Goff Phil: Budget Statement — Budget Debate 
Goff Phil: Budget Statement — Budget Debate 
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Hon PHIL GOFF (Leader of the Opposition) 
: 
 I move  
That the words after “that” be omitted and the following substituted: “this House have no confidence in the National Government led by John Key because the 2009 Budget fails to provide an effective plan to address the growing number of jobs lost and the increasing numbers of New Zealanders worried about losing their livelihoods and their homes fails to build a foundation on which New Zealand can emerge from the recession in a stronger position to take advantage of an economic upturn and fails to deliver on the promises and personal guarantees made by John Key in the election campaign just 6 months ago 
.” 
This is a dishonest Budget. It says one thing and it does just the opposite. In a nutshell this is a Budget that is full of rhetoric but empty of substance and empty of any vision. The tax cuts personally guaranteed by John Key dishonestly to win an election are gone but this Budget cannot even be honest in the words that it uses. It says “defers”. Bill English told the lock-up that the tax cuts were gone; they were gone for ever. 
But the biggest dishonesty is to talk about entitlements for superannuation being guaranteed at the very time that the Budget guts the funding of superannuation not for the 2 years that people might have been expecting but for more than a decade. That means that the Government will not face up to its responsibility for the future. It means that the baby-boomers over there are bound to be bludging off generations X and Y because by the time that generations X and Y come to retire there will be no funding to guarantee entitlements. The biggest lie of this Budget is that guarantees are made around entitlements. Without funding of superannuation when one in five New Zealanders retires in the next two decades there will be no superannuation. This Government has unilaterally broken the political consensus on superannuation and it has taken away the certainty that New Zealanders rely on for their entitlement. That more than anything will be the legacy of Bill English when this Budget is remembered in years to come. 
Talk about dishonesty! The Budget talks about closing the income gap with Australia. At the same time the Budget is entirely premised on New Zealanders having no increase in their real wages for 5 years—no increase in real wages for 5 years. Yet the Minister of Finance comes into this House and says the Government is going to close the income gap with Australia. 
Then the Budget dishonestly talks about productivity. What do we know about the keys to productivity? One of the keys to productivity is research and development. What does this Budget do? It reduces Labour’s funding for research and development through Fast Forward by 75 percent. It reduces the funding for productivity through research and development by 75 percent. 
It is a Budget that is designed to help those unfortunate enough to lose their jobs—that is the biggest lie. What do we find that this Budget actually does in practice? It takes $5 million out of the employment assistance designed to assist people who have lost their jobs to move on to another job. That is what it does in practical terms. Does it do anything for skill training? Not a thing! Does it do anything to keep young men and women in their apprenticeships? Not at all! At a time when 2800 young apprentices in the building industry have lost their jobs and their ability to complete their skill training this Budget does nothing to help those people or the hundreds of other young people who will lose their jobs lose their opportunity to acquire skills and lose their hope. This Budget has the rhetoric; it has none of the substance. 
Let us come back to what this Budget should have been about. It should have been a Budget for jobs; it is not. It is not a Budget for jobs. John Key said yesterday that his Government’s primary focus in the Budget was to avoid a ratings downgrade and within 5 minutes his loyal deputy and finance Minister had contradicted him—for the fourth time in the last 6 months—but in this case John Key was telling the truth. This Budget is designed to placate and grovel to Standard and Poor’s. This Budget was given in an unprecedented way to a group of overseas people—foreigners—who work for Standard and Poor’s 3 or 4 days before any New Zealander got to know what was in it. I say to Mr English and Mr Key that the ratings agencies are not part of the solution to the problems the world is facing; they are part of the problem. Standard and Poor’s and other rating agencies gave Enron a triple A rating right up to the weeks before it collapsed—a triple A rating. Standard and Poor’s and other agencies gave a triple A rating to the subprime mortgage agencies right up to the point that they collapsed taking with them the American financial system. And John Key came into the House smugly yesterday and said that Standard and Poor’s think we are doing a fine job. Well I am glad that Mr Key takes satisfaction from that. 
Ordinary New Zealanders have had a real gutsful of the fact that while the fat cats the financial institutions and others whose poor judgment and greed are responsible for the economic crisis we are facing emerge from this crisis with their personal assets intact and their bonuses increased ordinary New Zealanders are paying the price through the loss of their jobs and the loss of their savings. Mr Key knows that; he knows that it is New Zealanders who are paying the price for this recession and this Budget does nothing to help those who are its primary victims. 
Of course debt has to be taken seriously. Of course we have to make sure that in the longer term New Zealand lives within its means. But that does not mean that the best way of achieving that outcome is the slash-and-burn policies of this Government which will literally throw tens of thousands of New Zealanders on the scrap heap of unemployment. Am I exaggerating about tens of thousands? Am I exaggerating? 
Hon David Carter 
: Yes yes. 
Hon PHIL GOFF 
: Mr Carter is so out of touch that he does not believe that figure so let me tell him that for the first 3 months of this year the household labour force survey reported the loss of 24000 jobs—24000 jobs which was 8000 a month 2000 a week and 300 a day. What is it about those statistics that Mr Carter and his colleagues do not understand? 
Yesterday in the House I raised the point that in the last week the number of New Zealanders forced on to the dole had increased by more than 1250. Just last week 1250 extra New Zealanders were thrown on to reliance on the unemployment benefit. The National Government and Ms Bennett have suppressed that figure. Ms Bennett can tell the House whether that figure is true. In fact the figure is higher than 1250. That is the biggest increase in the number of people going on to the dole in any week since the 1990s when a National Government last oversaw a recession in this country. It is the biggest increase. 
