Debate on Budget Policy Statement 
Debate on Budget Policy Statement 
[Volume:615;Page:11516] 
Debate on Budget Policy Statement 
Mr SPEAKER 
: There are twelve 10-minute speeches. I still have one issue to resolve about one call. There will be one split speech between New Zealand First and National towards the end of the debate. I have ruled that that is in order. I will give a bell at the end of 5 minutes.  
CLAYTON COSGROVE (Chairperson of the Finance and Expenditure Committee) 
: 
 I move  
That the House take note of the Budget Policy Statement and the report on it of the Finance and Expenditure Committee 
. Firstly I want to commend the members of the Finance and Expenditure Committee for their robust review of the Budget Policy Statement for 2004. The committee examined 14 submissions. A couple were from what my colleague John Tamihere has described as the “big end of town”—that is the Business Roundtable and Business New Zealand. But also—and I think this is very positive—there were a large number from the social organisations that are at the coalface of trying to deal with and assist people in need in our community. They had many positive things to say about the direction of this Government and the direction of the upcoming Budget as signalled in the Budget Policy Statement.  
To quote from the statement: “The Budget Policy Statement sets out the overarching fiscal parameters that will guide Budget 2004 and outlines the Government’s policy focus.” That focus is unchanged. It is about providing for those on low and middle incomes who are in need. It is about providing stability and providing the necessary ingredients to continue the growth we have seen in this economy. 
We are here to focus on the Budget Policy Statement and also on the issues that are foreshadowed within it for the upcoming Budget. This is an economic debate. It gives us the opportunity also to look at the economic progress and social progress of our country. But I have to ask given that this debate is an economic debate why it is that the National Party since our return to the House this year has failed and has refused even to engage in debate on economic policy. There is a simple answer to that. When it comes to economic policy Dr Brash and his team look at the statistics and they are outflanked. They are completely outflanked in terms of economic growth in terms of employment statistics and in terms of growth in the numbers in apprenticeships and training. They are outflanked directly on economic policy. 
Let us have a look at some of the good news. Since this Government came to office 170000 new jobs have been created. 
John Key 
: I raise a point of order Mr Speaker. I am sorry to interrupt the honourable member’s speech but obviously he has not been paying attention during a number of speeches I have given in the House on the economy including the speech I made during the Address in Reply debate. I am happy to table it. 
Mr SPEAKER 
: The member knows that that is interrupting the debate. It is a debating point and it can be used as a debating point when the time comes. 
John Key 
: I seek leave to table it. 
Mr SPEAKER 
: The member is seeking leave to table a document. This is not the appropriate time to seek leave. Is there any objection? There is. 
CLAYTON COSGROVE 
: Mr Speaker thank you for your protection but when it comes to that member I have no requirement for it. That little act simply illustrates for the people of New Zealand the reason that those members are outflanked. Some junior member from somewhere no one has heard about who lives in Auckland and commutes to his seat now and again stands up and makes those sorts of statements. 
I think this is a serious debate. It is a debate about the economy which members on that side will not engage in. They will not engage in it because they are beaten at every turn. Since we came into office 170000 new jobs have been created. “Beat that!” I say to the Opposition. If we look at our growth rate we can see that annual growth rates on average for the past 3 years have been 3.4 percent compared with an OECD average growth rate of 1 percent. What do we get out of that? It means we are well ahead. The member can laugh but we are well ahead on the OECD rankings and we are doing well internationally as a country despite the difficult international conditions that we face and will face in the future. 
So the National Party will not engage in debate and the question we have to ask is why? Here they are Dr Brash the self-confessed economic expert and John Key another self-confessed economic expert but they will not engage in debate on economic policy because they have no economic policy because they are outflanked and because they cannot compete with the good news and the positive achievements that this Government has provided in terms of the economy. That party is all about privilege. The only policy—[ 
Interruption 
] They have a couple of policies. Apart from the spurious race debate that they have tried to ignite—and that is unethical—they have given us two policies. Dr Brash’s tax policy will give somebody on his salary 168 bucks a week and I think the figure is about 9c a week for the average working person. If that is not based on privilege I do not know what is. 
