Hon MARK GOSCHE (Labour—Maungakiekie) : I want to continue this speech on the theme that I finished with last time, when I was asking the National Party whether it had any policies it could put up as a Budget. We occasionally see the Leader of the Opposition on television, and he says he is not going to mislead the country. Dr Don Brash, a man known to be very frugal, who survived on corned beef and peas for so long, and kept his pyjamas from childhood, knows for a fact: “You can’t spend it if you don’t make it.” He knows that much. So how would a National Government give tax cuts but continue to fund the 2,700 extra teachers that Labour has employed, the 3,300 extra nurses we have employed, the 398 extra social workers at Child, Youth and Family Services, the 138 extra probation officers, the 820 extra prison officers, and the 1,080 extra police? How will Dr Brash—the man who is frugal, who knows that if the money comes in one can spend it, but if the money does not come in one cannot spend it—be able to give tax cuts and keep all those other things? How would National continue funding early childhood education for our young children, if it is going to give money away in the form of tax cuts sometime in the future?

Those are the questions we want answers to. We want to hear answers from any National Party speaker among the huge array of members opposite. What sort of economics allows a Government to give tax cuts, and still spend money on teachers, nurses, early childhood education, police officers, and so on? We are looking forward to those answers from the Opposition, and New Zealanders are seeking answers too.

This is a great Budget. It puts money where it is needed. It builds on all the wonderful things that this Government has achieved over the last 5 years. We have seen State houses rebuilt, and income-related rents; we have seen more spending on defence, the police, the health sector, and the elderly. We have seen visionary policies enacted by this Government to make sure that the baby-boom generation knows there will be a superannuation scheme for them. We are also saying to some New Zealanders: “We’ll give you a hand to buy your first house.” We have to start in a relatively small way, because the previous National Government sold all the mortgages, and the State houses. We want to ensure that the people of my generation, whose parents bought their house with a 3 percent State Advances Corporation loan, can look to Labour to reintroduce policies of that sort with a mortgage insurance policy and a KiwiSaver loan.

That is the sort of visionary Budget that New Zealanders need, not some nebulous policy that says to people: “We’ll give you a tax cut some Christmas in the future.” But nobody in the National Party said which Christmas, or how big or how small the tax cut would be. Dr Brash, the man who knows about economics, realises that if he gives the big tax cuts he is promising everybody, he will also have to give those with a mortgage a whopping great increase in their interest rates. Is that the sort of thing New Zealanders are crying out for?

The Australian Government learnt all about that. That is the policy it suggested the Labor Party would be following. How are National members opposite going to answer that one? Do they have any answers? Is anyone capable of standing up and explaining what a National Party Budget would look like? We are looking forward to those answers, but I do not think we are going to get many. This Government is proud of its Budget, but National runs and hides when it comes time to pronounce any policy.

GERRY BROWNLEE (Deputy Leader—National) : If there is anything certain about the last Budget delivered by Michael Cullen it is that, in its dying days, the Labour Government gave up on aspiration for New Zealanders and pronounced that the mediocre approach to life was the best any New Zealander could hope for under a Government led by Labour. The message was that people should not think for themselves. The message was that people should not have aspirations for themselves; they should have just whatever Helen Clark, Michael Cullen, and the rest of the Labour cabal are prepared to allow. That is what Labour said in its Budget, and that is what New Zealanders heard overwhelmingly.

I can tell all those Labour back-benchers who are going to brush up their CVs soon after the election, that I knew they were in deep trouble when, just a couple of days after the Budget, I was in a supermarket unloading a grocery trolley on to the conveyor belt, and the very nice lady on the checkout said to me: “There won’t be much in that lot for 67c, will there?”. I said: “You’re dead right.” I have to confess that she did not actually make a connection to which party I came from; she just knew I was from Parliament. She said: “I can’t see why you boys couldn’t have done better for us.” I was pretty keen to explain that I was not part of that Budget and that that was not my party. It was Labour that said that 67c in 3 years’ time is what that checkout operator could expect to receive in her pay packet—67c a week one year after that person has had to pay at least $4 a week in “Kyoto tax”.

I can tell members that that woman was adamant she would not vote for Helen Clark again. That is the truth of it, and that was very soon after the Budget. [Interruption] I could take that member over there—what is his name again? He is the guy in the shiny suit, the guy who has brown hair today. It was blond last week, and next week it will be blue, because he will be trying to associate himself with a winning party. I could take that member to the supermarket and introduce him to that checkout operator, and he could find out for himself how deeply in trouble his party is in the electoral sense.

The other nonsense that Government members talk about is what they are doing in housing, and what they are going to do to help people get into houses. Well, I ask that member this. In those few years, when people can get their $1,000 a year grants, and are saving their money in a vehicle or account yet to be nominated—probably one of those 1.5 percent Kiwibank accounts—what will be the value in the meantime? Because the problem is the ability to repay. That goes right back to the issue of income again. National has said that we are going to lower taxes. We get this argument from Mr Gosche, of all people, the great union economist, telling us that if we let people keep more of the money they earn, it will push up interest rates. Well, is he prepared to go down to the Engineering, Printing and Manufacturing Union and tell them that if they get a 5 percent increase, that will also push up interest rates? Oh no, he would be silent on that, because he knows that under the current tax regime, if the average worker in that union gets a 5 percent pay rise, it will equate to about $5 a week, with about twice that much going out of his pocket in increased tax. Mr Gosche is silent on that, because it is another great tax grab by the Government.

