Shirley Ken: Budget Debate 
Shirley Ken: Budget Debate 
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Hon KEN SHIRLEY (ACT) 
: 
 We have just heard from the poor poor member the St Marys Bay member for west Auckland Mr Cunliffe. He raised a number of interesting points. Perhaps the most interesting was his statement that we are sailing into the new century. I fear he is right but he has forgotten that we live in the age of jet travel. We are past steam yet he and his party are still in the age of sail it would seem. 
We heard earlier about Mike Williams the President of the Labour Party and the big secret that was going to be in the Budget. We heard from Dr Cullen in question time today that he did not know anything about that. Clearly he did not because if ever a Budget was a fizzer it is this one. All around the country all commentators have called this Budget an absolute lost opportunity an absolute fizzer. 
 The clear message now resounding around the country and across the political spectrum—other than in Labour ranks—is the overwhelming justification and need for a taxation cut. Cutting taxes has been a core philosophy of the ACT party since its inception. We have seen successful economies around the world basing their success on tax cuts but still the Neanderthal socialist Labour Government in New Zealand refuses to accept reality and to deliver a tax cut. 
This week we have seen a response to the Budget. The business community anticipated that perhaps Labour would do something significant and that community is shattered. It is stunned that the Budget was a fizzer. And what have we seen? Business confidence in New Zealand measured this week is the lowest it has been since immediately after the sharemarket crash in 1987. We understand what happened in 1987; there was a worldwide economic crash. But now business confidence is the lowest it has been since then in spite of there being no justification for that sentiment other than disappointment in the lost opportunity of this Government’s Budget. 
Tax cuts are now mainstream. When we hear Jim Anderton actually calling for tax cuts as he has done this year it is staggering that the Labour Government has not heeded the message. Across the Tasman the John Howard Government gave comprehensive tax cuts on the basis of a surplus that is 1 percent of the Australian GDP. The New Zealand Government is sitting on a 4 percent GDP surplus and saying that it cannot afford tax cuts. That is absolute baloney! The New Zealand economy will suffer as our competitiveness against the Australian economy slides further and as opportunities for investment jobs and prosperity are greater across the Tasman than they are at home. We will lose people and we will certainly lose investment. 
There is no virtue in having a surplus per se just as there is no virtue in having a deficit. A deficit essentially means a Government living beyond its means overspending and that it is in a way intergenerational theft. But equally there is no virtue in having a surplus because—other than the fact that a Government might be retiring debt—all a surplus says is that the Government is taking too much money from people. The Government is draining money from people because they pay the tax. It is true. When we look at the surplus figures we see that we in this country have a rich Government—a very rich Government. Unfortunately we have poor people. We have a rich Government but poor people. 
The whole philosophy of this Labour Government is just to take more and more and to take more control of the economy. This Budget provides for an extra $2 billion of spending by the Government. We might say that it is spending the money on health but we have been told that we are not receiving any better health outcomes. The waiting lists are not declining. In other words the Government is squandering the money. It is wasting it. Apart from the wanangas the hip-hop tours and all those overtly wasteful expenditures because of the Government’s crazy philosophical mantras even in the core sectors it is pouring more money into wasteful structures and we are not getting the outcomes that we should be getting. 
What did the Budget actually offer in tax cuts? It offered 70c per week to be delivered in 3 years’ time. Is it any wonder that the average Kiwi out there is a bit cynical when the Government is trying to say it has delivered a tax cut and that tax cut is 70c in 3 years’ time? That is outrageous. We know that the tax cut will be only 0.5 percent of Government spending in 2009. If we look at it as part of business costs we find that it will be only 0.2 percent of Government spending in 2009. So the tax cut for business is infinitesimal at a time when Australia has delivered a significant cut and when successful economies around the world are basing their success on lower taxation attracting investment. 
Again we heard an incredibly confused message from Mr Cunliffe the previous Labour speaker in this debate. He started along the lines of asking how on earth we would fund schools and hospitals if we were to cut taxes. He clearly does not understand the difference between the rate of tax and revenue. There is a big difference between the rate of tax and revenue. We know that when one cuts taxes one gets investment. Investment creates wealth and prosperity. There is more wealth and more people are paying GST and revenue to the Government. We can get that from the base of a lower incidence of taxation. But the Labour Government does not seem to understand that—or if it does understand it is certainly being duplicitous. 
Jill Pettis 
: Some of us remember the 1990s. 
Hon KEN SHIRLEY 
: Oh it must be market day—the paint stripper from Whanganui is at it again. She is shouting away as usual. She and her Labour colleagues do not understand that basic difference between taxation rates and revenue. 
Then we come to the net worth of government. Today the net worth of government in this country is $35.5 billion—that is assets less liability. In 5 years’ time by 2010 under the projections of this Budget and this Government that figure will have risen from $35.5 billion to $63.1 billion. That is a 12.2 percent per year growth in Government spending—bigger and bigger and bigger government. That is what this Labour Government is all about. To fund that it takes more and more money out of society and from hard-working families who should be able to retain their own earnings and make their own choices. 
Jill Pettis 
: On silly things like hospitals and schools I suppose! 
Hon KEN SHIRLEY 
: But no says Jill Pettis the member for Whanganui. She is defending the taking of more money. On top of that of course we have the new carbon tax. Let us look at how that will work. Let us look at the electricity market. If we burn a fossil fuel like coal the tax is $15 per tonne. Huntly power station is our big coal burner; Huntly will be paying it. But how the electricity market works is that there is an auction every half-hour at 200 take-off points from the national grid and everyone pays the top price. Because Huntly is the biggest generator at 1000 megawatts it sets the price. So the State-owned hydro generators will be paying that same price. That will put up the price of electricity for all consumers. 
The hydro generators of course will get windfall profits because they are not burning coal but they have to charge that price. Their price will be the full rate incorporating the carbon tax even though they are not using carbon-based fuels. Who gets all that money? Who owns the big hydro generators—Meridian Energy Mighty River Power and Genesis Power? Members have guessed it—the Government does. Super profits are all paid back as a dividend to the Government. 
So this is really just an underhand way of imposing extra taxation on the consumers of New Zealand through transport fuels and electricity. The money will go back into the coffers of this Government so that it can throw away $1 billion a time on wanangas hip-hop tours and all its chosen little social engineering programmes and waste the money to the incredible degree that it does. 
The ACT party’s message is very simple: leave that money in the pockets of hard-working New Zealanders. They will make better decisions than the bureaucrats and the politicians in Wellington. New Zealanders will create a better society and generate more wealth and prosperity than this socialist Government will.