Bayly Andrew: Debate on Budget Policy StatementText is incorporated into the Bound VolumeBayly Andrew: Debate on Budget Policy Statement[Sitting date: 09 March 2016. Volume:711;Page:9545. Text is incorporated into the Bound Volume.]ANDREW BAYLY (National—Hunua): Before I start I just want to acknowledge the passing of Tahuna Minhinnick who was a leader of Ngāti Te Ata in my electorate. He played a pivotal role in leading that iwi and he has been cut down in his prime. I want to share my condolences and sympathy with not only the family but also the iwi.It was interesting listening to that speech by the previous speaker Stuart Nash. Sometimes you must wonder whether we are actually in the same place. I just do not even know where some of those figures came from. I have been trying to find out where he even dragged up some of those figures from which I think in some cases are totally wrong. What I am going to talk about today is that this Government has four key things that it is trying to achieve. One is returning—Stuart Nash: I raise a point of order Mr Speaker. [Interruption]The ASSISTANT SPEAKER (Lindsay Tisch): Order! [Interruption] Order! There is a point of order.Stuart Nash: Page 4 Budget Policy Statement—The ASSISTANT SPEAKER (Lindsay Tisch): Order! That is not a point of order; that is wasting the House’s time.ANDREW BAYLY: The second thing we are trying to do is make this economy much more productive and competitive. Thirdly we want to deliver better value from the Public Service—and again we are going to pick that point up—and fourthly we do and have continued to support the efforts in Christchurch. I note that we have spent $17 billion over the last few years trying to get Christchurch back into shape.I will just deal with the first point: returning this country back to surplus. Well guess what? We have already achieved that. We have taken this country from an $18 billion deficit in 2011 back to a surplus of $414 million. From here—even with the Treasury forecast—we are going to be around budget but continuing to grow those surpluses over time. Mr Nash I suggest you stay and learn something before you take off. Of course we just reported in the last 7 months to the end of January Mr Nash that we have achieved an even higher Budget surplus than we were projecting which is close on a billion dollars.So what does this all mean? Every year this Government spends $6 billion on new infrastructure: roads rail transport education and new schools. What it does is it creates the opportunity for new spending. This year we have an extra billion to spend and next year $2.5 billion. What that does is help to fund that continued building of an infrastructure network for this country to enable all New Zealanders to grow and prosper whether they are working as employees or whether they are running a business. The second thing is that running a surplus means that we can reduce debt. Contrary to what Mr Nash said the rate of debt to GDP is actually 25.4 percent. We have got a projection an intention to get it down to 20 percent by 2020. I have spoken previously in this House about how we compare with countries like Australia which in 5 years’ time is projected to have close to twice our level of debt—i.e. just under 40 percent. England and Europe are projected to have four times our level of debt and the US five times our debt levels. We have modest debt levels and we want to see them come down. The only way to do that is to deliver surpluses.The other thing that is leading to these surpluses is growth. Somehow everyone from the Opposition has been very silent on this. It is 2.3 percent—Todd Muller: How much?ANDREW BAYLY: It is 2.3 percent in the year just gone and it is projected to be averaging 2.7 percent over the next 3 years. Of course what does that all mean? It means that we can actually start to see wage growth and see people getting paid more and families earning more.Hon Clayton Cosgrove: To pay your public services.ANDREW BAYLY: So it is interesting that when we look at the wage growth in 2015 it was 3.1 percent Mr Cosgrove—3.1 compared with one of our lowest inflation rates of 0.1 percent. That means a 3 percent real increase for all the working people in New Zealand—even for you Mr Cosgrove. Also what that means is that they are also continuing to benefit—our households our working people—from low interest rates because we have low inflation; also fuel costs and all those other things. So we are starting to see some real benefits coming to our hard-working New Zealanders. Then when you overlay that with those recent policy announcements around our social initiatives—not only the free access to health care for under-13-year-olds which was brought in last year but also the recent Budget announcement of nearly $800 million that is going towards people who earn less than $36500 getting a $25 increase per week. That is a real increase for those people. That is about sharing the gains with all New Zealanders. This is what this Government is about: sharing the gains and recognising that everyone has a part to play. Everyone should be participating in the upside.I now want to turn to the second one of our initiatives which is about making our economy more productive and competitive. By running a good economy it means that we can start to help businesses in an even more meaningful way. We are limited and this is where the Opposition I find starts to stray into saying that the Government should be doing these things and this and that. Often we do not have jurisdiction over them. We cannot influence what goes on in the business sector. What we can do is make sure we have got the right policy settings. So it is interesting what we can do.What have we done? ACC—we have basically written off $2 billion of levies reduced them by $2 billion and I note in the last Budget that we cut them by $430 million. The Hon Nikki Kaye is doing a great job seeing the levies reduce for employers for the workers’ account and also for motor vehicles. Secondly we continue to invest in research and development and I note the previous speakers on this. We want to get research and development up to 1 percent of GDP but we put $80 million in in the last Budget to further increase the level of investment in research and development and we do agree that research and development is vital to our economy.Thirdly we are continuing to invest in skills training and we have got a target of getting to 60 percent of all people aged between 25 and 34 into skills training. People seem to have glossed over it. We have opened up 21 new trades academies. I note in the February 2016 report that there are over 40000 people now doing apprenticeship schemes in New Zealand or the equivalent—40000 people working. And I hear it all the time that we do not put people into apprenticeship schemes. That is very meaningful.Then what else can we do? The main thing we can do for businesses is to create a marketplace. From a Government perspective that is about free-trade agreements. We have already done the Korean one. We have done the Trans-Pacific Partnership agreement and of course there is a lot of debate about it but what cannot be debated is that even on today’s figures there is a $102 million benefit for the dairy industry. I heard it all during question time about what we are doing in the dairy industry: there is a $102 million immediate benefit once that agreement comes into force. So those are really important things. We are also going back over the China free-trade agreement. We were the first to get that but we are going back now that the Australians are doing one seeing whether we can leverage that position and to further improve our trade links. I think that is great. It is a meaningful thing when you take $200 million - odd and give it to businesses in the form of reduced penalties that they have to pay at the border.Then there are other initiatives—for instance with iwi. I think the passage of the Te Ture Whenua Māori Bill which enables iwi to better use their lands is a very important economic step in terms of helping them drive their own investments much more productively. Then there is the roll-out of broadband. I do not want to labour that point but everyone is well aware of that—what a significant investment it is just on $2 billion.But I just want to say that with the better value for services that we have been trying to drive out of the Public Service we have reduced the extent of the investment that we have made in public services from 34 percent to 30 percent of GDP. That is effectively $9 billion of savings. That is $9 billion of savings that can be applied to new schools and new investments in road and in transport. I think that during that time what we have also done is we have made sure that our Public Service is working much more effectively and getting better value for money. So it is not just necessarily about cutting back the number of people involved in those activities; it is about getting better results.The other thing that I think is most important about the way this Government is operating is it is setting clear targets—sometimes even uncomfortable targets to try to achieve whether it is social policy whether it is in the environmental sector—and trying to measure ourselves against those as opposed to just simply spending money which is always the way that Governments are operated. So this approach towards a real outcome focus I think is a most important factor towards driving better Government. I think all those things around social developments around our environmental policies around our economic management are all about rebuilding the Kiwi Dream.