Burns Brendon: Budget Debate 
Burns Brendon: Budget Debate 
[Volume:664;Page:11713] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 It is perhaps my good fortune to again follow Hekia Parata as we speak on the Appropriation (2010/11 Estimates) Bill. I note her comments about the importance of early childhood education. This Budget cuts early childhood education by $250 million. We heard her say that we cannot afford to spend more than we earn and therefore we should not be borrowing but this Budget borrows the best part of half a billion dollars for tax cuts that are clearly unaffordable. We heard her comments that all the commentators are applauding this as a brilliant Budget. Well I say to her that she ought to go back and reread the commentary of some of those who have observed this Budget such as the Productive Economy Council Business and Economic Research and the Manufacturers and Exporters Association and she ought to look at their comments about this Budget. 
I note that some of the previous speakers from the other side of the House have been rural MPs talking about how this is a great Budget for their electorates. Well I ask how this is a great Budget for a rural economy when the Minister’s own statements to the House reflect the fact that we will see in the next year an increase in exports yes of 2.4 percent but an increase in imports of 10.8 percent—leading to a blowout in the current account balance. That is actually a more important measure of our wealth as a nation because it measures all of the expenditure that we make and all of the costs that we incur. We have not had our current account in balance since I was in shorts at school. That is where we should be trying to head with this Budget but in fact we are going backwards. 
I note the comments from Amy Adams about awful wasteful expenditure. I will mention the call that I got from a rural constituent—not in my electorate of Christchurch Central but from a rural Canterbury constituency—who asked in desperation whether I could assist her because her home help has been cut from three visits a week to two visits a fortnight. She has had three accidents on the farm or nearby—one was a road accident—and she is struggling to keep body and soul together. Those home-help visits are the difference for her between a quality of life and no quality of life. If the Government describes that as wasteful bloated expenditure they need to think again very very seriously. 
Bill English was in front of the Finance and Expenditure Committee last Thursday and the question was put to him about how this Budget would stimulate the economy when we have tax cuts. All the signals are that those who will have discretionary income from tax cuts will retire debt. So there will not be very much stimulus for the domestic economy and certainly not for discretionary spending like in the retail and restaurant sector. Of course we have exports flattening out in part because of the rise in the official cash rate which the following speaker at the Finance and Expenditure Committee the Governor of the Reserve Bank Dr Bollard confirmed. That feeds into higher interest rates so the dollar rises with it. Therefore our productive sector which is the lifeblood of this economy is certainly not being assisted by the Budget’s economic settings and what is flying out of them. The reality is that this Budget is not a good Budget for the productive sector—the rural sector—or indeed the urban sector of New Zealand. 
Let me comment briefly about the Prime Minister’s comments today that there may be funding found perhaps in this financial year for irrigation schemes in Canterbury. I want to say that believe it or not I am a supporter of irrigation for Canterbury with this important caveat: we want to see irrigation in Canterbury and we want to see more greening of the plains but we want to see it take place in a situation where the environmental outcomes improve alongside the economic outcomes. When the Prime Minister is indicating and has said on the record that he wants to see new irrigation in place in Canterbury next year I say that there is no way on God’s Earth that that can be done alongside environmental improvements. That is why we see the question today about the role of Wyatt Creech who 18 months ago was being briefed about what was needed in Canterbury. Nearly one year before he took on his role reviewing Environment Canterbury and nearly one year before he took on his official role as an independent chair of an independent review he was being briefed by the Minister of Agriculture’s office about what was needed in Canterbury. Things flowed from there very very obviously. 
This Budget was a shocker for people in my electorate. More than three out of four people in my electorate of Christchurch Central earn less than $40000 a year and that is why I oppose the increase in GST provided for in this Budget. It is simply a smokescreen. It is a smokescreen to allow a further tax cut for those on the top rates of pay. They will benefit handsomely from that increase while those on very basic incomes will get virtually nothing by the time cost increases take their toll. 
We have had 12000 job losses in my city of Christchurch in the last year—12000. There is very little in this Budget about providing training to give any stimulus to the economy in terms of job creation. Just in the last 24 hours we have heard the announcement about more than 100 job losses looming at the meatworks on the outskirts of Christchurch. Where is the Government’s response to that? What will happen in respect of the people working there and their lives? What is coming from the Budget to assist them and their families into their futures? There were 12000 job losses in 1 year in Christchurch—1000 a month—and there is nothing in this Budget to provide for more job training. In fact job training is going backwards. The YMCA in Christchurch was until quite recently providing literacy training for 15 and 16-year-olds who were basically in last-resort education. That funding has been lost recently and it certainly has not been replaced in this Budget. I say that that will leave a social legacy in my city whose effects on everybody else in our community will be seen for a long time to come. 
We are also seeing the situation of nearly 50 early childhood centres in my electorate where mums and dads are simply going to have to pay more because of the cuts with perhaps $1 an hour or more having to be found by some of those families on basic incomes to provide for their childcare. In the meantime of course other sectors of the community will be doing it hard as well. We are seeing a handful of money provided by way of personal tax reductions and then two handfuls coming back to the Government by way of GST higher early childhood fees rising power prices and a number of other things as well. 
One other little gem in the Budget that has not been given much focus yet is the cut in the rates rebate funding. That is a scheme that Labour introduced to try to take some of the pressure off those who are at the bottom end of the income scale. Rates can be a big impost and they will be going up as a result of this Budget. At least 2.5 percent will be going on to rates and I will comment about that further in a moment. The $58 million in the previous Budget to provide for people who might take up the scheme—and only about two out of three do—has been reduced by this Budget. That simply means that we should be promoting the scheme and taking some of the pressure off low-income households but in fact that spending has been deleted by the Budget of last month. My prediction is that we will see a quite savage round of rates increases next year because of course city councils district councils and other territorial authorities struck their rates before the Budget really took effect. They will therefore have to take account of the year from 1 October through to 30 June next year and then they will have to take account of any inflationary impact driven by the GST increase for the following year as well. So I suggest that we will see some significant double-digit rate increases next year flowing in large part out of the GST increase of this Budget. That will be a further impost on costs for low-income families. 
The Environmental Protection Authority missed out in this Budget in terms of funding. That was a blow to the credibility of the Minister for the Environment Nick Smith who pledged last year that the Environmental Protection Authority would be up and running by 1 July this year. Now he is saying that it should be up and running by 1 July next year. He is talking about 150 staff but he does not mention much that 90 of those will be staff coming from the Environmental Risk Management Authority and many of the others will actually be employed and paid to process major resource consents. So I ask where the environmental protection staff of the new environmental protection agency are because they are certainly not provided for in this Budget. They are very very much needed especially if we are to see new water growth across Canterbury and other regions. It is another gap in this Budget one of very very many indeed. It is a very poor Budget it is not a brilliant Budget by any means it is a Budget that savages low-income people and it is a Budget that this Government will pay a price for in the days and years to come.