Hipkins Chris: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Hipkins Chris: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11123. Text is incorporated into the Bound Volume.] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 This Budget demonstrates very clearly what a cruel hoax the National Party played on New Zealanders at the last election. National members went up and down the country and said that New Zealanders could have significant tax cuts with no cuts to public services and no increase in borrowing. They could still have big tax cuts. Did they get that yesterday? No they did not. They got both of those things: they got cuts to public services and they got an increase in borrowing to pay for tax cuts. That is exactly what the National Party said it would not do. This is a Budget of broken promises—be very clear about that. National broke so many of the promises made in its manifesto it is almost impossible to count them all. 
John Key stared down the barrel of a TV camera and said that if he did a halfway decent job of managing the economy National would not need to increase GST. Here we are only 18 months into National’s management of the economy and what has it done? National has increased GST in order to pay for tax cuts that will disproportionately go to those on the highest incomes. 
A full third of the money that was dished out in tax cuts yesterday goes to the top 5 percent of income earners. People like Mr Key and me even who are in the top 5 percent of income earners will get the lion’s share of the tax cuts that are being dished out while those on the lowest incomes will continue to scrape by in order to meet the increased cost of living that this Budget will impose through increased GST and increased inflation. Every time hard-working Kiwis go to the supermarket they will pay more. Every time they fill up their cars at the petrol station they will pay more. Every time they pay their rates bill they will pay more. For every bill they pay that has GST on it they will pay more. New Zealanders will pay more. People on average and lower incomes will be given only modest very small tax cuts that will not compensate for the extra money that average hard-working New Zealanders will be paying in order to fund the tax cuts that disproportionately go to those on the highest incomes. Broken promises are what this Budget is all about. 
There were going to be no cuts to early childhood education under National but that is exactly what it has done. Not only has National made cuts to early childhood education but it has made cuts to the highest-quality early childhood education. Those parents who send their kids to early childhood centres that made the effort to get 100 percent of their staff qualified are having their funding cut. They are going to pay more; if they have 2 kids they will have to potentially pay 50 bucks extra a week—50 bucks extra a week—for their early childhood education. It will not be compensated for by the tax cuts that the Government has offered. Those families will get clobbered. That is a broken promise. 
National said that it would keep student loans interest-free. Well the Government has not introduced a market interest rate: it has introduced a new annual fee instead. That is another broken promise. It said that it would not introduce interest-free student loans and instead it has introduced a new annual fee. 
National said it would focus resources on the front line and would deliver tax cuts. National has not focused on the front line in respect of accident compensation. In fact it has doubled the policy advice budget for the Accident Compensation Corporation. Why has National done that? Because Nick Smith wants more advice on how to privatise accident compensation. National says that in the Budget document. National has another $2 million going into policy advice on how it can privatise the accident compensation scheme. This is another broken promise from the National Government. 
The biggest hoax of all though was that National would not increase borrowing to pay for its tax cuts because that is exactly what it is doing in this Budget. I say to all of the baby boomers in particular who will retire in the next 10 years that there will be a significant increase in the cost to the Crown of their retirement. Where will the money to pay for their superannuation come from? Where will the money to pay for their health care come from? The Government has not been contributing to the Superannuation Fund and it is still not contributing to the fund. Instead it is giving out tax cuts to those on the highest incomes. What does that mean for the baby boomers who will be retiring in the next 10 to 15 years? John Key said that he will resign if their superannuation is cut. He will not be here in 10 to 15 years’ time when the baby boomers retire but he will have left a strategic deficit a massive deficit. Borrowing to pay for tax cuts will be his legacy. In 10 years’ time we will have increased debt and a baby-boomer population wanting to retire and wanting their superannuation and the cupboard will be bare. There will be no money left to pay for it because John Key and Bill English dished it all out in unaffordable tax cuts in this year’s Budget.