Budget Debate 
Budget Debate 
[Volume:647;Page:16546] 
Budget Debate 
Debate resumed from 28 May on the Appropriation (2008/09 Estimates) Bill. 
Hon DAVID CUNLIFFE (Minister of Health) 
: 
 For the last 9 years each year has been better than the one before it. The average income has increased by nearly 25 percent unemployment is at a historic low and 1000 new jobs every week have been created under this Government. But in a world beset with cold international headwinds New Zealand families need even more than that. They need hope that their tomorrows are going to be better than their yesterdays. Under this Government they can have that hope. But there are headwinds blowing and that is the context for this Budget. There are the headwinds of a global credit crunch and the headwinds of a sharp increase in world oil prices. There is also the pinch at the supermarket checkout when we tally up the weekly food bill. 
To use a football analogy those are the breezes into which the Hon Dr Michael Cullen has kicked the goal from our 10-yard line right between the posts. But this time there are four posts not just two. In respect of the first post we have maintained the debt anchor at 20 percent or thereabouts thereby keeping low the cost of interest and the burden on future generations. Secondly we have been successful in delivering historic tax cuts—$10.4 billion over 4 years which is $40 a week for an average Kiwi family with kids or $70 a week by the time the cuts fully come through. These tax cuts are socially progressive. They do not reinforce inequality and they are good for all New Zealanders. 
The third goal post is dedicated to maintaining and expanding social services like health and education and that has been done at the same time as we have delivered tax remission. The fourth goal post is economic growth. We have invested heavily in infrastructure by buying back the railways for the sake of an energy-efficient transport future and we are investing rapidly in fast broadband—about as fast as capacity will allow us to go. The Government’s broadband initiative is a model of good design and it is appropriately funded so that we will have maximum capacity going into the ground or through the airwaves over the next 5 years. That initiative stands in sharp contrast to National’s plan which is wasteful and poorly targeted. A capital tender with only one potential bidder will surely reinforce the dominance of the incumbent as a vertically integrated provider. As in previous years National is very slow to learn the lessons of history. 
Health services receive a further three-quarters of a billion dollars of new money every year for the life of this Budget. That funding will strengthen our trust in health services and will provide future funding for district health boards at a rate faster than that of inflation and that of population growth. The funding actions an agenda for equality with nearly $172 million being provided over 5 years to strengthen district health board collaboration and it puts in place new measures to underpin patient safety. It invests in wellness and public health including $52 million over 4 years to fight obesity—surely one of our most serious social challenges. It invests in the early years in youth potential with the human papilloma virus vaccinations and a new programme of oral health services for young people. 
The Budget is full of good and positive reasons why the public can have confidence that under a Labour-led Government their tomorrows will be better than their yesterdays. I feel bound to share with this House the three reasons why anyone looking at this Budget ought not to vote for John Key. The ill winds of the credit crunch have been caused by financial fiddlers just like he has been—people who rig cheap debt to bring down the whole house of cards. That is what he was up to in his career before he came into Parliament. Why would one vote for a guy whose stock in trade was making problems worse? 
The energy crunch has been caused by the war in Iraq and the failure to properly plan for an energy-efficient future. Again I turn to the National Party. National is led by a man who once supported the war in Iraq then changed his mind then could not remember then denied he had ever done it and now he does not know where he stands. He thought climate change was a hoax then he wanted to be carbon neutral and now he has changed his mind again. He is a man who is an inconsistent short-term position taker. He is devoid of direction devoid of strategy and devoid of hope. 
ANNE TOLLEY (National—East Coast) 
: 
 It is a pleasure to stand today and discuss the 2008 Budget where Dr Cullen finally opened his wee purse and where the average wage earner finally got a tax cut worth approximately $16—just about enough to go and buy a family block of tasty cheese. But they will wait another 2 years before they get anything more. We have waited 8 long years for Dr Cullen to consider tax cuts for taxpayers and the speaker who has just sat down made the comment that each year of the last 8 years has been better than the one before. The only context that one could put that into is in regard to the tax take because every year Dr Cullen has dug deeper and deeper into the pockets of taxpayers to accumulate the billions of dollars of surpluses that we have seen in the Budget. 
I will talk about a specific area in the Budget—that of education. The Minister of Education went out to make his announcement the day before the Budget. He went to his own electorate to make his announcement about what was in the Budget for education. Why on earth did he have to seek the safety of his own electorate to make that announcement? I would have thought that if he had good news for the education sector he would have been trumpeting it around the countryside but no he made the announcement of an extra $171.6 million over 4 years in the safety of his own electorate. 
Nathan Guy 
: Wow the old 4-year trick! 
ANNE TOLLEY 
: The old 4-year trick makes it sound bigger. As if there is any chance that he will be there to deliver that. What was the response to that magnificence that he announced to his electorate the day before the Budget? Well the New Zealand Principals Federation came out by 5 o’clock that day and said that it was extremely disappointed with the Budget announcement and that the Government had broken earlier promises to the education sector. The New Zealand Principals Federation president said: “Last year we were promised funding to recognise the workload covered by our admin support staff in covering Government initiatives. … It’s a complete double standard—the Government acknowledged a need for extra funding in this area but they have not kept their word.” So that was not a pass mark for the Minister. A press release at 5 o’clock that same day from the Post Primary Teachers Association (PPTA) President Robin Duff said: “Today’s bitterly disappointing Budget announcement was a blow to secondary teachers who had hoped against hope for staffing relief.” He went on to state: “Perhaps the can-do attitude the Government expects of schools in terms of managing their money could be used by the ministry when it comes to where its funds go.” That was not a very encouraging reaction to the Minister’s generous announcement. Unfortunately for the Minister when he made that announcement he used some examples. One of the examples he used was Rangitoto College on Auckland’s North Shore which is New Zealand’s largest secondary school. He predicted what its increase would be going back to 1999. Well unfortunately for the Minister he got his maths wrong. 
Nathan Guy 
: Did he? 
ANNE TOLLEY 
: Yes he got his maths wrong. First of all he talked inclusive GST figures against exclusive GST figures and then he forgot to count in the extra 600-odd students who had started at that school which had increased its funding along the way. So the principal of Rangitoto College quite rightly came out in the media on the day of the Budget and said: “Mr Minister you’ve got this wrong.” and explained how it was. Now what do members think the Minister’s response to that was? What do members think the Minister said? Did he say “Gosh. I’m really sorry. I got the maths wrong. Look why don’t we sit down and have a chat about this and go through the figures?”. 
Coincidentally the day after the announcement of the Budget the Minister was due to go and meet with a group of North Shore principals and boards of trustees and the Rangitoto College principal was due to be at that meeting. So what happened? The Minister put out a press release abused the principal told him he was talking through a hole in his head and that he was ungrateful and cancelled the meeting the next day to meet with those other principals. It is a typical attitude. The Minister was so keen to go out and trumpet the success of his Budget bid and what he would do for education that in fact he abused the very people he was trying to get onside. He refused to meet with them and sit down like any sensible person and justify what was in the Budget. He not only talked about $171.6 million for the operations grant over 4 years but he talked about how that was to include $65.3 million for information and communications technology. However when we look at how much information and communications technology has actually cost schools over the last 9 years we see that it is more in the region of over half a billion dollars. Half a billion dollars has had to be raised by parents around the countryside in order to pay for information and communications technology and the Minister has responded with an extra $65 million over 4 years to help go towards that. So the Minister not only has not fronted up and defended his Budget to principals around the country but he has fallen out with the unions and has not delivered what the Government promised. 
Perhaps one of the reasons that the Minister did not want to front up to principals and defend his Budget was that at the same time he would have had to answer questions about what the Tertiary Education Commission got out of Vote Education. The Tertiary Education Commission received a 44 percent increase as against the operations funding increase which was in the region of 5 percent. The Tertiary Education Commission received an extra $22 million not over 4 years but 1 year—a 44 percent increase. One would have to ask why on earth an organisation such as the Tertiary Education Commission would qualify for such a huge increase in its operating budget when in the last year it had a 25 percent staff turnover it blew its consultancy budget by three and a half times—350 percent—and its staffing has ballooned into the hundreds over the last couple of years. The performance of the Tertiary Education Commission has been really poor yet the Minister has seen it rewarded it with a 44 percent increase of $22 million in just 1 year. 
Schools had been led to believe by the Minister—and members can read the lines from the PPTA and the Principals Federation—that the operations grant which had been reviewed in the previous 2 years would be adjusted significantly to take account of the extra work being demanded of them and that there would be recompense for that in this Budget. But the Budget did not do that and that is because this Government has its priorities all wrong. It rewards the bureaucrats but it continues to allow one in five Kiwi children to leave school without being able to read write and do mathematics anywhere near their chronological age. It allows four out of every 10 children to leave school without a qualification that provides them with the foundation knowledge and skills needed for work or further study. It is not good enough that more than 25000 Kiwis aged 15 to 19 are not in any form of education training or work. Labour’s Budget did not have any answers to those problems. The money went to the bureaucrats in the Tertiary Education Commission rather than into schools so that they could deal with those sorts of issues. 
Let us be fair: the Budget did provide a little bit more money for schools and that was good. It did provide a little more money for some more teachers and that was good too. We should not let anyone think we do not want to see any money going in. But the Budget did not contain any new ideas for improving what is actually going on in those schools and in the classrooms where the teachers are teaching. Labour does not seem to realise that the education system is underperforming for 150000 New Zealand children. It needs to change things if we want our education system to take the step up needed to give our children world-class skills and world-class jobs. National is ready to make those changes. 
Hon TREVOR MALLARD (Minister for the Environment) 
: 
 I am surprised that that member Anne Tolley who I think is National’s education spokesperson has not visited a school recently. She clearly has not done so because if she had then she would have seen enormous change—change in the buildings change in the staffing ratios change in the quality of staff and changes in the quality of resources. If she had she looked really carefully especially at the literacy and numeracy results then she would have seen that there has been considerable improvement especially where teachers have already had the new professional development that has been available over the last couple of years. In fact in respect of the children who are doing the programmes in those classes my understanding is that the average progress is approximately 2 years in reading for 1 year in their lives. That is enormous progress especially for brown children who are the most advantaged by those programmes. 
In my Budget speech I do not want to spend too much time on Anne Tolley; I will just comment that she appears to have caught the habits of her leader in terms of her inability to listen to the person who follows her which is something that is a tradition in this House. She has shot through already. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: You are sailing close to the wind. 
Hon TREVOR MALLARD 
: But I would say that I know who Anne Tolley is and I think after this week everyone in the House now knows who Kate Wilkinson is. Quite a few members were not sure. Some of us have a little bit of a problem in that a number of the women on the National Party benches look very similar. Certainly in looking at their hair colour I can say it looks like they share their shampoos or hair dyes and they do look somewhat similar. Kate Wilkinson is not one of that group but today we know who she is because earlier in the week Kate Wilkinson was honest enough to announce National’s policy. 
Nathan Guy 
: Not like you. 
Hon TREVOR MALLARD 
: Oh she was not honest according to the man from Otaki—the man who wants to be the MP for Otaki and who was beaten by a schoolboy in the last election. 
Kate Wilkinson was honest. She said that the National Party did not stand for compulsion. John Key slapped her around and told her off—literally and figuratively—and made her feel very very small and embarrassed for telling the truth. It is just not on for party leaders do that. But what John Key did not say was whether National if it were ever elected—and I must say that with approaches like that it is becoming more and more a distant possibility; it is looking farther and farther away—would keep KiwiSaver employer contributions compulsory at the level they are currently in the legislation going from 1 percent to 4 percent. He said “compulsory as of now”—that is at 1 percent which is on average worth $9 a week to employees. 