We are simply saying that it is time to meet in the middle. Yes, wages have to rise. Incomes in New Zealand self-evidently have to rise if we are going to stop the flow of 600 talented, young people a week across the Tasman. But the way incomes can rise surely has to be a mix of paying less tax as well as earning more. The Government argues that it is best that it looks after people’s money, spends people’s money, and makes people’s choices for them because otherwise interest rates might rise. That is utter nonsense, and it is an argument that certainly will not be sustained.

I heard also Mr Gosche bringing up the old Labour trick of saying that National sold all the State houses. Well, I am very proud of the fact that we sold 4,000 of them.

Hon Taito Phillip Field: 4,000!

GERRY BROWNLEE: Yes, and who bought them? I can tell this House that the people who bought them were the people who lived in them—the tenants who had paid for them over years and years. I have a question for Labour. If Labour builds one new State house tomorrow and puts a tenant in it, and if that tenant pays the rent for 30 years, is there any point at which Labour would be prepared to say that that rent has covered the capital cost, and that the tenant, probably on a low income, should get some benefit from the asset? No, they are all shaking their heads. The answer is no. Labour does not like the idea that New Zealand is a property-owning democracy. New Zealanders like to own houses, and if Labour were prepared to admit that, it would be able to admit that its pathetic home buyers’ scheme is in the Budget for that very reason.

Labour members are a very confused group of people. I bet that after the caucus meeting last Tuesday—prior to the delivery of the Budget—they walked out of the caucus room feeling smug. They thought they had the winning Budget. They thought it would propel them into a third term of Government. But the Budget fell flat. It fell flat all over the show. The issues poll in the New Zealand Herald published earlier this week showed that higher taxes is the second-biggest issue. The biggest issue is health, and that is where the current Government has failed most miserably. Is any Labour member silly enough to stand up and suggest that more elective surgery procedures are being performed this year than last year or the year before? [] Well, that just proves how silly they are. They are wrong. The numbers have fallen, but the funding is way up. Where has the money gone? It has gone to pen-pushers, not those who are actually delivering health services.

When it comes to the issues that New Zealanders have outlined, then every time they consider the 6 years of a Labour Government they will see the situation getting worse. Do members know what the great irony for me is in that New Zealand Herald poll? The great irony for me is around the issue of police and police services. I am very heartened to know that New Zealanders are still great people. New Zealanders do care enormously about their community and for the society the live in, and they have great respect for the police. And despite the absolute debacle that George Hawkins has presided over and the terrible situation the police have been put into, New Zealanders still have great confidence in them, and I think that is a wonderful thing. But that may well be—no thanks to the Labour Government—the only thing that has been preserved and is unchanged during the term of the current Government.

It is clear and obvious that the Budget is a disaster for the Labour Government. It has given up any prospect of giving New Zealanders a message that is inspirational. Labour has shown that it is returning to being the kind of Government that Labour has always been—that is, inserting itself deeply in the daily lives of people and telling them exactly how things are to be and when they are to be. The Government’s remaining time in office is very short.

MOANA MACKEY (Labour) : We can tell there was nothing in this year’s Budget for Mr Brownlee. What a bitter, bitter speech. I say to the people of New Zealand: “Let National and ACT anywhere near the Treasury benches and their first Act of Parliament will be to cut taxes for high-income earners in order to line their own pockets.” National has done this every time when in Government and this time will be no different, despite the rhetoric.

I am happy to stand and take a call in this debate on Budget 2005, and in doing so I would like to congratulate the Hon Dr Michael Cullen on what was a very important Budget for New Zealand. It was a Budget that finally attacked some of the long-term issues facing New Zealand that Governments of all stripes have put in the too-hard basket for far too long. I would particularly like to draw attention to the new funding in this year’s Budget, which will continue to support regional New Zealand and rural New Zealanders. This Labour-led Government has a proud history of achievement for the regions in New Zealand. Anyone who lived in regional New Zealand under the National Government’s reign in the 1990s saw first-hand how the National Government sucked the lifeblood out of regional New Zealand. One could measure it week by week by the increasing number of empty shops appearing on the main streets of regional New Zealand, or by the increasing number of students leaving high school and going to university, knowing they were unlikely ever to return to their home towns, or measure it by the increasing number of unemployed workers, as business after business shut their doors.

This National Government’s legacy has not been forgotten, despite the leaps and bounds that rural New Zealand has made under this Labour-led Government. Many of my colleagues have highlighted the enormous benefit that will flow from increased spending on health, education, police, and small business, and in other areas. But I would like to outline a few of the announcements from Budget 2005 that have not been as high profile but will be of particular interest to the regions. Under Budget 2005, $36 million annually will ensure that thousands more rural New Zealanders will be eligible for assistance when accessing specialist health services, thanks to the Government’s new travel and accommodation policy. This policy will significantly improve rural people’s access to specialist services. Currently, about 30,000 people nationwide get assistance under the current policy but this number will exceed 100,000 under the new scheme.

There are existing travel and accommodation subsidies but eligibility, reimbursement, and administration do vary between different regions. The new policy will standardise this service across the country and target those who have to travel long distances, and those who, regardless of their income, incur high travel costs as a result of frequent specialist visits. It will also continue to support those who have a community services card. This is particularly important in regions like Opōtiki, where the previous National Government closed the hospital and promised such a scheme but, true to form, never delivered it. So what would the National Party do now? Would it scrap this assistance in order to pay for tax cuts for its mates? We do not know.

