Budget Debate 
Budget Debate 
[Volume:639;Page:9686] 
Budget Debate 
Debate resumed from 23 May on the Appropriation (2007/08 Estimates) Bill. 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 During the debate last evening a National Party member challenged my statements in relation to benefit reductions on the East Coast and in Opotiki. I seek the leave of the House to table the Work and Income statistics from those areas for last month compared with those for 1999. 
Document by leave laid on the Table of the House. 
KATHERINE RICH (National) 
: 
 I start my speech by commending my fellow colleague Judith Collins for raising the issue of the single core benefit which again is nowhere to be seen in the Budget. Labour members have been speaking about that benefit for well over a decade but there is as much chance of sighting Elvis in the Porirua mall as there is of seeing the single core benefit under this Government. 
What a debacle the public relations exercise for this Budget has been. What was the headline in the paper on the day of the Budget when the Government expected to be basking in the self-congratulation of its own announcements? The headline was about Gordon Copeland leaving United Future and it wiped Helen Clark’s face off the front page of every single paper in the country. Was that not just delicious? And today at a time when the country is still supposed to be thinking about the Budget and talking about the so-called good news from this Government the Budget and the discussion of it was again wiped off every New Zealand paper and wiped off every TV channel as the country discusses the issue of Taito Phillip Field. 
The Taito Phillip Field issue is very interesting. The Prime Minister told us that there was nothing to worry about—in her usual “nothing to see or hear move along quickly the Ingram report was thorough” way. What we have seen is quite the opposite of that. The Prime Minister actually said that the Ingram report was thorough enough for her and that the investigation was thorough enough for her. Well I would have to say that the police obviously do not think so because they are going to seek leave from the High Court to be able to press charges. I think the Prime Minister should come to the House and explain her position because she is the person who told New Zealanders that there was nothing to worry about that the investigations had been done to her satisfaction and that the public and the Opposition should just forget about the Taito Phillip Field affair. Well obviously some other information has moved the police to seek to press charges. I think that affair is just another case of that Government trying to cover things up and get the public to forget about the issues that are important. 
We have not seen a case like this that I can think of in the history of the New Zealand Parliament. Cases of bribery and corruption may be par for the course in other Parliaments around the world but I have not seen or heard of a case like this one—particularly a case of this nature. MPs who are asked to work on behalf of constituents are supposed to do so with a level of honesty and dignity. Well the Prime Minister needs to explain her position because the way that she set up the Ingram report meant it was designed to fail—to not get the answers to the questions and to not get to the bottom of the affair. But thankfully the police did not give up. 
 I would like to turn my attention to the education sector and frankly to the lack of what was in the Budget. There was not much for education in the Budget and in a cynical attempt to manage political groups and those within the education sector all the lollies are planned for the 2008 Budget. There was no significant shift in the operations grant for schools and no significant shift in a lot of areas in which there have been huge growing expectations. It is classic for Minister Maharey I have to say— 
Hon Murray McCully 
: “Slippery Steve”. 
KATHERINE RICH 
: —“Slippery Steve” to wait until an issue is sufficiently difficult before he calls for a review— 
Hon Murray McCully 
: The “life of blameless excellence”!. 
KATHERINE RICH 
: —the “life of blameless excellence” as my learned friend Mr McCully points out. The review will take a year. Then there has to be a year to evaluate the review then he will wait until an election year—what a surprise—before he actually delivers any funding. He has told those within the sector there will be no movement in the operations grant until 2008. 
But the most slippery example which I think is what we are getting used to from this Minister was the swift movement he did in changing the Government’s position on its policy regarding teacher-pupil ratios in junior classes. At the 2005 election the Prime Minister and the then Minister of Education Trevor Mallard said that by 2008 junior classes would have no more than 15 students per class. We now see in the Budget the watering down of that policy—a slippery slithering of the position—to a point where the ratio will now be 1:18 sometime in 2008; and the objective of 1:15 is so far off in the distance that it is not measurable. I am concerned that things obviously looked terribly simple around the Labour Party election table but just as we saw with the policy of 20 free hours’ early childhood education what sounds simple around the Labour Party election table becomes quite different when one looks at the complexities of trying to implement the policy. 
I think the Minister has been quite negligent because even as late as last year it was quite clear from Treasury documents that the Minister and the Government had not done anything to cost the policy on ratios in junior classes. They had not costed out the staff implications they had not costed out the property implications and certainly they had not put aside the dollars. That is why the policy is not achievable. There certainly will not be a 1:15 ratio in junior classes by the end of 2008 unless the Minister is planning on a tidal wave of teachers joining the education sector between term 2 and term 4. 
I would like also to discuss the slippery slithering position on 20 free hours because that is also another policy that looked very simple around the Labour Party election table as members were thinking about the top 10 ways they could win the election by bribing people. At the election Ministers and the Prime Minister said all 3 and 4-year-olds come 1 July 2007 would get 20 free hours within the early childhood sector. There were no qualifiers; it was to be for all 3 and 4-year-olds. But as we all know the reality is quite different. The position moved from being “all 3 and 4-year-olds” to “up to 92000 students” to “approximately 92000 students” to “Well I hope 92000 students”. But we know that the reality will be quite different from that. The Government will be lucky if it can provide half of that number of places because many centres have not signed up to provided the hours. There is a reason why centres have not signed up: they do not like the control that the Government is trying to impose on them. 
On looking at the rates and at the way that the Government has gone about the implementation of the 20 free hours policy we can also see it is quite clear that the work has not been done on that. The Minister stands in the House and pretends that a policy is successful if a great number of forms—259000—are printed and distributed around the country. He thinks that is a measure of the success of the policy. If life were as simple as that then politics would be a very easy business. Why he is excited about 259000 forms I do not know because allegedly there are only 92000 places. I tell the House that those parents will be damned angry when they have obtained their form filled it out and marched along to their centre only to be told the centre is not taking up the 20 free hours. They will be angry; there will be increased anger about this policy after 1 July. 
I think another swiftie was pulled in respect of the funding of the 20 free hours. The Minister tried to pretend that increasing the amounts provided to compensate for inflation was his big concession to the sector. Well I do not think the sector will be particularly enamoured of that and certainly will not be swayed by it. 
Finally I want to make a few points about KiwiSaver. I think it is a wonderful irony that the Labour Party which says it stands for the workers is now putting in place a savings programme that will not benefit low-income people because they simply will not opt in. Those on $11.25 an hour will not have the space to save. Not only will they have to forfeit a pay increase and not get a tax cut—not even the 67c a week that Minister Cullen promised in a previous Budget—but they will be subsidising higher-income Kiwis who are saving. I think the Minister should go out and explain to 18-year-olds why they should be excited about not getting a pay increase or a tax cut now because they will get something in 45 years’ time. 
Chris Auchinvole 
: If they’re lucky. 
