplementary estimates legislation carries on in the same tone as Budget 2012, with more sensible fiscal management in difficult times. It is another means by which the Government can continue on the path to getting better results for public services.
It was fascinating to see over the last couple of days how the political Opposition reacted to the Government announcing 10 results that it is going to be chasing for better public services. I think it was described by one prominent Labour member as pretty well all meaningless stuff—pretty well all meaningless stuff.
Mike Sabin: Mr Parker did the same thing this morning.
Hon BILL ENGLISH: Oh, did Mr Parker do the same this morning? “Pretty well all meaningless stuff.” Actually, for the Labour Party, it is. Getting results is exactly what it does not want, because getting results means smaller government. Imagine if more teenagers stayed on the rails and did not get in trouble. That might mean, perhaps, fewer social workers. It might mean a smaller Government department somewhere. Of course, in the Labour Party’s world that is failure. It is failure. If you end up with smaller government because the community is working better, then that is a failure.
The Labour Party now represents only one thing, and that is the industrial interests of some parts of the public sector. That is it. In our interaction with those people who are providing public services, more and more of them do not want to be represented by the Labour Party, because those people on the front line want to get results, and the Labour Party does not. More and more public servants now understand that, and some of their traditional allegiances are therefore weakening.
This Government is determined to pursue the notion of getting results, and in this context can I compliment the Prime Minister. He is the first Prime Minister I can recall who has been willing to go out in public and say: “Here are 10 things we want to achieve for public services.”, and say exactly what they are. I do not think—well, I know that the previous Labour Prime Minister did not do that. She did not do it. She never actually went out and said: “Here are 10 things we want to do better.” That is actually a much more difficult thing than going out to say: “Here are 10 things. We have got more money, and we are going to spend it on them”, which is what usually happens.
The Labour Party says: “You know we care, because we got another $30 million.” Well, if that worked, why, after a decade of a Labour Government with more money than it knew what to do with, did we end up with worse intractable social problems at the end of that decade than we had at the start? I mean, that is the measure of it. Why were crime rates worse at the end of that decade than at the start of it? Why was long-term welfare dependency worse despite the best economic decade the whole world had had in two generations? Why was long-term welfare dependency worse at the end of that decade? The reason is that you can spend endless money on these things and show you have got more public servants to do it, but if you do not focus on getting results, and adapt when you discover that the programme is not working, then you are not going to get results; you are just going to spend an awful lot of money.
Hon Annette King: Give us some results. Give us 4 years of results.
Hon BILL ENGLISH: Well, I will tell the member one very good result. For the first time in a generation we are going to close some prisons. There is nothing that saves money like closing prisons. Look, I know it means fewer prison officers. I know that is a failure! It means fewer prison officers, which means fewer members of the prison officer union paying their fees to the Labour Party. We think that is unfortunate for the prison officers, and we are going to try to get them jobs elsewhere. But it is not worth keeping a prison open to employ the prison officers. That is the difference between the National Party and the Labour Party. Labour would rather keep the prison to keep employing the prison officers. We would rather have fewer prisoners reoffending, and close the prison. It is pretty straightforward.
And we would rather have some performance in our public services. If we take the justice and the law and order areas, the Government has negotiated a world-leading contract with, I think, the consortium that is going to run Wiri Prison, which focuses on reducing reoffending. Along with another example, immunisation rates, these are things Governments have talked about for years without making any appreciable progress and without making any real difference. So the kinds of results that the Government announced the other day are not new. It is not as if these are a different set of aspirations from what has been articulated by Governments for decades. The difference is that we are taking it seriously. We are going to put these results into the performance expectations of public sector chief executives. We are going to have real-time, total transparency for the public to examine whether we are making progress on these results, and we are going to put ourselves to the test.
We would hope—and I would guess, actually—that the Labour Party is interested in reducing the number of assaults on children. In fact, I know it is—I take it for granted. But I hope it will support the changes that go with that. I suspect that it will not do that.
I suspect that those members will say: “We want to reduce the number of assaults on children, but if you do anything different with social services, that’s bad. That’s the mean, nasty National Government.” Well, actually, I think the public has moved on—well ahead of the Labour Party. The public accept that in order to get results we will need to change things. In fact, we have been changing things. In the last Budget there are $4.5 billion of new initiatives funded from $3 billion of savings.
The best things for fiscal policy are the things that are the right results for the community: a teenager who stays on the rails, a prisoner who does not reoffend, a vulnerable child who is not assaulted. That is how we save money, and this Government has set store by getting better results in order to get back to surplus, not by going around cutting services.
That fits in the broader picture of an economy where we have to focus strongly on competitiveness and on productivity. The world is making it harder to rebalance this economy away from consumption and debt and towards investment and savings and a highly productive export sector, but that does not mean we are going to stop trying. In fact, what it means is that we are going to have to try even harder, because if people want higher incomes and more jobs and more job security, then we need to have a steadily growing economy. The supplementary estimates are being delivered in the context of more dark clouds on the horizon around the world. It is our view that by taking considered and consistent decisions about both our fiscal progress in getting to surplus and our drive for productivity and competitiveness, New Zealanders can look forward to moderate growth that will help underpin their job security and give them the opportunity—
The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.
Hon DAVID PARKER (Labour)
: What a load of bollocks that was in respect of targets! Bill English said we in the Labour Party criticise those targets. Well, we sure do, because here we have got the National members out there again sprinkling fairy dust, promising accountability in 2017, and not acknowledging any accountability until now for their failures on so many fronts. We have them saying: “Look, we’re going to decrease violent crime by 20 percent by 2016 or 2017.” We all want violent crime down. It has actually been going up in New Zealand under this Government. More particularly, overall crime has been going up in parts of Auckland, which is suffering the results most severely of the economic deprivation caused by this Government’s policies. Then Government members come along and say: “Look, we want violent crime to go down.”, and then say that that is a result. That is what Bill English said then. The results they announced earlier in the week were that they were going to have a target in 2016. That is a result under the National Party.
What is missing from those targets, while we are talking about these targets? Well, there are no targets around the sustainability of superannuation. Nothing. Nothing. There is no target or milestone around closing the wage gap with Australia. Remember that promise? The National Party in the 2008 election said that it would close the wage gap with Australia. Has it? No. Has it agreed any milestones? No. Has it got any target for that in these Better Public Services targets? No, it has not. National members say that targets and milestones are important for accountability of the Public Service, but not if it affects them. They do not want accountability for the measures that they promised that they would achieve, because they know that they are failing to achieve them.
It is not just the wage gap with Australia. What about this promised step change in the economy? Well, you know, the other thing I was surprised about in that speech we just had from Bill English was that he virtually did not talk about the economy. At the
end he said: “Look, there are problems in the world and therefore it’s tough in New Zealand.” Again, we all know that there are problems in the world. No one expects the Government to magic away those problems, but 1,000 people a week for the last year have not gone to Australia because of the problems in Greece; they have gone to Australia because of the problems in New Zealand, and those problems are not being addressed by the National Government.
The Budget does nothing to improve New Zealand’s export performance—nothing, nothing at all to improve New Zealand’s export performance. New Zealand has now run a current account deficit for every year in more than three decades. New Zealand’s credit rating, which National members said would never drop under them, was dropped by Standard and Poor’s and some of the other rating agencies last year because of our external liabilities, our net liabilities to the world—not the Government’s liabilities to the world, because the last Labour Government ran Budget surpluses, and we reduced Government debt to amongst the lowest in the world. Even now, after 4 years of this Government, after the challenges of an earthquake, because Michael Cullen, Helen Clark, and her Governments put money away in a time of plenty—Budget surpluses that were opposed by Bill English, Don Brash, and John Key—and because Labour did that, even now, after 4 years of deficits under the National Government, New Zealand still has low levels of Government debt.
But we have got high levels of private debt, and it gets worse from here. Every year that you have a current account deficit, that deficit is bridged by either borrowing more money from overseas or selling your assets to overseas. This Government oversees both of those, and has got no plan at all in this Budget to turn it round. As a consequence, we have Standard and Poor’s saying that the biggest risk for New Zealand is our external deficit—the fact that the value of our exports does not cover the cost of our imports and our interest. Every year from here it gets worse. Treasury has it going out to 6 percent of GDP—or 6.8 percent of GDP, I think it is—by 2016. The Reserve Bank says it is a problem, the OECD says it is a problem, and the IMF says it is a problem, but National ignores it. That is what this Budget is: it is a zero ideas Budget in respect of the big issues.
What are the other things we have had in this Budget that are touched upon by the supplementary estimates? Larger class sizes. Larger class sizes is the way to improve educational outcomes, which we all—
Hon Annette King: But not for their kids.
Hon DAVID PARKER: No, not for their kids—that is right. In fact, the media disclosed the fact that a large proportion of the National Cabinet Ministers have their kids in private schools that sell their attributes to people on the basis of smaller class sizes than they can get in the State sector already. New Zealanders rebelled against that because they did not like it. Now the Government is trying to fool them by pulling the wool over their eyes by saying that it does not need to address some of these difficult issues like our export performance, like the age of eligibility for superannuation, like our need to save more through improvements to the KiwiSaver scheme, and like some more investment into the export sector by introducing a capital gains tax so that people invest in businesses on the basis of the profitability of those businesses rather than the tax bias that currently favours investment in property to the detriment of our export sector. Those are the sorts of measures that we ought to be debating today, but we do not hear one word of them from the Minister of Finance. We have these pixie dust, rainbow at the end of every street promises by National, but no way to get there.
Even National’s objective in respect of the number of people dependent on working-age benefits has as its target a higher figure than it was when it took office. Is that not abject failure? We had Bill English saying that we did nothing to reduce long-term
benefit dependency. We actually had New Zealand’s unemployment down to the lowest in the world. There were about 2 years when we swapped with South Korea. It was South Korea and New Zealand who had the lowest rate of unemployment in that year. We had domestic purposes benefits down as well. We had the DPB numbers down as well.
We had crime dropping across the country, in no small part because we had a buoyant economy, people had hope in their lives, and they were adhering to the social mores of our country because they had a sense of hope and participation in our community. When you have increasing numbers of people who do not have hope, then they ignore the rules in society more often. It is no excuse, from my perspective, but it is a reality that when you have poor economic performance you have increasing crime rates. Bill English denies that, as his predecessors did in prior National Governments, but whenever you have the economy going better you do also get drops in the rate of crime.
Growth in the economy, growth in jobs, growth in exports, and growth in income are what we needed from this Budget, and we have not got any of them. This Budget forecasts very, very mediocre growth—very mediocre growth. Even since the global financial crisis, outside of Europe average growth rates have been far higher than we have achieved in New Zealand. That is despite the fact that our two largest trading partners, Australia and China, have been the most prosperous economies in the world. And yet New Zealand has been in the doldrums. This Budget does not show any advance upon it.
I think it says a lot about the National Government that the biggest part of its economic agenda these 3 years is to change who owns what already exists. That is what is happening with these State-owned enterprise sales. That is the biggest part of its economic plan. Not only does it increase the Government deficit by $100 million per annum, not only does it increase our current account deficit overseas, and not only does it increase power prices to domestic consumers, but also these asset sales disclose how empty the cupboard is when it comes to important economic changes being brought about by this Government. The central part of the Government’s economic plan for these 3 years is to sell off those State-owned enterprises, and we on this side of the House know that changing who owns what already exists does nothing to improve our economy. We do not get any more exports out of it. We do not get any more jobs out of it. We do not get any more economic growth out of it.
What we do get is more inequality. The National Party oversees inequality very well every time it is in power. We see a move of assets and income to the higher-income people, at the expense of the middle classes and lower-income people. We have seen it in prior Budgets from this Government, where 40 percent of its income tax cuts went to the top 10 percent. It is those top 10 percent of income earners—the wealthiest people in society—who will be disproportionately buying these shares, and we will see inequality in New Zealand increase as a consequence.
This Government continues to throw out these little targets and throw diversions. We have had—
The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.
METIRIA TUREI (Co-Leader—Green)
: I listened very carefully to Bill English’s speech this morning and to the description of the targets. You know, the Green Party is a very strong advocate, actually, for setting targets for reducing poverty and for eliminating family violence, and we think there is a lot of opportunity for some better cross-party work on those targets. The problem with Bill English’s speech is that it was all just talk. It is not a question of just setting the targets or saying what he said, as nice
as it might have sounded. The practicalities of a Government and the choices that a Government makes about where it puts it priorities, whom it values, and who gets it resources are set out in the Budget, and if you look beyond the pretty words of Mr English and look at the details of the Budget, you can see very clearly that there is no commitment to eliminating poverty, and there is no commitment to protecting vulnerable families or vulnerable children, because the money is being taken from exactly those families and being delivered elsewhere—to mining companies and to the very wealthy. So it is all well and good to hear those nice words, but the Budget itself shows that those words are just not true. They are rhetoric designed for public consumption. I think it also behoves the Government to understand that the New Zealand public is just not that stupid.
This Government is failing New Zealanders every day, and it has made life much worse for those who have the least. The choices that the Government has made in the Budget are poor choices, and what it has required in that Budget is that ordinary New Zealanders pay the price for its poor economic management. There are some examples. There is the $2 billion cost because of the 2010 tax cuts. By giving a huge whack of money to the wealthy, the Government has created an economic hole, and now it is asking low-income families to pay for that. There is the $12 billion that the Government has committed still to motorways. Even though it requires increased borrowing and the Government cannot afford it, it would still rather spend $12 billion on motorways than on families. There are the emissions trading scheme pollution subsidies. The Government would still rather pay $1.5 billion to polluting companies than make sure that New Zealanders have warm, secure housing. It would rather give $400 million in irrigation subsidies to a few, despite the cost to the environment and to the rivers, than make sure that all our kids have access to a high-quality public education service. And, of course, there are the asset sales. Treasury itself has shown that the Budget deficit will be made worse as a result of the asset sales. Well, that is $100 million a year that the Government is prepared to waste to meet its ideological drive to sell off New Zealand’s assets.
Having made these bad economic decisions about where it is putting its money, the Government is now looking to New Zealanders to pay the bill. And it is not just ordinary New Zealand families but their children—the very vulnerable children and the young people Bill English was talking about this morning. The first tax cuts were supposed to be paid for by the increase in GST, which vulnerable families had to pay. The Government is now going back to low and middle income New Zealanders and saying: “Please pay some more.” Please pay some more in your student loan. Please pay more in your student allowance. Please pay more by having your training incentive allowance for beneficiaries taken from you. Please pay more for early childhood education. Please pay more for your prescription charges. That is what this Government is asking of low and middle income families. Please pay more so that we can continue to dole out our resources to the people we like, like the mining companies, the emissions trading polluters, and others.
We did some analysis of this to look at how families have been affected by this Government’s Budgets over the last few years, and this is what we found. A solo mum of one who is on a benefit, who is also working part-time—so she is involved in her community—is $5,000 worse off today because of National’s economic management. A typical family with both parents in work, with three kids, earning around $70,000—a very average family in economic terms—is $11,000 worse off because of this National Government’s poor economic management. But someone who is earning $400,000—say, someone on a Prime Minister’s salary—who has two kids, is $19,000 better off as a result of National’s policies. So we can see, just with a very simple analysis of
National’s economic management, who is getting the money and who is being asked to pay. And who is getting the money? It is the very wealthy. Who is being asked to pay? It is the very poor.