The $137 million being spent to establish a new drinking water subsidy scheme will help to improve drinking water systems in small New Zealand communities and allow them access to the good-quality drinking water that people in urban areas take for granted. The Drinking Water Subsidy Fund will provide funding to councils and suppliers for technical advice and direct capital assistance, which would otherwise have had to come from rates or water charges. This is great news for many small rural communities.

The fund is one of a number of initiatives in this area that have been established by the Government to ease the burden of basic infrastructure demands on regional communities and ratepayers, including $133 million appropriated in 2003 to help councils pay for sewerage systems and a $10 million fund appropriated last year to help communities to cope and position themselves for rising tourist numbers. These initiatives are helping rural New Zealand to cope with infrastructure pressures that come with the increased growth, population base, building developments, and tourism, which have underscored the recovery in the regions under this Labour-led Government. Would a National Government cut this funding to pay for tax cuts for their mates? We do not know. Maybe it would simply drive us into another recession in the regions, and hope that as many people leave as they did last time National was in Government, in order to reduce these pressures.

These are just a few of the initiatives that will be of direct benefit to regional New Zealand and continue the fine tradition of Labour supporting, rather than ignoring, the regions. I welcome also the announcement in this year’s Budget of the extension of paid parental leave to self-employed women. The Labour-led Government introduced paid parental leave, fronted by the Hon Laila Harré, for the first time in New Zealand in 2002. Since that time, 45,000 people have accessed the scheme. The scheme was extended last year to cover more parents, and the duration of the payment was increased from 12 weeks to 13 weeks, and will be extended again to 14 weeks in December this year. The extension of the scheme to self-employed women will be of great benefit to many rural mothers and addresses a glaring gap in the scheme. I pay tribute to the Hon Ruth Dyson for the work she has done over the last few years to ensure we have a robust scheme for self-employed rural women and their families.

This poses an interesting dilemma for National Party members, who oppose the scheme in principle but know that it is not a popular position to take, so have been using the lack of provision for self-employed women as an excuse to oppose the bill thus far. What will they do now? Will they scrap this scheme to support new families, to pay for tax cuts for their mates? I suspect not, given that one of their MPs took leave, on full pay, from her job as an MP in order to have children. I have no issue with her doing that, as I believe she has a lot to offer this House as a talented young woman, and I am pleased she has managed to combine her family life and her career so effectively. It is the inconsistency that is hard to take.

Increased funding to support trade negotiations has also been welcomed by local primary producers. Budget 2005 allocates a further $31.1 million over the next 4 years to conclude trade agreement negotiations and ensure we are better placed to access key markets for our goods and services. This goes hand in hand with a huge amount of new spending in biosecurity, which has also been welcomed by this country’s primary producers. This Labour-led Government has boosted baseline funding of biosecurity every year since we have been in Government. Will the National Party cut this funding to pay for tax cuts for their mates? We do not know. Maybe National members think we do not need any biosecurity funding, because in the event or threat of a biosecurity outbreak Dr Brash will just not tell anyone. I suspect that the National Party might have to drastically increase funding for trade negotiations once it starts being less than 100 percent honest with our trading partners.

Regional New Zealand has suffered from three one-in-100-year national disasters in the last 18 months. Civil defence emergencies used to be a rarity but are now an annual occurrence. I welcome the extra $19 million in funding to help communities prepare for such events and thereby minimise their impact. I have no doubt that the National Party, which has shown no commitment to civil defence in its time, will scrap this money to fund tax cuts for its mates. The National Party has criticised the Government’s response to the recent floods in the Bay of Plenty. It has criticised the Government departments that are doing their best to ensure that evacuated families are looked after, and has sniffed at the $250,000 cash donation from the Government. National is a party that, when in Government, was asked to provide assistance to the people of Wairoa and Nuhaka in the mid-1990s after a series of weather-related natural disasters. In fact, the district had endured so much damage to its roading system and had so much work to do, that its roading subsidy that year, which was normally 60 percent, was at nearly 100 percent.

The National Government, under Prime Minister Bolger, offered 30 Task Force Green workers and $15,000. The money was not enough to cover the cost of the fence posts, so that the Task Force Green workers actually had something to do. The then National Minister of Transport also refused to extend the roading subsidy past 1 July, when it was due to drop back to 60 percent, so that repairs on the roads could receive the higher subsidy, in light of the huge amount of money that that small rural council had had to pay out over the year for roading repairs. Apparently it was tough luck that the national disaster happened to occur in the month of June, right before the cut-off date. And how many National Ministers and members of Parliament went to Wairoa and Nuhaka in the wake of the natural disaster? Not one, and when the issue was finally raised in the House they sent Katherine O’Regan—2 weeks after the event.

The National Government, with its “market will provide” blind ideology sucked the life out of regional New Zealand, and given half the chance it will do it again. The transformation of regional New Zealand under this Government has been staggering. A guest speaker at a Gisborne Chamber of Commerce event commented on this change, saying that during the 1990s a colleague of his had visited Gisborne and said that he felt physically unsafe. The guest speaker told us he had urged his friend to come back and be prepared to be amazed at the turn-round. Our unemployment rate in Gisborne is nearly at the national average, which it has never been before, the rate of Māori unemployment has plummeted, and tourism is booming. We do not want to go back to the failed policies of the 1990s, when it was the regions that paid the most harshly for the tax cuts for the rich mates of the National Party.

SUE BRADFORD (Green) : Dr Cullen’s election-year Budget says little and cares less about the many children and adults in this country who are still living in poverty. All the talk in the world about future savings schemes and minor tax cuts makes no difference to all the people who are, right at this moment, struggling to survive from one end of the week to the other.

