Budget Debate 
Budget Debate 
[Volume:673;Page:19241] 
Budget Debate 
Debate resumed from 8 June on the Appropriation (2011/12 Estimates) Bill. 
CHARLES CHAUVEL (Labour) 
: 
 When the bell rang last night interrupting the debate I was talking about the proposal in the Budget to privatise the power companies Meridian Energy Genesis Power and Mighty River Power and also to sell the stake in Air New Zealand. I was setting out why Labour thought this was such a short-sighted policy. I listened very carefully and with interest to the interchange during question time between the finance spokesperson on this side of the House and the Minister of Finance. The Minister was trying to make some sort of case that the special dividends from Meridian Energy paid as a result of selling assets that Meridian had acquired in Australia should be excluded from the valuation and that somehow this made it sensible to sell off strategic stakes in the power companies. But I want to say to the Minister of Finance that it is ordinary business practice as he should know as a shareholding Minister for those energy companies to be buying and selling assets overseas all the time. 
If the Minister knew the portfolio well he would know that Mighty River Power for example at the moment has significant geothermal assets that it is working on overseas. There is a joint venture in Chile and some work is being done in the United States. Nobody expects Mighty River Power to hold on to those assets overseas long term. Everybody knows that Mighty River Power’s core business is developing renewable energy in New Zealand as we saw with its announcement yesterday of a very significant geothermal plant in the North Island which will take its geothermal production up to significant levels and also make that manner of renewable production a very significant part of the energy mix in New Zealand. So it is wrong to say that somehow we should take a company’s overseas activities out of the mix when calculating its rate of return to the Crown. That is simply misguided and it shows a further flaw in the thinking that selling a majority stake in our important and profitable power companies and selling the stake of about 80 percent in Air New Zealand is somehow good for the country. 
Just on the case of Meridian I tell the House that the Australian business the Minister referred to was one the company purchased when I was on the board and sold when I was on the board. That resulted in nearly $1 billion worth of value for New Zealand taxpayers and accrued no risk to New Zealand taxpayers. While the business was being held in Australia it meant that we got scale when we were trying to build wind power in both New Zealand and Australia and that we could sell that activity at a profit in an overseas market with no effect on New Zealand taxpayers at all except to make sure they got nearly $1 billion worth of extra revenue in the kitty. That not only was a good deal and a good example of a business doing something successful in Australia which unfortunately for New Zealand businesses is not always the case but also shows the lie inherent in the Minister’s thinking that somehow we should exclude special dividends from the equation when we are looking at the rate of return from State-owned enterprises. The fact is that under Labour there were frequent special dividends. Special dividends are still paid by State-owned enterprises under this Government. The Minister knows that and trying to cook the books to avoid the half a billion dollars this Government got in special dividends only this year from State-owned enterprises in respect of which he would sell a stake that once gone is gone for ever is just absolute folly. 
I will talk about what selling the rest of our power companies would mean in practice. I remember when I was on the board at Meridian and I have to say that it was a very very good board; I learnt a lot from the businessmen and women who sat on that board and who exercised excellent governance skills in the company when I was there. I think the directors’ fees were $50000 a year. At Contact Energy which ran a business of a similar size and with a broadly similarly balanced portfolio of hydro and other generation activities—because they all inherited the old ECNZ set up—the directors’ fees in total in 2010 were $993000 for doing the same job that State-owned enterprise directors do for a fraction of the cost. That is another thing that will happen if these power companies are sold off. The reality is that it will cost a lot more to run them because the private sector which will have a significant stake in them will demand a lot more to participate in governance and probably in management. 
We see this repeated all the way through in overheads executive pay and the general approach to the way in which the business is run. No one should presume that we would have the amount of renewable energy that we now have in New Zealand or indeed that we would have acquired the additional generation capacity and the efficiencies in generation that we have acquired over the last 10 years if most of the system had not been State-owned. Most of those directors sit there every day. They know that the Government thinks it is in the general national interest that there should be more and better generation capacity and that it should generally be renewable. They know that is what the people want they know it is generally what the Government wants and they sometimes take what I will say is more than a commercial approach to make that happen. That is a good thing. We should be pleased that our power companies do that and that they try their best to keep a lid on power price rises. 
If this proposal goes through and if majority stakes are sold or even if significant minority stakes are sold in Mighty River Power in Genesis and in Meridian then we will undoubtedly see attempts to put power prices up significantly. Indeed if we look at the Budget documents we can see that the Government has calculated a higher rate of return on that very assumption once the sale has occurred. The experience with energy privatisation overseas particularly in the United Kingdom is that a country does just get higher prices and greater extravagance and of course it loses for ever the dividend flow that it currently benefits from. The policy is a foolish policy. It is what this Budget absolutely relies upon in order to make the figures work but it is something we should not follow at any cost. 
Hon TIM GROSER (Minister of Trade) 
: 
 The Budget has to be considered not in a vacuum but in the context of the three Budgets that Mr English has presented. To understand where we are trying to steer New Zealand I think we have to have a close appreciation of exactly what the fiscal and structural problems are that the Budget is intended to fix. So it is worth spending just a few minutes rehearsing the context of this Budget to understand where I think we want to go as a country. 
The context of this Budget—the narrative—is now becoming I think a little clearer. By 2004 the froth of the early conditions of the previous Government had been knocked off and the traded sector—that is roughly speaking the competitive part of the sector the thing that creates wealth rather than spends wealth on our behalf—was already in recession. Not a single job had been added in the last 5 years. There was also massive ballooning of private sector debt from around $80 billion or $90 billion in 2000 to about $160 billion or $170 billion in early 2009. Inflation was at 5.1 percent—people have forgotten that—at the end of 2008. We had a massive blowout of core Government spending. From memory it was something like $32 billion in 2000 which had gone up to about $60 billion in 2008; there had been a 50 percent growth in just the last 5 years. The economy had grown by less than 1 percent in each of the previous 3 years prior to our becoming the Government compared with Australia growing at over 3 percent. As we now know New Zealand achieved the remarkable feat of entering into recession—it was the only developed country to be in recession—before the global financial crisis was triggered by the collapse of Lehman Brothers. Not just Budget 2011 but also the previous two Budgets taken in conjunction as a suite are designed to fix those problems. 
I have to say thank heaven for the election. If New Zealand had continued on that trajectory I know exactly where we would be today: we would be in an IMF recovery ward along with other countries that have comparable debt-to-GDP ratios. We proved quite conclusively as the Prime Minister put it that we can spend like a First World nation. Now is the time to prove that we can earn like a First World nation. 
What are we trying to do? First of all we are trying to manage the current fiscal situation against the background of some very severe turbulence coming out of left field. Not only have we had the global financial crisis which was the worst economic recession in the last 70 years and has tested—and let us face it continues to test—many many developed economies but also we have had two massive shocks from these two earthquakes. If anyone thinks this is just an idle comment I tell them to just look at what has happened in the No. 1 export market of New Zealand and the No. 4 export market to New Zealand. I am talking about Australia and Japan. In Japan our fourth-largest export market we have seen exactly the human impact that the dreadful disasters—the nuclear fall-out the tsunami and the earthquake—have created. There has been appalling loss of life but also it has severely impacted on their economy and their production. In case anyone did not notice although the tornados and floods in Australia did not lead to large loss of life—thank goodness—they have resulted in the worst quarterly GDP outcome for Australia in 20 years. 
These extreme events—known as black swans I think in technical literature—happen. They do not happen just in New Zealand; they have happened to two of our closest partners. And they have been an added dimension for us to deal with. Nevertheless this Budget has stuck to the task and has steered New Zealand through these difficulties while addressing the Christchurch problems in a very coordinated and structured way. 