I sit here and listen to Bill English talking about how the Government wants to set targets to help protect vulnerable children, and I know that that is just a lie, because the Budget tells me—
The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member will withdraw and apologise for that comment.
METIRIA TUREI: I withdraw and apologise. The Budget tells me what this Government actually wants to do, which is to take money away from low-income families, from those vulnerable children, and give it away to the wealthy. We see that over and over again.
The Green Party has been very clear that we are committed to reducing inequality in this country and to ending child poverty, and it is also clear that our solutions work. The best example of this, of course, is the home insulation scheme. In a deal that was done between the Greens and National last term, and the Greens and Labour the term before, we established the home insulation scheme. It was originally designed to see what kinds of savings could be made in energy, but, actually, it turns out that for the $300 million - odd that is spent to insulate New Zealanders’ homes, the country saves $1.5 billion in health costs. It is an enormous, fantastic economic success. By investing $330 million in New Zealanders and their families and their homes, $1.5 billion of health savings is returned to the entire country. And not only that but the research shows that the lives of 18 elderly people have been saved as a result.
That is the kind of green economic solution that actually does do what we said it should do. It does make lives better for ordinary New Zealanders. It does protect the health of those who are the most poor—in this case, mostly those who are very elderly and living alone. It does have huge economic benefits, not only in creating jobs but in health savings to the country as a whole. These are the kinds of successful solutions where clear and careful investment of Government money into those solutions that work for families does deliver. It is one of the success stories of the green economy. It is also true that the Budget failed to allocate any more money for that scheme, and we will continue to work with the Government to see whether we can get it to at least contribute something, given that so many businesses now and so many communities are involved, and so many families take such a huge benefit from it.
Not only are there significant costs to New Zealand families as a result of this Budget but there are also real threats to the environment. We know that our rivers and lakes are under threat from dairy intensification. There are increased subsidies for irrigators. Over half of our monitored rivers are unsafe for swimming. That means our kids, our vulnerable kids, are not safe when they go out swimming in New Zealand waters. National, of course, makes plans to make it much worse by subsidising more intensification—mining our soils, as someone described it. Well, of course, that is not all that National is mining. Those members are talking about mining World Heritage sites now, of course, too. I understand that John Key has said that they just want to look at what is in the World Heritage sites but they will not touch. It is a bit like a child who just wants to count the lollies but promises not to eat them. Yeah, as if New Zealanders believe that!
New Zealanders know rhetoric when they hear it. They know that this Government is demanding that New Zealand families pay the cost for its poor economic management, and that means that ordinary New Zealand families will suffer. Not only, as our analysis has shown, are ordinary families much worse off now than the very rich families but there is the increased cost to these families over time of the failed transportation
decisions, prescription charges, and early childhood education, and the continual fights that our community has to have in order just to maintain essential services like reasonable class sizes so that their kids get a decent education. These are all costs borne by families, and those costs are imposed by this Government through the choices that this Government makes about where it puts resources.
Every Budget demonstrates the values of a Government, and this Government does not value children, families, and communities. The Green Party is here to stand up for children, families, and communities. Thank you.
ANDREW WILLIAMS (NZ First)
: I take a call on behalf of New Zealand First on the Appropriation (2011/12 Supplementary Estimates) Bill and the Imprest Supply (First for 2012/13) Bill. We heard from the member from Dipton, otherwise known as the “Double-dipper from Dipton”, and what a disappointing speech—what a disappointing speech. New Zealanders are increasingly feeling that this Government seems to be just rearranging the deckchairs on the
Titanic. Basically, it is just playing around on the fringes, playing around on the edges, but at the end of the day really not making a quantum change for New Zealand to take New Zealand forward, to grow the pie, to grow the economy, to grow jobs, to grow opportunities in New Zealand, and to grow business in New Zealand. The Government is just rearranging the deckchairs on the
The National Government inherited 7 or 8 years of surpluses, and immediately—immediately—took this country into deficit. It started with an $8 billion debt—it started with an $8 billion debt—and today we are in excess of $52 billion, some 3½ years later. How does anyone run a company, how does anyone run a household, how does anyone run anything where you take the debt from $8 billion to $52 billion - plus in 3½ years? The Government is not even saying that that is the end of it. The Government is saying that there is worse to come—in another 2 or 3 years we will be over $70 billion in debt. It is no wonder New Zealanders are increasingly saying: “What have we let loose here—what have we let loose here? A Government that basically, really, is inept.”
The Government keeps promising that front-line services will not be cut, and there is all this rhetoric about front-line services not being cut. And yet week by week all we hear about is more 0800 numbers being started up by the various Government departments and ministries, and more and more call centres being set up, half of which I do not think are even in New Zealand, to service the needs of New Zealanders. I have constituents who say that now they wait on the telephone for 45 minutes to try to get a response from a department, and that is what this Government has provided for New Zealanders. If they have a problem with the Housing New Zealand Corporation, if they have a problem with Work and Income, if they have a problem with ACC, they sit and they wait, and they wait, and they wait on the 0800 number, and if they are lucky they will get somebody on the end of the line.
That is what this Government is doing. Does this Government care about that—does this Government care about that? I do not think so. The Government says that it is changing the way that the economy is run and it is changing the way the figures are controlled, but most of it is just moving things into things like 0800 call centres, so basically the services of New Zealand are in decline. It also seems to be very hypocritical, because on the one hand it says that everyone must tighten their belts, everyone must take cuts—
Mike Sabin: I raise a point of order, Mr Speaker. The member made reference to the word “hypocritical”.
The ASSISTANT SPEAKER (Lindsay Tisch): No, no. He did not. He said that it was hypocritical.
ANDREW WILLIAMS: Thank you, Mr Assistant Speaker. As I was saying, quite rightly, it is hypocritical of this Government to ask for everyday, good New Zealanders to tighten their belts and make cuts and sacrifice services, whilst, for instance, the Department of the Prime Minister and Cabinet just balloons out in terms of the costs. From a relatively small staff under the former administration, look at the huge swell in numbers in the Prime Minister’s department. I understand that there are now floors and floors of people there servicing the Prime Minister. Hundreds of people are servicing the Prime Minister, basically, when in former administrations there was a fraction of that number. Large numbers of security guards and spooks follow around behind the Prime Minister, even going to Hawaii on holiday with him—even going to Hawaii. Who would even know who John Key is, in Hawaii? Nobody would even know the man. Nobody would even recognise the man—he would not even be known. But, no, he has to take his private spooks along, paid for by the New Zealand taxpayer, so that while he is lying around a swimming pool with his wife and children, while he is having a lovely time in Hawaii, he looks important. When he goes down to the cafe and the coffee shop, he has these guys with all these wires hanging out of their ears so that he can look important when he walks into the restaurant, so that if he just happens to meet his mate Obama down at some restaurant, he can walk in with all his guys with the curly wires hanging out of their ears.
That is what this Government has come to. It is all about face. It is all about putting on this big front. It is all about the smiley, happy-clappy stuff and looking good. It is all about “Mr Spray and Walk Away” wanting to make a Government look good. Meanwhile, the very same person who holidays in Hawaii—he does not holiday in New Zealand; he holidays in Hawaii—is a major shareholder in ski fields in the United States. Not ski fields in New Zealand—he is a major shareholder in ski fields in the United States, not New Zealand.
Meanwhile, we watch our tourism in decline. We read this weekend that New Zealand is falling off the radar, that New Zealand is no longer seen as an attractive destination in many of our major tourism resource markets. Is that not appalling? Yet that same gentleman, our Prime Minister, is the Minister of Tourism. Goodness knows why, because he said at the beginning when he became the Minister of Tourism that he would use the influence of his office of Prime Minister to help improve tourism in this country. Well, it has been a failure. It has been a failure. Why should we have the Prime Minister as the Minister of Tourism with the results he has achieved?
And again, we were promised that this Government would grow the pie and increase jobs, and it started off in the first year with a Job Summit in Auckland, at the TelstraClear Pacific Events Centre. That Job Summit was going to bring all the chief executive officers and top brains from around New Zealand, and grow the New Zealand economy and grow the jobs. This Job Summit was going to grow—well, what has it done? It has done nothing. There are more people now queuing up on unemployment than when that Job Summit was held. There are more people travelling across to Australia—50,000 a year—than when that Job Summit was held. And just a short time before that, when John Key was the Leader of the Opposition, he stood in the Westpac Stadium in Wellington and he said—and we all remember this—“I am standing here in the Westpac Stadium, which holds 35,000 people, and this is the number of people who are leaving every year to go to Australia. And when I become Prime Minister, I am going to put a halt to that. I am going to put a halt to that. We will reduce those numbers.” Well, what has happened?
Iain Lees-Galloway: It’s Eden Park.
ANDREW WILLIAMS: Eden Park—dead right. Eden Park holds 55,000 people, and now John Key can stand in the middle of Eden Park and say that under his watch,
under his administration, 55,000 people a year are now going to Australia. He can rightfully now stand in Eden Park and say that.
It is appalling. We are seeing lip-service from this Government. We are seeing lip-service from a failed administration that basically is not really doing things. It is attacking good aspects of New Zealand left, right, and centre. It is attacking, for instance, local government—something very dear to my heart. It is taking local government apart. It is really, really putting the boot into local government. Again, a quote from John Key when he was Leader of the Opposition: he said in a speech to local government “We have to work in cooperation, because if this country is going to succeed and grow our infrastructure and grow our economy, we, as central government, have to work with local government.” And what does this Prime Minister and this Government do? They just continue to put the boot into local government, put the boot into the regions, put the boot into things like the Mayors Taskforce for Jobs, and put the boot into our education sector by dividing the education sector and trying to tear it apart.
Left, right, and centre this Government is not doing well by this economy. We have seen the failure in the Ministry of Foreign Affairs and Trade, and how the Government tried to decimate our front-line services around the world. Our front-line services around the world it has tried to decimate, and it is not good enough. New Zealand First will continue to oppose many of these measures of this Government, because they are not good and they are not in the interests of everyday New Zealanders. New Zealanders are waking up to this. They are seeing the Government selling out our country. They are seeing it selling the silverware: the power stations, the dams on the Waikato River, the dams in the Tongariro, the dams in the South Island, and the geothermal stations around Taupō. They are seeing all these being sold out from under them, and New Zealanders are increasingly saying: “We don’t trust this Government.” There will be changes and they will be coming in 2014.
TODD McCLAY (National—Rotorua)
: It is a pleasure to rise and speak in this debate. I was not sure how to start my speech, until Mr Williams gave us an autobiographical account of life as a mayor of North Shore. He said: “Spray and walk away. Spray and walk away.” Those were the days when he was there as the mayor. He also mentioned to us that he had been talking to some of his constituents. Well, here is a little wake-up call, Mr Williams: you do not have constituents, you are a list MP. It was Maggie Barry who won in that seat. She has constituents. Maggie Barry has told me she got 20,000 votes and you got 1,000 votes in that election. I did not realise there were 1,000 people in that electorate who had lemon trees. “Spray and walk away” was the theme of that last speech.
This is a very important debate today because it was an excellent Budget for New Zealand and an excellent Budget for New Zealanders, delivered by an excellent Prime Minister, John Key, and a hard-working Minister of Finance, Bill English. The Government has an economic plan. New Zealanders knew about it, they voted for it, and we are now delivering on it.
Earlier in the debate David Parker spoke about his concerns about direction. He told us a bit about his vision for New Zealand. Well, that was economic policy by David Parker of Athens—Athens in Greece, of course, not Epsom, where he also stood. Another colleague in the House got so many more votes; in fact, I think more Labour Party voters voted for my colleague in Epsom than for the Labour Party candidate at the time.
Can I say that our Budget is about reducing debt and investing in New Zealand and New Zealanders, about working hard to get back to surplus by 2014-15, and about less borrowing, less wasteful spending, and greater investment in New Zealand assets, and
we will grow them over the next 4 years to $267 billion worth of assets. They are important assets for New Zealanders: schools, hospitals, roads, infrastructure—things that make us more productive and get ahead. Focus on what people can do, not on what they cannot do. I was reading a story to my young daughter the other day. It was about the little engine that kept saying: “I think I can, I think I can.” Well, the little red engine on the other side is the engine of “can’t”. The Labour Opposition says: “New Zealanders can’t do anything. Nothing is right. We shouldn’t do anything at all—can’t, can’t, can’t.”
Of course, we are reforming the welfare system, getting back to helping New Zealanders, supporting them back into doing the things that they can do, and not merely focusing on what they cannot do. As a speaker said earlier in the debate, this is not about taking people on the unemployment benefit and moving them to a sickness benefit or an invalids benefit, which happened over 9 long years of a Labour Government; this is about supporting New Zealanders, helping them get the skills they need to be productive in our society, and telling them that this Government has their back and we know and believe that they can do more.
In law and order, we are making New Zealanders safer—making New Zealanders safer—which is something that has been important to this Government over the last 3½ years. We are recognising the rights of the victim, not the criminal—putting the victim first. We are supporting our communities, supporting the police, and making New Zealand a safer place, and the statistics are showing this and proving it.
Finally, we are focusing on productivity and growth. We are a trading nation—productivity and growth. The more productive we are, the more competitive we are. When we export our goods overseas we will earn more for them. That is better for our country. Businesses will invest in their own businesses. They will employ more. This is about supporting New Zealanders and New Zealand businesses, not about the Government employing and the Government taking money off others, recycling it, putting it back into the economy, and growing a system of dependency.
Over the last 3½ years the National Government has taken a moderate and balanced approach to managing the Government’s finances. I want to recognise that this 3½ years has been extremely difficult for many New Zealanders, as it has been for many countries around the world. This has been part of a much wider economic programme to put the economy on a sounder footing. We have constantly reprioritised spending, and what we have done is made sure that when we spend taxpayers’ money, they deserve a return on it. So we have not just said in the area of health, where the Minister Tony Ryall has worked effectively and hard over 3½ years: “Here’s a lot more money. Go and see what you can do with it.” We have said: “The taxpayer deserves more bang for that buck—more operations with the money you have.”
The great news is that Mr Ryall has increased spending in health, but also productivity in health has increased dramatically. In the Lakes District Health Board in my electorate, last year, the year before, and again this year, we have had more elective surgery operations than in any year ever before with almost the same amount of money. That comes through the hard work of doctors, nurses, and experts, and they are backed up by Tony Ryall. They know that Tony Ryall supports them, which is something they did not know of the last Minister over the last 9 years of a Labour Government. We have also said that for the past 3½ years the Government has provided responsible economic management at a time when New Zealand very much needed it.
I want for a moment to talk about a fantastic announcement by our Prime Minister, John Key, this week. He said that for New Zealanders, we will set 10 targets to challenge our public sector over the next 5 years. [Interruption] I am going to read out what those 10 targets are, because already there is a cacophony of people on the other
side of the House who should be finding something more productive to do, and who are naysayers. As I said earlier, that is the party of “can’t”—“You can’t do this, you can’t do that, you can’t do these other things.” All those members are about is being “can’ts”, and I do not think that is what New Zealanders want.