The pride of this year’s Budget appears to be the new KiwiSaver scheme. Although I do not want to knock that excellent initiative to try to open up the possibility of work-based superannuation savings for a whole lot of people, I must say at the same time that the KiwiSaver scheme does not address the real issues of wages and benefits that are not enough to live on, or deal with the fact that people on low incomes will not be able to put away 4 percent—much less 8 percent—of their wages anyway. As Auckland University economics professor Tim Hazledine said, in a speech the day after the Budget: “Low wages, not low savings, are New Zealand’s real economic problem.” The Green Party agrees absolutely with that analysis. As long as the minimum wage remains at the ridiculously low level of $9.50 an hour and benefits are often not enough to sustain people without their sinking even further into debt, we will continue to trap a large number of adults and children in a trans-generational mire of poverty, with all its attendant ill consequences.

I realise that Labour’s response to that will be to say that the Working for Families package is the answer. However, as a number of us have been pointing out ever since its introduction last year, Working for Families is, firstly, a massive taxpayer bail-out of employers, using Government funds to top up wages that remain consistently low, and, secondly, a conscious push by the Government to entrench the structural discrimination against beneficiaries that National started in the 1990s. That is not good enough. Professor Innes Asher, a well-respected Auckland paediatrician who supports the excellent work of the Child Poverty Action Group, spoke last week about a family in Porirua who had no furniture in the house and who recently had to spend $80 for an evening visit to a doctor, and for medication, after one of the children had an asthma attack. That $80 was the family’s entire food budget for the week—gone in one fell swoop. All the family had left to eat for the rest of the week was bread and butter. For families like that, the 2005 Budget offers no hope of an improved standard of living now or at any time in the near future. A family with at least one adult in paid employment will have benefited earlier this year from the Working for Families package, but, of course, no more is on offer from that quarter until next year. However, beneficiary families will not even have the in-work payment to help them, and this Budget will have given them not one crumb extra.

Poverty-related diseases continue to beset the children of the poor. In south Auckland meningococcal disease has struck 1 in 300 Pacific Island children under 1 year of age. Rheumatic fever, pneumonia, chronic lung infections, serious skin infections, and other conditions brought about by overcrowded and otherwise unhealthy living conditions are rife. More of our babies die than in many other comparable countries. Endless research has been done on the causes and effects of poverty on children, and there is no question that income is a critical determinant of health, of whether children are brought up in secure, warm housing, and of whether they succeed in the long term in education and employment. Without enough money to live on adults suffer, but the impacts on their children all too often last a lifetime, however long or short that life turns out to be.

This Budget does do some good things. For example, as the member who just resumed her seat has said, it extends paid parental leave—that is great—and it increases the funding for early childhood education, for out-of-school care, and for special education. Also, it increases the support for disability support and provides for increased uptake of the primary health care strategy. However, although all that is to the good, it is not enough. There are still nearly 12,000 households on the waiting lists for State houses. The Government is going to build more State houses—again, that is great—but the numbers they are talking about are a drop in the bucket, compared with the real need right now in Auckland and outside Auckland.

The KiwiSaver programme will not do anything for the families that are, right now, in overcrowded, substandard, or inappropriate accommodation, nor will it do anything for the next 5 to 7 years or more. Not only will it be almost impossible for many people on low incomes to join the scheme—because they need every dollar they earn just to survive—but there is also a risk that people will pay out the 4 percent at the same time that they continue to incur ever-rising debt, which in the long run will only make things harder for them. The KiwiSaver scheme can be used by people on low to middle incomes to put a deposit on a first home after at least 3 years of contributions. After 5 years, people will be able to access the maximum of $5,000. However, no one will be eligible for the full $5,000 until 2012. That means that families that are struggling today, and that will continue to struggle over the next 7 years, will not be helped until 2012 at the earliest. Others who will fall outside the 3,000 likely to qualify, even when the scheme becomes fully functional, will continue to miss out altogether. The Government is once again holding out a pocketful of hope that will become a reality for only a tiny fraction of the people who need hope—and help—the most.

On top of that, one of the most iniquitous aspects of the 2004 Budget unfortunately remains in force. I refer to the proposed abolition of the special benefit next year. The special benefit is a third-tier discretionary benefit that props up a lot of the gaps in the welfare system, left over from the days of the 1991 benefit cuts. It is often the only way that people can get enough money to survive. Its loss will save the Government many millions of dollars, at the expense of those who can least afford it: beneficiaries and their children. Labour can be as optimistic as it likes about getting beneficiaries into paid employment, but I have a strong suspicion that, despite the Government’s best efforts, we will not see a continuing decline in the unemployment rate. In fact, quite the opposite of that is beginning to happen, which will leave beneficiaries and their families more vulnerable than ever.

The Green Party believes that this Budget is simply not good enough. Too many people continue to be left out. We would have liked to see something quite different. For example, Working for Families should be extended so that all families are eligible for the same payments based on income and numbers of children, not on parental employment status. We would have liked to see the introduction of a universal child benefit, like the old family benefit, paid to the primary caregivers of all children, regardless of whether they are in paid work. We would have liked to see benefit levels that are enough to live on, and until they are, the special benefit must remain. More money should be invested in meeting people’s real housing needs now through the State sector, through local government, and through the community sector. Some of the huge cost of the accommodation supplement should be transferred sideways, out of the private rental market and into social housing. The minimum wage should be lifted to $12 an hour immediately. Nine dollars and fifty cents is transparently a totally inadequate living wage, and the taxpayer should not continue to prop up employers to the massive extent that currently occurs through Working for Families.