KATHERINE RICH 
: That is if they are lucky as my colleague points out. Labour is naive in thinking that is— 
Hon David Cunliffe 
: Good for them. 
KATHERINE RICH 
: David Cunliffe might have been one of the few 18-year-olds who was planning his superannuation at the time but most of them are not excited at the prospect of lollies in 45 years’ time. 
There was an opportunity for great vision for education in this Budget. There is nothing in this Budget that will effect positive change in the sector. There is nothing to increase the literacy and numeracy of our kids. There is nothing that will make a difference to the one in five kids who are currently failing in our schools. Certainly there is nothing that will improve things in the early childhood sector. 
Hon PHIL GOFF (Minister of Defence) 
: 
 That was very poor performance from a member who is generally capable of much better than that. It is a bit rich for that member to start saying that a person on the minimum wage of $11.25 an hour cannot afford to save. I would remind Katherine Rich that the minimum wage was $6 an hour when her Government left office—$6 an hour—because the previous National Government year after year refused to give the lowest-income people in this country the chance to earn a decent wage. Those members did not change it when they were in Government over 9 years; this Government has put up the minimum wage every year it has been in office. And she said that those people will not appreciate having the chance to have a superannuation scheme which is what KiwiSaver is. 
It is all right for Katherine Rich who like every member of this House is entitled to a matching employer contribution in a superannuation scheme here. Most of the lower-income people do not have that opportunity and this legislation this Budget gives those low-income people the chance to save. For every $20 they save each week they will get $40 in tax credits. That is great. The member said that people do not appreciate it but the polls showed that 77 percent of New Zealanders supported or strongly supported that particular measure the KiwiSaver. In fact a mere 7 percent—and that included every member of the National caucus—opposed it. 
This will be good for families because it enables them to get help to get into their first home. It will provide $10000 for a couple to help towards their deposit to get into their first home. It will give people including those on low incomes help to do that. Putting aside $20 a week is not impossible; it is harder for low-income people than it is for people in this House but it is not so hard when we compare it with the price of a packet of cigarettes or a couple of beers at the pub. People can do that and that will give them the chance to have a retirement that gives them more than the basic amount they would get under New Zealand superannuation. 
It was bit rich too that Katherine Rich talked about how bad the provision was for early childhood education. National would scrap the several hundreds of millions of dollars that this Government is putting into helping people get free and good-quality preschool education for their children. National has done nothing ever for preschool education. Every initiative that has been taken to invest in the area of education which is arguably the most important area of Government spending has been done under a Labour Government and we are proud of that. 
I will comment briefly on the throwaway line Katherine Rich said about Mr Field. There are some fundamental things in our democracy and in the rule of law in this country. One is that there is a separation between the Government and the judiciary. The second is that there is a presumption of innocence and that guilt or innocence is decided in a court—not by members of the National Party. But what really makes me sick is the hypocrisy of National members who on the day that Phillip Field left the Labour Party ceased asking questions holding him to account for what he might have done and only today have they resumed asking questions about that matter. That is double standards and it does not reflect well on the National members sitting opposite. 
I want to go back to KiwiSaver because I think that it is really important not only for families as I have pointed out but also for the economy of our country. One thing we know about New Zealand is that we have had one of the worst records of personal saving in the OECD. It has taken a long time to get here. We now have a scheme that will dramatically increase the rate of personal savings. What does that mean for New Zealand? It means that instead of borrowing the personal savings of people who live overseas we will use our own savings to invest in our own economy and we will continue to control our own economy rather than passing control ownership and dividends to people living overseas. Australia has had a scheme of this nature for over 10 years now. It has put together a more than $1 trillion - deep pool of savings that has strengthened its economic performance. There is no reason why New Zealand will not similarly benefit from having this scheme. 
Actually we could have had this scheme 30 years ago. The Norman Kirk - led Labour Government brought in a scheme that would have seen New Zealand become a totally different place today in terms of our savings our investment and our economic performance. That scheme was taken away—illegally as it happened—by the former National Government in 1975. It is deeply ironic that it was Mr Muldoon’s National Government that did that then and it is Mr Key’s National Party that is threatening to do the same thing today if it is given the chance. 
I say that that lot will not be given the chance. Those tired old faces—Murray McCully and the rest of those members sitting along there—will not be given the chance because the National Party voted against this measure that 77 percent of New Zealanders support. The fact is that the National Party is a dinosaur. It has learnt nothing it has no policy and it has no vision. This Budget shows that not only has the Labour Government managed this country competently for nearly 8 years—and has managed it to create 347000 jobs; no wonder our registered unemployment has hit 25000 which is one of the best records in the Western World and indicates one of the best rates of growth over that term in office of any OECD country—but also we are the party that is still coming up with new ideas and new initiatives. We are thinking to the future and taking this country forward. 
Murray McCully does not have ideas like that. He has not had an idea in a decade. When the public of this country look at who can lead New Zealand forward they will choose somebody with the depth of leadership and the competency of Helen Clark over the shallowness and vacillations of a John Key. You know the National Party voted against the Budget and KiwiSaver savings—and the business tax cuts—but we cannot rely on those members to oppose it tomorrow. This is the party whose leader said just a few months ago that climate change was a hoax. Then the next day he turned around and said that climate change was the greatest problem facing New Zealand and asked why the Government was not doing more about it. 
Where is the depth of analysis? What can we believe about this National Party? One day those members would have had the troops in Iraq; the next day they were against doing that. One day they were against New Zealand’s nuclear-free policy; the next day they were for it. One day they were against our having 4 weeks’ holiday for workers; the next day they were for it. The fact is that the public is fast realising that they cannot believe anything the National Party says and they cannot believe it because the National Party does not actually believe anything. 
 Where is its programme of action? Where are its policies? Where is its vision for the future? Where is its competent front bench? It is full of hacks from the last failed National Government and its 9 bleak years in the 1990s. National promised that it would not take away superannuation—no ifs no buts no maybes. The first thing that Government did was to increase the surtax rather than remove it. If that is not dishonesty if that is not breaking one’s word what is? It is largely the same people sitting on those benches who failed this country so badly just those few years ago. 
The other part of this Budget that I think is particularly good is the business tax reform package. New Zealanders are quite smart. They know that if we want better living standards if we want the delivery of better social services we have to generate the wealth to pay for those things. This business tax cut package does just that. That is why again New Zealanders are overwhelmingly in favour—66 percent in favour—of these business tax cuts. Seventeen percent including every voting member of the National Party on that side is against them. We do not know whether they believe in tax cuts. John Key says he wants them he wants $7 billion worth of them and Bill English says they would be massively inflationary and he will not have a bar of it. There we are. We have the Leader of the Opposition the deputy leader of the National Party and the Opposition spokesperson on finance saying opposite things. 
