Donald Rod: Debate on Budget Policy Statement 
Donald Rod: Debate on Budget Policy Statement 
[Volume:615;Page:11527] 
ROD DONALD (Co-Leader—Green) 
: 
 I would like to begin by thanking all those organisations that made submissions to the Finance and Expenditure Committee on the Labour Government’s Budget Policy Statement. My gratitude even extends to Business New Zealand because by and large its submission serves to remind me that given half a chance it would take New Zealand in exactly the wrong direction in terms of where it should be going. 
For example Business New Zealand pointed out its opposition to four pieces of legislation passed in this term: the Local Government Act ratification of the Kyoto Protocol the Supreme Court Act and the Land Transport Act. These were all supported by the Greens and in two cases were passed only because of our votes. Business New Zealand’s call for a cut in the corporate tax rate to 20 percent fails to acknowledge both the obligation that the business community has to society and the extensive services that the Government provides the business community with in return. It also conveniently ignores the corporate welfare that businesses receive through the support that the Government is obliged to provide low and middle income workers through for example the accommodation supplement tax credits family support and childcare subsidies because too many businesses do not pay their workers enough to live on. 
There are even some things where the Greens and Business New Zealand share a common view. One in particular is our joint opposition to the New Zealand Superannuation Fund. We also broadly agree on the need for the Government to reduce its debt levels. 
However the Greens share a lot more in common with a number of other submitters. In particular I mention the Public Health Association Barnardos Caritas the Save the Children Fund Unicef Action for Children and Youth Aotearoa the Refugee and Migrant Service the New Zealand University Students Association the Downtown Community Ministry and the National Council of Women. There was a consistent message coming through from those frontline organisations which have to bear the brunt of the negative impacts of harsh Government policies. I am grateful that for several years they have balanced the pro - free market submissions of the business lobby and have helped to pressure the Government to properly address child poverty in New Zealand. Like the Greens they have high hopes that the Government has finally listened to their pleas with Dr Cullen’s announcement that the centrepiece of this year’s Budget will be a Future Directions package that will in his own words “give priority to low- and middle-income families enhancing their living standards and their ability to give their children real opportunity and security.” 
Time and time again we have said that a Budget surplus is not real if it is built on the backs of children living in poverty. It is an indictment on all of us but particularly on Labour members who despite their history of standing up for the poor and the downtrodden have taken 4 years to decide that the time is right to tackle seriously the fact that 30 percent of New Zealand’s children are living in poverty. It may be financially prudent to do as the Minister says and wait for good economic and fiscal conditions before increasing income support and incentives to move into paid work as well as making housing more affordable but it is socially irresponsible to have waited as long as this. It is also socially irresponsible and downright discriminatory to penalise children because of the income source of their parents or caregivers. Yet despite the strong submissions from all the social service and welfare organisations that the child tax credit be available to all families below the appropriate income threshold Dr Cullen remains determined to penalise the children of beneficiaries and superannuitants. That earned a rare unanimous rebuke from the multiparty Finance and Expenditure Committee. Not known for our unanimity we all agreed that while we do support incentives to move people from welfare to employment the Future Directions package should ensure that “… appropriate assistance is also made available to children who are dependent on a sole parent superannuitant or beneficiary”. 
The Greens are adamant that the Government must remove the discriminatory aspects of the family assistance packages. If Helen Clark were serious about funding services on a basis of need then the one in four children in New Zealand whose parents or caregivers rely on a benefit or superannuation would no longer be excluded from the child tax credit. Michael Cullen repeated today that this Government is committed to needs-based regulation; this is his chance to make his rhetoric a reality. Although the payment is only a maximum of $15 a week per child it could make a real difference to the quality of life and material well-being of those children. It would also lift the morale of those families who are dependent on the State. At the moment the message they get is that the Government thinks it is sufficient for single parents with one child to live on $231.53 a week or $14500 a year before tax but if parents are in paid employment it is OK for them to earn $30000 and receive that tax credit—a tax credit that single parents on the benefit are not eligible for. We believe it is unconscionable that the Government deems that one child deserves a better start in life than another child especially when we are talking about a quarter of this country’s children. 
It also raises the concern that the Government will increase its targeting mechanisms in the Future Directions package. Make no mistake: the Greens are all for reducing the poverty trap so that beneficiaries do not face a drop in income when they enter or return to the workforce but there are real problems with the targeted system currently in place. The evidence shows that the move to targeting has not increased the welfare of the poorest in our society but has instead enabled successive Governments to keep tax rates low for the well-off. Targeting mechanisms are costly to administer as well and they are often so complicated that many families in need do not apply. The current family support package has serious problems with families incurring large debts because they underestimate their annual family income and therefore receive too much assistance. This estimation of income is particularly difficult for low-income parents who may work several jobs in a year because they are forced to undertake casual work. 
That is why we are promoting a universal child benefit and why we are looking for support from members in the House for Sue Bradford’s member’s bill which is currently on the Order Paper. This universal benefit is similar to the old family benefit which would have provided many of the MPs in this House with a real start to life by in many cases enabling their parents to buy their first family home. Several other countries have maintained universal benefits throughout the new-right period—even the United Kingdom. Its child benefit is worth approximately $47 per week for the first child. 
As well as calling for the end to discrimination against children the submission of the Public Health Association highlighted that about one-third of all hospital admissions could be avoided if more funding was specifically invested in health—that is in preventing illness. We agree. We also support the concern of the association that avoidable hospital admissions of Maori are 60 percent higher than those of other New Zealanders and that those of Pacific people are 70 percent higher. I asked the submitters whether those rates could be reduced if the health system adopted Dr Brash’s colour-blind approach. In a very thoughtful answer Dr Gay Keating said that while focusing solely on socio-economic factors would have a significant impact on reducing admission rates there was also an indisputable ethnic factor. In other words Maori of the same socio-economic status as Pakeha are more likely to be admitted to hospital for illnesses that could be avoided. That puts paid to the rubbish coming from the National Opposition that ethnicity should not be a factor when addressing needs. If we are serious about ensuring equal opportunity then whatever criteria that work must be applied to ensure that outcomes are fair. 
I am glad that the Labour Government continues to recognise this reality but I am surprised to have just listened to the Minister for Economic Development Jim Anderton refuse to acknowledge some home truths about the New Zealand economy. The Government’s accounts may look good but the rest of the economy is struggling. Dr Cullen may feel like the king in his counting house counting all his money—whether in cash or on paper—but outside people are feeling the squeeze. Workers bosses and farmers are all struggling largely because of the high dollar. Jim Anderton when he was in Opposition used to highlight important economic indicators like the trade deficit the current account deficit and the national debt but today there was not a word about those. I would like to offer a reality check to this House. This country’s national debt is now over $102 billion. Our current account deficit is forecast to rise to $7.3 billion this year $8.5 billion next year and $8.6 billion for the 3 years after that. The January trade deficit was $571 million—28 percent of exports. The trade deficit for the year was $3622 million the largest since records began in 1961. 
The New Zealand economy is sick. The New Zealand economy is unsustainable. A cynical view is that the Future Directions package is more about trying to pump up a sagging economy and shore up Labour’s core support in the lead-up to the election than a heartfelt commitment to helping the less well-off.