Tremain Chris: Debate on Budget Policy Statement 
Tremain Chris: Debate on Budget Policy Statement 
[Volume:653;Page:2079] 
CHRIS TREMAIN (National—Napier) 
: 
 The Budget Policy Statement 2009 sets the framework for taking this nation forward through one of the toughest recessions we have had in two generations. It sets the framework for blunting the edges of this recession and providing a platform from which we can grow this nation and take ourselves out of this recession. I am proud to say that on the front cover of this Budget Policy Statement rests the name of our Minister of Finance the fine Mr Bill English who will set the platform and deliver the Budget in May of this year to take this nation out of this recession and to go forward. 
This Budget Policy Statement is set in the context of a range of historical events and statistics that have set the basis of where we are at this point in time. I shall refer to a few points from the speech of the “myth-buster” the Hon Ruth Dyson who spoke about the myths that she thought needed to be busted for the New Zealand public. I will talk about some of those things myself because we find ourselves in the context of a number of historical events both positive and negative. I say to the member that we start from a position of low Government debt—18 percent of GDP. That is a good thing and I acknowledge that. Let us look for the benefit of New Zealanders at how we arrived at that debt. If we go way way back to 1984 we see that we had a debt to GDP ratio of 78 percent to 80 percent. In fact we have reduced our debt as a percentage of GDP from 80 percent down to 18 percent over a period of progressive governance. 
Hon David Parker 
: It was 60 percent—you’ve even got that wrong! 
CHRIS TREMAIN 
: I say to Mr Parker that the biggest drop in the ratio of debt to GDP over that period was in the 1990s so getting to a period of having one of the lowest debt to GDP ratios in our history has been a result of the work of a number of Governments over time with the biggest single drop in the debt to GDP ratio occurring in the 1990s. We are in a good positive position and it is the result of progressive government. 
The second point which is a positive point that we have reached relates to unemployment. We have come from having low unemployment levels of 3.5 percent. Once again we arrived at that position over a period of time through progressive government. Let us understand that through the 1999 to 2008 period we had one of the largest periods of economic growth in a generation—economic growth that was driven by businesses. The former Minister the Hon Ruth Dyson has the cheek to stand up and say that Labour drove unemployment down as a result of its policies. What a load of rubbish! It was businesses that employed people. It was businesses that did the hard yards with owners who put their houses on the line to make sure they could employ people. It was businesses that took this country to the point of having the lowest unemployment. So we did start from a positive position. 
The other thing in terms of the positive side is that we started with a fiscal stimulus package that has come ahead of those of other nations. We saw a huge spend in the 2008 Budget and we saw tax cuts that were forced on to Labour in October of last year. Those tax cuts formed the basis of a strong fiscal stimulus package now added to by this Government. So on 1 April 2009 we will see very positively one of the largest fiscal stimulus packages around the globe—among the top five nations. Once again members opposite will say they did all of that. The guts of the matter is that we have a strong fiscal stimulus package going forward which puts us in an excellent position. 
We on this side of the House have been very prudent in the way we have gone forward. We have said “Actually we are in a good position. We don’t want to engender huge levels of debt for future generations.” Members from the other side stand up and say we are not doing enough and that there is not enough going on. In fact reports from the IMF state that we are in a good position going forward we have structured our fiscal stimulus package well and we are in a great position. There are some good positives there. 
On the negative side to counter the Hon Ruth Dyson’s point we have weak projections going forward and we have inherited two chronic deficits. We have two huge deficits going forward. Firstly we have the balance of payments deficit. As the Minister of Finance Bill English said in 1999 we came in with a balance of payments deficit of 5 percent of GDP. That has grown to 9 percent of GDP over a 9-year period. It has been fuelled by debt which has fuelled consumption-driven growth over that 9 years. That puts us in a very difficult position and we need to address that. It is a tough place to come from. 
Secondly in the 2008 Budget we saw a turn-round—as Bill English said. It was the first time for a number of years that we moved from surpluses to a period looking at deficits going forward. So we have inherited two chronic deficits: the balance of payments deficit and certainly the Budget deficit going forward. We have the positives and the negatives. But also going forward there are some other global trends we need to take account of in terms of looking at where the Budget Policy Statement is going. There is definitely continued uncertainty out there and we are still not sure where the junk loans are going to end up and where all these other financial derivatives are going to drive us to. World growth projections are continuing to worsen and our key trading partners are showing severe economic decline. As we have seen from the IMF world exports have declined by 7 percent. These are tough economic times that will require a Government that is looking forward considering our current situation and putting forward sensible solutions. 
That is what this Government has done. We have come in under the John Key - led Government. He has got to the plate quickly put in his Cabinet and had a 100-day plan which included some key initiatives to drive our economy forward. Included in those initiatives was immediately getting that tax cut policy on the agenda. Opposition members say we should have pegged back the tax cut policy. In fact we saw that policy as a key part of our agenda of giving people the incentive to get out there and to get ahead. So we will make sure that that tax cut policy continues. 
We have driven other initiatives such as the small and medium enterprises package. I have been fortunate to be on the Finance and Expenditure Committee helping to steer that package of initiatives through the House. We have looked at the way we deal with provisional tax for small and medium enterprises the thresholds for GST and legal fees and fringe benefit tax thresholds. Again they are all positive initiatives focused on the “engine room” of our economy: the small businesses that make up 95 percent of our businesses. We are focused on that and on taking that forward. So all up that is a $480 million package. 
The Hon Paula Bennett came out with the ReStart package immediately we got into Government. It is a package—she announced today—that 1245 families are already benefiting from. Again we are stopping the impact of the recession on those families and helping them through it—1245 people are benefiting from it. The job support scheme and the 9-day fortnight are also coming into play. The Prime Minister said here today that Fisher and Paykel Appliances have been able to take up that 9-day fortnight initiative. Three-hundred and twenty jobs have been protected by that initiative. Opposition members say it is disappointing that 100000 people are not benefiting from it. Actually we do not want people to use it if they do not have to; we want people to stay in employment. That is the guts of it. Opposition members do not get that. They actually want people to be unemployed; we do not. On this side of the House we want people to stay in employment. This initiative is a safety net that will be used only if it has to be. I can tell members that companies are not going to be racing to the trough to take it on. Companies will take it on only if they very much have to. 
I will close my speech by talking about a range of other initiatives particularly investment in infrastructure—$500 million was spent on transport and $142.5 million on roads. It is great to see two roading projects in my own electorate within the Hawke’s Bay—the Matahorua Gorge and the southern expressway extension—which again are providing local jobs and local incentives to help New Zealand get through this recession to blunt the edges of this recession and to provide a platform for us to grow going forward. I am pleased to stand today with this Budget Policy Statement and to recommend it to the House. Thank you.