Joyce Steven: Budget Debate 
Joyce Steven: Budget Debate 
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Hon STEVEN JOYCE (Minister of Transport) 
: 
 I have been in the House for about an hour now and as I rise to speak in the debate I feel that we are operating in parallel universes. On this side of the House we have a Government that is facing up to the biggest world recession since the 1930s and it is facing up to that in its Budget. It is focusing on prioritising spending that will help contribute to growing the New Zealand economy. There is an old-fashioned concept regarding jam today or more jam tomorrow and this Government is focusing on securing more jam tomorrow. On the other side of the House we have what might be called a parallel universe or perhaps a twilight zone that is spending all its time crying that the Government is not spending enough money on pretty much anything. 
One of the interesting things that really winds up those members is education. I do not know how many spokespeople on education Labour has; I think it is about 20. The arrogance oozes from them that another party besides the Labour Party could possibly have a different view from Labour on education expenditure health expenditure or social welfare expenditure—that a party could have the temerity to have an alternative viewpoint. That is reflected in the sheer number of spokespeople that Labour puts up. 
I would like to talk about the postponing of contributions to the Superannuation Fund because that has been one of biggest objections to the Budget raised by Labour speakers. Let us talk about that because it is important that we all understand the reason. Opposition members are spending all their time trying to scare New Zealanders about retirement entitlements but that is a famous Labour Party strategy: if one is losing the argument scare the bejesus out of people. That is generally the approach it takes. If Labour is losing the argument it just scares the hell out of everybody and thinks that things will be OK. Let us be clear: the Superannuation Fund is to help pay for superannuation from 2029 onwards—in 20 years’ time. It is a 70-year investment. The National Government says it will resume payments when the economy is back in surplus. That fund is designed to pay around 1 percent of superannuation in 2029 rising after that. We have said we will resume payments when we are back in surplus but even if we were not—and we will be—a 10-year holiday would mean at maximum about a quarter to a third less money in the fund. A very quick back-of-the-envelope calculation shows that the fund will contribute around 8 percent of New Zealand’s superannuation payments from 2050 not 11 percent. That is the difference; that is what we are talking about. In 2050 even if we did not resume the contributions it would contribute around 8 percent of New Zealand superannuation payments not 11 percent. 
If we postpone those contributions what do we get? We get much less debt as a country in the short to medium term. We get a higher credit rating which means lower interest rates than we would otherwise have had. It is as simple as that. It means a much greater ability to finance borrowing on the world markets not only for Government borrowing but also for private sector and household borrowing. People can pay their mortgages businesses can grow and invest and the Government can spend less of the country’s money on paying interest and more on the Government services we all need. In simple terms the country grows faster. It becomes wealthier so it then pays more tax. Amongst other things that means we can afford more superannuation. 
That is called economics and sadly Labour Party members do not understand it. They are completely bereft of that knowledge. They believe only in how to spend other people’s money. They cannot understand that the great pyramid scheme that has been the world economy in the last years has stopped and the bill now has to be paid. They believe that money grows on trees. They believe in the money fairies at the bottom of the garden. Let us be clear: they do not want to get rid of any Government spending programmes. That has been the reality of their Budget debate speeches. They do not want any Government expenditure controls. They do not want any Government checks on the quality of expenditure. They attack this Government for getting in people to second-guess what money is spent on which programmes. They think it is awful to get people in to have a second look at what the Government is spending its money on. That is outrageous to the Labour Party and it does not want to stop payments to the Superannuation Fund. 
Members opposite are like the guy in his little red sports car racing towards a cliff who sees the hazard of going over the edge of the cliff and tries to speed up. As the last election was approaching like drunken sailors the Labour Government spent even more money. It bought the railways. That was a fine investment! It cost $690 million. Toll Holdings was the steal of the century. Labour then spent hundreds of millions more on the railways and as a result today it is worth around $349 million. What a brilliant investment; what brilliant economic management! I say give those guys a tin medal. 
Dr Rajen Prasad 
: What would you have done? 
Hon STEVEN JOYCE 
: I tell you what; I would not have paid $690 million for the railways. That is for sure. Labour members proposed the idea of borrowing $2.8 billion to build a limited Waterview Connection tunnel; an idea that incidentally they still back. They went on about it; they were going to double-track the railroad north of Wellington they were going to do this they were going to do that. The world did drive off the edge of the economic cliff actually. What are Labour members saying now? They are saying: “Drive faster; go even faster.” Their little red sports car is flying through the air towards impending economic doom and they want to speed up. They are like Weimar Germany between the two world wars; they would have us all wandering around with huge amounts of money in wheelbarrows. They would have us keep all the Labour Government programmes including the unfunded ones. They would have us keep borrowing for the Superannuation Fund spending more on this spending more on that and keep borrowing for the Waterview Connection. Damn the torpedoes; who cares! 
As a country our debt will be high enough in 3 years’ time. Currently we are heading towards around $50 billion once we net out the Superannuation Fund. That is a lot. But if we had a Labour Government and it kept to its spending ways if it kept putting money in the Superannuation Fund over the next 3 years and built the “Waterview Fantasy Road” then without anything else the debt would be getting closer to $70 billion with all the extra interest thrown in. Instead of curving down our debt curve would be shooting through the roof. We cannot afford that. We simply cannot afford that as a country and any suggestion that we can is a cruel hoax. We need a responsible Opposition. I say to members opposite by all means debate the priorities by all means disagree with our priorities but be intellectually honest be genuine and tell people what Labour would spend instead. Those members should not keep saying that nothing has changed. This global recession is the worst since the 1930s so members opposite should have the decency to tell people what Labour would do instead. 
I would like to put something on the record about the worst economic crisis this House has seen since the mid to late 1980s. That is what we are in right now. Most members were not here then. 
Hon Darren Hughes 
: Have you got Melissa Lee’s phone number yet? 
Hon STEVEN JOYCE 
: I think Darren was in short trousers back then. There are a couple of members on this side who were here. Of course the honourable Leader of the Opposition was here as were two senior members who sit on the cross benches most days Jim Anderton and Roger Douglas. They were in the Labour Government of that time. From memory Jim Anderton was one of New Zealand’s great future leaders while Roger Douglas was Minister of Finance for 4 years in a Labour Government. I head down memory lane now because Sir Roger has taken to lecturing this Government about what a bunch of spendthrifts we are. The problem with that lecture is history. When Roger Douglas became Minister of Finance in 1984 Government spending was 37 percent of GDP. When he left 4 years later it was 39 percent of GDP. 
Hon Darren Hughes 
: He’s insulting everybody. This is how he treats his support partners. 
Hon STEVEN JOYCE 
: My point is that it is virtually impossible despite taking the axe to all the programmes that Labour had in the 1980s to cut spending as a percent of GDP in an economic recession. But it is another thing entirely to have no responsible approach to it to try to grow Government spending and to try to spend one’s way out of a problem. The Labour Opposition is taking an irresponsible and visionless approach. 
This Government is spending on education to tackle the long tail of underachievement it is spending on broadband it is spending on transport it is trying to sort out the Resource Management Act it is investing in the tradable sector by understanding that the private sector grows the New Zealand economy it is investing in energy and resources and is investing in growing the economy faster. That is what this Government is doing that is what this Budget is doing and everyone will hear a lot more about that in the next couple of years. We need to hear some intellectual honesty from the Opposition about what Labour would do instead. Thank you.