Cunliffe David: Third Readings — 
Text is incorporated into the Bound Volume 
Cunliffe David: Third Readings — 
[Sitting date: 20 May 2010. Volume:663;Page:11179. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 In relation to this tax legislation we have seen the Government bring down a Budget of broken promises. The promise not to raise GST has obviously been broken by this legislation. The promise to make everybody better off has been broken by inflation and by the skewing of this tax package to the wealthy who need it not. The promise to protect the elderly and restore superannuation pre-funding has been broken. The promise to protect front-line services and the funding of entitlements that the public of New Zealand expected under the previous Government has been broken. The promise to rebalance the economy and put it on a sustainable path to growth has been broken by Treasury’s own calculations. We will prove all of these things in this third reading of the debate. 
At this stage of the proceedings I guess some people over there will be feeling a bit in need of a Berocca. They will be feeling that the champagne has worn off after their orgy of self-congratulation last night. Like a lot of New Zealanders they will be asking to be told again how this Budget leaves them better off. The Labour Opposition can tell New Zealanders that it will not leave them better off. 
The first reason is that 6 percent inflation will deal in short order to the small crumbs that fell from the rich folks’ table. Middle New Zealand will see no benefit from this Budget until at least 2012 or 2013. We believe that New Zealanders will be worse off in the medium term because those upper-income tax cuts are funded in part by extra debt and extra borrowing but the Minister of Finance has the nerve—the gall—to lecture the Labour Party about fiscal prudence. He is borrowing more to give tax cuts to the wealthy while old people go without; he should be ashamed. Inflation will feed into mortgage rises and interest rate rises. If there is one sure way to kill off a recovery as we all know it is to raise interest rates. Alan Bollard’s job just got harder and New Zealanders will pay for it. 
It is OK that the middle-income brackets got some income tax relief; members can bet that Labour would have done that too—and raised tax thresholds as our leader has already said. But it is not OK—and members on this side cannot see past this—that people on a million dollars a year get a thousand dollars a week extra in the hand that they do not need and did not ask for. 
Hon Tau Henare 
: They can go and spend it on the economy. 
Hon DAVID CUNLIFFE 
: Well that member says they will spend it but his leader says they will save it. Would somebody please pass the key lines to Tau Henare because he is off the song sheet again. 
Hon Tau Henare 
: Let them have their own money; stop stealing their money. 
Hon DAVID CUNLIFFE 
: I say to the member “Same to you with bells on.” Underneath all of that is the underlying agenda that National is proposing over time of progressively shrinking the State by strangling revenue flows. Then National will tell New Zealanders that they will have to do without the services they have counted on. As my colleague Grant Robinson pointed out New Zealanders will not have enough for the paper and crayons in their sons’ and daughters’ schools let alone in their preschools. There will not be money for the hip knee or cataract operation for granny because National will be underfunding hospitals by $300 million in the next year. As my colleague the Hon Ruth Dyson so eloquently put it on the radio today the health system has been on life support and somebody has just turned off the switch. Who has done that? Bill English and John Key have done that and senior citizens on waiting lists for a hip operation will remember this day—$300 million short. Waiting lists are growing longer but National is shrinking the State out of pure ideology. 
National also said it would be rebalancing the economy and fixing the tax preference towards the binge-bust property cycle but that has not happened. National has tinkered with depreciation and it has mingled around the edges in relation to qualifying companies but it has not solved the problem. It has not offered for the economy a clear path forward that rebalances a tax system that has got out of whack. National will be condemned by that in the years ahead when Kiwi businesses especially small businesses cannot borrow or access the debt and equity finance that they need in order to grow and create good jobs create higher incomes and drive New Zealand forward in an evermore complex world. 
The Government said the bottom line was that it would create growth when it cut taxes for our best and brightest but it told mainstream New Zealanders not to get jealous: “We need those people; they are better than you.” Well here are the Budget’s numbers on the growth forecast. There has been no manipulation; this is a straight quote. By the Government’s own calculation it is shown that in fiscal year 2012 growth will go down in fiscal year 2013 growth will go down and in fiscal year 2014 growth will go up by less than one-tenth of one percent. That is the step change. After the high-income tax cut growth will go down in 2 years out of 3 and will hardly budge in the third. So New Zealanders are being told to put aside—if they can—the fact that granny will get her home help cut and have to wait for her hip operation put aside the fact that they cannot get a subsidy in the early childhood sector and put aside the fact that millionaires do not need an extra thousand dollars a week and judge the Budget by whether it will deliver in the future in terms of jobs incomes and growth. 
Here is the proof: in Treasury’s own numbers the Budget fails. On its own objectives and its own numbers the Budget is a waste of time. It was a waste of ink; it should not have been printed. It takes New Zealand backwards it does not rebalance the economy it is not socially just and it does not leave New Zealanders better off. 
When the rosy glow of Beehive spin wears off New Zealanders will know that they have been swindled. They were promised a step change but they did not even get baby steps. They got a step back in time to the failed policies of an old-fashioned National Government Budget that rewards the rich at the expense of the poor and in which the forgotten middle class is forgotten again. But this time what is different is that the middle class is being told not to be envious because the upper class deserves it! Thank you.