Cullen Michael: Budget Debate 
Cullen Michael: Budget Debate 
[Volume:639;Page:9702] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I have one question for that member Nathan Guy: will he support a regional fuel tax to fund the Transmission Gully road? There we go. There is the National MP who runs around the Horowhenua saying the Transmission Gully road has got to be built but he does not want to pay for it; he wants somebody else to pay for it but he cannot find out who it is. 
Over the last week we have seen 48 headless chooks running around this Chamber trying to find out where the axe came from. An unkind person would suggest that when National Party members lose their heads it has absolutely no effect on their intellectual capacity. But the reality is that they sat there during the Budget saying: “This isn’t what we thought was going to happen. What do we do now?”. They turned to John Key and asked: “Where is plan B maestro?”. John Key came up with this answer: “Don’t worry we’ll just have to borrow some more if we become the Government.” I will come back to that a little bit later on. 
The National Party has demonstrated three things in this Budget debate. The first is that it has no new ideas at all. The only thing it has said is that there should be a personal tax cut. It is either a little one according to Mr English or a very big one according to Mr Key and it is either to be borrowed according to Mr Key or to be paid for from overseas according to Jacqui Dean. 
The second thing is that it has failed to paper over its internal cracks. Every speech differed from the other speech. There were members who thought they could do everything in terms of tax cuts and everything in terms of State spending in the core areas without any impact whereas Mr Key and his supporters believe that one borrows money to pay for tax cuts which is about the most stupid thing I have ever heard in my life. 
What we had indeed was a leader who was fiscally reckless. National is simply not fit to govern. What did Mr Key say in this House yesterday in question time? When I provoked him by asking a question about his view that the Government should be geared more highly—that is borrow more—he popped up to ask a question because he thought as he always does that he had to top that. He asked whether it was true that the Government was building up assets in the Superannuation Fund so that in fact we could carry more debt. In other words because we have a superannuation fund to pay for New Zealand superannuation in the long term the rest of the Government can borrow a lot more money! I ask what the purpose of having a superannuation fund is if we then go and borrow the money somewhere else and build up more debt. 
That is particularly so if we do not invest that money even in direct productive capacity but simply hand it out to people to spend largely on consumer goods. We were told by Mr English in a brilliant piece of stupidity that the real problem with the Budget was that if we saved more we might have to reduce the growth in our consumption. Well someone who says that a country with a current account deficit of 9 percent of GDP should not be reducing the growth in its consumption simply has not got it simply has not understood. The National Party simply has not understood the challenges facing this country. It actually believes we can borrow and then spend our way to prosperity. 
That is because Mr Key is a financial market trader. He thinks in minutes. He thinks in seconds. He thinks in minutes and hours and maybe weeks. How to make a quick buck? How to turn the paper money over—shuffle it around—to make some money in the short term? He does not think in years and decades and beyond. He does not think about the long-term future. He thinks about some smart-alecky private sector company of the sort he tends to be associated with that can engage in great plans to borrow and spend to try to expand and if it all fails the company is just restructured. One lays off half the workers cuts half the business tries to restructure and moves on from there. 
Well a private sector company can do that but a Government cannot. A Government cannot say to “New Zealand Incorporated”—the people of this country—“Sorry we got it wrong. That whole programme didn’t work. We’re going to put half of you out of business we’re going to flog off everything we own and we’re going to completely change the entire arrangement of our education health and superannuation.” Well it could! That is indeed what Ruth Richardson did between 1990 and 1993 but it did not actually work. And it will not work again if it is tried. 
The notion from Mr Key that because of the Superannuation Fund we can borrow and we can borrow to fund tax cuts so that we can spend is just the most stupid thing— 
Hon Dr Nick Smith 
: You’re borrowing $4 billion. 
