Foss Craig: Budget DebateText is incorporated into the Bound VolumeFoss Craig: Budget Debate[Sitting date: 26 May 2015. Volume:705;Page:3959. Text is incorporated into the Bound Volume.]Hon CRAIG FOSS (Minister for Small Business): The previous speaker Tracey Martin said she was going to do some intro then she was going to get into the substance. Well I am standing here still waiting for her to come to the substance of that particular commentary on the Budget. But I guess we will still be waiting. Before I begin I just note that this morning I went to the Memorial Day service noting those who have fallen in service for the United States. It is a public holiday there today like with our recent Anzac and Gallipoli reflections in New Zealand. Actually it was a very good reminder of the friendship we have and those we stand side by side with around the world to protect the values that we all cherish and the price that has been paid over many many years for the freedoms and the values that we have in New Zealand and that allow us to have free and open debate in forums such as this. I think it is very important never to forget—lest we forget.Budget No. 7—Bill English’s Budget No. 7. I did not think it would get better than the last one but I said that the last time as well. Actually it is. Budget No. 7 continues the core part of managing our finances prudently—a fiscally responsible Budget making the hard calls for medium and long-term sustainability if you want or vibrancy for our economy rather than the short-term inclinations that some members in the House keep wanting us to go back to. Actually I did mean to say when Mr Norman was speaking earlier that if it is really as bad as he seemed to make out and if life is so terrible and everything is as tragic as he seemed to be implying that it was well actually step out into the real world because any indicator be it well-being the happiness index confidence or an economic-type matrix is actually very very good and solid trending in the right way. A little bit of a word to the Opposition—if you like a word of advice. Those members do not have to take it but if you stay negative and you will stay negative polling. Be positive be aspirational as we are with New Zealanders for New Zealanders and perhaps their prospects will improve somewhat.There has been a change. There has been a shift in our economy. Yes it has been gradual and incremental but there has been a fundamental shift in the public’s expectation of how we run the Crown finances and the environment that we are dealing with today. For example there has been quite a bit of discussion about the fact that we have almost zero percent inflation—zero point something. It is as good as zero percent inflation. It is phenomenally good for consumers it is good for our economy with inflation not being corrosive on wealth but we also have about 2.83 percent growth forecast. In fact we had 3.8 percent last year. I just say that right now we have near zero percent inflation last year we had about 3.8 percent growth I think we have about 2.8 percent forecast through this Budget and floating mortgage rates are around 5.5 to 6 percent. That is the real world passing judgment if you like on how we are managing its finances and its balance sheets and on how we are managing the economy.Our only test of another regime running our economy—say the last Labour Budget or the financials or the economic matrix when it was last in Government in 2008. It is an interesting contrast. For some of it I still cannot work out how it managed to achieve it. It is worth reminding us what happens with ill-disciplined endless spending endless revenue-gathering with productivity disappearing through the economy and inflation absolutely—by theft almost—taking wealth from New Zealanders. For example in 2008 the Consumers Price Index was nudging 5 percent. The Consumers Price Index was 5 percent. It seems unheard of now because now it is around zero percent. It was 5 percent and that was pumped up by the revenue gathering borrowing and spending of the previous administration. That is not a number I have made up. That is the number that it was. I think most people in the House would agree that ongoing inflation is not good for our economy or for our families. But anyway that is what it was—5 percent—and it is now about zero percent.And yet another metric—actually when National came into Government New Zealand had been in recession for about 1 year which was 1 year earlier than the global financial crisis and of course that hit at around the same time. But right now we have had over 3 percent growth. We have zero percent inflation and about 3-plus percent growth versus 5 percent inflation and a recession under Labour. It is interesting how those can be true. How does that play out for our families? Well the simple measure or comparison is their mortgage. For most families the highest and largest expense in their household budget is in fact funding their mortgages. Well a mortgage is now around 5.5 to 6 percent yet at the time when inflation was around 5 percent the country was in recession and mortgages were around double figures at 10 percent. I say to those listeners on the radio or watching on TV or members in the House imagine if your own mortgage was now 10 percent. You would probably be paying out almost double on a mortgage what you do now because it is now 5.5 to 6 percent. That is very interesting. Even though many members opposite talk about the housing situation in Auckland—and that has been well canvassed I guess—actually the horror thought is if a Labour Government were running the show at the moment and it continued where it left off. Remember inflation was near 5 percent mortgages were in double digits—at near 10 percent—and the country was in recession. In fact the export sector had been in recession for about 4 or 5 years.There is much in this Budget for small business. I could talk about the framework or the cost. I could talk about the cost of working capital for example or cash-flow management. You see under a Labour Government when floor inflation is around 5 percent and when mortgage interest rates are around 10 percent the cost of working capital for our businesses is so much higher. Yet when we have near zero percent inflation and mortgages at around 5 or 6 percent the cost of running a business of being an entrepreneur and of taking a risk under the National Government is diametrically totally absolutely opposite and more beneficial to those business owners and to New Zealand than it would be under a Labour Government. There is nothing subjective about those numbers.For example low inflation and stable interest rates all impact on and help our families and our businesses of course. The $500 million in ACC levy cuts benefits our small businesses. In fact that is on top of the $1.5 billion in levy cuts already locked in over previous Budgets. The tax cuts we had a few years ago—lowering company tax adjusting personal taxes and rebalancing—all benefit our small businesses particularly our small-business families who are of course those who are funding the small businesses. The tyranny of distance has been smashed—not only international distance but domestically the tyranny of domestic distance has been smashed. For example Kiwibank is now operating one of its back offices in Hastings in the Hawke’s Bay. The 150 to 200 new jobs in Hastings in the Hawke’s Bay would not have been possible unless there was an ultra-fast broadband fibre roll-out across New Zealand. That is the magic of empowering companies to have another look at the regions making an economic analysis and evaluation themselves and creating jobs in the regions. We are going to see more and more like that. The New Zealand Business Number continues to be rolled out and there is money in the Budget to help facilitate that.Dr David Clark: Ha ha! More red tape.Hon CRAIG FOSS: The member may laugh. I would be interested to know whether it is Labour policy to stop the New Zealand Business Number. If the member laughs at the New Zealand Business Number he is laughing at the 1.1 million businesses that already have it. The member is laughing at about 500000 businesses that are looking to take it up. I would be interested to hear from other speakers whether in fact it is now Labour policy to cancel the New Zealand Business Number which will be fully implemented for Government agencies by 2017.Jacinda Ardern: You’re just making stuff up.Hon CRAIG FOSS: No I am not making it up. I am asking the question because the member laughs—he laughs loudly—at the New Zealand Business Number and disputes it. I ask whether the Labour Opposition supports and endorses the New Zealand Business Number and all the benefits it creates such as productivity or other for New Zealand businesses families and our economy. It would be interesting to get that clarification. I would welcome it if it does come. Thank you.