Bennett David: Debate on Budget Policy StatementText is incorporated into the Bound VolumeBennett David: Debate on Budget Policy Statement[Sitting date: 09 March 2016. Volume:711;Page:9519. Text is incorporated into the Bound Volume.]DAVID BENNETT (Chairperson of the Finance and Expenditure Committee): I move That the House take note of the report of the Finance and Expenditure Committeeon the Budget Policy Statement 2016. It is great to be able to talk about the Budget Policy Statement a document that shows the future of New Zealand going forward into 2016 and beyond. It draws on Treasury forecasts in the half-yearly update it looks at how we are managing public finances to responsibly deliver a surplus to New Zealanders and reduce debt it makes sure that we get a productive and strong economy it delivers better value for public services and it supports the rebuild of Christchurch.It is a Budget that shows prudent economic management in the most difficult of international times. It shows that this Government can deliver the best environment for New Zealand businesses to succeed and prosper. We are delivering the stable conditions for economic prosperity in New Zealand. The Government made a surplus of $414 million in the 2014-15 year. We made this surplus after the most severe economic recession since the Great Depression and rebuilding our second-biggest city. With a debt of an $18.4 billion deficit in 2010-11 we have now turned that into a surplus of $414 million. That is a great achievement for any country and especially the small country that the New Zealand economy represents.There is a weaker outlook going forward due to lower commodity prices and the international situation and I will come back to that later. But let us have a look at some of those statistics. Real GDP growth was 3.2 percent in 2015 and it is forecast to be 2.1 percent in 2016. We are running slightly higher now at 2.5 percent. That is great news for New Zealand. The unemployment rate—the actual rate in 2015 was 5.8 percent and the forecast in 2016 is 6.5 percent. We are running below last year’s actual rate at 5.3 percent.If you look at the Consumers Price Index and the inflation rate 0.3 percent was the actual rate for 2015 and it is forecast to be at 1.4 percent. Low inflation means low interest rates for New Zealanders and we have record low inflation in New Zealand. Wage growth is going up. It has gone up by 2.1 percent in 2015 and is forecast to go up by 2.6 percent in 2016. The current account balance is at negative 3.5 percent and is scheduled to go up to minus 4.8 percent. That may sound bad but when you consider the current account deficit under Labour of 7.9 percent that is an improvement for the New Zealand economy. The total Crown operating balance before gains and losses at 0.2 percent is forecast to go to a negative 0.2 percent. And net Crown debt at 25.2 percent is forecast to go to 26.9 percent—still keeping New Zealand’s debt at reasonable levels for this country going forward.We need to compare this with the country that we inherited—a country in recession a country that had interest rates at around 11 percent a country with a current account deficit of 7.9 percent and a country that had permanent deficits and debt rising to over 60 percent of GDP under the figures that Labour would have delivered for New Zealand. The Opposition members over there will talk endlessly today about agriculture in their speeches in this debate. They will say that they care about farmers.Speaking as a farmer it hurts us to see the Opposition members actually come into this Parliament and say that they care about farmers. Not once have they ever supported anything for farmers in this Parliament in the last term and they have no intention of supporting anything in the future. To all those New Zealand farmers who are listening today—do not believe what you will hear from the other side. Do not believe those members’ rhetoric about how they suddenly care about farmers and they are there for farmers in their time of need because believe me Labour never has been never will be and never can be there for anybody who is in the rural sector or in any economy that is based around the rural sector.Let us have a look. There are lower payouts coming to dairy farmers this year—nobody is denying that. It will be extremely tough times for New Zealand dairy farmers—they will be extremely tough—and New Zealanders will face greater impacts from this as it flows through into our economy. But as the Minister of Finance said today similar things happened in the sheep and beef industry in the late 1980s. Every industry will go through ups and downs and they have to be able to reconcile that with their debt their income and their ability to service that debt going forward. All businesses do face challenges and this is a time of immense challenge for the New Zealand dairy industry. Let us not forget that at all.It is not just a Fonterra issue. A lot of people will blame Fonterra and say that this is a Fonterra issue—it is a problem of having a structure around Fonterra. It is not a Fonterra issue. Open Country Dairy suppliers will have the same problem of lower payouts coming to them as well. In fact they have got a bigger problem than Fonterra shareholders because at least Fonterra shareholders have a shareholding in that company which gives them a greater asset. Open Country Dairy farmers are probably the most at risk because their only asset is their land and their cows. They have no shareholding asset in the company and they do not have that buffer should the banks be looking at their properties and I think that that is something that we need to take into account. It is a whole dairy industry issue not just a Fonterra issue.In saying that Fonterra is the biggest player and New Zealand dairy farmers do look to it for leadership and this is a time when Fonterra can step up and show that leadership. It has done that earlier in the season by providing some extra funding through a capital mechanism for its shareholders and it is indicating that it will have another capital mechanism later in the year to help farmers as well or some other mechanism through using its assets. So it is time for Fonterra to actually help and deliver to its farmers but it is not just solely a Fonterra issue.New Zealanders need a Government and a Parliament that understand and support farmers not a Parliament that tries to take advantage in their time of weakness and their time of difficulty to make political capital but that is what is happening on the other side of the House. I ask the members of this House and I ask the public who are watching here today: when was the last time that the Opposition parties supported the Government’s actions on water reform? When was the last time the Opposition parties supported our reforms of the Resource Management Act? When was the last time the Opposition parties supported the free-trade agreements like the Trans-Pacific Partnership (TPP) agreement? And when was the last time that the Opposition parties actually supported New Zealand dairy farmers by voting for them in this Parliament rather than saying one thing and doing another? Farmers do not want that. They do not want Opposition parties saying one thing and doing another because they can see through that and see the reality of the situation.Let us look at what would happen if the Opposition parties were in power. There would be no free-trade agreements. There would be no trading with the TPP agreement—Clayton Mitchell: There would be three trade agreements.DAVID BENNETT: Oh no. The New Zealand First Party wants to do trade with Russia in dairy products but it does not want to do a TPP agreement. So let me understand that one. The Resource Management Act reforms would be off the table. There would be no chance of having Resource Management Act reforms from the Opposition. The Opposition parties would not support the Government on Resource Management Act reforms. The Opposition parties would have higher taxes on farmers. They would be taxing farmers to a higher level to pay for unrealistic election promises that they have already made around payments to students for example and there will be more to come during the election campaign.That unrealistic spending would mean higher interest rates for New Zealand farmers. The biggest problem coming out of this room that New Zealand dairy farmers would face would be if there was an incompetent Government here delivering a poor economic situation and a poor Budget which would lead to higher interest rates. That is exactly what the Opposition would deliver. New Zealand farmers are smart they are hard-working and they will deliver for this country as they have in the past.We do not need a patronising Opposition that does not care about farmers to come into this Parliament and suddenly show that it has some ambitions. The Opposition members over there will yell and scream all they like and in the next speeches you will only hear from the Opposition members about how under Labour there would have been a diversified economy and how under Labour there would have been none of these problems. Well I say to you—and I say to the members of this House—New Zealand farmers would have been worse off with those guys. New Zealand farmers deliver and will deliver in the future and we do not need the patronising attitude from the Opposition at this time.