Goldsmith Paul: Appropriation (2012/13 Estimates) Bill — Third Reading Imprest Supply Debate 
Text is incorporated into the Bound Volume 
Goldsmith Paul: Appropriation (2012/13 Estimates) Bill — Third Reading Imprest Supply Debate 
[Sitting date: 21 August 2012. Volume:683;Page:4564. Text is incorporated into the Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 It is my pleasure to take a call on the Appropriation (2012/13 Estimates) Bill and the Imprest Supply Bill. It has been a very interesting debate we have had in the House. Mr Cunliffe gave what sounded like a leadership qualification speech. He reminded me of Huey Long the great American politician of the 1930s whose motto was to suck up the fat and spread it thin. That seems to be Mr Cunliffe’s new approach to politics. His speech was all about demagoguery getting out there and trying to buy votes all around the country. 
Members will by now be very familiar with National’s plan to build a brighter future for all New Zealanders which underpinned the Budget. The priorities are firstly responsibly managing the Government’s finances; secondly building a more competitive and productive economy; thirdly delivering better public services; and fourthly rebuilding Christchurch. We know these themes so well because there has been a measure of consistency in what this Government has done and that is never more valuable than today in these difficult international times. 
The headline measure of our financial management in this Budget has been the fact that we are on track to post an operating surplus in 2014-15. It is not the world’s largest surplus we concede but it is a very important milestone for this country. It will be the first time in a number of years that the Government will be raising enough revenue to pay its way without having to increase debt. We will have the opportunity then to start repaying some of the debt we have accumulated during this recession as we should be during good times when the economy is growing. That represents a huge turn-round given the impact of the 2008 recession. 
It has not been a miserly or mean Budget as some have alleged. There is nothing generous about spending other people’s money. There is nothing generous about spending money you do not have. That is what many of the promises that have been made from the other side are about. The focus of the Budget has been on returning to surplus and at bottom that has been about strengthening New Zealand’s resilience in uncertain times. It is about maintaining New Zealand’s international credibility a status that is hard-won but easily lost. It is about helping to keep interest rates low which has been underpinning the ability of many households around New Zealand to pay back mortgages and increase their savings. It is worth noting that although most sides of this House nod and say that yes we have to get back to surplus they have opposed every single restraint that we have brought to this House in order to get this economy back to surplus. So it is one thing to say it; it is another thing to do it. 
We are very conscious at the moment that New Zealand’s high level of private sector debt is an issue for the country. There has been some natural correction going on as households have been saving in a positive manner for the first time since 2000 and household debt has indeed fallen. But as I indicated at the start returning the Government’s books to surplus and increasing household savings is only part of the solution. 
Another important aspect is that our prosperity depends on building a more productive and competitive economy based on savings and less debt. The Labour Party I accept and agree says it agrees with National on that basic message that we do need to grow our economy—at least that is what David Parker has been saying in recent speeches. I am not sure about the rest. I am certainly not sure about the Greens. I do not think they do want to see growth. But most people are concerned about retaining our people in New Zealand and not losing so many New Zealanders to Australia and that at the end of the day comes down to growth generating jobs and generating products that the rest of the world wants to buy. 
So let us run through just some of the things that the Government has been doing which this Budget has referred to. It is about the tax changes that we made initially in 2009-10 realigning the tax system away from taxing income and on to taxing spending. Labour and the Greens both oppose that. It is about boosting capital markets through the Mixed Ownership Model Bill. That has been opposed. We have been investing much much more in innovation and science. Labour probably says it supports that but when it came to the point it did not. Labour did not do much when it was in power— 
Moana Mackey 
: The R and D tax credit. 
PAUL GOLDSMITH 
: I will come to that in due course. Labour did not do much when it was in power for 10 years. When we talked about getting people off benefits and back into work that has been opposed. When we talked about the focus on primary resources and encouraging the use of our resources around the country—our mining resources—and investing in infrastructure that has been opposed. It has certainly been opposed in the exclusive economic zone bill. And when we talked about investment trade policy and encouraging new free-trade agreements that has been opposed. Labour used to support free trade but it does not seem to any more. When we talked about the 90-day probation period that was also opposed. Labour talks about wanting to grow the economy but when it comes to the crunch it opposes it. 
In recent times we have seen under the guidance of Bill English and Steven Joyce two eminently capable Ministers the Government taking further steps and crystallising its thinking around the Business Growth Agenda. We have two wonderful reports that have been produced recently. The House does need to resist the siren calls of the Labour Party which has gone back to the same old song of the 1960s and 1970s. We have seen some ideas floated from Mr Parker in recent times about forcing Government departments to buy locally made goods even if somebody else can produce them more efficiently and cheaper overseas. I do not see how that has had a good track record for many years. 
We have heard him talking vaguely about controlling the currency. I would love to know how Mr Parker is going to do that. It is a very difficult area. Is he proposing that we should start watering the milk like other countries or printing money? Is he proposing that we should wind back the clock to the 1930s and exchange-rate controls? I am very much looking forward to seeing what Mr Parker is going to do to control that problem. Or is it a return to the research and development tax credits that Labour tried? Well the Labour Party does not seem to have learnt anything from history. Taxes should be low rate and broad-based. Mr Parker’s path of research and development tax credits which were tried is a path back to the shambles of the 1980s when New Zealand— 
Moana Mackey 
: It was only there for a year. You got rid of it before people had even been able to apply for it. 
PAUL GOLDSMITH 
: We had them for decades. They had them for decades in the 1970s and the 1980s. They did not work then and they will not work now. In the meantime although Mr Parker is wanting to take some money off exporters he is wanting to increase taxes on exporters at the same time because export companies all have capital gains. He wants to increase taxes at the same time with a new capital gains tax and also take research and development taxes off them. It does not make any sense to me. It seems very short-sighted and it also implies that local businesses are somehow less worthy. Why should local power telecommunications or infrastructure businesses for example which are every bit as important to New Zealand’s economy its growth and its international competitiveness not have tax credits along the lines that Mr Parker suggests? 
The idea of research and development tax credits is an idea that has passed. It never worked in the past and it will not be working again. The best thing for New Zealand businesses— 
Hon Lianne Dalziel 
: Nonsense! They were only in place for 12 months and then you got rid of them. 
PAUL GOLDSMITH 
: You had them for 20 years in the 1970s and 1980s and they did not work very effectively. These ideas look superficially attractive but history has shown that over the long term such breaks rarely succeed in boosting home-grown businesses. The best thing for a New Zealand business is to compete openly in the world on its own merits. There is no magic for this other than producing goods and services that the rest of the world wants to buy for the best price and that is what this Government is keen on supporting. So we have put a lot of thought into what things businesses need in New Zealand. The six areas that come to mind are the ones that are universal. They are not unique to New Zealand. Businesses need access to ideas and innovation to create an opportunity they need money to build businesses they need access to the necessary raw materials they need skilled people to work in businesses they need customers who want to buy their products and access to export markets is implied in that and they need the infrastructure that the businesses depend on such as electricity broadband and transport. 
This Government has gone through in a systematic fashion looking at what those basic requirements are for successful businesses asking that question and producing very detailed and logical plans as to how the Government can ensure that businesses have access to those six essential areas. That is what these Business Growth Agenda progress reports are all about. We have seen the first two come out in recent days on export markets and innovation. These documents here fill me with great hope for the future of New Zealand given the guidance we have from this Government. 
So all in all it gives me pleasure to speak in favour of the Government’s Budget this time around as relayed through this legislation. Thank you very much.