Hon Dr MICHAEL CULLEN 
: Ah! He says we have borrowed $4 billion and therefore we should borrow more. That is like saying that because people have borrowed money to buy a house they can borrow everything they need to buy a car a fridge a washing machine and everything else they want and then they can borrow even more and they can spend it all in the next year and somehow or other they will pay something back at some point. That is National Party economics. Even Ronald Reagan at his strangest did not engage in that kind of voodoo economics which is what the National Party is engaged in. 
What we saw also is that Opposition members do not know what to say about KiwiSaver. They secretly think it is a good idea but they do not have the oomph to support it and they cannot make up their minds whether they should oppose it. All they said was that people on low incomes cannot save. I do not know where they found any to talk to because National Party MPs do not talk to people on low incomes. If somebody on a low income signs up to a job and is compulsorily enrolled in KiwiSaver that person will treble his or her savings because the Government will match them and the employer will match them. 
We will actually pay for the employer’s contribution. It costs the employer nothing. Members opposite are trying to say it will cost employers $2 billion a year. Well that was a rubbish number; it was probably invented by that man from the Employers and Manufacturers Association (Northern) who has a bee in his bonnet about this even though he takes 70 percent of his own salary by way of superannuation. That kind of silly nonsense misses the entire point. It is the people on the street who think KiwiSaver is a good idea and it is responsible business that believes that KiwiSaver is a good idea. Air New Zealand today announced that it will match the full 4 percent right from the beginning of KiwiSaver. National members have nothing to say about that. 
Then they voted against the corporate tax rate cuts. That is utterly consistent because National has never voted for a corporate tax rate cut in the last 40 years. For the last 40 years National has never voted for a corporate tax rate cut. It is at the very least consistent in that measure. No doubt National members will vote against a research and development tax incentive and will say it is all right if New Zealand’s research and development is carried out in Australia. They will ask why we should be interested in that because we know it will not work. Well it will work and let us wait and see how it works to lift New Zealand’s research and development. 
I went to a small company today that will benefit from this package in the Budget both in terms of the corporate tax rate cut and in terms of the research and development tax incentive. That company is not worried about compulsory employer contributions to KiwiSaver. It supports those contributions because it wants high-quality loyal staff. That company is taking a longer-term view about its own self-interest not the short-term money-market trader view that we heard from Mr Key. 
Hon Dr Nick Smith 
: What were you before? 
Hon Dr MICHAEL CULLEN 
: That is what he is. He is a short-term money-market trader. If he had been in the Temple when Jesus arrived Jesus would have overturned his table. That is who Mr Key actually is. 
Hon Dr Nick Smith 
: What did you do before? Ever filled out a tax return? 
Hon Dr MICHAEL CULLEN 
: Oh yes of course I have filled out a tax return—silly man! For God’s sake—silly man! At the same time we have also provided a changed international tax regime which will encourage our businesses to expand offshore. National brought in a regime that has seen a flood of New Zealand businesses leave New Zealand entirely because once they are active offshore they are penalised by the current taxation system. Labour is changing that. I bet National will vote against that change as well when we get— 
Hon Dr Nick Smith 
: Against the Budget; it’s a bad Budget. 
Hon Dr MICHAEL CULLEN 
: Dr Nick Smith said National will vote against that one as well. 
Finally this Government put major investment into our social priorities: into health education and superannuation; into overseas aid; into electrification of the railway system; into energy; into efficiency initiatives; and into a whole range of matters that this Government supports. What did National say? There is only one thing in life that matters to the tiny teeny little National Party mind: “When am I going to get my tax cut?”. That is it. That is all Dr Nick Smith could say: “When am I going to get my tax cut? I’ve been sitting here for 7½ years doing nothing and I deserve a tax cut.” Well Dr Smith does not deserve a tax cut. He has a subsidised superannuation scheme from the State and it is high time he allowed the ordinary workers in New Zealand to have a decent superannuation scheme as well. 
Mr DEPUTY SPEAKER 
: The amendment is in the name of John Key.