I received a text this week on the 5-year Public Service targets. It said: “Dear Todd, congratulations on the Prime Minister’s announcements. Not sure if I’ve missed these before. Perhaps this is the first time I’ve seen a Government come out with clear, well-defined 5-year targets. It would have been good to see these targets done earlier. Well done. It’s so important for the general public to see where as a country we are heading, with concise targets such as these. Have a great day.” Not a Labour Party supporter—that is right. Not a Labour Party member of Parliament, because that text is all about what we can do, not what we cannot do. The little red engine that thought it could, but actually it could not—it cannot.
So what did the Prime Minister say? He set 10 clear targets for what it is that we must do in New Zealand. Reducing long-term welfare dependency—reducing the number of people receiving the new jobseeker support for more than 12 months by 30 percent, from 78,000 to 55,000 by 2017. What an admirable target. On this side of the House we will work hard to make sure that we achieve that. Why would we do that? I firmly believe that when people are in work they and their families are better off. We want to back New Zealanders to help them do the things they can do, not tell them what they cannot do. Supporting vulnerable children—what did we hear from one of the members opposite yesterday? These targets are not important.
Jami-Lee Ross: Meaningless.
Alfred Ngaro: Meaningless.
TODD McCLAY: Meaningless, meaningless. Well you know what happened on 26 November last year. The New Zealand public told us what was meaningless. The Labour Party got the lowest vote ever under MMP. That is what meaningless was.
Supporting vulnerable children will ensure that by 2016, 98 percent of children starting school will have participated in early childhood education—fantastic. Not only have we put much more money into early childhood education, we are going to make sure that those who are least advantaged, the most disadvantaged, are helped to get their kids into early childhood education, so that they can get on the road to better education and better achievement.
We are going to increase infant immunisation rates to 95 percent of 8-month-olds—a fantastic idea. Well done, Tony Ryall. I know that we can do this. We will reduce the incidence of rheumatic fever by two-thirds by 2017. This is a disease that should not be in New Zealand. We all in this House need to join hands to find ways to support that and to change it. We will help stop the 10-year rise in children experiencing physical abuse, and reduce the number of children experiencing substantial physical abuse by more than 1,000, on projected numbers, by 2017. Actually, would it not be great if we could join together and find a way to do that? Minister Paula Bennett is focused on making sure the lives of our young people are better and that they are better protected.
We are going to focus on boosting skills and employment—on 85 percent of young people getting the National Certificate of Educational Achievement level 2—and reducing crime is very important for us. On the opposite side of the House they say it is not happening. Well, look at the statistics. Get out and talk to people. Talk to some of Maggie Barry’s constituents and you will see that New Zealanders are feeling safer, but we have a long way to go here because we want to put the New Zealand public first and the criminal second. There are some other changes around businesses so that they can have a one-stop shop in dealing with the Government, and so that New Zealanders are
able to complete many more of their transactions with the Government in a digital environment.
I say to you that this is a Budget for the people. We are a Government for the people. We have a Prime Minister of the people. I think that this is a wonderful thing that we are doing here today, and I commend this legislation to the House.
Hon CLAYTON COSGROVE (Labour)
: So now we have it. After 3½ years, National has announced some targets. Remember, it had some targets 3½ years ago when it won its first election. What were those targets? A brighter future was the first one. Closing the gap with Oz—that is gone; that has been torpedoed, vaporised.
Then it had the target—and the member speaking before me, Todd McClay, talked about unemployment—“Oh, we’re going to get unemployment down. We’re going to assist.” In fact, the Minister for Social Development, Ms Bennett, said: “We are going to assist people into jobs.” Well, here is the go. Now we have 50,000 more people unemployed than there were 3½ years ago, thanks to that target, thanks to that Minister.
Then, of course, National was going to reverse immigration. Remember that? Andrew Williams talked about that. That was another target 3½ years ago. Now we have, of course, 52,000 people a year—1,000 people a week—going to Australia. As my colleague David Parker said, it has nothing to do with Greece or Spain or Portugal or the global financial crisis or the world economic meltdown. Oh no! They are off for the brighter future on the Gold Coast. So they were the targets that National had—50,000 more people unemployed. And it asks us what we would do.
At the last election we had a really simple thing. I note that Todd McClay, of course, never mentioned the earthquake. The earthquake is a tragedy, but the earthquake is also an opportunity. It is the world’s biggest training scheme. That is what it is—the world’s biggest training scheme. We knew—the Government knew—almost 2 years ago now, when the first one hit, that we were going to need 20,000, 30,000, 40,000, or, some people say, 50,000 trades-trained individuals. We have the other side of the equation, thanks to Paula Bennett, of nearly 89,000 young people not in work, not in training, languishing in the dole queue. I think that is another target displaced and disregarded by the National Government.
The question for the National Government is this: why is it that it cannot match a large group—89,000 young people—to a massive training opportunity in Christchurch? We now know that the Government has spent a minuscule amount on trades training of the trades-training budget—$42 million was put aside; I think it has spent $7 million. Right? So why can it not get the group of unemployed off the dole and into training? Yes, it might cost some money; yes, that is true. But the payback is that those young people, had they been put through trades training and started it 2 years ago, would be two-thirds through their time—productive young people swinging the hammers, turning the screwdrivers, picking up the trowel, laying the bricks, rebuilding our second-largest city, and, by the way, in jobs and paying tax.
You might ask: “Well, hang on, we’ve got no dough. How do we pay for that?”. Well, we did have a simple policy. It was to take a year’s dole and give it to the boss, and the boss tops it up with a couple of hundred dollars a week. The boss gets that for the first year to get that young person over the sort of hump when they are not productive and when they are actually a cost to the business, and thereafter the boss bites the wage bill and trains that person. A guy in Christchurch called Brent Mettrick, who is from one of the biggest residential construction firms in Christchurch, said that he had 20 gangs out there, and he would take 20 people tomorrow. It does not cost a penny because it is fiscally neutral, because either you pay the young person to sit on the dole and languish, or you give the money to the boss and the deal with the boss is that they train that person in a trade.
Now, I reckon that that is a goer. It is a bit of innovation, it is a bit of smarts, and it is backed by the business community, which desperately needs it. But, oh, what have we got over there? Nothing. Members opposite cannot even convince—and they cannot even use the money they allocated themselves to match 89,000 young people to 50,000 potential trades training jobs. Not a thing.
So here is the prediction. Here is the prediction. What will happen when the gun goes off in Christchurch is that those geniuses over there will turn the immigration tap on, because a victim does not care who does their house—they just want their house back—and you cannot tell a business to wait 3 more years until the National Government gets its act together and starts training some people. So in will come the flow of trades qualified people from offshore. In fact, they are coming now. Of course, the missed opportunity here is that the taxpayer will still be paying, as they do every day, for more and more unemployed folk. Paula Bennett’s great legacy will be—to date, and counting—50,000 more people on the dole queue. I just say, do you remember the target that National had to get unemployment down, close the gap with Oz, and turn the immigration tide round?
Remember the cycleway? The cycleway was going to be the big king-hit. We had Chris Tremain, the Associate Minister of Tourism, in before the Commerce Committee last week. We asked him, after a couple of years of sort of cycling around the cycleway: “How many jobs, Minister?”. He did not know. Well, I can tell him. There are a couple of hundred permanent jobs in constructing the cycleway—a couple of hundred—and that Minister could not name a figure. So then we asked him further, because the target, of course, was 4,000 to 5,000 jobs out of this wonderful cycleway. He could not tell us. The best we could find out was by flicking through some statistics to work out that there might be a couple of hundred people in construction.
Then we asked the Minister: “How many businesses?”, because on 17 July 2009, I think, when John Key launched this great initiative, he said: “There will be businesses opening up everywhere. They will be lining up down each side of the track to sell to tourists. They will be flocking in.” So we asked the Associate Minister of Tourism: “How many businesses?”. Well, he told the truth. He said that in Napier, I think, one was a fish and chip shop, but I am not sure. There were two businesses that he named. One, I think, was a cycle shop, actually—he will correct me when he gets up and takes a call. He named two businesses, and good on him. I will admit that that is progress, but it ain’t the target National set for this country in its manifesto.
An Associate Minister of Tourism could not tell us, after 2½ years, how many jobs there would be, how many jobs there are now, whether he had reset the target, whether there is going to be an evaluation—well, there is, apparently; evaluating what, I do not know—or how many businesses the great cycleway had generated. He could not tell us, because it ain’t many. We know that there are two in New Zealand, and to those two businesses in Napier, I say congratulations. What a fantastic opportunity they have got. Those two businesses have kicked a goal for the country, and good on them.
Then, of course, we had the financial hub. That was announced, and it was going to be the king-hit. That was going to be the new target, the silver bullet for the country, and it has disappeared off the face of the earth. Gone—never mentioned now in the 120-point plan.
So I say to National members that the best strategy that they have got—the only thing they have put up—is to rip off paper boys, kick the elderly in the guts with the asset testing, tinker around the edges, and flog off the family silver. That is all they have got. I ask them now: what is the target for jobs in the next 3 years, how many jobs will be created, how much growth, and how many new export markets will be created as a result of selling assets? A big fat zero. They crow that they have announced 10 more
targets—10 more targets. Well, announcing targets does not put bread on the table for people. It does not pay off the debt that the Government is racking up at 300 million bucks a week as a result of a tax cut where 10 percent—the top 10 percent—got 40 percent.
So the Government just keeps announcing targets, and you know when a Government is sort of out of ideas, because there are just more targets coming out. You know, it says there is a war on this and a target on that, and the best gimmick it could come up with last week was Anne Tolley standing on the wreck of a car body. What a genius!
Hon Annette King: In her stilettos.
Hon CLAYTON COSGROVE: In her stilettos. Well, I do not own a pair of stilettos, but I am told by Annette King that it is rather difficult—
Hon Members: Are you sure?
Hon CLAYTON COSGROVE: I am sure about that—I am sure about that. It is difficult, they say, to stand on the bonnet of a car in stilettos, and sort of “Rambo-ette”-like was Anne Tolley.
So the National Government’s plan is to re-announce and re-announce targets, such as a 10-point plan for the Public Service, and to tinker around the edges, with no real strategy and no mention of what the growth target is or how many export markets will be opened up. Even the clichés from Todd McClay: “We want to help people into employment.”—great aim; we all agree with it. But where is the evidence that anything has happened? “We have got 10 targets”—he said—“for the Public Service.” Great! You have had 3½ years to actually produce the goods, and the country has gone backwards, absolutely backwards.
I say that this crew, even “Rusty” in the corner over there—even “Old Rusty”—has no targets. What will she say to her people? “Well, unemployment’s up. The gap with Australia’s opened—they’re 38 percent ahead in wages. Well, the country’s gone backwards, but we’ve announced some more targets. We’ve announced some more targets.” Well, I say this. It is going to be a big target, all right. It is going to be a big bull’s-eye. It is going to go on the back of every member over there, and the people of New Zealand will take aim. They will take aim in 2014 and, by God, they will hit the bull’s-eye.
Hon PAULA BENNETT (Minister for Social Development)
: I seek leave to table the benefit numbers for the month of May, which will show—
The ASSISTANT SPEAKER (H V Ross Robertson): OK. Is there any objection to that course of action being taken? [Interruption] Thank you. There is objection. [Interruption] Order! I know that it is early.
Just before I call the next member—[Interruption] Order! Can I just inform members that yelling across the House—that interjections are permitted, but it is usually aimed at the person who is speaking. We have not got anybody speaking at the moment. Before I call the next member, can I just advise the House and the whips that there will be a number of 5-minute calls coming up, and I will ring the bell with 1 minute remaining for those with a 5-minute call.
Dr CAM CALDER (National)
: It is a huge pleasure to take one of these 5-minute calls. I am just wondering whether the previous speaker, the Hon Clayton Cosgrove, was displaying wilful ignorance or a real lack of understanding, or maybe he has had his eyes closed over the last 3½ years. He talked about export markets. We have just had yet another example of the excellent work being done by our Minister of Trade, the Hon Tim Groser. The work he has done has been going on for a long, long period of time, but the most recent jewel in the crown was the expression of interest from Mexico and
Canada in joining the Trans-Pacific Partnership, which is going to add to our trading opportunities.
We have set ourselves a number of targets, and we are very happy to do that. This is a Government that is prepared to set targets and to be held to account. One of the targets we have set is to generate 40 percent of our GDP through trade. This work, through the good efforts of our excellent trade team, led by Tim Groser, will only help that. The Trans-Pacific Partnership recognises that the Pacific Basin is an area of prosperity. New Zealand’s lead role in that is well signalled and well recognised by such countries as the United States, which has put up its hand to be involved. Japan is signalling its intention. We know that Viet Nam, Malaysia, Australia, and all these countries have joined with the initial group, which was Singapore and New Zealand, to create a very powerful trading bloc in the world for the future.
It appears that there is little or no awareness of the global financial crisis on the other side of the House. There is little or no awareness of the turmoil that exists in Europe at the moment, where just a few days ago there was a second attempt by the Greeks to form a Government. They have done so, and, by the skin of their teeth, they have decided to listen to the EU, the IMF, and the European Central Bank, and to adopt the austerity measures demanded by those who are helping them weather the huge recession and financial crisis they are facing. The European financial turmoil remains a significant threat for New Zealand. However, despite this, the good work of this Government over the last 3 years has cushioned New Zealanders from the worst effects of that ongoing crisis, despite the fact that we heard in the House just a very short while ago that the previous Leader of the Opposition does not think it is actually still going. In fact, it still is. I believe that we on this side of the House recognise that it is, even though others feel that maybe it is something that New Zealand does not really have to have much awareness of.
We have had excellent results in our GDP figures. We are making progress. It may be lumpy, it may be bumpy, and it may be a little bit grumpy, but we are making progress. Primary production is up, and manufacturing is stronger. In “La-La Labour Land” these things seem to be unrecognised. In “La-La Labour Land” they seem to have no appreciation of the huge progress that has been made over the last 3½ years, which will be continued by this Budget.
One of the things we have made progress on, despite the comments made by a previous speaker on the other side of the House, is the significant improvements in our country’s safety. Security is the first duty owed to a community by the State, and all over New Zealand communities are feeling safer. In my own area of interest, where I have my office, in Manurewa, the people there in Manurewa are telling me they are feeling safe—they are feeling safe. [Interruption] They are telling me they are feeling safe. The reason they are feeling safe is that this Government has invested in them.
We are doing a lot of work to protect our most vulnerable, and this will continue with this new Budget. The work done by the Hon Paula Bennett on the white paper addressing how we can protect vulnerable children is addressing an issue that is a stain on our country’s escutcheon. It is appalling that so many of our young people have been assaulted, battered, and subjected to physical violence over a period of time, and we are putting up our hand to do something about it. And it is not easy; there are no simple, easy answers. But this Budget is determined to set targets in the Public Service. One of those targets is to improve the results for our vulnerable children in avoiding the appalling statistics continuing to increase as they have, year after year. This is a fine Budget. This is an excellent Budget.
CATHERINE DELAHUNTY (Green)
: Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. I found it interesting to hear the previous speaker, Cam Calder, say that the first
duty of the State is to provide security, when it has just sold our assets and made us all feel a lot more insecure.
