Smith Lockwood: Budget Debate 
Smith Lockwood: Budget Debate 
[Volume:639;Page:9614] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Let me remind listeners who that member was—that member who was just speaking in this Parliament. It was Russell Fairbrother. He came to this Parliament as the MP for Napier in 2002 and then achieved the impossible. I have to hand it to him; he achieved the impossible. Napier was one of Labour’s safest seats. I do not think National has held it since 1951 after the big waterfront strike carry-on in 1950. Russell Fairbrother whom the Parliament has just been listening to achieved the impossible: within 3 years he lost Napier to National and not just by a little margin. My excellent colleague Chris Tremain now holds Napier by several thousand votes. Having just listened to that speech we can all understand why the people of Napier abandoned the Labour member Russell Fairbrother in their thousands as they went to an excellent member of Parliament in Chris Tremain. 
In this Budget we are debating today Dr Cullen has taken to a whole new level the issue of “Labour knows best”. In so many areas of our lives these days in recent years we have had this “Labour knows best” attitude dictating to New Zealanders how they should run their lives how they should bring up their children and where they should spend their money. But this time Dr Cullen has really excelled himself. What he said this time with this Budget was: “You naughty naughty New Zealanders are not saving enough. Naughty naughty New Zealanders are not saving enough so I Dr Cullen am going to force you to save more.” I think that is a huge insult to hard-working New Zealanders. 
If we look at the 8 years that Dr Cullen has been treasurer in this country since we have had a Labour-led Government we see the extra tax he has taken off good hard-working New Zealanders. When Dr Cullen came to office the outgoing National Government used to collect $32 billion in tax off hard-working New Zealanders. This last year Dr Cullen is collecting $52 billion. That is $20 billion—$20000 million—more tax he has taken off New Zealanders. That is a 62.5 percent increase in taxation. How does that arrogant Dr Cullen expect New Zealanders to save when he has taken $20000 million more tax off them each year? That is not the cumulative amount of extra tax he has taken; that is the difference per year now between when Dr Cullen came to office and what Labour now takes off hard-working Kiwis. It is $20000 million a year. 
How the hell are New Zealanders meant to save when the Government is taking all their cash and leaving hard-working New Zealanders having to borrow to make ends meet borrow to own their homes borrow to build new homes and borrow to do darn near anything while Dr Cullen taxes them to hell and beyond so he can look so good in paying back Government debt and putting money into his fancy Cullen fund? What this Labour Government is doing is obscene. It is wrong. It is just wrong to tax New Zealanders so hard and then to say they are naughty naughty people for not saving enough. It is totally unfair. 
What I guess makes me feel even sadder about it all is that Dr Cullen even admits that in his 8 years his operating surpluses have totalled $35000 million. That is the surplus money after spending all the money required on health education superannuation—you name it. His cumulative surpluses have been $35000 million. That is enough to give hard-working New Zealanders a tax break but of course Labour knows best. Labour does not trust New Zealanders with their own money. Labour believes it is in New Zealand’s interest to take the money off hard-working Kiwis because Labour knows best how money should be spent. 
In fact now with KiwiSaver Labour members are rabbiting on and saying not only do they know best how Kiwis should spent their money but now if Kiwis dare to want to use any of their KiwiSaver money to invest in a house they have to buy that house in a certain area and they are not allowed to spend more than a certain amount on it. This is New Zealand we are talking about. This is not communist China or communist Russia as it once was. This is New Zealand; a land my great grandparents came to for freedom—freedom from the controls in the United Kingdom. They came here to a land of the free and now we have a Labour Government that not only taxes us to oblivion but now tells us: “You cannot spend that money on a house in that area—oh no no no. You must spend that money in this area because Labour knows best.” Dr Cullen knows best where New Zealanders should spend their money how they should raise their children and where they should buy a house and New Zealanders have had a gutsful of it. They are sick to death of Dr Cullen and Helen Clark thinking they know better than ordinary New Zealanders. 
I want to focus on a particular part of this Budget that has not had much coverage and I refer to page 16 of the Executive Summary in the Budget 2007 document. What is interesting about that page is that it spells out the new spending. Already prior to this Budget the Reserve Bank has been hugely concerned about this Labour Government’s spending binge. If we look over the years that Labour has now been in office—8 years—we can see that it has doubled the size of the core Government bureaucracy. The Government has increased policy advisers and administrative staff by 95 percent. Accommodation for those extra bureaucrats under this Labour Government—just the extra space to accommodate them compared with that in 1999—has taken 15 football fields worth of office space. If one tries to lease an office here in Wellington one will find one cannot because the Labour Government has leased all the office space—15 football fields worth of it just to accommodate those extra staff. 
The Reserve Bank has analysed that in the last 2 years nominal GDP has gone up by 9 percent in this country—nominal GDP—but spending on social welfare has gone up by 16 percent. Despite unemployment coming down spending on social welfare is up by 16 percent in the last 2 years. Spending on health has gone up by 21 percent. Spending on education has gone up 22 percent. We have had far bigger increases in spending than increases in GDP. The Reserve Bank was so worried about that that a couple of months ago it had a whole section in its monetary policy report on it. As the bank looked ahead it projected—and I want David Benson-Pope to reflect on this— 
Interruption 
] This is in the bank’s documents and I invite David Benson-Pope to have a look if he can read it and see what the bank was projecting the Government’s expenditure increases were going to be over the next 2 years. The expected increase was $7 billion. 
On page 16 of this Budget document the increase in 1 year alone this year is $3758 million. That means that in 2 years—even if the Government does not increase spending in election year; if the increase next year is just the same as and I bet my bottom dollar it will be more than this year’s—the increase will be closer to $11 billion not $7 billion. That means the Reserve Bank will have to put up interest rates and that means home mortgage rates will stay up higher for longer. Ordinary New Zealanders are not only being taxed to oblivion and having to pay a petrol tax of 10c per litre in some regions but their home mortgage rates will go up and exporters may yet face a still higher dollar because of the massive spending binge outlined in this Budget. 
I say to Labour members that they show how callous they are about low-income New Zealanders. Low-income New Zealanders cannot put 4 percent of their wages into the KiwiSaver scheme. They pay the taxes though. An ordinary person on an income of $25000 a year with no dependent children pays 20 percent in tax and at $25000 a year that person cannot put 4 percent into this scheme but he or she pays 20 percent of that income in tax subsidising people who are on higher incomes and who can put money into this scheme. People’s home mortgage rates will go up because of the massive spending binge. They will get a lower wage increase because of the KiwiSaver scheme and they have even lost the “chewing gum” tax cuts. This Budget is a disaster for ordinary Kiwis and they will show that at the next election and boot that bunch out.