Parker David: Budget Debate 
Parker David: Budget Debate 
[Volume:654;Page:4243] 
Hon DAVID PARKER (Labour) 
: 
 This Budget proves that the pretence is over and the scales are lifting from the eyes of New Zealanders. They now understand that there is a difference between Labour and National. There are a number of differences; perhaps the most important difference is one that relates to integrity. Over the 9 years Labour was in Government it made affordable promises. What Labour said it would do it did. It did not do what it said it would not do. Labour kept its promises. The difference between that and the current Government is already clear. The Government has no integrity. National made unaffordable promises at the election in order to win the Treasury benches—promises it knew it could not keep. National has been forced to break its promises. That is the difference between John Key’s Government and the previous Helen Clark Government. That is the difference between John Key and Phil Goff and Annette King. The integrity of Phil Goff and Annette King is their most important trait. They will never trade their integrity for the baubles of office and they will never make promises they cannot keep unlike the National Party. 
Why did the National Party do this? Why did National members make so many unaffordable promises in order to bribe their way into office despite the fact that the international turmoil had already begun that the IMF had already warned of a very significant slow-down in the international economy and that Lehman Brothers had already gone into liquidation? Despite that reality why did National tell journalists who at the time asked “How can you make these tax promises in light of that?” that it could? National still persisted in the myth that that was affordable because it wanted to get the Treasury benches. 
Most New Zealanders were pretty happy with what the previous Government had delivered to them. We delivered the third-lowest Government debt in the world. That would not have been achieved by a National Government because every time the Labour Government ran a Budget surplus National said that that was wrong and that there should have been more tax cuts. Had it not been for those responsible surpluses in a time of plenty the National Government would not have inherited the third-lowest Government debt in the world and have the room to move that it has now. Neither would the Government have inherited the lowest unemployment in the world an honour we shared with South Korea; we flipped from lowest to second-lowest from quarter to quarter. 
The previous Labour Government cut taxes to companies from 33 percent to 30 percent. We had very substantial tax cuts—over $100 per week—for families with children in the process lifting 130000 children out of poverty. We established the Superannuation Fund to secure the future of superannuation for people as they age in the knowledge that an increasing proportion of the population will be reliant on superannuation. In order to secure superannuation for them in the future it was necessary to pre-fund from the current generation who will receive that superannuation in retirement rather than forcing cuts in the future or unreasonable costs on following generations. 
It was that legacy that the National Government tried to claim as its own. It tried to say that New Zealanders could have all of that plus tax cuts. National said there was no difference between itself and Labour except for tax cuts. Well that has been exposed as the lie it always was. Within 6 months of the new National Government passing those tax cuts under urgency it was here under urgency again last week throwing them away. But it went further than that; it also cut contributions to the Superannuation Fund. 
A lot of commentators are asking: “Where to from here for New Zealand?” and that is a wise question not only in respect of superannuation which is now at risk—and my colleague the Hon Clayton Cosgrove has just traversed that recently so I will not go into that again—but also there is the broader question of where New Zealand goes in the future in terms of our economic welfare the state of our environment the fairness that we have between generations and the wealth of our poorer people. Where do we go? 
The reality is that for New Zealand to be better off we have to address some of the fundamentals in our economy that are left unchanged by the Government in this Budget. What has the Government done to improve the productivity of the economy? The answer is virtually nothing. It has done nothing for skills training of any significance; in fact there are more cuts than there are gains in real terms. The Government persisted with its cuts to research and development. In order for us to get wealthier as a country we have to sell more overseas; we have to sell more higher-value products. So what has the Government done towards that end? Nothing. The Government has done nothing. It persisted with its very significant cuts to the research and development tax credit and to research and development in the agriculture sector. Fast Forward was having matched funding from the pastoral sector. It was funded and the money was sitting in a bank account but that money has been withdrawn by the current National Government and replaced by a much smaller fund. How does that increase productivity and grow our exports? It does not; neither does the abolition of the research and development tax credit. 
New Zealand has a problem with private sector savings. Private sector savings are too low. We need to save better so we can afford to invest in plant to invest in the decent wages we all want in our economy and to improve the product mix that we sell overseas. On the savings front National has persisted with its cuts to KiwiSaver. Savings will be worse relative to what they would have been not better. How is this a vision for the future? How does this address New Zealand’s current account deficit? It does not. Year by year our current account deficit makes us poorer as a country. We own less and less of ourselves every year and more and more of it is owned by overseas corporations. 
How does this Budget make that better? It does not. What does it do to reclaim ownership of our financial institutions? What does it do to improve the savings of those who invest in institutions be they New Zealand-owned or overseas-owned? It does nothing. This Budget does not take New Zealand forward. It cements in intergenerational inequities in respect of superannuation. Superannuation will not be secure. It is a mark of disrespect to the intelligence of New Zealanders that National has cut contributions to the Superannuation Fund and has then tried to pretend that future entitlements are not at risk. No one other than National thinks that. National is not honest enough to confront the reality because Mr Key made another promise in the election and that is that superannuation would not be cut. He has breached his promise for his unaffordable tax cuts so he does not want to be seen to be cutting superannuation. But in reality the effect of the cuts to the contributions to the New Zealand Superannuation Fund make that almost inevitable. 
Those cuts will be maintained for more than a decade. National has said that the cuts to the New Zealand Superannuation Fund will not be restored until at least a decade away. What will National do before then? Will it prioritise the funding of Government superannuation or tax cuts? I suggest that tax cuts will come back on to National’s agenda. National will try to bribe its way through another election with more promises of tax cuts. It will strip money out of the State-owned enterprises by increasing indebtedness on the balance sheets of energy-related State-owned enterprises in order to hide the terrible reality that it is creating for New Zealand. National will try to fund future tax cuts before it restores the funding of the Superannuation Fund. That is irresponsible; that is cynical politics. It creates intergenerational inequity. In addition to that National is not doing anything in this Budget to grow our economy. 
I will say one positive thing: the insulation fund is a good idea and I thank National and the Greens. I also make the point that the insulation fund was already in place at the last election and had National not canned it since the election it would not have had to reinstate it. But it is a good policy and I know that because I helped to design a lot of the details of it. It is somewhat ironic that I am here supporting what was going to happen anyway. But the fundamentals of this Budget are poor. The Budget does not lift New Zealand’s productivity it does not address savings and it does address export earnings.