Where are we with this Budget? First of all we have continued to restore some fiscal prudence on New Zealand. Taking account of the past and new measures to restrain the growth of public expenditure we now forecast that we will be back to roughly I think from memory a $700 million deficit by 2013 and to surplus by 2014. This will allow us to start repaying debt which many developed countries with very high debt-to-GDP ratios may not be so favourably placed to do. It will be a remarkable testimony in my opinion to Mr English and his senior colleagues that we have gone through this most difficult situation with some reasonable prospects in sight. 
Nor have we forgotten what I would call the long-term structural agenda. Nothing had been done under Labour to address an outmoded tax system or to reduce tax and incentive-sapping measures. We have had the most important tax reform in 20 years. We now have a situation where in gross terms—not in net terms because of course a fiscally neutral tax package was introduced—two-thirds of the revenue costs went to reducing taxation on people below the average income. So much for the rich mates’ ritual we hear from members on the other side! They simply will not look at the facts. We now have the highly favourable situation where three-quarters of New Zealand taxpayers pay a top marginal rate of 17.5c. To put it round the other way they are actually able to keep 82.5c of every marginal dollar they earn. 
This will take some time to seep through the economic structures of New Zealand before we can see the incentive effects coming through in a very positive way. But one thing is very clear: the advice we received from many sources—not just Treasury—was that if we wanted to do something to create a step change in New Zealand’s economic performance we had to address these tax issues. That is exactly what we have done. 
The structural programme has also advanced on a number of fronts. Education is not just a social policy issue; it is also an economic reality. I think there is a wide understanding in New Zealand that at the upper level of New Zealand educational achievement there is nothing wrong at all with our education system. In fact it is a world-class education system. The people at the bottom of the heap have been underperforming and we know what those statistics tell us. So although we started a programme of addressing some of the structural deficiencies at the tail end of the New Zealand education system through such elementary steps as introducing standards by which parents could make some judgments about whether their children are making progress we are also advanced across a number of areas. As for the suggestion that this might have been a slash-and-burn Budget I tell the House that total education spending will I think reach $12.2 billion this year which is an all-time high. We are a moderate Government doing sensible things in a moderate way and I think we have a lot of support from New Zealand for that approach. 
I will also focus on infrastructure. I recall the Prime Minister making the point a couple of years ago when he said that New Zealand is in a sense a country like a small company with outstanding assets but under-invested in its own future. We have had to ramp up structural investment in our infrastructure. The State will inevitably play a large role in that; we have no ideological problem with that whatsoever. So the State has invested very significant money in what everyone calls—I think completely correctly—the superhighways of the 21st century and this Budget has rolled out another $900 million - plus to complete the next cycle of that investment. 
I have the privilege of going around export companies in New Zealand and company after company always come to me and say what a boon this investment will be to them. One of the things that is becoming clear is that the distinction between manufacturing export companies and service export companies—what we call them—is no longer clear. I went to see a company called FRAMECAD an outstanding New Zealand export company. It is hard to describe what it is. Is it a manufacturing company? Yes. Is it an information technology company? Yes and it sends its CAD designs of framing materials through ultra-fast broadband to machines it has pre-installed in locations. It is companies like that—and sometimes we will not even be able to predict who it will be—that will take advantage of these things. We are making an investment in our future out of trust that this is the right thing to do. 
Finally I will focus on investment in water. I think that that will prove to be an outstanding background for us to exploit all the advantages of these new trade agreements. Thank you. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker. It is a privilege to take a call in this Budget debate. I intend to focus on transport issues. When it comes to transport this Government under Steven Joyce as Minister of Transport is simply on the wrong track. This Government is creating monuments in concrete and asphalt to 1950s-style transport thinking. The roads of national significance—or the roads of significance to National—that dominate the transport budget are memorials to old-fashioned thinking locking Kiwis into cars trucks and an oil-dependent future. 
As Wellington debates an appropriate sign for the airport I would like to propose instead of the “Wellywood” sign a gigantic statue of Steven Joyce near the proposed Basin Reserve flyover in order to remember him the “Colossus of Roads”. 
I intend in this speech to explain the Green Party approach to transport look at the roads of significance to National and discuss the smart alternatives we should be adopting. The transport budget is primarily delivered through the Government policy statement which is currently out in draft form. It is an enormously influential document determining how we will spend more than $38 billion over the next 10 years. 
Firstly I will state the Green approach to transport. We believe that our Government is wasting our scarce national resources on uneconomic motorways and locking us into a car truck and oil-dependent future. I ask where the balance is when for every dollar we spend on walking cycling buses trains and coastal shipping this Government is pouring $7 into building more roads. Walking and cycling come off particularly badly in this Budget receiving less than 1 percent of the total transport budget even though 10 percent of Kiwis cycle or walk to work and would do so even more if it was safer. 
This Budget is massively skewed with $13.7 billion or 39 percent of the total National Land Transport Fund going towards State highways to the detriment of local roads police safety transport planning and public transport infrastructure. It is like investing in a CD store at the dawn of the iPod age. These projects lock us into old ways of getting around and constrain the smart alternatives. 
The Government policy statement allows for an increase of only $90 million in subsidies for public transport services over the next 10 years. Public transport services will receive less than 10 percent of the National Land Transport Fund. This suggests that the Government wants to constrain the high growth we have seen in patronage over the last 10 years. 
There is no joined-up thinking in this transport budget. The Government talks about roads of national significance when it should be looking more broadly at transport corridors of national significance. The Green Party believes in smart transport investments that balance roads with sustainable transport options that will future-proof our transport system so that it is more affordable efficient and versatile. 
Out of Government the Green Party has achieved the electrification of the Auckland rail network we have saved the Overlander train Johnsonville’s trains and Wellington’s iconic trolley buses and now we are working with the Government to roll out the national cycleway. The Greens are not anti-car or anti-road; we love to drive. We are pro transport choice. We do not want to stop all road investment; we just want to stop pouring billions of dollars into white elephant motorways that will make congestion worse. 
The roads of significance to National that dominate the transport spend are expensive. We are talking about $10.7 billion over 10 years and many of the roads are uneconomic under the Government’s own benefit-cost ratios. That is without measuring the true cost: the externalities of climate change obesity and road safety. The OECD report reference to the National Infrastructure Plan shows there is no correlation in New Zealand between motorways and economic growth yet there is a strong positive correlation between investment in other types of local roads and rail. 
Recent research from the United States shows that the economic stimulus spending on public transport there created twice as many jobs per dollar spent than spending on motorways created. We hear from the “Colossus of Roads” Steven Joyce that motorway projects are good for creating jobs. However that makes no sense when to create just a single job costs between half a million dollars and $1 million. Even Don Brash in his latest 2025 task force said of one of the roads of significance to National that there was no evidence that the project would provide a net benefit to the economy. 
Many of these projects are not even needed. For example the Western Link Road which was the community’s preferred option over the Kapiti Expressway or north of Auckland the Campaign for Better Transport’s “Lifesaver Highway” would cost considerably less and do considerably more for road safety in the short term than the $1.7 billion “Holiday Highway”. 
Essentially the National Land Transport Fund is the Minister’s own discretionary fund to play with and make political decisions with and he has rammed through these motorways under a shocking process. That is why I call them roads of significance to National. These roads benefit trucks primarily and are roads of trucking significance. They run through iconic and important communities of national significance and they lock us into an increase in greenhouse gases which are already up by 70 percent since 1990 in the transport sector as if the climate was not of significance. 
The Government is woefully and wilfully ignoring the price of oil. None of the business cases take into account volatile or rising oil prices nor the huge impact that current world prices are having seeing road traffic levels declining over 3 percent over the last year. Unlike many businesses councils and Governments this Government has no plan—or plan to start planning—to reduce our dependence on oil which accounts for 16 percent of our gross domestic product or 99 percent of our transport fuel. 