But under the John Key approach in 3 years’ time he would rip $27 a week on average—$27 a week—out of the KiwiSaver accounts of New Zealand workers. I say to John Key that it is a disgrace to rip $27 a week out of the KiwiSaver account of the average earning Kiwi who is saving in KiwiSaver in order to give his rich mates a further tax increase. John Key is also not committed for example to stay with the $1000 kick-start. 
I just want John Key to be honest with the House and to get up and take a call in the debate. I would seek leave for John Key to take an extra call in this debate if he would tell us about National’s KiwiSaver policy and answer some questions. Would he keep the $1000 kick-start in place? Would he take that out of people’s accounts retrospectively? And if he did would he take out the interest or the other income earned on that $1000 or would he just take the $1000? Would he keep in place the payment of the Government contribution of $1040 into the account? I hear silence from John Key; it is deafening. 
John Key will not tell us whether he will keep the Government contribution either to the employer or directly into the account in place. Will he keep the full support for first-home buyers in place? And what is this middle-class sweetener he is talking about? 
You know it is not often that I agree with the  
New Zealand Herald 
—the  
New Zealand Herald 
 has not been that supportive of the Government in recent years. But it stated in the concluding paragraph of an editorial today that is very critical of John Key: “National’s confusion over KiwiSaver should be a warning. Indecision breeds unease. It also hands the initiative to the Government. National can avoid this trap only by releasing policy coherently and in quick order.” 
I invite John Key to do that and at the same time I will invite him to release policy in another area as well. I am asking him just to be absolutely straight with this House—in the speech that I am quite happy for him to take after this speech—and tell the House why as Leader of the Opposition he is having discussions with financiers in Australia in order to sell to them the assets of New Zealand’s State-owned enterprises. He is having discussions about how he can fiddle his balance sheet by selling the assets of the State-owned enterprises that have been built up over generations in New Zealand. They were a contribution in some cases from our grandparents—by way of tax to set up the electricity department for example—but John Key is now offering to sell those and to lease them back. 
Jill Pettis 
: In the first term. 
Hon TREVOR MALLARD 
: Well he said that he would not sell the State-owned enterprises but he made no commitment at all about the major assets of those State-owned enterprises. And I just think that he is being too tricky by half— 
Dr Ashraf Choudhary 
: Slippery. 
Hon TREVOR MALLARD 
: —and slippery. I think that John Campbell got it just about right when he said that John Key was being “slippery as a snake in wet gla—grass”—and on wet glass as well probably but “wet grass” was the quote. John Key is very very slippery and he is just now beginning to get a reputation for being a smart-arse in these areas. It is just not appropriate for a Leader of the Opposition to bend the truth to the extent that John Key is doing in order to avoid answering a question. 
I must say that I do not think that the media is doing that well on this KiwiSaver issue. It did OK for 24 hours and then it got bored. But there is a list of questions that any decent media people would pursue. Would John Key keep the $1000 in place? Would he keep the employer contributions going to 4 percent? Would he keep the Government tax credit for employers? Would he keep full support for first-home buyers? 
John Key receives the same pay as a Minister and I think that he should be treated in the same way by the media. No Minister within New Zealand could just say to the media: “Oh I do not want to answer those questions any more. I am too scared. I do not have answers. I am embarrassed. I am running away.” No Minister can do that in New Zealand so John Key should not be allowed to do it either. 
NANDOR TANCZOS (Green) 
: 
 Listening to this debate a person could be forgiven for thinking that the Labour and National Parties have only one speech each and that members are simply passing their speech notes down the line one to another. It is all very amusing but actually a bit of a waste of time particularly when even a cursory interest in the state of the planet reveals that we face having to make some very hard decisions if we do not want to completely betray our children and our grandchildren. So these proceedings have a bit of an air of unreality. I guess that that is not entirely unusual for this place but it is nevertheless embarrassing. 
Both the Labour and National Parties are procrastinating on doing something meaningful about one of the greatest challenges of our time—climate change. The Government’s proposed emissions trading scheme will now do nothing useful it seems until 2016. The National Party will do nothing useful until Australia does. If there is no action before 2012 that is too late. “What we do in the next two to three years will determine our future. This is the defining moment.” Those are the words of Dr Rajendra Pachauri the head of the Intergovernmental Panel on Climate Change warning Governments of the world to wake up. 
Climate change is only a part of it; water is under threat from over-extraction and from contamination both in this country and overseas. Food security escapes increasing numbers of people not just from the diversion of food crops to biofuels but from drought and these will increase with climate change and with the increasing global appetite for meat and dairy products—aggressively promoted by Fonterra. Twenty-nine percent of the world’s fish stocks have collapsed according to Steve Palumbi of Stanford University and the rate of decline is increasing even while the New Zealand fishing industry attacks any moves to cut quotas. Of course we are facing an oil-supply crunch in the next few years according to the International Energy Agency—a conservative forecasting body. Other organisations such as the Energy Watch Group say that world oil production has already peaked in 2006 and that we now face the inevitable decline in production at the same time as demand is rising in places like Asia. 
Where are the strategies to deal with all this? Where is the courageous leadership that this country so desperately needs to chart a way forward? Members of this House know as well as I do that that leadership is to be found only in the Green Party. There is no reason to think that we cannot build ways of living that are more meaningful—more connected and more socially emotionally and spiritually satisfying than the oil-addicted treadmill we currently find ourselves on—while meeting all of our material needs if not our greeds. But if we do not start planning and acting with some urgency we will have a very rough time. The big interest in this Parliament and in the corporate media—that of tax cuts—leaves me cold. Dr Cullen’s tax cuts or any that John Key might offer are not worth a fart in a gale force wind. 
There is one tax reform that would actually be helpful. That reform would be to tax resource throughput heavily while taxing labour and income less. New Zealand Governments have subsidised resource throughput in the past in order to stimulate growth. In fact that is what we are now proposing to do to dairy farming through the wealth transfer of the emissions trading scheme. That is what we do for Comalco with its cheap electricity rates and in the context of ecological degradation it is extremely unwise. It is time we stopped these cash subsidies and indeed it is time we started to remove implicit environmental subsidies as well. I have spoken before in this House on the use of pigovian taxes to internalise environmental externalities but they are difficult in practice. Professor Herman Daly of the University of Maryland and former senior economist with the World Bank instead recommends the blunter and simpler method of shifting our tax base away from labour and income and on to throughput. 
The present system is highly distortionary in that it signals business to shed labour and substitute more capital and resource throughput. It would actually be better to economise on throughput because of the high external costs of its depletion and pollution and at the same time to use more labour because of the high social benefits associated with reducing unemployment. In addition we must stop counting the consumption of natural capital as income. Income is by definition the maximum amount that a society can consume this year while still being able to consume the same amount next year. Natural capital is not income although we continue to treat it as a free and unlimited good. 
We have to devise a new set of national accounts: the genuine progress indicator. Green MPs have spoken about this in this House and elsewhere at length before. For poor countries GDP growth does increase welfare or is associated with an increase in welfare—at least if it is reasonably distributed. But the same is not true beyond a certain level of development—and we are well past that level in this country. The fetish that all parties except the Greens and the Maori Party have made of GDP growth is more akin to religious fundamentalism than it is to economics. Government policy should aim to maximise the productivity of natural capital in the short term and invest in increasing its supply in the long term. Due to Green pressure this Budget does contain some initiatives that increase resource efficiency. But for all of last year’s sustainability rhetoric negotiating those initiatives was like pulling teeth and although we are proud of them they are small fry compared with what is really needed in the world today. 
Finally Professor Daly recommends that we must move away from the ideology of global economic integration by free trade by free capital mobility and by export-led growth. We have to develop a different orientation; we have to promote domestic production for internal markets as the first option. International trade should only play a part where it is clearly and significantly more efficient. That does not mean that it is just cheaper because the price is subsidised through poor environmental standards or poor labour standards in developing countries; it means where it is genuinely and significantly more efficient. To paraphrase Rod Donald—and I think he got the original quote from Tim Hazledine: “Trade is the spice of life but not the basic proteins and carbs of a healthy national diet.” 
Both the Labour and National parties are committed to an entirely different direction—one where sustainability is a clip-on and where the environment will always come second. For all their pungent verbal pugilism they are really just two sides of the same coin. 
NATHAN GUY (National) 
: 
 We are debating the Budget for 2008—the final throw of the dice for the Labour Government. After 9 long years the Government has delivered its final Budget. It is a Budget of lost opportunities. 
National has been calling for a tax reduction for years and now Labour has been led screaming and kicking to tax cuts because Michael Cullen is ideologically opposed to them. What has the Government done? It had to deliver a tax reduction package under urgency last week which we supported because we have been saying for years that hard-working Kiwis need more of their money and need to make their own decisions instead of being suffocated by this Government—the nanny State that knows best. 
But boy oh boy what a drop in the bucket the tax cut was! It was $16 a week for the average hard-working Kiwi and lo and behold they will get it on 1 October. That has ruled out an early election. We all know now that we will be going to the polls in October or more likely November. Hard-working New Zealanders will have to make a decision. As families go through this winter when food prices are soaring fuel prices are up and mortgage rates are up—they have doubled under this Government—they are finding it particularly tough. Do members know that 1.6 million hard-working Kiwis do not get anything through the Working for Families package? They will now have to wait until October and get through the winter— 
Paula Bennett 
: To get their $16. 
NATHAN GUY 
: —to get their 16 bucks as Paula Bennett rightly points out. 
Lynne Pillay 
: What’s yours going to be? What are you going to do? 
NATHAN GUY 
: I know that the member—I do not know her name—is worried about what the tax package will be when she gets booted out of Parliament. I know the Labour members will be worried when they are on the scrap heap. They want to know what National’s tax package will be because they are really worried about their retirement. When the voters turn round and say that they have had a gutsful that member should be ashamed of this Budget. 
Lynne Pillay 
: Give us a clue. 
NATHAN GUY 
: That member will just have to wait. She has been led down the garden path by Dr Cullen who thinks he knows best. 
Dr Cullen has been out there spouting on about his four-way test for tax cuts. Let me read that out to that member. The first test in Dr Cullen’s four-way test is whether there is physical headroom. Well the golden years have gone under this Government. The second test is whether there would have to be any borrowing. Dr Cullen says he does not believe in it. Well lo and behold there is borrowing in this Budget. Will it be non-inflationary? That is the third test of Michael Cullen’s ideology. Well interest rates are tracking back up after a week of maybe dropping slightly. The fourth test is whether tax cuts will lead to inequality. Dr Cullen has always said that tax cuts would lead to inequality but now on the verge of the election with this dying Government he has delivered just that. 
Dr Cullen says we need 4 percent growth in this economy even though he openly says that his policies will deliver only 2.4 percent of growth over the next 4 years. This is a huge big-spending Government. I have trawled through and done a bit of research and that member over on the backbenches of the Government will be interested to know that under the three terms of the previous National Government our surplus was a little over $8 billion. Over the three terms—over the nine Budgets that National delivered—we had a surplus of $8 billion in total. Now for the Labour one. In Labour’s first term the surplus was tracking at close to $5 billion in its second term the surplus was close to $15 billion; and in its third term the surplus was $20 billion. Over Labour’s three terms—9 years—it has been running a $40 billion surplus. 
This Government is a big-spending Government with a high level of waste. Today and yesterday in Parliament we have seen that Housing New Zealand Corporation should be embarrassed. It has 10000 of the most needy on its waiting list yet it sent its staff up to Tongariro Lodge. The sum of $65000 was squandered on that talkfest while 10000 of the most needy are waiting for a house. That Minister Maryan Street should be ashamed. That is just one example of the Government’s waste. 
Let us look at the bureaucracy that has grown under this Government. When Labour came to power in 1999 there were 26000 bureaucrats. That number has grown to 36000—an increase of 10000. 
Paula Bennett 
: Oh! 
