Budget Debate 
Budget Debate 
[Volume:663;Page:11442] 
Budget Debate 
Debate resumed from 27 May on the Appropriation (2010/11 Estimates) Bill. 
Hon PANSY WONG (Minister for Ethnic Affairs) 
: 
 This morning I was at the Wellington Fathers’ Breakfast with 280 fathers to celebrate families and the important role of fathers. I went there as the Minister of Women’s Affairs to show that women support men and vice versa and that families are important. This was what the Minister of Finance had in mind when he constructed the 2010 Budget—a Budget for the family and for future generations. I say well done and congratulations to the Minister of Finance the Hon Bill English on delivering a Budget for the many not for the few. 
This is a Budget that rewards hard work. Seventy-three percent of income earners will face an income tax rate of 17.5 percent or less. Two-thirds of the tax cuts in the Budget apply to people on incomes below $48000 a year. Compensation will be provided to superannuitants and to Working for Families recipients to compensate them for the 2.02 percent increase to GST. This is a Budget that strengthens our economy with $321 million being invested over 4 years in research innovation and commercialisation. Investment in ultra-fast broadband KiwiRail and transport infrastructure will continue. 
I ask what the response to this well-thought-out Budget has been from the Labour Opposition. The answer is the Hon Pete Hodgson. He is on a daily mission on taxpayer-funded time to apparently google our Prime Minister a self-made successful Prime Minister who was brought up by a solo mother in a State house. He is a self-made successful man who gave up his overseas business to come back to New Zealand because he wanted to ensure that the younger generation of New Zealanders would have the same opportunity. 
So if the answer from the Labour Opposition to the National-led Government’s Budget is the Hon Pete Hodgson the question beckons as to who else can lead a debate. Some people may have believed the Hon David Cunliffe who believes that he himself is the most competent member of the Labour bench to be the answer for Labour. However today when he asked a question he showed himself up. He made an assumption about the tax calculator which was set up to help individuals to check out what their net income position would be after the tax cut. He said that inflation would have to be factored into that tax calculator but he absolutely refused to accept that New Zealanders may earn more or that competition may bring prices down. So here is a one-eyed Labour finance spokesperson. 
I ask who else there is. Some may ask what happened to the invisible Phil Goff the Labour leader and the Leader of the Opposition. Well most New Zealanders may have forgotten by now that a week before the real Budget the Hon Phil Goff delivered an alternative budget. In light of the Labour alternative he delivered we asked whether he would reverse the tax cut. The answer he gave was “maybe”. We asked whether he would reverse the GST increase. The answer apparently was “maybe”. We asked whether he would exempt “healthy food” from the GST regime. The answer was “maybe”. Well maybe the Hon Phil Goff will be the Leader of the Opposition by election time next year. Who knows? 
New Zealanders breathed a sigh of relief that our Prime Minister backs the Minister of Finance in the delivery of a Budget that contains no “maybes” and lays out a clear path for a brighter future for our country. Everyone in the town hall this morning was very impressed by the five speakers including our Prime Minister. I will give a snapshot of one of the incidents that the Prime Minister related to the 280 fathers there in order to show his style of being a father. He talked about turning down a photo opportunity to open a baseball match that his son was competing in because he said the day belonged to Max his son. Our Prime Minister is happy and content to sit on the side watching and cheering as a father rather than to be there as Prime Minister. He is backing his son and he is not backing just his own children; he is backing the younger generation of New Zealand. 
We all know individual well-being— 
Sue Moroney 
: What a hero! I do that every weekend. 
Hon PANSY WONG 
: It is quite interesting that every time we talk about our popular Prime Minister it upsets Labour members so much. I ask them to get over it. He happens to be a successful generous man and to have a sunny personality. It is fantastic that he is the leader of our country. 
Hon Clayton Cosgrove 
: I can’t hear you Pansy! Speak up Pansy—I can’t hear you! 
Hon PANSY WONG 
: The Hon Clayton Cosgrove has so little to say when he faces up to our capable Minister of Police the Hon Judith Collins. Next time that member might want to speak up when he asks a proper question to our Minister of Police. 