I want to talk about what I think the duty of the State is with regard to education in terms of this appropriation debate. I will start with targets, because we have heard a lot of rhetoric about targets this morning. Target No. 1 was to sell assets. Target No. 2 was to sell them to pay for tax cuts for the top 10 percent of people in the country. One of the other targets is to privatise the education system, and another target is to bash beneficiaries. All of these targets are well on track, but they are not working for the people on the streets. I spent 5 hours yesterday on the streets of the Kāpiti Coast listening to citizens talking about their experience of the current Government, what they believe about asset sales, and what they think about education. It is very educational to spend time on the streets listening to what people have got to say.
I want to talk first about the appropriations, because the figures do not tell the real story. The figures are fairly opaque, and you can do what you like with them. Every Government tends to spend more on education, simply because the population grows and we have more children to educate. It has got very little to do with a real investment in it, and that is why I say that one of the targets is a privatisation agenda for the education system.
We will start with early childhood education, which is one area where there is a great claim that we have spent more money. At a recent forum in Waikato David Bennett, Sue Moroney, and I met with early childhood teachers and with early childhood teaching students who were doing their practicums in early childhood centres. In fact, both Sue Moroney and I did not really need to say anything, because those people told the Government very clearly that they were being undercut by Government policy on early childhood education. No longer can they go through an education process and be guaranteed they will get a job in an early childhood centre, because the target for qualified staff has gone from 100 percent to 80 percent. Early childhood education centres, which are all feeling the pinch due to the freeze on their funding, are not able to actually hire people with qualifications. It is a perverse educational incentive when the less qualified you are, the more likely you are to get a job in your chosen passion, which is early childhood education.
In all the rhetoric around the importance of children, the first concept we need to sort out is universalism, and then targeting. If we do not provide universal access to early childhood education, we will never meet the need, because we can never know where all those children are, and it is not possible to do an effective target without universalism. So the early childhood education experience is very bitter, and anyone who was at that forum would have heard exactly what those people are saying—that they were very disappointed that they were having to put up fees, meaning that people could not access early childhood education.
Let us move on to primary schools, because I have got only 5 minutes to talk about this subject. Again, if you look at the appropriations, the professional development budget has been narrowed into one form of professional development, and that is to ensure that schools are rolling out the Government’s agenda, and it is not an agenda that they chose. That agenda is the agenda to roll out national standards. National standards, according to the teachers and parents I have talked to, are not even properly moderated, which means you do not have them as a standard across the country, nor can they be said to be national. Apparently, a whole lot more money is about to be spent on expensive software—a programme where you can punch in some numbers and then those numbers will print out a result, and that will tell you what league table your school is going to end up in. That is not proper moderation and it is not going to make sure that we have any kind of assessment that works. I would just like to point out that the target
to increase national standards is actually a target to cut arts advisers and science advisers and whole child education.
I was outside Parliament the other day and met two American teachers who are over here looking at our system. They said: “The reason we’re here is because you have some fantastic principles that run your education system. Of course, it can be better.” But one of the things they said was: “We have lost it in the United States with education. We are assessing, assessing, assessing, and we are no longer teaching. We are not teaching the whole child. This is about whole child learning. We have seen in your schools that your teachers are committed to whole child learning.” They said to me: “If you are a politician, don’t let this happen.” Therefore, in terms of the appropriations debate, it is really important that the money gets spent on broad professional development and on supporting the curriculum. Otherwise the targets are a complete waste of time. Thank you.
PAUL GOLDSMITH (National)
: It is my pleasure to speak in this second reading debate on the Appropriation (2011/12 Supplementary Estimates) Bill and the Imprest Supply (First for 2012/13) Bill.
I am reminded of the fact that on Friday morning I went up at the crack of dawn, 8 a.m., to the top of One Tree Hill on the edge of the Epsom electorate. We were there to celebrate the centenary of the death of Sir John Logan Campbell, who is recognised as the father of Auckland. He died in 1912 and is most famous for the fact that he left Cornwall Park—one of Auckland’s greatest assets; a beautiful park—for the city, which the people enjoy, and it does not cost the ratepayers of Auckland one bean.
The civic-mindedness of Sir John Logan Campbell is an inspiration to us all. He went through lots of ups and downs during his career. In the 1870s he almost had to subdivide that park to pay off his debts, and it is a good job that he did not. But the thing about Sir John Logan Campbell is that before he was a great benefactor he was a great entrepreneur, and his life and story is typical of Auckland’s story as a city of enterprise. He was a man who started with nothing, came to New Zealand in 1840, and built a lot of businesses. He was involved in the Bank of New Zealand and New Zealand Insurance. He had farms. He had all sorts of businesses—liquor, beer—
Andrew Williams: I raise a point of order, Mr Speaker. I thought this debate was on the Appropriation (2011/12 Supplementary Estimates) Bill. This is very wide of that subject. Could we stop the history lesson and get on with debate?
The ASSISTANT SPEAKER (H V Ross Robertson): Can I thank the honourable member for his contribution. The member, of course, is right, but I also allow a little bit of latitude when members are first starting.
PAUL GOLDSMITH: I was setting the scene and wending my way to the point. And the point is that John Logan Campbell is an exemplar of the enterprise that is at the core of the city of Auckland, our greatest city in New Zealand. Enterprise is at the core of New Zealand’s success and at the core of this Government, and this Budget, which we are here to discuss, is all about encouraging and supporting enterprise in New Zealand, which is how we are going to make progress.
It is not written in stone that New Zealand will always continue to be one of the wealthiest countries in the world; it is not ours as of right. It is not something that we deserve in any way; it is something that we have to earn every year. It is about generating products that the world wants to buy at a decent price, and every year we need to go out and fight in international markets to persuade people that they will buy our products.
We hear from the other side of the House a sense of entitlement that is reminiscent of the problem that plagues many countries around the world, particularly in Europe, where populations and Governments have given in to the idea that somehow everything
is owed to them as of right, and for ever and a day they will continue to have these wonderful pensions and have these wonderful social security arrangements, and somehow the money will magically come from somewhere to pay for it. It does not work like that, and here we are at the end of an era where those Governments will have to face up to that reality. They can try to put it off for a few years, but they will only make the situation worse.
We are lucky that we live in this country where at least over the last couple of decades Governments have recognised that New Zealand has to earn its way. We lost sight of that reality, I think, in the 9 years in the earlier part of the last decade, but this Government has brought us back to that realism. It is interesting that most parties in this House recognise that it is critical that we grow the pie in New Zealand—grow the pie in terms of the overall economy in New Zealand—so we can afford all the sorts of things that people enjoy, so we can afford superannuation down the line, so we can afford to have health care of the style and quality that we have come to expect, so we can afford to buy the latest pharmaceuticals, and so we can afford to employ quality teachers in our schools.
I suppose the only party that does not seem to understand that is the Greens, whom I regard as basically an extremist party. They actually want to shrink the pie. They actually want to make the economy smaller. They talk about mining the soil. They are against the farmers who create most of the wealth in this country. They want to make it more difficult to have a farm and to grow a farm. They do not want us to mine. They do not want us to use any of our resources. They actually want us to go backwards as an economy, because somehow they think this is a better way to live. Well, I have not met anybody who does not want to have access to the best-quality health-care that money can buy, but they do not seem to see the contradiction in that. It is amazing.
I thought we were going to have Mr Hone Harawira speaking to us next. I find it kind of embarrassing, really, that we have somebody in this Parliament who complains about local Māori in Northland heading off overseas to Australia to work in the mines. He says it is terrible and he says we should be providing work for these local Māori in New Zealand, but, at the same time, in the same breath, without any barefaced embarrassment, he will oppose every little thing that the Government proposes to do in Northland.
He opposes any idea of any mining going on in Northland—no, we cannot possibly do anything like that. He does not seem to see the contradiction in what he is saying. You cannot, on the one hand, say that we do not want mining, and, on the other hand, say: “Oh, this is terrible, people are leaving New Zealand to work in Australian mines.” The contradiction does not seem to enter his head, but it enters everybody else’s heads, and that is why they are so embarrassed to be hearing this sort of thing.
It is like the Greens going on about housing affordability no end while they do not seem to see the contradiction in artificially raising the price and cost of land in Auckland by their ideological fixation on tight boundaries for the urban area. Put one and one together, you do get two, but they do not seem to see this connection.
This Budget and this Government are all about being realistic about how the economy works, and the fact that you have to earn your money and you have to grow the economy—and it is important to grow the economy. We understand that we have to leave some room and some money for New Zealanders and New Zealand businesses to grow, and reduce the demands that the Government makes on individuals and companies so they have the resources and so they have the capital to invest in their businesses, to employ people, and to grow the economy. The only people who do not seem to have cottoned on to that idea are Len Brown and his Labour and Green friends on the Auckland Council, who seem to be quite happy to put rates up by 30 percent—10
percent each year in Epsom for about the next 5 years. Ten percent each year! People are looking at inflation of about 2 percent over the next little while, but council members seem to be living in a parallel universe. They think you can just keep on increasing the rates by 10 percent each year for ever and a day, because somehow they deserve it. The council can spend its money far better than the poor ratepayers, and you just keep on cranking it up somehow, and somehow this is going to lead to—
The ASSISTANT SPEAKER (H V Ross Robertson): Order! When the member uses the word “you”, he is speaking to me.
PAUL GOLDSMITH: My apologies, Mr Speaker. I was getting carried away there. It makes me very upset when I think about what is going on in Auckland Council at the moment and the way that it is using ratepayers’ money and continuing to increase rates.
I return to some of the issues in this Appropriation (2011/12 Supplementary Estimates) Bill. Despite the surprises that have come our way, the New Zealand economy is now much stronger than it was when the Government came in in 2008. We have improved the tax system—the 2010 Budget was critical for that—so that it encourages work and savings rather than incentives to hide income or to head offshore.
Just imagine if we had been so unfortunate as to have had the Labour Party in power! We would have been fiddling around with the GST system, and the good people in Remuera who go to Jack Lum’s and buy the asparagus that has been flown in first-class from Sweden and Spain would not have to pay the GST. That would be so important! Would that not be a marvellous and sensible way to deal with the tax system—stuff up GST? That is what the Labour Party was proposing to do. We might have been considering a capital gains tax at the moment. That surely would have solved New Zealand’s problems in terms of encouraging enterprise! You would slap a capital gains tax on each of the farms and each of the small businesses that have been built up, and somehow you would be encouraging enterprise by adding a new tax for those entrepreneurs to have to pay.
We have also made the Government run parts of the economy more efficiently, so they do not get in the way of the internationally competitive parts of the economy. We have reduced our reliance on foreign lenders by limiting our debt. That is what the whole story of the Mixed Ownership Model Bill that we have been debating at great length over the last week has been about.
Although it may be possible to get plenty of money on international markets at the moment at low interest rates, there is no guarantee that that will be the case in 1 month’s time, in 6 months’ time, or in a year’s time. It is only prudent and proper that this Government should be reducing the overall amount of debt that it is taking on by the mixed-ownership model, which frees up $5 billion to $7 billion in capital, as we have discussed, and enables us to continue to invest in many assets and in incoming earning assets such as the irrigation scheme in the South Island.
We have also cut tape to encourage enterprise and flexibility. We can talk about the changes to the Resource Management Act, which are under way. We have introduced the 90-day probation period for new workers, and that has had a remarkable effect. I could go on at great length about how this Government is doing the hard graft that it needs. Thank you very much, and I commend this bill to the House.
MICHAEL WOODHOUSE (National)
: In the previous call, I heard Mr Williams interjecting that the Auckland super-city legislation was National’s fault. Actually, let us just think about the consequences of that. Certainly North Shore’s loss is Parliament’s gain, is it not? Were it not for the fact that that legislation was passed, we would not have Mr Williams gracing us with his presence in the House, waxing lyrical with such great lines as “Mr Spray and Walk Away”. He is, indeed, the gift that keeps on giving. That has been the sort of debate, has it not? One of the more eloquent
members of the Labour caucus described Mr English’s speech as “pure bollocks”. Well, I think that is a measure of the sort of language that has been coming out of the Labour Party caucus in the last 24 hours. It is very unfortunate, but people are listening.
But what confuses me the most is how Labour Party members claim they understand the importance of an export-led open economy with our trading partners, and then turn around and say: “The things that happen in Europe can’t matter to us. Why is the Government always blaming Europe for our woes?”. Well, actually we are not. They are simply an environmental variable. But it is worth, I think, reflecting on the sorts of things that trading nations around the world are having to do, including the very significant austerity measures that are being taken by those economies. The UK is facing cuts in nursing staff in National Health Service hospitals of up to 20 percent, as part of a plan to reduce public sector workers by nearly three-quarters of a million. That is about one-third of our workforce, and it is having to cut it as part of its austerity measures. We do not need to remind the House of what is going on in Greece and the very, very real risk of the contagion effect of the European banks not continuing to support that economy. It was certainly a relief last weekend when some form of common sense prevailed by the voters of Europe. In Spain there is a very large debt challenge and it is one of our largest kiwifruit markets. So it is simply not possible to say that we are to pretend that we are an open trading nation and then not say that those things matter to this economy.
Our tradable sector was in recession for years before National took back the Treasury benches. We faced 10 years of deficits, unemployment rates targeted to achieve 7.5 percent, inflation already 5.1 percent when we came to office and forecast to go to nearly 6 percent—and we have stayed below that despite increasing GST—and interest rates at an overcooked 8 or so percent, now down to a much more moderate level. Yet still there is criticism from members on the other side for setting targets. Well, I want to compare those targets with the rhetoric—or, as Dr Clark said last night, the “rhe-toric”; we have a “ple-thora” of “rhe-toric” from the other side of the House—and to remember what those “rhe-toric” comments were from the Labour Government. The knowledge economy—remember the knowledge economy? The tide went out on the knowledge wave, did it not? Remember—this is the one I really like—the zero-carbon economy? Yet under a Labour-Green Government carbon emissions went through the roof. We lost 35,000 hectares of trees.
What else did we have? Closing the gaps—remember closing the gaps? The gaps widened. One of the reasons is that while those members talked in “rhe-toric”, as Dr Clark would say, not a single target was set. In the best of economic times, not a single target was met. And do you know the best thing about not setting targets? You do not have to meet them. One does not have to meet them. There is no measure of failure. Well, I think the Prime Minister and his Cabinet have set very ambitious and brave targets. They are putting themselves out there. I think this is a very, very significant moment for politics in New Zealand, because it is an edgy business. But it does definitely give some meaning to the substance of the policies that we are debating in this House and implementing. One of them, of course, is the mixed-ownership model. The Labour Party will say that it learnt from its mistakes in the 1980s—and it is true; it learnt. Actually, so did the National Government, because we would never sneak in asset sales under the radar of an electoral mandate, as Labour did in the 1980s. We would never sell 100 percent, we would never do it to a single purchaser, and we would never do it under urgency. This was very fair, it was well signalled, it went through a select committee, and it had a mandate. I think that is a very, very good way to do it. This Government learnt.
The ASSISTANT SPEAKER (H V Ross Robertson): I can read the member’s lips. He will have to be louder. But anyway, I will call the honourable member Denis O’Rourke.
DENIS O’ROURKE (NZ First)
: Thank you, Mr Speaker. I hope you can hear me now.
The ASSISTANT SPEAKER (H V Ross Robertson): I can. Yes, I can.
DENIS O’ROURKE: First of all, I would like to say that some previous speakers have talked about growing the economy, and certainly New Zealand First supports that. But what the previous speaker, Michael Woodhouse, did not understand is that it is necessary to grow an economy sustainably, with all that that means. That is where he was also wrong about his comments about the Green Party. Secondly, of course, the benefits of an economy must be fairly distributed, and that is one of the things that I think this Budget simply does not do.
