Goldsmith Paul; Carter DavidHon PAUL GOLDSMITH (Minister for Tertiary Education Skills and Employment): It is my pleasure to speak on this Budget which is a Budget that is delivering for all New Zealanders. I want to deal with the strong economic forecast that the Budget documents laid out. I want to speak about the improving fiscal forecast and I do want to talk about the investment in public services and infrastructure for growth that we have seen in this Budget reducing debt as a net percentage of GDP and the Family Incomes Package.Not many countries around the world today—developed countries with developed economies such as New Zealand—can point to such strong economic growth over an extended period. We are looking at this Budget prospect of 3 percent growth—in excess of 3 percent growth—every year for the next 4 or 5 years which collectively will lead to a significant expansion in the New Zealand economy. Why is that important? Because it is only a strong economy that delivers the jobs the incomes and the opportunities that all New Zealanders want for themselves and their families. That is why we focus so much on strong economic growth in this country.We have seen the 137000 jobs that have been generated out of this economy in the last year. That is hard-working New Zealand businesses taking a risk investing in taking on new people investing in new plants investing in new businesses taking on the world in a competitive environment—and succeeding—and providing new jobs for New Zealanders. That is what this economy is all about and this Budget shows the success that we have had. We have seen an employment rate that is one of the highest in the world. We have 76 percent of working-age New Zealanders in work. There is no other country that compares—our friends in Australia have only 72 percent and our friends in the European Union have barely 66 percent—and that is because there are so many jobs in this economy. We have seen a jobs boom in this country over the last few years. In terms of the strength of the economy—Fletcher Tabuteau: You realise it might be indicative that they can't live on anything else.Hon PAUL GOLDSMITH: —what we have seen—Professor" you might listen if you have a chance here—in the last few years is notwithstanding a substantial drop in dairy incomes over 3 or 4 years ago we still managed to expand exports every year year on year through that period which demonstrates the diversity and sophistication of the New Zealand economy. Part of that the export education sector which I will talk a bit about later continues to grow—about $4.5 billion. The high-tech sector which is driven in part by the ideas and innovations coming out of our R & D sector is a big part of that diverse economy. It gives us the ability to ride our way through storms.When I first came into Parliament 5 years ago we had lectures every week from the Rt Hon Winston Peters and others about the woeful state of the current account deficit in New Zealand and the fact that the current account deficit had been nearly 7 percent of GDP back in 2008 when the previous administration the Labour Government was in power. We were losing literally 7 percent of our GDP in terms of current account deficit. We were told that the end of the world was happening and it was never going to turn around. What we have seen is a continual upswing. Now we are looking at about 3 percent of GDP at the moment and delivering strongly because that is the strength of the New Zealand economy. We have seen the construction sector growing. We have seen a strong response from the housing sector in terms of building new houses. When we move on to the fiscal side we look forward in the Budget to a series of increasing fiscal surpluses—that is that the Government is spending less than it is drawing in terms of revenue. That is important. When investors are deciding whether to invest in hiring a new person or building a new business or taking a risk they can look at the state of the New Zealand Government books and say that yes what they are doing is sustainable. They can continue doing what they are doing at the moment for the next few years. They're not going to have to lurch off in a wildly new direction because what they are doing cannot be sustained. They can have confidence to invest. While having those surpluses we can continue to invest in capital expenditure such as investing in infrastructure building those roads fixing the railway and investing in quality new schools. We are able to do that without increasing our debt because we have cash in excess in the surplus.So over the next few years we will not have to borrow extra money. We will be able to reduce our debt as a percentage of GDP because the economy continues to grow and that enables New Zealand to be much more resilient for the next crisis that comes along—and there will be another crisis of some sort. We hope that the geological disasters that we have had in the last few years will not repeat but you can rest assured that there will be another global financial crisis at some point down the line. There will be recessions somewhere down the line and New Zealand as a country needs to be resilient. That is what we have shown—that we are going to be resilient and that New Zealand is able to respond and borrow if we need to in those circumstances. But we cannot do that if like many other countries in the world we have a high level of debt going into those periods. That is why we are determined to get that debt down and give ourselves the flexibility that we need to grow. In terms of my area I do have the privilege of having the ability to guide our science and innovation spending and our tertiary sector and we have made substantial investments in both those areas as part of the Innovative New Zealand part of the Budget. Following on from a very substantial infusion of new funds last Budget—more than $700 million—this year we are putting another $300 million in in order to strengthen the scientific and innovative capacity of New Zealand over the years so that our companies can be more competitive internationally infused by quality ideas and innovations coming out of our universities and through our Crown research institutes and so that we can continue to see the massive investment by the private sector in R & D. We have seen that growing by 29 percent over the last 2 years partly encouraged by the growth grants through Callaghan Innovation. Through our tertiary system we can continue to deliver the skills that are required for a growing economy and a more highly sophisticated economy. That is why for the first time we have had an increase across the board for tertiary providers—about $70 million over the next 4 years. That is why we have continued to put extra resources into the Performance-based Research Fund which is that part of the tertiary system that rewards research excellence. We have done that consistently over the past few years so that those wellsprings of knowledge and scientific ability and that capability can be built up in the economy and used by our companies to make them more internationally competitive. The other primary contribution that the science sector makes is that it helps inform our decision making in Government so that we have fact-based decision making around the regulations that we bring in—the challenges such as water quality and the way that we deal with preserving our biological heritage such as the work that Maggie Barry has been working on. The extent to which we can deal with those national science challenges that we are funding depends on the capability within our system. They help us preserve and enhance what is special about New Zealand. Science is about delivering new ideas innovation and skills to help power the New Zealand companies so they can be more successful internationally but it is also about helping us preserve and enhance what is special about New Zealand which is the quality of our environment and our high levels of social cohesion. It is also fundamentally about us contributing to the global store of knowledge. We may be a small country but we are not freeloaders. We do not just sit back and accept all the scientific work of the rest of the world; we contribute to it. That is why we have invested an extra $20 million-odd into Antarctica research. It is an area that we are close to and we can make a contribution. We can understand what happened in the ancient history of the ice down in Antarctica to get a better understanding of our global climate history. That is why we continue to invest in our understanding of the geological challenges of New Zealand—the earthquakes the volcanoes. We are on the Pacific Ring of Fire and the rest of the world expects us to know a bit about that. We make that contribution and that is why we continue to make the investment that we do. This is a confident Budget for a confident nation that has its best years ahead of it. For 8½ years this Government has provided strong stable Government that has enabled New Zealanders to have the confidence to invest. The economy continues to grow. We have got a great set of fiscal forecasts out ahead of us. Steven Joyce has done a great job and it is a privilege for me to be able to condemn—to commend this Budget to the House. Thank you very much.Mr SPEAKER: I understand this will be a split call. I will ring the bell at 4 minutes—Peeni Henare."