They said opposite things about broadband. John Key says we have to spend a lot more on it. Bill English says: “Oh no not really.” Murray McCully when asked to explain the contradiction said: “Oh that’s because Bill is speaking in his capacity as finance spokesperson.” I say to Murray that that is very impressive. That will increase the credibility of the National Party all over the country! We cannot believe it. We have two men who sit alongside each other who hate each other’s guts. Why would not Bill English dislike John Key in that way? John Key turned up at his house the night before the caucus vote and said: “I’m with you Bill.” He went out the next day—and Murray knows this—and voted against Bill English in a way that lost him the leadership. How can we have two people who dislike each other trying to present a united face to the country? 
Hon MURRAY McCULLY (National—East Coast Bays) 
: 
 As members will have discerned we have just heard from easily the happiest front-bencher in the Labour Government. Indeed he is clearly the happiest member of the Labour caucus. In fact there is one person in this House who I suspect is even happier than John Key when we open up a new public opinion poll these days and that is Phil Goff. Phil Goff looks at each of those public opinion polls with a double-digit lead for John Key and the National Party and he looks at the list of names of his colleagues. He can see which colleagues will be biting the dust come the next election. Mr Goff knows very well that these are the people who were inserted against his wishes by Helen Clark and others—the people who intend to vote for Steve Maharey when the revolution comes. There is nobody happier in the Labour Party today than Mr Goff who is waiting for the next election. He can see the fallout that is going to occur and he is secretly very pleased indeed. 
The Budget that was read in this House a week or so ago is subject in my mind to one acid test—and I invite any member on the other side of the House to consider this and to respond. I looked at the statistics released by the Government Statistician for this year to March and they tell us that 700 New Zealanders on average left this country for Australia each and every week in the last year. About 36000 New Zealanders in the space of a year are going to Australia—that is more than the number of people in a city the size of Gisborne are being wiped off the face of the New Zealand map in the space of a year. 
I asked Mr Cunliffe about this and he should take note. I see his colleague Mr Duynhoven has been fitted up with a noose around his neck by the Prime Minister. We know what is next. Mr Cunliffe will be the next to receive that treatment from the Prime Minister if he carries on like this. I suggest to that Minister that he should ask himself this question: will the Budget read in this House last week see fewer than an average of 500 New Zealanders a week leaving for Australia in the coming year as was the case last year or not? He knows and every member opposite knows that that outward flow to Australia will increase rather than decrease as a consequence of the Budget. That is the acid test. 
Hon David Cunliffe 
: I seek the leave of members opposite for me to answer the question just posed to me by the speaker who has just resumed his seat. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member has sought leave. Is there any objection? There is objection. 
Hon MURRAY McCULLY 
: The Minister can take his call. He can have the next 10 minutes and that will be plenty of time even for him to answer a question as complicated as that. 
I suggest that the effect of the Budget on the flow of people to Australia is the acid test. New Zealanders will vote with their feet as they voted with their feet last year and the year before in increasing numbers. That is the test and it is for one reason: each and every year we are seeing an increase in the gap between average income levels in New Zealand and Australia. 
I was privileged quite recently to go to the Australia New Zealand Leadership Forum in Sydney to see a presentation by Dr David Skilling from the New Zealand Institute. That presentation broke down the states of Australia and looked at the per capita GDP figures for each of those states compared with the figure for New Zealand. That presentation contained some very chilling news. It showed that New Zealand in terms of per capita GDP is lagging behind even the worst-performing state in Australia—Tasmania—by some significant margin. As a consequence of the Budget read in this House last week we will see those numbers get even worse in the year ahead. 
I say to Mr Cunliffe to Mr Goff and to others that that is why the public have taken the phone off the hook. That is why the public are no longer interested in the claptrap we hear from those members at question time. The public are no longer interested in the empty words and the slogans we hear at Budget time. The New Zealand public know that unless there is a change of course this country is in serious difficulty indeed. 
I want to spend some time in this Budget debate looking at one of the items that was referred to in some detail in the Budget speech—foreign affairs. I preface my comments by saying that on this side of the House despite the fact that we are in Opposition we understand that foreign policy for any country is not owned by any individual political party by any Government or by any individual people. Foreign policy is in fact something that is owned by the people of a nation. That is why National members have taken some considerable care as an Opposition to speak where we can in one voice with the Government in matters relating to foreign affairs trade and defence. 
This is a small relatively isolated country. We are heavily dependent on the rest of the world for trade opportunities. It is important that New Zealand’s interests do not get shuffled around or ebb and flow as a consequence of movement in the electoral cycle. That is why our starting point in these matters is for us to be bipartisan wherever that is possible. It is important that that should be understood in the context of the remarks I now want to make. We have some differences with the Government in these matters. They are differences of degree and emphasis and I think it is important that they should be understood. 
Firstly it is not clear from the Budget line quite how much money is being voted in this respect but a figure of something like $35 million seems to be contained in the Budget to support the role of the United Nations and the bodies associated with that entity. I urge that in the year ahead New Zealand should take a more assertive role than has been the case in the past in the search for reform within the United Nations. I am one of those who believes that there have been some reasonably spectacular failures on the part of that entity in recent years. We could mention the oil for food programme and we could look at some of the tragic events in the former Yugoslavia. 
Indeed just recently in the last fortnight or so I see that the United Nations Commission on Sustainable Development has seen rather stunningly the election to the chair of that body the country least equipped to deal with that responsibility—Zimbabwe. Just imagine: Zimbabwe with 4000 percent inflation; Zimbabwe which has managed to reduce the average life expectancy of its citizens back to something like 35 or 36 years. Zimbabwe is the country that is now being entrusted with the chairmanship of the United Nations Commission on Sustainable Development. I say to members on the Government side of the House and to all members that that simply brings the United Nations into disrepute. 
There is a crying need for reform in the United Nations. The previous Secretary-General Kofi Annan made some relatively modest suggestions; even more modest changes were adopted by that organisation. I suggest that in the years ahead this country will need to take a more assertive role in that respect. 
I turn finally to the question of aid to the Pacific. I have no particular quarrel with the fact that we are seeing more aid go to that part of the world. I am one of those who supported the Waring report that suggested that New Zealand needed to spend more of its aid budget in its neighbourhood and that we should try to thin down the number of places we were sending aid to to below the 100 or so countries that receive aid at the moment. I am bound to say—[ 
Interruption 
]—Mr Cunliffe may like to explain to the House why it is that we will continue in the year ahead to fund gender equity programmes in the Greater Mekong region for example rather than spend that money in our own regions. Why are we continuing— 
Hon David Cunliffe 
: I raise a point of order Madam Speaker. I seek leave for the member to yield so I can answer his question. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Leave is sought for the member to answer the question. 
Hon MURRAY McCULLY 
: No. 
The ASSISTANT SPEAKER (Ann Hartley) 
: There is objection. 
Hon MURRAY McCULLY 
: I again invite Mr Cunliffe to take a call. He has 10 minutes available to him and I look forward to hearing from him. I suggest to Mr Cunliffe that he and his colleagues should explain why it is that we will continue to fund poverty elimination programmes for rural indigenous people in Nicaragua for example when those moneys could demonstrably be used closer to home. 
