Banks John: Budget Statement — Budget Debate 
Text is incorporated into the Bound Volume 
Banks John: Budget Statement — Budget Debate 
[Sitting date: 24 May 2012. Volume:680;Page:2419. Text is incorporated into the Bound Volume.] 
Hon JOHN BANKS (Leader—ACT) 
: 
 Let us start with one indisputable fact and one ACT Party proposition. The indisputable fact is that 49.9 percent of every dollar spent in New Zealand was spent by the Government or an agency of the Government—50c in every dollar. Now for the proposition: ACT believes that taxpayers can spend their money better than any politician or collective group of politicians in this Parliament. We believe that hard-working New Zealanders can spend their money better than anyone in this Parliament. There are many good things in this Budget. Compared with the Budgets Labour gave us particularly for the last 4 years of the Helen Clark Government this Budget is a very sound and sensible document. Here is another indisputable fact: under Labour core Crown expenditure increased from $35 billion to $64 billion from 2000 to 2009. That is a $29 billion increase over 9 years. The total expenditure under this ACT Party - supported Government has risen only $8 billion in four Budgets. Beneath that headline figure are many good stories that this Government is doing with less. This Government clearly understands that the proposition from the other side of the House today that you can borrow more spend more and tax more to get us out of our small corner of the world in the global recession is mistaken. 
The welfare reforms for which the ACT Party has long campaigned are a welcome change. After 20 years of no inflation adjustment raising the price of prescriptions by $2 is just common sense. It frees up taxpayers’ money and improves incentives to use medicines well. The parliamentary Opposition would say let us go to the Crown account and borrow more money each week to fund everything that everyone thinks they need. We in the ACT Party are hopeful that this Budget heralds the beginning of a new era in education an era in which we accept that teachers can make a difference and we pay for them to make a difference. We believe that teachers can make a difference and we want to pay teachers to make a difference. 
The announcement that we will fine-tune the Public Finance Act is very good news—fine-tuning of the Public Finance Act. New Zealand has a growing tradition of better fiscal performance through better financial reporting and that goes back to the 1990 Government when I sat over there in the 1990 Government. This Budget makes major beneficial additions to those traditions. [ 
Interruption 
] I want the Opposition to listen to this because it is critical stuff. Treasury produces a triennial 40-year forecast of New Zealand’s finances. The first one in 2006 was called  
New Zealand’s Long-term Fiscal Position 
. In 2006 Treasury predicted that if we carried on business as usual—if we carried on with a Helen Clark Government and a Michael Cullen financial ministry—then by 2050 we would end up with Government debt at 106 percent of GDP. That is exactly where Greece was before the collapse. 
The next report in 2009 makes more interesting reading. It is called  
Challenges and Choices: New Zealand’s Long-term Fiscal Statement 
. That report said that under spending patterns present in 2008 and 2009 we would have public debt of at least 223 percent of GDP by 2050—223 percent. Under this Budget and this National Government supported by ACT and my other friends here in this coalition we will well and truly have all of that structural debt repaid by then. We will not have public debt at 223 percent of GDP by 2050. This is the beginning of saving our great-grandchildren yet to be born from having to foot the bill of the interest costs of the massive debt that the Labour Party and its friends over there would ramp up on their backs. 
The message is clear: if we return to the spending patterns of the previous decade of Labour Governments then as Jane Clifton put it “PIGS-R-US”. That is what Treasury would be calling future forecasts if the parliamentary Opposition was on this side of the House today. Can you imagine increases in taxes capital gains taxes everything-that-moves taxes more borrowing more spending and more handing out? We would not be the Government spending 50c in every dollar; it would go to 55c 60c 70c. The Russians have plenty of evidence that this has never worked. 
The ACT Party believes that we can do better. Labour introduced $15 billion of completely new spending in its first four Budgets—$15 billion. As we were going into a global recession it went out and spent more and more borrowed more and more and taxed more. The ACT Party has supported the coalition Government’s introduction of only $750 million in its first four Budgets. This Government has spent only an additional $750 million in its first four Budgets. We need to reduce expenditure because every dollar the Government spends is a dollar taken out of the pockets of a hard-working New Zealander. That is a dollar that could have gone towards a weekly grocery bill. It is a dollar that could go towards a kid’s school shoes. It is a dollar that could have been invested in starting up a business. It is a dollar that could have gone into savings for retirement. But these people want to take all those dollars and they want it distributed. That is called middle-class welfare and it does not work and it is unfair. 
Last year the Government’s financial statements recorded that 49.9 percent of the New Zealand economy was the Government. The ACT Party says that is wrong. The ACT Party says we have to reduce the size of Government reduce the size of the State get off the backs of the workers and stay out of the lives of business people who create wealth and jobs and make sure that we give them a fair go. These people opposite believe they know best and the bottom line is that they believe that they can spend your money much better than you can spend your money. So we say today in this Parliament in this first Budget debate after 12 years’ interregnum roll back the excesses of Working for Families. Roll back the election bribe given to our most able earners in the form of student loan interest write-offs. Roll back the pension age to 67 as so many of our trading partners have done and the Retirement Commissioner believes we should do—that would save $1.6 billion a year. Roll back free doctors’ visits for millionaires and the early childhood education funding which was almost entirely captured by families already using early childhood education. 
We aspire on this side of the House to a New Zealand where people who work save take risks raise their families are good citizens and invest are rewarded. That is what we aspire to. We aspire to hard work savings risk taking investment and hard work. Less Government spending means more private sector growth and more money left in New Zealanders’ pockets to reward their hard work. We say to the people opposite to get off the backs of the taxpayers and let them spend their money as they see fit because they have done the hard graft to earn it. It would be a New Zealand where the tax wedge separating effort from reward would be thinner. That tax wedge from reward and effort must be thinner and New Zealanders’ pay packets must get thicker. 
I finish as I began: hard-working New Zealanders can spend their money much better than the Labour Party has ever spent their money. And remember this: any Government big enough to give you everything you want is a Government big enough to take from you everything you have. The ACT Party supports this Budget and we will keep supporting Budgets and sensible Budgets for the benefits of hard-working New Zealanders. This is a good start in difficult circumstances. I am glad I am on this side of the House and those people opposite are not on this side of the House. As I have said before imagine those ferocious and very very greedy rabbits inside the lettuce patch of the Treasury finances on this day as we go forward. There would be more borrowing there would be more spending there would be more taxing there would be no hope. They would be on the backs of the taxpayers and New Zealanders today are glad that this Government is in charge of the finances under these difficult circumstances— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry to interrupt the member but his time has expired.