This huge fortune we are wasting on our motorways is based on a fuel of declining significance. These roads of significance to National will not even help motorists stuck on our crowded roads. Building roads to deal with congestion is like dieting by extending the belt buckles. These roads will increase sprawl significantly in low urban housing density meaning higher infrastructure costs and higher household commuting costs and constraining public transport more akin to the 1950s than the 21st century. 
We are at a turning point. If we keep doing things the way we always did building more motorways and spending the vast majority of the Budget on roads for trucks we will not get a different outcome. We need smart transport solutions. 
Just before Bill English read out his Budget speech I highlighted the major missing piece of the Budget—funding for the central business district rail link—when I tabled my petition signed by thousands of Aucklanders. Building the link would transform the rail network whose patronage grew over 20 percent in the last year. It would unlock the rail network unlock its constrained capacity and transform the central business district. Primarily the rail link would benefit motorists by taking cars off the road massively benefiting the regional economy. 
This Government however is determined to continue the heritage of previous National Governments by thwarting Auckland’s ambition for a central business district rail link. The Government policy statement contained only $370 million or 1 percent of the National Land Transport Fund for building new public transport infrastructure meaning the central business district rail link will stay just a dream. Auckland cannot do it alone given that this Government removed its transport revenue - raising options. The “Colossus of Roads” got his officials to produce a negative review of the business case amazingly identifying only $148 million in benefits whereas I prefer to go by the internationally reviewed and more robust Auckland Council review which showed $3.3 billion in wider economic benefits. This Government is holding Auckland back despite the clear call from the people of Auckland the strong business case and the plain need to get the loop now. 
In Wellington funding was missing for another transformational transport project—the light rail system—to link up the region’s rail network with its southern suburbs. The Greens have been champions for rail in Parliament. We love it because it is efficient better at reducing congestion safer environmentally friendly and lastly economically beneficial. 
This Budget fails to address the affordability of buses and trains to develop a smart strategy to see more Kiwis cycling to encourage car sharing or to promote better urban design. At a time when New Zealand’s Budget deficit is higher than ever we should be investing only in transport projects with strong and proven economic cases like the central business district rail loop or walking and cycling. Steven Joyce has essentially raided the transport pantry and taken all of the money to fund his pet political project—his politically inspired roads of significance to National—in the pursuit of some outdated and misguided vision of economic growth. 
In summary these uneconomic and in many cases unneeded roads of National Party electoral significance and roads of trucking significance rammed through under a terrible process through communities of national significance based on a fuel of declining significance—as if the climate was not of significance—must be stopped. We need real transport leadership and a balanced approach to transport spending but all we have is a monument to the 1950s—a “Colossus of Roads”. 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 I am pleased to take a call and to stand up and support this Budget. I thank the Hon Bill English for the work he has done—and might I say that it was not easy. It has been a hard process to go through this but there is no doubt that this National-led Government has presented a Budget that is about building our future as a country it is about building a stronger economy it is about a stronger workforce it is about a platform for growth and it will make a substantial difference to where we go as a country. It is a responsible approach in these times which are our times and which indeed are a bit tougher. In Vote Social Development I am proud to say we found savings but avoided wholesale cuts to services and to programmes. We have done so through a continued focus on finding efficiencies and getting smarter at what we do how we run it as a business and how we do our business. 
Vote Social Development has a total appropriation of $21.7 billion—one-third of all spend is under that responsibility. In this Budget fiscal constraints meant that we had no new funding. So we have focused that funding and that spending on who needs it most. I am going to talk to members about youth employment children in care parenting support employment assistance the Christchurch rebuild community organisations that have had our support and of course our wonderful superannuitants. On those wonderful superannuitants we are projecting to spend about $9.5 billion in the next financial year—$9.5 billion just on superannuation. On top of that we also project to spend about $288 million in supplementary support to them. That is through disability allowances accommodation supplements and also through special needs grants and special needs loans. 
In Budget 2011 we set aside or reprioritised $250 million for social initiatives. This included of course the $55.2 million that is going into youth employment and a $43.7 million package—and I will talk to members a bit more about those wonderful children in care who need every bit of help they can get. The $55.2 million that has gone into the youth employment package is to help those youth who make up about one-third of our current unemployment benefit numbers. Currently we have about 17100 young people on the unemployment benefit. We all know that they need better lives. We all know that getting them at that age and making sure they have a future and a way forward is one of the best investments we can make as a Government. That is why we have built on what works. So we have evaluated and looked at what has worked and then we have progressed that. 
We have the Skills for Growth programme in which we subsidise an employer who takes on a young person for a minimum of 12 months and attached to that is a whole training and skills growth programme. The young people are attached to an industry training organisation. They are attached to a target industry where the jobs are needed. The intention of that policy is to make sure that those people do not come back on a benefit in their lifetime. That gives them a skill for life real job experience and also that training alongside of it. We think that is pretty exciting and will make a difference. 
We took the very very successful Job Ops youth employment scheme which currently has seen over 11000 young people in work. Those 11000 young people are in work due to the $5000 subsidy for 6 months. The scheme takes those young people in gives them a job for 6 months and most of them stay on for a lot longer. We now have training attached to that scheme so it is now Job Ops with training. That means those young people also having training systems alongside them for those 6 months. It is $13 million but funding places for 3000 young people is certainly a worthwhile spend and one that we have come up with in this Budget. 
Of course we have the Limited Service Volunteers which occasionally gets mixed up with the military-style activity camps and I do not like that. They are very different schemes. The Limited Service Volunteers scheme is for those on the unemployment benefit. It is a 6-week course that is about motivation and self-responsibility and clicking into what young people can do. It gives them those sorts of skills gives them career advice and then follows their progress afterwards. However the military-style activity camps are very very different in that they deal with very serious youth offenders. I am really rapt that the Limited Service Volunteers scheme has come along that we are putting a lot more into it and providing a lot more places. There is ongoing funding for 1500 places a year. 
I turn to community responses. We knew the recession was hitting as we came into Government and we knew there would be an increase in demand for our services that are out there with people working on the ground. However there was a decrease in funding because the foundations and the various philanthropists were not able to give the same amount of money to those services. We wanted to fill that gap. We have spent more than $55 million over the last 2 years on 700 organisations. More than $55 million has been spent on more than 700 organisations. What we really notice though is that those organisations are still feeling that pressure. As we went around and spoke to them they said “It ain’t over yet. We need a bit more help.” I am absolutely delighted that this Budget has put $25 million more into those community organisations. There will be three rounds of funding. It will be available as it is and I know that the funding is much needed. We are getting a fantastic response from the people out there in the community. I love that it is community-led organisations as well. It is people in the community on that forum who are taking these funding applications and deciding who gets them and where they are needed most. 
But I have made no secret that what I am most proud of in this Budget is the assistance we are giving to children in care. These are the children who are removed from their homes because quite frankly an adult has treated them appallingly. At worst the children have been seriously abused or sexually assaulted and in this instance the best is that they have been hideously neglected. These are our children. They are broken they are hurt and we are not doing as well by them as we could. We take about 2200 of these children from their homes each year and we take about 90 babies at birth. Literally a social worker and a policeman or policewoman are waiting outside a delivery room and the baby is taken. What we do with the children is put them into great foster homes and try to work with them to get them the right counselling. In some cases we are doing it well and in others the truth is we are not. 
What we are doing after running a pilot scheme is increasing the Gateway assessments for health and education. It is as simple as asking how we can fix their very complex problems if we do not even know what they are. How can we do what needs to be done with these children when we do not even know what their history is what their needs are and what we can do? There is a full assessment usually led by a paediatrician with an administrator next to them who collects all of the children’s educational history which sometimes can go back quite far. The children are often transitional. They have moved from before-school programmes to after-school programmes to schools because they have been moved around. We are making sure that we are going back and getting as much information as we can. 
