Hodgson Pete: Budget Debate 
Hodgson Pete: Budget Debate 
[Volume:626;Page:21075] 
Hon PETE HODGSON (Minister of Transport) 
: 
 I rise to speak in favour of the motion for the Budget debate and to say that I am very proud of this Government. It has brought down a Budget that is fiscally responsible and that invests in health and education—the things that are at the cornerstone of a good society. It has a bunch of initiatives to help New Zealanders to save and to build a stake in their country through the KiwiSaver scheme and it is building the conditions for growth in the way that it has approached its taxation policy. 
On the fiscal responsibility front the very first issue this country had its very economic sovereignty in doubt only 20 years ago because of earlier borrow-and-hope policies of a previous National Government. By the time a Labour Government was swept into power in 1984 we were closing our foreign exchange we were devaluing out of necessity and we had ourselves a society that was deeply indebted. Quietly that debt has been reduced. Quietly we have got our levels of gross debt to GDP down to levels that are amongst the best in the Western World. We have done that at the same time as we have pre-saved for superannuation through the Cullen fund so that when the demographic bulge hits the country we unlike Japan or France will be able to weather that demographic bulge somewhat. 
That fiscally credible stance is to be characterised as at serious variance from what the National Party is likely to try to win this election on. It will run on tax cuts even though we have a cash surplus that over the out-years equals about zero. We have a cash surplus of $2.4 billion for the year in question. It reduces to about zero in 2005-06 and then moves into deficit for the following 3 years with an average of about $1.9 billion a year. We do not have room for tax cuts but that has not stopped the National Party saying to people that it will bribe them with their own money. 
The question then arises as to where it would get the money from. Would it borrow in order to pay for tax cuts? Is that what we will see again? Will we see a return to the Muldoon era—the man who said that he was a very good manager of the New Zealand economy? He sold the idea that he was a good economic manager when he was in Opposition in the 1972-75 period and then between 1975 and 1984 we learnt that that man could not run a bath. We learnt that New Zealand had run itself into a debt far more serious than that of almost any other country. We had remarkable regulation on our finance sector which meant that this country more or less ground to a halt. 
There was the price freeze—wages were in the freezer and prices were in the butter warmer as people remember those years. We cannot go back to that. Yet if there were to be a tax cut now funded by borrowing that is what the future would look like. So there must be another alternative. That would be a tax cut funded by cuts to services—to health education and the police—which the previous speaker made mention of. That is not the future either. The Government is very proud to be putting more money not less into health and education. I am now an Associate Minister of Health. I can tell members that more than $1 billion of extra money went into health in the course of this Budget. We have gone from about $10 billion to about $11 billion or thereabouts. 
It is a very substantial increase and it is occasioned by all manner of things. Certainly everyone would agree that the nurses’ increase is valuable. That is probably the best part of 10 percent of this year’s increase. I think everyone would be in agreement that phasing out National’s hated asset tests is a very good thing. That is the best part of 10 percent of the health budget. But wait there is more. Hundreds of thousands of New Zealanders have some form of disability—some of which are serious and some of which are less serious. New Zealanders with disabilities have been excluded from our society for far too long. By working through the New Zealand Disability Strategy—and I acknowledge the work of my colleague the Hon Ruth Dyson in that respect—we now have a substantial increase for people with disabilities for all manner of things. People who are not safe can be made safe. People who want to get back to work are encouraged to do so. People who want supported independent living can have supported independent living. We have moved so far in this country over recent years and we are about to move a step further as we seek to further include New Zealanders with disabilities. 
Then there is the issue of the health of older people. This is the rest home stuff. Probably the thick end of 10 percent of the budget went into rest homes into dementia care and of course into home-based care which is where more and more New Zealanders want to spend more and more of their lives. They do not want to go into rest homes early. They do not want to go into dementia units early. They want to stay at home—in their own home—and be better supported. So there is a very substantial increase in home-based support services coming through in the Budget. 
Let us not forget the doubling of the orthopaedic surgery that was announced in last year’s Budget and how that rolled out last year and will continue to roll out in the next 3 years. There has been a doubling in the amount of surgery on knees and hips going on in this country over the course of 4 years. That is a very substantial increase. Members should also consider Annette King’s announcement just prior to the Budget referring to this year’s health budget which was to see a 50 percent increase in cataract surgery. 
Can we see the trend there? If the better health of older people means that they will be able to stay in their own homes longer and longer it would be a really good idea if they could see better. So the cataract backlog will get dealt to. Annette King has worked with ophthalmologists and opticians to ensure that that is the case. That is the sort of money we are spending in health. 
The roll-out of the primary health organisations is continuing. On 1 July 18 to 24-year-olds join those who get cheap access to doctors and prescriptions. Prescriptions will be $3 for anyone aged 0 to 24 and anyone aged 65 and over. Over the following couple of years that will be rolled out to the rest of the New Zealand population and that is in the health budget too. 
Another example is the meningococcal B roll-out. It has gone well—it is going well in my home town of Dunedin as we speak—and the lives of children and often babies will be saved. That is the sort of thing people can expect from a Government that puts emphasis on health and education—and we cannot put health and education expenditure up if we have tax cuts. Instead we would return to the days when people got an extra $10 a week in their pockets only to be charged $200 a day in hospital part-charges as occurred in 1991 1992 and 1993. 
Do not forget those days. Hospital part-charges are within living memory. They were brought in by a National Government. That is the sort of future we are likely to see if ever that party were to be re-elected to Government. 
I will go on to the new initiatives to help New Zealanders save and build a stake in their country. The KiwiSaver programme is intended to begin operation on 1 April 2007. We say that we are a property-owning democracy but right through the 1990s the rich-poor gap in this country grew to the point where people could not afford to buy a house because they could not afford the deposit. Even if people could they could not afford the mortgage because the Governor of the Reserve Bank was Don Brash and for over half the time he held that job household interest rates were at 10 percent or higher. That is why fewer and fewer New Zealanders are owning their own property and why the KiwiSaver scheme has been introduced. 
I will make a couple of remarks on the business growth package. It is a remarkable thing that about $620 million or thereabouts is being given back to business in tax changes other than by changing the headline rate. The easiest thing in the world to do would be to say that the 33c in the dollar tax rate will become 30c or 28c or whatever. But a smart Government does not do that. A smart Government says that it will look at fringe benefit taxes depreciation and whether it can target taxation at companies that are more likely to be transformational New Zealand - owned going through a rapid growth phase and needing the high turnover of their capital stock in order to increase that growth. If a company is going through a rapid growth phase there is no profit to tax. If we give help to those companies that are going to be the future—those companies that are growing fast and doing well—then we end up with a transformational tax system instead of one that simply gives money willy-nilly to any business at all. 
With those few remarks I endorse this Budget and hope that it is passed unscathed.