This is a country with a very special relationship with the Pacific. Pacific nations now contribute significant numbers to our largest city—our largest city is in fact the largest Pasifika city in the world. It is a— 
Hon David Cunliffe 
: Auckland. 
Hon MURRAY McCULLY 
: Indeed Mr Cunliffe has even managed to work out which city he represents in this House. 
I suggest to members that it is time that we looked more critically at where that aid budget is being spent. We should not be making just the soft decision to spend new money on new programmes in the Pacific but we should be looking at reprioritising some existing programmes so that some of the low-quality programmes which are yielding no particular results of any consequence in parts of the world that we have nothing in particular to do with can be trimmed down in favour of doing a more generous and more effective job in that part of the world where we truly have a significant responsibility—in the Pacific. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First supports Budget 2007 we support most aspects contained within it and most of all we support KiwiSaver. New Zealand First has long made savings an issue and we have voted in favour of any savings attempt that has come before the House whether we agreed with it totally or not. In most cases we agreed to the tune of probably 80 percent or 90 percent but would have liked to see further enhancements. It makes us very happy indeed to see those enhancements made to KiwiSaver—or “KiwiSaver II” as some people have called it—even before it is introduced. We commend the Government for that. 
We think it is essential that people right across the spectrum of New Zealand society have the ability to participate not only in a savings programme but in a savings programme that is backed—in this case by the State. I have no problems at all in speaking of it in that manner. As we heard Mr Goff say we in Parliament have such a scheme. It is quite interesting that the scheme is spoken about in the newspapers or anywhere else as a perk of our job. I regard it not necessarily as a perk but as an essential addition to the salary package that we enjoy. 
 It saddens me that the National Party is opposed to and has voted against the KiwiSaver scheme. It has done so for the skimpiest of reasons in my view by saying that people on lower incomes cannot afford KiwiSaver should not have it and would be better off under some sort of a tax break. To my knowledge the best advice says that such a tax break would be at the lower level to a maximum of somewhere between $5 and $10 a week. I do not think one has to be too smart to work out that if we take the Working for Families package in conjunction with KiwiSaver we see that the total package is a far far more attractive option than a one-off provision for tax savings which everybody knows would give far more on a percentage basis to the wealthy in society than this ever would. 
No scheme is perfect and no scheme of a voluntary nature can guarantee take-up. I applaud the Government for realising that the take-up of an unsubsidised scheme—I know we are not allowed to mention those words any more—or rather an unassisted scheme would not have had the take-up that was required. So the Government has stepped in—rightly in our view—and said it will enhance the KiwiSaver programme and it will front up. In our view there is no better market mechanism than the Government saying it believes KiwiSaver is the right thing to do to such a degree that it will stump up some dollars—it will put its money where its mouth is if we want to put it in that way. 
We believe that it is the right thing to do for another reason: to build up the available capital in this country to fund our businesses and other parts of our society. It is rather old hat to say that there is no shortage of capital. Capital can be gained from anywhere in the world; one just has to meet the market for the price of that capital and that capital can come to New Zealand to fund the businesses. That is all true. Capital is available to everybody and always has been. But the important thing is the cost of that capital and the cost to the country of that capital. I suggest that people should think of it in terms of their own households. Are they happy to live in a rented house and to go outside to borrow money from their neighbours for everything that they require to do in their homes? I think not. I think prudent money managers would make sure—to the extent that is humanly possible—that they operated with their own capital within the constraints of their daily life and that people from outside did not have undue influence on the decisions they made either today or in the future. 
In New Zealand First’s view we have gone a long way in this country from being in control of our own destiny in those areas. We have become too reliant on overseas countries. We have become too reliant on people who may or may not be willing in the future to help or be friendly to us. We think it is sensible that we look to provide as much of our own capital as we possibly can. 
The opposition to the Cullen fund that I often hear is that it is invested overseas or that it is not all available for our businesses in New Zealand or something like that. To me that is a rather naïve statement especially coming from people who are pretty literate in financial matters. It does not matter where one’s money is; it is still one’s money. It does not matter where borrowed money comes from; it is still borrowed money. If one’s money is let out at the highest rate of interest one can then look at borrowing other money at lower rates of interest. This is what other countries have done to us and now we want to do it to them; we think that makes sense. 
In speaking to a couple of other issues in the Budget I say again that it saddens me that National members—though I am sure they will change their opinions later on—voted against a tax rate reduction in the area of company tax. I am sure they did so for ideological reasons. I am sure they voted against it simply because they felt they should oppose the Budget—in fact they said so. The days of that sort of politics is long gone. That may be what National members used to do when Muldoon was in charge of the National Party and that may be what members used to do when there was a first-past-the-post voting system in New Zealand with just the two big parties in the House but I suggest that the people of New Zealand expect something far more responsible in this day and age of MMP. People will not feel comfortable with a party voting against tax cuts then going out into the public arena and urging people to believe it when it says it will give tax cuts to the population. It is again ironic to me that we have to go back to the days of “Kiwi Keith” Holyoake—some time in 1966 I am told—to see the last time National gave a tax cut. So that was sad. New Zealand First of course voted in favour of the company tax rate reduction and we are proud of that. 
Mr McCully mentioned the increase in the foreign affairs budget and the increase in aid to the South Pacific. I cannot make this speech without giving credit to my leader the Rt Hon Winston Peters who has consistently said we should provide aid to those areas that we consider to be home to those areas that we consider to be our neighbours to those areas that we have some responsibility for and to those areas that we have some closeness to and that we regard as friends. He has done that. But the important thing is not just the aid but the recognition from America—another country we have become a tiny bit estranged from. 
 It is a matter of convincing America England and Australia that we are not only doing our bit in the South Pacific but we are doing it with some style and panache we are doing it in a friendly way and we are doing it with aid and with friendship. We are not doing it with threatening words we are not doing it with gunboats and we are not doing it in a colonial way as it was done in the past. It is being done between friends and for friends and I think that my leader should at least be congratulated on that. 
Hon LUAMANUVAO WINNIE LABAN (Minister for the Community and Voluntary Sector) 
: 
 Kia ora talofa lava and warm Pacific greetings to you all. It is a real pleasure of mine to rise and contribute to this debate. In her statement to Parliament in February this year the Prime Minister said that New Zealand’s future is dependent on long-term sustainable strategies for our economy society environment culture and way of life. She went on to say that those strategies have to be driven by strong leadership and sound policies. Helen Clark is providing the strong leadership this country needs. Dr Michael Cullen’s eighth Budget is bold bright strategic and contains sound policies that will benefit all New Zealanders. New policies will build on this Labour-led Government’s proven track record of implementing sound policies that invest in our people rebuild infrastructure and grow our economy. 
