Woodhouse Michael: Budget Debate 
Woodhouse Michael: Budget Debate 
[Volume:673;Page:19206] 
MICHAEL WOODHOUSE (National) 
: 
 There are so many good things to talk about in Budget 2011 that it is really hard to know where to begin. I think it is worth looking at one of the expenditure areas so important to New Zealanders and that is Vote Health. I was fascinated to see the press release the New Zealand Council of Trade Unions put out on the day of the Budget. It said that its analysis of health expenditure estimated that Vote Health would need to increase by $564 million just to keep pace with population growth ageing new treatments etc. But Budget 2011 did better than that with $585 million being made available for health as part of a $1.7 billion commitment to health over the next 4 years. 
We have had the largest recession in 80 years and countries all around the OECD are taking austerity measures and laying off doctors. I think the UK is preparing for cuts of around 4 to 7 percent per year as part of a £20 billion reduction in its health expenditure. Portugal announced new austerity measures including slashing spending on health services. Ireland has just laid off hundreds of people in the health sector. Amongst all of this this Government has raised Vote Health by $1.7 billion. There is $80 million for new medicines. 
Dr Rajen Prasad 
: Somebody has already given that speech. 
MICHAEL WOODHOUSE 
: Well it is worth hearing again I say to Mr Prasad. Good news is worth repeating again and again so the member should listen up. I am sure he will be delighted to hear the data again. There is $68 million more for elective surgery. National campaigned on moving up the number of elective surgeries from 114000 in 2008 to 190-something-thousand by 2025. The Government has achieved one-third of that growth in just 2 years. There are now more resources to do more surgery and to return more New Zealanders to health. There is $55 million more for mothers and babies. 
How is it that the Labour Government poured billions of dollars into the health sector for absolutely no increase in services in real terms whereas the National Government has been able to achieve such a dramatic improvement in performance? I think there are two reasons. First this Government is not in the business of running back-office bureaucrats. I am very pleased to say that to members on this side of the House front-line staff and hard-working doctors and nurses are much more important than policy analysts and administrators the numbers of which went up under Labour by several thousand just in the health sector. I am proud of the fact that 1000 extra nurses and 500 extra doctors have been added to our hospitals and health services. 
The second reason is that the Government understands that it is possible to be more productive and to produce a lot more with a little more. Simply setting expectations about performance and watching our district health boards meet and exceed them has been particularly pleasing. District health board staff tell me how proud they are of those achievements and I look forward to those productivity improvements continuing. 
One of the vote reductions that has flown a little below the radar has been in Vote ACC in the Government’s contribution to the non-earner account. A more than $600 million reduction in Vote ACC has been achieved. It is not because we have cut or slashed; it is simply because we have set a higher expectation for rehabilitation performance in ACC. That $600 million is part of a multibillion-dollar reduction in the future costs of present claims. I look forward to more of that happening when ACC is opened up to competition in the work account. It will work. Competition is a good thing. If competition does not work employers and the self-employed will be given the opportunity to stay with ACC this time as opposed to what happened in 1998. That is a fail-safe device that means that if the premiums go up then all an employer has to do is simply stay with ACC. 
Many more expenditure areas are good news in the Budget but I think the real story about Budget 2011 is the path to surplus that has been outlined. Despite the global financial crisis finance company collapses two earthquakes snowstorms in Southland kiwifruit scares in the Hawke’s Bay and storms in the North Island—despite all of those things—this Budget provides $5.5 billion for the rebuild of Christchurch and returns the Government’s books to surplus a year earlier than Budget 2010 would have. It has been done without the slash-and-burn austerity measures that have been so evident around the world but with a nip here and a tuck there. There have been some changes to some programmes like KiwiSaver Working for Families and interest-free student loans—programmes that the electorate have told us are important to them and which will be preserved and sustained under these changes. 
There are also changes for which the Government has said it will go to the electorate in November and seek a mandate. There is no simply doing what the Government likes as was the experience under the Labour Government. This Government does not treat the public like they are idiots. We will go out and ask the public what they think and seek a mandate to do those things and some other things as well. It is definitely being done without punitive tax increases. Certainly Labour would increase the top tax rate. It has been done without an earthquake levy which the Greens proposed. New Zealand taxpayers will get whacked around enough as a consequence of the earthquake with increases in Earthquake Commission levies and other insurance levies. Frankly I think that is enough. 
It is sad to have to reiterate the huge benefits that last year’s tax switch has given taxpaying New Zealanders but I will do it again simply because it takes a while for the message to get through. Two-thirds of the tax rates were applied to low and middle income earners and that two-thirds group now pays a top marginal tax rate of 17.5 percent. I am sorry to keep Mr Faafoi awake. I am sure that if he sat up it would be easier for him to listen. The top marginal tax rate is 17.5 percent. That is one of the lowest top tax rates for low and middle income earners anywhere in the world. Labour will bang on about tax cuts for the rich but the facts simply do not bear up under scrutiny. 
Dr Rajen Prasad 
: Yes they do. 
Louisa Wall 
: They do actually. 
MICHAEL WOODHOUSE 
: Members should listen up because the facts are these: according to Deloitte in 2008— 
Louisa Wall 
: The top 10 percent got how much? 
MICHAEL WOODHOUSE 
: Listen and I will tell the member. In 2008 the top 12 percent paid 46 percent of the personal income tax burden in this country. Three years later one would imagine that that proportion would have gone down if the tax cuts were for the rich. The top 13 percent because there has been an accretion now pays 51 percent of the personal income tax base in this country. Do members know what? Most high-income earners think that is fair enough. 
We have a progressive tax system. Some might think that Working for Families is a little too progressive. A family with two kids earning 50 percent more than another family might pay 700 percent more in income tax and have a marginal tax rate of around 58c in the dollar. Most people think that is fair enough. But they do not think that tax rate is too easy and they should be whacked again. 
I will tell you where the job growth— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: You are bringing the Speaker into the debate. 
MICHAEL WOODHOUSE 
: I will tell members where the job growth will come from. It will come from travel agents. Those people will be heading to travel agents and the really rich will go to their tax accountants. My mates in the tax sector would love to see Labour come back and slap on top personal tax rates of 39 and 40 percent. That creates the sort of tax planning need that accountants have done so well out of under the Labour Government. Labour members complain about loss attributing qualifying companies they complain about the rich getting Working for Families and they complain about the children of the rich getting student allowances. If that were the case why take the top tax rate and widen it so much from the trust rate which creates the environment for legitimate tax planning exercises? Do not think that it would stop there. High tax rates would be followed by higher spending higher interest rates higher borrowing and higher exports of our best and brightest in this country. 
I will put this Government’s Budget and this Government’s plan for growth up against whatever Labour has to offer at the November 2011 election. I have no idea what Labour’s plan is. We would not know given the speeches we have heard in this debate. I am very happy to put this Budget up at any time against Labour’s policies.