Hutchison Paul: Budget Debate 
Hutchison Paul: Budget Debate 
[Volume:631;Page:3356] 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 It indeed is a sorry sorry assault on listeners’ ears to hear so much gibberish coming from Minister Maharey the retired sociologist who has reinvented the language; the man who says that spending on welfare dependency is an investment whereas as John Tamihere says: “Minister Maharey just can’t call a spade a spade.” Spending is spending and when it is spending on welfare dependency Mr Maharey is just in absolute denial. 
Dr Cullen’s Budget 2006 has just cemented in two of the biggest election bribes—the largest expenditure bribes—in the history of New Zealand. The first is the $1 billion interest-free student loan scheme. The second is the $1.5 billion Working for Families bribe. 
Hon David Benson-Pope 
: What about the billion dollar National Party lie? 
Dr PAUL HUTCHISON 
: Mr Benson-Pope of all people like Minister Maharey has encouraged that expenditure as something that will move New Zealand forward—whereas it will do the very opposite. 
Hon David Benson-Pope 
: Be careful you nasty little man. 
Dr PAUL HUTCHISON 
: Mr Deputy Speaker I wonder whether you could get Mr Benson-Pope to just repeat what he said. 
Hon Mark Burton 
: He said you were a nasty little man. 
Dr PAUL HUTCHISON 
: Oh did he? Well coming from a 5-foot gnome that is not bad. 
Anyway I would like to ask whether we could get Dr Cullen to come up to Port Waikato and speak to some of the young women and men sharemilkers in the electorate who have just paid for their last herds with commercial loans because it is such young people who are the backbone of the New Zealand economy. They get up at 4 a.m. During the winter they work in particularly difficult conditions and they often go to bed very late at night. They work extremely hard and they pay big taxes. To cap it those taxes go to subsidise the interest-free student loans that Dr Cullen has perpetrated on New Zealand. If we are ever going to move forward that is not the sort of incentive we should be giving our young people. 
Of course the Working for Families package is just a form of rechurning by this Labour Government. Labour just cannot believe what people right around the world know—and it is quite simple—people want to have clear incentives like tax cuts. Labour cannot believe that and it is in denial of the fact that over 600 New Zealanders are leaving permanently for Australia on a weekly basis. 
I want to spend some time today talking about an area that this House often does not debate—that is the area of research science and technology. I think that most commentators around the world regard it as an extremely significant driver of growth. Yet we have the trio—Prime Minister Helen Clark Minister Maharey and Dr Cullen—all talking it up but doing very very little about it. They did nothing about the 2002 Knowledge Wave Trust recommendations. In fact as with tax they are in denial over those very significant recommendations. What did Helen Clark say in the Speech from the Throne on 8 November 2005? She said: “My Government believes that science and innovation are critical to driving our prosperity.” But what are the facts? Under this Labour Government over the last 7 years the investment in science and technology as a percentage of GDP has actually gone down. It was 0.59 percent in 1997 and now it wallows at 0.54 after 7 years of a Labour Government. 
 What does the Minister of Finance Michael Cullen say about Budget 2006? He has the gall to say: “Economic transformation lies at the heart of this Labour-led Government’s ambitions for the future.” He went on to say that “Budget 2006 was a Budget for the long term.” Well what do we know? When that tawdry Labour Government came in in the last quarter of 1999 growth was at an unprecedented rate of 4.9 percent. But what was the growth rate in the quarter when Dr Cullen gave his Budget speech? It was 0 percent and it is predicted to grow at a rate no greater than 1 percent in the next year. How do we compare that with what is happening across the ditch in Australia? Here in New Zealand the Labour Government’s growth rate is predicted to be less than 1 percent over the next year while Australia will charge on at a rate of about 3.6 percent. 
What do the commentators say about Dr Cullen’s so-called transformation Budget? Rod Oram one of the Labour Party’s friends simply said that Cullen’s transformation Budget would not change much. Colin James wrote in the Business Herald: “And ‘economic transformation’ is at best slow-acting. Tepid injections into the research science and technology … budget underline that.” He also notes that Dr Cullen put a target of 0.68 percent of GDP on public investment into science research and development but that he put no date on it. It is just like the Labour Party when it first came into office and said it would get New Zealand up into the top half of the OECD by 2010. Where are we? We are wallowing down at about No. 17 or 18 and there is no prospect whatsoever of that position improving. So that is the sort of commitment that this Labour Government has for the vital area of research science and technology. 
Let us look at the figures for that area. The biggest spending amount was $626 million in 2005-06 which will rise to $647 million in 2006-07. The Government is planning to spend $100 million over the next 4 years. I applaud the fact that the Government is putting anything into that area. The Government aims to put $250 million into the Performance-based Research Fund by 2010. This time the amount will go up again by about another $20 million. Indeed that fund is a very important part of the research effort. But the point is that the Government says that science and innovation are critical to driving our prosperity. There has been the billion-dollar bribe of interest-free student loans and $1.5 billion has been put into social welfare dependency yet in the context of what really drives our economy—areas like science research and development—the amount put in is approximately 5 percent of what the Government is putting into the social areas and that will result only in further welfare dependency. 
I also say that the Government has surrounded this spending with language such as “investment”. It has changed “spending” on welfare dependency to “investment” and it has totally forgotten the fact that the spending it has carried out will act only negatively in driving New Zealand’s economy into the future. 
I want to make two further points about the science and technology area. The first is that the amount of the most prestigious fund—the Marsden Fund—has stayed the same this year as it was last year. That relates to one of the areas of basic research where there is market failure and where there is a place for the Government to invest. It is an area where only 15 percent of internationally regarded peer-reviewed high-quality applications are put in and funded but the Government does not recognise it. Instead the Government has said it will put another $100 million into the Venture Investment Fund which is an area it started 3 years ago. Only $60 million has so far been invested; there is $40 million to go. The Government has done no assessment as to how effective the fund is but it has said it will put another $100 million into it. So here we have a Labour Government that is totally ignoring the most relevant part of science in terms of basic research by making no change but instead is sprinkling another $100 million into the Venture Investment Fund. Labour’s tinkering around with science research and development will not grow New Zealand’s economy.