Brownlee Gerry: Budget Debate 
Brownlee Gerry: Budget Debate 
[Volume:673;Page:19073] 
Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) 
: 
 It is my great privilege to spend a few minutes this afternoon speaking about Budget 2011. I shall reflect on how well this Budget has been received by people throughout New Zealand not only by those many commentators who have gone public with their support for this Budget but also by the tens—even hundreds—of thousands of New Zealanders in their homes who have been advantaged by this particular Budget. 
One of the biggest spends in this Budget was the commitment of some $5.5 billion to the rebuild of Christchurch. The devastation caused by the earthquakes has been well rehearsed in this House and comes as no surprise—[ 
Interruption 
] 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It is partly about the disruption but I wonder whether the disruption might be caused by your wearing a rugby tie. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No that is a frivolous point of order Mr Mallard. I call the Hon Gerry Brownlee. While I am on my feet I urge members who want to have private conversations to please leave the Chamber. Thank you. 
Hon GERRY BROWNLEE 
: I will not say anything other than that rugby tie you are wearing is not half as fetching as the scarf you often adorn yourself with in this House. Although the scarf itself is not a cause of disorder it is most certainly the cause of distraction at various times. 
Everyone knows that Christchurch is facing a degree of difficulty at the present time. That is significant. For many homeowners it is particularly difficult. The Government has made commitments to ensure that we get people back to close to a 3 September position as quickly as possible—albeit that will prove somewhat difficult. 
The thing that matters most to the vast majority of New Zealand families is the ability to purchase their family home and to hold that ownership. One of the pleasing things about this Budget is that it will ensure that mortgage rates for families in New Zealand remain low for a much much longer period of time. Just a short time ago—just prior to the 2008 election in fact—interest rates were well above 10 percent. Over the last 3 years we have seen those rates drop back to just over 5 and up to 6 percent. For an average family on an average mortgage that means the savings are about $200 per week—quite a significant amount. That is one of the reasons why I think New Zealanders as a whole have embraced this Budget as being particularly good for them. There was no lolly scramble in this Budget no attempt to buy off small pockets of the community with various little pet projects and other such things. The consequence of having a fiscally strong budget is the ability to deliver mortgage savings for New Zealand families. 
One of the hallmarks of the last 2½ years of the National Government has been the willingness to do what is right in the interests of the widest number of New Zealanders. We came off the election trail after the 2008 election to find that the New Zealand economy was in serious decline. As we all know despite what Mr Goff says the world was in economic meltdown. There were—and there are—ongoing effects from that meltdown. To suggest as Mr Goff did that it was all over in 2009 is simply wrong. We have a situation where the Government has had to hold up the New Zealand economy via a significant borrowing programme. One of the key features of this Budget is that from the middle of next year weekly borrowing will reduce by some two-thirds to the point that we will be looking at surpluses at a much earlier time than was previously forecast. The point about that is simply that any debt that is carried by a Government is equally shared by anybody who is a contributor to the economy. The concept of debt reduction of a Government making sure that its expenditure is not excessive while at the same time ensuring that we do not dislocate the economy so as to cause social disruption I think is something this Government can be very very proud of. 
One of the consequences of this Budget is the effect on incomes. Certainly the previous Budget which of course flows through into this one saw that two-thirds of the tax reduction was shared by all of those people whose incomes are under $48000. What does that actually mean? It means that most taxpayers now are paying about 17.5 percent as a tax rate. So we have I think an economic picture developing of a country that has high growth rates and low taxation rates. Ultimately that will lead to higher wages and higher incomes for New Zealanders. There is no reason to assume this country will be any different compared with other countries that have experienced the same sort of situation. 
One of the interesting things about the New Zealand economy and its growth will be the Christchurch effect. There are those out there who suggest that we may see in that part of the country some depopulation and various declines in economic activity. But I am full of admiration for the large numbers of people who have stayed in the greater Christchurch area who continue to operate their businesses who continue to keep their workplaces going and who continue to live their family life in those circumstances. One thing we can all be certain of is that as the $20 billion - plus that is required to repair Christchurch is spent over the next 5 years—the good news about that is that $20 billion is available and will flow through—we will see a considerable increase not only in economic activity but also I suspect in the population of the greater Christchurch area. That will flow through to the rest of the New Zealand economy. The amount of $20 billion is about 10 percent of the country’s GDP. Concentrating it—even over a short period of time—as a one-off in a small area of the country will result in significant economic growth. 
One of the confusing aspects of this Budget was the response to it from the Opposition. I have to unfortunately go through some of the contradictions that are coming through from our opponents in this particular circumstance. First we have Mr Goff’s inexplicable comments in which he is highly critical of the previous GST increases highly critical of the previous tax reductions and now highly critical of almost everything in this Budget including KiwiSaver changes and many other aspects one of which is the shared-ownership model. Not once has he said that he would reduce GST other than on a certain product line that is subject to an enormous amount of price fluctuation on a seasonal basis not once has he said that he would increase taxation although everybody on that 17.5c tax rate desires a higher income in time and would not want to be unduly penalised for their success by picking up a higher tax rate imposed by any future Labour Government and not once has he indicated what a Labour Government’s attitude would be to KiwiSaver changes. All of those comments we have heard are either Mr Goff contradicting positions or wanting to keep his options open. Second we know that in many cases on all of those issues there has been a counterview from his finance spokesman David Cunliffe and we know that is just part of the ongoing difficulty that the Opposition has in this House. 
All in all I think this Budget has delivered for New Zealanders has set forth a path to lower Government debt and has put us back into a position where the Government will be running surpluses much sooner than was expected. Importantly it makes a commitment in health and education and in other social service areas that New Zealanders deeply appreciate and expect. 
This has been a very good Budget that has been well received by New Zealanders. I am delighted to support it.