Our pilot schemes have told us that 88 percent of those children who come into care have health needs—40 percent or more have mental health needs. Those children are not being seen and they are not getting the services they need. Of the more than 40 percent of children who are seen to have either severe mental or behavioural issues only 7 percent are currently getting assistance through the Child and Adolescent Mental Health Service and that is not good enough. We then had to make sure that we were getting them the services they needed so we put $14.5 million into mental health services. To be quite blunt we can spend so much time arguing about whether something is behavioural or psychological or what has caused the major problems that these children have that we are trying to squeeze them into a gateway that is not there or it is a mental health issue. The mental health people say it is not their problem and the psychologists are saying that the child fits more there and in the meantime this child has grown up and not received the support that he or she most desperately needs. 
So I will build them their own little flexible box and I will direct-purchase what they need without the need of having to slot into those arguments of where they fit. I reckon that is one of the most important things that we can do as a Government. Let us work out what those needs are. Let us make sure we then address them. 
We will also fund early childhood care for those children from the age of 18 months through to 3 years and then of course the 20 free hours’ care clicks in. I say that this is great for the kids because we know that quality early childhood care makes a difference but I equally say that this is about respite care for those wonderful foster parents or grandparents who are raising these children. They have stepped in to look after them. Yes we are funding $2.4 million into Parents Inc. to give support to foster parents and to those grandparents raising grandchildren in our communities up and down this country. They beg us almost on a daily basis for help. They take these children on all through their own means. They live in our very small communities and they live in our larger towns as well. They want help. I am really proud to be giving that help to them. I am proud of this Budget I am proud of what we are doing for those most vulnerable children and I think it will make a difference. Thank you. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 We have just heard from the Minister for Social Development and Employment. It was interesting to hear her final comments in her speech about children. One of the areas where she has disappointed me most is that she has been more about talk than action in her 2½ years as Minister. Although she has said how much she cares about children she does not follow it up with action. I am looking forward to the day when there will be some real action and children in New Zealand will be put at the centre of a Government’s policy. 
I have heard the words “bland” “boring” “no vision” “no plan” “no ideas” and “a Budget for yesterday not tomorrow.” Those are some of the comments that we have heard from around New Zealand on the National Government’s third Budget. I would like to add a few other words to those ones. There has been quite a lot of “creative accounting” in this Budget. There is a fair dose of “dodgy figures” in this Budget. Some very heroic assumptions have been made in this Budget and the whole lot has been mixed up with a very big handful of fairy dust. I believe that the public over many many months have been played like a fiddle in the lead-up to this Budget. The Government has been assisted by the media by commentators and by cheerleaders for National all playing the same tune as we went into this Budget. People were softened up to expect a tough Budget. There would be no new spending; it was a Budget about savings and growth. There would be cuts to projects that were “nice to have” although it has never been defined what “nice to haves” are. It was to be about the unaffordability of the growing deficit this country has. 
We were told week in and week out over and over again that we were borrowing $380 million a week and that it was unsustainable unavoidable and unacceptable. New Zealanders were told that in this Budget they would have to take the pain. They would have to accept the pain they would have to swallow the cuts that were coming and they would have to stop complaining about selling our power companies and selling Air New Zealand because there was no alternative. The poor Government had to do this because it was forced into this position! That was the mantra we heard week in week out. I believe that the public were played like a fiddle. The truth is that the public are being fiddled by National because if we look at National’s Budget we see that it is based on some pretty dodgy figures indeed. They are now emerging. Weeks after the Budget was presented; we are starting to get the true picture of what this Budget actually meant. 
Let us take the first dodgy figure: the need to borrow $380 million a week which is equivalent to $86 having to be borrowed every week for every man woman and child in New Zealand. But we have now discovered something after the Budget was presented and it came out not by the Government being upfront about it. The public has learned that Bill English has been borrowing $100 million more per week than he needed to borrow. But miraculously before the election the Government will not need to borrow so much so good will their management of the economy be. No one would argue that they ought not to borrow when the terms are good but why not be honest and upfront about what they are borrowing and why they are borrowing it? New Zealanders are clever enough to understand if they are told but what was happening had to be uncovered and drawn out. 
The Government used that $380 million per week of borrowing as a way to scare New Zealanders. It made people much more worried than they needed to be. People worried about their own personal situations. They saw their jobs going they saw their partners’ jobs going and they saw prices rising faster than their wages. They saw their food bills power bills petrol costs and rents going up. They could see that the tax cuts that were supposed to help them and the income assistance available were less than the rising prices they were facing. They knew they were not getting compensation in their wages or from those tax cuts so they were very worried about their own situation. Loaded on top of them the Government then made them worry about the position this country was in. It was about to implode because we were borrowing $380 million a week. 
It has been beautifully orchestrated by National members. They were covering up their own economic incompetence. They used the shadow of the Christchurch earthquakes and the Pike River disaster along with alarming Kiwis to set up what I believe is an agenda to push through their old tired policies of the past. It was all about positioning for the election. There is no denying that we have to reduce our Government borrowing in this country. It needs to be tackled and a Labour Government would do that but why not be honest about what we are borrowing? Why not front up to the public of New Zealand and say what money will be spent on? The first step in a recovery plan is to be honest about the situation one faces. We have not had that sort of transparency from this Government. This Government should own up to the fact that it is borrowing for the tax cuts it gave to thousands of well-paid New Zealanders last year. It should stop the fudge about it and stop the fiddle about it. It is a fact: this Government is borrowing to pay for tax cuts for the top income earners in New Zealand. We could not afford those tax cuts but the Government gave them anyway. 
The irony of it is that Government members made changes in this Budget to Working for Families. I believe the changes they made to Working for Families bring them in about $300 million or $400 million which affects middle-income earner families earning up to around $80000 or $90000 per year in joint income. Government members could have been much fairer if they had just lifted the top tax rate a little for those who got the big windfall in the tax cuts last year and it would have brought in the same amount of money. But who did they tackle? Who did they hit? They hit middle-income earners with families to grab money off them but left the high-income earners in this country with their tax cuts and the money in their pockets. There was no fairness in that. 
Let us have a look at some of the fairy dust that Government members sprinkled around at the time of the Budget. Let us look at the jobs they said will be created over the next 4 years. They said we will get 170000 jobs. Was that not the same figure that they promised in the 2010 Budget? I believe it is. In fact if we look at the Budget’s additional information estimates we see that 155000 jobs will come between now and 2015. That is actually 10000 fewer than they had in last year’s Budget. Those jobs will not be out there unless there is a change in this Government’s direction and a proper plan to create those jobs. In fact unemployment has gone up not down. Then we had the fairy dust about how our economy was going to grow by 4 percent every year over the next 4 years. Even Treasury is backing away from that prediction. Guess what? There is more. We can look forward to wage increases of between 4 and 5 percent every year for the next 4 years. Who believes that? The public certainly do not. 
Then we had the doozy of them all: the creative accounting in the Budget. We will be allowed to choose whether we sell our assets. We will get to choose by voting at the next election. But when one looks at the Budget documents one sees that the Government has already cashed up. It has banked the money already over the next 4 years. The Government has sold our assets. It is a con job. There is no choice for New Zealanders. The Government has banked the money from the sale of those assets. 
Then we get to KiwiSaver the other bit of a fiddle that went on. We get to choose whether we want to change KiwiSaver but the Government is already cutting the $10 a week tax credit from New Zealanders from 1 July. This Budget is not about a forward plan; it is about pulling the wool over the eyes of New Zealanders. 
SIMON BRIDGES (National—Tauranga) 
: 
 Since John Key’s campaign before he became Prime Minister in 2008 and since then he has been relentlessly focused on the things that matter. We have been focused on bringing down debt bringing down taxes and really delivering a brighter future for the people of New Zealand. We can contrast that with the Labour Party. We can contrast that with Trevor Mallard for example. We are told that Trevor Mallard is campaign manager for the New Zealand Labour Party. One would think that in that role he would have a lot to do. But we have a party over there that is more focused on sports events than on the campaign. I understand that Trevor Mallard is in serious training for a cycle race. 