Budget 2007 continues our good work. Budget 2007 is about saving and investing for our sustainable future. Today I want to address two aspects of last week’s announcements: the changes to tax rebate thresholds for charities; and KiwiSaver. Tax and charities: the Budget contains some very significant and highly positive news for charities and those who donate to charity. The tax rebate threshold on donations to charity is to be scrapped from 1 April 2008. This means all Kiwis who donate to charity will be able to claim back a full 33?c in the dollar on all income up to their annual net income level. The old threshold of $1890 will be scrapped. 
So for companies and Maori authorities the 5 percent deduction threshold will be removed. This means companies and Maori authorities that donate to charity will be able to lower their net income before tax by the amount they donate. This is great news for businesses Maori authorities individuals and the philanthropic sector. The United Future Party should be recognised for its work in this area and I congratulate the Hon Peter Dunne. Work that we started together soon after the 2005 election is now producing rewards for a sector that contributes enormously to the well-being of the diversity of our many families and communities and deserves to be further supported. 
A recent report released by Philanthropy New Zealand found that Kiwis are very generous donors compared with other countries and of course charitable giving is to be encouraged and rewarded. That is why these changes are designed to lay a foundation for a stronger culture of charitable giving in New Zealand. As Minister for the Community and Voluntary Sector I am very very proud of this. But the really great news is for our charities and our communities. This is what makes me excited. It is making it easier and more attractive to donate to charity and will I am sure result in higher levels of donations by Kiwis. 
It is not just me who is excited. The response from the charitable and philanthropic sector has been overwhelmingly positive towards these changes. Dave Henderson from the Association of Non-Governmental Organisations of Aotearoa said that the changes will be significant in encouraging further a culture of generosity and giving in our country. Ric Odom from YMCA New Zealand said that the announcement will help not only to sustain a philanthropic spirit in this country but also to support sector organisations in the great work they do for all of our local communities. David Wilson from the Auckland University of Technology’s Institute of Public Policy said that the changes were a big step in the right direction. Lisa Cescon from World Vision said that the announcements show the Government’s appreciation and understanding of the good work of charitable organisations; and of course our hero Major Campbell Roberts from the Salvation Army said that the Government is to be commended for the changes. 
Our Labour-led Government recognises that charities make an invaluable contribution to our social cultural environmental and economic well-being. Every day they are working in our communities often without pay humble and without a great deal of recognition. Heads down working together that is the Kiwi way. It is these values that make us proud to be New Zealanders. The changes will make it easier for charities to ask for donations and more attractive for our people to donate. 
In 2005 our Labour-led Government established the Charities Commission to build public trust and confidence in the charitable sector and to provide better information about this important part of our society. Together with the Budget 2007 changes on tax rebates these initiatives are part of our Government’s commitment in supporting charities and working in partnership with key stakeholders to build the capacity of the community and voluntary sector. 
KiwiSaver is another great announcement. It is a bold policy. It is a strategic policy. It is bright and it is sound. It does encourage greater savings to address our poor savings record as a nation. If we can all save more we can all build up assets that will make our futures more secure.This Government is taking responsible and bold steps to ensure the financial security of New Zealanders into the future. I know that many many Pacific Island people will benefit from KiwiSaver. It will help our working Pacific communities to build up savings for a first home and for retirement. Families young and old that have financial security are very important to Pacific people and indeed to all New Zealanders. Our Labour-led Government’s Working for Families policy is already delivering tax credits to our working families. 
KiwiSaver will also allow our Pacific families to build up savings and assets beyond the family home. During the harsh economic restructuring in the 1990s when National was in Government our Pacific people suffered the worst—personally socially emotionally psychologically and economically. Social capital was hugely eroded also because our people were focused on survival. Many of our people who lost their jobs under National are only now getting back into employment under this Labour-led Government and since we have been in power we have seen a huge change in our communities with more people than ever moving into work and doing better. 
There is a positive attitude out there. There is more participation in community life and we can see positive young successful role models coming from Kiwi-born Pacific people. Some of them are Alexander Fala a Rhodes scholar Karlo Mila; the winner of the Montana’s first book of poetry award; and Maria Tutaia who is in the Silver Ferns. 
Unemployment benefit numbers in my Mana electorate have fallen by 20 percent in the last year. That is wonderful because it is great news for those families in that community. There is further evidence of those statistics right around our country and across our regions. Compared with 1999 figures when Labour took office the total number of people receiving an unemployment benefit in Mana has dropped by 2353 or 55 percent. That is good because people feel better if they contribute more and if they can participate in the lives of communities. 
KiwiSaver is so very important to our Pacific people and to all Kiwis. It is important that Kiwis who join that scheme will receive $20 in their accounts from the Government and employers will also contribute. Charities and income tax - exempt organisations will also benefit from employer tax credits. Income tax exemptions do not matter because the KiwiSaver employer tax credits are offset against PAYE tax. 
For 2008 the KiwiSaver tax credit will fully cover the 1 percent employer contribution for employees earning up to $104000 gross. The KiwiSaver tax credit will give charities and non-Government organisations the confidence they need to continue their great work in our communities. New Zealand does remember the misery that was caused during the 1990s and it is important that we do not forget. The previous National speaker the Hon Murray McCully focused a lot on deficits and negativity. We all know that the facts speak for themselves—there is a wonderful positive sense of well-being out there. Winston Peters is to be applauded for the increase in aid. It is exciting to see that the Pacific will focus on a Pacific plan where one of the main goals will be economic development. Thank you. 
JOHN CARTER (National—Northland) 
: 
 One of the things I want to talk about is the cruel hoax that is being put on this country by this Labour Government. But just before I do that I have to reflect on one thing. We have just heard a speech that was read and quite honestly I think it is a tragedy that we have allowed in our Standing Orders that members can come to this House and read speeches. It would have been far better actually if we had carried on—as some of us who have been here a while still tend to do—just speaking off the cuff and talking about the things that we know should be spoken about. I just make that point. 
I listened to that member from Labour talk about how this Budget will help a whole lot of New Zealanders—and particularly Pacific Island people she claimed. I listened to Doug Woolerton who also talked about how this Budget will benefit a whole lot of low-income and other people in this country. Well I want to talk about my family and to explain to this House and to this country actually how the Budget will affect them—we can actually talk about it in person. 
Leoni and I have five children. Two of them are well established. One is a dairy farmer. In fact he told me the other day that with the increase in the payout that is happening from Fonterra he is likely to get a windfall of at least $80000 extra this year. You know the funny thing is that he is likely— 
Nathan Guy 
: That’s nothing to do with the Government. 
JOHN CARTER 
 God no! Thank God it is nothing to do with the Government; otherwise it would not have happened. The only thing the Government will do is to rip some more taxes off him. But ironically he will be able to afford to invest in KiwiSaver if he decides to do so because he has that windfall. He already has three houses put aside as it happens—just by the by. My second boy is also established in his own home and is looking to start up his own business. He is well established and likely to be in a position where if he wishes or chooses to he could decide to invest in KiwiSaver—if he wants to do so. Those are two of the three boys. 
