Goldsmith Paul: Budget DebateText is incorporated into the Bound VolumeGoldsmith Paul: Budget Debate[Sitting date: 28 May 2013. Volume:690;Page:10422. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National): It is a pleasure to rise in support of this great Budget and interesting to follow on from David Clark who has been studying in the United States for the past few weeks. I had hoped that he would come back to New Zealand better informed and with some fresh ideas but instead we have the same old monotonous line about our record over the last 50 years.Dr David Clark: Which is the worst of any Government.PAUL GOLDSMITH:Well hello Mr Clark the global financial crisis has been the worst crisis internationally for 70-odd years but the good news is that this Budget confirms that New Zealand is on the right track. Our growth is amongst the best in the OECD unemployment is falling real wages are rising inflation is subdued interest rates are the lowest in decades and the Government books will be returning to surplus in 2014 and 2015 as we promised. Sure these are not boom times. Retailers in Newmarket and around Auckland and New Zealand are still facing headwinds. Everybody know that. But most fair-minded New Zealanders agree that the results of this Budget are indeed promising and relatively good in a difficult international context.That good result was by no means guaranteed. It is easy to forget that when John Key and National entered Government at the end of 2008—when I was still happily writing books in Auckland—in the early years of the global financial crisis Treasury projected 10 years of deficits and rising debt. The previous Government had increased spending by an amazing 50 percent over a short period. The New Zealand Government’s books were pregnant with expensive new schemes that were never properly funded which led New Zealand to have deficits projected for 10 years. So to have turned that round so that this year’s deficit will be less than 1 percent of GDP and next year will yield a surplus is an achievement of which we can all be proud. Contrast that with Australia which has just announced a $20 billion deficit this year and with many other comparable countries such as the United States and the UK where there is no end in sight to deficits—it is a remarkable achievement for New Zealand.I hear the Labour members opposite saying that they would have done the same. Yeah right! We do not believe that for a moment. They have opposed every control and limit that we have placed on spending—every scheme that we have tried to get spending under control they have opposed. Perhaps their idea is just to increase taxes. Well how is that working in France? Not very well as far as I can see. Maybe they think a capital gains tax on productive businesses is a good idea but I certainly do not see that that is a good way to increase and promote savings in this country which they say they are concerned about.I am particularly proud overall that the adjustment that we have made in this Budget has been achieved without resort to the excessive austerity that we have seen in other parts of the world. The return to surplus has been achieved carefully without undermining growth and while we continue to support the most vulnerable in New Zealand society. There have been no gimmicks. This Government holds to the traditional notion that a country has to earn its money—it cannot simply print it—and that the only way to pay our way in the world is to produce goods and services that freeconsumers out there want to buy. So this Government has focused on doing the basics well. It is about building a productive and competitive economy.I am happy to take the House through the core elements of the Business Growth Agenda which people have heard about a number of times over the last few years. It focuses on what businesses need to grow and thereby increase exports and employ New Zealanders with good high-paying jobs. It is about ensuring access to export markets and innovation—more of which I will talk about later. It is about skilled and safe workforces such as trade training schemes which we are investing a lot of money in. It is about access to capital markets and we have given a shot in the arm to that area with the Mighty River Power flotation. It is about natural resources—and we are hearing about the Denniston Plateau right at the moment again opposed by the Greens and their friends in Labour—and infrastructure. The Waterview tunnel of which we had the sod-turning only a few days ago will reduce traffic enormously on the streets of Epsom and throughout Auckland and is a very good example of the investment that we are making in infrastructure in this country.As well as those things it is all about delivering better public services without increasing spending in most areas. A good example of that is in the area of police where recorded crime is at a 24-year low in this country and we are rolling out new technology for front-line police officers but the baseline funding for police has not been increased. Instead police have found more efficient and effective ways of doing their jobs and generating savings that we can reinvest.Governments should be judged on the quality of what they achieve rather than the vast amounts they spend and this Government has understood that as every other business person who has to survive on their wits has understood that for a long time. Health and education once more received the lion’s share of the new spending in the Budget and considerable resources some $200 million are also being pumped into science and innovation.We are signalling that ACC levy cuts that will benefit families and businesses across New Zealand will be coming in the next couple of years. We are expecting a $300 million reduction in 2014-15 and around about a billion the following year. As a small business operator myself in the past I know how painful ACC levies are—the invoices always arrive at the most inconvenient time. I am very proud to be part of a Government that—because of the improved performance of the way that we have managed ACC that led to better rehabilitation rates—can sustainably reduce those levies over time and I hope we can go further on that score.This Budget also includes the proceeds of the first partial asset sale—some $1.7 billion for Mighty River Power—and that money is going into the Future Investment Fund for investment in new capital assets such as the redeveloped hospitals in Christchurch. That partial asset sale allows us to have these new assets without borrowing more on global markets and thereby reduces our vulnerability to a sudden change of sentiment in these dangerous times. I have no doubt as well that the scrutiny of the share market will improve the business performance of Mighty River Power and over time the electricity market in general.I am still shocked frankly by the proposal of the Labour Party and the Greens over power. I expect that sort of thing from the Greens but I had thought that since the 1980s there has been an understanding within the major parties of this country that heavy-handed regulation had failed in the 1970s and that markets were the best way to get an efficient system in power and education. But Labour seems to have withdrawn from that basic understanding and I am shocked and deeply saddened by that.The real focus also in the Budget has been on supporting low-income families. Budget 2013 signals our intent to grow the social housing sector. As well a further$100 million has been invested in warmer healthier homes for those in need. Already there are some 215000 homes across the country from deep in the south up into the north that are warmer because of this Government’s scheme. So I am proud to be a part of that.Addressing Auckland’s housing affordability issues was another part of this Budget and rightly so. My aunt in Feilding might well ask why on earth she should care about Auckland house prices when they are cheap down there. Well the answer is that she will care if runaway house prices in Auckland lead to higher interest rates for all New Zealanders. And she certainly would care if those higher interest rates if they were to come sooner than they needed to led to the New Zealand dollar being higher than it needs to be putting further pressure on the economy as a whole. So getting on top of Auckland housing affordability and the bubble that we are potentially seeing in Auckland with 12 percent growth in the past year is an important focus of this Budget.It is a real worry that thousands of Aucklanders are struggling to progress up the housing ladder. So the Government’s housing response has been grounded in the work of the Productivity Commission and it is focused particularly upon increasing the supply of land. Constantly we hear people denying that there is a link between rigid land supply policies and house prices but you only have to look at the evidence: the availability of sections in Auckland has plummeted over the past 10 years and the price of sections has increased over the past 5 years from about $100000 to $325000 today.We are currently building only 4000 houses when we need 13000-odd so the Government’s Budget initiatives on housing and the housing accord that it signed with Auckland Council and is working on with Auckland Council provide a circuit breaker to get some pace and momentum back into addressing housing supply in the Auckland region. I am sure that will make a real difference to the lives of many Aucklanders who are wanting to get on to that housing ladder.National is building towards a stronger more stable economy and it continues to work on building a brighter future for all New Zealanders. I commend the Budget to the House. Thank you.