I want to refer particularly to two subjects amongst these appropriations. The first is the national cycleway. There has been a reduction in commitment to this by National over the years. It was 4 years ago that National campaigned on a national cycleway as a means of supporting tourism. But there has been no real supporting strategy for that, and therefore no real substantial result. It was mostly puffery. And we see in this appropriation even less commitment to that particular strategy. Nevertheless, some good works were done. Some good works were done but not enough—not enough. There is a need for innovation in support of tourism, because tourism, under this Government, is simply failing. Tourism, even with the Prime Minister’s support, is simply failing in this country and not succeeding at all. So innovations of this kind and more innovation are needed to support tourism. It would, in fact, be better if the Government was to apply this allocation and more to the support of urban cycling as a good means of supporting transport strategies and also tourism, because cycling is good for tourism within urban areas as well.
The second subject I want to move on to is the allocation for water storage and investment. Water issues are huge issues globally and will be for the whole of this century—huge issues also within New Zealand. I might say that they are particularly huge issues where I live in Canterbury, which has 70 percent of the nation’s irrigated land. Irrigation schemes have been struggling in New Zealand, and there are many reasons for that. One of them is the consent processes, which are often far too long, produce far too little benefit, and sometimes have some perverse outcomes. I might also say that the rules applied by regional councils in this country are too often irrational, confusing, seem to move from year to year, and make it difficult for projects to get going. Access to water resources is the main challenge, and storage of them—which is one of the purposes of the allocation in this Appropriation (2011/12 Supplementary Estimates) Bill—is a very difficult issue. Many legal challenges, a lot of competition for water, and the storage problems still remain and have not been properly addressed by this Government at all.
I would like to say that I am involved personally with one of these schemes, the Central Plains Water scheme—a 60,000 hectare scheme. I am the chairman of a trust that is to hold the consents for that scheme. The bottom line for that is sustainable development. A sustainable farming protocol is what the application was based on and has been granted on, which is enforceable under contract and through the consents. But it took 10 years and $10 million - plus to get that far, and that was without any Government assistance whatsoever. So, after all those consenting barriers and all the barriers put in place by regional councils, we still have no substantial water storage in Canterbury. There is some strategy, but very little. The Government response, as we see in this legislation, has been completely inadequate—a small amount for the purposes of
assisting schemes to final design stage and a capital provision of somewhere between $400 million and $450 million. But in terms of New Zealand’s requirements, that is actually a drop in the bucket and is a completely inadequate provision for the development of sustainable agriculture through properly developed water schemes for irrigation in this country. So what we need from the Government is a lot more than we have seen in the Budget, and in particular in this particular allocation. It is absolutely vital for New Zealand’s future and it is vital that these provisions be sustainable. The Government needs to do a lot more.
DAVID BENNETT (National—Hamilton East)
: Thank you, Mr Assistant Speaker Robertson, for the way that you have conducted the debate today. It has been very well done, and I think that—
Hon Members: Ha, ha!
DAVID BENNETT: Ha, ha! First of all I just wanted to thank you, Mr Assistant Speaker. That was a very interesting speech from the New Zealand First member Denis O’Rourke. The first line, I think, in that speech was to suck up to the Green Party—a potential neighbour; they sit beside each other. But the whole speech then talked about water allocation: how hard it has been to get consents, that they wish to be able to do it in a sustainable way, that it took 10 years, and that they had to invest heavily in getting through that consenting process with regional councils. I notice that the Green Party was very silent through that process, because the Green Party would actually encourage more of that process and would not want to see that water allocation happen in the end, anyway. I think that is the paradox that New Zealand First finds itself in. It is sitting in between two parties that have no concept of economic management and no desire to actually grow the economy, and yet at the same time tries to spout the rhetoric that it thinks the public wants to hear.
This debate, unfortunately, has been about a lot of rhetoric on the Opposition side. The Opposition tried to tug off vulnerable, innocent people. It tried to use the emotions that people have and scare tactics. It is a shame when you come to this House and see the Opposition parties, day after day, try to prey on the vulnerable in our community by making them scared of what the Government is doing, when the Government is doing what is in the best interests of New Zealanders going forward. The Labour-Green Opposition does not have a plan. For all that it says, it does not have a plan to grow this economy, and all it does is try to frustrate and deny what is in the best interests of New Zealand. And that is a very big shame.
Andrew Williams: What about the Job Summit?
DAVID BENNETT: And we have got the member across there who talked about a Job Summit, and things like the national cycleway. Well, they were initiatives that were good, but we are dealing with a big situation at the moment: New Zealand has been in recession because of the world recession, and because Labour put New Zealand into recession before the rest of the world.
Hon Members: Ha, ha!
DAVID BENNETT: The Labour members over there may laugh, but look at the facts: under Labour’s economic management, in the best of times New Zealand was put into recession before the rest of the world. The Labour Party cannot deny that; it is a fact of history and it is something that the Labour Party needs to acknowledge and deal with.
When we came into Government not only did we find a country in recession but we found a country that had its future spent by the policies of the previous administration. A decade of deficits faced this country, without even having to deal with the recession of the world that was about to impact, and without even having to deal with the consequences of the Christchurch earthquake. To our credit, we have dealt with those
issues. We have dealt with them in a way that has meant that New Zealanders have not had the burden of the sharpest edges of the recession, and that New Zealanders have seen a future going forward. We are doing that in a productive and successful manner.
We are looking forward at a country and developing it, its industries, and its productive base. We are not looking at holding this country back through things like capital gains taxes, which the members opposite have confirmed this morning that they will bring in should they ever get into Government, and I see the Green Party member nodding in approval. The Greens and the Labour Party want a capital gains tax, so New Zealanders out there, remember that. The Greens and the Labour Party will advocate for a capital gains tax. They will look at hurting the most productive parts of this economy; that is what a capital gains tax will do.
The New Zealand First Party members are starting to bark in their corner. Well, remember this, New Zealand First. The New Zealand First Party talks about economic growth. The biggest impediment to economic growth in New Zealand will be Labour and the Greens, because they will want to bring in a capital gains tax. The productive economy of New Zealand, based around agriculture, will be the most affected by a capital gains tax. The Green Party is smiling now. It knows that is the truth—that that policy will hurt the most productive part of the New Zealand economy. New Zealand First speakers will not be talking about how hard it is to get through the consenting process for farm development in the South Island; they will be talking about how the New Zealand farmers cannot actually produce, because of the capital gains tax requirement brought in by a Labour-Green Government if it ever becomes the Government.
That is the truth of what we see, and that is different from the rhetoric of what we hear in this House. In this House we hear the Greens, Labour, and New Zealand First talking about things like growth. They say the right things, but at the same time they bring about policies that will have the opposite effect, such as a capital gains tax. Do not be fooled, I say to New Zealanders listening to Labour and the Greens—do not be fooled at all. They do not mean to grow the economy. They do not mean to actually develop you as individuals and as a country. They have only one thing that they want, and that is control, control, and control. They will have that through things like capital gains taxes so that they can control people’s voting preferences, and that is what they have done for many years.
That is the true difference on this side of the House. We believe in New Zealanders and we give them that chance. We believe in them over a whole variety of aspects of their life. We believe that they can get a good education. We believe that they can get a good job. We want to give them some rewards for doing that and making the right choices, and we believe that they can invest and make this country stronger. We believe in our people. We do not try to control them, and we do not try to influence them in the way that the Labour Party and the Green Party do.
There is one other thing that I think New Zealanders need to talk about and that is the tax switch, which the Labour Party and the Green Party say was $2 billion given to the richest New Zealanders. That is simply not true—it is simply not true. I ask the Labour and Green members, if they believe that is true, in their next calls to stand up and itemise each part of that $2 billion, to itemise each part of that tax switch, and to come up with those numbers, because they simply do not stack up. You need to take into account the whole programme that was announced at that time: the change in GST and the change in depreciation. The change in depreciation brings in $1 billion a year from the most wealthy New Zealanders, you could say. That is not taken into account in the rhetoric of the Labour Party and the Green Party, because they do not want New Zealanders to have the full story. They do not want the truth out there. They want only
the rhetoric that they can push and pull to the most vulnerable people in this country, and that is really sad for parties that think or say that they actually represent people who need that assistance from Government. They do not mean it; they do not care. It is all about them—it always has been and always will be. That is the nature of the left in politics, and that will never change.
When we look at this Budget, it is a good Budget. It is a hard Budget, in the sense that we have got difficult times. We cannot go out there and promise the world. It would be nice to be able to do that, but we have to be realistic. In being realistic we have made the right choices—choices that will deliver a stronger economy going forward and that will give our people the future that they demand and desire. It will not happen with the rhetoric and the approach of the Opposition members, who talk about things but will not actually deliver them, or, if anything, will deliver things that will hurt the long-term interests of this country going forward. I look forward to the day when the parties on the other side of this House stand up and say what is actually out there, that they actually believe in our people, and give them the credibility and sense of desire—
Andrew Williams: And don’t sell the assets.
DAVID BENNETT: Now we hear the New Zealand First Party going back to selling the assets. It is another one of those senses of rhetoric. It is very sad to see that that is how the Opposition can retain and reinforce its debate. Thank you.
Hon MARYAN STREET (Labour)
: The speech of the member who has just resumed his seat, David Bennett, reminds me of a line in
Othello: “But yet the pity of it, Iago! O! Iago, the pity of it,”. If the member wants us to itemise what is wrong with the tax cuts, can I just give two examples. When the wealthiest people in this country get a tax break of $1,000 a week and ordinary workers get $10 a week, the National Government needs to look at what it is doing and at the structure it is setting up in the taxation system and whom it serves.
My greatest fear from this Budget is its timidity, its lack of vision, and its lack of boldness to do anything that is required to alter the structure of this economy and to assist anybody other than National’s mates. The previous speaker tried to make a point of saying that Labour and others on this side of the House are in this business of politics for ourselves. I think the member needs to look closely at the kinds of contracts that Murray McCully has let out, to whom, and by which process. National members need to look at how, across the State sector, contracts are let—not just by the office of Murray McCully, but others—and see how many of their friends have taken up contracts in a way that verges on a word that I am not allowed to use in this House but starts with “c”.
Just when New Zealand needs bold leadership in economic management, we get timidity. We get the same old tired answers from a centre-right party that should be able, with its new influx of members over the last couple of elections, to engage with new thinking and new ideas. But we do not get that; we get the same old things. We get tax cuts and asset sales and, apart from that, nothing new. Everything else is tinkering. There is a danger in this, because this Budget is not just about the next year. This Budget is a symptom of the poverty-stricken thinking in the National Party. It is a symbol of the fact that this National Government has no idea about how to manage the country into the future, and has not the will to engage with the big issues. For example, we do not see the Government tackling a lack of savings. We do not see it wanting to make KiwiSaver compulsory. We do not see it tackling an unbalanced taxation system. Why not? Because it serves National’s friends well to have an unbalanced taxation system. So, no, National would not introduce a capital gains tax, because that might even things up too much. That might actually discourage people from investing in property and assist them to invest in business, new ventures, and growth. At the same time, National can make sure that their mates’ housing prices stay high, because it is
doing nothing to address that investment and the fact that people like to invest in property. It is doing nothing about that area, which could have an effect of pulling down the rate at which house prices increase, at the very least. I want to come back to that theme in a moment.
More than that, we have a complete unwillingness in this Budget for the Government to address the big issue of superannuation affordability. All of those members over there, including the Prime Minister, know that the way superannuation is structured and the demographics coming upon us in short order mean that superannuation as it currently is is not sustainable. So the Labour Party decided to take that on and address it as a hard issue, as the facts became clear in the last term of Parliament. We decided to front that issue, but this Government cannot because its Prime Minister has single-handedly painted himself into a corner over this issue—single-handedly painted himself into a corner. And because of that, the rest of them have to troop like lemmings in behind him. Very soon they will find the edge of that cliff and all tip over it. Come the end of 2014 the lemmings will follow their leader over the cliff, because they are not prepared to speak up and take account of the big issues, the structural issues, that are confronting the economy in this country.
I want to take one issue in particular that distresses me almost more than any other, and it is the issue of housing. The Minister of Housing has done nothing in 3½ years to address the question of housing affordability. There are economic structural things that can be done, such as balancing up the taxation system, introducing a capital gains tax, and encouraging people to invest their money in growth and development rather than in static assets like property. But, no, he will not take those big issues on, even when he was given an idea and a platform by the previous Government—and I had the privilege of having the housing portfolio for the year before the 2008 election—of taking the Hobsonville project, which put up the idea of building 3,000 houses. The planning that was going into that had got to the stage where houses were ready to be built. Of the 3,000 houses in Hobsonville, 2,000 of them would be market price houses, 500 of them would be social housing, and 500 would be affordable houses. So that is 500 State houses, 500 affordable houses, and 2,000 for all of the rich people who are friends of the members opposite and who want to buy in that lovely part of Hobsonville in west Auckland. And what has the Minister done with that? He has built 17 houses—17 houses—and cancelled the rest of the programme. Why? Because it is in John Key’s electorate, and John Key said in 2008 in the election that there will not be any of those nasty little State houses in his electorate and—not to worry—he was going to can that project. Housing is at a crisis point in this country, and there is nothing in this Budget that has been provided to address it.
The other issue that is a critical lack in this Budget is the lack of a skills strategy. We have got billions of dollars over the next 4 years going into roads—billions going into roads—and nothing going into apprenticeships. The apprenticeship system has been shut down by this Government. We do not see the investment in young people. Had there been investment in young people that simply continued from where we were at at the end of 2008, we would have seen a readiness to rebuild Christchurch that is not there. We should not need to import labour when we can train our own perfectly well, but we have a gap now where a skills strategy used to be. There is no vision, there is no foresight, and there is no investment in people. The roads are there already. They might be able to be improved, but, as a matter of priority, putting billions of dollars into roads and not into people is a travesty. That is an absolute travesty, and this Budget will go down in history for only one thing—because it will not be remembered for much longer—and that is its timidity, its lack of vision, and its inability to think creatively and over the long term. That is what this Budget will be remembered for.
GARETH HUGHES (Green)
: Kia ora, Mr Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to take a call on the Appropriation (2011/12 Supplementary Estimates) Bill and the Imprest Supply (First for 2012/13) Bill.
This Government has been a poor economic manager for the economy. We have seen over successive Budgets no real plan for the economy, no real vision, and no real emphasis on the things that matter, which is our children and what we are doing going forward. All we see from members on the Government benches—their only plan—is to drill it, mine it, frack it, cut it, and sell it. That is it. We have seen over the last few years a number of terrible economic decisions that have been made. We have seen those unaffordable tax cuts, which were not cost-neutral. We have seen poor transport spending. We have seen this Government subsidising polluters. It is bailing out its mates, from MediaWorks to Skycity to Warner Bros.
David Bennett asked the Opposition: “What is out there?”. He asked the question: “What is out there?”. But to quote from the popular TV show: “What is out there is the truth.” And you have only to look at those Budget papers on the Table to see the truth. What we see from the Government and the last Budget, which is what these supplementary estimates deal with, is a Budget deficit of over $18 billion, which is a New Zealand record for a Budget deficit. We see Crown debt rising to $13.4 billion, making that total Crown debt $40 billion—that is poor economic management. And we are seeing economic activity stagnate at levels just above a technical recession, and that is poor economic management.
