Cunliffe David: Budget Debate 
Cunliffe David: Budget Debate 
[Volume:608;Page:5810] 
DAVID CUNLIFFE (NZ Labour—New Lynn) 
: 
 Would the real National Party economic policy please stand up? Is it that of Don Brash who is backing Michael Cullen’s Budget of fiscal prudence and fiscal headroom or is it that of Bill English who says “The surplus is too big”? Why do the two of them not get together and actually talk about it so that they may agree on a single policy? We know why they do not: they hate each other. Don Brash is still learning politics 101 and he has not read up to the page that states one should not white-ant one’s leader if one does not have the numbers. Don Brash announced he was running against Bill English while Bill English was still shoring up his last gasp of votes. 
How did Bill English do it? He did it by playing the race card again—by promising to axe the Maori seats and in the process kissing goodbye to the very last Maori vote that National might ever have had. But Bill English cannot count. Otherwise he would have known that by 2020 one-third of our workforce will be Maori or Pacific Islander. If we do not have an inclusive social policy and an inclusive economic vision that brings those constituencies along and gives every New Zealander the opportunity to be the best that he or she can be then this nation will be the poorer for it. But that does not matter to Mr English. He just wants to keep his job away from Don Brash Gerry Brownlee Simon Power or any other National MP who can smell a political vacuum when he or she is in one. 
The message to Bill English is that when one is in a hole one should stop digging—but he did not do that. He said the Government “had abandoned the growth strategy” but Mr English was wrong again. There has been 4.4 percent growth which is one of the very best rates in the OECD. By definition we are on track to be in the top half of the OECD because we were at the top of the league table this year. At 4.9 percent we have one of the lowest unemployment rates in the OECD. There have been over 100000 new jobs created in the last year—that is 100000 people who are not receiving the dole and who are paying taxes. Success breeds success. That is why there is a $4 billion surplus on the Operating Balance Excluding Revaluations and Accounting Changes in this Budget. With the accrual basis we need to take out some paper re-evaluations for the Government Superannuation Fund and the Accident Compensation Corporation but that still leaves a healthy $1.3 billion surplus. Don Brash agrees with Michael Cullen saying he should not spend it but save it because there are rainy days on the horizon. 
But members should understand this. Even in doing that and in bringing forward the full superannuation contribution we have gross debt down to 23 percent of gross domestic product. That is below our own target of 30 percent and is below the National Party’s target of 25 percent. For the first time in our history since Prime Minister Vogel first borrowed money to build the railways we project that by 2008 the Crown will be a net creditor with no net debt at all. 
Bill English says the Budget does nothing to promote growth—that is rubbish. But members should not believe me; they should believe this. There will be $140 million over 4 years excluding capital for research science and technology. There will be $110 million over 4 years to implement the task force recommendations for biotechnology information and communications technology and the creative industries. There will be $73 million over 4 years to promote overseas trade. There will be $19 million for pre-seed business start-ups and $6.4 million for new business incubators. The Government is putting its fiscal punch where its strategy is. 
The growth strategy is not just about seed funding for new technology and new ventures. The Treasurer and Minister of Finance Dr Cullen has announced today a major review of the State-owned enterprises portfolio. Because of the State-owned enterprises’ size and strategic significance he said we need them to contribute to the growth objectives by giving optimal returns on taxpayers’ funds. In short if we are not to privatise them—and we are not—we had better ensure that they are well managed in the taxpayers’ interests. We also need to integrate the balance sheets of the State-owned enterprises portfolio into the Crown’s capital budgeting process. As the Minister notes the long-term hold review will not alter the fundamentals of the State-Owned Enterprises Act nor will it impinge on operational matters that are the preserve of the boards’ governance processes. This is a project whose time has come. 
I am a relatively new member of this House and it fascinates me that at about this time every year in the Budget process an enormous amount of time and energy goes into the new spending. In effect that is the last 1 percent or 2 percent of what the Government spends. I am very supportive of the Minister of Finance’s plans to have a value-for-money exercise run which looks at the other 98 percent of the money that we spend on a rolling basis throughout the year. I believe that is a very very sensible thing to do. It will ensure that the taxpayers’ investment is always spent wisely and that the returns on that investment are monitored wisely. I was in a select committee meeting today where I heard about some very good work that is being done in the Department of Child Youth and Family Services and I commend that work to the House. 
It is also very important to recognise that the growth and innovation framework is not just about the three key enabling sectors that we have prioritised. It is part of an ongoing drive to modernise not only the economy but also the Government’s own machinery. That is why we have brought through the review of the centre which looks at managing for outcomes not outputs—at getting the job done that we really want to get done and not just making and counting widgets. It also speaks to the whole-of-Government approach that we are taking to make sure that departments talk to each other about what they are trying to do that they work as a team and that they work in partnership with and not against each other. That is why we are talking about devolution—and I recognise my colleague the Hon John Tamihere here. We recognise that the devolution of Government services is sometimes to the community sector sometimes to the private sector and sometimes to the local government sector. The point is that the closer to the beneficiary of a policy the decision is made the more likely it is to be a good decision—a practical common-sense down-on-the-ground decision. 
That is why we want to modernise and streamline the State sector so that it is fast flexible and responsive to genuine human need. That is a 21st century type of smart Government in the public interest. It is neither the old-fashioned bureaucratic statist model of the 1960s nor the do-nothing hands-off we-don’t-care model of the 1990s which saw the gap between the rich and the poor in this country widen ever more. 
This Budget has a cool head and a warm heart. It maintains strong fiscal discipline and at the same time feeds into a monetary framework that allows interest rates to come down in order to boost growth. It is a Budget that runs healthy surpluses recognising the threats on the international horizon of severe acute respiratory syndrome (Sars) international instability and high exchange rates. It gives the Minister of Finance fiscal headroom to tackle the problems of the year ahead as he needs to do. But this Budget is more than that. It spends over $500 million per year on new health-care services and puts $167 million into new teachers for our children in order to reduce class sizes. It is a Budget with a social heart that will see us building hundreds of new State houses. As a west Auckland MP I can only commend that; the waiting lists for State houses are huge and growing. 
I am very very proud to be a member of a Government that has preserved its fiscal cool head and its social warm heart and I commend to the House the fourth Budget of the Hon Dr Michael Cullen who will go down in history as one of the very best Ministers of Finance that this country has ever seen.