NATHAN GUY 
: I ask Miss Bennett whether she knows what the most embarrassing thing is. It is the fact that the Government does not measure productivity. It does not have a clue whether the people who are coming in are actually making the economy spin or whether it is performing. I think that is an absolute embarrassment. I tell members to look at the growth in ministerial staff numbers. The number of managers is up by 22 percent and the number of communications staff—spin doctors—is up by 73 percent. 
Paula Bennett 
: How much? 
NATHAN GUY 
: There has been a 73 percent increase in spin doctors. The number of portfolio advisers is up by 80 percent and the number of political advisers is up by 40 percent. [ 
Interruption 
] Those members hate it do they not? They would prefer to put money in and never measure productivity. They just dump it in. I cannot wait for that member David Cunliffe to interject when I get on to the health portfolio because he should hang his head in shame. 
People here are voting with their feet. Over the last 12 months 44000 people have gone to Australia. They have said: “We have had a gutsful.” They are not going just for an OE; they are going because in Australia their wages are up by a third and they are paying less tax. The other day I worked out that that number is the equivalent of every voter in the Otaki electorate going to Australia. That is the same as having all the voters of Paraparaumu Waikanae Levin Foxton Shannon and the rural hinterland leave during the last 12 months. That is a shocking indictment on this Government. It should hang its head in shame. We are at least half a decade away from catching up with Australia. 
Let us think about this Government’s slogans because it is good to look back over the 9 years. Those members wanted to close the gap did they not? Yet we have widened the gap in terms of our OECD rating the barometer that measures countries’ wealth. We have gone down under Helen Clark’s leadership. Then we had the knowledge wave. Yet our youngest and brightest are choosing to head offshore. So that has not delivered anything has it? Then we had talk of growth and innovation. Yet Michael Cullen is forecasting less growth. Then of course we heard talk of carbon neutrality and the Prime Minister made a statement. She said she wanted to get rid of the big gas-guzzling Crown cars. And she said she wanted to replace them with BMWs by the way—BMW 7 Series. But lo and behold those Crown cars are now being driven around Auckland so the carbon footprint has not reduced. All those slogans do not make the economy go faster and this Government is out of touch and out of ideas. 
It is interesting to get out on the street in the Horowhenua community and listen to what some of the punters have said about this Budget. I think it is very important for the listeners out there and for the members in the House to understand what people in the most marginal seat in New Zealand are saying. Bernice McGillivray a retired woman from Foxton states: “I am a pensioner and it doesn’t impress me at all.” Kerry Henderson who is a retailer in Levin said: “I’ll believe it when I see it.” Mrs S McDonald a pensioner from Levin said: “It’s not much is it? And then it gets taxed before we get it taxed again so we’re lucky if we end up with half of that.” Sharon Skeet from Levin said: “People can’t get anywhere in life. The cost of living is ridiculous.” I could go on and I will. Sharon Hanson said: “Our health system sucks.” That is what Sharon Hanson from Shannon said. Mary Davis an administrator from Levin said: “I think it’s too little too late. It should have been done earlier and with the price increases.” 
That was a snapshot of Budget 2008 from the people on the street. [ 
Interruption 
] I am looking forward to Mr Ashraf Choudhary answering these questions—I think he is the next speaker for Labour. Does this Budget promote any economic opportunity for New Zealand? I want Mr Choudhary to answer that question. The answer on this side of the House is no. Will Mr Choudhary’s party be able to lift wages in this country? The answer from this side of the House is: “We don’t believe you and we look forward to hearing you say how you’re going to do that.” Will Labour be able to measure productivity? Let us wait to hear whether Mr Choudhary can address those three questions. I do not believe so. This Government is out of touch. People on the street are searching for change. John Key and National will deliver that change. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 I am very proud to stand and speak in support of this Budget. Why? Because it is about growth services delivery to Kiwis—to families and to older citizens—and a moderate affordable tax cut for all that gives relief up front and is phased in so that it does not cause undue stress on our economy and push up interest rates. This economy is geared up to face global uncertainty and that is what we are facing. We know that the worldwide increases in food fuel and mortgage rates are hitting New Zealanders. We know that as do all countries—although we are much better off than we were under those dark dark years of a National Government in the 1990s. Although we know we are much better off than that we do know— 
Nathan Guy 
: Spend and waste. 
LYNNE PILLAY 
: I ask the member to tell me how many people John Key has in his office. Is it 10? 
Tim Groser 
: A tenth of the number in the Prime Minister’s office I would say 
LYNNE PILLAY 
: Mr Groser says it is 10. Do we have a rise on 10? Labour members say it is 15. Do we hear another rise from the other side of the House? 
Hon Member 
: 30. 
LYNNE PILLAY 
: We are nearly there. 
Dail Jones 
: 37. 
LYNNE PILLAY 
: It is 37. I say thank you to Dail Jones. I would never disagree with Dail Jones in this House. He gets it wrong sometimes on things like the Waitakere Ranges legislation but by hokey he is good on detail. He says that John Key has 37 bureaucrats in his office who teach him how to be slippery and how to make sure he does not tell New Zealanders anything. I will ask those cheeky people over there what they have to say to that. Does John Key have 37 people in his office? We do not hear anything. 
I congratulate Michael Cullen. He has managed our economy over 8 years and delivered cheaper doctors’ visits and prescription charges interest-free loans for students Modern Apprenticeships 20 free hours’ early childhood education huge tax relief for families tax relief for business support for business innovation KiwiSaver more police officers on our streets income-related rents 4-weeks’ holiday increases in the minimum wage and investment in public transport. It is beyond belief. It is 1000 times more than what the former National Government invested in public transport. We have also bought back rail. Labour has raised superannuation but National cut it. All of these great policies that I have reeled off were opposed by the National Party. 
Let us look at how these tax cuts deliver—and I must say without borrowing and putting pressure on our economy. From 1 October a couple on superannuation will receive an additional $45.88 a week—almost $46—and pay 26 percent less tax. But wait; there is more. They will still get the rates that will apply when they rise again in 2009. We can expect around— 
Nathan Guy 
: Why has it taken 9 years? 
LYNNE PILLAY 
: I will tell that member why it has taken 9 years. It is because Labour had to build up from the cuts that National put on to superannuitants in this country. But that build up means that by 1 April 2009 a couple receiving superannuation will probably be $75.32 a fortnight better off. That is what happens under a Labour-led Government. The same happens for working families and for low-paid families. They have benefited hugely through Working for Families and through the increases to the minimum wage. The minimum wage was languishing at $7 an hour when we came into Government but it is now $12 an hour. That is what happens under a Labour Government. 
New Zealanders have also had the benefit of all the things I spoke of previously such as health education more job opportunities through Modern Apprenticeships interest-free loans etc. I am really proud of what this Government has delivered. What other big-ticket items are in this Budget for New Zealanders? There is a world-class broadband network. There is a huge investment in public transport and also in science and research. There is money to upskill our workforce for building sustainable homes and communities and for promoting our arts and culture. There is also a huge investment in health. The Minister of Health my good friend David Cunliffe is sitting here. He is a great guy. There is $750 million a year over 3 years going into health. That is over $2 billion going into health in this country. We know that under this Government job numbers are growing by 1000 a week. There are 1000 new jobs a week under the Labour Government. 
Now I will take a little bit of time to pause and pay tribute to Kate Wilkinson. Kate Wilkinson had the courage to tell it how it was. Of course National is not the party of compulsion. National opposed the employer contributions so she told it how it was. 
Hon David Cunliffe 
: She told the truth. 
LYNNE PILLAY 
: She told the truth. She was not slippery. She has not been in with the 37 bureaucrats being taught how to be slippery like John Key. She just knows how to be straight up and honest—she told it how it was. It was just like the time when Tony Ryall—another honest member—told it how it was. I notice that the Opposition members are very quiet now. Tony Ryall said: “We will lift the cap on GP fees.” We know what that means. Good old Jonathan Coleman has been on the case looking after general practitioners and making sure that they get all the subsidies from the Government and as well as that saying that they can invest and make a heap more because National will get rid of the cap. What happened? John Key was on the case again. His 37 bureaucrats said: “Quickly John get in there. Tell them that Tony Ryall who’s had far more experience than you and who is actually telling the truth has got it wrong.” I should be careful not to say John Ryall. John Ryall works for the Service and Food Workers Union and he is a very hard-working man. Tony Ryall got it wrong according to John Key. Whoops! That was wrong again and there was a quick pulling back from that position. I will tell members something: I do not believe John Key’s statements. Do other members believe them? I do not believe them. 
Hon David Cunliffe 
: Pick a spin doctor. 
LYNNE PILLAY 
: Exactly. It is a case of: “Where do we go? Where is the public opinion? What do we say? Don’t say anything; we can’t tell fibs. We can’t be caught. Just be slippery; don’t say it how it is.” 
I tell members that last week Michael Cullen was my politician of the week. 
Hon David Cunliffe 
: He was the country’s politician of the week. 
LYNNE PILLAY 
: He was the country’s politician of the week. But this week my politician of the week is Kate Wilkinson. 
Hon David Cunliffe 
: “Careful Kate”. 
LYNNE PILLAY 
: “Careful Kate”; “Honest Kate”; “Kate who tells it how it is.” I do not agree with Kate’s politics. Kate Wilkinson is on my select committee. Well she has substituted there for a while. Chris Auchinvole was not there and we missed him terribly. 
Hon David Cunliffe 
: Are they letting her on a select committee? 
LYNNE PILLAY 
: Well on mine yes and she has been incredibly helpful on that committee. She is straight up and tells it how it is as does Chester Borrows. He is another member who told the truth about KiwiSaver. So whilst I do not agree with Kate Wilkinson’s politics I admire her integrity and honesty. 
Hon David Cunliffe 
: She’s not slippery. 
LYNNE PILLAY 
: No she is not a bob-each-way girl. 
Tim Barnett 
: She’s dry not slippery. 
LYNNE PILLAY 
: That is right. She is dry but dry in a nice way. She is dry and honest and not slippery. She tells it how it is. We may call that naive but as far as I am concerned she shares one principle with the Labour Government and that is integrity. Well she shares two with the Government—honesty and integrity. 
It is probably time for me to start winding up and I just want— 
Nathan Guy 
: It is when you talk about integrity. 
LYNNE PILLAY 
: It is. I challenge the next National speaker to tell us what National’s policy is—just one. That speaker will be Chris Auchinvole and I will put my faith in Chris. I will put my faith in the fact that he will tell us one thing that National believes in—just one—in an upfront way. 
CHRIS AUCHINVOLE (National) 
: 
 Madam Assistant Speaker thank you very much for an opportunity to speak this afternoon. In respect of the member who has just spoken Lynne Pillay I note that one could not hear all of the speech because most of it was delivered with such a high pitched shrill call that it passed beyond the hearing of human ears. It really did. Outside no doubt the dogs were barking and they were certainly barking inside. I will not rush to Kate Wilkinson’s defence. Kate is a fine person. She is in the next office to mine—I rent her one of my little offices—and she is a fine person. She is well capable of looking after her own reputation on which I thought that member tried to make a somewhat nasty attack. But I am not here to entertain the masses although the previous speaker runs quite an amusing select committee. It has had such outstanding achievements as the Electoral Finance Bill. Well that was a beauty and now it has another one which I cannot talk about because it has not yet been reported back. 
Lynne Pillay 
: I raise a point of order Madam Speaker. I know that this is a broad debate but the member is talking about the Electoral Finance Act and this debate is about the Budget. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: It is a very broad debate but I think the comment was made in passing. 
CHRIS AUCHINVOLE 
: Thank you very much Madam Assistant Speaker. As you noted so wisely it was just a passing remark. But I will try not to introduce too many deviations because it is indeed the Budget that I wish to speak about. I called last year’s Budget a sad Budget. It was a bad Budget. It was an “ever been had?” Budget. This year the Budget is sad it is bad and touches of it are mad. It is an “ever been had?” Budget but it is also a “more than a tad” Budget. It is more than a tad too little and more than a tad too late. 
