Budget Debate 
Budget Debate 
[Volume:631;Page:3432] 
Budget Debate 
Debate resumed from 24 May on the Appropriation (2006/07 Estimates) Bill. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 The seventh Budget delivered by Michael Cullen is an outstanding Budget. It demonstrates that for the first time New Zealand has a net surplus. This country inherited decades of debt from National. Not only have we got a surplus but we are paying money into a fund to guarantee superannuation for the future. The Budget provides for more police more teachers and more social workers. We have the lowest rate of unemployment in living memory and Michael Cullen is only beginning to approach the mid-point of his career as Minister of Finance. 
This country has done fabulously well under the stewardship of the good doctor Michael Cullen. New Zealand is now one of the envies of the world for its economic stewardship. It has record lows in unemployment record savings for superannuation more police more teachers and more of everything we want. Anything that should be up is up and everything that should be down is down. It is a fantastic Budget for this country. Dr Michael Cullen will continue to deliver Budgets for the benefit of New Zealand and the Labour-led Government can look forward to many terms in office as a consequence. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I congratulate that member on that brief scintillating and brilliant speech in which he managed to mention my name as often as John Key did in his speech during the Budget debate—he seems to have a fixation about me. 
National members have had one simple message throughout this debate. 
Darren Hughes 
: What’s it been? 
Hon Dr MICHAEL CULLEN 
: “We lost you won we’ve got indigestion.” That is all they have managed to say during this entire debate so far. The other thing they did during the debate was to keep asking themselves this simple question: “Why are we here?”. We echoed it. We too asked them why they are here because they said they wanted to be in Australia. They said: “Please free us from this bondage so we can go to Australia.” Indeed that dinky-di Australian Don Brash acted as a sort of advertising agency for the Australian immigration office throughout his speech followed by both his acolytes and the rest of the members of the National caucus during the Budget debate we have had so far. 
I will respond on a couple of issues. I do not want to attack my friends in Australia but it is true that I thought a couple of things Peter Costello said raised some issues about the tradition of mateship that Australians are supposed to stand by. But let us look at growth over the last 5 years. Per capita GDP growth in this country rose by 12.4 percent. In Australia it rose by 9.9 percent. It was one-quarter more in New Zealand. But what about the previous 5 years for comparison when Dr Brash’s colleagues were in office? Australia had a growth rate of 17.9 percent; New Zealand’s rate was 11.9 percent—two-thirds the size of Australia’s. 
What about that taxation? We will hear a lot this afternoon about capital gains tax. In Australia every taxpayer has to pay a net capital gains tax on their worldwide assets every year in full—100 percent capital gains tax worldwide every year—and that is in a country where there is a 1.5 percent Medicare surcharge. And if someone is earning over $50000 and does not have private hospital insurance there is another 1.5 percent on top of that. Plus there is stamp duty that might set that person back 20000 bucks when he or she buys a house in Sydney. So before Dr Lockwood Smith strips off his gear again and rushes off to Bondi he had better think about the stamp duties he might have to pay when he gets there and the extra taxes he will have to pay. Members should not believe what Dr Donald T “Dinky-di” Brash is telling them about going to Australia. [ 
Interruption 
] What is Ms Bennett trying to say? 
Paula Bennett 
: I said: “Gosh you’re funny!” 
Hon Dr MICHAEL CULLEN 
: Oh I do not know what I said that was so funny. Perhaps she will tell me later and we will learn about that. 
Of course Dr Brash used to be extremely close to the Business Roundtable. He used to tell us that he believed in cutting health spending cutting education spending and cutting spending in almost every area of Government. These days of course he has only a loose connection with the Business Roundtable and he tells us that he will increase health spending increase education spending increase law and order spending increase roading spending and that he will cut taxes but will not increase borrowing; he will just increase debt. That is the National Party’s fiscal position as explained by Dr Brash almost entirely by himself on  
Morning Report  
the day after the Budget. I could not believe it. He said there would be more spending on roads more on health more on education more on law and order and that there would be less revenue but they would not be borrowing more. There are just too many tooth fairies opposite for that to be believable in terms of where National gets to with its fiscal position. 