We know that individual well-being is enhanced when people are surrounded by strong families. Cohesive communities are also enhanced by strong families. Strong families and communities lead to a harmonious and peaceful society. We need to support our families. Our families in New Zealand care for each other. I want to acknowledge that some of our families in the community face more challenges than others and therefore as the Associate Minister for Disability Issues I acknowledge the courage and the spirit of self-reliance shown by members of our disabled communities and their families. The motto of our disabled community is “Nothing about us without us”. I was so proud to take part in New Zealand Sign Language Week which was organised by the National Foundation for the Deaf. It was also humbling to attend the fund-raising appeal of the Royal New Zealand Foundation of the Blind which is raising money for a digital talking library. 
One of the wishes of disabled people is to feel included and respected and to have opportunities to work. This Budget will deliver that. It provides $3 million for a public awareness campaign to change attitudes and behaviours that limit the opportunities for our disabled people. The Budget provides $1.5 million to help promote design standards that will make homes accessible for a person’s lifetime. We have also set aside $93 million for disability services over the next 4 years in the health services area and in the community support services area in order to support independent living. We have set aside $2.7 million for respite care. 
Society is judged by the way it looks after the disadvantaged and this National-led Government makes us all feel proud of having a society that watches out for its disabled community. 
ALLAN PEACHEY (National—Tamaki) 
: 
 On 20 May this year the Minister of Finance delivered for the Government the most far-reaching significant Budget in the last 20 or so years. It is a Budget that will impact on this country for many years ahead. Then for a very slight moment in time the nation paused and there was a collective silence—and “collective” is one word that Labour members understand; it is part of the socialist blight that affects their thinking. For a collective moment there was silence and then as the Leader of the Opposition began to speak the nation collapsed into laughter because that leader who incidentally had not asked the Prime Minister or the Minister of Finance a question on the Budget until 1 June—today—asked not about a matter of fiscal substance no it was all about the cycleway. 
Let us reflect for a moment on what it is that the Leader of the Opposition and the Labour Party do not have confidence in. They claim not to have confidence in tax reform—the very cornerstone of this Budget. The objective of the Government with this Budget and with the tax reform package is to encourage saving and productive investment. It is to ensure that the tax system finally rewards effort it is to make sure that the tax system is fairer and that it is aimed to attract and retain skilled people. How can Labour not have confidence in a Budget and in a Government that has those objectives? 
Let us have a look at the tax changes for a moment. On incomes up to $14000 the tax rate is cut from 12.5 percent to 10.5 percent. How can the Labour Party not have confidence in that? On income between $14001 and $48000 the tax rate is down from 21 percent to 17.5 percent. How can it be that 250000 New Zealanders on or close to the average wage in the $40000 to $48000 bracket have had in the 18 months of this Government their income tax nearly halved? How can the Labour Party not have confidence in that sort of decision by a Government? 
I hope the list member Carol Beaumont takes her colleagues aside and has a word with them. Ms Beaumont has spent some time in the Glen Innes area of the Tamaki electorate which I have been elected to represent. She will be getting the message which she must convey to her colleagues that the people in those income brackets who used to vote Labour without even thinking about it are no longer interested. The old Labour Party constituency has worked out that the Labour politicians of today have absolutely no interest in their welfare and absolutely no interest in providing them with an opportunity to get ahead. That is where the Labour Party with its vote of no confidence in this Budget has failed its old support base. The list member Ms Beaumont knows that. She has been told that on the streets of the electorate that I represent in this House. It is incumbent upon her to deliver that message to her caucus colleagues. 
Tax on incomes between $48001 and $70000 has been cut from 33 percent to 30 percent and tax on incomes over $70000 is down to 33 percent. I can understand why the Labour Party does not have confidence in that move. The House just has to go back to 1999 to remember how quickly Trevor Mallard and his mates moved to raise the tax rate up to 39 percent. There was no justifiable fiscal or economic reason for that Government to do that. It was sheer vindictive punitive action against people who worked hard and made a success of their lives. That is all it was and it is a tragedy that we have had to come all this way to a Budget in 2010 10 years later before a Government has had the opportunity to redress the balance. 
So we come back to the basic question. What is it that the Labour Party does not have confidence in? It does not it appears have confidence in the ability the commitment and the dedication of New Zealanders to make good choices for themselves with the money that is left in their hands. Let us never forget that taxation is all about denying choice to the people who earn the money and the more that the socialists take from the people the less choice they leave them. 
