Cunliffe David: Budget Debate 
Cunliffe David: Budget Debate 
[Volume:639;Page:9522] 
Hon DAVID CUNLIFFE (Minister of Immigration) 
: 
 It has been rather amusing to watch that speech being given. For those who are listening at home we have had the spectacle of Nick Smith working his hardest to lift the volumes of Supplementary Estimates and to wave the Budget documents around the House in a manful show of force. He has exclaimed that he just cannot find anywhere in these documents any evidence of sustainability. He has looked high and he has looked low. He has said he has thumbed through all the pages and he has spent hours on it. 
Darren Hughes 
: Unlikely. 
Hon DAVID CUNLIFFE 
: Unlikely. What part of $600 million worth of electric trains for Auckland and Wellington that are highly efficient and contribute to a sustainable transport future did he not understand? What part of $50 million to upgrade the national track system did he not understand? What part of $23 million for an interest-free loans scheme to help homeowners pay for energy efficiency and clean heating upgrades did he not understand? What about the $14 million for the EnergyWise grant scheme the $15 million for the Home Energy Rating Scheme the $7 million for home energy-efficiency and heating research or the $3 million to communicate to homeowners how to heat their homes safely affordably efficiently and sustainably? That leaves out the $28 million to improve sustainability in the primary sector the $4 million for international collaboration on agricultural research the $11 million for sustainability research in Antarctica—for example core ice samples that will give us better data on carbon dioxide concentrations in the atmosphere—the $24 million for the Healthy Housing programme the $6 million for the household sustainability awareness campaign and so on and so on. 
But the best strap line that the member could come up with after a week of studying the Budget documents is that he just could not find anything on sustainability. Well it is only because I want to talk about some other things including KiwiSaver that I will not do him the favour of reading out the rest of it. But listeners will get the idea. There is plenty of it in there. 
This is a great Budget. It is a Labour Budget. It is a Labour-led Government Budget and it is so different from anything members opposite would have come up with. It is a Budget that shows real leadership—real political courage actually. It does not respond in some English-Key flip-flop focus-group driven spur of the moment way to whatever people think they wanted last week. 
 This is a Budget that understands at its heart the macroeconomic challenges facing our country for this generation and puts in place a generational solution to take us sustainably to our shared future. It understands that although there is a decent fiscal surplus this year—and cash deficits for the next 3 years—we should not increase spending or give additional tax cuts this year because that would expand demand. If we expand demand when we already have the world’s lowest unemployment rate that would simply push up inflation. If we push up inflation what happens? The Governor of the Reserve Bank has to raise interest rates and as Mr Key well knows that is simply a magnet to the hot money—the carry trade of billions of dollars that swishes around the world—and will simply drive up our exchange rate. Then what happens? New Zealand exporters suffer our current account balance worsens and we only perpetuate the imbalances that have led to the current account deficit that we inherited from members opposite. 
What is causing those imbalances? Probably the single biggest problem is New Zealand’s savings gap. It was about 2003 when I started giving speeches on behalf of Dr Cullen and myself on the savings gap. It was a controversial idea back in 2003. But New Zealanders spend $1.11 for every $1 they earn. We have one of the worst—if not the worst—savings performances in the OECD. How do we fund that gap? We fund it by borrowing money from foreigners and surprise surprise they want something in return. Members opposite would have to be idiots to miss the wave of private equity funds sweeping New Zealand at the moment. They are buying up just about any small company that is not bolted down. If we do not have our savings funds in circulation in New Zealand we can kiss goodbye to any sense of ownership of our own future. New Zealand for New Zealanders means we must have the ability to fund our own investment. That is why we need KiwiSaver and that is why we need the Cullen fund—as well as the fact that we need to provide for Kiwis in retirement. 
This Budget is incredibly strategic; it hits all the right buttons. It avoids creating additional inflation by stimulating demand in the economy. It raises the speed limit by contributing to productivity through the business package which I will come to. It provides for ordinary New Zealanders in their retirement. We have used the example of a married couple on $70000 which is the average household income roughly speaking. If they start saving under KiwiSaver plus when they are 30 how much do they have when they retire at 65? In today’s money—in 2007 buying power—they have around $400000 that they did not have before. That $400000 provides them in their retirement with another $20000 to $25000 a year in interest. That is roughly double what they currently would get under New Zealand superannuation. Anyone aged 30 who goes into KiwiSaver and is earning around the average income will double his or her retirement income. What could be wrong with that? Such people are helping their country they are helping their family and they are helping themselves. 
There are a few people including Mr Key—although it is not really the Opposition’s intent as members know—who have said that yes but “poor people” cannot afford it. Actually “poor people” know that they have to save because no one else will look after them when they retire other than this Government. They know they cannot flog off their fourth or fifth house or their luxury yacht; they have to be prudent. That is why around half at least of the people participating in an AMP survey who earn under $30000 said that yes they were in. 
Another common attack on the KiwiSaver plus programme has come from the whingers in the business community. They say they will have to pay for it. Rubbish! For the first 2 years they are completely indemnified by a subsidy from the taxpayer of up to $20 a week and their total contribution on an average wage basis rises to 1.2 percent after 4 years—net. That is hardly a back-breaker especially when we figure that allowance is likely to be made for it in wage negotiations. So the KiwiSaver plus scheme is incredibly strategic. It is incredibly important to New Zealand from an economic sovereignty point of view and a national welfare point of view as well as from an individual savings point of view. 
What then is the National plan? I will give members a small example relating to my own portfolio of information and communications technology. Two weeks ago John Key said: “Hey we’re going to shell out to fund broadband.” A week later Bill English said: “No we’re not!”. A week after that Maurice Williamson rose from the dead to say: “Yes we are.” Maurice Williamson wants us to adopt the Australian Labor Party policy. The Nats are all over the place. National looks like a party rightly consigned to perpetual Opposition because its members cannot get their act together. They are short-run driven and focus-group driven. Their attitude is: “Let’s think of something popular just to get ourselves elected and then we’ll worry about the country’s problems when we get there.” That is what it looks like because that is what it is. 
New Zealanders are too smart for that. They have seen that cynical kind of Government before. They saw it when Muldoon ditched Dove-Meyer Robinson’s public transport plan in the 1970s and when the same National Prime Minister ditched the Kirk superannuation fund the last time we built one. Every New Zealander has reason to look forward in gratitude to a securer climate thanks to the Cullen superannuation fund and KiwiSaver plus and knows that he or she personally can never afford the prospect of a National-led Government. It is not just superannuation; it is social services and it is productivity—all the reasons Labour should and will remain in Government.