One of our daughters is at university. At this stage she is not an income earner so KiwiSaver is not a matter she has to focus on. 
Our other two children are typical I guess of the young people this Government claims it is going to help. They have each had their first child and are about to have their second—one is due in June and the other in January. My daughter Bridget her husband and their little girl are currently on a single income because my daughter is not teaching at the moment. She will go back to teaching and they will have two incomes. But to say to them a family who is trying to make progress that they should put 4 percent of their salary or income aside—that is a hugely difficult thing for them to do. They may well be able to put a little aside but it will be a huge struggle for them to do so. 
The other lad his partner and their little baby—with the second baby due in January—are a low-income family. They would be expected on their income to contribute probably about $30 a week into KiwiSaver. I would like someone from the Labour Government to tell me how our son on a low income will suddenly find an extra $30 a week to put aside in order to take advantage of the tax concession the Government claims it is going to give him his wife his child and his future child. I know he knows and Government members actually know that he and his family cannot do that. They do not have the extra money floating around. They are already budgeting in order to make sure they get by and they are very careful—they are very good at it actually—when doing their budget. Nevertheless they do not have surplus money to invest in order to get themselves ahead. 
It is ironic that this Government is saying to them that they must pay taxes so that people like Leoni and me who are well established and on a high income can invest. As it happens I have had an investment going for 20 years and very shortly the amount I have to pay into it will reduce so I will have some surplus money. I will not notice it; it has been going out for 20 years. Leoni’s student loan will be paid off in July so all of a sudden she will have extra income that she can invest in KiwiSaver. Both she and I will be able to take advantage of KiwiSaver. We will have the funds to put in and they will be quite significant. Also the amount of money that the taxpayer will contribute to it will be quite significant. But our children who cannot afford to get into KiwiSaver will be paying taxes to contribute to the fact that Leoni and I can take advantage of KiwiSaver. 
I ask the Labour Party members in this House to stand up and tell me where the fairness and equity is in that. There is none. Why should low-income people in New Zealand be asked to pay taxes and contribute so that people like myself—people who are on a high income—can save and be subsidised while doing so? That does not make any sense at all. 
Many of the people in Northland know that this is a cruel hoax by this Labour Government. As I have said before I cannot wait to get up on to the stage with Shane Jones in Northland during the next election campaign because by then a good number of those people will know that this fraud perpetrated on them by the Labour Government is real. They will start to understand that they cannot take advantage of KiwiSaver. They will begin to understand that it works for people around them who are well-to-do and who have already taken advantage of it but that it does not work for those who are in “Struggle Street”. 
I cannot wait to talk on the stage with Shane Jones and ask him to explain why it is fair that someone like him or like me—or a family like my family; Leoni and me—should be able to take advantage of it but a poor person on a low income cannot. Why should low-income people have to pay taxes that benefit me? 
Hon Annette King 
: But they do now. 
JOHN CARTER 
: They may well do but the point is that this Government is saying the KiwiSaver scheme is for everybody when it knows it is not. 
Darren Hughes 
: Give up your pension scheme. 
JOHN CARTER 
: The good thing is that that member who is interjecting at the moment will not even be here next time. I have to say that if ever there was a plus in terms of this Budget then that fact will be one of the pluses. At least in that way we will get some benefit out of it; we will have one fewer hopeless Labour member in this House. At least we will have one advantage: we will have a very very good member who represents that electorate after the next election—someone who actually understands; someone who knows. 
You know this Labour Government will be judged by its contribution to this nation during its term. One of the things people will know when they look back at the time of this Helen Clark - led Labour socialist Government is that this Government has not been effective. It has done a lot of social engineering; it has manipulated a lot of social aspects of this country. But the sad thing is that this Government—instead of giving people an advantage so that they can stand on their own feet get on with their lives and make opportunities for themselves—has with Michael Cullen’s eighth Budget had its hands so far inside people’s pockets that it has taken away their right to make decisions. Quite honestly that is despicable. The one thing a Government should do above all else is to look after its people and give them the people of this country the right to make decisions and take opportunities for themselves. It should not bully manipulate and put cruel hoaxes put on them such as the one the Government is doing by saying it is going to give them something through KiwiSaver when they will then find that maybe as many as half of them—certainly those on the lower end of incomes—will not be able to take advantage of it at all. I say to this House that this Government—given that as time goes by over the next 18 months people will become more and more aware of the impact of KiwiSaver and of those who can take advantage of it and those who cannot—will be judged. 
Hon ANNETTE KING (Minister of State Services) 
: 
 There is more than a little irony in the comments made by the member John Carter who has just resumed his seat. He is the member for Northland a wonderful part of New Zealand which deserves decent representation. I look forward to there being a new member for Northland in the future because there is more than a little irony in Mr Carter talking about a man on his huge salary getting help from the taxpayer to save. I tell members in the House and people who are listening that Mr Carter is one of those who received and continues to receive huge benefit from the MPs’ superannuation scheme at higher levels than other New Zealanders could ever dream to have. He voted to get rid of it for every other MP in 1991 while keeping it for himself. So I do find it just a little ironic that he raised that with the tears dripping down his face as he was saying it. Yeah right! 
 I congratulate Dr Cullen on his eighth Budget. All eight Budgets have been Budgets for the benefit of New Zealand. Many members opposite will never get the opportunity in their entire parliamentary career to present eight Budgets to this country. Dr Cullen will be here next year presenting his ninth Budget and I look forward to his 10th 11th and 12th Budgets in the future. 
Budget 2007 is a Budget for the future. It is not about short-term expediency; it is not about hanging one’s policy after licking one’s finger putting it up in the wind and seeing which way it is blowing which is what we have had from the National Party. Budget 2007 puts some real stakes in the ground on behalf of New Zealanders and their future well-being. How often have we seen that from a Government? We have only ever seen it from a Labour Government. I remind members that the last time we had a compulsory superannuation scheme for this country it had been brought in by the third Labour Government but it was dumped because of the short-term expediency of a National Government led by Robert Muldoon who got rid of the scheme. 
Then we have this day in day out comparison between Australia and New Zealand. Australia brought in compulsory superannuation under a Keating Labor Government and what does it have today? It has over a trillion dollars in a superannuation scheme which enables it to invest its superannuation scheme money into all sorts of projects and investments in our country but we do not have the same ability to do so there. 
So when we look at building a future we have been reliant on a Labour Government to do just that and that is what this Budget does. It puts those stakes in the ground. I believe that it builds on many of our other Budgets that we have seen in this House. I would like to remind members of some of the things it builds on; some of them have been very dear to my heart. 
