Groser Tim: Budget DebateText is incorporated into the Bound VolumeGroser Tim: Budget Debate[Sitting date: 05 June 2013. Volume:690;Page:10737. Text is incorporated into the Bound Volume.]Hon TIM GROSER (Minister of Trade): Budget 2013 has I think to be seen against the background of its predecessors the economic challenges facing New Zealand and in particular the quite extraordinary challenges facing other developed economies of the OECD. Shortly after the Minister of Finance introduced this Budget into the House I—like other trade Ministers from New Zealand over the last 10 years—had the privilege of representing New Zealand at the OECD ministerial meeting. Going from New Zealand where I think there is growing confidence that we are indeed on theright track into the heart of Europe and the heart of the problems of the eurozone was very striking indeed. To say that the mood was sombre would be considerably understating the case. I mean forget the outlier countries—the countries in serious trouble like Greece Portugal and Spain. We just got news on the eve of the OECD ministerial meeting that the youth unemployment rate in Sweden—a country that I am sure most members of this House would consider is one of the most cohesive and successful societies in the world—is 25.1 percent. There is 25.1 percent youth unemployment in Sweden with riots taking place in Stockholm as a result of the frictions that this inevitably causes. So I think that people need to wake up and smell the roses here when they sit down and see the enormous progress that New Zealand has made under the superb leadership of the Minister of Finance Bill English.I had the privilege of speaking to a leader of one of these countries who asked me: “Well Mr Groser what are the big numbers in New Zealand?”. And I said: “Well the big numbers Prime Minister are these. We have growth of 3.1 percent. We have inflation of 0.9 percent and 0 percent on food prices. We have unemployment still higher than we want but trending down and currently at 6.2 percent. We have seen household income rise 20 percent in the last 4 years. And as for our debt”—and remember this: the average gross Government debt to GDP in OECD countries is well over 75 percent and for many of them it is above 100 percent—“we are trending just above 30 percent at the moment from memory and we will be back below 30 percent in a year or two. We will return to surplus in 2014-15 which has been much improved by the latest statements coming out of Treasury a few days ago.” This Prime Minister said to me: “My God I wish we had numbers like that.” And I bet that most of those countries would wish that they had numbers like that; they wish they could tell their young people that there is a future for them in their countries.The achievement of this Government is quite considerable and I sense a growing realisation in New Zealand that we are turning the corner. When we set this against the background of the numbers that we inherited—let me reel off just a couple of them. Inflation—Dr David Clark: Five long years.Hon TIM GROSER: —you can check it yourself if you think it is a lie—to November 2008 was 5.1 percent which is five times the current rate of inflation. We had huge debt growing because the Labour-Green Government of the previous 3 years lost the plot completely just throwing money at every problem that arose in the belief that that would solve the problem. There was no prospect of returning to surplus at all. There was not even a date out there—no prospect of returning to surplus. When you think about the turn-round between those two sets of numbers and also factor in the extraordinary additional challenges of the biggest natural disaster to hit New Zealand for 70 years which cost $40 billion and the collapse of our finance companies through the greatest financial crisis in the last 70 years I think this Budget and the achievements of the Minister of Finance and his senior colleagues in steering New Zealand to this position is nothing short of remarkable.Looking at this Budget I will pick out just a few issues at random. Look at the position of health. I think it is important to look at these issues given the absurd critique that somehow this Government is focusing on—what do they call it—rich mates. Is that not the rhetoric that is used—rich mates? Let us look at just the facts. This is a National-led Government. We are working for the nation. Let us look at some of the data in this year’s Budget to uncover the real truths here. In health a portfolio that Minister Ryall has handled with outstanding professional ease the way that Mr Ryall has managed to move this whole debate forward in such a positive direction is extraordinary. We have allocated in this Budget over the next 4 years an additional $1.6 billion for dementiacare for more elective surgery for better treatment of diabetes and for more screening for adult health.We have allocated an extra $900 million that is carefully targeted at early childhood education at primary education and at social education. And as for poor families—just to return to the theme of the absurdity of this critique that we are trying to look after rich mates—we are interested in all New Zealanders particularly people who are hard-pressed by economic conditions. The first thing is that we believe absolutely—and all the empirical evidence tells us this—that the most important assistance you can give somebody is a paid job and we have created 50000 of those new jobs in the last 2 years. We are going to insulate a further 46000 homes mostly for people on low incomes because the evidence tells us that warm homes are a crucial ingredient in the health and educational performance of young children in low-income families. We are going to allocate an additional $21 million to deal with rheumatic fever one of the childhood problems that have plagued these people over many years. This is what this Government is interested in: all New Zealanders—the nation.But this has not been a Budget just conceived on its own; we have also pursued a rigorous plan through the Business Growth Agenda. Much of this has been implemented through previous Budgets. If we look at the fantastic tax reforms the fiscally neutral tax reforms introduced in the 2010 Budget by the same Minister of Finance we can see the benefits of this already coming through. The figures that came through in terms of fiscal balances this week showed increased tax revenue as a result of the structural changes the Minister of Finance introduced under some of the most difficult economic conditions that the world has seen in 70 years. And we will see also as this economy continues to move in the right direction the effects of incentivising middle-income New Zealand to the point where 75 percent of New Zealanders are paying the top tax rate of 17.5c. We are going to see the structural policies that we have introduced over the last four or five Budgets start to impact on New Zealand’s long-term and medium-term prospects.And all of this has been done under a coordinated plan called the Business Growth Agenda which covers broadly speaking six headings: innovation capital markets skilled and safe workforces management of our natural resource base more effective use of our infrastructure and investment in it and close attention to export markets which is the portfolio obviously of greatest interest to me in terms of the Government’s structural plan. We can see elements of Budget 2013 in moving forward all of these agendas. Let us just look at innovation for example. This Budget has allocated an additional $96 million for further investment in public services. We are going to invest $106 million over the next 4 years in research and development assistance to business and new start-ups. So I think that this Budget as with its predecessors is placing New Zealand in an excellent space so that in the second decade of the 21st century New Zealanders can look forward with great confidence to a future in this country.Finally to conclude I am going to award first prize for the most ridiculous comment made in the context of this Budget to the co-leader of the Green Party Dr Russel Norman or as I call him “Dr No” since he is opposed to any policies that would raise growth or create employment. You may recall that Russel Norman likened our current Prime Minister to Rob Muldoon. Having been in that Prime Minister’s so-called think tank for 3 years—2½ years under Muldoon and 6 months under David Lange—unlike an Australian schoolboy I actually knew Muldoon’s personality. I would argue that I have never met two people more unalike than John Key and Robert Muldoon.