Hon Trevor Mallard 
: I haven’t ridden a bike for 3 months. 
SIMON BRIDGES 
: Well on his blog he has challenged a former sickness beneficiary turned blogger to a cycle race. My question to Trevor Mallard is whether that makes him the Sonny Bill Williams of New Zealand politics. Does that make him the Sonny Bill Williams— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I have to leave the Chamber so I cannot take the next call. The answer is that unfortunately I do not quite have the body. 
The ASSISTANT SPEAKER (Eric Roy) 
: That is not a point of order. 
SIMON BRIDGES 
: I agree with the member; he does not have the body. He is not the only one in the Labour Party who it seems is focused more on sporting events than on campaigning on the issues that matter in this country. Take Trevor Mallard’s close colleague Clare Curran. Earlier this week she auditioned to be a franchise rugby team cheerleader. Then we have my old teacher Chris Carter who is not standing for the future Parliament. He is also very much involved in sports. He is training for the New York City Marathon—in New York sadly! 
National is a party that is very much looking at the policies and focusing on the issues that matter. In this current term we have brought down taxes bureaucracy and borrowing. We have continued to do that. Current projections are for 170000 jobs in the next 3 or 4 years and for real wage growth of 4 percent. We can contrast that with a party on the other side—not many of whom are in the Chamber—that wants to put up taxes spend more and borrow money. 
Todd McClay 
: Spend other people’s money. 
SIMON BRIDGES 
: Labour members want to spend other people’s money not their own because of ideologies they learnt about at university which for some of them was a very very long time ago. 
Todd McClay 
: Or when they first came to Parliament. 
SIMON BRIDGES 
: Or when they first came to Parliament which again was a very very long time ago. But we on this side of the House are in the real world. We have delivered a Budget for the times. It is a realistic Budget a Budget we can be proud of and a Budget that builds for the future of this country. 
Hon Rick Barker 
: Even Tau’s going to sleep now. 
SIMON BRIDGES 
: I say to the senior whip on the other side that Labour can be ashamed of its record over the 9 years before we were in Government. Debt as a country was up from about $100 billion— 
Hon Rick Barker 
: Debt was down. 
SIMON BRIDGES 
: The facts do not lie. Debt was up from $100 billion to $170 billion. We know that Dr Cullen by taxing more— 
Carmel Sepuloni 
: Who’s borrowing an additional $100 million a week that they don’t need? Who’s borrowing more than they need? 
Hon Rick Barker 
: Every Budget with a surplus. 
SIMON BRIDGES 
: Labour members do not like it. They do not like the facts. By taxing more Dr Cullen managed to balance his books. But we know he grew the State from 2005 on by about $2.5 billion more each year. That is not a record to be proud of. In fact that is a record to be ashamed of. All the while the real economy in this country—certainly from the end of 2004 onwards—was going backwards. If we take out of the equation the huge ballooning of Government spending and the spending on plasma TVs by the likes of the Opposition spokesman on finance David Cunliffe so he could watch himself on Parliament TV we see that frankly this economy was going backwards. Exports were going backwards. That is a record of shame. Labour left us with a decade of deficits with rising debt year on year for 10 years. 
In this Budget and in the earlier two Budgets we have consolidated our position and have taken off the sharp edges so we have done the opposite. We are moving the country over the next 3 to 4 years—2014 to 2015—back into surplus which will be by the end of a second National term. So we are bringing debt down— 
Hon Maryan Street 
: You’re borrowing more than you need and you’ve given unaffordable tax cuts. 
SIMON BRIDGES 
: Maryan Street says we are borrowing more than we need. Here is the deal: her Government if we were unlucky enough to have one in this country would want to borrow more. 
Hon Members 
: No. 
SIMON BRIDGES 
: Well let us go through it. The Labour Party says “Oh yeah let’s have a research and development tax credit.” When Phil Goff is asked what that will cost he says it is about $800 million which he will take off the farmers. We will get to that. What will it really cost? It will cost about $1.2 billion more than that. 
Hon Maryan Street 
: No Simon you don’t know what our Budget looks like. You don’t know what our policies are yet so stop talking out of a hole in your head. 
SIMON BRIDGES 
: Well the facts do not lie in respect of Labour’s uncosted research and development policy. How will Labour pay for its research and development tax policy? I will tell members: it will do so out of its farmer-hating policies. That is we have on the other side: farmer haters. Labour members want envy taxes. They will take it out of an emissions trading scheme from 2013 I think. 
Hon Maryan Street 
: Make them pay their fair share you mean? Make farmers carry their own weight like the rest of us have to? 
SIMON BRIDGES 
: Actually farmers are people who work very very hard day in and day out. 
Hon Maryan Street 
: They could be a lot more productive if they tried harder. 
SIMON BRIDGES 
: There we go. Maryan Street says that farmers could be a lot more productive if they tried harder. What a slap in the face to hard-working farmers. I hope Federated Farmers pick up on that comment. Maryan Street said that the farmers of this country should try harder and be more productive. They actually are productive. They are a brightline in this economy. 
Members on the other side of the House through their envy politics and taxes want to tax farmers more and take down the good that is in this economy. We do not subscribe to the sorts of policies that would tax farmers more. We do not cost our policies on that. We do not want to put the top tax rates up. Let me tell the House what putting up the top tax rates does. It sends the so-called rich—and let me say that there are not many of them in this country—overseas. They are the doctors the builders and the hard-working people that Ms Street does not seem to like. That would send them overseas. All the while Labour members with their wedge politics want to put minimum wages up. Labour members want to put the people they say they represent out of jobs. 
I say that unlike Labour we want to give this country a fair go but we want to do it through equality of opportunity. We want to do it through getting our debt down paying our own way getting Government finances in order delivering more jobs and investing in public services and infrastructure. Yes we will trim back where we need to because we cannot have the lolly scramble that Carmel Sepuloni wants; we cannot have that any more. Unlike the other side which seems more interested in sporting events—and in Trevor Mallard being the Sonny Bill Williams of New Zealand politics—I think we are a party that is interested in the things that matter in this country. I am proud to be part of this Government. 
CARMEL SEPULONI (Labour) 
: 
 If the $300 million per week that the Government is borrowing for this country was going any way towards alleviating the struggles that New Zealanders are feeling then we could understand it but that money is doing absolutely nothing to do with that. The three things I want to focus on today with regard to the Budget announcements by the National side of the House are first the beneficiary-bashing that has begun under this Government second the impact that the Budget will have on Maori and Pacific young people and third the social implications of the high levels of unemployment that are being brought on by that side of the House. 
I really want to start with the beneficiary bashing. I see that the Government has set aside $40 million for welfare reform and the Minister for Social Development and Employment will be convening a group of seven Ministers to look at the Welfare Working Group’s recommendations. I wonder which Ministers will be on that group and what we as a country have to look forward to. Obviously the Minister for Social Development and Employment will be on that group. She is a solo mother herself who now looks down her nose at other solo mothers and says she got the training incentive allowance but other sole parents do not need it. She says times have changed now so sole parents do not need the same level of support that she had. 
We have a Prime Minister who likes to go around saying he grew up in a State house yet in his own electorate where Labour had planned affordable State housing to be part of the Hobsonville housing development that Government decided that it did not want that in the Prime Minister’s area—that type of housing there or those types of people to be living in that specific area. We also have a Minister of Education who when she first started increased the fines for truancy but who in her own electorate recently refused to fund a school bus that would get kids from a poor rural area to the nearest school. We see it does not make for a very good committee if we look at the Ministers who may possibly be on it. 
