Adams Amy: Budget Debate 
Adams Amy: Budget Debate 
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AMY ADAMS (National—Selwyn) 
: 
 It is a real pleasure to take a call as one of the earlier speakers said as we come to the end of this 2010 Budget debate. Since 20 May I have been following this debate with some interest both within the Chamber and from my office. I have to say having followed the debate since Budget day that I am as proud today of the Budget that Bill English delivered on 20 May as I was then. I could even say that I am now prouder of it because over that time we have all had a chance to get out into our communities talk to our constituents listen to our communities and hear what people are saying about how this Budget will affect them. The message we are getting loud and clear is that this Budget is giving people a fair deal it is giving them a reason to get ahead and it is giving them reason to hope for the future of this country. That is what this Government came into power to give. That is what we came here to deliver. That is what we are committed to delivering. 
We know that it will take some substantial change to do it but this Budget is a substantial part of where we want to see New Zealand go. We are aspirational for this country. We are ambitious. We want to see New Zealanders have higher incomes better jobs a higher standard of living and the sorts of social services that we all aspire to. The recipe for that is economic growth. Economic growth is what the National-led Government is committed to delivering for this country and economic growth is what Budget 2010 is all about. 
Before I turn to look at some of the detail of the Budget in the debate this evening I will take a minute to recap the challenges that New Zealand was facing when this National-led Government came into power because those challenges are still the pressing issues that this Budget is very much addressing. We had a productive sector that had been in decline consistently since 2000. That is a frightening statistic. Since 2000 our productive sector had been steadily declining. As a country we were continually spending more than we earned. We saw rapid growth in Government spending yet scarily there were fewer front-line outcomes for New Zealanders. Net Crown debt was forecast to peak at around 70 percent of GDP and the household sector was routinely described as being consumption-focused and debt-driven. Because of that we were looking at having a balance of payment deficit of over 8 percent of GDP and our biggest single vulnerability was our external liabilities forecast to be around $168 billion or 90 percent of our GDP. 
With that sort of external indebtedness we were facing debt servicing that was strangling the little life that was left in the economy. I do not think it is overstating it to say that without some drastic intervention we would have been teetering on the precipice of being the sort of economy we now see Greece as being. That is the sort of economy to which world markets will not keep lending. They will not keep throwing money into the pit while such an economy keeps on spending. Until the world markets had some confidence in where our economy was going they would not have kept on lending to us. If we had not made some pretty important and serious changes both in last year’s Budget and continuing through until now we could very easily have found ourselves in the situation that Greece and other European countries are finding themselves in. 
This Government needed to protect the entitlements of New Zealanders it needed to soften the harshest edges of the recession and while doing that it needed to get New Zealand back on to the path to growth. We needed to reprime that economic pump and to get a handle on Government spending and debt levels while we did that. We needed to address the fact that our best and brightest were continually leaving our shores. That was not acceptable to us. We did not want New Zealand to be a place where one grew up and left to get ahead. New Zealanders want to have their grandchildren and children here in New Zealand and not have them saying that there was nothing for them here and that they had to go. We wanted New Zealand to be a place where New Zealanders want to live and want to get ahead and we still do. [ 
Interruption 
] There is a future for them here I say to Ms Turei. We did not want a country where we are all made as poor as each other but as long as it was equal no one cared. We have greater aspirations than that and we are not ashamed to stand up for them. This Budget was a major step in our plan to get our economy away from debt and consumption and towards saving and investment where there are aspirations and hope. We wanted to address this not just in the public sector but also in the private sector. 
Let us look at some of the things that this Budget addressed in the public sector and at how we are changing that culture of inefficiency debt-driven overspending and rising debt levels. What that means to this Government and what we are seeing in this Budget are things like putting a lid on new spending. We signalled last year that we were committed to having a new spending cap of $1.1 billion. That was signalled to our core Crown agencies and we are living within that. Last year we saw $2 billion of poor-quality spending being reprioritised towards front-line outcomes for New Zealanders and this Budget has found another $1.8 billion. That is $3.8 billion of poor-quality spending that Bill English and John Key have now reprioritised into real front-line services for New Zealand that will get this country growing. 
It is about spending more than ever on the health sector. I will repeat that because I think members opposite fail to accept that. We are spending more money than ever on the health sector. Health is the biggest single area of new spending. If the numbers do not add up for members opposite they should get a new calculator. We are spending more money than ever in the health sector. That does not fit in very well with the Labour campaign speech but it is true. I am sorry if that upsets their brochures but we are spending more money than ever in health. We are also putting another 4 percent into operational grants for schools. I can tell members that a 4 percent increase into the operations grants for schools will make a significant difference. Even though we are in this period of fiscal restraint having to live with a cap on new spending an extra 4 percent is going to schools’ operational grants. It is about delivering better smarter public services it is about getting more for less and it is about imposing on the Government books the sort of fiscal discipline and efficiency drivers that businesses have been living with year on year. 
Frankly Government spending was getting fat and lazy and we came in and said that it was time for the Government sector to live up to the sort of restraint that the private economy has been working with in this country for a long time. We saw endless examples under the last Government of more and more money being spent and fewer and fewer outcomes. That was not good enough and that is the sort of poor quality spending that this Budget addresses. 
It is about delivering better balance sheet management. There is a phrase we have not heard very often in relation to Government expenditure. But the Government is the largest holder of assets in the country. We are talking about over $217 billion worth of assets. If we are not managing those assets well how will this economy get ahead? If we cannot manage our ship if we cannot get our assets performing how can we expect that of the wider economy? So this Government is demanding better from its Government-owned assets. We are starting to see a significant improvement now coming through. 
What will those sorts of changes and that sort of discipline mean? I will tell members one thing those things mean. I mentioned earlier in my contribution tonight that under Labour core Crown debt was forecast to peak at around 70 percent of GDP. Well last year’s Budget announced that that would come down to close to 36 percent of GDP. Now in this year’s Budget we see that forecast to be 27 percent of GDP falling away to 14 percent of GDP. That is the sort of fiscal discipline that will get this country back on track. It will ensure that we are not the next Greece. My estimation is that we will come out of this recession better than our trading partners. We will come out stronger relative to the rest of the world. We are putting New Zealand back on the track to economic growth. That is what this is about. Economic growth means jobs. 
Treasury tells us that the 3 percent growth we are forecast to get for the next 3 years means 170000 new jobs for Kiwis. It means $7000 per annum more income for Kiwi families. Those are the sorts of outcomes we want to be hearing about. We want to hear about better jobs better incomes and better standards of living. That is what economic growth gives. That is what we are here to do. I know that it is a cliché but it is about growing the pie. We cannot keep cutting it. Sooner or later we have to see the pie grow. That is what this Budget will do. 
In the private sector it is about getting away from consumption and heading towards investment and saving. The Budget tax reform has been well gone over in this debate. That is the sort of change that will see New Zealanders rewarded for their effort and incentivised to get ahead. We are letting New Zealanders keep more of their own money. We are saying that if they bend their backs and get stuck in we will let them keep much more of that money; for 73 percent of New Zealanders 82.5c of every dollar earned stays with them. That is half the tax that those New Zealanders were paying. This Budget from this Government is a significant step to delivering New Zealanders the sort of future that we promised in 2008 and we are delivering on in 2010. I am very pleased to commend it.