Dunne Peter: Budget Statement — Budget Debate 
Text is incorporated into the Bound Volume 
Dunne Peter: Budget Statement — Budget Debate 
[Sitting date: 24 May 2012. Volume:680;Page:2421. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Leader—United Future) 
: 
 I want to begin this afternoon with two quotations that are relevant to the context of this year’s Budget. The first is from the OECD yesterday and it says in respect of New Zealand: “The government needs to adhere to its fiscal consolidation plans given the twin vulnerabilities of rapidly rising public debt and high external debt. Delaying monetary tightening is appropriate in light of the fiscal contraction and risks to global growth though as reconstruction accelerates capacity pressures will bear close watching. As the government shrinks reinvigorated structural policies are needed to channel resources into productive economic uses.” That was the OECD yesterday. The second quote is a little longer in its history—it is from President Kennedy in 1961—but it is still relevant in the context of this Budget. He said: “We sometimes chafe at the burden of our obligations the complexity of our decisions the agony of our choices. But there is no comfort or security for us in evasion no solution in abdication no relief in irresponsibility. … For it is the fate of this generation … to live with a struggle we did not start in a world we did not make.”  
In terms of New Zealand’s place in the world and the international conditions that have very much shaped the context of this Budget it was a struggle that we did not start and it was certainly a world that we did not make. But there is one other important point in the OECD report that goes to the heart of some of the issues in this year’s Budget. It noted that apart from falling commodity prices and the ongoing impact of the Christchurch earthquakes one of the impediments to growth in New Zealand at present has been household deleveraging.  
When you look at the Budget tables and you look at the experience over the last couple of years one can see that since the Budget 2010 tax initiatives there has been a significant increase in household saving rates—probably far greater than was ever envisaged at the time—and that is likely to continue to strengthen with the increase in the KiwiSaver contribution rate from April of next year. So on the one hand New Zealanders are relieving themselves of debt; on the other because of that they are not spending in consumption which is slowing our rate of growth. I must say that one of the things that did disappoint me in the Budget was the deferral of the auto-enrolment exercise for KiwiSaver. I understand the reasons why but I actually believe that it is time to move to make KiwiSaver a compulsory savings scheme and then some of the costs associated with an auto-enrolment scheme could be got over because you actually remove those incentives.  
I think when one looks at the Budget and the context of it and at the commentators who have spoken about it and compared New Zealand’s situation with the rest of the world the one thing you can say with absolute certainty is that the claim by the Leader of the Opposition that a zero Budget is a no-growth Budget would be one of the greatest fallacies of all time. What this Budget does very cleverly in my view is reprioritise just under $5 billion of spending into a much higher-quality level of spending by seeking better performance rather than just simply throwing more money at problems. In so doing it lays out a couple of challenges: one to the Government sector to continually up its game in terms of the quality of service and the quality of performance for the service it delivers and the second challenge—and the bigger challenge—is to the productive sector of this economy to start to take those lessons on board now and to make a positive contribution to New Zealand’s growth moving forward. So in other words contrary to Mr Shearer’s assertion that the only way you can get growth in the economy is for the Government to grow what this Budget is saying is that the Government is setting its own house in order so that the circumstances are there for the productive sector of the economy to take the lead and for it to grow for it to create the jobs for it to create the revenue for it to create the opportunities for the people of our country.  
Again you have got to see this in an international context. New Zealand does have an issue with debt; the OECD acknowledged that. But high debt to GDP ratios are far stronger in Europe in Britain even in Japan for instance and in many other countries. They have higher rates than New Zealand. We are better positioned. We might not like the position we are in. We might well say that we can do better but we are better positioned than many of those countries and many of those countries now face much harsher choices as a consequence of their position. For instance we are not talking here thankfully about cuts in Public Service salaries in the way that the Greeks or the Irish have been speaking or even about what the new socialist Messiah M. Hollande has spoken of in France. In fact cutting senior Public Service salaries was one of his first acts. That is not on New Zealand’s agenda because we do not need to do that. Nor do we need to follow the rest of Europe in this headlong rush to a crazy complicated unworkable financial transactions tax or even go down the path that some here advocate of a capital gains tax.  
What we are doing here through this Budget and through the careful and prudent reprioritisation that is occurring is setting the scene for future growth. I think that marks a considerable difference from many of the 28 previous Budgets I have seen delivered in this House. All of them have had an understandable—for different reasons at the time—preoccupation with the short term: the next electoral cycle or the next immediate crisis. This Budget is brave enough to stand aside from that and say that over a long track of 4 to 5 years—very long in our parliamentary terms—the Government is making some decisions about the future shape and structure of the New Zealand economy that will in turn inform the decisions that many of the key players within that economy will make. And it is starting to send some signals that I think are long overdue and welcome.  
For years successive Governments—particularly actually Governments of the left—in New Zealand have talked about the need for partnerships. They have called them strategic alliances or accords—all those sorts of things. And in fact what this Budget does is actually start that process because it recognises that the Government can no longer do everything. You see the challenge used to be that people talked about partnerships but partnerships were always led and dominated by the Government. What this Budget is really saying is the Government cannot have all the answers but it can know where and who the most productive or most effective groups in the economy to deliver certain needs are. So what you are starting to see in terms of the Government’s relationship with business in terms of what is going on in the health and education sectors is a much greater focus on working with the key groups to get the best outcome for the dollars that are invested.  
I will give you one very specific example. I am currently in the midst of a review of our mental health strategies. One thing that has become very obvious during that review is that the previous pattern has been that essentially mental health issues and mental health services are Government-delivered. We have a vibrant non-governmental organisation sector—highly skilled highly capable—that actually wants to get involved and there is no reason why it cannot get involved in doing its job best to deliver effective services for that particular group of people. That is but one example.  
What we are starting to see is that the challenges that the Governments of the future will face are not going to be about that traditional distribution issue; they are going to be about the increasing demands of technology and the expectations that the public have in respect of that. Even silencing equipment might not be a bad advance in that respect. In other words it is about the point of entry that people have into the availability of public sector services. That is why things like the Inland Revenue Department’s technology system for the future are so important and the investment in that is going to be so critical. It is why we talk about the need to protect this little ship in a very turbulent international economy. We are a country that because of our history relies on our ability to trade—on that big picture. But we are the one trading nation that is at the far end of the world; we are the developed country furthest away from any of our major trading partners. So we have got to be a global citizen. We cannot pretend that the world around us does not exist.  
Then finally because it is tied up with all of this we have got to commit to the rebuilding of Christchurch after not one but four major earthquakes in a 13-month period. I think people forget that and think that this was just some one-off event that had minimal impact. It has had a huge impact on that city and province and a significant impact on New Zealand and because of its unusual unique nature it continues to have an impact today. One simply cannot pretend that that $20 billion impact can be ignored or that it will go away.  
What this Budget is about is giving New Zealanders the opportunity and taking the chance to focus on our future and to build constructively for the needs we have as a country moving forward not just dealing with today’s issues but taking a very positive long-term focus.