Hon David Cunliffe 
: He’s the tad cad. 
CHRIS AUCHINVOLE 
: Well it was a caddish Budget. But that was the comment from the Minister of Health not from me. He called it a caddish Budget. I would not do that because it would reflect on Dr Cullen. 
The Budget began with a lament and all good Scottish Celts know what effect a lament has on people. It is a sadness; it is a keening from the inside of the heart. How did Dr Cullen begin? He said: “Oh dear! Oh dear! It’s such a sad time because everything that is squeezing the purses and the wallets of the good citizens of New Zealand is beyond the Government’s control.” He nearly added “So there!”. It reminded me very much of  
Chaucer’s Complaint to his Purse 
 the final verse of which is: 
And you that have the power  
all our troubles to correct  
have consideration upon my supplication.  
That is the modern English version. Dr Cullen put this Budget forward as a sort of supplication a nostalgic cry for the days of huge surpluses when the arithmetic was easy. But this time there is $44 billion and I wonder how much of that has been spent on the West Coast and Tasman districts. Very very little! Yet the Government has been talking for so long about very little unemployment and huge development on the Coast. I heard the previous speaker Lynne Pillay talk about the jobs created under Labour and the wealth created under Labour but none of that was as a consequence of the Government’s actions. I was challenged by that member and again as a good tartan-blooded person I never refuse a challenge to say one thing that National believes in. All I have to do is echo the sentiments of Dr Cullen. Everybody heard them. He gave them an apostolic a tremendous—what is the word when someone speaks from the heart— 
Tim Groser 
: Cri de cœur! 
CHRIS AUCHINVOLE 
: —cri de cœur! He said: “John Key believes in tax cuts.” Do members remember him saying that? He said that John Key believes in tax cuts. Let us put that to the test. We do believe in tax cuts. Let us ask the people of the National Party. We know John Key. 
Lynne Pillay 
: Do you believe in early childhood education? 
CHRIS AUCHINVOLE 
: The previous speaker asked for the one thing we believed in. She is getting it; could she please let me give it to her without interruption because she will learn from it. Members can help me with this: do the National Party and John Key believe in tax cuts? 
Hon Members 
: We believe! Yes! 
CHRIS AUCHINVOLE 
: We believe in tax cuts. Righto! We know John Key; we know ourselves. Let us ask: do the Labour Party and Dr Cullen believe in tax cuts? 
Lynne Pillay 
: We believe! 
CHRIS AUCHINVOLE 
: Let us try it again! Do the Labour Party and Dr Cullen believe in tax cuts? 
Lynne Pillay 
: We’ve done it! 
CHRIS AUCHINVOLE 
: Ha ha! Labour has “done it” with a touch of regret. My colleague Tim Groser used a delightful expression; he said: “Dr Cullen gave voice to the tax cuts through gritted clenched teeth.” Not only that I think it was Churchill who said that in victory we should be magnanimous and in defeat defiant. Why is Labour being so defiant about its Budget? National is being magnanimous about it. National is voting for it. We are voting for the tax cut bits yet Labour has been defiant throughout the whole presentation of the Budget debate. So National believes in tax cuts. I do not doubt that the previous speaker will want to take another call to thank me for giving her that piece. 
We asked whether Labour really supports tax cuts and a plaintive voice said yes—“We believe!”. Well that will really thrill the punters out there who are trying to pay for food petrol and everything else that Dr Cullen tells us is beyond his control. I understood that Budgets were to exercise control of otherwise uncontrollable forces. Surely that is what we have Governments for. Otherwise we would not need Governments regulations and laws. We have to have an intercession and that is why we have Budgets. 
But it is a bad Budget because it gives in. There is no great boost for production or aspirational leadership and it was ill-intentioned in its purpose to try to prevent a new Government from using initiatives and opportunities to boost the country’s economy. Again I call on my very literary friend Tim Groser who described the Budget as a “poisoned well”. Has Dr Cullen poisoned the well? Has he had a cut and burn? Has he left anything in? This Budget lacks a goal. I think it was New Zealand First members who raised the prospect albeit belatedly in their speeches that perhaps the Budget should have included something to encourage export growth. 
Labour members keep asking: “How are you going to pay for things?”. Perhaps we could earn some money. Earning money is quite a good idea but there are difficulties associated with it. Let me paint a little scenario that will be old hat to the Minister responsible for the Pacific I am sure. I used to deal in the Pacific. For 15 years I travelled the Pacific countries working for the New Zealand Dairy Board and I loved it. I was given the job of forming a company and increasing sales. So we formed a company. We corrected the discrepancies in stock control. We got our stock control and our logistics right. We started meeting the ships properly. The customers got what they wanted when they ordered it and at the price agreed—the three basic elements. Then the directors said: “Increase the sales.” So I said: “By how much?”. They said: “Double them.”—we were earning $17 million a year as long as a little bit of milk-powder was included that actually went to Australia—so we said “OK.” and we had a look at the market. 
In those days the usual way to increase sales was to increase marketing increase advertising and reduce prices. But we had a look at the market and saw that most markets in the Pacific had controlled margins. Therefore every time prices were reduced people’s incomes were reduced. So we increased prices and the people responsible for importing our goods started to get wealthier. They stopped buying Australian products and started to concentrate on New Zealand products and in 4 years our earnings went from $17 million to $34 million. In the last few days I have reflected on whether Dr Cullen would have approved of that had he been the chairman of our company. He would have said “No!” because other people were going to get wealthy out of our activities. But we have to make sure that other people will get wealthy otherwise why would they bother? 
That brings me to my last point which is the railways episode. Was this a “Have you ever been had?” Budget? I sincerely hope not. New Zealand railways are incredibly important to the West Coast. We have $660 million worth of coal and $96 million worth of gold brought out by train—even though last May I think it was Dr Cullen said that we have no mineral wealth in New Zealand. The only way out of the Coast is by rail. I am an enthusiast for rail. I modernised and renovated the Moana railway station with my wife. We love rail and I hope that this purchase of rail by the Government is not going to be an ideological purchase. My great fear is that the purchase arose simply from the Government’s inability to complete a negotiation with Toll Holdings. How is money made from a railway? It is made by having control at both ends. Toll Holdings is already the largest road carrier in New Zealand. It has always made money from the railway at each end. It has now just been able to lose the other bit and we hope the new Labour Government will not lose the railway. 
I shall finish with a quote which to me typifies Dr Cullen’s betrayal. It comes from the great protector Oliver Cromwell who wrote of himself—and I think Dr Cullen could use this quote after the Budget—“I need pity. I know what I feel. Great place and business in the world is not worth looking after.” And to continue with Cromwell and to address Labour I also quote: “you have sat here too long for any good you have been doing. Depart I say and let us have done with you. In the name of God go!” 
SU’A WILLIAM SIO (Labour) 
:  
Malo lava le soifua. Talofa lava. Kia ora tatou katoa. As the newest member of Parliament having been here 2 months come 1 June I have achieved something for my community of Manukau that Mr Key and the National Party can only talk about and wish for. With the first Budget of my term I have been able to proudly say to all our communities in Manukau City that Labour with its coalition partners and supporters is not just talking about tax cuts; this Government is delivering tax cuts for all New Zealanders. This Government says what it means and means what it says and when it has said it it delivers on it for everyone. 
I have had the privilege of observing this House and its processes and I have met many of the people from all sides and by and large everyone seems to be sincere in genuinely wanting to do the right thing for this nation. It comes therefore as a surprise that this week in the Budget debate National has been absent in terms of questioning the Minister of Finance on the Budget. One has to ask why that is. What are those members afraid of? What are they hiding? John Campbell on  
Campbell Live 
 on 22 May had this to say about Mr Key and the National Party. John Campbell speaking to John Key said: “I also think that you are as slippery as a snake in wet grass.” The young people ask me what National and Mr Key are really like and I have to say they are hard to pin down when it comes to policy. The young people tell me that it must be like trying to catch eels in the creek. 
Earlier in the week Kate Wilkinson the National Party spokesperson on industrial relations revealed that she believed—and I think she honestly did believe it—that it was National Party policy to scrap compulsory employer contributions to KiwiSaver. That has traditionally been National’s philosophy—to be against compulsory employer contributions. Sadly for Kate Wilkinson Mr John Key has trashed her and trashed her statements. The public are now asking what they are to believe of Mr Key and the National Party. They ask what Mr Key will really do. Can he be trusted? I suspect that ordinary Kiwis listening to Mr Key will be holding up Tui signs that say “Yeah right!”. 
National still has not come clean regarding tax cuts. National still says it will provide tax cuts “north of $50” a week but it will not tell us exactly what they will be. Nor will it tell us how it will pay for them. The public of New Zealand have every right to be asking Mr Key and the National Party what their policy on tax cuts is and how they would fund it. Who would they favour? Would it be the ordinary working families of New Zealand? I doubt that. Would it be big business? I am sure it would be. Does National stand for anything real or are those members hollow men as written in some book? What is their policy on industrial relations? Will they scrap the Employment Relations Act? Will they look at driving down the wages of the workforce of New Zealand? What is their policy on housing? Will they sell off State houses again as they did in the 1990s? What is their policy on health services? Will they remove the subsidies that support children and the elderly? How do they propose to pay for the tax cuts of supposedly “north of $50”? 
What areas of the public sector will they cut or will they borrow first then cut the public sector later? If Mr Key and the National Party do cut the public sector will they cut the Government’s investment in education of about $10.8 million? Will they cut the Government’s investment in housing of about $950 million? Will they be cutting the health investment of about $12.6 million? Or will they look at cutting the $50 million of new spending on arts culture and heritage that this Government is providing? Or will they cut the new spending of $3.1 million on law and order? Or will they look to cut the Working for Families tax credits of about $2.7 billion? 
To all New Zealanders listening to this debate National is refusing to come clean. It would seem to me that Mr Key and the National Party are still tinkering with the details. What are they hiding we must ask. Can we trust them? What does National really stand for? For National and Mr Key to continue along this line of saying a lot without saying anything of promising the world without anything to show smacks of disrespect and contempt for the citizens of this great nation of ours. It is not good leadership. Good leadership is saying what you mean and meaning what you say then acting on it. 
Through Dr Michael Cullen this Government is proudly showing strong and clear leadership for the future of our nation. Budget 2008 will invest in the Government’s plan for a strong sustainable future for New Zealand. The Budget brings tax relief for individuals and families managing cost of living pressures. Labour with its coalition partners and supporters has been a careful steward of the economy. With global economic uncertainty the strength of our economy enables us to prioritise the needs of Kiwi families and continue to invest in our common future. 
The Budget enhances public investment in education health care social agencies and other important services. Major investment includes the roll-out of a world-class broadband network; the largest-ever public investment in science and research to boost innovation and sustainability in the food and pastoral sectors; and significant investment in upskilling our workforce in sustainable homes and communities in planning for our response to climate change—building on work already under way—and in the promotion of our arts culture and heritage which are so critical to New Zealand’s unique national identity. Luamanuvao Winnie Laban I and the Minister of Arts Culture and Heritage will be attending the Pasifika Festival which is evidence of the investment that this Government puts in our arts. It will be held this Saturday at the TelstraClear Pacific Events Centre along with the Pacific Music Awards. 
Budget 2008 is a Budget that addresses both the pressures of today and the needs of future years. The Government’s economic goal is to deliver sustainable and balanced economic development that results in more jobs lower unemployment higher real incomes and more equal distribution of wealth. New Zealand’s economy has begun to feel the effects of a challenging global environment. Global increases in commodity prices have seen the cost of food and petrol increase significantly here at home. Internationally there are fears that the same increases could impoverish tens of millions of people in developing countries. The continued fall-out from the subprime mortgage crisis in the United States and the resulting global credit crunch has led to higher mortgage rates and a weakening of the housing market domestically. As a result the budgets of existing homeowners are being squeezed and there is a reduction in household spending and in investment growth. The weakness of the United States dollar has been an important driver of the very strong New Zealand dollar which is making life difficult for some exporters. 
