Benson-Pope David: Budget Debate 
Benson-Pope David: Budget Debate 
[Volume:631;Page:3360] 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I begin by thanking the two preceding speakers for those very positive comments. I am sure most people in this country would acknowledge that this Budget is a clear demonstration of the results of collaboration and working positively for the future of New Zealand. 
Anyone who has taken the trouble to read the Budget will acknowledge that Budget 2006 continues some very strong progress made by the Labour-led Government in investing in our country and our people. We are focused on transforming New Zealand’s economy into the dynamic knowledge-based innovative society and economy that we need to have and we will do that by improving the quality of life of Kiwi families young and old and by building pride in New Zealand’s unique national identity. This country has a proud history of social innovation. Over the past century in particular we have created a society that is about fairness inclusion and ensuring everyone gets a fair go. That is the Kiwi way. 
In the past 6 years the Labour-led Government has reinforced the relationship between social and economic development. We have put a much stronger emphasis on the well-being of families. We have taken a much more active approach to social assistance with case managers increasingly focused on supporting people into sustainable work rather than simply processing support. The results show that that approach is working and working very well. Currently 2.1 million New Zealanders are in work. Our labour force participation rate is the highest ever at 68.5 percent and we have the second-lowest unemployment rate in the OECD at 3.9 percent. The number of New Zealanders receiving an unemployment benefit has fallen by an extraordinary 72.4 percent since 1999 when National left to us the appalling legacy of 161000 New Zealanders unemployed. 
Jill Pettis 
: How many? 
Hon DAVID BENSON-POPE 
: I tell Jill Pettis that 161000 New Zealanders were unemployed. The figure is now at 44500 and is continuing to improve. 
Hon Chris Carter 
: What is it now? 
Hon DAVID BENSON-POPE 
: The figure now is 44500 and it is continuing to improve. Indeed the total number of beneficiaries has fallen by nearly 30 percent over the same period and the number of children living in benefit-dependent households has dropped by 20 percent. That is very good news indeed for our young people. 
Economic and employment growth gives us more resources to invest in social development parents children and young people workers students job seekers people with ill health or disabilities older people and communities—to invest that is in families young and old. Labour invests in New Zealand’s future while Dr Brash is busy investing in Australia’s. National Party billboards may be a big thumbs up for Australia but they offer no vision for New Zealand. 
It is vital that all our families enjoy more opportunity and security and share in the progress that New Zealand is making. Budget 2006 confirms that the Labour-led Government has the policies to deliver those goals. Over the next 4 years the Government will invest an additional $5.8 billion of operating expenditure and an additional $460 million of capital expenditure in families young and old. A strong family is of course a secure family. A strong family enjoys the economic independence of paid work whenever possible and has security and protection for family members who for whatever reason are unable to work. The purpose for our social assistance system is very clear: we must support everyone who can work to get into work and to stay in work and we must provide protection for those who cannot work. For families to thrive they must have access to work and that work must be financially worth it. 
Budget 2006 fulfils the Government’s pre-election promise to extend tax relief to working families through the Working for Families package. From 1 April this year 85000 families have been entitled to extra support through extended eligibility to and reduced abatement for family assistance. This involves new spending of $360 million in 2006-07 and $1.8 billion over the next 4 years. By 2007-08 the total Working for Families package will be $1.6 billion every year. Around 350000 Kiwi families will be gaining from the advantages of this tax relief and associated support. 
Let us be clear. An average New Zealand family with two children will have the lowest tax burden in the OECD thanks to the Working for Families package. OECD data confirms that in terms of a single-earner family with two children on average earnings Working for Families tax credits have taken New Zealand from having the eighth-lowest tax take to having the fifth-lowest tax take in the OECD. In the process New Zealand has overtaken Australia which is lying in sixth place. The 1 April extension to Working for Families will further reduce that overall tax take. If other countries remain unchanged New Zealand will then be ranked the lowest in the OECD for tax take. For families with children Working for Families has made a huge difference. 
Of course these are not facts that National Party members want to share with New Zealanders as they continuously talk up Australia and talk down their own country and their own countrymen and women. The National Party has confirmed that it would borrow billions of dollars and need to cut health and education spending in order to deliver its misguided and poorly targeted tax cuts. What National has not given us is a serious alternative approach to targeted tax relief that would tell New Zealand families whether they would lose the tax relief they are currently getting under Working for Families to pay for tax cuts for high-income earners and National’s mates. 
Let us look at the response of ordinary Australians to their Budget. According to a poll conducted for the respected Melbourne  
Age 
 two-thirds of Aussies would have preferred more spending on services ahead of tax cuts. That is just what we have delivered in New Zealand—an investment in the future of all New Zealanders. 
The OECD also confirms that for an average person the overall tax take taking into account all Government contributions transfers and tax credits as a proportion of gross earnings is already lower in New Zealand than in Australia. Even after Australia’s recent Budget Treasury has advised that New Zealand’s tax wedge for the average family will remain lower than Australia’s—Australia’s tax cuts being targeted of course at the higher tax thresholds. National keeps claiming that the grass is always greener in Australia. Ordinary New Zealanders need to know that the OECD for one does not see it that way. 
Budget 2006 further invests in the future of New Zealanders. Quality affordable housing is as we know fundamental to the health and well-being of families and communities. Housing has a really strong impact on a family’s health education and employment opportunities and on a community’s safety and cohesion. In the 1990s National sold 13000 State houses despite mounting demand and poverty. On taking office Labour immediately began rebuilding that asset adding 496 houses into the network in 2000 alone. This coming financial year we will add another 815 houses and by 2009 we will have added a total of more than 7200 extra homes since 2000. Budget 2006 adds $62 million of capital over the next 3 years to the $597 million already earmarked to continue that programme. In addition to the provision of extra homes Budget 2006 also sees further spending on modernising old State houses community renewal projects healthy housing projects and energy efficiency. 
The Budget is investing $9 million over the next 4 years to strengthen and expand family violence prevention and support services. This is an important first step in our programme to improve family violence prevention. A safe community respects the rights of everyone living in that community. A safe community is one where everyone can access the services they need. A safe community has high levels of trust and support among its members. A safe community is also free of crime. Removing crime from our communities is not just important for its own sake it is also vital in order for us to achieve the other qualities of a safer community. That is why Budget 2006 furthers our work towards safer communities in a number of areas. It provides $164.3 million in operating costs and $52.3 million in capital over the next 4 years for the first slice of the 1000 front-line sworn police and 250 non-sworn police promised under the confidence and supply agreement with New Zealand First. More than $10.8 million over the next 4 years has been allocated to Victim Support for it to continue its restructuring and that funding will enable Victim Support to hire more practice specialists and other key staff adding to its core volunteer workforce. 
We are investing for the future through investments in transport the superannuation fund and more teachers through lowering the costs of doctors’ visits and through helping with access to job training. Budget 2006 builds on progress made in creating a dynamic innovative economy that will raise the living standards of all New Zealanders. As the economy slows we are continuing the wise fiscal management we have demonstrated. We have paid off the mortgage. Our total financial assets exceed our total liabilities for the first time in this country’s history.