First of all we see in this Budget—it started on 1 April but is funded in this Budget—the end of the phase-in of tax credits for Working for Families. That has brought a huge amount of benefit to low-income families right through to those families that earn more but have more children. What is the aim of that? It is to benefit families who are bringing up their children and wanting to do the best for them. The Government is saying: “Here is a tax credit to help make that more possible.” Surely that is what a good Government would want to do. 
This Budget also builds on the implementation of the primary health care strategy. I was privileged to be the Minister of Health in New Zealand for 6 years. One of the things dear to our heart as a Government and made possible with the support of our supply and confidence partners over the years has been the implementation of affordable primary health care for New Zealanders. We had set out a 4-year agenda to bring back to the people of New Zealand subsidised primary health care. We always believed that it was very strange that people had to pay top dollar to get to their doctor when they were trying to keep themselves well but they got a free hospital service. So although we want people to have free hospital services why would we not invest in keeping people out of hospital? I say to Mr Ryall who shows a terrible lack of understanding of anything to do with health that one of the reasons we can end up having fewer people requiring operations or first specialist assessment is that we have early intervention in primary health care. He should ask the parents who can get their children into the doctor at a very affordable cost or at no cost and prevent things happening to their children that could mean they end up being hospitalised at a later date. Over 4 years we have brought in affordable primary health care to reduce the fees for going to our primary health providers—not just doctors but also nurses and others who work within the primary health organisation concept. 
We have also reduced the cost of prescriptions for all New Zealanders and this Budget was the final part of that implementation. The last people for whom that is to be implemented are our healthiest—our 24-year-olds to 45-year-olds. They are now covered. So from our newborns right through to our elderly we now have subsidised primary health care once again available to New Zealanders. I ask members opposite as they may well have forgotten who took away subsidised primary health care from the people of New Zealand. It was a National Government in the 1990s. We had always had subsidised primary health care but in 1991 Ruth Richardson’s Budget took it away and brought in the community services card. It has taken from 1991 until 2007 for us to bring back that affordable primary health care and I am particularly proud of that. 
In this Budget we have invested in our crucial infrastructure and I will talk a little more about that in a moment. 
I heard Bill English being interviewed on Television One’s  
Agenda 
 programme last Sunday. He was asked not once but twice what he would have done had he been the Minister of Finance presenting Budget 2007. I would like people to get the transcript and read it because he refused to tell the people of New Zealand a single thing that National would have done. He said: “Well we would have done things differently. We would have done things differently years before this.” He would not give any indication. How can an Opposition be credible when it changes what it says it will do from one day to the next and when there is deep division between its leader and its finance spokesperson about the real agenda for New Zealand? I can tell the National Party members that over the next 18 months we will be drilling into what they say they would do for New Zealanders. We have a pretty good idea that they will say one thing today and something different tomorrow. 
I am proud of this Budget when it comes to transport and I thank the Minister of Finance for his commitment to the transport infrastructure of this country. We have seen the biggest investment in transport in this country’s history with over $13 billion going into our transport system over the next 5 years. We are seeing the electrification of the rail network in Auckland—$1 billion of investment—we are seeing the upgrading of rail in Wellington and we are seeing investment into public transport. Let me just remind people that in 1999 the National Government was investing $18 million into public transport in Auckland. The second figure I want members to hear is $266 million. That sum is forecast to go into public transport in 2006-07 and it does not even include the money we are putting in in this Budget. Members should look at that in terms of investment not only in roads and rail but also in public transport. 
I think it is important that New Zealanders look at where the real commitment to building a strong and vibrant country is. It rests with a Government that is prepared to invest for our future to think about our kids and our grandkids to give away short-term expediency—which we see from the National Party and its history is littered with it—and to say that we want our kids and our grandkids to have a strong future. One does that only by investment in the sort of Budget we see here today. 
NATHAN GUY (National) 
: 
 That was the Minister of Transport Annette King spouting on like so many of the other members on the other side of the House and blaming National for all these problems of the past when that Minister has failed even to mention the problems in her portfolio to do with the Resource Management Act. Her acting chair told the select committee the other day that one of the difficulties of gaining consent under the Resource Management Act was the costly process of going to the Environment Court which adds huge cost to each project. Project after project has to go through the roadblocks and the hurdles of the Resource Management Act. Not once did we hear from the Minister of Transport about how less asphalt is being laid per dollar spent because of the problems of the Resource Management Act. 
So we are now seeing a minority Budget in front of us today that is not supported by the majority of New Zealanders. We have a Government that is not thinking about the rest of New Zealand. It wants to talk about KiwiSaver when only half of the people of New Zealand are going to sign up for it. They will be the people who can afford to do so not the hard-working New Zealanders who are on the minimum wage. Those people will be sitting there wondering where they should put their $18 and whether they should put it into paying off their mortgage or into KiwiSaver. I look forward to seeing the Government roll around the country trying to sell this policy to hard-working New Zealanders. 
What this Budget does not do is talk about how we need to have a balanced approach to savings. It does not talk about how we need to get the economy moving. We need a decent education system whose standards can actually be understood by parents. We need infrastructure that can deliver for our country not be hurdled by the Resource Management Act. We do not need more taxes which we have not heard about from Annette King today and which will slap on another tax of 10c a litre for Auckland and for Wellington. I look forward to the proprietors of the Levin petrol stations grinning with glee in the knowledge that they will be able to sell petrol more cheaply than those in the Wellington region. We need an economy that encourages young New Zealanders so that they will not leave these shores to head over to Australia—700 are leaving each week. 
We have seen Dr Cullen deliver his eighth Budget without a vision for our country going forward. The National Party leader and future Prime Minister John Key will deliver that vision for New Zealand. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I have one question for that member Nathan Guy: will he support a regional fuel tax to fund the Transmission Gully road? There we go. There is the National MP who runs around the Horowhenua saying the Transmission Gully road has got to be built but he does not want to pay for it; he wants somebody else to pay for it but he cannot find out who it is. 
Over the last week we have seen 48 headless chooks running around this Chamber trying to find out where the axe came from. An unkind person would suggest that when National Party members lose their heads it has absolutely no effect on their intellectual capacity. But the reality is that they sat there during the Budget saying: “This isn’t what we thought was going to happen. What do we do now?”. They turned to John Key and asked: “Where is plan B maestro?”. John Key came up with this answer: “Don’t worry we’ll just have to borrow some more if we become the Government.” I will come back to that a little bit later on. 
The National Party has demonstrated three things in this Budget debate. The first is that it has no new ideas at all. The only thing it has said is that there should be a personal tax cut. It is either a little one according to Mr English or a very big one according to Mr Key and it is either to be borrowed according to Mr Key or to be paid for from overseas according to Jacqui Dean. 
The second thing is that it has failed to paper over its internal cracks. Every speech differed from the other speech. There were members who thought they could do everything in terms of tax cuts and everything in terms of State spending in the core areas without any impact whereas Mr Key and his supporters believe that one borrows money to pay for tax cuts which is about the most stupid thing I have ever heard in my life. 