Those challenges are significant but the New Zealand economy faces them from a position of remarkable if not unprecedented strength. This Government has managed the public purse responsibly. It has not squandered resources in times of greater optimism. I want to give members an example of the benefits that will come from the provisions starting on 1 October. Let us consider the case of Alapati and Teresa from Mangere in the centre of Manukau. Alapati and Teresa are both 35 years old and have two children: Joe aged 9 and Daniel aged 5. Alapati works full-time and earns $45000 a year and Teresa works 3 days a week and earns $20000 a year. Through personal tax cuts and additional Working for Families tax credits Teresa and Alapati will benefit from new tax savings of up to $85 per week or $4397 per year. 
This Government says what it means means what it says then acts on it. That is what we have done with Budget 2008. 
Hon DAVID CARTER (National) 
: 
 We have had another 10-minute contribution from a Labour party member and there were two words we wanted to hear. There were two words that should have been delivered with enthusiasm by that member—the words “tax cuts”. That member could not bring himself to say with any enthusiasm the words “tax cuts”. He is typical of all the Labour members who have taken part in this debate. They do not believe in tax cuts they do not want to be delivering tax cuts and they have done it only out of desperation over the polls. 
Hon David Cunliffe 
: We voted for them! 
Hon DAVID CARTER 
: Mr Cunliffe yells out that they voted for them. We know he voted for them but we know he did not want to vote for them. I rise to support John Key’s motion before the House: “this House has no confidence in the Government led by Helen Clark because New Zealanders have had to wait far too long to see any changes to personal tax thresholds or any lowering of personal tax rates and over nine Budgets this Government has presided over a decline in New Zealand’s standard of living compared to the rest of the world.” I will certainly vote for that motion at the end of the debate today and I challenge every party to state their positions on that particular vote. I suspect it will be close. I suspect if the Government survives that vote it will be only because one or two parties come in to vote on one of the most important votes we have in this House—a vote of confidence or no confidence in a Government—and abstain. They are elected to be in Parliament but they will not have an opinion on whether they have confidence in the Government. That I suspect will certainly be the Green’s position and New Zealanders will want to reflect on that. At the next poll when they consider where to put their vote they ought to realise that if they vote for the Greens they are voting for a party that is likely to come back into Parliament and not know whether it can form an opinion as to whether it has confidence in a Government. 
When I reflect on the Budgets we have heard from the Labour Government over the last few years I find there has been a common pattern to most of them: they have all had a slogan. Members may remember that we started with “Moving New Zealand back to the top half of the OECD”. I have not heard that one for a while. Then we had “closing the gaps”. That sounds a bit like the London Underground does it not? We have forgotten about that one. Then we had “the knowledge wave”. 
Tim Groser 
: Never heard of it! 
Hon DAVID CARTER 
: Oh no we had “the knowledge wave”. It meant a lot to Helen Clark until she realised she did not understand what it meant. Then we had “economic transformation”. Yes that was another one. Then we had “growth and innovation”. Then we had—I think it was last year’s slogan—“carbon neutrality”. As for a slogan for this Budget Helen Clark could not think of one; she has actually run out of ideas. But there was one she could have slipped in there—and it is something the National Party aspires to. It is “growth”. Do members know the figure that has grown the most under this Labour Government? It is the amount of money it takes off people to spend through bureaucracy. When Labour came into Government annual Government spending was around $36 billion. In nine Budgets it has gone up to $62 billion—nearly a 90 percent increase in the size of government in this country. New Zealanders can legitimately ask whether they are any better off because the Government’s size has effectively doubled. The answer from most New Zealanders to that is clearly—as acknowledged in the polls throughout the country at the moment—that they are certainly no better off and I suspect most New Zealanders know they are substantially worse off. If members do not like that slogan “growth” I have another one for Dr Cullen and for Helen Clark. Let us call it the “Valedictory Budget” because I am pretty sure that it will certainly be the last one that either of them ever has much to do with. 
The question that everybody in politics is asking—and I think we will get the answer to this over the weekend—is this. Will this Budget which begrudgingly delivers a tax cut of $16 a week to the average worker do anything to lift Labour in the polls? Tim Barnett says it all by the worried frown on his face today because I think he already knows that it has not worked out. Dr Cullen has not been genuine in delivering the tax cuts. No Labour member has stood in Parliament since the delivery of the Budget and spoken enthusiastically and genuinely about the need for those tax cuts. 
We even had the incredible position whereby the Budget was delivered and before the afternoon was over we were slammed into urgency to deliver tax cuts that do not come into place for a further 5 months. When Dr Cullen was asked: “Why put the House into urgency to deliver the tax cuts that don’t effectively come in for another 5 months?” he quite honestly said—and one has to admire him for this—that he would not trust himself to deliver them if they were not enshrined in legislation. He has a track record of doing that. He actually gave tax cuts in the lead-up to the last election and immediately after the election welshed on his word and took those tax cuts away. So that is why we have had to enshrine them in legislation—enthusiastically supported I might add by the National Party. National members keenly voted for that legislation. It was the likes of Mr Cunliffe who actually found it a little hard to swallow. But be that as it may they are there now. 
There is one specific group I want to acknowledge that has benefited because of the tax cuts in the Budget and that is the superannuitants. I think things have got a lot tougher for people in the New Zealand community who are over 65 years and rely entirely on superannuation to live. They have had a very inflationary Government causing food prices to continue to rise every time those people go into the supermarket. We have fuel at over $2 a litre which is not entirely the Government’s fault but certainly some of it is and those people have been hurting. If Dr Cullen had wanted to help those people he could have done so every year for the last 9 years simply by delivering tax cuts because as he and his Labour Party colleagues have finally realised their calculation of superannuation is based on after-tax wages. So every time we get tax cuts in this country—and under a sustained programme National would deliver them—the superannuitants of this country will be substantially better off. 
I will talk particularly on one or two issues around my portfolio area. I looked for the biggest single new spending initiative in the Budget for the Ministry of Agriculture and Forestry. I am surprised and a bit ashamed to have to acknowledge this on behalf of Mr Anderton but the biggest new spending initiative is in regard to climate change policy advice and implementation. That expenditure goes from $27.4 million to $43.3 million. 
Tim Groser 
: How much? 
Hon DAVID CARTER 
: There will be $43.3 million to be spent on bureaucrats within the Ministry of Agriculture and Forestry alone to try to find out how the emissions trading scheme will work and how to implement it. Mr Groser laughs. I suspect if one looks at the Ministry for the Environment one will see that a similar appropriation will have been made there of another $30 million or $40 million— 
Tim Groser 
: But only $600 million for the Ministry of Foreign Affairs and Trade! 
Hon DAVID CARTER 
: That must be because Mr Peters holds the trump card; it must be. Anyway in the Ministry of Agriculture and Forestry budget the biggest single new item is for more bureaucrats to figure out how to make the emissions trading scheme work which potentially could ruin New Zealand agriculture if it is passed in the form it is currently in before the select committee. One would have at least thought that the responsible thing to do was actually to get the bureaucrats to work out how the scheme would work before one passed the legislation! I would have thought that was fairly typical but clearly Labour does not. 
In conclusion this Budget could have set wonderful opportunities for New Zealand. It is at least an admission of the failure of the previous nine Budgets where tax cuts have been affordable. We finally get a little: $16 a week which depending on the price of cheese on the day is one one and a half or two blocks of cheese for the average worker. At least it is a step in the right direction; given a National Government after the next election it will be the first of many many tax cuts we will vote for. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Before I call the next speaker I just draw to the attention of the House that the two New Zealand First speakers will be sharing the 10 minutes and the bell will go at 1 minute before each member needs to finish his or her 5 minutes. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I am very pleased to take a call in the 2008 Budget debate. In New Zealand First we are delighted that again extra money has actually been injected into the health system. Health is almost always in the headlines and it needs attention particularly on workforce issues. Now I could not understand why the National leader did not even mention the word “health” in his speech or even indicate any policy direction in this important area. This was a missed opportunity. The silence was absolutely deafening. There was not a mutter or a murmur from any of the health spokespeople in the Opposition about what they could do what they have done or what they intend to do bigger brighter and better than what we have already. There was nothing forward-looking at all. 
I do have to be fair and say that there was one remark which we heard from the previous speaker David Carter acknowledging what the Rt Hon Winston Peters has secured for senior citizens and how National can do better. But it is really important to realise that although the Opposition members say they can do better they did not say about what they did not say how or they did not even say when. In this House we all know that the devil is in the detail but the details we did not hear or even the directions. The adage that it is OK to criticise as long as one has a positive solution seems to be lost on the Opposition. 
On the positive side of the coin and in my portfolio area the increase in the health budget will go some way towards addressing some of the challenges that lie ahead. It is very evident that there will be serious challenges ahead for the medical workforce. Yesterday the World Health Organization released a report stating that this was an area that needed urgent attention. New Zealand First was very pleased to see that this issue had been acknowledged and will begin to be addressed as it is just not sustainable to continue to import the numbers of overseas-trained medical staff doctors and nurses that we are currently importing and have been importing. We need to urgently invest in boosting medical student numbers and in training for nurses and other medical personnel. This Budget has made a positive step in this direction which we can appreciate. 
The big challenge will be to retain those greater numbers of medical graduates in New Zealand. New Zealand First has policy to assist in this area and here we must congratulate National on using our policy so I say “thank you” to National. It is rather ironic that Australian health providers advertise in New Zealand newspapers for our medical staff to make the move overseas. But the reality is that we need them here and we need comprehensive strategies in place to retain them to ensure that they actually do stay in New Zealand. 
New Zealand First was very pleased with the increased subsidy for hearing aids for the SuperGold cardholders. The increased subsidy from $198 to $500 for those aged 65 and over from 1 October will be very welcome. We know that hearing aids are very expensive and very vital pieces of equipment and one size does not fit all. This initiative will benefit many of our senior citizens—[ 
Interruption 
] I say to Mr Hide that no doubt it will benefit some of the other members in the House. 
Other New Zealand First gains include an ongoing funding boost for the elder-care sector. This is a growing sector it is very important and it needs a careful eye on it to ensure that funding is adequate. What New Zealand First is providing here is very positive as is the boost to superannuation. We know that our superannuitants need this boost. All in all we believe that this is very positive news for our senior citizens. We are pleased to see the continued investment in the area of oral health. It seems to have been slowing down and this will give it the kick-start that it needs. 
As my leader said Budget 2008 contains some good elements a few bad omissions and the promise of something better from New Zealand First. 
DAIL JONES (NZ First) 
: 
 One of the interesting press articles coming out after the delivery of the Budget was the  
Dominion Post 
 one about the “last chance saloon”. I thought about that phrase and how appropriate it was. All the parties are sitting around the table making their bids. The chips are in the middle of the table and it is the final round. Gordon Copeland calls and puts down his cards. The ACT party puts down its cards the Greens put down their cards and it is up to New Zealand First to show what it has. We call Labour. We want to know what it has and it shows us. So now it is up to the National Party in the last chance saloon. This is its last chance. What does it have? It has nothing. It has absolutely folded. It has just run away. 
This Budget debate has continued in the same vein. It is as if the National Party like a 4-year-old has decided it does not like the game of tax cuts any more and it has picked up its ball and run away. It has not taken part in this debate to tell us what its tax cuts will be. That is an absolute failure on the part of the National Party. 