Finally, in regard to a separate but related issue, I take this opportunity to add my voice to those of trade unions, the elderly, and providers in the aged and disability care sector who are really distressed at the implications of the Budget for the work those providers do. Over the few months prior to the Budget, Government people kept holding out a shard of hope that the Budget would bring relief to a sector that reached almost total meltdown some time ago. In fact, what has been delivered is manifestly inadequate, even though it sounds good. In a radio interview last week, Minister Pete Hodgson confirmed fears that the $71 million theoretically allocated by the Budget may, in fact, be spent by district health boards on other services, with the Minister himself saying that there is no guarantee that that money will go on aged care at all. It was also made clear that over $34 million of the $71 million is back-pay to district health boards, which have been underfunded for some time in the past for residential care. Thus, the long-awaited increase in funding, desperately needed to boost workers’ wages and to allow providers to survive, may simply be a complete mirage. I cannot understand why the Government does not take the situation more seriously, when providers are closing down all the time and staff are leaving in droves for better-paid jobs here and overseas. Telling us that most people in need of full-time residential care are better off to stay in their homes is not the answer. Nor, as a country, can we fly in the face of the reality of an ageing population that will need more services, not fewer, in the years to come.

LYNNE PILLAY (Labour—Waitakere) : I am proud to stand today to speak in support of this Budget. It is about working for New Zealand: for families, for our older citizens, for young people, for business, for workers, and, in fact, for all New Zealanders. Unlike National’s view of the world, or its so-called strategy—if we ever see one—our Budget builds on the most exciting initiative that this Government has introduced since coming into office. It continues with whopping investments in business, job growth, health, education and support for families and superannuitants, training and apprenticeships, transport, police and justice, and savings. This Budget works for New Zealand. Under this Budget New Zealand families will be helped to get ahead, and it will provide extra security for the future. It builds on the progress we have made in rebuilding our public health system and our education. There is extra support for our businesses and for families with children.

One of the major programmes in this year’s Budget that I am particularly proud of is the Working for Families package. This package helps low and modest income families and families with children through increases in their family support, help with the cost of childcare, and increased assistance through the accommodation supplement. Already this year family support has increased by $25 for the first child and $15 a week for each additional child. In the coming year there are more increases in family support and childcare subsidies to help cover the costs of raising Kiwi families. By April 2007 our families on incomes between $25,000 and $45,000 per year will be an average of $95 to $100 better off a week. Compare that with the tax cuts that National is offering.

In education there will be more teachers and funding for schools than ever before. Since 1999 the Government has increased school funding by an average of $348 per child—almost 15 percent in real terms. We have also increased the number of teachers by 2,700 over and above the numbers required by school roll growth. From 2006 we expect to increase the number of teachers by a further 421 teachers.

Budget 2005 continues the huge investment that we have made to make sure that more children can access quality early childhood education. We are increasing funding to existing centres and will build up to an extra 65 more centres in areas in need of those centres. From July 2007 all 3 and 4-year-olds will be eligible for 20 hours’ free community-based education per week in early childhood centres. That is great for our kids’ future and it is great for their parents.

Whilst talking about education I have to mention that the investment of $60 million in information technology in schools is an increase of nearly 1,800 percent since 1988 to 1999, when only $3.2 million was spent during that time.

So it is all good news under this Budget, and I cannot go past the KiwiSaver scheme. To incentivise saving for our families and, in fact, for all our citizens, whether they are on benefits, self-employed, or working for wages, this Government will kick-start savings schemes, with $1,000 upfront to a scheme nominated by the employee—a portable scheme that will help people to save for their superannuation and the future. But what is just as important, if not more important, is that for first homebuyers those savings can be put towards the purchase of their first house. To incentivise and to help that along, this Government will give $1,000 per year of saving. For a young couple who has saved for 5 years that means this Government will give them $10,000 towards their homeownership. That is great for young people. People of my age, and older, can remember the start we had through the State Advances loan, and I think that this savings scheme will go a long way to make housing more affordable for our young people.

We cannot go past looking at our primary health strategy. Through our primary health organisations we are already subsidising under-18-year-olds, those aged 65-plus, and from July we will be increasing subsidies for all 18 to 24-year-olds. From there we will continue to roll out cheaper health-care to cover all New Zealanders by 2007.

I was at a family function in my electorate very recently, and I talked to a young couple with their first child. They were really pleased with this Government. They had paid parental leave, they were receiving $60 per week through Working for Families, and their child had been immunised. Can members imagine their delight when I told them what else is to come. Under the Working for Families package there will be more money over the next few years, cheaper health-care, 4 weeks’ leave, 20 hours’ free childcare per week, $1,000 towards saving, and up to $10,000 towards their new home. They were really chuffed about that.

This Budget also lifts funding for older people in residential care, by over $80 million this year, on top of the $60 million that was announced in December and the money that will cover the changes to the Holidays Act, which have added a small cost as we deliver more holidays for workers in this country. Also, for our older citizens, we are phasing out National’s asset testing, and from next year many superannuitants will get rate rebates.

Under a Labour-led Government we have seen a dramatic drop in unemployment. That means more jobs. There was 7.4 percent unemployment, and it is now 3.8 percent. This does not happen by chance. This happens by investing in skills, investing in training, and investing in people.

Lesley Soper: Good management.

LYNNE PILLAY: That is right. It is good management. Funding for industry training overall has gone up this year to $120.5 million. That is up over 100 percent from what was spent in 1999 by a National Government. Let us not go past the Modern Apprenticeships scheme. By December 2006, 9,000 young people will be in apprenticeships.

