Calder Cam: Budget Debate 
Calder Cam: Budget Debate 
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Dr CAM CALDER (National) 
: 
 It is a great pleasure to rise and take a call on the Appropriation (2011/12 Estimates) Bill. I take the opportunity to pay tribute to my colleague the Hon John Carter who is a gentleman a good man and someone who has contributed hugely to our country. He will be sadly missed in the House. I wish him well in his retirement to the Cook Islands. I am delighted to hear from his own lips that he intends to return and take the field again for the Parliamentary Rugby Team. 
During the course of this debate we have heard a lot of comments about how the Opposition members have not really been addressing the issues facing our country in a time of unparalleled financial stress. I have to say we have heard a lot from the Opposition about coats of paint on historic buildings and new carpet. The Leader of the Opposition did attempt to address the economic situation in his speech on the Budget a couple of weeks ago. It was a guttering candle of a speech compared with the Prime Minister’s arc light oratory. In the Hon Phil Goff’s speech he made a comment that the global financial crisis finished in 2009. It was an astonishing claim yet sadly all too reminiscent of the wild flights of ersatz economic fantasy that erupt from those opposite on occasions. It was interesting to watch the Opposition benches. David Cunliffe choked Grant Robertson’s jolly demeanour slipped for a while and Shane Jones just grinned to himself and continued drafting a possible future leadership acceptance speech. The rest of the Opposition caucus failed to notice and remained in the ordinary state of torpor that is their default position. 
A statement like that from their leader is yet another reason why Labour lacks any economic credibility with hard-working New Zealanders. These New Zealanders know even if the Hon Phil Goff does not that the US economy—the largest in the world the engine room—has a horrendous Budget deficit sky-high levels of debt and a housing market that has seen a bigger percentage drop in value than was witnessed in the great recession of the 1930s. There is no indication yet that it has stabilised. In addition the Federal Reserve is debating a third round of quantitative easing. That is the US which is the engine room of the world economy. 
Is there any good news across the Atlantic that Mr Goff perhaps had privileged access to? No there is not. A few days after his speech the European Union raised €4.75 billion for Ireland and Portugal by a bond sale executed by the European Commission on behalf of the EU member states via the European Financial Stabilisation Mechanism. The $60 billion European Financial Stabilisation Mechanism is the lesser-known of the two bailout funds that the European Union has set up to deal with the ongoing European debt crisis. The other the European Financial Stability Facility is headquartered in Luxembourg. It is essentially an independent offshore bank with €250 billion to lend to various troubled member states. The idea behind both bailout mechanisms is to sequester the peripheral countries in trouble from the international markets giving them time to undergo austerity measures and cut Budget deficits. 
The global financial crisis is alive and well. These mechanisms may be of doubtful legality but the European elite are prepared to sweep any such concerns under the rug. Of greater concern because they have no control over it and because it could potentially scuttle all efforts to suppress the crisis is the mounting populist angst in the countries doing the bailing out and the countries being bailed out. The rise of Euro-sceptic parties in Germany and other core eurozone States is leading to a lot of turmoil among the students youth and unions in the streets of Spain Greece Portugal and other peripheral economies which could potentially further deepen the economic storm by derailing those efforts to mitigate it. Amid the confusion Fitch Ratings has downgraded Greece further below junk status and Standard and Poor’s lowered Italy’s rating outlook the next day. 
Unlike Mr Goff this Government recognises that these are tough times. This is a Budget for tough times. This is a Budget of respect and a Budget by a Government that has respect for the hard-working Kiwi families who are at the core of our society. The previous administration cynically encouraged New Zealanders to mine the fool’s gold of bountiful access to cheap international credit. This diverted attention from the Labour Government’s supervised neglect and woeful underperformance of our tradable sector as well as the general parlous state of our economy under Labour’s watch. Fuelled by ever spiralling amounts of borrowed money New Zealanders embarked on an unproductive spending frenzy on houses and consumer goods. Household debt rose to a peak of 159 percent of disposable income by mid-2008. Since inheriting an economy in crisis this Government has worked constantly to cushion New Zealanders from the harshest edges of the recession whilst at the same time working to turn the economy around in the face of the worst global financial crisis in decades—a crisis that continues to this day—and an almost apocalyptic series of natural disasters here at home. 
We have made no secret of the size of the challenges we are facing. Every New Zealander knows that the Government has been borrowing $380 million per week. They understand that such large borrowing cannot continue and that it is patently unsustainable. If we keep doing what we have always done we will get what we have always got. We believe that New Zealand can and must do better than that. New Zealand’s hard-working families agree and they understand the need for change in how New Zealand is run. Across the country New Zealanders understand clearly why we need to get spending down which we are doing why we need to cut out waste which we are doing and why we need to make “New Zealand Incorporated” work more efficiently export more and start to pay off that burdensome debt. 
What is the Opposition’s plan to grow our economy? Sadly there appears to be no plan just more tax borrow spend and hope. It is more lazy shotgun thinking from which the country suffered so grievously under the last administration. Labour has signalled its intention to take GST off carrots and raise the taxes paid by hard-working New Zealanders—an oddly perverse version of a carrot-and-stick policy. Under Labour New Zealand would borrow a staggering stratospheric extra $45 billion from 2008 to 2014. It is a decision that would virtually guarantee to drive New Zealand into an economic morass and fiscal bog. If Labour’s economic flights of fancy were ever implemented the international credit agencies would be tolling their equivalent of the Lutine Bell for another economy lost. New Zealanders know that Labour’s profligacy is not an option. They know that we have to grow the economic cake and be prudent guardians of the public purse. 
We are taking a balanced and considered approach to find our path back to surplus protecting health education and income support for the most vulnerable as we do so. It was a great pleasure for me to go to Manurewa recently to visit Wiri Central School and see the pilot of a health programme in the school to swab kiddies’ sore throats early and avoid that appalling ravage of rheumatic fever which affects far too many in our community in New Zealand today. It is an example of more spending in areas that matter. There is more spending in health and we have some very very good spending in education. We are spending an extra $550 million in early childhood education which is going to improve the participation for Maori and Pasifika children. They are the people in our society who currently miss out. Thank you.