Nash Stuart: Budget Debate 
Nash Stuart: Budget Debate 
[Volume:663;Page:11388] 
STUART NASH (Labour) 
: 
 The previous speaker John Carter stood up and spent 5 minutes telling a joke about beer. I challenge that member to go out and organise a public meeting in a pub in his electorate and explain to all his constituents that his Government has just increased the price of beer for everyone by raising GST. All the hard-working people of that member’s constituency will be paying more for their beer because GST is going up. That member also told us that this is the best Budget he has seen in 23 years. Did he have his ears closed when Dr Michael Cullen delivered a Budget with full employment low debt and zero net debt? He called this Budget aspirational. I call zero Crown debt and low unemployment aspirational. Goodness me! If this is the best Budget that member has heard in 23 years I think it is about time he went back and looked at  
Hansard 
 or perhaps opened his ears. 
Supply-side economics sometimes referred to as the trickle-down theory states that if we give big tax cuts to the wealthy they will spend the extra money on investing in businesses that will grow the economy and create jobs. That is supply-side economics. Paul Krugman is a Princeton professor who won the Nobel Memorial Prize in Economic Sciences in 2008. He said this about the economic theory that the National Government is operating under: “ ‘supply-side economics’ is a crank doctrine that would have had little influence if it did not appeal to the prejudices of editors and wealthy men. It has been disproved because what happens in reality is in times of uncertainty the wealthy tend to pay down debt or save money.” Very rarely will they be investing in the so-called productive economy that will drive this country forward. Once again let me remind members that one of the world’s top economists said that the National Government’s guiding economic theory—supply-side economics—is “a crank doctrine that would have little influence if it did not appeal to the prejudices of editors and wealthy men.” 
Why would wealthy men love this Budget? Let us see why. Under the Budget’s tax cuts the chief executive of Telecom Paul Reynolds will get over $350000 extra in the hand per year; the chief executive of Fonterra Andrew Ferrier will get a cool $197000 extra a year; the chief executive officer of Air New Zealand Rob Fyfe will get about $120000 extra per year; and the chief executive of Contact Energy David Baldwin will get only about $73000 extra per year. I could go on but my point is not that those men are overpaid. Their tax cuts are not their fault because they did not set the Government’s tax strategy; they are just lucky beneficiaries. But I bet members that if they asked Rob Fyfe he would say that he did not need another $120000 per year. It would be nice to have but for Rob Fyfe it is not the difference between making ends meet and not making ends meet. That is the dilemma facing many New Zealanders at this point in time—simply how to make ends meet. My point is that this Budget delivers massive tax cuts for those earning significant salaries. While Paul Reynolds gets over $300000 per year Joe Citizen on the medium wage in Napier gets about $3 a week or $150 per year after increases in GST have been taken into account. 
Gerry Brownlee has told us that the emissions trading scheme will cost the average family about $365 per year. That amount alone is about $215 more than the Napier medium wage earner gets in his so-called tax cuts. The opposite of supply-side economic theory is demand side. It states that if we give money to those who need it the most they will spend it on the necessities of life. They buy food they purchase petrol they pay power bills and they put clothes on the backs of their children. But with this Budget things just got tougher. The GST increase from 12.5 percent to 15 percent will hurt a great many New Zealanders. Inflation at 5.9 percent will mean that the meagre tax cuts given to those on the medium wage will be gone quick smart. When he was electioneering in 2008 Mr Key looked down the camera and told New Zealand: “National is not going to raise GST.” and he did. He also told New Zealand that he would not borrow for tax cuts and he did. 
This is not the sort of Budget that a Labour Government would have delivered. As a party Labour understands the message about equality of opportunity. We understand that everyone in our society needs the same opportunities to be as good as they possibly can be and that is what the previous Labour Government delivered over 9 years. We absolutely value businessmen and businesswomen. We think that the contributions of our top scientists engineers doctors entrepreneurs bankers lawyers farmers and foresters are invaluable in driving economic growth. But we also know that if hard-working Kiwi families—and we must remember that 800000 families in this country survive on a household income of $60000 or less—lose the opportunity to engage in education lose access to first-class medical facilities and struggle to put food on the table and put clothes on their children’s backs then we as a country will never be as good as we can be. 
The National Government increased the minimum wage by 25c per hour last year—25c per hour—and Treasury has said in the Budget documents that wage growth will not keep pace with inflation over the short to medium term. If that Government really wanted to drive productivity and growth it would treat workers with dignity and with respect. It would instigate ways to really increase productivity through driving up wages and salaries not by crowing in a condescending way about how lucky the poor are to get a tax cut as well. Sure the Australians cut their company tax rate down to 28c—like New Zealand did—but the Australians also increased employer contributions to the Australian version of KiwiSaver from 9 percent to 12 percent. This Government has left employer contributions to KiwiSaver at 2 percent. How will that build a savings culture and drive economic growth? Well it will not. 
This Budget and that Government are stealing the dreams of hard-working Kiwis as more and more people become sick and tired of broken promises from their leaders such as that the National Government will not raise GST and that National will not borrow for tax cuts. Then we have news that the Government is to mine the high-value conservation estate. What is schedule 4? I describe it as one of the very few globally competitive advantages we have. It is the picture on the cover of the glossy brochure sitting on the travel agent’s desk in London that sells this wonderful country to those who want to get away from the maddening rush and spend a few pounds somewhere exotic. I say to the Government that if it ruins that it will damage New Zealand’s image and reputation internationally. Even the most cynical businessmen and businesswomen I have met understand that doing that would be madness. 
Then there is the talk about selling Kiwibank. Eight hundred thousand Kiwis have invested personally in Kiwibank and that Government wants to sell it. George Bush Snr’s legacy as US President was his quote: “Read my lips: no new taxes.” That cost him the election. John Key’s legacy as Prime Minister could well be his quote: “National will not raise GST.” I will raise a glass of “PM Pinot Noir” to that. Bring on election 2011 because ringing in the ears of the public will be John Key standing in front of a camera telling the people of New Zealand: “National will not raise GST.” and that Government did. This is a Budget of broken dreams and broken promises. Thank you.