The economic conditions around the world are concerning. We are facing a debt crisis globally. In New Zealand it is particularly important, given debt is expected to exceed $72 billion over the next few years. We have a growing current account deficit, which is at 4 percent of GDP, and estimated to be around 7 percent of GDP in a few years. We have massively growing inequality between our richest and poorest New Zealanders. We are seeing 270,000 Kiwi kids growing up in real poverty. We are seeing kids going to school without shoes, without breakfast—real poverty in a First World nation. But we are also seeing a lack of vision from the Government. It has got no plan bar drill it, mine it, frack it, cut it, and sell it.
So what has National done over the period it has been in Government, which these supplementary estimates deal with? Well, we have seen the unaffordable tax cuts. In 2010 those tax cuts, which were not cost-neutral, delivered the biggest cuts to those New Zealanders who needed it the least. We saw the head of Westpac bank getting $5,000 a week from tax cuts, and who is paying the bill? Well, it is those other Kiwis at the lower-income levels who are paying it through increased GST, but it is also future generations who are paying for that $5,000 a week tax cut for the head of Westpac through borrowing. So it was not only fiscally reckless, it was also immoral.
We have seen poor transport spending—which the Labour Party, it is good to see, has come to the party on, as well. Look, this Government has somehow, in a time of austerity, facing the debt crisis, a growing current account deficit, and an $8 billion a year oil import bill, found the ability to borrow $14 billion over 10 years for motorways, with negative benefit-cost ratios. I would get laughed out of a business board meeting, or I would get laughed out of a council meeting, if I proposed a project with a benefit-cost ratio of 0.6, because when you are investing $1, you are losing 40c. But somehow members of this Government, and particularly Steven Joyce and Gerry Brownlee, have convinced the Government and Bill English to find $14 billion to borrow to throw at these unaffordable motorways.
We are seeing subsidies for polluters. This Government has also found $1.5 billion in the last financial year and $800 billion in the next financial year’s Budget to subsidise polluters, under its amended emissions trading scheme. We are not sending the right
signal. We had Amy Adams go to Rio to rail against fossil fuel subsidies, but then she is quite happy to come back and talk to her Cabinet Ministers to keep this $1.5 billion in subsidies to polluters continue.
Hon Amy Adams: Just wrong.
GARETH HUGHES: It is a subsidy. The taxpayer is paying for it, and what you are doing is sending the wrong economic signal, which is to keep investing in polluting technology. Well, this Government, in its books, has got that figure there. It is the taxpayer fronting up, funding polluters. But it does not stop there. We heard Tim Groser in the House say he was quite happy for this Government to subsidise risky deep-sea oil drilling with a $25 million free handout in the seismic survey. When the Government is railing against inefficient fossil fuel subsidies around the world, really it should look closer to home. Action begins at home.
Despite all the risks with deep-sea oil drilling, it is not the only sector this Government is helping out. The clear theme of this Government is that it is quite happy to help its mates out. You see it with the dodgy Skycity negotiations. The Convention Centre is not going to be a game-changer. It is not going to help our current account deficit, it is not going to help lift us out of growth, and it is not going to help with the huge number of jobs, and it is going to be paid for by those low-income Aucklanders who are going to be paying for it out of their pockets with those pokie machines. The Government has got money to throw at Warner Bros and it has got money to throw at MediaWorks. This Government is all about helping its mates. It says it does not pick winners, but this Government does pick winners, be it risky deep-sea oil drillers, the gamblers, or the other sectors in the economy.
With the drilling—which this Government wants to stimulate; wants to aggressively promote—what we know from all the data is there is going to be hardly any jobs for New Zealanders, because it has put all the jobs on the skill shortages immigration list; hardly any taxes, because there are so many exemptions; and hardly any royalties, because we have got one of the lowest royalty rates in the world. In fact, we have got the fourth-lowest Government take, or royalties plus tax rate, in the world—the fourth-lowest rate. So we know we are going to see hardly any jobs for New Zealanders, hardly any taxes—
Hon Tau Henare: So what are you going to do?
GARETH HUGHES: —hardly any royalties, and we know the profits are going to go offshore.
What we would do is not sell the assets, which is what the Government is doing. What it has done is it has dug itself a fiscal hole, and now what it is doing is selling the same tools that would get us out of it. These assets are returning healthy dividends, but what the Government wants to do is some days it wants to pay off debt, which does not make sense because the cost of borrowing is at an all-time low, and some days it wants to invest in other sectors like, again, more subsidies to its mates in the agricultural sector, with a $400 million irrigation scheme.
So what we would do, as Tau Henare keeps asking, is keep these assets. We would use them. We would use them and we would supercharge them. We would use them to promote our environment and our economy, because what our environment Minister does not get is that New Zealand’s economy is dependent on our environment. There is a global greentech boom happening at the moment. It is predicted to be an $800 billion market in the next few years. For the first time ever last year, and I am not sure whether the Government is aware of this, investment in renewable energy outstripped investment in fossil fuels—for the first time in our planet’s history. But this Government, for its inspiration, is looking to the 19th century for its economic
inspiration, not to the current century, which is going to be framed by those global challenges like climate change.
We could be using our assets. We could be supercharging them. We could be at the forefront of the global greentech clean energy market. We could be using these State-owned enterprises like Mighty River Power to be exporting that geothermal technology around the world, but this Government wants to flog them off and forgo the dividends. But worse than that, it wants the taxpayer to pick up the tab. It wants the taxpayer to fund around $120 million for public relations spin doctors. It wants to fund that $120 million for admin costs. It has got $400 million, approximately, for its loyalty scheme. “Loyalty” is the wrong word to use for this scheme. What the loyalty scheme will be, when we finally see the details and the Government has stopped hiding and keeping secret what it is embarrassed about, is simply welfare going to those New Zealanders who can already afford to buy shares. Again, it is going to be the taxpayer, those poorest New Zealanders, who are subsidising those New Zealanders who have the resources to purchase these shares—welfare for the rich, through the loyalty scheme.
There is a better way. We could be supercharging our assets. We could be rebalancing our economy towards more sustainable production. Drill it, mine it, frack it is not going to cut it in the 21st century. There is a whole host of smart, green economics we could be using. There is a $6 trillion global green race, as Pure Advantage pointed out recently. We started in a wonderful position. We had such a head start over many other nations, but this Government has squandered its lead. It is looking to the 19th century for inspiration. We should be extending the insulation scheme. We should be increasing the minimum wage to $15 an hour. We should be boosting research and development. We should be putting a real price on carbon to promote a low-carbon economy. We should be reducing KiwiSaver account fees by having a public option. There is a whole host of things we could be doing. Drill it, mine it, frack it, cut it, sell it is not in New Zealand’s interests.
MAGGIE BARRY (National—North Shore)
: This, I firmly believe, is a Budget that delivers a moderate and balanced approach for managing this Government’s finances, because although the Opposition continues to be determinedly unrealistic, we know how important it is to focus on what is important—to focus on what is important to improving the quality of people’s lives. That is what this Government is committed to doing—to giving money to those who need it, not just to those who say they need it, who create a lot of noise, and who have their hands out all the time. This is about looking beyond the obvious, and drilling down and targeting the money and the resources to the people who are genuinely in need. We are a realistic Government.
When it comes to the twin areas of health and welfare in particular, these reforms, I think, are first-class illustrations of how this Budget is making a difference to New Zealanders lives and building a brighter future. I commend Minister Paula Bennett for her courageous and far-reaching welfare reforms. She boldly and fearlessly goes where others would not. Twelve percent of our working-age population is on a benefit. That is completely unacceptable. We have 220,000 children living in welfare-dependent homes. That is also unacceptable. It is trapping families into poverty, it is costing too much money, and this Government firmly believes that those who can work should work.
Let us look at what we have delivered in this zero Budget, because although we need to have a Budget that is tight in these difficult financial times, we are directing and targeting that money, as I said, to where it is required. Budget 2012 is investing up front in welfare some $287.5 million over 4 years. That is supporting stage one of our welfare reforms. This upfront investment is really going to help support New Zealanders on welfare to go into work, to leave behind that dependency. And in the meantime, as a result of that, we will be saving for New Zealand taxpayers about $1 billion. Let us look
at the numbers: $80 million is going into early childhood education. We absolutely appreciate that young people—our very, very young—need all the help that they can get from a very early age. That is why we are so committed to it. Guaranteed childcare assistance payments—this is the sort of thing that is really going to help. And we are targeting the Pasifika communities—those who have not traditionally taken advantage of childcare facilities. We have increased that by 10 percent in the first 3 years of this Government, and with the money, resources, and intelligent policies that we are bringing into play here, that will increase.
We have $55 million for 155 dedicated Work and Income support staff at the front line to support job seekers and sole parents into work. That is a good thing. We will spend $148 million on better youth services, as well, to work particularly with young people who are disengaged and unemployed. These are the priorities that Minister Bennett and this Government have. We are addressing health issues and vulnerable young people in particular. When it comes to health, this is something that I observed over 30 years in the media: health is often a story that is in the news when you have centre-right parties, because there is a tendency to target that money, and there are people who feel left out about that. So in this Government, under the leadership of Tony Ryall in the past 3½ years, we have seen that free-wheeling spending under Labour, which achieved very little and got us into very difficult situations, turned round. I commend Tony Ryall who in the past 3½ years, and, in particular, in this latest Budget, has really made a difference. I need to look no further than in my own electorate of the North Shore. The
Waitematā District Health Board used to be in the news for all the wrong reasons.
Chris Auchinvole: Corridors!
MAGGIE BARRY: People in corridors—exactly, Mr Auchinvole. People who were unable to get into hospitals were waiting for unacceptably long periods of time to get into the accident and emergency department. The waiting time targets were met something like only 61 percent of the time. That is not good enough—absolutely not good enough. That is why we set targets. So, in the meantime, what we have been doing now, since Tony Ryall appointed Lester Levy, who has taken a very firm view on what the
Waitematā District Health Board was doing, is put some more money into it where it is required. We have seen that, amazingly, go up to more than 95 percent—95 percent—so we have met that target, and we have exceeded it. So we are now able in the North Shore Hospital to admit, discharge, or transfer patients within that 6 hours. That is a tremendous achievement.
When you set targets, you can measure them. They are achievable targets, they are ones that we are firmly focused on, and we direct people in the Public Service to achieve those. If they do not, it is at their cost. When I look at what has happened, particularly in Waitematā, I am very encouraged as a local member of Parliament. On the North Shore, I get many people contacting me on a weekly basis, telling me good news stories about their experiences with North Shore Hospital.
Hon Member: Constituents.
These are real constituents, not just people like “Mr Spray and Walk Away”. [Interruption] Yes, he is, indeed. As my colleagues Todd McClay and Michael Woodhouse have pointed out, he is the gift that just keeps on giving. The North Shore was in a difficult situation, and as a result of what this Government and, in particular, the health Minister, Tony Ryall, have done with the North Shore Hospital, that situation has been turned round.
It has come at a cost. Over the past 3 years the Government has invested $1.5 billion of new money into the public health service—[Interruption]—$1.5 billion, indeed. In these very difficult financial times we have found that money because we have
prioritised it. Of that amount, $153 million extra funding has gone into the Waitematā District Health Board. That has been put into the facilities that I have mentioned, the emergency care departments, the new dialysis centre, and a new elective surgery centre. These are the sorts of measures that are really making a difference to people’s lives. I would ask Opposition members to listen and to pay attention to what we have done—they might learn something.
When I look at what the district health boards are doing by focusing on health targets—and, again, targets and control are uncharted territories for the people on the Opposition benches—they are the reason why this Government is making gains in tough times. So we have improved access to elective procedures, there are much shorter waits for cancer treatment—and I will come back to that in a moment—there are shorter stays in the emergency department, and we have targeted increased immunisation again and reducing the incidence of rheumatic fever. Illnesses such as those should not be around. We have those things in our sights and we will make sure that we make huge gains on them.
We have better results for people who are trying to give up smoking. We are working closely with Tariana Turia and those in the Māori Party around those measures, because these are vital measures to the Māori community, Pacific Islanders, and, indeed, to all New Zealanders. We are making sure that there is help there for smokers who want to quit and to help themselves.
We also have more heart and diabetes checks. Again we are looking at trying to get the information to help people at an earlier stage of their care, rather than much further down the track when it is going to be much more expensive not just in terms of dollars but also in terms of the emotional toll that it takes on people.
I am particularly encouraged by what we have done in this Budget when it comes to cancer treatment. For anyone who has been through that journey themselves or has had a loved one go through it, you might be aware that some patients might have to explain their treatments, symptoms, and the problems that they are having to up to 30 doctors, and many more nurses than that. This adds unacceptable strain to many cancer patients. These are people who are already suffering enough, and who need treatment of the most appropriate kind and in a timely fashion. As a result of the extra money that we have put into that—some $33 million—we have appointed designated cancer nurses, who will be able to assist that individual going through the treatment and their families to know who to go to and when. They will be able to get to specialist care more quickly. They will emerge through the system and through their treatment in the knowledge that they have not wasted their precious time and their precious energy on informing bureaucrats and filling out forms. The essence of what we are trying to do in health is encapsulated with cancer patients, because it is about helping individuals, and helping them to help themselves, but making it as easy as possible to navigate things.
From 1 July, in fact, district health boards—in particular, my one at Waitematā District Health Board—are collecting data at key points along the patient’s clinical journey. Why are we doing that? Because we need to be able to measure and hold accountable the system, and, if it is not delivering, we will land on them. We are improving public services and we will continue to do so, and that is because we are holding them accountable. But, yes, we are compassionate. We are not leaving people who need us—vulnerable people—out in the cold because they are waiting at the end of a long queue. We are targeting, focusing on, and helping those people, and that is really making a difference to people’s lives.
The policies of our Government, I believe, and in particular this Budget, in these difficult times will result, as Bill English said earlier this morning, in a moderate growth to our economy. We will bring the books back into balance. We have, under the
charismatic and visionary leadership of John Key, a very intelligent Cabinet and a united and wise caucus, which will see through the policies with a rigour and a tenacity that will make a difference to people’s lives, and will, indeed, build a brighter future for New Zealanders.
Hon RUTH DYSON (Labour—Port Hills)
: I am delighted to contribute to the second reading debate on the Appropriation (2011/12 Supplementary Estimates) Bill. When the Minister of Finance, Bill English, introduced this debate, he said that this bill carries on the same theme as the Budget. I noticed that Minister Parata paled at those words, thinking of those days of agony that she had to go through when, first of all, she had to admit to the entire House that, no, she had not asked for any information at all in relation to what impact the Budget cuts in the education sector would have on the number of children who were going to be in classrooms around our country. She seemed surprised that we would expect her, as the Minister of Education, to have asked for that information. Then she had to, tragically, come down to the House and correct her answer, having denied receiving such information, because in fact her office had received the information. So not only did she not bother asking for it; she did not even know that her office had received it.
