Anderton Jim: Budget Debate 
Anderton Jim: Budget Debate 
[Volume:639;Page:9376] 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 All I can say is that if Milton Friedman is the answer to New Zealand’s economic problems then I do not know what on earth the question was. I have to say to Mr Hide if he is interested in the facts that the economic growth gap between Australia and New Zealand has actually closed in the last 7 years but as I do not think the facts will ever get in the way of Mr Hide’s reactionary prejudice I suppose it is a bit wasteful to give him those facts. 
As leader of the Progressive Party and a coalition partner in this Government I want to say to the House how proud I am of this Budget. I congratulate Michael Cullen on it and I look forward to this side of the House delivering many more Budgets. I am proud of the Budget because it turns its back on the selfishness and government-for-privilege that is the Opposition’s only reason for being. I am proud of it because it is a Budget for all New Zealanders. I am proud because this Budget completes the decisive turn away from the disastrous policies of the 1980s and 1990s to which the National Party Opposition would drag us back. Well I am not even sure of what it would drag us back to after hearing the speech from the leader of the National Party. I have not got a clue what its policy is except that it would borrow a lot more money to pay for the groceries. That is all I heard. 
I am proud of this Budget because KiwiSaver will make a dramatic difference to the wealth of individual New Zealand households—and the only one who seems to be in any doubt about that is Mr Key the futures trader. I am proud of it because the business tax changes it introduced are the most sweeping in 20 years and it is the most comprehensive measure to lift innovation and productivity since I have been in this House which is now going on for 24 years. I am proud of it because it invests heavily in our present and future needs without worsening the stressed parts of our economy. 
I am proud of this Budget because it invests in infrastructure and builds the capacity a modern economy needs—something that Governments successively in the 1980s and 1990s failed to do. I am proud of this Budget because it makes a deep investment in tertiary education and an investment in the needs and skills to demand higher incomes in a global economy. I am proud of the initiative the Budget takes in my portfolio areas—in the primary sectors that form the backbone of our economy and in protecting vulnerable young people from suicide and drug abuse. I am proud of the Budget because it invests in better social services in stronger health-care and in education. 
I am proud of this Budget mostly because it is a Budget that is carefully shaped to fix New Zealand’s problems increasing our savings in a way that will last for generations lifting our innovation productivity and exports and investing in the infrastructure that we need. Every serious problem this Budget fixes is a problem that the National Party Opposition will ignore. We could have chosen a Budget of course that scratched the short-term itches—the ad hoc and ultimately damaging approach to which the National Party is still addicted. We could have gone back to the past to the destructive slash and burn of the 1980s and 1990s as the National Party evidently still wants to do. But this Budget is much better than that. This Budget will make a difference to generations of New Zealanders. KiwiSaver is a historic scheme. I invite Mr English to say whether he would repeal the KiwiSaver scheme if he were ever elected to Government. Let us hear from Mr English about the real policy National would follow. 
The expansion of KiwiSaver is one of the most important social programmes ever introduced into New Zealand. KiwiSaver is a very strong incentive to New Zealanders to save. It is a very strong incentive to keep New Zealanders of talent here to build for the future. The challenge for the Opposition is to say how it would create savings anywhere near as comprehensive as these. It could not and it would not because it does not actually see the need for saving. We need to save more because not enough New Zealand households have enough saved to live in retirement in the way they do during their working life. What does the Opposition propose to do about that? Clearly the answer is “nothing”. It proposes to ignore our poor household savings rate because it stands only for people who already have ample savings and it does not care about the average New Zealand family. 
What is there about an incentive for a poorer family to earn three times more than what it saves in its savings account for its future in terms of buying a house or for retirement? It is an indictment that the National Party leader holds poor New Zealanders in contempt by thinking that they will not be able to count like that. Obviously he cannot count; they can. 
We need to save more because we have a problem with interest rates and a high exchange rate. I am happy that New Zealanders feel that their household wealth is rising and they are enjoying the use of better-quality cars plasma TVs and all the rest of it but the inflationary pressure is burning our exporters. The high real interest rates are holding back our businesses. We need to move the pressure from household spending to household saving. Ever since the 1980s the current account was forecast to be repaired by exporting more. After all the pain we went through in the 1980s and 1990s the end result is that the exporting share of GDP is more or less the same as it was. But the current account deficit is worse now than it ever was. We need to lift our exports and we are not going to reduce our current account deficit until we save more. 
This Budget will make a difference to our exporters. It invests $80 million in export market development assistance. Is Mr English against that? It cuts the company tax rate. Is Mr English against that? I called for the business tax rate to be cut 3 years ago. I am glad I have had to wait only that length of time to see it brought to fruition but I will not claim any credit for it. We will not go there. 
Hon Trevor Mallard 
: Everyone else is—why don’t you? 
Hon JIM ANDERTON 
: That is true. One reason that the cut will make a difference is if there is a substantial differential between the top personal and top corporate tax rate. That encourages business to leave more capital in the business to grow it instead of taking the capital out in dividends. It makes sense to me. Everyone who is arguing now for the top personal tax rate to be cut as well as that is actually arguing for less capital in our businesses. How will that help grow the New Zealand economy? Perhaps Mr English will tell us. 
So the question for the Opposition is this: what is the most important challenge for New Zealand? Is it cutting taxes? That would be mainly for those in the top income tax bracket. Anyone in this House who does not know that tax cuts benefit the most affluent New Zealanders does not have a faintest idea. Is this Budget about saving more or is it about blowing the current account increasing interest rates and bashing exporters with a still higher exchange rate which is every single bit of the policy I hear coming out of the National Party—spend more borrow more save less and invest less? Or is the Budget about saving more for investing in our future? 
This Labour-Progressive Government is today making a $3 billion to $4 billion investment in innovation. Has the National Party ever heard that word? Does it have any understanding of what it means? This gives our businesses the tools they need to compete effectively and to make sure that New Zealand becomes a much more attractive place in which to invest in new enterprises for the benefit of all New Zealanders. It gives our infrastructure a shot in the arm. There has never been a time in the last 100 years when we have invested as much in new roads and new rail and in this Budget we are now deepening further that pool of investment. 
The only reason we are able to do that is the fiscal prudence that Michael Cullen has shown over the last 7 years to put us now in a position to deliver. The thought that a National Party might ever get into Government and with profligacy wipe out all of those advances is one of the most appalling thoughts I could have. 
We are investing in our most important industries to future-proof them from the challenges they face whether they be challenges in different markets or problems down on the farm. In my primary sector portfolios this Budget strongly supports a pro-business approach to these industries. This Budget increases research and development in the primary sector. It increases research and development in the primary sector. It increases capability at the border to keep out organisms that can harm our biologically based economy. It funds initiatives to protect rural communities from adverse weather events and erosion and it improves the environmental performance of the primary sector. 
This is simply a landmark Budget. Saving and investment will build on our progress over the last 7 years. It will continue to transform New Zealand into a more dynamic and innovative economy. The Budget provides solutions to meet challenges we face today and tomorrow and its social investment will allow New Zealand families to enjoy a better quality of life—something this Government stands for absolutely. It strengthens our place in the world it strengthens our economy and it strengthens security for New Zealand. I strongly commend it to the House and I congratulate the Minister of Finance who has delivered not only his best Budget but the most profound Budget for the future of this economy and all New Zealanders should be proud of it.