Swain Paul: Budget Debate 
Swain Paul: Budget Debate 
[Volume:626;Page:21091] 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I am very pleased to rise to speak in the Budget 2005 debate. As a Labour member of Parliament I am very very proud of Labour’s record. This is our sixth Budget and this Labour Government has put money in the pockets of working families rebuilt the infrastructure and put money back into health and education as compared with National which I shall talk about in a minute. 
I thought it was a bit rich for Maurice Williamson to talk in this House about roading in Auckland. What was the single biggest issue that faced this Government when it came into office in 1999? It was the under-investment in the transport infrastructure for 9 long years under National. Most people in Auckland know that. Now National has the cheek to say in this House that the billions of dollars we are spending up there is not enough. National ran down that infrastructure. One could not see a bulldozer or a roadworks sign in Auckland for years and years. But what is the big complaint that some of our electorate offices—offices like that of Judith Tizard—get now? It is that people are concerned about the congestion caused by roadworks because so much work is going on up there. So any attempt by the National Party to say that it was the party that did so much for transport is just ridiculous. People will not forget the fact that the National Party was the party that was going to privatise the roads. Do members remember that? That policy was hated by councils up and down this country and they campaigned against it. So that little policy still lies in Maurice Williamson’s bottom drawer and it will be back again. 
Finally now there is a bit of a contrast. We are finally starting to hear some of the things that the National Party might do—not what it will do but what it might do—and we shall investigate that a little more. On the one hand we have the Labour Party which is fiscally responsible and has been so for 6 years because it is important to put a few little nuts away from the tree just in case things go a bit soft. That is the way it is done. Then of course Labour has been investing in health and education. That is the important thing to do given that they were also run down under a National-led Government during the 1990s. National talks about health education investment and spending. Part of the problem has been investing in the infrastructure like paying for nurses’ salaries—because they were leaving and going overseas—paying for doctors’ salaries and things like that. That is very very important. The Working for Families package is a tax cut. That is money going into the pockets of ordinary working families. That is a tax cut that is targeted to people who need it the most and that is the Labour way of doing things which I have always talked about and I have talked about infrastructure. 
On the other hand of course is the National Party’s policy. How would one sum it up in three basic sentences? Well first of all National will spend more and I will talk about that in just a minute. In my own area National is talking about spending over a billion dollars on new prisons because it will get rid of parole or something like that. National will spend more. How will it fund that? It will borrow. Have members heard of that before—spending and borrowing? Yes. It goes back to the Muldoon era. It is typical Tory economics—spend now and put a mortgage on the rest of New Zealand for years and years to come. We have heard it all before. Then just to chuck a little bit of spice into the mix National will cut taxes. So it will spend more and cut taxes. In the old days that was called voodoo economics—somehow one could have one’s cake and eat it too. Somehow one can cut huge amounts of money out of the system yet somehow provide more services for people. Most people now in the 21st century realise that that cannot be done. [ 
Interruption 
] Well National members will say that of course and they will slip and slide. 
What did the National Party say about tax cuts? Initially John Key all hot and flushed said on television: “There’s going to be a Budget. Tax cuts before lunchtime.” Then we heard that because of the timing of the year and things like that it might just take a little time to work out the policy and pass legislation etc. They had forgotten about that. So the tax cuts could come in sometime around April next year. Now we are hearing that tax cuts will probably be phased in over a number of years—9 years actually. I think that is what National is talking about when it comes to phasing them in. I do not think that the people in New Zealand will have missed the fact that huge tax cuts were promised by the Howard-led Government in Australia—and what did the average working person get? 
Hon Marian Hobbs 
: Six dollars. 
Hon PAUL SWAIN 
: I do not think that when New Zealanders are hearing “tax cuts” they are thinking “$6”. They are thinking more like $30 or $40 or $50 or $60. People have to work out whether the National Party is talking about or promising $40 or $50 or $60 in tax cuts. That is what people are expecting. National has talked this up to a point where the average person is thinking: “I’m going to get $30 $40 or $50 off my taxes.” Well if that is the case the average person has to consider two things. First there will be a lot of cuts in spending and I can tell members that one does not get much for a couple of hip-hop tours that are cancelled. The hip-hop tour was worth just a few bucks compared with the billions and billions of dollars that will be needed to fund a tax cut of $30 or $40 or $50. We know what will happen. Everyone knows that. When Dr Brash was the Governor of the Reserve Bank he said on many occasions: “If you fiscally stimulate like that with tax cuts interest rates will rise.” So ordinary people’s mortgages would go up and as the cost of living rose the impact of those tax cuts would go down. The worth of the tax cuts would be eroded. The cost of living would rise and people’s standard of living would be eroded. Everybody knows that. In fact there is no free lunch any more in New Zealand. What we spend we have to earn. Now the National Party wants to ruin the work that has been done under Michael Cullen who has kept a steady hand on the tiller for 6 years. The National Party wants to borrow spend and cut taxes. It is an outrageous proposal and the vast majority of New Zealanders will see through it. 
The real thing though that people will judge at the election is how much things have got better in health and education. I remember being an electorate member of Parliament prior to 1999—and the National Party has the cheek to talk about waiting times now! Then the reality was that everybody was told they would be looked at and that could have been by Christmas the next Christmas or whichever Christmas—for years and years and years. We have put real money into health we have put real money into education and we have put real money into infrastructure. What about the Working for Families package? If we take an average family working 60 hours a week and earning say $37400 a year before tax on 4 October that family was $42 a week better off through the childcare subsidy. On 1 April 2005 that family had $40 per week more in family assistance. On 3 October 2005 it will have $6 more per week through the childcare subsidy. On 1 April 2006 it will have $55 more in family assistance per week. On 1 April 2007 it will have $20 more in family assistance. That is a total of about $160 per week. People can compare that with the $6—potentially—that family would receive from the National Party. 
People need to start thinking about the sums because if someone comes along and promises something that sounds too good to be true the general law of economics is that it always is too good to be true. We cannot cut taxes promise to spend more on defence and prisons and then borrow at the same time. The effect of doing that is interest rate rises. So we look forward to going into this election campaign. We want to start to see the colour of the Opposition members’ eyes because they will slip and slide. They will talk about the 4 weeks’ annual leave—yes it is in; no it is not. They will talk about the Employment Relations Act—in out in. What about our nuclear-free stance? Will that be gone by lunchtime? What about superannuation? The fund was to go but now it is back and those members will have to nail their colours to the mast. This election is about the difference between a Labour-led Government which cares about New Zealand and New Zealand families versus that party which will promise anything to get into Government. The fact of the matter is that the people of New Zealand are not as silly as that.