Heaven only knows what her Cabinet colleagues thought when they signed off the education budget cuts. Did they not think about what the implications will be in our classrooms for our children and the quality of their education? But, of course, the Prime Minister rode to the rescue of the poor and by then stunned and silent Minister and said: “No, we’re going to put a cap on these changes, on these cuts to education in this year’s Budget.” So National announced this great fix, and then just a week later it said: “The deal’s off. We’re going to have to find the money somewhere else.”
So when Bill English said that this bill is going along the same lines as the Budget, I must admit that my heart went out to Minister Parata. I thought: “That’s really cruel. I hope she doesn’t have to go through that same week and a half of embarrassment again.” For the Minister of Education to not know that when you cut the education budget, when you change the ratio in the classrooms, it will have an impact on the number of children in each classroom in every school, and that, undoubtedly, that has an impact on the quality of education—
Hon Hekia Parata: Oh, really?
Hon Trevor Mallard: She’s learning. She said “really”. She’s picked it up.
Hon RUTH DYSON: No, I do not think the Minister has quite grasped the point yet.
Hon Hekia Parata: Ha, ha!
Hon RUTH DYSON: She laughs at parents, she laughs at teachers, and she laughs at the anger that people felt when they were told that their child could have another five or so children in their classroom and it would not make any difference. That is not what teachers, parents, or even children feel about what we all want, and that is quality outcomes.
Bill English said this bill is going to be along the same lines as the Budget. Well, that just means there is nothing in it that has any leadership, any aspiration, any vision for New Zealand. It was an absolutely zero Budget. It missed out on all the opportunities that New Zealanders would love to see coming from the Government, all the opportunities that New Zealand would thrive on, that New Zealanders are crying out to see. Instead, we got a Budget where the centre point was, really, taking money out of the pockets of paper boys. That was the high point. That was the inspiration from Bill English that we got to see in the Budget: “Let’s turn the poor little paper boys upside down, rattle their ankles, and see whether we can get a few coins out of their pockets.” A pitiful amount of money, but taxing paper boys was a key element.
The other piece of legislation that came in, of course, under urgency in the Budget was capping the amount of money that people could keep for themselves, to leave to their families, in those final days of their lives when they were living in a rest home. Their having had an annual increase of $10,000 in the asset threshold, the Government said: “No, that’s too much. We don’t want elderly people to keep that sort of money. We want them to pay it to us’’—to the Government—“for their rest home care.” So National put a stop on that, as well. So we saw the most vulnerable people in our communities—older people who live in rest homes or in hospitals—being affected, and the youngest in our community who are doing a few hours’ work a week doing paper runs getting taxed on that money.
I think that if anyone from any other country in the world heard those two policies as centre points of the Budget, they would be hanging out for the next page of the Budget document. But it was not there. There was nothing at all providing any vision or providing any leadership. That is what New Zealand wants at the moment. That is what New Zealand needs, so that we can go back to playing our part as a strong contributor to the international economy. National has put its head in the sand over the most important issues facing New Zealand—over superannuation, over economic growth, over any vision and foresight for where New Zealand is going to go in the future.
In my view it is not just a lazy thing; it is shirking the legitimate responsibility of a Government. There are hard decisions for a Government to make. There are decisions that should be made that will challenge its popularity, even. In my view, and it was certainly the view expressed by the Hon Simon Power in his valedictory speech to this House, that is part of the privilege of the responsibility of Government—facing up to those hard decisions, and making them for the betterment of the whole nation; not for the popularity polls, but for what is best for New Zealand.
We know that in any Budget there are choices, there are alternatives, and there are different ways that different political parties look at things. I did have to have a little chuckle, though, at the member Maggie Barry, who resumed her seat immediately prior to me, when she started boasting about targets that had been set by the National Government. She said: “We set these targets so that we meet them.” Well, I would be quite keen to know what happened to the 4 percent growth that John Key predicted. In the Budget, the measures of which we are debating, the growth rate is set at 2.6 percent. That is quite a gap between a target that was set and a target that was met.
Last year John Key, the Prime Minister, said we would have 170,000 new jobs created. This Budget, which we have just finished debating, cut that target by 16,000. Those are not just figures. Those are real people who cannot get paid employment even though they desperately want to, because the target that John Key as the Prime Minister set was not met—another target not met by the Government. Last week he said that exports were rising. Well, the latest statistics show that exports fell in the last 12 months by 17 percent. That is $800 million worth of exports. So the trend in exports is going down rather than going up. That is another target that was not met. Last year the Prime Minister said that we would get real growth in wages this year. We have seen it peak at just 1.5 percent, and now it is trending down again. That is not a set of targets that have been set and then are met; that is a set of targets that John Key, the Prime Minister, promised New Zealand, and then he and his Government failed to meet those targets.
There are alternatives, as there always are. There are alternatives for this Government to step up to the mark and face up to, and to deliver; or the voters of New Zealand can elect another Government that can provide a different way of leading our nation. We do need leadership that is willing to make the tough decisions, and that is not prepared to say: “We will put our heads in the sand, we will bury the hard issues,
and we hope they will go away.” We need to ensure that we do support businesses to create new jobs and support higher incomes for New Zealand.
Reaching the surplus seems to be the only target that this Government has. It is even prepared to sell New Zealand - owned assets in order to achieve that surplus. Well, of course reaching a surplus is important, but a single-minded approach of reaching a surplus is not good enough. The sacrifices that the National Government is making New Zealanders and our economy pay in order to reach that surplus are just unfair.
It is not about spending more money, which is always the National Party’s chant. That is not the position that Labour has always espoused. It is about making the right choices. It is about looking at the options for the Budget, and saying what our priority is, and what the best way is to invest in New Zealand now, so that as we move out of difficult financial times New Zealand and New Zealanders are on a stronger footing to take advantage of the better economic times. We have seen alternatives tried in other countries. The Budget and this Appropriation (2011/12 Supplementary Estimates) Bill are a wasted opportunity from the National Government. The bill is a continuation of a zero Budget with no ideas.
JONATHAN YOUNG (National—New Plymouth)
: Better financial times—that is what the previous speaker, Ruth Dyson, mentioned. That is exactly what this Government is leading this nation into, through its 3½ years of strong, stable, responsible Government, and it is so essential. In the year when we took the reins of office, the financial crisis had reached its peak, and the New Zealand economy, which had gone into recession before anyone else, had shrunk 3 percent, topping off 5 years of historically low growth. Exports had flattened out completely. We know that the tradable sector had been in recession since 2004. So this country was on its knees and desperately needed some wise, stable, strong, responsible Government, and this is what we are presenting. It is prudent, it is moderate, but it is balanced. We are presenting a Budget for the time that also has an eye for the future. We are very much part of a Government that is building a strategy for a competitive economy domestically, and internationally as well.
One of the biggest input costs to New Zealand consumers and businesses is electricity. We have worked very strongly in this particular area. The Electricity Industry Act 2010 was a redraft of the electricity landscape. It was a structural reform to electricity retailing, which is bringing benefits through to industry and also to consumers. I mentioned last night, and I will mention again today, that an example of this is the What’s My Number campaign, which creates transparency between electricity retailers regarding their pricing, and the associated Powerswitch programme, which means a consumer can easily switch between retailers. That is very important for this country going forward, because it begins to bring some real opportunity between retailers to compete for their consumers, and the benefit of that is not only efficiency, which we are driving forward, but also the competitiveness and the resulting price structures that New Zealand businesses and consumers are paying. That is very important in terms of this country going forward.
Carl Hansen, who is the chief executive officer of the Electricity Authority, said that that campaign originally targeted 50,000 unique visitors to the website it set up. That is what it targeted: 50,000 in the first month. In fact, it got 50,000 in the first 3 days. New Zealand business and consumers are hungry for efficiency in this economy, and they are looking for some price competitiveness. That is what we are doing in being a strong, stable, and responsible Government. We are working on efficiencies, because for many, many years we lived in this country as if money was no object, and the spending was prolific. But the result of that was not what people were looking forward to. Productivity was low for that investment and we needed to be working on that quite
strongly. So that programme happened in the What’s My Number and the Powerswitch programme.
What that actually achieved was a reduction in the CPI for the first time in many, many years. In fact, back in the December quarter of 2011 that reduction happened in a quite significant way. One energy company that has been cited is Contact Energy. In fact, that is a private energy company that was losing lots of customers because of that programme. Within the first month of that programme it changed its discount for online payment, which had been set at 12 percent, and increased that to 22 percent. So those are the sorts of structural reforms and changes that, particularly, this Government is looking at, and we are seeing that come through—
Hon Trevor Mallard: Is this the same speech as yesterday?
JONATHAN YOUNG: No, it is not. In fact, we are seeing that come through—
Hon Trevor Mallard: Who wrote this one?
JONATHAN YOUNG: I wrote this one, Mr Mallard.
Hon Trevor Mallard: He wrote this one. He admits it.
JONATHAN YOUNG: Thank you. I wrote this speech, Mr Mallard. This is the programme that we are doing: structural reforms that are building this economy, making it competitive, and enabling businesses in this country to become stronger and more competitive internationally, and that is what is going to enable them to employ more people. So it is not just a matter of the Government throwing out cash and increasing the number of people who work for the Government, which is what the previous Government did, increasing the core Public Service by 50 percent in its time. It is making this economy competitive. It is making it efficient. It is enabling us to compete because of efficient price structures—internationally, globally—in such a way that we start to lift our tradable sector. That is what we are doing.
I want to just touch on some of the aspects of this Budget around the area of the mixed-ownership model, which is now in place. This is hugely significant for this country. We know that the Opposition members have scaremongered up and down this country, but you know, we know, and all of us know that in January 2011 the Prime Minister started talking about this to the electorate and we went to the polls. The Opposition members went to the polls on it. That was their major platform of opposition against us, yet in the poll of 2011 National won the highest vote ever in MMP’s history.
I want you to listen to what the OECD has to say about this policy. This is in its April 2011 report on New Zealand. It says: “public ownership of commercial enterprises has increased over the last decade,”. That is over the time when Labour held the Treasury benches—that is what the OECD is saying. That, I guess, is the nationalisation of companies and just the general thinking that the Left followed through. This is what it said: “public ownership of commercial enterprises has increased over the past decade, which has likely restrained aggregate productivity by reducing competitive pressures and risk-taking, while discouraging [foreign direct investment].” It said: “Compared internationally, New Zealand’s SOEs seem to perform better than many others, but there is room for improvement. These asset holdings are substantial, and moving towards public listing of state-controlled commercial assets and full or even partial privatisation would strengthen market discipline and transparency through securities listing requirements and legislation protecting minority shareholders.”
You know, the question came up when Mighty River Power, which is the first State-owned enterprise that is going to be offered to New Zealanders, came to the Commerce Committee to report on its financial year ending June 2011. The question was: “So what would the benefit be if you were partially listed?” The response from Doug Heffernan, who is the chief executive of Mighty River Power, was simply this: “We would have saved $100 million.”
Dr Cam Calder: How much?
JONATHAN YOUNG: It would have saved $100 million. That is what he said. You were there, Clare Curran. You heard what he said. It was very, very clear indeed. He said that although the State-owned generator had performed well “the proposed sale of shares in the business will increase scrutiny of its investments, and will help improve its dynamic efficiency long term.”
Energy News, which was there in that room, reported that, that very day. Had the company been listed it is likely there would have been pressure to quit its landfill gas interests, which were non-core and non-material, much earlier. He told this to the Commerce Committee that day: “The company’s investment of about $100 million in gas exploration in the middle of last decade is also likely to have been viewed negatively by the investment community, forcing management to act earlier.”
We know that the Opposition has decried that, but we know that market pressures create efficiencies. We know that competitive pressures create efficiencies, and the beneficiaries of that are the consumers. The beneficiaries of that are the consumers, who have better price structures. And this is why we introduced the Electricity Industry Act 2010—to create competitiveness in the electricity industry. Back in 2004, 2005, 2006, and 2007 under the previous Government, all of these companies were in silos servicing just very small groups of consumers, but through this there has been competition across the country, and through this mixed-ownership model we are going to see that productivity increase through those competitive pressures. Thank you.
CLARE CURRAN (Labour—Dunedin South)
: I want to talk about this Government’s incompetence and its deceit—its incompetence in running the economy and the incompetence of Ministers in their portfolios. Some Ministers do not even seem to understand what their portfolios mean, let alone grasp what their responsibilities are. This legislation, the Appropriation (2011/12 Supplementary Estimates) Bill and the Imprest Supply (First for 2012/13) Bill, sets out the Government’s spending and revenue raising plans for the year ahead, and it gives Parliament authority for those activities to take place. But this Government is not going to address the big issues on the economy. The Budget does not do that. It is petty, it is short-sighted, and it is just plain dumb and nasty in parts. It certainly is not providing any new ideas to grow the economy. The only idea that this Government has is asset sales. That is proving to be a great idea, is it not?
Last year John Key promised 170,000 new jobs. Instead, we have got a Government with the worst growth record in 50 years, with more than 50,000 people leaving for Australia, 52,000 more in unemployment than under Labour, and nearly 50,000 more on benefits. Let me tell you what the Minister for Economic Development, the great Mr Steven Joyce, said to the Commerce Committee last week when he was put on the spot around those jobs. This is the great economic hard man of this Government; the guy who gets things done. He is the Machiavelli who pulls the strings in the back rooms. Well, let me tell you what he said. The chair of the select committee who sits across the House there, Jonathan Young, was there, and he heard what he had to say. He could not make a case. He floundered. He could not make a case to back up his Prime Minister’s ridiculous pledge to create 170,000 jobs, because there is no case. Instead, Kiwis are going out the back door in droves; they are flying out, and they would be leaving by the boatload if the seas were not so rough.
This is what Steven Joyce said. When he was asked what his forecasts were in job growth in the different sectors to make up that 170,000, and how he was tracking them relative to job growth targets, he said: “Well, actually we are making some very good progress. We are very comfortable with that 170,000 job target, and in terms of where they are coming from, naturally they are coming from a range of areas, right across the
economy. We are seeing significant growth in the number of vacancies.” But when asked for estimates on what work the department has done and the ministry has done region by region, sector by sector for that job growth: “Well, no. We haven’t done that.”, he said. They have had a year to do it—a whole year to do that—to give some kind of analysis on where those jobs are coming from. Where are they coming from? When asked how many have actually been created, he could not tell us. He could not tell us, and that is because he simply just does not know. That is because, as with all the other targets that this Government has announced—particularly the targets it has announced this week—it just does not know. They are meaningless; they are meaningless targets that cannot be backed up, and essentially they are trying to pull the wool over the eyes of New Zealanders and tell us a great big story.
And then there is the pettiness and incompetence of other Ministers and their petty, stupid, misguided decisions, which are going to have long-term implications for our country—implications that will have long-term effects for our nation. Apart from asset sales, the other big issue that is happening this week is the decision by this Government to axe funding for TVNZ 7, which is our only public broadcast channel. The funding was removed from this year’s Budget, a big blank line for this year’s Budget. Maybe the Minister of Broadcasting has not actually read the Budget? Because he does not seem to have read his Cabinet papers, or a lot of other papers, or even understand what his job is. TVNZ 7 funding was removed from this year’s Budget and it will have huge long-term effects on this country.