What we do know of course is that it will cut the foreign affairs vote. That vote is going up by $120 million a year but National will take that away. We know that National will scrap the new spending on the National Library. What a bunch of philistines! The National Library is one of the cornerstones of our education system and intellectual development in this country. But the National Party like philistines will cut that back. Then we have Government House which is one of the iconic buildings in New Zealand. We will spend some money to make sure that it is done up but if National comes into office it will stop that and let Government House run to rack and ruin. What a bunch of vandals! We were talking about graffiti artists but that is even worse. 
Of course when we look at other votes such as those to do with transport and roading we see that New Zealand First has made sure that the roading budget has expanded dramatically. How much did we spend on roading in Auckland in the 1990s in total? We spent $40 million. What is being spent in the Auckland region now? It is $40 million per month—not $40 million over 9 years but $40 million per month. What will National do to fund whatever tax cuts it might have? It will take money away from the excise tax and the roading tax. That is what it will use once again in the traditional Muldoon way to fund its Government expenditure. 
In respect of defence we have to congratulate Major Mark—Ron Mark—as we see that we have five wonderful new helicopters in defence. We applaud the Government for doing that. What will National do? Well if it wants to make cuts bang go those five wonderful new helicopters. That is clearly what National would have in mind. 
Doug Woolerton our spokesperson on agriculture has made a wonderful contribution in this debate already and he is working hard for the country. We have just heard from our spokesperson on health Barbara Stewart. She is putting up a strong fight for the people of New Zealand in the health field. Pita Paraone who is away on parliamentary business has fought hard on the issue of Maori wardens and we have seen great improvements in that area. 
I am concerned about Vote Justice. I am concerned about whether National will scrap the vote for increases in legal aid. There is a 10 percent increase in funding for legal aid in this Budget which is the first increase since 1996. In fact the budget for legal aid was increased in 1998 by the Treasurer—who was from New Zealand First—in the National - New Zealand First Government. That increase was cancelled by National in 1999 and the budget was taken back to the 1996 figure. 
We have had an increase in the funding for legal aid this time. All those ladies involved in domestic violence cases who cannot get lawyers will now have the opportunity to get lawyers for their cases. Will National scrap that increase again? That is the question we have to ask. We have not had a word from that party on that. 
As far as the funding for education in the Budget is concerned I am concerned that Playcentre New Zealand has not been recognised for the work it does and I believe that some consideration should be given to including it in that early childhood education grant. I would like to see more done for computer science in schools and of course New Zealand First supports having a universal student allowance. 
New Zealand First is here to make a difference. We front up when the chips are down when the “last chance saloon” comparison is made. Our MPs have made it clear that we talk the talk and we walk the walk; we have been able to get things done for New Zealand First supporters in this Budget. Thank you Mr Deputy Speaker 
LOUISA WALL (Labour) 
: 
 Kia ora Mr Deputy Speaker; tena koutou katoa. It is my pleasure to korero about what Budget 2008 means to me as a member of Labour’s Maori caucus and as Labour’s candidate for the electorate of Tamaki Makaurau. Firstly I will focus on the rationale behind our Budget and highlight the values and Labour Party principles that make it easy for us to articulate our policy initiatives. 
Labour’s 2008 Budget which builds on what we have achieved since we became the Government in 1999 is all about building a fair economy and a strong future for all New Zealanders. Our economy has been so well managed by Dr Cullen that in these hard economic times we have the resources to assist New Zealanders and that will help to relieve at least some of the pressure of the increasing costs being felt by families at the checkout and petrol pump—and yes to buy that block of Colby cheese if they so choose. 
Being able to deliver tax cuts at this time is completely by design and not by accident because Dr Cullen has managed the Government’s budget so very well in the 9 years he has been responsible for doing so. We have been able to prioritise tax cuts in Budget 2008 in addition to continuing our focus on Working for Families and preparing for the future. I note that in today’s  
New Zealand Herald 
 the editorial writer’s piece summarises this beautifully: “Over the past nine years Finance Minister Michael Cullen has worked assiduously to prepare for the retirement of baby boomers from 2011 developing the Superannuation Fund and KiwiSaver. A far more knowing electorate needs to be reassured that another National government would not devalue KiwiSaver let alone repeat the Muldoon Administration’s error.” 
Also according to the editorial in today’s  
New Zealand Herald 
 “National’s confusion over KiwiSaver should be a warning.” and the writer like other hard-working Kiwis just does not get why John Key is saying “We haven’t finalised our programme yet.” This attitude is just too risky and Kiwis at the end of the day will not hand over the driver’s seat of our proud nation to someone who cannot even tell us what he would do. It is worth noting from today’s  
Dominion Post 
 that employer lobby groups are pushing National to adopt a policy that allows businesses to take KiwiSaver contributions from wages which the New Zealand Amalgamated Engineering Printing and Manufacturing Union has calculated could cost the average worker $190000 in wages and lost interest over their working lives and which would put Kiwi workers even further behind their Australian counterparts. This is the real National agenda—workers are last on its list of priorities. 
Budget 2008 focuses on helping people especially those on lower incomes those with families and superannuitants among which 22000 kaumatua will benefit by $23.84 per fortnight as a single person and $45.88c per fortnight as a married couple. This builds on the $500 rates rebate and the SuperGold card to show a long-term strategy. Our tax cuts do not come at the expense of public services. When National was last in Government and times got hard it cut superannuation and public services. Now it wants Labour to do the same—that is to hurt those New Zealanders who are most vulnerable. That is not our style and we make no apologies for focusing on working families and older New Zealanders. 
The Labour Government I belong to is very clear about meeting the needs of hard-working New Zealanders and their families and ensuring that they have access to public services. Our plan is responsible because it provides tax relief while continuing to invest in public services like better hospitals modern classrooms cheaper doctors’ visits and prescriptions and more nurses doctors teachers and police officers. Labour will keep planning and investing for a strong future for our economy by investing in its modernisation with more funding for science and research public transport and trades training. We are also investing in buying back our rail system—for a modern sustainable transport network—fast broadband the lifting of the skills of our workforce and a reduction in taxes for business. So we have a plan with coherent and principled policies as opposed to the Opposition who at this point in time have little if any policy. 
What is in this Budget for Maori? Specifically there is over $130 million worth of initiatives. Before I outline some of these I will make some comments within a context of a growing Maori identity. In the 2006 census over 565000 New Zealanders identified as Maori—an increase of 30 percent since 1991. So one in seven Kiwis are indigenous and approximately 40000 of these share Pacific ancestries. Nearly 25 percent of Maori live in Auckland and 35 percent of them are under the age of 15. As at the 2006 census nearly 18000 Maori had bachelor’s degrees 2241 had master’s degrees and 387 had PhDs. The relevance of this achievement to Maori is evidenced within Maori income level statistics with approximately 50000 more Maori earning between $30000 and $100000 and with the median income increasing from just under $15000 in 2001 to just under $21000 in 2006. I note that the biggest jumps are in the $40000 to $50000 bracket where the median income rose from $14550 in 2001 to $26352 in 2006 and in the $50000 to $70000 bracket where it rose from $9864 in 2001 to $21945 in 2006. 
Maori have benefited in other ways under this Labour Government. The Maori unemployment rate in March 2008 was 7.7 percent compared with over 15.4 percent in March 2000. The Maori rate of participation in early childhood education is now over 90 percent with many families benefiting from our policy of 20 hours’ free early childhood education. The Opposition has said that we have failed Maori but again it has no policy no solutions and just empty rhetoric—that is other than its commitment to the abolition of the Maori seats lest we forget that. 
Education is of critical significance to Maori and Labour supports Maori aspirations. We know from recent research that Maori success in education from a solid base of Maori identity corresponds to greater educational achievement. So we have committed an additional $1.49 million in Budget 2008 for kohanga reo which builds on the $3.8 million allocation in Budget 2007. Additionally seven kura and wharekura will open over the next 2 years—four in Tamaki-makau-rau one each in Kirikiriroa Waiariki and Whanganui—which will build on our investment in kaupapa Maori educational facilities. 
We are committed to working with Maori in the Treaty settlements process. Budget 2008 commits an additional $5.3 million in operational funding over the next 4 years in Vote Treaty Negotiations. Since December 2007 we have reached six agreements in principle which will build on the now estimated $16.5 billion Maori asset base. This is an increase of 83 percent since 2001. Additionally we have two heads of agreement under the Foreshore and Seabed Act that recognise and protect in this instance the mana of the iwi of Te Whanau-a-Apanui and Ngati Porou while simultaneously protecting public access. Other parties have attacked the right of iwi to enter into such negotiations and to settle with the Crown but we concur with kaumatua Api Mahuika and congratulate Ngati Porou on making a precedent that others can follow. 
I want to highlight the imminent Central North Island Collective settlement in providing the opportunity for the iwi involved Ngati Tuwharetoa Ngati Whakaue Tuhoe Ngati Rangatihi and Ngati Whare—noting their collective membership totals more than 75000—to korero together and propose to the Crown a way forward in developing a solution as to how forest lands in their region will be used in historical Treaty settlements. 
Maori then will need support to enable the transfer of this asset base into business and job opportunities for all New Zealanders. We will do this by investing over $40 million in Budget 2008 for the establishment of Maori Business Aotearoa New Zealand. This entity will establish services for Maori by providing business support identifying opportunities for Maori economic development and providing some facility for loans to Maori businesses. This initiative is all about building upon and expanding Maori economic aspirations and continuing to look to the future. 
Budget 2008 also recognises the value of Maori nurses with a $12 million allocation over 4 years to increase their numbers and skill base. This is complemented by a focus on Maori provider development where this Government continues to value Maori-specific service provision in meeting the needs of Maori and other New Zealanders. As part of this Labour-led Government’s total of $446.5 million investment in community organisations we have committed over $10 million to 170 Maori providers. 
Finally I will highlight the additional $14.9 million this Government is investing specifically in strengthening the Maori Wardens Association which in addition to the $2.3 million in capital funding will bring the total funding support to $17.2 million over 4 years. 
SIMON POWER (National—Rangitikei) 
: 
 We are debating Budget 2008 but I would just like to begin by genuinely wishing Mark Gosche well. If the wires are to be believed he has announced this afternoon that he will not be standing for Parliament again at the next election. I certainly wish him well and I know that the members of the National Party caucus do so as well. 
I must say that that speech from Louisa Wall was disappointing. When Louisa Wall arrived in Parliament members were led to believe that this was part of the new generational change in the Labour Party and I was expecting to hear a far-sighted view of the world under a Labour Government which that member loves and belongs to. Unfortunately the first 15 percent of that speech was spent talking about the same tired old issues that the Annette Kings the Trevor Mallards and Phil Goffs of the Labour Party have been speaking about for the last 15 to 20 years. So let us hope that at some point we will get some sense of where that member thinks the Labour Party will head and what direction she believes will make a difference to that party’s fortunes in years to come. 
We know there is great hope resting on that member’s shoulders. Members on this side of the House know that if the future of the Labour Party rests with Phil Goff and David Cunliffe it is not just the country that will suffer it is the quality of the Parliament that will suffer in that particular case. We would be left in the curious position of having a leader of the Labour Party who does not have the confidence of the left wing of the Labour caucus and a deputy leader who just does not get on very well with his colleagues by all accounts if what one hears in the corridors is true. 
I thought the interesting thing about the delivery of the Budget was the following two facts. Firstly it was just how quickly Michael Cullen delivered it. Now people know that Michael Cullen generally speaks quickly but he sped through that Budget at a rapid pace. It was almost as if it was something he had to get off his chest and get out there rather than something he was slowly and methodically guiding the country through and that he really believed in what he was saying. I have said this before and I will say it again: the most curious thing when we came to the big tax cut announcement was that the only thing that moved was the metaphorical tumbleweed rolling through the debating chamber. There was not one clap one “yahoo!” or one nod. Yes there was some applause when we got to the announcement around superannuitants’ entitlements which of course came from the tax cuts in any event but there was no recognition of those in the first instance. 
