Clark Helen: Budget Debate 
Clark Helen: Budget Debate 
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Rt Hon HELEN CLARK (Prime Minister) 
: 
 The only squandered opportunity in sight today was that sad speech. I agree with the Minister of Education: sack Richard Long if that is the best he can do! Where was the policy? Where was it? A response to the Budget is the Leader of the Opposition’s opportunity to set out what he would do. Well I do not know whether I missed something but I must have missed quite a lot. He failed to do that. Most conspicuously he tried to paint economic success as failure when the facts tell a completely different story from that uninspiring dirge. 
I think future Opposition speakers from the National Party should explain one thing: why is it that when Labour supported by United Future puts up improvements to family support family tax credits and child tax credits that is a bribe but National’s tax cuts are not a bribe? Explain that to me! I will credit the National Party with one single policy—not that it was outlined today. The single policy is tax cuts—voodoo economics. The National Party would cut taxes while also doubling defence expenditure cutting expenditure on health education and superannuation bringing back user-pays and privatising. What does all of that do for New Zealand families? Absolutely nothing! The message today is that a Labour-led Government lifts families up; National impoverishes families as it did all the way through the 1990s. 
I congratulate the Minister of Finance on his work in bringing this Budget together. I thank all the Ministers who have contributed to the very significant new initiatives in this Budget—and there are many significant new initiatives. I am very proud of this Budget. I am proud of it because like every single Budget delivered by this Labour-led Government over 4½ years it delivers not to elites but to heartland New Zealand—to our families our superannuitants our workers and to those who need the care and support of all of us and get no sympathy from right-wing parties in this House. 
The Budget does not deliver just by spending on important initiatives; it also delivers by keeping a very firm hand on economic management and this Government with the Minister of Finance in charge of the economy has consistently done that through 4½ years. Obviously what is delivered in this Budget today could not be delivered without economic success. The facts are that under this Labour-led Government economic growth has averaged over 3.5 percent. The facts are that under this Labour-led Government unemployment is at its lowest level in 16½ years. Since Dr Brash likes international comparisons how about our having the fourth-lowest unemployment rate in the Western World? The figures on unemployment speak for themselves. In the March quarter of 1999 under a National Government the figure was 7.2 percent; in the March quarter of 2004 under a Labour-led Government the figure was 4.3 percent. In May 1999 under a National Government close to 144000 people were on unemployment benefits; in May 2004 under a Labour-led Government there were under 68000. That is well under half. 
What is there about that strong economic performance that the National Party does not understand? This is not about squandering opportunity; this is about creating opportunity steadily over 4½ years. From the beginning this Labour-led Government has undertaken to invest the fruits of growth right back into meeting the needs of heartland New Zealand and building a stronger economy. That has been done over 4½ years and it is what this Budget delivers. The earlier Budgets built the platform for stronger economic performance and we began making huge investments in education and skills training including apprenticeships for school leavers. We boosted spending on research and development and I am proud to say that today’s Budget takes the total increase in the Government research and development spend to 45 percent over our five Budgets. That is a staggering figure. We developed Smart Growth strategies working alongside our regions industries and companies to boost economic performance. We changed the immigration policy to recruit more migrants who could meet labour force needs. As unemployment continued to fall those Jobs Jolt policies kicked in to get even more people off benefits and into work and those policies are working. 
From our earliest Budgets we also began very badly needed reinvestments in public and social services and infrastructure. I can say today that for one of those core services the Department of Child Youth and Family Services over the period of this Government with this Budget its expenditure is doubling—and it needed to double. We redistributed to meet the needs of our families superannuitants and workers. Our Budgets have delivered on every one of our election pledges—namely to lift the rate of superannuation to bring back income-related rents for State housing to make tertiary education more affordable and to drop waiting times for treatment in our public health system. All of those things have been delivered on. As well we have invested heavily in education overall in mental health and primary health-care in State housing and in core services like our police. Two years ago a new policy—paid parental leave—helped our working parents to have time at home that they needed with their new babies. 
All along the Budgets of this Government have struck a very careful balance—a balance between investing back into growth people and services while maintaining a solid operating surplus. It is that balance that continues in this Budget today. We will invest back into growth people and services as much and as fast as we can afford and we will invest where it is needed most—not where it is needed least like the tax-cuts policy of the Opposition. 
The big focus of this year’s Budget is on New Zealand’s working families. They have been helped in many ways by our previous Budgets. But for this Budget it has long been our goal to directly improve the household income of our low and middle income families. That is not best done by across-the-board tax cuts. The major beneficiaries of across-the-board tax cuts will always be the top income earners. So how do we help in this Budget? We help by lifting family support lifting the family tax credit changing abatement levels replacing the child tax credit with a large in-work payment for our working families and increasing the subsidies for childcare and for accommodation costs. 
