Quinn Paul: Budget Debate 
Quinn Paul: Budget Debate 
[Volume:654;Page:4168] 
PAUL QUINN (National) 
: 
 It gives me great pleasure to stand and address this House on Budget 2009. Without question the Budget presented by the Minister of Finance last week is an outstanding Budget. 
I want to take all my friends and colleagues in the Opposition back to the election. National was elected on a platform of aspiration with a focus on jobs and growth. We were elected to encourage people to achieve their potential. We were elected to provide equal opportunity for all. We were elected to promote enterprise and most of all we were elected to entrench sustainable growth. Those are the reasons we were elected. 
We were elected in response to 9 years of largesse and extravagance by the previous administration. During the time of the previous administration GDP growth although it had increased by 3 to 4 percent on an annualised basis was mostly driven by private consumption and Government expenditure. In the meantime capital productivity which is what real growth is driven by decreased over the period of the last administration by 0.05 percent. Capital productivity went downwards every year. Why did that happen? That happened because on the one hand the previous administration spent 9 years ripping off the taxpayer and on the other hand it allowed and led an insatiable appetite for binge spending. 
National has come in and taken office on a platform of aspiration jobs and growth. It based those assumptions on the promised surpluses in Government accounts as they were laid out prior to the election. As we know of course when we arrived in Government we found that those surpluses were in fact fantasy. That pathway of moving from forecast surpluses to re-forecasts of deficits was very eloquently described by my colleague the Hon Maurice Williamson. 
When we took office instead of being able to establish a programme that would set about re-energising the country we had to go back to basics. A starting point for that is a truism that my father I am sure would have taught one Parekura Horomia when he was in his primary school days at Rangitukia. The lesson my father would have given my friend and colleague Parekura Horomia comes from Charles Dickens’ famous book  
David Copperfield 
: “Annual income twenty pounds annual expenditure nineteen nineteen and six result happiness. Annual income twenty pounds annual expenditure twenty pound ought and six result misery.” That is where we are today. That lesson is no less true today than it was those many moons ago. 
I am afraid that Parekura could not get that message through to the previous Labour Government. Over the last 5 years of that administration core Crown expenses increased by 49 percent and revenue increased by 25 percent. That Government was outspending the amount of money it was collecting by 100 percent. That was the parlous state that we took over. 
Let me give the Opposition a little Economics 101 lesson. Growth commonly measured in GDP terms is equal to private consumption Government expenditure the trade balance and investment. I have already canvassed the issue of investment. We had a deficit over 9 years of 0.5 percent on an annualised basis. That was not contributing much at all. Let us look at private consumption. Household debt rose from $93 billion in 2000 to $168 billion by the year 2009. That left the debt of householders at 160 percent of their disposable income. The big issue with this debt is that most of it had gone either into housing or into imported consumables. That is the big issue because we had no exports and no productivity driving exports to match the imports. 
I now move to the current account deficit. In 1999 we had a deficit of $5 billion. By the time the previous Labour Government was chucked out of office the current account deficit was $15 billion. We had gone from the previous pattern of cyclical movements to the situation where the current account deficit is structural. That is a fundamental reason that this Government on coming into office set out to turn things round. 
My colleague the Hon Maurice Williamson has covered the issue of Government expenditure so I will not canvass that. But when we talk about capital investment let us reflect on what Labour did when it was last in Government. Members will remember the knowledge wave: economic transformation growth and innovation. If all those programmes were so successful and so good for the country then how come productivity went down? Where are the fruits of all that propaganda? There are none. The bottom line is that under that party’s period in Government this country gorged itself on things that it could not afford and that has set back this country by 20 years. 
This Government has announced a number of key objectives in this Budget which I am sure my friends and colleagues will cover over the next few days of this Budget debate such as keeping the economy going safeguarding entitlements—those will be spelt out and some of them already have been—improving public services keeping Government debt under control lifting productivity and improving New Zealand’s international competitiveness. 
I will touch on a couple of things that seem to have occupied the minds of Opposition members. One is superannuation and the fact that Labour members would borrow to maintain superannuation. The first thing is as Dr Cullen has said that superannuation is really just a cash-flow control issue. When we are in surplus we will put cash away and when we are in deficit we will not do anything. Members opposite want to margin-trade away this country’s future. 
The second thing I will talk about briefly is that members opposite have said that the ratings agencies are the same ratings agencies that gave ratings to Enron and so on. The point they have missed is that it is lenders who take guidance from the ratings agencies not borrowers. Lenders want to know what the ratings agencies are saying about us. The fact is that to survive we will have to adjust our budget. 
This is a Budget for the times. It is about getting our house in order. It is about eliminating waste. It is about value creation. It is about the road to recovery. It is about aspiration.