Goldsmith Paul: Debate on Budget Policy StatementText is incorporated into the Bound VolumeGoldsmith Paul: Debate on Budget Policy Statement[Sitting date: 12 March 2014. Volume:697;Page:16578. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (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 2014. The John Key - led Government heads to the 20 September general election firmly focused on the issues that matter to our community to all Kiwis: a stronger economy and more jobs better front-line health and education services a safer New Zealand and rebuilding Christchurch. That is what I want to talk about today and that is what most New Zealanders are concerned about.The National-led Government’s programme to build a faster-growing economy with more jobs and rising incomes is delivering positive results for all New Zealanders. Updated forecasts in the Half Year Economic and Fiscal Update and Budget Policy Statement issued in December show a relatively strong upturn with expected economic growth reaching 3.6 percent in 2015 and the unemployment rate falling. Although the recovery is gathering momentum the global environment still remains uncertain. We have only to look at the events in Ukraine and Russia over the past few weeks to see how fragile the world is. Markets have largely shrugged off those geopolitical scares so far but we do not know how things will pan out in the next few months so we do need to take all care. In this environment it is important to maintain clear and credible economic and fiscal settings. This is the best way to create new jobs raise incomes and help families to get ahead.The latest forecasts show the Government posting a modest operating surplus before gains and losses of $86 million in 2014-15 similar to the $75 million surplus forecast in Budget 2013. Surpluses are then forecast to increase over the next 2 years debt is forecast to fall and net core Crown debt is expected to peak at 26 percent of GDP in 2014-15 before falling to 16.9 percent in 2019-20. The National-led Government remains committed to responsible long-term fiscal management and that is why I fully support all the figures that are outlined in the Budget Policy Statement.By the way I just wanted to talk about some comments I came across in the Australian Financial Review yesterday in its review of the New Zealand situation. There was a quote from the Australian Financial Review that said speaking of New Zealand: “A new Labour government if it kept its promises (NZ Power NZ Assure Kiwibuild) would likely be the most interventionist Labour government since well before the Roger Douglas led pro-market reforms of the 1980’s”—i.e. if Labour followed the policies that it has announced so far it would be heading back to Bill Rowling’s days or worse than that.Funnily enough—I was doing some digging around—the Labour Party when it was formed in 1916 was all about nationalising the means of production distribution and exchange. The party got around to dropping that in 1954. I took the time to have a look at the Labour policy platform that was signed off at the November 2013 conference last year. David Parker’s introduction to that policy platform said that it is binding: “The Platform is binding on the Party including the Caucus. It will guide the creation of the manifesto …” for next year. So what does that include? On the question of equality it says: “Our vision of a just society is founded on equality and fairness. Labour believes that social justice means that all people should have equal access to social economic cultural political and legal spheres regardless of wealth gender ethnicity or social position.” Well I think most people could basically agree with that.It continues: “Labour says that no matter the circumstances of our birth we are each accorded equal opportunity to achieve our full potential in life.” Again I think most people would agree with that. But that is not where it ends because in the Labour Party policy platform it says: “We believe in more than just equal opportunities—we believe in equality of outcomes.” Equality of outcomes—Labour has not learnt the most basic lesson of history that the equality of outcomes can be achieved only through extreme force and by massively increasing the power of bureaucrats and the State and that the outcome generally universally in those situations has been disastrous. Some people work hard; some do not. Some are lucky; some are not. Some are talented in music and sport and science; others have talents elsewhere. Some make wise choices in their personal lives; some do not. Some people smoke; some do not. Some have five kids with five different partners; some do not. They all lead to very different outcomes so how can the State alter the natural outcomes of the diversity of life—that is something that the Labour Party is very keen on diversity—so that all the outcomes are the same?By outcomes I am not quite sure what the Labour Party means. Does it mean that all are as wealthy as each other or all have the same incomes or all are as happy as each other or live as long as each other? I am not sure where it is all heading but I would be very interested to hear from Mr Cunliffe as to what he means by “achieving equality of outcomes” in New Zealand. The only way you get there historically is by using massive amounts of force. I am sure that that is not what Labour is proposing but I would like to know what it is proposing. That is the problem we face here today. New Zealanders up and down the country are scratching their heads and trying to work out what it is that Labour actually stands for. Talk is cheap—fine words and sentiments but there is no basis to them. What is Labour really saying? What is David Cunliffe really saying? What is he really? Is he a raging left-wing union reformer or is he a more moderate business-friendly man? Nobody really knows.So if we just run through a few of the contradictions in what they are saying we hear Labour members talking about power prices going up and being very concerned about power prices going up—notwithstanding the fact that they went up twice as fast when Labour was last in power—and yet they champion an emissions trading scheme on steroids that would inevitably lead to higher power prices. So which one is it? Are they concerned about it or are they quite happy to increase power prices? It is the same with housing affordability. They say that they are very deeply concerned about housing affordability particularly in Auckland yet the single most important thing with housing affordability is interest rates. This Government by constraining new spending on government to $1 billion a year and being highly disciplined in Government spending and fiscal policy has kept a lid on interest rates. It has kept them lower than they would otherwise have been. But when the Labour Government was in power it was splurging around $3 billion a year in new spending stoking the fire of inflation and stimulating the economy like nobody’s business. The result was that interest rates were nearly 11 percent. So Labour members go on about housing affordability yet Labour’s record was to greatly increase interest rates. They talk nobly but their actions achieve the exact opposite.In the meantime the Greens go on about housing affordability but they support promote and push for at every opportunity highly restrictive planning policies that artificially increase the value of land. Labour goes along saying: “Me too.” in that area. It is the same on the question of poverty. We know that the best way out of poverty is work and yet Labour and the Greens oppose every aspect of our welfare policies which are designed on the principle that everybody can do something and should do something and that the best thing they can do is get back to work.Iain Lees-Galloway: Where are the jobs?PAUL GOLDSMITH: That is where we have the contradictions that we have to make our way through in this Government.We have had a good start to the year in terms of the economy. Things are going very well but a successful rebalancing will require consistent and positive change over the next few years. The New Zealand economy has continued to expand through 2013 growing at 3.5 percent a year into September despite the severe drought that we have had and significantly reduced growth in the first half of 2013. This was amongst one of the higher rates in the developed world.Iain Lees-Galloway: Where are the pay rises?PAUL GOLDSMITH: Let us not forget when we talk about where the jobs are which I heard from over on the other side that there have been more and more jobs. There are 66000 more people employed now than a year ago and the unemployment rate is at 6 percent. It is still too high but it is dropping as the economy gathers strength in contrast to what is happening in Australia. Budget 2014-15 will continue this.It is the consistency of the way that the Government has been approaching the situation over the past 5 years that has given the confidence that businesses have needed in order to invest and to create jobs. It is the consistency about the four priorities that we have had: responsibly managing the finances and getting back to surplus pushing ahead with a wide range of microeconomic reforms to increase the productivity and competitiveness of the economy driving better results through Better Public Services and supporting the rebuilding of Christchurch. People know where they stand with National. They do not know where they stand with Labour. On that basis I affirm this Budget Policy Statement. Thank you.