In Waitakere we celebrate job growth in boatbuilding, vineyards, film making, and our traditional industries. We celebrate our great skills. We celebrate early childhood education, our art, and our music. We celebrate our young people in training. We celebrate our new hospital. All of this has happened under a Labour-led Government.

Added to that is the huge investment in transport and infrastructure. There is more money for nurses, higher police numbers, and the lowest crime rate in 22 years. There is real support for business. There is cheaper and more affordable tertiary education for students. We are rebuilding our housing stock, which National flogged off. We know we can afford it, because we are doing it.

All of this would be up for grabs from National, with its mantra of tax cuts. Remember the 1990s? Who won then? National wants to give tax cuts and a few bucks extra—what will go? Will it make cuts to early childhood education, to schools, to tertiary education, to training, to apprenticeships, to superannuation, to health, and to police and, with that, will it have more borrowing from overseas? I can see, on the benches opposite, those members of the National Party bowing their heads in shame. This Budget takes us forward. National is trying to drag us backwards, and we will not let that happen.

Hon TONY RYALL (National—Bay Of Plenty) : I am very happy to stand in this debate and support the motion of Dr Don Brash. It is a motion that clearly shows that this is a failed Budget from Labour’s outgoing Minister of Finance. It is a failed Budget because it does not address the priorities of mainstream New Zealand. It is a Budget about the carping minorities that have captured Labour. The Government does not propose anything for ordinary, hard-working people, other than 67c in 3 years’ time. How do we say to a hard-working family on $40,000 a year, which is trying to get ahead, that this Government offers it 67c in 3 years’ time? It provides hardly any incentive to work hard or to get ahead.

This Government is presenting a Budget surplus of over $7 billion, and is trying to tell the country that ordinary working people should not be allowed a decent tax cut. With a surplus of $7 billion, of course this country can afford lower taxes to reward effort and create jobs. Of course, with a $7 billion surplus there is enough money to lower taxes, to reward effort, and to create jobs. Ordinary New Zealanders, mainstream families, want a tax system that rewards their work and effort, that gives them an incentive to get ahead. What does this Government offer? Well, it offers 67c in 3 years’ time. But what does it offer to families that are trying to get ahead? It offers the Working for Families package. What does that do? It says to two households in Papamoa that live next to each other—one with two kids and earning $40,000 a year, and one next door with two kids and earning $60,000—that the family that earns $20,000 more gets to take home $40 a week more than the family earning $40,000. Where is the incentive to make the effort required to get ahead? Let us lower taxes to reward effort and create jobs. Mainstream New Zealand wants a Government that recognises that the values of endeavour, self-reliance, and independence need to be rewarded.

This Government’s Budget, the final Budget of Michael Cullen, reveals that this Government’s priorities owe more to carping minorities than they do to ordinary New Zealand families. Where is the investment in dealing with crime? Where are the extra police to go on the streets of Rotorua?

Jill Pettis: 10,000 extra police.

Hon TONY RYALL: “10,000 extra police.”, says the outgoing member for Whanganui. The fact is there has been no increase in the number of police, based on population. I have these answers from the Government. What was the number of police per 100,000 New Zealanders at the end of April 2004? It was 211. What is the number of sworn police officers per 100,000 New Zealanders today? It is 211. There has been absolutely no change in the ratio of police to population under this Government. What about a commitment to dealing with those criminals in our community who keep reoffending—

Hon David Cunliffe: Lowest crime in 20 years.

Hon TONY RYALL: Mr Cunliffe says we have the lowest crime rate in 20 years. I think Linda Clark summed it up best on her programme when she said to the Commissioner of Police: “We can’t believe anything you say any more, because these numbers are so cooked.” We now know that 17,000 cases are shelved every year. We know that there are “ghost squads” responding to 111 calls. We know that this great record of the 111 centres responding to calls within 2 or 3 seconds is a joke, because that is only after Telecom has got them through. As Linda Clark said, we cannot believe one word of those crime statistics.

Where is the action on the economy? Where are the tax cuts to reward effort and create jobs? Where is the extra investment in trade training? There is plenty of investment in hip-hop tours, homeopathy for pets, and Twilight Golf—all things that Labour defends. There is no howling from the Government on that issue. But there is no money for trade training. Why are apprentices being put off? They have to wait for next year’s Budget. What about supporting businesses? Where are the lower accident compensation premiums through competition?

Lindsay Tisch: Not there.

Hon TONY RYALL: They are not there. Where are the fewer compliance costs, through a better Health and Safety in Employment Act? Where is the opportunity to create new jobs through National’s 90-day grievance-free period?

Where is the vision in education? This Government offers no vision in education. Its education portfolio is led by a thug, and that is no way to provide vision for New Zealand people. This National Party says that it wants no child left behind, and that there will be a focus on literacy and numeracy in our schools. Where was talk in the Budget of national standards for literacy and numeracy? There was no mention at all. Where was there a mention in the Budget about cutting bureaucracy and paying good teachers more? There was none at all. Where was the work in the Budget to address the concerns of the Secondary Principals Association, which said that bureaucracy is stifling innovation in our schools? There was nothing on that. Where was the Government’s plan to deal with the disaster of the National Certificate of Educational Achievement (NCEA)? Where was the plan to deal with NCEA?

