Dunne Peter: Budget Statement — Budget Debate 
Dunne Peter: Budget Statement — Budget Debate 
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Hon PETER DUNNE (Leader—United Future) 
: 
 In this morning’s newspaper there was an announcement that New Zealand scientists had discovered a series of planets that floated independently through the solar system. I think in listening to the responses from parties opposite this afternoon that we have discovered some of those planets. The arguments that members opposite have advanced really bear no relationship at all to contemporary reality. Let us just take a few moments to reflect upon that reality. The first thing is that since 2007 the world has been going through the greatest economic crisis since the Great Depression. It is no coincidence that northern hemisphere economies are deeply in debt that the American economy is on its knees and that New Zealand has had its share of shocks. To try to suggest as members opposite do that somehow those events have no impact on New Zealand’s situation today is utterly fanciful. Then we add in two major earthquakes in Canterbury in the last few months both of which by international standards have been highly significant in terms of the costs they have imposed physically emotionally socially and financially on the people of Canterbury and the country as a whole and we also add in the Government’s responsibility to make good that physical damage as best it can. The Government has to pay for those measures and it does so in this Budget. It is sheer folly ignorance and stupidity to say that somehow those figures have no impact on the state of our Budget and our books today. 
I think that what most people looking at this Budget will conclude is simply that most New Zealand households know that when times are tough we make adjustments to our budgets to reflect our circumstances. We do not go looking for the Labour money-tree at the back of the garden because it is not there; nor do we go and burn everything down in the hope that by destroying the village in the way Dr Brash would we can rebuild it. We make prudent wise adjustments with a little bit of adjustment here and a little bit of adjustment there but fundamentally we enable ourselves and our families to get through the difficult circumstances and to look forward to a positive future. That is exactly what this Budget has done. Before the Budget there was a huge amount of hue and cry about changes to KiwiSaver and about a return to the days of uncertainty in terms of retirement savings provision. In fact the changes announced today are minimal. They have a big fiscal impact but in terms of individual savers and the certainty surrounding the scheme they are minimal. 
It is worth reflecting on why the changes have arisen. To put it very simply KiwiSaver has exceeded everyone’s expectations in terms of its success. It was originally projected to have 700000 members by 2015; in 2011 it has more than double that number at 1.7 million members. We cannot therefore acknowledge that somehow there is no additional fiscal cost to the Government because of the member tax credit the kick-start and the other provisions that the Government provides as part of the scheme. So the Government has had to quite prudently say that to secure the sustainability of KiwiSaver for the future we need to make some adjustments that will have a significant fiscal impact but will not deter significantly the level of saving that is going on. That is precisely what has happened. To come back to my household analogy it is exactly what a household would do in similar situations. 
I happen to believe that the Government could go further. I strongly favour KiwiSaver being made a compulsory national savings scheme and I believe that will happen eventually because that will lock in absolutely the security and future of the scheme and it is really what most New Zealanders are looking for. It would then enable us to have a much more balanced approach to the whole question of retirement savings and long-term provision in the future. 
Much was made of the projected changes to the Working for Families regime. Again that was a scheme that far exceeded expectations from the time of its introduction in 2004. It has been successful; it has delivered uplift to a number of families and that is good. But the reality is that it has also come at a cost. I do not think any of the original authors of that scheme would have acknowledged then that the flavour of the scheme would be as it is today. 
So there are issues that need to be addressed. We started in the Budget last year by addressing some of those issues in relation to definitions of income for eligibility for Working for Families tax credits. In this Budget the Minister quite prudently makes some adjustments to the abatement rate and to the question of those people who have children over the age of 16. The time frame for their implementation—over the next 8 years—suggests a very modest impact for most people but again a significant fiscal positive for the Crown. I think when one looks at the overall context in which the Budget is performed one would have to conclude that this is very much a Budget for the times. 
That is not to say there were not things that could have been included in the Budget. I welcome the additional spending going into the health sector. I particularly welcome $80 million more going into the provision of medicines. That will see another 32000 people get access to the medicines they need. On top of the funding advanced in the previous two Budgets that means that somewhere in the order of 270000 New Zealanders now will get more access to medicines than they would have at the time this Government came into office. That is a tremendous achievement and will be beneficial for a significant number of people who rely on medicines to maintain a good quality of life. 
In terms of health though I think the next big change we need to start to address is in the area of prevention. I believe very strongly that when we are spending about $800 to $900 a day keeping a person in a public hospital we ought to be moving over time to a free annual warrant of fitness health check initially for over 65s but ultimately for everyone in the population. Prevention and the level of expenditure up front to achieve that is far better and far more cost-effective than the cure further down the track. 
A lot was said in and around the Budget and in the speeches today about cracking down on those who do not pay their fair share. I reject the arguments raised implicitly—because he did not say it explicitly—by the Leader of the Opposition about tax increases. I tell the House what the outcome was of the additional funding advanced to the Inland Revenue Department last year to crack down on tax avoidance tax evasion and people who were simply failing to pay their tax on time. Last year’s Budget put in place approximately $120 million over a 4-year period to put more effort into that particular area of activity. It has already returned $115 million in additional revenue in just 9 months. We are getting about 13 percent more than we expected; we have somewhere between five and eight times the amount invested being returned in the amount collected. That is sending some very clear signals about tax avoidance and tax evasion in New Zealand and the Government’s intolerance—and proper intolerance—to that practice continuing. 
Finally before I finish I acknowledge the additional funding included in this year’s Budget for Wellington urban rail services. By my quick calculation that brings us up to about $300 million over the last few years. It is great to see the new trains running but I say to Tranz Rail that the new trains and the new equipment have to be matched by a new attitude in terms of the delivery of service. Tranz Rail’s passengers will increase but they will leave very quickly if they find surly sloppy service not matching the quality of the infrastructure now being provided. 
Overall I think New Zealanders can feel confident that this Budget is a prudent step towards managing our country’s finances in a very difficult and stressful time. It sets a course for the future. It gives heart and confidence to the people of Canterbury in their hour of need but also gives assurance to New Zealanders of every generation that their circumstances have been protected and that their circumstances are very much at the forefront of the Government’s attention. Frankly the lack of alternatives put forward this afternoon by Opposition parties leaves New Zealanders with a very clear sense of the options they face come 26 November later this year.