So what did the Budget actually do? First of all a lot of money is to be spent on roading. That has got the Greens upset but all I can say is that they should look at the big four-lane cycle tracks we will be building for them in the future throughout New Zealand. The Greens will be able to cycle fully abreast—the entire caucus—down some of those roads. They will be able to take a positive view of life in that respect and they will stop moaning about the fact that some of us poor decrepit older ones who cannot ride our bicycles for about 100 kilometres will be using our cars and getting along more rapidly as a consequence—with less pollution and hopefully killing far fewer people on the way because we would have addressed safety issues on those roads. In the Waikato and Bay of Plenty those safety issues are very serious indeed. There are terrible rates of vehicle accidents in some of those parts of the country. 
Dr the Hon Lockwood Smith 
: We’re not going to see these roads for years. 
Hon Dr MICHAEL CULLEN 
: Yes it will take some time to build the roads because the National Government left a huge infrastructure deficit. 
During this period of time we will be spending 130 percent more per year on roads than we inherited from National. We will be spending on land transport all of the income from excise duty from road-user charges and from motor vehicle registration fees. So when people in Auckland and Wellington say they want even more spent on public transport it has to come out of general taxation. There is nothing left out of the fees on motorists to spend in those areas. So they have to make a strong case and not simply tell me that if we put electric engines rather than diesel engines in trains Aucklanders who are so unused to the notion of electric trains will flood on to them in perpetuity and use them instead of diesel trains. Given that this is a country where one-quarter of us go overseas every year it seems likely that most Aucklanders have already been on electric trains and have already enjoyed the experience. 
Secondly we did—let us announce it again; a sort of ex post facto leak—indeed foreshadow the regulation of telecommunications; unbundling the loop. What has that done? Already Telecom has indicated investment in higher speed broadband. Already TelstraClear has indicated massive investment. Even before the legislation has been drafted we are getting investment committed to improve this country’s telecommunications system. That is a major improvement crucial to economic transformation and crucial to economic growth. 
 Thirdly in this Budget we provided the funding for the introduction of the KiwiSaver scheme which will lift the rate of savings. The only argument now is about whether it should be compulsory but I note that nobody in business wants to pay for it as they do in Australia. They want employees to pay for that if it is going to be a compulsory scheme. Fourthly we provided for the fulfilling of our promises. Now that is the bit the National Party hates about all the seven Budgets I have produced. In every one we fulfilled pre-election promises and other undertakings. That for National members is indecent appalling and a betrayal of the political tradition that they are the proud inheritors of which is: “Say everything to get elected and then turn round and deny it. Once you’re in and don’t actually do it.” That is the approach they believe Governments should take. We do not take it. And of course we do not have to pay for just our own promises; we have to pay for some other people’s as well as part of forming Governments under MMP. 
Then I foreshadowed that Mr Dunne and I are working on a business taxation document that will address issues of taxation within the business area and assist in terms of productivity growth and economic growth within New Zealand. We signalled more investment in skills and more investment in building human capital in the country which is the most important input. 
The Government makes no apology for the fact that in this Budget we provided the money to give an $88 a week increase on average to 350000 families with children reducing the number of children living in poverty by 2007 by some 70 percent compared with the figures that we inherited from a National Government. We do not believe we have to have New Zealanders living in mass poverty in order to make a few people comfortable about living here. If some people believe they must live in a country with high levels of poverty in order to feel good then they should go—leave this country—because this country’s national identity is not one for people who believe that kind of thing. This is a country committed to social justice committed— 
Dr the Hon Lockwood Smith 
: You’re so arrogant. 
Hon Dr MICHAEL CULLEN 
: That is not arrogant. Abolishing poverty is not arrogant I say to Dr Lockwood Smith. If he did not come from such a privileged background he would not say something as stupid as that. The most important thing a Government can do in the modern world is ensure that all its citizens can enjoy a decent life bring up their children in decency enjoy good employment have a decent house and retire with dignity. If Dr Lockwood Smith hates that then he can go to a country where they do not do those things and I will stay here with a Labour Government for years and years to come. 
A party vote was called for on the question  
That all the words after “That” be omitted and the following inserted: “this House has no confidence in this Labour-led Government because for 7 years it has demonstrated a lack of vision and a lack of the policies to transform New Zealand into a high-income high-growth nation and has instead wasted the opportunities provided by buoyant international conditions by overtaxing New Zealanders and wasting billions of taxpayers' dollars on low-quality spending programmes.” 
Ayes 48 
New Zealand National 48. 
Noes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Abstentions 10 
Green Party 6; Maori Party 4. 
Amendment not agreed to. 
A party vote was called for on the question  
That the Appropriation (2006/07 Estimates) Bill be now read a second time. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 10 
Green Party 6; Maori Party 4. 
Bill read a second time.