Donald Rod: Debate on Budget Policy Statement 
Donald Rod: Debate on Budget Policy Statement 
[Volume:606;Page:4006] 
ROD DONALD (Co-Leader—Green) 
: 
 I ended my speech in last year’s Budget Policy Statement debate with a challenge to the Government. I said it was an indictment on the Labour-Alliance Government that low and middle income earners—those earning less than $38000 per year—were and are being penalised if they are saving for their retirement through an employer-subsidised superannuation scheme. My challenge provoked a response and I am pleased to say that it was a partially positive response because Dr Cullen has finally agreed to stop penalising people who earn less than $38000. That is one small step in the right direction but like so much about this Government it does not go far enough. Dr Cullen admits that he cannot afford to give salary and wage workers earning less than $60000 the 6 percent tax incentive that he is giving to those of us earning more than $60000. I ask Government members how they can be part of a Government that is happy to justify rewarding workers who are already well off but not those who are struggling. How much would it cost to do the right thing by New Zealand workers? The cost would only be $60-80 million per year—not a lot of money. It is not a big price but it is too dear for Dr Cullen. 
Why is that too costly? It is because Dr Cullen has to find $2000 million per year every year for his “think big” superannuation scheme—the New Zealand Superannuation Fund—that is doomed to fail. Dr Cullen is handing that money—our taxes—over to private sector investment managers and he wants them to invest it on the overseas sharemarket. Is that a smart move? No it is dumb dumb dumb. That is not just because the markets are in free fall not just because savvy investors like New Zealander Craig Heatley or international investor Warren Buffet are either getting out of shares or not buying any more just at the same time as Cullen’s superannuation fund intends to buy them and not just because the same investment strategy has already cost the Government Superannuation Fund over $300 million in the 14 months to December 2002—and I suspect it has cost it quite a chunk more since then—and not just because if the New Zealand Superannuation Fund took the same hit at its peak it would lose over $6 billion in one fell swoop. It is simply not a smart move because the casino economy is not the right place in which to stake our future. 
Instead this Government should be putting its faith in the people of New Zealand especially our young people. Now that would be loyal. Everyone has been talking about loyalty in the last couple of weeks. How about showing some loyalty to our own people especially our young people? Will the Government show them that loyalty? Of course it always does a little bit of that but nowhere near enough. There are token gestures to keep the Government’s supporters happy but no bold vision of how to put New Zealand on to an ecologically sustainable economically self-reliant and socially just footing. That is the challenge for this Government and it is failing to meet it. It is failing not only at a time when it is pouring billions of dollars into its “think big” Superannuation Fund but also at a time when it is running large Budget surpluses. 
I say to this Government that a surplus is not real as long as a significant number of children are living in poverty. It is simply not acceptable that a Labour Government with its history of standing up for the poor and downtrodden is happy to crow about $2 billion operating surpluses when 30 percent of this country’s children are living in poverty. If members do not believe me they should consider the submissions we received on the Budget Policy Statement. The Downtown Community Ministry the National Council of Women of New Zealand Presbyterian Support Services Child Poverty Action Group Barnardos New Zealand the Family Planning Association the United Nations Children’s Fund and the Public Health Association of New Zealand all highlighted child poverty. All those submitters called for the Government to tackle child poverty now. They called on the Government to do that not in next year’s Budget but now because that would be humane and because investing in our children today will lead to long-term savings in such areas as health welfare and the costs of crime. It is ironic that the Government says its key priorities for the 2003 Budget include supporting a productive and cohesive society reducing crime and its impacts and investing in the future when it refuses to do the most obvious thing to achieve those goals: to look after this nation’s children. 
Given that Dr Cullen has got around to doing half of what I challenged him to do last year which was to help working New Zealanders to save for their retirement I would like to offer him some suggestions for tackling child poverty. Even if he implemented only one of them it would be a step in the right direction. I challenge Dr Cullen to introduce a universal child benefit. It would be a non – income-tested transferable payment to the primary caregiver similar to the family benefit that my parents relied on when I was growing up which was scrapped by the callous National Government in 1991. We would propose a payment of $15 per week for the first child and $10 per week for every subsequent child. 
We also challenge this Government to review and reform its family assistance policies. International research has shown that family assistance plays a crucial role in reducing child poverty rates. We challenge this Government to extend paid parental leave to 14 weeks for all mothers in the workforce. We challenge it to end compulsory work testing for single parents on the domestic purposes benefit and for partners of beneficiaries whose primary responsibility is caring for dependents. We challenge it to provide support and education programmes for parents. We challenge it to provide additional support for parents in the first year of each child’s life. Like most members in the House I enjoyed Plunket visiting our home. It is time to increase the resources of programmes such as Plunket in order to ensure that every child is seen regularly in his or her first months of life because that is a very effective early warning strategy that solves a lot of problems that might otherwise arise later on. 
In addition we challenge the Government to introduce a tax-free threshold at the bottom of the income scale. That would have a direct impact on child poverty by giving low-income families more money in their pockets and reducing the poverty trap. We challenge it to set benefit amounts at a level that is sufficient for all basic levels. That means some significant reforms to the benefit structure. I would like to refer specifically to the submission from the Downtown Community Ministry which gives us the example of a couple on the unemployment benefit with two children. The current rules state that after they earn $80 per week their benefit is severely abated. The Downtown Community Ministry stated: “For the first dollar they receive from part-time work they have their accommodation supplement abated by 25 cents in the dollar. After $80 gross their unemployment benefit is abated by 70 cents in the dollar. At the same time they are being taxed at the secondary rate making a combined effective marginal tax rate of 93 cents in the dollar.” Not even the rich have to pay that level of tax. The ministry went on to state: “As well their family support may be abated and if they were getting a special benefit they would probably lose that as well.” It is not good enough when we have the Labour Government putting $2 billion per year into the Superannuation Fund for my retirement and running Budget surpluses of $2 billion per year to have families living in those circumstances. It is time that the Government tackled the child poverty issue. 
It is also time that the Government did more about helping people to buy their own homes. I hear that is one of the drip-feed announcements today in the lead-up to the Budget. Let us do it right rather than just tinkering with it. Home ownership is beneficial in many respects. It helps family stability strengthens communities and is the best way for people to save for their retirement. It is something that I believe every person in this House would support and certainly as someone who had the assistance of a home ownership scheme when I bought my first home I encourage this Government to at least reinstate the suspensory loan that used to exist to allow people to be able to buy their first homes. That would be a step in the right direction in so many respects. 
So also would be investing more money in the prevention of illness. Another key submission was the one from the Public Health Association of New Zealand which stated: “invest in health not hospitals”. We entirely agree with that. According to our calculations we would save around $200 million a year if we put more funds into preventing illness.