What we had indeed was a leader who was fiscally reckless. National is simply not fit to govern. What did Mr Key say in this House yesterday in question time? When I provoked him by asking a question about his view that the Government should be geared more highly—that is borrow more—he popped up to ask a question because he thought as he always does that he had to top that. He asked whether it was true that the Government was building up assets in the Superannuation Fund so that in fact we could carry more debt. In other words because we have a superannuation fund to pay for New Zealand superannuation in the long term the rest of the Government can borrow a lot more money! I ask what the purpose of having a superannuation fund is if we then go and borrow the money somewhere else and build up more debt. 
That is particularly so if we do not invest that money even in direct productive capacity but simply hand it out to people to spend largely on consumer goods. We were told by Mr English in a brilliant piece of stupidity that the real problem with the Budget was that if we saved more we might have to reduce the growth in our consumption. Well someone who says that a country with a current account deficit of 9 percent of GDP should not be reducing the growth in its consumption simply has not got it simply has not understood. The National Party simply has not understood the challenges facing this country. It actually believes we can borrow and then spend our way to prosperity. 
That is because Mr Key is a financial market trader. He thinks in minutes. He thinks in seconds. He thinks in minutes and hours and maybe weeks. How to make a quick buck? How to turn the paper money over—shuffle it around—to make some money in the short term? He does not think in years and decades and beyond. He does not think about the long-term future. He thinks about some smart-alecky private sector company of the sort he tends to be associated with that can engage in great plans to borrow and spend to try to expand and if it all fails the company is just restructured. One lays off half the workers cuts half the business tries to restructure and moves on from there. 
Well a private sector company can do that but a Government cannot. A Government cannot say to “New Zealand Incorporated”—the people of this country—“Sorry we got it wrong. That whole programme didn’t work. We’re going to put half of you out of business we’re going to flog off everything we own and we’re going to completely change the entire arrangement of our education health and superannuation.” Well it could! That is indeed what Ruth Richardson did between 1990 and 1993 but it did not actually work. And it will not work again if it is tried. 
The notion from Mr Key that because of the Superannuation Fund we can borrow and we can borrow to fund tax cuts so that we can spend is just the most stupid thing— 
Hon Dr Nick Smith 
: You’re borrowing $4 billion. 
Hon Dr MICHAEL CULLEN 
: Ah! He says we have borrowed $4 billion and therefore we should borrow more. That is like saying that because people have borrowed money to buy a house they can borrow everything they need to buy a car a fridge a washing machine and everything else they want and then they can borrow even more and they can spend it all in the next year and somehow or other they will pay something back at some point. That is National Party economics. Even Ronald Reagan at his strangest did not engage in that kind of voodoo economics which is what the National Party is engaged in. 
What we saw also is that Opposition members do not know what to say about KiwiSaver. They secretly think it is a good idea but they do not have the oomph to support it and they cannot make up their minds whether they should oppose it. All they said was that people on low incomes cannot save. I do not know where they found any to talk to because National Party MPs do not talk to people on low incomes. If somebody on a low income signs up to a job and is compulsorily enrolled in KiwiSaver that person will treble his or her savings because the Government will match them and the employer will match them. 
We will actually pay for the employer’s contribution. It costs the employer nothing. Members opposite are trying to say it will cost employers $2 billion a year. Well that was a rubbish number; it was probably invented by that man from the Employers and Manufacturers Association (Northern) who has a bee in his bonnet about this even though he takes 70 percent of his own salary by way of superannuation. That kind of silly nonsense misses the entire point. It is the people on the street who think KiwiSaver is a good idea and it is responsible business that believes that KiwiSaver is a good idea. Air New Zealand today announced that it will match the full 4 percent right from the beginning of KiwiSaver. National members have nothing to say about that. 
Then they voted against the corporate tax rate cuts. That is utterly consistent because National has never voted for a corporate tax rate cut in the last 40 years. For the last 40 years National has never voted for a corporate tax rate cut. It is at the very least consistent in that measure. No doubt National members will vote against a research and development tax incentive and will say it is all right if New Zealand’s research and development is carried out in Australia. They will ask why we should be interested in that because we know it will not work. Well it will work and let us wait and see how it works to lift New Zealand’s research and development. 
I went to a small company today that will benefit from this package in the Budget both in terms of the corporate tax rate cut and in terms of the research and development tax incentive. That company is not worried about compulsory employer contributions to KiwiSaver. It supports those contributions because it wants high-quality loyal staff. That company is taking a longer-term view about its own self-interest not the short-term money-market trader view that we heard from Mr Key. 
Hon Dr Nick Smith 
: What were you before? 
Hon Dr MICHAEL CULLEN 
: That is what he is. He is a short-term money-market trader. If he had been in the Temple when Jesus arrived Jesus would have overturned his table. That is who Mr Key actually is. 
Hon Dr Nick Smith 
: What did you do before? Ever filled out a tax return? 
Hon Dr MICHAEL CULLEN 
: Oh yes of course I have filled out a tax return—silly man! For God’s sake—silly man! At the same time we have also provided a changed international tax regime which will encourage our businesses to expand offshore. National brought in a regime that has seen a flood of New Zealand businesses leave New Zealand entirely because once they are active offshore they are penalised by the current taxation system. Labour is changing that. I bet National will vote against that change as well when we get— 
Hon Dr Nick Smith 
: Against the Budget; it’s a bad Budget. 
Hon Dr MICHAEL CULLEN 
: Dr Nick Smith said National will vote against that one as well. 
Finally this Government put major investment into our social priorities: into health education and superannuation; into overseas aid; into electrification of the railway system; into energy; into efficiency initiatives; and into a whole range of matters that this Government supports. What did National say? There is only one thing in life that matters to the tiny teeny little National Party mind: “When am I going to get my tax cut?”. That is it. That is all Dr Nick Smith could say: “When am I going to get my tax cut? I’ve been sitting here for 7½ years doing nothing and I deserve a tax cut.” Well Dr Smith does not deserve a tax cut. He has a subsidised superannuation scheme from the State and it is high time he allowed the ordinary workers in New Zealand to have a decent superannuation scheme as well. 
Mr DEPUTY SPEAKER 
: The amendment is in the name of John Key. 
A party vote was called for on the question  
That all the words after “That” be omitted and the following words inserted: “this House has no confidence in the Government led by Helen Clark because it has presided over a decline in New Zealand’s competitiveness and has failed after eight Budgets to deliver a meaningful reduction in taxes for New Zealand workers.” 
Ayes 50 
New Zealand National 48; ACT New Zealand 2. 
Noes 61 
New Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Abstentions 6 
Green Party 6. 
Amendment not agreed to. 
A party vote was called for on the question  
That the Appropriation (2007/08 Estimates) Bill be now read a second time. 
Ayes 61 
New Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 50 
New Zealand National 48; ACT New Zealand 2. 
Abstentions 6 
Green Party 6. 
Bill read a second time.