This Government tries to hide failure. New Zealanders want an education system that does away with the “no marks, no failure” culture that this Government has brought into the education system. From a Government dominated by schoolteachers, I would have expected more. So there was no new education vision in this Budget. There was nothing that matches National’s vision of “no child left behind”—national standards in literacy and numeracy. This Labour Government has brought a “no marks, no failure” culture into the education system. Everybody passes; nobody fails. Everybody feels good. Pupils can go to school and sing “Kumbaya” and get a pass in NCEA. That is what this Government proposes.

Here is another failure of this Government: where were the leadership and new ideas in welfare? We know that the number of people on the sickness benefit and the invalids benefit has simply rocketed under the Labour Government. In the Bay of Plenty the number of people on the sickness benefit and the invalids benefit has increased by hundreds of percentage points.

Where was the plan to deal with one law for all in this country? Where was the plan to deal with ending treaty separatism? This Budget contained no idea whatsoever on that.

Where was this Budget’s vision for getting more investment in roading? It was nowhere whatsoever, and still more of our road taxes will be siphoned off by this Government to pay for every noisy minority group that puts its hand up.

Any noisy minority will be looked after by Labour, but those who are part of mainstream New Zealand will get absolutely nothing, because this Budget has no vision for ordinary people and no vision for this country. There is no hope here for the families in the middle who are trying to get ahead. Those are the families who lose out on all the family support payments, on the student allowances, and on every little thing this Government offers to minority groups. But those people are the backbone of this country. Mainstream families battling to bring up their kids to be self-reliant, independent, and proud are the people we in the National Party stand with. I can tell the people of New Zealand that when this country has a new Government—in a matter of weeks—people will see that the mainstream has taken back control of this House. The noisy minorities who fill the Labour Party’s electorate committees, the noisy minorities whom this Government showers with money, will be on the out, because mainstream families will be back in control of this country.

GEORGINA BEYER (Labour—Wairarapa) : What a dour and depressing contribution that was from the member who just resumed his seat! His depression can well be understood, given the pressure that that member and his party are under to come up with even one policy that outlines their vision, in their attempt—bold as it may be—to lead this country. I do not think that will happen.

Mr Ryall could refer only to tax cuts, and what we ought to be talking about is what those cuts would actually mean for New Zealanders if they were to occur. They would mean that the 2,700 extra teachers we have employed would quite possibly no longer be there. I will come back to the list of shame—frankly, that is what it is—should the National Party find itself in the unlikely position of sitting on the Treasury benches after the next election. We would also like to remind ourselves that the dour 1990s matched the member’s dour, dour speech.

The 2005 Budget from Dr Michael Cullen is, once again, prudent and responsible. It maintains a strong and credible fiscal stance. It is fair and most certainly inclusive. It is helping Kiwis to build a stake in their country, and that is building the conditions for growth. That leads to prosperity, and that leads to jobs. We are experiencing that situation now, with more jobs than one can shake a stick at, at the moment.

We can compare it to how it was not very long ago, in the 1990s, when through various methods the mean-spirited Government of the day, the previous National Government, did not assist people, certainly not in provincial New Zealand. That has been talked about this afternoon by members on this side of the House—a great reminder. Moana Mackey’s speech summed it up quite perfectly. She gave some examples of the struggle, the strain, and the stress suffered by people who could have been regarded as being quite hard-core supporters of the Opposition, once upon a time.

Now, the Opposition is going through some kind of charade for the upcoming election; it is throwing tax cuts around but neglecting to say what those cuts would actually mean for New Zealanders all over the country—including, importantly, rural New Zealand. Tax cuts would threaten the 3,300 extra nurses we have employed, not to mention the hospitals we have built since hopes were dashed in the 1990s under the previous National Government. It would just be despicable, frankly, to consider that situation at any time in the near future.

New Zealanders do have a choice; it is the right choice. Under tax cuts from National we could possibly see the 950 extra medical staff we have employed disappear, but Labour is trying to build capacity. Our 2005 Budget builds upon the very prudent and careful management that has cleaned up after the tattered 1990s. This Government has had to grapple with some of the grave errors of judgment made during the terrible 1990s under the previous National Government.

This Government has taken hold of the situation and has brought the country through to the point of this present Budget, with great stability and prudent fiscal responsibility. That is what New Zealanders want to see maintained. They want to see initiatives like Working for Families get to work fully, because they can see that those initiatives will be of great benefit to them.

Under the tax cuts promised by the National Party, we could possibly see the 1,250 extra non-clinical support staff go. I do not think anyone would want to consider that. We could even see the 398 extra social workers at Child, Youth and Family Services go.

Most certainly, New Zealanders welcome the rebuilding of the capacity that was gutted during the 1990s. I can testify to that. As a mayor during the 1990s, I saw unexpected conditions arise as a result of the absolute viciousness of the Budget of 1991. It stripped many people of dignity. It certainly did not enhance employment. It certainly did not address things like apprenticeships.

I remind everybody in this House that this Government restored value to workers in trades in this country by restoring value to apprenticeships—unlike the National Party, which saw fit to dismiss apprenticeships out of hand. Well, New Zealand has responded since this Government brought that initiative back to the fore. It is obvious that apprenticeships are something we are most committed to, and we are committed not just to that sphere but to all spheres of training.

Under a National-led Government, and under National’s tax cut proposals, the 138 extra probation officers could go. We heard Mr Ryall whingeing on before about crime and such things—but here we are again, a Labour-led Government, restoring capacity where it was once ripped away by a National Government.