Secondly the most extraordinary thing happened. The Prime Minister got to her feet after the Leader of the Opposition had given his speech and started talking about the Springbok Tour in 1981 and the Budget speech of Robert Muldoon in 1984. I personally was waiting for her views on the Crimean War but they did not come as quickly! But the most interesting thing about the start was that although the Prime Minister had a platform there to sell to the country exactly what she thought New Zealand could look like if Labour was re-elected at the next election all she could do was cover the same old tired arguments that she has covered for the last 25 years. It is not that some of those issues are not important; they are but the country has actually moved on to discuss other issues. The most stark thing about that Budget speech was the generational difference between the Prime Minister and John Key in the way they approached the Budget. Mr Key was there on his feet optimistically talking about his ambitious view for New Zealand about recruiting home those thousands and thousands of skilled New Zealanders who have gone offshore and about not begrudgingly returning to taxpayers the money they had paid into the Government coffers but genuinely wanting to say to New Zealanders that we want to take from them only as much tax as we need in order to deliver the core services of the Government. 
Whereas all the Prime Minister could do was talk about battles of the past—not just battles fought in the last year or in the 1990s but battles that were fought in the 1980s. I remember 1984 well. I was in the fourth form in 1984. I remember seeing on the walls of my fourth form economics class the photos of the members of the new fourth Labour Government and their portfolios. Phil Goff and Annette King were there. These are the bright faces of the future of the Labour Party—people who first went to Cabinet when  
Miami Vice 
 was on TV. And these are the people we are expected to believe have a vision for a new fast-paced global New Zealand! They are backward-looking. 
The Budget showed us that Dr Cullen was prepared to deliver the tax cuts in it only to try to be the sly old fox and box National in—to begrudgingly hand back taxpayers’ money because that is what the polls and the focus groups were telling Labour to do. But is it not interesting that none of the Budget was fundamentally about what Labour believed the future of New Zealand needed to look like? That was actually the most telling point in the Budget this year. For example in the last few months we have seen Labour members of Parliament scuttle from the caucus and announce their retirements in a frenzy—a frenzy—to get off this ship. My friend over there the Hon Steve Maharey was smart. He left with his dignity intact. He could see the writing on the wall. He knew that it was time to go and now he looks like the calm elder statesman of the Labour Party while the panic ensues around him. I wish he would lean over and tell Rick Barker: “It is time Rick. Don’t put yourself through it!”. But we know that Mr Maharey is too clever by half. 
This Government has increased Government spending from $32 billion to $60 billion over 9 years. What have we got for that $28 billion? I will tell you what we have got some nice prisons! We did not bother having budgets for those by the way. We had a collaborative working arrangement where people sat around wearing skivvies calling each other “Reg” and decided that they would get in whoever they needed to complete the job because they were taking a holistic intergovernmental inter-sectorial approach to building these prisons. At every single public meeting that I have been to around New Zealand where I have talked about that half a billion - dollar prison budget blowout I have not come across one contractor that was against it. I tell members why: it is because the contractors were smart enough to know when to move in and make money while they could. 
The Prime Minister’s legacy will be determined by the passage of the emissions trading scheme. This legislation is lurching around in the Finance and Expenditure Committee with barely enough support to get it through its report back let alone through the next stages. We know that the Prime Minister is desperate to tick that box—not because it is good for New Zealand not because she thinks we should be a fast follower of Australia in this area but because the Prime Minister needs the entry on her CV for the next job she applies for. 
The Budget debate is coming to a close. There cannot be many speakers left—there must be the odd Labour speaker still to come. When that member stands I want to hear him or her talk about what the Labour Party believes New Zealand should look like in 10 to 15 years. I do not want to hear about the Springbok Tour again. I do not want to hear again about Robert Muldoon in 1984. I do not want to hear about the debates of the late 1980s and early 1990s. A generational change is at work in politics in New Zealand. John Key is leading that generational change. This Budget debate is nearly over as is the life of this Government. 
Hon MARYAN STREET (Minister for ACC) 
: 
 I would like to speak in this Budget debate about the vision that Labour has for New Zealand for the next 10 or 15 years because this is the balanced Budget that allows after years of prudent and careful management of good times for the Government to invest in the things that are important to Labour and to the majority of New Zealanders—that is upward economic growth including the provision of health and education services and at the same time being able to ensure that the tax cuts in the Budget are appropriate are manageable are meaningful and are in the end sustainable. I would like to talk about the vision we have for a future of New Zealand that goes way beyond simply the carping mantras that we hear from the Opposition. 
I would like to talk first about housing and about the things we are moving along in housing particularly to address the issue of affordable homes. Budget 2008 includes significant investment in affordable housing and that reflects a wide-ranging plan of action with considerable innovation in it unlike the views we hear so frequently from the Opposition. We have some innovation we have some ideas and we have some enduring balance to our Budgets which the Opposition cannot deny. The fact that those members do not have such vision and do not have such balance in any of their statements to date indicates that they are neither fit to govern nor competent to deliver the kind of Budget that is good for the times. 
New capital spending of $37.8 million over 3 years is set aside in this Budget for the first phase of the Hobsonville development. We anticipate that this development will generate some net revenue to the Crown but more important the development which will be undertaken in several phases uses Crown land to create up to 500 affordable houses and up to 500 State houses as part of a wider project that will set a benchmark for sustainable urban development. The project also gains additional operating funding of $5.1 million over 4 years. 
As housing Minister there is another thing I am particularly proud of in this Budget. I wish to again pay tribute to the Green Party for its contribution in this respect. It is to do with the additional funding that will go into insulating the remaining 21000 State houses that were designed and built before 1978—before insulation standards became mandatory. This new time frame because of this funding secured by the Green Party in its bid will mean that in the next 5 years we will be doubling the pace of the insulation of State houses. I have visited State houses that are not adequate for current times. The ongoing work stream to improve the insulation and retrofitting of these houses is to be sped up so that 21000 of these remaining State houses or about that number will be properly retrofitted in the next 5 years. The retrofitting will include underfloor insulation ceiling insulation draught-stopping and a whole range of measures that will provide immediate benefits not only in health and personal welfare terms to those houses but also in efficiencies that will provide them with savings in power bills. There is no doubt about that. We are setting about to deliver improved services to these houses as of 1 July. 
Another initiative in this Budget that I wish to draw to the attention of the House is the shared-equity pilot I announced just before the Budget. Budget 2008 funds a 2-year shared-equity pilot that will assist between 500 and 700 households into starter homes. In the concerns that we have had around affordable housing we have never as a Labour Party resiled from the dream of New Zealanders to own their own homes. We know that in the last 5 years the price of houses has increased by 80 percent. No Government would have been able to keep pace with that kind of increase yet this Labour-led Government has increased incomes to households by some 25 percent in real terms. In addition we are now making available as of 1 July a shared-equity pilot that will allow first-home buyers the best chance to get into their first home. 
The shared-equity pilot which I am proud of has been targeted and tailored. The reason it has been targeted is that there are five areas in particular in New Zealand that are extremely expensive for people to live in. Those areas are Auckland Wellington Christchurch Nelson and Queenstown. We have sensibly tailored the shared-equity pilot to those areas. Yesterday Nick Smith was at some pains to say that this would not address the issue of interest rates in Nelson. The shared-equity pilot was never designed to address interest rates. It is designed to provide an interest-free loan for a portion of the cost of a first home. In that sense it addresses interest rates because it deals only with an interest-free component which it makes available to first-home buyers. 
In the Nelson area there is a cap on the house price of $240000. When this was first announced Dr Smith was very keen to point out that there were no houses of that price in Nelson. Unfortunately he had not read the most recent property magazines in Nelson nor had he read the  
New Zealand Herald 
 where the intrepid reporter had actually gone on to a real estate website to discover that there were 60 properties within that housing cap in the Nelson area. 
Hon Member 
: 60? 
Hon MARYAN STREET 
: Yes 60 properties. I was about to say to the reporter from the  
Nelson Mail 
: “Yes this won’t buy you a house in Princes Drive.” Anybody who knows Nelson will know that it is that drive on the crest of the hill that looks down to the port and back to the city. It is a wonderful spot. The thing that is really important is that I was prepared to say that that initiative will not buy a house in Princes Drive and I opened up the latest property magazine and what did I find? I found a house in Princes Drive. The ad states: “Three bedrooms immaculate condition city views large sun deck $235000.” Ten percent of that would be interest-free to a first-home buyer who could raise a 5 percent deposit. 
That is the kind of initiative that will deliver to people in Nelson. That is part of our ideas our initiatives our plan and our coherent strategy to address the issue of affordable housing. That remains one of the most important things in this balanced forward-looking futuristic Budget. 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 During my Budget speech I will concentrate on one thing and that is the difference between the two major parties in their attitude to the roll-out of high-speed—in fact in the case of the National Party blisteringly high-speed—broadband Internet. I am very proud of the announcement that John Key made back in April about rolling out a fibre-optic network to at least 75 percent of New Zealand homes. Fibre optics is the future and National has been saying that. And I find it interesting that David Cunliffe has just recently said: “Labour has always said that fibre to the home is our goal as well.” So I put some questions for written answer to David Cunliffe and members will have seen these in their lists. My question asked where in the National Digital Strategy—I read it carefully and then I used a search engine—does it say even the words “fibre to the home” let alone that fibre to the home is the Government’s primary goal? He did not refer to it at all in the answers. I said that I had the digital strategy and he said: “No it’s in the draft revision of the digital strategy which I released last week.” So he saw where National had gone. We still have not seen the final version; it is still out for consultation. But “fibre to the home” has always been Labour’s goal? Yeah right—what a joke! Those members should have a look at the answers to my written questions and they will see it. 
I thought that the differences were glaringly obvious but David Cunliffe has actually put the spin exactly the wrong way around. He has said that National’s proposal is a huge subsidy to Telecom. Well he is wrong and he is wrong for this reason. The open access network we propose to roll out will give Telecom or any other private sector company no special rights no privileges and no benefit. Anyone who wants to participate and put some money and some skin in the game will be able to. 
But what has Labour proposed in this Budget? It is going to put in $325 million which will go almost nowhere. That will not get us fibre to the home. David Cunliffe says that that is an ambitious goal that is too ambitious for this country. Well it is not. But now the Government is going to spend $325 million. What will it do with it? It will give it to private sector companies and allow them to do their best to roll out fibre to the node not fibre to the home—and the Government will not get any return for it. If that is not the most appalling stewardship of public money! But the National Party will keep control of the $1.5 billion that we have announced. We will be a 50 percent shareholder in the vehicle that rolls it out. We will take a return on the weighted average cost of capital—a realistic return—and no public money will be wasted. 
I bet that like the Toyota salesman people will say that they would expect National to say that. So I thought I might have a look at what others have said about our proposal and what they have said about Mr “Conloffe’s” response— 
Pansy Wong 
: Who? 
Hon MAURICE WILLIAMSON 
: —Mr “Conloffe”—because I think that that is really important. He used a quote today—from I think the  
Australian Financial Review 
; he did not say where it was from—and he made some derogatory comment. But he did not for example have a look at what was said by Ernie Newman the chief executive of the Telecommunications Users Association of New Zealand. He is not National’s best friend. He has been known to bag the National Party and me in particular quite heavily. In fact there was a stage when I thought Ernie Newman had a Maurice Williamson doll in his desk and spent his day sticking needles in it. But members should listen to what he said about Labour’s broadband. He was glowing in his response when National announced its policy so on Budget night I thought his response would be interesting. He said: “But to be honest I feel a bit underwhelmed. The amount of money is pretty sparse and I guess I was anticipating more. The administrative processes are complex and slow—I foresee rosy times for the burgeoning Consultation Industry with lots of people huddled in interminable meetings. By the time the consultation evaluation and analysis is done hamlet by hamlet will the amount of money left to dig trenches through the streets of Waitotara cut the mustard.” That is what he said. That is not what one could call a glowing endorsement from the Telecommunications Users Association of New Zealand. 
