Heatley Phil: Budget Debate 
Heatley Phil: Budget Debate 
[Volume:663;Page:11306] 
Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture) 
: 
 Last year National was very focused on getting the Government’s finances under control as I think the public experienced. The recession was deepening during that period and people were threatened with losing their jobs. It was a very difficult time for New Zealanders and their families. This year of course we are squarely focused on the economy and building the recovery. As Bill English has often said the recession did not begin after we came into Government. It was in New Zealand well ahead of the rest of the world. In fact we had been in recession for some time; it just did not show up until the rest of the world came under pressure. 
The Government had a number of approaches during the last year following the last Budget. One of them was a big focus on reining in Government spending where there was no gain and where there was not a dollar of value for every dollar spent. We also looked at ways in which we could curb regulation so the Building Amendment Act was passed and the Resource Management Act was fixed as well to a very high level. Now we focus on more specific Resource Management Act reforms. Last and most important was the fiscal stimulus package that we introduced in the last Budget. Members will recall that about half a billion dollars was put in as a capital injection to housing roading and education. The thought behind that was quite simple. We wanted to spend some money in the economy but we wanted to spend it on capital items—infrastructure—not operating items. It was essentially an infrastructure package. 
We looked at housing roading and education and decided we wanted to inject capital into those areas. We also wanted to do work that was urgent and that had been on the Government’s books collecting dust for a decade. So the Minister of Transport the Minister of Education and the Minister of Housing dusted off all the plans for the roads the houses and the schools that could have been upgraded in the last decade. They asked themselves whether they were still good ideas whether it was worth injecting capital into those projects—those schools those roads or those Housing New Zealand estates. If so they asked whether they were already consented because they wanted the fiscal stimulus package to have immediate effect so it would be good if the consents were already there. They also determined whether a workforce would benefit from those construction projects. It worked very very well. The fiscal stimulus package put about $124.5 million into the State housing sector. We have upgraded about 11000 State houses over the last 16 to 18 months. That was the plan and it is trucking well on its way to completion on 30 June of this year. So 11000 houses have been painted been insulated top and bottom had clean heating installed had the kitchen renovated or had the bathroom renovated. That type of essential work has been done. It was a boost package during the recession. 
We focused on upgrades as opposed to new buildings because we did not need consents for a lot of the upgrade work. The $120 million fiscal stimulus could be virtually immediate because we did not have to go through that consenting process. Also a large number of houses were uninsulated and were in a serious state of disrepair. There were 940 healthy housing upgrades and added on to the programme that was already planned to increase the number of State houses 87 new homes were built as part of the jobs and growth package. It was important that we built new homes rather than bought existing ones. The main reason for that is that it meant people were employed. I can say that Housing New Zealand Corporation going forward now has a preference to either build its own homes on land that it owns or lease homes that are newly built on new sections. The reason is that in both those cases that increases housing supply while only purchasing houses which might happen on occasion does not increase housing supply. It is a very significant stimulus package which of course ends on 30 June. 
This year we are focused squarely on the economy—and on some other things. First of all this Budget will put economic growth at centre stage. Its overriding aim is to tilt the economy towards people working harder and longer investing more energy into their work and getting the rewards for that. So it is an economy that will be tilted towards work saving and investment and also towards exports. It will be tilted away from what was the case which was a lot of borrowing and spending. We are moving away from spending and towards saving. We are moving towards making sure that people are incentivised to work rather than not work. And so it goes. 
Secondly our major tax-reform package features across-the-board tax cuts that help families get ahead. That is where the reward is for work. Thirdly the Budget shows an improved fiscal outlook where both Crown debt and budget deficits are better than forecast. Last year there was not good news. This year it is still tough looking ahead but there has certainly been an improvement and we want to do better still. 
Finally the Government and the Minister of Finance have been very very strict with Ministers to make sure that we keep within our $1.1 billion allocation for new spending to make sure that we are not increasing spending just for the sake of it but that every extra dollar that we spend is a dollar’s worth of investment. The Minister of Finance has asked Government departments and all agencies to do more with what they have. That is a very significant shift from the previous Government’s approach. We are making sure that we test every programme before it is re-funded or gets a boost in funding. So Government departments and agencies will receive little or no new money for the next few years unless they are in the area of health which receives the biggest slice of new money—an extra $2.1 billion over the next 4 years including $512 million in the next financial year. As we have heard from the Minister of Education Anne Tolley schooling and early childhood education will also receive an extra $1.4 billion over the next 4 years including $417 million in the next financial year. Those are very significant investments. 
I have to say that one of the investments that we are most pleased with in the last couple of years has been the Housing Innovation Fund. I acknowledge members across the House who began that fund originally with about $12 million. Much of that money went into the development of housing organisations. We have switched the fund around a bit. We have increased it from $12 million to $20 million and we have said that the money has to be spent on building or purchasing houses. No longer can the money be spent on the development of plans organisations or that type of thing—what people call capacity building. It must be spent on capital expenditure. That is a change that we made as well as the funding boost. The Housing Innovation Fund has been extended again this year by another $20 million. Of that $16 million will be spent on grants or loans to support social and affordable housing and $4 million will be spent to meet the cost of interest-free loans that are provided to community housing providers. The Maori demonstration projects and partnerships will continue also this coming financial year. So far in the current year that has resulted in 96 new housing units and not all the announcements are finished yet. 
I can say that the New Zealand Housing Foundation has been allocated $3 million which goes towards its $12 million project for 30 affordable homeownership opportunities in Auckland. We have attributed $3 million out of a total of $12 million. That shows members how we can leverage input from the private sector or other housing providers. The Salvation Army received $2 million for 15 new rental properties. Other trusts such as Habitat for Humanity the Monte Cecilia Housing Trust and Queenstown Lakes Community Housing Trust received money through the Housing Innovation Fund. I am delighted to extend that fund into the next financial year.