No, this country does not want to see a return to those dark days. They were dour—as dour as Mr Ryall’s speech was. He is no longer sitting there with any kind of smile of happiness on his face from his speech. He is hearing what I say—

The ASSISTANT SPEAKER (Hon Clem Simich): I am sorry to interrupt the member, but the time has come for the dinner break.

• Sitting suspended from 6 p.m. to 7.30 p.m.

NANDOR TANCZOS (Green) : When it comes to tertiary education, this Budget is an old dog. It is not a vicious killer dog—a pit bull or an angry Rottie. It is more like an old Labrador—the kind of scabby dog that is friendly enough but that slobbers on people’s trousers when they are seated at the table. It is the kind of dog that means people have to wash their hands after they pat it, to get rid of the odour and the fur. Unlike last year’s Budget, this year’s Budget did not bite tertiary students. Last year the Government scrapped the independent circumstances allowance and savaged the financial position of students who had planned their study programme around access to that allowance. Last year’s Budget was a vicious guard dog protecting the Government’s surplus. It is now well known that, despite the promises of the Government that 36,000 more students would benefit from the changes to the allowance system, in fact, fewer students receive a student allowance this year than last year. No, this Budget is not like that. It does not bite students—it does not even bark at them. It comes in for a pat, but leaves a pungent odour on the hand of the unwary. Then it waddles away to fall asleep by the fireplace, dreaming of its past doggy glories when it still had enough puff left to give some chase.

This Budget does contain a few good initiatives, but they are totally marginal. What it provides for tertiary students would be excellent additions to a core package that did something serious about student debt. But there is no core package. There is only garnish; there is no meal here. Like the poor and like the environmentalists, students have a right to feel cheated. The Budget offers them froth. Members should not get me wrong—at least the Budget gives students that. A National-led Government would have offered a much more bitter pill—a more measly allowance scheme with even more restricted eligibility and harsher implementation. National would have screwed down spending on tertiary education for our young people—for our future—in order to fund tax cuts for its campaign contributors. As Moana Mackey said, tax cuts for National members and their rich friends are at the heart of National’s economic policy. That is why the Greens could not support a Government with the kind of short-sighted, exclusive, and self-serving approach taken by the current National Party. That is why the Greens have said that we will support Labour to be the Government after the election, if we can negotiate an agreeable policy agreement.

Student support and graduate debt are clearly areas that we take a great deal of interest in. The issue of student debt is enormously important for our country. It is not just an issue for students; it affects many people who have been through the tertiary education system in the last 15 years. In June 2004 the total number of borrowers was 418,000—13.2 percent of the population aged 15 years and over. That is a staggering statistic. Further to that, student debt affects our whole society. Evidence is growing about the impact of student debt on fertility rates, migration rates, homeownership, the urban concentration of professionals, career choice, and study choice.

Student debt is a time bomb for our country. According to a 2004 report from the Ministry of Education, the Inland Revenue Department, and the Ministry of Social Development, forecast gross debt levels will rise from over $7 billion today to $10.5 billion by 2010, $13 billion by 2015, and $15 billion by 2020. The Greens believe that, far from being 20/20, it is myopic in the extreme to allow that to continue. That is why the Green Party is advocating a debt write-off scheme for student debt. We say that for every year a person stays in the country and works the equivalent of full time, whether in paid work or unpaid work, we should wipe the debt accumulated in 1 year of study.

The most debilitating thing about student debt is that for some people, it never ends. Again, according to the report I referred to before, of those who last borrowed in 1997, only 18 percent had repaid their debt in 2000, and nearly half had a debt that was no smaller in 2000 than it was in 1997. The Government’s focus on average repayment times does not tell the real story for real students. A significant number of people on low incomes will never see an end to their debt under current policies. We believe that there should be an end to debt if people stay in the country and contribute to New Zealand society. Why do we expect people to become social workers, nurses, or workers in any of the myriad of professions that require tertiary education but that do not recognise that in the pay scales of their practitioners? It amazes me that anyone goes into those fields of work, at all. I commend the New Zealanders who continue to study for those professions, regardless of the many disincentives, because they have a vocation and a real desire to help others.

A TNS survey conducted for the New Zealand University Students Association found that the greatest impact of debt, according to students, was on their ability to save for the future, buy a house, and choose when to go overseas. Around half of those surveyed said that having a loan would affect their relationship with their partner, and 28 percent said that it would have an impact on when and whether they had children. Among recent teaching graduates, 41 percent considered leaving New Zealand because of debt, 60 percent said that their student loan impacted on their study, and 30 percent said that having a student loan would influence their decision to have children. Around half the debt was incurred to pay for living costs, because of inadequate access to student allowances. Only one-third of full-time students are eligible for an allowance, according to the New Zealand University Students Association report of 2004.

The Greens recognise that the Government has made some small improvements in terms of access to allowances. We have seen adjustments to the parental income threshold, and greater recognition in this Budget of the challenges when parents are separated. But we reiterate that the changes do not go anywhere near far enough. We also recognise and acknowledge the moves around the maximum allowable income. We have raised with the Government in this House the issue of how the rules around maximum allowable income are interpreted. We recognise that the threshold has been raised to $180 per week, and we welcome that. We would also like a commitment from the Government that the implementation of the regulations will be in line with the Student Allowance Appeal Authority’s repeated decisions, which the Ministry of Social Development continues to ignore. As I said, the changes do not go far enough. The Greens will continue to call for a universal student allowance for all full-time students, a cap on and a reduction in tertiary student fees, and a debt write-off scheme year for year.

RUSSELL FAIRBROTHER (Labour—Napier) : I move, That this debate be now adjourned.