Bishop ChrisCHRIS BISHOP (National): Budget 2016 was delivered by our great Minister of Finance at a time of great global economic uncertainty and actually those uncertainties have only increased in recent days with Brexit—the British exit from the European Union. I was thinking over the weekend as I remained transfixed watching the BBC coverage and the Sky News coverage on television and reflecting on the seismic political and economic events in my lifetime. I was 6 possibly 7 when the Berlin Wall fell. I do not really remember the Berlin Wall falling but I certainly remember 9/11. I certainly remember the attack on the twin towers and I was thinking over the weekend about what is comparable to 9/11. I do not think Brexit meets it but it is certainly probably second in terms of the big political and economic events of my lifetime.I have got to say that I am a bit of an optimist about the exit from the European Union by Britain. I think Britain is fundamentally a great country and its history demonstrates that it is versatile and adaptive and it will cope with exiting from the European Union as indeed we will cope with it as well. The initial response from the markets in the short term was panic I think in the few hours post the decision as we watched during the day on Friday as those leave votes tallied up in the north-east and then increasingly around the country. Is it not an interesting irony of the whole situation that all the exciting things in British politics happen in the middle of the night? They vote till 10 o'clock the results come in at 4 a.m. and it is nice for us because it is 4 in the afternoon and we can watch it all happen.I think economic uncertainty has increased in the days following the Brexit vote so the question really is now more than ever before we need a Budget like Budget 2016 which this Appropriation Bill gives effect to and we need a Government that knows where it is going—that provides the stability and the economic confidence that will allow New Zealand to continue to make its way in the world. I think this Budget does three things that are very important in light of the global economic uncertainty—and we had the Reserve Bank officials in at the Finance and Expenditure Committee which I am privileged to serve on a couple of weeks ago talking about how global growth is still weak despite very stimulatory monetary policy around the world.We look at the EU and we see anaemic growth; we look at the United States and we see fundamentally anaemic and sclerotic growth rates. So this is a time of uncertainty and I think this Budget does three things that are very important. Firstly it moves to increasingly diversify our economy; secondly it tries to build an economy based around innovation and based around science and technology; and thirdly—and this Appropriation Bill gives effect to this—it is a Budget that tries to expand our opportunities on the international stage and that tries to grow our export markets and that is incredibly important in light of the British exit from the European Union.On that first point about the diversification of the New Zealand economy when Britain entered the EU in the 1970s it is fair to say that New Zealand did not respond well and that it was a cataclysmic shock to the New Zealand economy when 60 or 70 percent of our exports went to Britain and that was cut very quickly—not quite overnight but very very quickly beyond that. In 2016 we are in a much better position to cope with Britain's exit from the European Union because we have an increasingly diverse export base in terms of both the types of goods and services we export and the places to which they go. The fourth Labour Government from 1984 onwards deserves a lot of credit for the important changes to the New Zealand economy that it enacted which have led to that situation—changes that Labour members have turned their backs on in some ways I suggest to the House.This Budget builds on past measures by past Governments to diversify the economy and we are increasingly seeing our ICT sector that we are blessed to have in Wellington and the Hutt Valley—or as I call it Technology Valley"—booming. Exports are growing at record pace. Jobs are being added into that sector of the economy—the report out just last week demonstrated just that. If you look at reports like the TIN100 Industry Analysis and the TIN200 report you will see exactly the same. Our tourism sector under the guidance of Paula Bennett as Associate Minister of Tourism and of course the Prime Minister as Minister of Tourism is going great guns.Something else in the Estimates I want to point to is something that I know is of real importance to our regional MPs—people like Sarah Dowie and Stuart Smith—and that is the regional research institutes that are going to increasingly diversify our economy in a regional sense. I was down in Southland last week with the regional development caucus committee of the National Party meeting with the great people down there from Venture Southland the Southland economic development agency hearing about its plans for its regional institute which has been shortlisted and is about investing in primary industry productivity. I know my colleague Stuart Smith from the great wine-growing province of Marlborough has high hopes for the regional institute that he hopes to establish there—a wine institute. That is exactly what we should be doing as a country—focusing on the regional strengths that we have. Clearly if you go to a region like Marlborough or you go down south where they have got aluminium and they have got primary products or you go to Taranaki with oil and gas it obviously makes sense to focus on our strengths. This Budget gives effect to those regional institutes and I think that is a good thing.The second thing I want to point to is innovation. Every now and then—well not every now and then; actually it is a constant refrain from members opposite that we have got to focus on building an innovative economy we have got to focus on innovation and those members' solution to all this is always research and development tax credits. They never take that next step and actually look at the broader picture that we need to be investing in.What this Budget gives effect to is the Innovative New Zealand package—$761 million across the science sector and across our tertiary sector to invest in the core capabilities of our Crown research institutes to invest in things like the Pre-seed Accelerator Fund to increase investment for our incubators in New Zealand and for a range of very important initiatives like that. It is not true to say that this is politically directed flunkeys handing out science money as one particular member opposite sometimes mentions. Science funding in New Zealand is arm's length from the Minister. It is given out by independent bodies like the Marsden Fund and we know it is independent because the Marsden Fund gave Jane Kelsey a large sum of money to issue a study on neo-liberalism and the transcendent nature of it in the public policy sphere. I can assure members that if it was politically directed the National Government probably would not be funding such a project but that just illustrates the falsity of the claim that this is something that is politically directed.It is likewise too with the other funds that are funded like the Endeavour Fund. This Innovative New Zealand package will lead to more commercialisation of scientific discoveries and if you go to the Callaghan Innovation campus and the precinct that I am privileged to have in my neck of the woods in the Hutt Valley there is a range of highly innovative companies there doing great things and this Budget will help support companies like that.The third thing I want to mention is what this Budget does about expanding our overseas trade opportunities. We have done a lot in this space already signing free-trade agreements with Malaysia and economic partnerships with Taipei Hong Kong Korea and of course the big one of them all which is the Trans-Pacific Partnership agreement. Something that has not received a lot of press in the Budget but I think is really important is the new initiative that funds the Centres for Asia-Pacific Excellence which will be based in our universities.Increasingly our future is not so much with the EU and UK or not so much with the old economies that we have traditionally associated with; our future is in Asia and we need more young kids in our universities and more young students studying Asian languages and studying Asian cultures. That is why we funded things like the Prime Minister's Scholarships for Asia programme—which is given effect to in this Budget—that sends young New Zealanders offshore to Asian economies and Asian countries to study culture to learn the language to enmesh themselves in the cultures of those economies and then to come back to New Zealand as they invariably do and add to the knowledge base of this economy. That is why we fund things like that and it is why we are funding the Centres for Asia-Pacific Excellence. There are going to be three of them set up. I think that will be a significant and substantive long-term legacy of this Government and this Budget. This is a Government that is focused on building an outwardly focused confident New Zealand on the world stage.I want to end my speech by just cycling back to where I started which is: in a time of global uncertainty what is the correct policy response? Is it to try to insulate ourselves from the rest of the world? Is it to put up the shutters of "Fortress New Zealand" and retreat to some sort of 1970s utopia that never existed? This Government does not believe that is the right answer. This Government believes the right answer for New Zealand is to be outwardly focused to be confident on the world stage and to expand our overseas trade opportunities. I commend this Appropriation Bill to the House."