Ms Bennett can tell the House the other statistic that she will be aware of: that most of those New Zealanders going on to the dole have never been unemployed before—never been unemployed before. The document is sitting on the desk of every Government member; those members should have a look at it because it shows that by the end of next month the number of people on the unemployment benefit in New Zealand will have doubled since National took office—doubled since National took office. How does it help to maintain our credit ratings and to make sure our debt levels come down when tens of thousands more New Zealanders are being thrown out of productive work and on to reliance on the unemployment benefit? They are unable to pay tax; breadwinners are unable to support their families; young people have no hope; and people in the Maori and Pasifika communities as always are bearing the brunt of that unemployment. 
The focus of this Budget should have been on jobs: on ensuring growth and ensuring we can get our exports up and on ensuring that people are kept in productive work. That has not happened. This Budget is bereft of imagination of vision and of any practical way to help people into jobs. I heard the rhetoric at the Job Summit. I heard the rhetoric about the 9-day working fortnight. Yes 143 jobs have been saved over the last 4 months—143! That is just over 10 percent of the number of people who went on the dole last week and last week alone. So Mr English should not come into this House pretending that this is a Budget that worries about the battlers in New Zealand that worries about the people thrown out of their jobs and that worries about the people who have lost their lifetime savings because of the corruption of people in the financial sector—which this Budget also does nothing to address. 
There were measures to get New Zealand’s economy back on track. There was KiwiSaver because we knew we needed to save more. What did this Government do? It gutted KiwiSaver; it took $3.5 billion out of KiwiSaver. That money would have done more than anything else to ensure that New Zealand got on top of its current account deficit. National scrapped the New Zealand Skills Strategy it gutted the New Zealand Fast Forward Fund and it removed the tax credits for research and development. Then Mr English comes into the House pretending that he is going to do something about the New Zealand economy. This Budget is a “Standard” but “Poor” National Government Budget. That is what it is. The Government took its instructions from people who saw one dimension of the New Zealand economy. It has done nothing in this Budget to get our country back on its feet and to get our people back into employment. 
I would like Mr Key when he gets to his feet to tell this country what the projections are for unemployment by the end of the year. Will it be up by 70000 more? Is that the figure that has been given to him by Treasury? I think it is. Will he get up and admit that or will he sit in his seat smirking? This Budget will not stem the dramatic increase in joblessness that is occurring. This is a Budget of missed opportunities. This is a Budget of broken promises—broken promises about tax cuts. You know the average New Zealander will not be too upset about the scrapping of those tax cuts because most of the money would have gone to those on higher incomes. They will not be too upset about that but they will be angry about the absolute dishonesty and recklessness of Mr Key in making that promise in order to buy votes during the election campaign when he knew that it could not be delivered upon. That is what New Zealanders will be angry about. 
They will be angry about the fact that the certainty around their superannuation has gone. They will be angry about that because the people who are now going into retirement know that the younger people are not going to pay tax now for something that they will not get when they retire. The other big part of the dishonesty around superannuation is the claim that to invest in it would be to lose money. The New Zealand Superannuation Fund last month made $1.75 billion! 
Hon Members 
: Oh no! 
Hon PHIL GOFF 
: It made $1.75 billion. There is nobody in this House who does not understand that the best time to invest funds is when the market is at or close to the bottom. By the National Government’s theory New Zealand homeowners should be selling their house now and buying it back when the prices have risen! That is National’s philosophy. Kiwis know that it makes no financial sense so why cannot the Prime Minister and the Minister of Finance see that? 
The other great broken promise was that jobs in the public sector would only be capped not cut. Mr Key should explain that to the 1470 hard-working decent ordinary New Zealanders who worked in the public sector that his Government has sacked. It does not stack up. 
This Government inherited an economy that was in good shape. It inherited an economy where the level of net debt was zero. Mr Speaker you might think it appropriate that those members are barracking to the point where you probably cannot hear the matter I am about to raise with you. The truth is that in the good times a Labour Government paid off the debt so that New Zealand’s net debt was zero. That gave the incoming National Government the flexibility with which it could have protected jobs. Instead of giving tax cuts to the top 3 percent it could have given the money to the decent ordinary working families earning less than $40000 who got nothing. Had they got something there would have been jobs for them in that. 
The truth of the matter is that the priorities of this Government are absolutely skewed and are wrong. The truth of the matter is that this is not a Budget for Kiwi battlers; it simply makes their struggle harder. This is not a Budget for employment; the National Government has clearly given up on employment. This is a Budget of missed opportunities. This is a Budget of broken promises and no more so than in the area of superannuation. This Government will be remembered for having gutted a superannuation scheme that gave certainty to New Zealanders equity to New Zealanders in retirement and equity between generations. This Government because it knows that it will not be there to be held accountable for its actions at a later date has absolutely gutted the prospect of superannuation being maintained into the future. 
I want to finish by talking about my personal experiences last week when visiting a number of places in South Auckland to talk about how the recession was affecting people. I talked to the Salvation Army to citizens advice bureaux and to budget advisory services. The social cost that they reported to me from people suffering job losses was tragic. The demand for Salvation Army food parcels had risen by 44 percent in the last few months; for the Auckland City Mission it had risen by 60 percent. The Auckland City Missioner said to Annette King and me that she had advertised a job for a cleaner; within 24 hours she had had 200 applications. This Budget does nothing to address the key issue worrying New Zealanders today.