Beaumont Carol: Budget Debate 
Beaumont Carol: Budget Debate 
[Volume:664;Page:11722] 
CAROL BEAUMONT (Labour) 
: 
 I too want to talk about the Budget and I will focus on education. But before I get down to specifics I say that I feel as though we are in parallel universes. We are obviously talking to different New Zealanders. Certainly the New Zealanders whom I am talking to the good people of Maungakiekie recognise that this Budget is a great tax swindle. They recognise that most of the tax cuts will in fact be wiped out by the 5.9 percent inflation. We have already seen interest rates rise in response to inflationary pressures. Of course people can see the broken promises. They can see that the promise not to increase GST was rubbish the promise not to borrow in order to pay for tax cuts was rubbish the promise not to undermine 20 hours’ free early childhood education was rubbish and of course the promise that the majority of people would not be worse off was again rubbish. 
This is an unfair Budget. Let us put that on the table. I agree with what Metiria Turei said about inequality in this country. Again I say we are seeing 15 percent of the tax cuts go to the top 1 percent of income earners. Just in case members did not hear that I repeat that 15 percent of the tax cuts will go to the top 1 percent of income earners and one-third will go to the top 5 percent of income earners. In the Maungakiekie electorate 64 percent of people will not receive tax cuts when we factor in the increase in GST. There are also cuts in this Budget. The Government can characterise health spending as increasing but the level of health spending will not keep up with the increase in costs so we will see continued cuts to so-called front-line services. Certainly the elderly who are having their home help cut would consider that to be front-line expenditure. Of course there is also the issue of State house maintenance something that is quite important in the part of Auckland that I live in. Again we see a cut from $100 million to $10 million for State house maintenance. 
So what is the real agenda here? I think a lot of New Zealanders now realise that the real agenda here is people being softened up for privatisation. We are already seeing privatisation in the accident compensation scheme work account. We have already seen the Prime Minister flip-flop around on Kiwibank and privatisation. We need only to look at local government do we not? In local government we are seeing water potentially being outsourced for 35 years—an entire generation—and Auckland City corporatised. That is all about softening us up for privatisation and New Zealanders are seeing that. 
What I feel really strongly about is that this is also a missed opportunity to strengthen our economy. The economic plan if there is one is to have tax cuts. Tax cuts are the whole economic plan. Some of us do not believe that the trickle-down theory works. Government members can say as many times as they like that this Budget is about economic growth because they are cutting taxes but people know that it does not work like that. Where is the investment? Where is the investment in lifelong learning for example? We are seeing caps in tertiary education. We see no new initiatives in the skills area. Early childhood education is being cut by $250 million over 4 years and higher costs for parents and lower-quality education for their children will result from those cuts in early childhood education. Our economy is unbalanced. It is unbalanced in many regards. It is certainly inequitable and we have a very poor savings record. What is happening in that space? What is happening in the superannuation space for example? A strong economy is about people having quality jobs decent incomes and the public services that we need. That requires active Government and active Government includes investing in our people. [ 
Interruption 
] 
Some members on the other side of the House clearly do not understand much at all about the education system. Early childhood education is one of the most significant investments that we can make in our future. The compulsory education sector is facing funding shortfalls as increases in operations funding will not keep up with inflation. Of course we see further increases in the Aspire Scholarship programme prioritising private education. That is not a surprise is it? Tertiary institutions are capping places. That is ridiculous when we have skills shortages in our economy. In second-chance education a further $11 million is being stripped from adult and community education. That is just crazy. 
But what really is appalling is the lack of investment in workplace learning and skills development. Where are the new initiatives there? We are listening to a Government that is supposedly “ambitious for New Zealand”. Well where is the ambition in terms of workplace learning and skills development? Our workplaces are low-waged and generally low-skilled. Our Prime Minister the Hon John Key in his speech at the start of this year talked about labour laws imposing excessive costs on the country and holding back opportunities to create jobs. He thinks everything is about cost when it comes to investing in our workplaces. Actually it is about investment. 
There is a lot of rhetoric about productivity. One of the things that is really problematic in our economy is low productivity and we need to focus on skills and on productive employment relations. I just record here that a report last month showed that New Zealand managers in manufacturing have considerable room for improvement and that investing in their people-management skills would lead to major productivity improvements. The study was done by the University of Technology Sydney and it shows that the impact of increasing management capability from the lower to the upper quartile would be the equivalent of increasing the workplace by 41 percent. 
Paul Quinn 
: What’s quartile mean? 
CAROL BEAUMONT 
: Now that would be a lift in productivity. 
I tell Mr Quinn that perhaps if he listened instead of shouting he would hear that interestingly enough one of the priority areas for the New Zealand Skills Strategy was to build the capability of managers and workers to develop and utilise their skills. What has this Government done with the Skills Strategy? Despite a willingness on the part of unions business the tertiary education sector and industry training organisations to cooperate it took over a year to bring those parties together and even call a meeting where they could talk about implementing a skills strategy. There was an agreed Skills Strategy. That meeting was held in December last year to look at the supposed revitalised skills forum that was referred to by the Prime Minister in his speech to the Council of Trade Unions conference in October last year. There have been no further meetings of that group; so much for a revitalised skills forum. 
Why should we be worried about investing in skills? It is because the seven drivers of productivity are all about skills and investing in skills and that is what will lead to greater workplace productivity. Eighty percent of the workforce that we will have in 10 years’ time is already in the workforce. We have major skills deficits in our workforce. [ 
Interruption 
] It would appear that members opposite do not care about that but if we are serious about lifting productivity we need to invest in our workforce. New Zealand has major skills deficits as I am saying—the legacy of a lack of investment in skills in the 1990s. A Government with vision would invest substantial resources in supporting people into training to upskill our workforce. 
Although this may be amusing to some members opposite I tell them that investing in skills has benefits at every level and has benefits for individuals. 
Paul Quinn 
: Capital productivity is down. 
CAROL BEAUMONT 
: Yes and we had an agreed Skills Strategy and if you had been listening Mr Quinn you would realise that it has not been implemented by the new Government. 
The ASSISTANT SPEAKER (Eric Roy) 
: The member must not use the personal pronoun “you” when speaking in the debate. 
CAROL BEAUMONT 
: How kind it is of you to draw that to my attention Mr Assistant Speaker. As I was saying the benefits accrue to every level. They accrue to individuals in providing job opportunities improved income and greater job satisfaction. They accrue to families as they benefit from having a higher family income but they also accrue to parents who are able to support their children’s learning. The benefits accrue to businesses in terms of greater productivity. The benefits accrue to our economy through greater productivity higher GDP more innovation and an ability to transform our workplaces and our industries. We are laggards in this area. Thank you.