Let us reflect for a moment on the impact this Budget will have on the homeownership ambitions of our young people. Banks decide whether they will lend on the ability of the potential borrower to repay the loan and service the debt. That is how those decisions are made. So the more money that a Government leaves in the pockets of a young couple the more opportunity that couple has to go to the bank and raise a mortgage to purchase a house. It begs another question: why does the Labour Party not want young New Zealanders to have the ability to own their own homes? The answer is simple: the Labour Party depends on keeping people down and denying them choice and opportunity—denying them the chance to get ahead. 
Moana Mackey 
: That’s a great story grandpa. 
ALLAN PEACHEY 
: Let me just for the moment move to the area of health. There have been major significant increases in health spending. The member who called me grandpa will understand that I am having trouble reading my notes because the old eyesight is not what it used to be. But what I can see from what I have in front of me is a very significant increase in health spending. I would like to take one example of that—an example that is very personal to me. It is now easier and quicker to get treatment for cancer than it has ever been in New Zealand and that is because of the work of this Government this Minister of Finance and this Minister of Health putting the resources where people really need them. 
The same applies to education. There has been a significant increase in expenditure and the great thing that came out of this Budget unlike Labour Budgets was that that increase does not go towards building a huge bureaucracy it is going into things like an increase in the operational grants to schools. I suggest that before Labour members finally put their names to a vote of no confidence in this Budget they should go and talk to a few of the boards of trustees and principals in their electorates. They will get the message that the increase those boards and principals have been given is what they want. I commend the Budget to the House. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Members on this side of the House will be voting no confidence in this Budget for a number of reasons. As I said in previous speeches the day Mark Bryers a multimillionaire and the biggest crook in Blue Chip earning over a million dollars a year got his 75 hours community service John Key gave him a $1000 a week tax cut. Another reason Labour members have no confidence in the Budget is that on the same day as that people on the average wage became $30 a week worse off in real terms. After they got their tax cut it was negated by GST and by the big elephant in the room which is 5.9 percent inflation. 
I say to Mr Peachey that the other reason why we are voting for a no-confidence motion and he might want to reflect on it is that 56 percent of his electorate in Tamaki which he is so proud of—presumably the 56 percent he does not want to represent—earn $40000 or less and are therefore thanks to him and his vote of confidence $30 to $50 per week worse off. But his mates on the other side of the Tamaki electorate on a million bucks a year and more get $1000 a week. That man over there talked about the vindictiveness—that is the term he used—of tax increases. Well I say to Mr Peachey that if it is vindictive to raise revenue from the people to fund health expenditure education expenditure and superannuation expenditure then we on this side of the House stand guilty as charged—absolutely guilty as charged. 
That member then talked about choices. I ask Mr Peachey why he does not talk to the 56 percent of his electorate who are $30 a week worse off as a result of his confidence vote. He should ask them whether they have a choice to pay the increase in the power bill and the increase in the rates bill thanks to GST and inflation. Do the poorest in our community and the superannuitants on fixed incomes have a choice about paying the increase in food prices? Oh no where is Mr Peachey now? He is representing the old 44 percent of his electorate who are very well-off. It is not even that much actually when we look at the figures. 
This Budget is a swindle. On Budget night the members opposite stood up and talked about a Budget approval rate of 80 percent. Oh yes did they crow. But we said to them in speech after speech that the people will take a little time to unpick it to unravel it to undo the stitching as the hem of this Budget is released. What did we have last night? Well the people delivered their verdict. It was not 80 percent approval; only 37 percent of the people said they feel they will be better off. The rest said they would not be and we have yet to pile on the GST increase. 
A previous speaker Pansy Wong talked about the Prime Minister going to a footy match and said that in doing so he was standing beside the younger generation. How does that stand up in credibility with the massive cuts to early childhood education that are piled on and become costs that parents will pay? Then we have the GST increase plus 5.9 percent inflation. How is that “standing beside the younger generation” if that is what it takes to go to a footy match? What was the Prime Minister’s response in the  
Dominion Post 
 to the news that only 37 percent of people feel they will be better off and the rest feel worse off? His response was: “Don’t sweat it.” So they should not sweat the 2.5 percent GST rise the 5.9 percent inflation or the early childhood education cuts which equate to an increase in fees of $25 per child per week on top of what mum and dad Kiwis have to pay. “Don’t sweat it.” he says; and then he says that he stands by New Zealanders and he stands by young people. 