We are very concerned on the Labour side of the House about the beneficiary bashing that is taking place. It is a deliberate attempt to shift attention away from the fact that the National side of the House has done absolutely nothing to create jobs. It would rather put the boot into people who are already experiencing hard times and shift the attention away from the fact that this Government has done an abysmal job of leading this country. What we know about New Zealanders—and I think this is something that we need to remind that side of the House about—is that generally Kiwis band together when times are tough. We are compassionate as New Zealanders. We lend our neighbours a hand when they are experiencing difficulties. We do not put the boot in when they are down which is exactly what that side of the House is attempting to do in its beneficiary bashing. 
Hon Tau Henare 
: Where’s this member standing? 
CARMEL SEPULONI 
: I met a solo mother of two children on the weekend in west Auckland I tell Tau Henare. She is a solo mother whose husband left her last year. He left her last year with two kids and one on the way. When I met her on the weekend she told me that— 
Hon Tau Henare 
: Whatever. 
CARMEL SEPULONI 
: —I know Mr Henare does not care—things are so bad that she cannot afford to keep the third baby. She will be adopting that third child out because she cannot afford to look after another one. Yet members on that side of the House like to put a stigma on sole parents as if it is their fault and as if they are bludging off the system and deserve to have everything taken away from them. The woman I spoke to is struggling so much that she would put her third child up for adoption because she cannot afford to look after it. I blame members opposite for that I say to Mr Henare. 
When we look at the beneficiary bashing that is taking place we see people like a mother who came in the other day with her 18-year-old son a mother who is fearful that her son may commit suicide. He is on the unemployment benefit but has a sickness that I will not go into detail about. He has tried time and time again to get a job and cannot get one. His mother says she sees him becoming more and more depressed. She is fearful that he may actually kill himself because of depression over the fact that he cannot find employment. That side of the House has done nothing to create jobs for boys like that one. That side of the House continues to put the boot into people like that 18-year-old who is now considering suicide. 
Talking about the boot we may as well go on to boot camps. Earlier the Minister for Social Development and Employment said the $25 million that is going into these limited service training courses will be of benefit with regard to getting those young people motivated into employment and into training. She says they are not military-style courses yet they are run by our Defence Force. I cannot understand how they cannot be military-style when the Defence Force is running them. However $25 million is going into these military-style training courses which are prefaced on the idea that our young people have no motivation or discipline to work or to study when the reality is that they are not being given the opportunities to work or study. There is no lack of discipline or motivation; there is a lack of opportunities because that Government has failed to create them for those young people. 
I am fearful for the young Maori and Pacific people who are neither in employment nor in education because in 25 years’ time they will make up over 50 percent of the New Zealand population. They will make up over 50 percent of the workforce and we will be reliant on them to move our country forward. People like—hmm let me think—Brash Banks and all those people who continue to put down and pull down equity measures and who continue to attack our young Maori and Pacific women and men will be reliant on those very same young Maori and Pacific women and men to support this country yet that Government has done absolutely nothing to invest in them. 
We see cuts to early childhood education. I do not care what the Minister of Education says; this Government has cut the money provided for early childhood education. That as Professor Gluckman has said is where the investment needs to be made yet members opposite have no understanding of the evidence and of the importance of that investment for us and our future as a country. Instead we see Maori and Pacific young people continuing to be thrown on the scrap heap and then when they cannot find employment or get into training they are attacked by that side of the House as being bludgers on the State when that is simply not the case. 
I am concerned about the social implications of the high levels of unemployment that we face at the moment. Recently I was at a meeting with west Auckland lawyers—I think some of them showed up at a meeting that Tau Henare held recently and they were not impressed—and one of the senior lawyers said that during tough economic times a family lawyer will not go without work. Those family lawyers talked about the fact that because the Government is failing to address the needs of people we face such tough economic times that family lawyers are seeing increased cases of marital splits and domestic violence. All of those things are a result of what the Government has or has not been doing. 
I am concerned about the social implications of the high level of unemployment and the poverty that we face. I was a child and a teen during the 1990s. I had two parents who lost their jobs in the 1990s and I have been a single mother so I know how difficult that is. But I have never ever seen the situation as hard as it is now. I know of parents who cannot afford to put food on the table for their kids. I know of a mother who cannot even afford to keep her third child and who is adopting her child out because of that. Some people coming through our office are sleeping under bridges or in cars because on top of everything else there is a housing crisis that members opposite have failed to address. Those members are running our country into the mud. We need to make sure as a country that on 26 November they are not allowed to continue in Government because the situation will only get worse. We are looking at repercussions that will continue for decades if that Government is re-elected on 26 November. Thank goodness it will not be. 
Hon TAU HENARE (National) 
: 
 There is a song by that famous rock and roll band AC/DC called “Back in Black”. I tell members that the Budget we have just been given will put us back in black by 2014. By 2014 we will be back in black. Today somebody referred to Labour as being petty and pathetic. I have to agree with whoever said that— 
Hon Maurice Williamson 
: That’s just their good points. 
Hon TAU HENARE 
: That was just the two good points of that party. All those members could moan about were BMWs and the cost of a paint job and a few curtains. The BMWs were actually bought and signed off by none other than the Administrator of the United Nations Development Programme Helen Clark. But there was no talk of how good it will be with 170000 new jobs over the next 4 years. Nobody stood up and thanked Mr English very much not for creating 170000 jobs but for creating the conditions so that employers can get out there and start employing the unemployed. Today I heard the Governor of the Reserve Bank— 
Hon Member 
: Who? 
Hon TAU HENARE 
: That is what I expect from members of the Labour Party. That member asked who the Governor of the Reserve Bank is. All members opposite do is hate farmers but farmers are the backbone of this country. They still produce 30-odd percent of our economy and we should always stand up and thank them. 
This is the third Budget by the Hon Bill English. In 2009 we helped New Zealanders through the recession. We turned round the forecast of ever-rising debt. In 2010 we built the platform for growth savings and investments. In 2010— 
Carmel Sepuloni 
: Read the line again Tau. 
Hon TAU HENARE 
: I will get back to that member very shortly. In 2010 we made the biggest tax reform in 25 years. In 2011 we will have a faster path to reach surplus we will have faster growth and we will rebuild New Zealand’s second-largest city Christchurch. We will have done that all in the space of 3 years. 
This Government’s management over the last 3 years has been great. Oh here he is. Here comes the walking wounded “Mr Sonny Bill”. That is right. I say to him: “Have a seat; we’ll wait for 5 minutes while you sit down.” 
Why do Labour members hate the producers of wealth in this country? Is it because of jealousy? Last week I was down in Queenstown in Cromwell and in Alexandra. Queenstown is not a place I usually go to but I talked to some people on the ground. This is what I found out. They know that things are hard at the moment. They know that things are tough they know that things need a good management team and they know they have the team to do the job. I was touched by some of the words from those people in the south. 
I turn now to Auckland City. 
Todd McClay 
: Get on to Carmel Sepuloni. 
Hon TAU HENARE 
: She will be in there somewhere. I want to talk about Auckland City and how I see that city as being the engine room of New Zealand. I see it as the engine room of our economy. But there is something going on in west Auckland that is an absolute outrage. I have not heard one Labour member from the west talk about their so-called constituents. I know that we have a member of Parliament who does not even bother to turn up for work and that is an outrage too. It is an abject outrage. 
Simon Bridges 
: Are you talking about Carmel Sepuloni? 
Hon TAU HENARE 
: No I am not talking about Carmel Sepuloni or Phil Twyford but I will soon. My message to Len Brown Mayor of Auckland City is this: stop bleeding west Auckland dry. The Auckland City Council had the chance to bring in a rating system for all Aucklanders. 
Hon Trevor Mallard 
: Rodney promised not to. 
Hon TAU HENARE 
: I say this to “Mr Crippled” on the other side: Rodney Hide put together— 
Catherine Delahunty 
: I raise a point of order Mr Speaker. I am offended by people of any side of this House being referred to as cripples or people with disabilities being referred to as cripples or people with any kind of sports injury being referred to as cripples. It is no longer a contemporary parlance that is acceptable. 
