English Bill: Debate on Budget Policy Statement 
Text is incorporated into the Bound Volume 
English Bill: Debate on Budget Policy Statement 
[Sitting date: 02 May 2012. Volume:679;Page:1868. Text is incorporated into the Bound Volume.] 
Hon BILL ENGLISH (Minister of Finance) 
: 
 It is good to have the opportunity to talk about the Budget Policy Statement which confirmed the Government’s agenda as laid out by the Prime Minister early in the year around the Government’s four main priorities. They are to responsibly manage Government finances to push for a more competitive and rebalanced economy and better public services—even if there is a bit less money for it—and of course to rebuild Christchurch. The Budget Policy Statement confirms that consistent with policies put in place in the Government’s first term of office we are essentially on track which is not a bad effort given the global uncertainty that continues.  
We are looking forward to moderate growth over the next few years and by international standards it is pretty good growth. So over the next 12 months the New Zealand economy will grow faster than Europe certainly faster than the UK which has just gone back into recession likely as fast as the United States and at a similar growth rate to Australia.  
What that amounts to is the creation of more jobs. It amounts to meeting the expectation that New Zealanders have for higher incomes. The quarterly employment survey figures that came out yesterday indicate that incomes are growing faster than inflation—in fact almost twice as fast—and that means that where in many countries around the developed world people face desperate job insecurity and large-scale unemployment New Zealanders on average have the benefit of real growth in incomes.  
Much of the Government policy is focused on supporting those who can ensure that growth in jobs and incomes. As has been explained here in the House that growth will not include the Government. The Government is not going to be growing. The Government had a strong period of growth through the first decade of this century. Its spending grew dramatically. But that turned out to be unsustainable particularly in the light of both the New Zealand recession and then the global recession and growth in the future will not come from borrowing more or more Government spending. In fact the world is not going to lend us the money to keep pretending we are getting wealthier by running up a larger overdraft either privately or publicly. New Zealand households do have very high levels of debt. They have got the message. That debt has stopped rising and is now falling for the first time in 20 or 30 years.  
Growth in the future will have to come from different sources and there are not too many choices for that. It will have to be from selling more goods and services at higher value to more people outside of New Zealand who want to buy them. It is about as simple as that. So Government policy is focused on helping businesses and people who provide employment to make the decision to invest a bit more take the risks that go with that and employ another person therefore creating another job. This will help them with the value of their goods and services so that they can afford to pay higher wages.  
Unlike the Opposition we and most of New Zealand know that you do not get higher incomes by wishing for them. You have to get them from real economic value and employees getting their share of that increase in real economic value. The good news is that despite the headwinds and the global situation New Zealanders are currently enjoying the benefits of moderate real growth in their incomes. We do not claim that it is stronger than that but it is moderate real growth in their incomes.  
I think their expectations about what can be achieved are not unreasonable. They are in a very pragmatic mood and keen to see the Government promote more jobs growth and incomes and that is what we will continue to do.  
Hon David Cunliffe 
: God help not. 
Hon BILL ENGLISH 
: Well picking up on that member’s comment the Labour Party has probably got a bit of work to do among its four economic spokesmen who are regularly outpointed by the one economic spokesman in the Greens who takes up more space giving more considered contributions to public debate. One of their economic spokesmen said—I am told this and I will have to check this out because I thought it was unlikely but apparently it is true—that economic policy in New Zealand for the last 30 years has been wrong. So that means that we are going back to the late 1970s is it— 
Paul Goldsmith 
: I think Muldoon was the last one of that mind apparently. 
Hon BILL ENGLISH 
: Muldoon? Well maybe that is where they are going to go because if it was all a mistake for the last 30 years you have to go right back to before that. No doubt there are elements of the Labour Party leadership race where that resonates and I guess we will find out. It is a bit unfortunate that the other spokespeople are advocating those tragically wrong economic policies that were put up in the last 30 years. The research and development tax credit I think is the one and that has got them dancing in the streets—the research and development tax credit. 
The bit that Labour has not learnt—and this is directly relevant to the Budget Policy Statement—is that saying you are committed to skills and innovation is one thing and saying you have spent lots of money on it is another thing but neither of those mean that it actually made any difference. The Minister on the front bench here Anne Tolley indicated that with her response today to questions about trade training and qualifications in prison. So Labour is committed I am sure to rehabilitating prisoners— 
Hon Anne Tolley 
: But they didn’t do it when they were here. 
Hon BILL ENGLISH 
: —but it did not do a thing about it except drive up the prison population. There was no cohesive sense of what it was trying to do about qualifications for prisoners let alone for the broader public. I mean for the broader public it just threw lots of money at it including at the people who had died the people who had long since left the trades and the phantom applicants who never showed up for any trade training but there were 150000 places or something. Most of it was exposed as meaningless spin spending lots of money that was not working.  
One of the jobs this Government has committed itself to has been undoing a lot of that damage particularly across our public services and restoring a sense that a motivated Public Service can actually make a difference to the way the world is not just talk about it. 
Grant Robertson 
: How motivated is Foreign Affairs? 
Hon BILL ENGLISH 
: Well that is another thing: the Labour Party gets this stuff all out of proportion. New Zealanders actually want better health services a safer community and decent education and actually they are not obsessed with that member’s gossipy little Wellington circuit. 
Hon Member 
: Yeah the beltway. 
Hon BILL ENGLISH 
: The beltway and “Mr Beltway” himself the next leader of the Labour Party. When it has finished with Mr Shearer it is going to have “Mr Beltway” and that will not work. That will not work either and Mr Cunliffe is waiting waiting waiting because he knows he can afford to see off Mr Shearer and “Mr Beltway” because “Mr Beltway” will not get any more resonance than Mr Shearer and then it will be Mr Cunliffe’s turn. I agree with Mr Cunliffe. I think the patient strategy is the right one to take—and I am an expert on these things. Mr Cunliffe should take his time.  
The Government is not going to be distracted by what is going on in the Labour Party. We are sticking to our four priorities for the economy. We are pleased to be supporting so many New Zealand families and businesses who have changed the way they see the world. They have increased their savings changed their skills become more innovative made their struggling businesses viable and turned their families’ finances round. We are right behind those people because they are who are changing this economy for the better.