And then you would think that Peter Dunne, the great champion of public broadcasting, would have made just a bit more of an effort when he negotiated a deal with this Government. Well, you would have thought that he would make a bit more of an effort. In the briefing to the incoming Minister of Broadcasting in December it was mentioned that in “the confidence and supply agreement between National and United Future New Zealand, the National-led Government has agreed to ‘maintain at least current Budget funding tracks to TVNZ … to ensure they continue to fulfil their existing broadcasting roles’.” Apart from the fact that that is a meaningless sentence, given that he was such a supporter of public broadcasting—he rolls out on to the steps of Parliament to speak at the rallies; whenever there is a rally about public broadcasting, out comes Peter Dunne, championing the cause—if he was such a supporter as he claims to be, why did he not make his support for asset sales legislation contingent on ongoing funding for TVNZ 7? Why could he not have insisted? Instead, the country gets its energy companies sold off to overseas interests and we lose public broadcast television, all in the same week. What a great legacy that is. It was a Labour Government that allocated $79 million for TVNZ 6 and TVNZ 7. It was a Labour Government that had the intention of continuing public broadcasting in New Zealand, and it is a future Labour Government that remains committed to public broadcasting in New Zealand, and will reinstitute it.
As was revealed, it is just plain deceit to say, as the Minister—well, he calls himself the “Minister of Broadcasting”—said yesterday, that somehow it was never the intention to do it. This was revealed in today’s
Dominion Post, where it was shown through an Official Information Act request document that there was a plan on the table; that there was a plan to keep TVNZ 7 going, and that it was this Government that axed it. It was this Government that made the deliberate decision to axe it. The Minister of Broadcasting shakes his head, but as he revealed yesterday he does not even read the Cabinet papers. He does not actually know what happened last year when he was not the Minister, because maybe he thinks that his job started only as of December, and he did not need to know what actually happened before that. It is plain incompetence—plain incompetence. They put Craig Foss in as the Minister of Broadcasting, the
“Minister of Fumbling and Bumbling”, who does not understand his brief, who does not read his Cabinet papers, and who allowed Stephen McElrea, the Prime Minister’s electorate chair, to continue on the board of New Zealand On Air making decisions about public money for commercial purposes, and for programmes that are purely advertising-related, and that suit the Government’s agenda. That is what this Minister of Broadcasting does. He does not even realise that he has got the power to approve spectrum allocation for public purposes. He is the Minister of Broadcasting, and he does actually have the power to approve spectrum allocation for public purposes, but he did not seem to realise that yesterday, either.
Hon Craig Foss: Have another read of your question.
CLARE CURRAN: Maybe he could actually answer a few more questions on this, because he obviously has not read the framework, where his policy actually states that he is required to promote local broadcasting services and to promote innovation and digital broadcasting. Perhaps he could answer the questions as to whether the Ministry for Culture and Heritage and the Ministry of Economic Development have reserved any spectrum for the purposes of non-commercial television broadcasters that seek to fill that void that has been left by TVNZ 6 and TVNZ 7, which have been axed in the latest Budget—axed forever by this Government. Perhaps he should be asking himself, and asking for some advice from his ministry, about whether there has been any effort to determine whether other broadcasters are prepared to broadcast the non-commercial programme services, and, if they are, what he is going to do. What is he going to do? And how are those new non-commercial broadcasters going to fill the void—
Mr DEPUTY SPEAKER: Order! Your time has expired.
Dr JIAN YANG (National)
: It is a privilege to be given the opportunity to speak on the
Appropriation (2011/12 Supplementary Estimates) Bill and the Imprest Supply (First for 2012/13) Bill. I would like to focus on National’s responsible management of the economy and on our goal of returning the Government’s books to surplus by 2014-15. Just over a month ago the Hon Bill English delivered his fourth Budget, which outlined National’s platform for growth and for building a more competitive New Zealand economy while delivering on better services for New Zealanders. Despite facing ongoing global financial uncertainties and the aftermath of the tragic Christchurch earthquake, National has managed the Government’s finances responsibly without having to borrow more, and we have delivered and will continue to deliver on better public services to New Zealanders. In these unsettled times National can be trusted not to follow our European counterparts in bringing the country to its knees by continuing a legacy of debt-fuelled excesses. Greece, as we all know, is on the brink of economic disaster, with Spain following closely behind. The creditworthiness of 28 Spanish banks was downgraded recently. A “buy now and pay later” ethos has been the driving force for so many in recent times, and the end result has been catastrophic. Instead, we would do well to adopt the “save now, spend later” philosophy of our Asian neighbours.
This outlook is one of the reasons why countries such as China have been growing and have been doing so well economically. China has grown to be the world’s second-largest economy and a force to be reckoned with. China is still generating economic growth and is, inevitably, the country that New Zealand should focus on. Our trade with China has been growing rapidly. In 2009 our trade grew by 8 percent, in 2010 by 16 percent, and in 2011 by 15 percent. We are well positioned to reach the goal of doubling our trade with China to $20 billion in 2015, which will benefit all New Zealanders.
We should embrace and regard our Asian neighbours’ success as being beneficial to New Zealand. Not only has China become our second-largest trading partner but also it is our fastest-growing source for tourism. Tourism is one of New Zealand’s largest
export-earning industries and employs one in 20 people in the country. Recent figures show that the number of visitors from China in the year ended May 2012 increased by 32.3 percent. The spending by Chinese visitors in the year ended March 2012 increased by 20.1 percent. This spending is a gain for New Zealand’s economy. I understand that Tourism New Zealand has a comprehensive strategy to further develop the China market.
As a member of the Health Committee I would like to speak about National’s success in developing a better, sooner public health service. Despite difficult financial conditions, protecting and investing in better front-line health services is a priority for the National Government. Announced in Budget 2012 was National’s commitment of almost $1.5 billion extra over 4 years for our public health service. This will bring our spending on the health service to $14.1 billion in 2012-13. This will help deliver better operations and shorter waiting times. It will also help to continue the significant improvements under National that have seen record successes for emergency departments treating patients faster, record numbers of children immunised, record numbers of smokers quitting, shorter waits for cancer treatment, and more doctors and nurses working in our public health system. Again, this has not been possible without the responsible fiscal management by National.
Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise to the member, but is there any chance of talking to the people who are doing the volume? I think something has gone wrong with the sound system, and it is much louder than it normally is.
Mr DEPUTY SPEAKER: I think they have probably picked up your message and will make any modification necessary.
Dr JIAN YANG: National must be commended for doing its very best in guiding New Zealand through uncertainty, despite the tight economic conditions. We also have to address the previous Labour Government’s legacy of mismanagement. This included giving expensive handouts and encouraging a culture of welfare dependency. For example, National has to mop up Labour’s mess in chasing the repayment of student loans. National is working hard to recover debts of $2.6 billion, of which $409 million is overdue from overseas-based borrowers. Our scheme, introduced in October 2010, and which targets 1,000 Australia-based borrowers, has netted $20 million, with a further $2.9 million under payment arrangements. This scheme has now extended to 57,000 borrowers in Australia and the United Kingdom over the next 2½ years, and is a priority for National.
National is being realistic, given the tough global economic conditions. It is so easy for the Opposition parties to say that we are not doing enough. They lack credibility on growth, jobs, and responsible fiscal management. Their alternative is to return to the “buy now, pay later” ethos, which I spoke about earlier and which has been the bugbear of many European countries. The world is paying the price, as country after country in Europe is at risk of toppling like dominoes. National, instead, should be commended for policies that will help steer New Zealand through tough economic times, getting our books back into surplus by 2014-15, creating new jobs, and delivering better public services for New Zealanders.
What more approval can you get to support the fact that National is on the right track to getting us back to surplus than the International Monetary Fund June report that said: “The planned deficit reduction path strikes a balance between the need to contain both public and external debt increases while limiting any adverse impact on economic growth during the recovery. The authorities’ plan to return to budget surplus by 2014/15 should put New Zealand in a better position to deal with future shocks and the long-term costs of aging. Moreover, it will relieve pressure on monetary policy and thereby the exchange rate, helping contain the current account deficit over the medium term.”
The National-led Government is continuing to do the right things. Our strong economic growth agenda, disciplined spending, responsible fiscal management, our sound economic and financial institutions, our in-demand products—particularly by Asia—and the Christchurch rebuilding stimulus are all factors that will support New Zealand’s resilience and give New Zealanders a brighter future. I commend the legislation.
Mr DEPUTY SPEAKER: Before I call the member, this is the last speech in a time-limited debate. You have got about 9 minutes. I will give you a 2-minute bell.
Peseta SAM LOTU-IIGA (National—Maungakiekie)
: It is a great pleasure and honour to speak in this Budget debate and to give the final speech. It is quite an honour. I just want to say I support the Prime Minister, the Rt Hon John Key, as well as the Minister of Finance, Bill English, bringing this legislation to the House.
Looking back 3½ years over this Government’s tenure, New Zealanders know that we inherited an economy that had some of the highest interest rates and inflation rates in the Western World. The forecast for economic growth when we took over the Treasury benches was particularly grim. Treasury had forecasted deficits of Greco-Hispanic proportions—10 long years of crippling deficits. Labour’s great legacy—and Mr Hipkins knows this—which it likes to keep quiet, was 5 consecutive years of export contraction. The prolonged global economic recession, the Christchurch earthquake, and Labour’s economic mismanagement have led to a long dark night in our history. However, after a long dark night we all know that there is morning again, and this Budget represents morning in New Zealand. It is morning because in New Zealand this Budget will balance the Government’s books by the year 2015. It is morning in New Zealand because this Budget will deliver better Government services. Finally, it is morning in New Zealand because this Budget builds a more productive and competitive economy.
Under this National Government the economy has steadily built up to the point where 2,230,000 New Zealanders went to work in this country today. That is more than at any time in our history. Interest rates are at historic lows—under 5 percent. They were well over 10 percent under the Labour Government in early 2008. In fact, inflation was over 5 percent in mid-2008, and today it is at an all-time low of 1.2 percent. Finally, I want to say that economic growth in the first quarter of this year—the figures were released last Friday—came in at 1.1 percent. That is the third-highest rate in the OECD. The Opposition might ask—Mr Mallard in particular—why it is important that we balance the Government’s books. Well, it is important because as we look around the world—and my colleague Mr Yang referred to this—there are danger signs of countries where out-of-control debt has brought nations to their knees. In Greece crazy debt-levels led to a €130 billion rescue package for what is a €215 billion economy. Unemployment there is over 21.5 percent, and the economy has shrunk. It shrank by 6.5 percent in the first quarter alone. Mr Yang also referred to unemployment in Spain. It has hit 24 percent. The banking sector there is in crisis and facing serious downgrades, and a recession is imminent. In my view, this National Government would not allow that situation to happen here. It is through fiscally responsible policies, prudent economic management, and sound, common-sense leadership that we will make this country bolder, brighter, and better again.
New Zealanders ask what this Budget does to balance the books. Well, we have closed tax loopholes around livestock and mixed-use assets, to save $293 million over 4 years. We have removed tax credits that were no longer serving their purpose, and that will save $117 million. But what is critical, with debt in mind, is that the net core
Crown debt will remain below 30 percent. This is a gold standard compared with the debt of other developed countries.
Significantly, we are reprioritising $4.4 billion over the next 4 years to ensure that New Zealanders receive better public services in health, education, social services, and science and innovation. Why are we doing this? Why are we doing this? That is a particularly important question. We are doing this because these are the areas that actually matter to everyday New Zealanders. So in health—and I am glad the Hon Tony Ryall is here to join us in the House today—we are spending an extra $1.5 billion. Under his leadership we are spending an extra $48 million on more elective surgeries. That is right—more New Zealanders whose quality of life will be improved under this Government.
Hon Tony Ryall: That’s right. Record numbers.
Peseta SAM LOTU-IIGA: “Record numbers.”, the Minister says. This Government will increase science and innovation funding across government to more than $1.3 billion by the year 2016. That is $166 million of extra funding, which will go to develop the new Advanced Technology Institute. This is critical because these are the investments that support the high-value manufacturing and services sector. These businesses have the potential to create high-value exports and high-wage jobs, while not requiring significant land-based resources. I see this in my own electorate of Maungakiekie through innovative companies like Rakon, Buckley Systems, Masport, and Compac Sorting Equipment, as well as Sistema. The recent GDP figures are testament to this, with manufacturing up 1.8 percent in the March quarter alone. This represents the largest contributor to economic growth in this period.
Finally, just on the Future Investment Fund, which will invest $5 billion to $7 billion from the partial floats of State enterprises—and I again commend the Minister for State Owned Enterprises, who is in the House, for bringing the legislation through, which was passed yesterday—crucially, it will contribute $33 million towards the fit-out of ultra-fast broadband in my schools in Maungakiekie, but also in schools in the electorates of other members of Parliament here in the House today. We are also investing over $88 million in a number of hospital redevelopments across this country. So we are investing in our future by investing in our children and investing in their health and learning outcomes.
What has been clear in this debate are the ideological differences between those tired, pessimistic members on the Opposition benches over there, led by Mr Mallard, against these upbeat, aspirational members on the Government benches over here. The Opposition is arguing what we cannot do, while this Government is stating clearly what New Zealanders are capable of. The ideological divide is noted in a study by Harvard economists Alesina and Ardagna. Their conclusions were unequivocal. Fiscal stimuli based on tax cuts are more likely to increase growth than those based on spending increases. They added that spending cuts, which is what this Government is about, are much more effective than tax increases in stabilising debt and avoiding economic downturns, which is what Mr Mallard represents.
In closing, it is morning again in New Zealand and under the leadership of John Key our country is bolder, brighter, and better. Why would we ever want to return to the profligate ways of the last Labour Government, which emphasised tax, spend, and borrow, but very little hope? This Budget sets this country on a path to surplus, this Budget puts an economic framework in place for improved prosperity, and this Budget provides opportunities for all New Zealanders to get ahead and succeed. I say again it is morning again in New Zealand, and I commend this Budget to all New Zealanders and this House. Thank you.
A party vote was called for on the question,
That the Appropriation (2011/12 Supplementary Estimates) Bill be now read a second time.
||New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.
||New Zealand Labour 34; Green Party 13; New Zealand First 8; Mana 1.
|Bill read a second time.
A party vote was called for on the question,
That the Imprest Supply (First for 2012/13) Bill be now read a second time.
||New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.
||New Zealand Labour 34; Green Party 13; New Zealand First 8; Mana 1.
|Bill read a second time.
Mr DEPUTY SPEAKER: I declare the House in Committee for the consideration of the Appropriation (2011/12 Supplementary)—
Hon TREVOR MALLARD (Labour—Hutt South)
: I raise a point of order, Mr Speaker. I was of the understanding that we were going to skip this stage and incorporate by leave the amendments that the Minister, I thought, was going to move. Is that not the case?
Mr DEPUTY SPEAKER: I think the member knows that is not a point of order.
Hon TREVOR MALLARD: It is absolutely a point of order. It is a point of order before we go into Committee, because it was discussed at the Business Committee that the process would be to seek the leave of the House to incorporate at this point the amendments in the Minister’s name to the bill.
Mr DEPUTY SPEAKER: As I said earlier, that is not actually a point that the Speaker rules on. If there have been some considerations in the Business Committee or other places, but the Minister wishes to go into Committee to have the amendments considered, then that is the prerogative of the Minister. And at this stage, I have no other instruction before me. So I declare the House in Committee for the consideration of the Appropriation (2011/12 Supplementary Estimates) Bill.