Mr DEPUTY SPEAKER 
: I hear the member. I think it was done in jest. I looked at the member who was targeted and he was not responding in a way that he could have. But I hear what the member says and I just remind members that when we are in the House there is the requirement to address people by their names. I ask that we respect that point. 
Hon TAU HENARE 
: I apologise to the member. On average west Auckland businesses pay 40 percent more than anybody else in Auckland City and that is a constitutional outrage. 
I tell members that we played the game out in west Auckland. We went to see Len Brown. We made a submission. The businesses made a submission to the Auckland City Council and the council threw its hands up because its members are all lefties; they do not know what to do. They threw their hands up and said there was nothing they could do. Well the legislation that was put through under the stewardship of the Hon Rodney Hide allows them to make a change. But they have said they will not do it. 
Here is the thing: it is not as if businesses in west Auckland do not want to pay any rates; they do. They want to pay their fair share. But what they are being asked to do is an abject disgrace on Auckland City Council. Those businesses pay 40 percent more than anybody else in Auckland City. Do members know what effect that has on businesses in west Auckland? They are not in a position to pay for extra staff when times are tough. When times are tough nobody from the Auckland City Council and nobody from Len Brown’s office comes out and says that they will cut those businesses some slack for the next 3 years. No they expect businesses out in west Auckland to pay another 3.9 percent on top of the 40 percent extra they are paying in rates. 
I have just a little bit to say on Carmel Sepuloni and the other guy out in west Auckland—I forget his name. It would have been all right if Labour had a home-grown candidate but out of 180000 people in west Auckland it could come up only with somebody from Taranaki and somebody from—in fact I do not know where he is from because he has been all over. 
Simon Bridges 
: He’s from Herne Bay isn’t he? 
Hon TAU HENARE 
: No he is not in Herne Bay; that is the other west Auckland Labour member of Parliament. There are three seats in west Auckland. David Cunliffe is not from west Auckland. Carmel Sepuloni is not from west Auckland— 
Carmel Sepuloni 
: Taupo! 
Hon TAU HENARE 
: The member says “Taupo”. For goodness’ sake I am from South Auckland—25 years ago. I moved into the city and did the hard yards before I got into politics. It is time for west Aucklanders to think very seriously about the sort of representation we have had out of the Labour Party. It has amounted to nothing more than a slogan that west Auckland is an eco-city. That will change on 26 November when I come back to this House and I am the National member for Te Atatu. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 That speech was made by the former New Zealand First member for Northern Maori the former Mauri Pacific member for Te Tai Tokerau and now the National Party candidate—he has failed three times—for Te Atatu. He said he did the hard yards. 
Hon Tau Henare 
: That’s right. 
Hon TREVOR MALLARD 
: That member has never done hard yards in his life. He has never done hard yards. The hardest job he has ever done is lifting his arm to put on his Dirty Dog sunglasses. He uses his drinking action to put on his glasses—lifting his arm a little bit further than his mouth. That is the hardest work he has ever done in his life. 
He complained about rates in west Auckland. They could have gone down if Rodney Hide had got the legislation right. If the legislation that Tau Henare voted for worked it would have been all right for his constituents. What did we hear? The member did not even bother reading the legislation he voted for much less doing anything about it or making representations. 
I want to make a few points about the Budget. The first is that frankly it is disappointing. I thought that in Bill English’s third attempt—or is it his fourth attempt; I cannot remember whether it was Birch or English who did the last one for the last National Government—he would present something with some sort of plan in it. But unfortunately this Budget had nothing that looked like a plan whatsoever. It was ad hoc. It had a number of arrangements in it that would not be allowed under a prudent Minister of Finance like for example Dr Cullen. Even Bill Birch would not have put together the sorts of arrangements that Bill English has put together and called a Budget. For example I refer to the inclusion in this Budget of the sale of the State-owned enterprises over a 4-year period. I refer to the absence of money for the overseas advisers who apparently the Minister is lining up to sell the State-owned enterprises to the Chinese—lining up to work as consultants on it. I refer to the money that the Minister is proposing go to Featherston Street—about $300 million—to be spent on selling those State-owned enterprises. I refer to the lack of dividends from the State-owned enterprises. When we sell something the dividend flow stops and that should be taken into account. We cannot take in the money from the receipts as the Minister has done without showing the cost of the sales and the dividends forgone but that is what he has done. 
Bill Birch would not have fudged the figures as to the borrowing. Almost certainly Bill Birch would not have borrowed more than was necessary at a particular time. Bill Birch would not have speculated using Kiwi workers’ jobs on a change in interest rates. Bill English is borrowing today because he thinks he knows better than the people in Tokyo Berlin Geneva and New York what is going to happen to international interest rates. We know that Bill English has sitting beside him someone who played around quite a lot in the foreign exchange market and might know quite a lot about short-term positions but the message we have always had since the time of Muldoon is that one does not gamble in the foreign exchange and interest rate markets. That is what this Minister has done. I do not know how much higher the New Zealand dollar is as a result of that. I do not know whether it is 1c 2c or 5c but there is a view that each of those cents is worth at least 10000 jobs to Kiwis. I want to know why that Minister is keeping the exchange rate artificially high in the way that he is costing Kiwis jobs. He said and the Prime Minister said right at the beginning of their time in Government that their priority was giving Kiwis jobs. 
In the same way I ask why he and his Associate Minister of Finance Steven Joyce are prepared to idly stand by and watch New Zealand jobs be transferred from the Hillside workshops to China. Why do they not take into account the cost to New Zealand of that? Why do they not take into account the number of Kiwis who are made unemployed? Why do they not take into account the tax that would be paid in New Zealand if those jobs were here? Why do they not take into account the apprenticeships that would be created in New Zealand if those jobs were here and the training was done? That Minister and Steven Joyce specifically told the KiwiRail board not to take those things into account but to take—and I am an accountant—a narrow accounting view rather than an economic or socio-economic view of the value of that work. 
Hon Tau Henare 
: He was a teacher. 
Hon TREVOR MALLARD 
: Actually the taxpayer pays more I say to Mr Henare—the taxpayer pays more. As well as paying for the railway wagons we do not get the tax we do not get the apprentices and we pay unemployment benefits to the people who are dismissed. We pay more as a result of sending those jobs to China but that is something that Tau Henare and Bill English support. It is something they support and I think that is very very sad. 
Having said that this Budget does not even do the job the National members said it would do. They said they would attack the deficit and they said they would close the gap but what does this legislation do? It funds a $16.7 billion deficit. The Minister has got it up to a record level and he has got it to that level because he has managed to do what I thought was probably economically impossible: he has attempted to stimulate the economy with massive tax reductions aimed at people like the Prime Minister who get a tax drop of over $1000 but at the same time he has run the economy down. Normally the perceived wisdom is that if one gives tax cuts the economy will be stimulated. What that Minister has managed to do is at the same time give tax cuts and deflate the economy—to have the sort of growth that is almost unprecedented at the moment within the OECD. One has to go to places like Spain Greece or Iceland to find a country that has a plan that is so bad that it is deflating in this way. 
We know now from feedback that has come that there is a certain amount of boredom on the part of the Prime Minister that he is feeling particularly— 
Hon Maryan Street 
: Tired of the job. 
Hon TREVOR MALLARD 
: He is feeling a bit tired and a bit emotionally strained by it. There have been a few hard decisions to make. Even on this side we thought we would get some sort of leadership from a Budget that had a plan in it. We have seen nothing of that. We have heard irrigation schemes announced but not put into the Budget. We have had Telecom subsidies— 
Jo Goodhew 
: $35 million is in there. 
Hon TREVOR MALLARD 
: Oh $35 million of the $400 million is in there. I thank the member very much. She has just told us that $365 million of hidden subsidy to farmers is not in the Budget. I thank the member for making that clear. 