He went on: “I know Budgets are necessarily factual and a bit boring”—well Michael Cullen has taken that to an art form—“but I did hope to see a bold vision statement about the outcome.” And members will love this—this is my favourite bit: “It was always going to be hard for Labour to upstage the very strong and visionary plan announced by National.” That is what Ernie Newman said on the Telecommunications Users Association website. By the way if members look at that site they will see that a second article is called 
“The morning after the budget” because I know that Ernie Newman got a bit of stick from David “Conloffe” and others asking how he dared to say that. So he reflected— 
Paula Bennett 
: “Count Conloffe”. 
Hon MAURICE WILLIAMSON 
: —“Count Conloffe” said— 
Mr DEPUTY SPEAKER 
: Order! 
Hon MAURICE WILLIAMSON 
: Mr Cunliffe said. So Ernie Newman said the next morning: “So I’ve slept on the Budget. Among the comments I made … was that I was ‘under whelmed’ ”. So he said he thought about it and he wondered whether what he said was fair. He said that: “yes it was fair as a reaction”. He continued: “the quantum of money is too small. $324 million over 5 years is just not enough.” and “the administrative process”—announced by David Cunliffe—“is awful.” 
But look there are another couple of crackers including one press release that I simply love. Here is one that members would not expect. It is one that none of us expected. It is from Andrew Little of the Engineering Printing and Manufacturing Union. Andrew Little is almost the leader of the Labour Party. He will be the next Labour leader if Phil Goff does not sew up the leadership. This is what he said and I have his press release here if members do not believe it: “The Engineering Printing and Manufacturing Union says John Key’s policy of rolling out fibre optic cable to 75% of New Zealand homes is a step in the right direction”. Then he goes on to say: “We really want to see this sort of project happen as any investment that will increase productivity in New Zealand is good for our members …”. So we have Andrew Little onside. 
But wait there is more—[ 
Interruption 
]—I am afraid there is a lot more. I want again to paint the picture of the stark contrast between National future-proofing the nation and making sure that our nation is wired up so that our kids can stay and participate in our economy and “David Conloffe” who says no fibre to the home— 
Mr DEPUTY SPEAKER 
: The member may well be having difficulty in correctly pronouncing Mr Cunliffe’s name. I had not noticed it before today but something might have happened overnight or it might be deliberate. 
Hon MAURICE WILLIAMSON 
: Mr Deputy Speaker I must say that the Prime Minister called him “David Conloffe” in the House the other day and no one picked her up on it. If his own leader does not know how to pronounce his name properly then I think it is unfair to make a humble backbencher from the Opposition comply— 
Mr DEPUTY SPEAKER 
: No no. 
Hon MAURICE WILLIAMSON 
: —but I will try. I will call him the Minister because he is running the show. 
I will now go to some of the other organisations that were pretty effusive about where the Minister may have been going until National made its announcement. For example the Internet Society of New Zealand’s headline states: “InternetNZ commends National Party fibre commitment” and goes on to say: “InternetNZ welcomes today’s announcement by National Party Leader John Key …”. I understand that the deputy chairperson or president of InternetNZ is a guy who is the Labour candidate in Paul Hutchison’s seat. 
Hon Members 
: Oh really? 
Hon MAURICE WILLIAMSON 
: Yes I cannot remember his name— 
Pansy Wong 
: Who? 
Hon MAURICE WILLIAMSON 
: —that is right: who—but he is the Labour candidate and InternetNZ is saying that. 
I have another press release: “Bold broadband plan huge stimulus for business”. That is a cracker and it is from the Employers and Manufacturers Association: “The National Party’s economic plan that includes investing up to $1.5 billion in ultra fast broadband is applauded by the Employers and Manufacturers Association (Northern) or EMA.” This is what Alasdair Thompson had to say: “This is one of the best pieces of news for business and the whole economy in a long time.” 
I am happy to keep putting up these examples. There are heaps more and the statements have been very clear. I will have time to read out only a couple more but they have all been very welcoming. Labour would have been way better to say: “Yes we think that the time has come for fibre to the home—the products the services the innovation and the economic transformation that will be achieved by a nation that has blistering speed Internet not the nickel and dime approach whereby we have got to 5 megabits and next year hope to squeeze it up to 8 megabits.” That is down of course; with up-speed we are getting nothing like it because the “A” in ADSL stands for asynchronous. 
I ask the Minister this question: how is National’s proposal a subsidy to Telecom? How come? In no way does Telecom get any of the money because the money we spend will be spent on rolling out fibre. If Telecom wants even to be a participant it has to bring some skin to the game. It will have to put up its own money as will lots of other partners to make the vehicle that is the public-private partnership. I can tell this House without fear of anything that if Telecom is a player in that there will be no form of subsidy to the company. It will be Telecom’s own money that it will be putting into the game to be just one of many participants. 
But that is not so with Labour’s proposal. Labour’s proposal is to take $325 million over 5 years—$65 million a year which is less than what Maryan Street spends at a lodge on a weekend with some of her people—give it to private sector companies and tell them to do their best. If that is not the worst example of Labour having now gone in the completely wrong direction in relation to achieving the outcome then I do not know what is. 
I wish I had more time. I think I will go to one more example and it is from Business New Zealand. Again that is an organisation that is pretty frugal with taxpayers’ money. It does not like the Government going out and spending taxpayers’ money unless the spend is well-thought-out. The headline on its press release states: “Additional investment the key to broadband policy”. This release is from Phil O’Reilly the boss of Business New Zealand: “ ‘National’s plan to speed up provision of broadband to most premises is welcome' says Business NZ. Chief executive Phil O’Reilly says a public-private partnership is a logical way to spread the cost of such a huge undertaking.” 
I am damn proud of John Key and the National Party for what they have done on broadband and Labour’s response under David Cunliffe is pathetic. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The one thing John Key knows about Maurice Williamson is that sooner or later he will be stabbing him in the back just as he has done every previous National Party leader—and leaking like a sieve to the Labour Party his views about all the faults within the National Party. However his speech should be welcomed; it was the maiden speech from Mr Williamson this year—otherwise known as the “MP for Telecom”. 
He told us that the important thing for the National Party was not getting high-speed broadband to the farm and to the business; it was getting it to the home. [ 
Interruption 
] Well that was what Mr Key said; the important thing was granny at home being able to download faster the pictures of the grandkids. His answer to people leaving to live in Australia is to have high-speed broadband so that we in New Zealand can download more quickly photos from New Zealanders now living in Australia. We know that in Japan fibre-optic cable can be rolled out to the home and it is used for two things both of which reduce productivity neither of which raises productivity. The priority should be getting broadband to the farm and to the business in order to raise productivity and to leverage the maximum private sector investment for the public tax dollar—not a disguised subsidy for Telecom because who else other than the incumbent in terms of fixed technology would be the partner for the $1.5 billion? Name anybody else who would be that partner! 
There have been some great things about this Budget debate. The first thing we have learnt is that Bill English is totally ignored in terms of his views about the economy. Bill English said after the Budget that no money would be left by 2011 and every one of his colleagues following Mr Key ran around the country saying that people should not worry because National would find billions more dollars for bigger tax cuts. National members started off this debate saying they believe in tax cuts and they have ended it saying they believe in KiwiSaver. And who achieved that? The previously unknown Kate Wilkinson has managed to achieve a religious transformation in the National Party with one answer to one question. Just think what a strategic mind could achieve within that caucus if one error can achieve that kind of approach within the National Party! 
But there is something else: this is the first time that I have given a Budget and the National Party members could not think of a question to ask in the House the next week. There was not a single oral question or supplementary question from the National Party the whole week. Where was big brave Mr English? He tried to pick on other Ministers but unfortunately for him I got up and answered the questions instead. There was nothing about the Budget. Why? Because he knows that National members not only have swallowed whole rats; they have ended up being cornered by them as well at the same time. There they all are in the corner with nowhere at all to go and thinking how they can promise more to the people before the election. 
We had one policy from them and it has gone. It has been used up in the Budget. There is no other idea in the National Party—nothing at all. Every other policy is simply: “What a great idea Labour has had; let’s adopt it!”. National members did that with the New Zealand Superannuation Fund KiwiSaver Working for Families—just roll out the list. They say they believe in Labour’s policies and they say they believe in tax cuts but unfortunately the Labour Government has done them so there is nothing left for them to do. Why would people vote for National why would they vote for the glove puppets when they could have the real hands over on this side actually running the Government? That is the problem the National Party has got going into the next election. 
Then National members said that National could pay for more tax cuts if a National Government did some really bold things. First it would not open an embassy in Stockholm. That will save a lot of money! Secondly it would axe the special education service. It is National’s prime example of bureaucratic growth so it must be what National would cut. Thirdly it would transfer Housing New Zealand Corporation conferences from the Tongariro Lodge to the Brentwood Hotel and out of that magnificent saving of $20000 or $30000 a pop once a year it could provide a tax cut for everybody! The real purpose behind the National Party raising that issue was quite simple: its members like to have their caucus meetings in luxury lodges and they are worried that some Government department might fill up the luxury lodges. I guarantee that between now and the election that party will have a conference a caucus in a luxury lodge paid for by the taxpayer. The big “h” word will never occur to those members at any point in that process. Indeed I have a pretty fair idea that National did hold a caucus meeting in one of the examples read out this afternoon by the Minister of Housing and only about 2 or 3 years ago. That is the National Party for you; nothing is too good for the National Party when it comes to that kind of thing. 
This week we also learnt about the National Party’s policy process. The National Party’s policy process consists of hiring somebody’s water closet having the entire policy committee meet in a soundproof room inside it to arrive at its conclusions then making sure there are no leaks out of that water closet so that nobody else in the National caucus knows what the policy is. So the spokesperson on industrial relations did not know what the National Party plans for employers. It is supposed to be the party of the employers yet the spokesperson did not even know what the policy for employers was. So we have Bill English John Key and of course that giant of policy formulation Murray McCully meeting together to determine the policy of the National Party. The rest of the sheep baa bravely when the policy is finally released. National is a party that does not need a whip; it does not need two whips; it needs two Border collies! That is all that is needed to run the National Party in Parliament. 
The final thing we learnt in this debate after all the talk of National members about blocks of cheese—they are the “Colby Party”; they must be sponsored by Mainland from the way they have carried on—is that they have no answers at all. They do not have a single bit of policy at all. What is their policy? They say: “Remind us of the Labour Party policy.” and then they say: “That’s ours too! That’s our policy.” That is the National Party approach. I say: “Good luck team!”. 
This Budget has been a great Budget. This is a Budget on which we are getting better and better feedback every day of the week. I was stopped on the way to the Koro lounge I was stopped on the way into the plane and I was stopped on the way into the hotel in Auckland last night by people saying: “What a great Budget!”. I say to National: “We’re ready and you lot over there had better come up with some answers between now and sometime later this year because you’ve got none at the present time.” 
A party vote was called for on the question  
That all the words after “That” be omitted and the following words inserted: “this House has no confidence in the Government led by Helen Clark because New Zealanders have had to wait far too long to see any changes to personal tax thresholds or any lowering of personal tax rates and over nine Budgets this Government has presided over a decline in New Zealand’s standard of living compared to the rest of the world.” 
Ayes 50 
New Zealand National 48; ACT New Zealand 2. 
Noes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 6; United Future 2; Progressive 1; Independents: Copeland Field. 
Amendment not agreed to. 
A party vote was called for on the question  
That the Appropriation (2008/09) Estimates) Bill be now read a second time. 
Ayes 61 
New Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 50 
New Zealand National 48; ACT New Zealand 2. 
Abstentions 6 
Green Party 6. 
Bill read a second time.