The other policy that people are now starting to switch on to and listen to is his pledge on superannuation. He will hike the age of eligibility and cut the pension. We on this side of the House are happy to engage in the economic arguments because those members get skewered every time they put them up. I hope they start articulating their economic policy and then we will show them up for what they are. 
If we look at the Budget Policy Statement the fifth that this Government will deliver we can see that it shows a commitment to leadership and partnership and growth innovation fairness and security for all our people. What we are about is assisting those in need. The centrepiece of this Budget as outlined by the Minister of Finance will be the Future Directions policy. Its measures are about for instance assisting those in need to gain affordable housing. I refer to single parents and low-income families. We are going to give incentives obviously to move those people from welfare into employment. 
If we look at the health budget we see that the health funding pathway continues to be rolled out through the primary health organisations and in further investments in our district health boards. Here is one that I would love the Opposition spokesperson on health to engage in. We have increased Vote Health steadily since we have been in office: from $6.9 billion in 1999-2000 to $9.9 billion in the current financial year. That is an effective increase of 43 percent over 5 years. But do we hear any policy on health from Lynda Scott the National Party part-time spokesperson on health? Do we hear a health policy—a starter for 10? There is none. I ask Lynda Scott to stand up take a call and let us have a debate on the $9.9 billion in health funding in the current financial year. 
I want also to refer to the point that Dr Cullen made in answer to a question today. We hear from the Opposition that we are over-regulated there is too much compliance cost and everything is negative. Then we read the World Bank survey which covers more than 130 countries that rated New Zealand the least-regulated economy and one of the easiest places to start a new business. Based on that I ask the Opposition what is its small-business policy. What is its compliance cost policy? Let us engage in that debate. Let us leave all the spurious race relations provocative stuffto one side—the naked grab for a vote—and let us talk about the economic fundamentals that Dr Brash and John Key say they are such experts on. 
Let us look at education. Operating and capital expenditure on education will increase as foreshadowed in the Budget Policy Statement. The focus of course will be on progressing the early childhood education strategy and improving quality teaching. If we go back and look at the finances the debt track as outlined in the Budget Policy Statement is well under the Government’s 30 percent of gross domestic product (GDP). The operating balance excluding revaluations and accounting changes is forecast at $5.2 billion or 3.8 percent of GDP in the current year rising to $6.3 billion or 4.4 percent of GDP in the years 2004 and 2005. 
The Government in economic terms is continuing to focus on achieving higher sustainable rates of long-term growth. I do not apologise for Dr Cullen being a bit tight on the purse strings. If we asked people around the country and some people in this Chamber the $5.6 billion surplus would be spent three hundred or four hundred times over. But we have to ascertain whether those surpluses are locked in or whether they are cyclical. Dr Cullen has to look across the water see what is happening internationally and ensure that we have insulation to protect our people especially those on low incomes. 
I want to look also at what Mr Ralph Waters Chief Executive Officer of Fletcher Building said when he made a comparison as the National Party always does between New Zealand’s taxation rates and those of Australia. Because that is the other big pitch that Dr Brash puts in. He says that we are overtaxed compared to Australia. But if we actually look at it and do a comparison between our company tax rates and those of Australia and there is an accurate representation they stack up very badly against New Zealand. I have lived there and paid taxes there. When someone rolls into the Australian tax system there are other taxes such as capital gains tax payroll tax etc. What did Mr Ralph Waters say? He said that Australia’s company tax rate advantage is a myth. Do not believe me and I do not expect the Opposition to believe me but believe one of the big guns in one of our big companies when he says that Australia’s company tax advantage is a myth. 
I want to conclude by challenging the Opposition today to put up or shut up. I challenge Opposition members today—Mr Key will obviously be the next speaker and I challenge Dr Brash to take a call—to put up their policy alternatives to match the statistics I have outlined and let us have a real debate on economic policy. I predict that they will not do that because they know they will lose. 
Debate interrupted.