What the Labour Party stands for is a fair Budget. People should pay their tax and bludgers at both ends will be hit when there is a Labour Government. Beneficiaries who blatantly bludge will be hit and I make it clear that the bludgers like the “Prime Bludger”—the leader of the National Party the person who got a $1000 a week tax cut the sort of person who hides his income in trusts— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member but his time has expired. 
Hon BILL ENGLISH (Minister of Finance) 
: 
 After almost 14 hours of debate what is striking is the enormous gap between the Opposition and the people of New Zealand in their understanding of the Budget—an enormous gap. The general public have at worst shrugged their shoulders and said that something had to happen. They are looking forward with some confidence not just to the Rugby World Cup but to the prospect that after a number of years where they have not had much in the way of wage increases and where at times they have been concerned about their job security we will have an economy that picks up speed moderately but definitely. It will demonstrate to them that they have weathered a New Zealand recession induced by the previous Labour Government and its bad policies followed by a global recession and come through the other side of it with sound and positive prospects. 
The debate I think has shown the depth of the disarray of the Labour Party. I do not think it has hit rock-bottom yet. I know it looks like rock-bottom. It looks like it could not get much worse but it will—it will. It will not turn round until Labour apologises to the New Zealand public. It will not turn round until those members roll out of bed one morning and say to themselves that the New Zealand voters were right to kick them out. How many Labour MPs do members think believe that the result of the 2008 election was the right result for New Zealand? Not one. 
Hon Tau Henare 
: Stuart Nash. 
Hon BILL ENGLISH 
: Has he apologised? 
Hon Tau Henare 
: He has apologised. 
Hon BILL ENGLISH 
: Well is that not good? What a smart young man. He is widely regarded as a smart young man around the building I understand—a bit of a mover. But until they apologise— 
Hon Paula Bennett 
: Chris Carter? 
Hon BILL ENGLISH 
: No he will never apologise. He never will. At least he has realised that being in the Labour Party is bad even for his image—even for his image being in the Labour Party is a bad look. So he has got out. 
But no Labour members need to apologise first for the damage that they wreaked on the New Zealand economy. Thousands of people lost their jobs because of bad economic management. People’s incomes and well-being were reliant on a speculative economy driven by the fuel of borrowed money. That was actually Labour’s contribution to wealth in New Zealand. So those members have to apologise for that. Then they have to apologise for getting so out of touch with New Zealand voters that they forgot that the economy matters to voters. Labour was chucked out because its members thought that the things that mattered to Labour mattered to New Zealand. And they still do. They still think that the things that matter to the Labour Party in Parliament—which is dominated by student politicians and which is increasingly behaving like the executive of some worn-out student union—matter to New Zealand. The reason we know that is that those members keep wheeling out the same old stuff that they said when they were in Government. 
Chris Tremain 
: And filibustering on a bill for students. 
Hon BILL ENGLISH 
: Well that is what proves it actually. There is the one thing they have been really motivated about in this whole Parliament. I know that it matters to New Zealand because it fills the halls in Balclutha—I can tell the House that! If a speaker goes to west Auckland to campaign on voluntary student union membership even Tau Henare could get a crowd! The only thing that really matters to Labour members is to stop student union membership becoming voluntary. It is the only area where they have shown any focus any organisation any backbone or any leadership—from the real leader of the Labour caucus Trevor Mallard. And there is that rising star—what is his name—from Wellington Central; I cannot remember his name. All I know is that I used to think that Ruth Dyson was a hopeless health spokesperson but I have changed my mind because he has managed something that is almost impossible—that is to make Ruth Dyson look right on to it when it comes to health. He has succeeded. We will wait for “Stuart Little”—yes—“Andrew Nash” who plans to win the Napier seat does he? So the Labour Party has not hit rock-bottom yet. 
Hon Rick Barker 
: I raise a point of order Mr Speaker. I know these debates are to be free-ranging and that people like to have good humour and so on. But— 
Melissa Lee 
: I can’t hear. 
Hon Rick Barker 
: If the member has a problem she should take a point of order. 
Hon Members 
: We can’t hear. 
Mr DEPUTY SPEAKER 
: Just allow the member to speak. 
Hon Rick Barker 
: We are entitled to have a free-ranging debate but members are to be addressed respectfully and the way in which the member speaking addressed Stuart Nash was not in accordance with the Standing Orders. I ask him to withdraw and apologise. 
Mr DEPUTY SPEAKER 
: I just ask that there be some decorum and respect for the Standing Orders. This came up earlier in the debate. 
Hon BILL ENGLISH 
: The Budget debate demonstrates that until Labour members apologise no one will listen to them. 
Simon Bridges 
: So say sorry. 
Hon BILL ENGLISH 
: Until they say sorry to the country for all the trouble they have put us through— 
Carmel Sepuloni 
: Say sorry for what? 
Hon BILL ENGLISH 
: That is it— “sorry for what?”. I rest my case. I could not have put it better myself. 
This Government has had three Budgets and one plan. That plan is to rebalance the economy: to move away from excessive consumption and borrowing and move towards exports investment and savings. There is a very simple reason for that; it is pragmatic as this Government is under the leadership of the Hon John Key. New Zealanders will not be able to grow their incomes in the next 10 years from increased house prices and bigger Government spending because the world will not lend us the money to do it—full stop. That is it. Just about everyone in New Zealand knows that except Labour members so it cannot happen. We cannot indulge in wishful thinking here. The world will not lend us that money because we are one of the most highly indebted countries in the developed world. We are up there with Spain and Portugal. So we will have to earn it. That is why this Government over the last three Budgets has put in place the building blocks of better economic performance for the future at the same time as it has supported this economy through the recession. 
I will remind the House of a few of those: in 2009 we locked in one of the largest infrastructure investment programmes the country has seen in generations. And we have stuck to it despite the recession. It is long-term beneficial to people and the economy and the next bit is broadband. In the last Budget we did a tax switch. We increased taxes on spending and property and cut taxes on earnings savings and investment—the only thing that Labour had to say was that it wanted to put income taxes back up—which has changed the incentives in the economy and pushed us in the direction that New Zealand is already going. Then in this Budget we got the Government’s books under control and set out to lift national savings. 
The reason why the Government has been able to retain the support of New Zealanders through this difficult time is that we are simply pushing in the direction they are already going. New Zealanders have been admirably resilient through this recession. We have not had a national whinge-fest. They have rolled up their sleeves and got on with the job and that is what the National Government is doing. We are doing what New Zealanders do. We are being careful with their spending; they did that 2 or 3 years ago. We want to pull our borrowing back because they know and we know that too much of it is a bad thing. That is why we have so much confidence in the future. It is partly because the trading nations of the Asia-Pacific region want to pay more for more of our goods—that is very promising for the next 5 to 10 years. But the deeper reason for our confidence is that resilience that New Zealand has shown. 
I am proud to be part of a party that over the last two decades has backed New Zealand’s transition into being a small open flexible globally focused economy and now New Zealand is getting good at it. That is why New Zealanders have not complained about this recession and that is why they have strongly— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member. His time has expired. Members this debate has concluded. The question is that the amendment in the name of the Hon Phil Goff be agreed to. 
A party vote was called for on the question  
That the words after “That” be omitted and the following substituted: “this House has no confidence in the National Government led by John Key which has borrowed heavily and created a record deficit of $16.7 billion; has no plan and no vision to improve New Zealand’s economic performance; has broken its promises not to cut entitlements to KiwiSaver and working for families; has made cuts that hurt but will not solve New Zealand’s economic difficulties; and has failed to act fairly in the interest of all New Zealanders.” 
Ayes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Noes 67 
New Zealand National 58; ACT New Zealand 5; Maori Party 3; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That the Appropriation (2011/12 Estimates) Bill be now read a second time. 
Ayes 67 
New Zealand National 58; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Bill read a second time.