Anderton Jim: Budget Statement — Budget Debate 
Anderton Jim: Budget Statement — Budget Debate 
[Volume:654;Page:3952] 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 This is a Budget that has all the competence one would expect from the people responsible for Melissa Lee’s Mt Albert by-election campaign. The good news is that inflation is no longer a problem. We finally have the low-inflation economy that the National Party always said would deliver us its dream economy. However how is that working out? National has produced a lacklustre Budget that Bill Birch would have been proud of. In troubled times when the economy is rocking on the waves of global economic storms the Government has responded weakly not with a vision for the future and not with the bold steps that would lead New Zealand on a developmental path but with a weak uncertain sitting-on-its-hands response. 
Governments around the world are investing in the future; this Government has slashed the future. This is the broken-promise Budget. The total value of primary sector science investment falls from $2 billion under the New Zealand Fast Forward programme of the last Government to as little as $1.2 billion now. The Government is cutting nearly as much out of the science and research budget in the primary sector as it is investing in infrastructure. Government spending on science and research on a like-for-like basis falls from around $1 billion in the New Zealand Fast Forward fund to $610 million in National’s replacement programme. 
With matching private sector funding the total investment in primary sector research and development actually falls by $800 million or about 0.4 percent of GDP. In addition the Government has not replaced a cent of the cancelled research and development tax credit. This is a huge cut in scientific research and development. It is in fact a disaster for the future of New Zealand’s economy. 
Other developed countries are preparing themselves to come out of this recession stronger than when they went into it. New Zealand is preparing by switching from science and research to poltergeists and UFOs. The Government promised the private sector that it would spend more on scientific research and development. That is what David Carter said last week. He promised that it would spend more and that its Budget for scientific research and development would be bigger than the Labour-led Government’s. Farmers in the agricultural business community will be looking that up and they will not find increases; they will find cuts. The Government has broken that promise as surely as it has broken its promise on personal tax cuts. 
I want to turn to some other features of this disappointing Budget and to draw the House’s attention to the table on page 55 of the Fiscal Strategy Report. In that report the Government points to its expected increases in nominal average wages over the next 4 years. If we deduct these from the cost of living index there will be no increase in real wages for 4 years. Boy if John Key thought that people left New Zealand for Australia in droves under the Labour-led Government he should just wait until they figure out what 4 years of no real wage increases mean for them. 
This is the curious branch of economics that says the way to make New Zealand better off is to make everyone else worse off. The people who will be the worst off will be the people whom Tariana Turia represents but what will she do about this Budget? She will vote for it. Well over the next 2½ years I will be waiting for the outcome of that for the Maori people of New Zealand and I will hold her accountable for that. Not since the 1980s have we had an economy that did not increase real wages for 4 consecutive years. It is hardly conducive to keeping working New Zealanders here. 
There was a time when National would have said that the way to fix things is to spend on tax cuts. We have to give John Key and Bill English credit for one thing—they have now accepted that tax cuts do not always stimulate the economy. But they promised New Zealanders tax cuts. They now say they cannot afford them and that is fair enough as in truth we cannot. Back then though when they wanted New Zealanders to vote for them they told them that they would reduce taxes. Mr Key said that National has structured this economic package to take account of the changing international climate. So National members knew what was coming and they promised tax cuts but now they say: “Oh shock horror things aren’t as good as we expected even though we did expect them to be bad and we’re cutting taxes even though we promised we wouldn’t.” 
So when the National members said their tax-cut programme would not require any additional borrowing that was actually true because they did not intend to make any tax cuts so they would not have to borrow any money and that is exactly what has happened. Last year John Key said his tax policy was “appropriate for the current conditions and would require no additional borrowing”. Well now we know what the truth of that is. 
I was here in 1991 when the “mother of all Budgets” was presented. Initially there was a sort of “Shock horror we are in difficult times we had better accept all of this.” reaction but boy over time did that come back to haunt the National Government. National was actually down to 19 percent in the polls in that period from 1991-93. We will just wait and see how this Budget works out; I do not think it will be any different. 
John Key owes New Zealand an apology for getting himself elected on a promise that he knew he could never keep. Did he know before the election that the economic situation was deteriorating or did he find out only when Treasury told him? He is the smart money dealer; he is the smart market dealer; he knows everything about the markets so he must have known but he promised that there would be tax cuts. That is deceitful. 
In the time that I have left I want to turn to the cuts in the Superannuation Fund. This is pretty sneaky politics. Cutting the Superannuation Fund now reduces the ability of any Government in the future to provide for superannuation at anything like existing rates or retirement age. 
Paul Quinn 
: Rubbish! 
Hon JIM ANDERTON 
: Someone said “Rubbish!”. The member’s mind must be rubbish if the member does not believe that. Bill English is pushing out by 10 years the hard decisions about the huge tax increases or cuts to superannuation that will be needed to make superannuation affordable. I was on the superannuation task force and I know what is required to make superannuation fundable by 2040 and that is a doubling of the equivalent tax rates for superannuation by 2040. The only way we could get there without having to do that was to put aside the funds we were putting aside. But no the National Government will run this economy in such a way that nothing will happen until 2021. Somehow between then and 2040 some mug Government will have to come along and fix it. It clearly will not be that of Bill English; he knows full well that he will not be here. I would say he will not be here after the next 3 years either so we may have a chance of fixing it. 
Bill English has delivered an enormous burden for future taxpayers. The affordability of superannuation in the future must decline because we are no longer putting aside something now to pay for some of it in the future. In my view that means that the age of eligibility for superannuation will be increased. When we had the superannuation task force Treasury wanted the retirement age to be increased to 72; well it may well get its wish under this Government if we are not very careful. 
The Greens must be really pleased with the memorandum of understanding they have made with the Government but there is not a word in that speech today about climate change—not one single word. I mean it is the monumental problem facing the world but we have not had one single word about it. The Greens got $244 million of new spending for their home insulation scheme but when we look at the infrastructure spend we can see that the Government is shifting $258 million of spending on rail on to the roads. I thought that that was what the Greens did not want. So what has happened is that the Greens have lost $14 million net as spending has gone from the rail system to the roading system and they have got even less than that for their insulation scheme. The Greens have actually lost money. 
Then as I said in relation to the Maori Party the people who will be hardest hit by this recession are Maori and Pacific Island people. National is not doing anything for new jobs; the Maori Party is voting for that. At least Pita Sharples can wave at the unemployed as he drives past them in his new car—that might make him pleased.