I say that Mr Peachey should go and talk to the 56 percent of his electorate who are worse off thanks to that member’s vote of confidence. If 37 percent of people say they feel they will be better off we have to ask what the others say. That is why Labour does not have confidence in this Budget yet the Prime Minister’s response is “Don’t sweat it.” 
The Prime Minister’s own Budget figures show that after he has done all the cash—after he has borrowed $240 million a week for 3 years where the finance costs do not drop down do not start to decrease until 2021—the additional GDP growth cumulatively is 0.9 percent over 7 years. Well is that not a step change! Is that closing the gap with Australia? Is that aspirational for New Zealanders? Is that ambitious—0.9 percent cumulatively over 7 years? That is great is it not! Stack that up against the 70-odd people who allegedly are working on a cycleway. The previous speaker Mr Peachey questioned why we would vote against this legislation and I say to him that we will vote against it because it is unfair. It is unfair when a third of the tax cuts goes to the top 5 percent and 15 percent goes to the top 1 percent. It is unfair when Mark Bryers the crook from Blue Chip gets $1000 a week in tax cuts thanks to Maurice Williamson and his mates because he earns over a million bucks and people on the average wage are 30 bucks to 50 bucks a week worse off. Can members opposite tell me whether that is a definition of fairness? 
The previous speaker said it was vindictive to raise revenue for things like social services and superannuation. He said that we should be encouraging savings. I agree with him. The question is why his Government kicked the guts out of KiwiSaver when part of it was set up for the very sentiments that that member expressed—especially to give young people a start in their first home. Oh hang on! That vessel is empty it is echoing over on the other side. The old dust mite in the seat has not said anything. Oh no perhaps the old dust mite does not want to talk about the 56 percent of his electorate who will be worse off thanks to his vote of confidence because 56 percent of his electorate earns 40 grand or less. 
Hon Darren Hughes 
: What about Kiwibank? 
Hon CLAYTON COSGROVE 
: Oh yes! Mr English has spent all the cash he has borrowed $240 million a week borrowed up to the hilt the credit card is maxed out and then we come to the doozy that sort of slipped out the other side—to flog the family silver. Mr English has an interesting economic equation. He says that mums and dads can buy Kiwibank. He forgets of course that mums and dads everyone in this Chamber every member of the gallery every member of this nation already owns that asset now. So Mr English in his own privileged pompous way will allow mums and dads to spend their own money again to buy again what they already own. Then the interesting thing is that one has to ask which mums and dads will be able to afford to buy this asset for a second time. I would wager very few would. If they did get a chance to get a slice of it the international institutions would of course offer them something called a “very nice price for it” and away it would go back overseas into overseas ownership. But that one slipped out. The other problem with flogging Kiwibank of course is that we can sell it only once. The question for the Government is that if the thesis is that an asset that took I think about $80 million and returned a value in today’s terms of around $800 million—if that is good enough to sell a valuable profitable asset—then what about the other side of the equation? 
Hon Maurice Williamson 
: How many assets did Labour sell? 
Hon CLAYTON COSGROVE 
: Will the Government flog off KiwiRail because it is not performing the way we would want it to be? I ask Maurice Williamson who is barking like some sort of lame dog whether he is in favour of this. Will he call a public meeting and have a debate with his constituents on Kiwibank and let us see whether we can get a percentage of people who agree with flogging that off? The member says that we flogged assets off in the 1980s and that is true. Then we learnt. The problem is that party did that in the 1990s and that party has not learnt today. It slipped out of Bill English’s mouth although he said it a little bit before the election. What he is now doing is prepping these assets for sale. 
So we have in this Budget a dishonest Budget; one that has used all the cash; one that has borrowed for the next generation; and now the next step is to flog off some successful assets. Well I say that Kiwis will object to that. Judging by what is reflected in last night’s poll and the 37 percent rating it has taken a few days for Kiwis to logically coolly in a common-sense way start unravelling this Budget from stem to stern. They have finally worked out that all the spin saying they would be better off is not true. It simply stacks up on this equation again: how is it fair that a person who earns a million bucks a year gets an extra $1000 a week and someone on the average wage is 30 bucks a week worse off? That is not fair. That is a swindle. That is a dishonest Budget. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I move  
That this debate be now adjourned 
. 
Motion agreed to.