Chauvel Charles: Budget Debate 
Chauvel Charles: Budget Debate 
[Volume:647;Page:16401] 
CHARLES CHAUVEL (Labour) 
: 
 It gives me great pleasure to speak in support of the 2008 Budget because it is a Budget that balances matters very carefully—cutting taxes on the one hand and investing in services that New Zealanders need on the other. It is very carefully delivering personal tax reductions responsibly phasing them in over a 4-year period and fairly by applying them to all New Zealand taxpayers in proportion to their income. Having carefully managed financial resources since its election in 1999 in anticipation of difficult times that might lie ahead the Government can now afford to offer a substantial amount of tax relief to New Zealand taxpayers—and it is substantial. It is worth $10.6 billion over the next 4 years and recognises the contribution that hard-working New Zealanders make to our economy. It also provides an incentive for workers to stay and invest in this country. 
On the Government side of the House we all acknowledge that households have come under considerable pressure in New Zealand and across the world as all nations cope with rising food and petrol prices and higher mortgage repayments driven up by the credit crunch. The last eight Budgets have delivered major reinvestments in public services and infrastructure and a programme of substantial tax relief to businesses savers and families with children. From 1 April 2008 that programme will continue with the personal tax cuts I have mentioned as well as the further relief to be delivered through Working for Families KiwiSaver and further business tax reform. The tax cut package was delivered by a Government that can deliver relief for workers coping with the rising living costs I mentioned earlier without driving public accounts deeper into debt or slashing public services to do so. 
As well as easing the burden on Kiwi workers it is clear that the personal income tax cuts set out in the Budget will promote economic growth. It is interesting to note what Treasury had to say in the Economic and Fiscal Update it recently published. The update states: “Domestic demand slowed from mid-2007 and is forecast to remain subdued as a result of factors such as higher interest rates falling house prices lower net migration inflows and higher prices for petrol and food. Interest rates have been elevated because of ongoing inflation pressures and global credit constraints. Personal income tax cuts growing labour incomes and high farm incomes (albeit lower owing to drought) partially offset these forces.” 
It can be seen that Treasury is very clear that the timing of these tax cuts is responsible they are reflationary and this is very much a Budget for the rainy day that this Government has foreseen will be coming. We are now in the rainy day and the Government finances are being managed responsibly as Treasury’s Economic and Fiscal Update demonstrates. National members whom we have heard much from this afternoon—well not much in substance but much in terms of hot air and volume—would have us introduce greater tax reductions never mind about global economic uncertainty. But the Government in the three consecutive terms of office that it has enjoyed has clearly learnt the value of cautious and prudent financial management delivering long-term benefits for the nation. 
This is not a Government that believes in just squandering taxpayers’ hard-earned resources like members opposite would have it do. Rather than increasing expenditure even further for tax cuts this Government has shown its balanced approach by keeping funds aside. This is to ensure that it can continue to provide a wide range of public services to a high standard with a focus on expanding those services for which there will be increasing future demand. Not for this Government a return to the run-down public services of the 1990s we inherited when we took office. We have been reinvesting in this country and providing people with the sorts of services they deserve in a world-class country such as ours. 
It is interesting to note some of the major initiatives in the Budget. I am very proud of the expenditure being directed towards ensuring widespread access to high-speed broadband. After the effort put in by David Cunliffe and other hard-working Ministers in this Government to get the telecommunications sector right we are finally in a situation where Telecom and the sector it has dominated are required to manage things in a fair way instead of simply repatriating profits back to the United States. And what would National do? It would subsidise Telecom and turn it back into a monopoly operator—the behemoth astride this sector—by subsidising it to operate broadband across the country. That is absolutely crazy. This is supposedly the party with the great economic vision to take the great leap forward. I do not think so. [ 
Interruption 
] That is right; National is quite happy to subsidise the private sector but when it comes to building public sector infrastructure it tells a very different story. 
I am also very proud of the initiatives for upskilling the workforce. Obviously the carbon trading scheme—currently under consideration in the Finance and Expenditure Committee—will be compatible with international markets. It is a very important initiative and one that we are determined to get right and enact as soon as possible. Then we will upgrade New Zealand’s rail service so that it can accommodate the increasing number of commuters who choose—and have the meaningful choice thanks to the investments made by this Government—to take public transport because of rising fuel costs and their environmental awareness. There is also a targeted investment in services that is balanced as I said with sensible tax cuts and these are the cornerstones of this Budget. They demonstrate the Government’s commitment to steering New Zealand through these difficult and uncertain economic times and prepare us for future challenges. 
I was interested to hear the previous speaker Phil Heatley accuse Mr Gosche of being opposed to personal tax cuts. I have never heard Mr Gosche state such an opposition. In fact he has just told me a very interesting story about the housing portfolio he inherited in 1999 from the folk opposite. It was necessary to get rid of some positions from the housing entities we took over because those positions were to sell the houses! Those job descriptions do not exist under this Government and they never will. We do not want to see a return to that sort of bureaucratic nonsense. We will not have so-called bureaucrats selling houses. When we employ staff in central government it is to deliver strong quality services not to sell off the family silver. 
Michael Cullen is to be congratulated on a Budget that recognises at a time of record low unemployment hard-working New Zealanders and the contribution they make every day to our economy while taking account of the potential for tough times in the period that we are entering. This Government has its priorities right in creating incentives to join the workforce by cutting personal income tax while also investing in infrastructure that will enable us to see sustained growth through the development of a skills-based economy. Now more than ever it is necessary for New Zealand to invest in innovation and economic transformation and it is great to see the initiatives in that regard in this Budget. We need to be able to support our diverse communities and families and to protect the environment they live in to create a sustainable and prosperous New Zealand. Now is not the time for more dramatic tax reductions no matter what the consequence is as the National Party would have the public believe they would put in place. We have to do what is right for the New Zealand economy in 2008 and beyond. The tax cuts as they stand are substantial and will benefit all taxpayers. They will be phased in to avoid any significantly adverse effect on inflation and this is all to be commended. 
It is time for National to tell the country how it would deliver its promised tax cuts. How much would those tax cuts be? How would they be paid for? What services would be cut to fund them? How many nurses doctors and teachers would be made redundant? How much extra borrowing would have to occur and how much more interest would ordinary Kiwis have to pay on their mortgage bills as a result? Those are the questions we look forward to hearing the answers to.