What does this mean for New Zealand families? It means there is a substantial redistribution upwards of wealth in their favour beginning in this financial year and continuing to build over a 3-year period. What a contrast with the big redistribution downwards of the National Government when it took office and cut the incomes of our poorest people! As the Minister of Finance has outlined this Budget means a lift for more than 300000 families—that is over 60 percent of families with dependent children in this country. Who could say that they are not the most deserving New Zealanders? They are the most deserving of a lift in this Budget right now. We know that for our families in the $25000 to $45000 per annum bracket it will deliver an average of around $100 a week in the pocket over the 3 years in direct family assistance. That does not include any gains that may come from accommodation supplement improvements and the childcare subsidies. I am proud that this Budget will significantly drop child poverty. This country should be ashamed of the levels of child poverty reached as a result of the 1991 benefit cuts. 
The fact is that higher incomes and better opportunities off shore in the past have been reasons for our people to leave our country. A low-income low-skilled low-value low-growth economy was a crippling burden on our people’s aspirations. The National Government has to take a lot of responsibility for that. We have set out to change those features of the New Zealand economy. Our economy is growing well and better than those of most Western countries. Our unemployment is lower now than that of most Western countries. Our skills levels are rising and our economy is moving up the value chain. None of that happens by accident. It happens because a Labour-led Government has smart policies. 
The real test of policies is when the benefit is felt in the pockets of our families. This Budget delivers directly a growth dividend to our low and middle income families. It makes them more financially secure. It means they can look ahead to the future with confidence they can better meet their commitments and they can afford some extras for the kids and why not? The Minister of Finance has set out a number of scenarios of how families will benefit. There is one clear message today to New Zealand’s low and middle income families: Labour delivers to their family. That is the message. Families are better off with Labour and they are better off because Labour both runs a strong economy and invests everything it can back in its people 
and its services and in growing the economy. Our pledge to New Zealand families is that we will keep on delivering in that way so that our families can get ahead. 
I think it is very important to emphasise that making work pay is central to this Budget. Yes families on benefits will gain but the biggest gains come to those who are in work and those who move into work. It has long been said that many low-income families with kids are little or no better off in work than on a benefit once one takes a number of costs—abatement rates and so on—into account. There was a different approach to increasing the gap between work and benefits and that was the 1991 Tory approach which was to slash the benefit. Our approach is to make work pay by lifting the incomes of New Zealand’s working families. The message of this Budget to our families is clear: they will be better off when they go to work. 
And we want them to go to work. With low unemployment and skills shortages our country needs more workers now. In particular we need to boost the numbers of women in the workforce. Our country falls well behind top OECD countries in the proportion of women at work. Of course top OECD countries have long done much more to support their working parents and our Government is taking steps to see that this country catches up. A big step forward was taken with the introduction of paid parental leave. This Budget provides for the scheme to be extended this year and next. 
 It also makes very big improvements to childcare. The rates of childcare subsidy are increasing significantly and many more families will be eligible for the subsidy. Overall at least 28000 more families with 33000 children will benefit with gains of about $23 a week per child on average from next year. As well dramatic improvements in early childhood education are signalled. From mid-2007 3 and 4-year-olds will be entitled to have 20 hours’ free attendance at community-based early childhood services. Our kindergartens have long been free and this extends that tradition to other community-based early childhood education and care. We are investing in quality. We are investing in quantity. We are investing a spectacular $365 million more over 4 years in early childhood education. 
I am proud of what our Government is doing in this Budget for families for children and for education because I know that taken together these changes mean more opportunity higher living standards and more Kiwis in work and paying their way. That is a fantastic output from this Budget. 
There are many other significant initiatives in the Budget presented by the Minister of Finance. I announced yesterday with the Minister of Health a doubling of the number of major joint operations to be undertaken in this country over the next 4 years. That will take our rate of intervention for those operations to the same level as that in the United Kingdom and above that in Australia. Now orthopaedics are going to be able to meet the same targets we are meeting in many other areas of surgery. This is very big news for older New Zealanders who have the major call on these kinds of operations. We know how painful and distressing bad hips and bad knees are and how they destroy quality of life and limit independence and mobility. We know the whole new lease of life that comes from being able to have these critically important operations. Our senior citizens deserve no less. 
The other good news for our older New Zealanders in this Budget is the commitment to the New Zealand Superannuation Fund. We in the Labour Party believe in saving now to save New Zealand superannuation for the future. That is why there is another $2.1 billion going into the fund this year. That fund is essential to the future security of income for older Kiwis and this Labour-led Government is totally committed to that. 
Over 4½ years we have worked in many ways to make tertiary education more affordable and for this second term in Government we signalled we would move on student allowances and that pledge is honoured in this Budget today. We will be spending another $110 million a year on student support. That will mean more move from partial allowances to full allowances more who got nothing will get partial allowances and some who have been getting partial allowances will get a higher amount as well. That is delivering on commitments made at the last election. 
Time does not permit me to go into many other areas of the Budget. I note though that it does provide over the 4 years for close to half a billion dollars more to go on strengthening the economic performance. Investments there will range from spending on skills to developing export markets to increasing the research and development spend to attracting quality offshore investment to growing our companies to increasing the value of our industries and to negotiating the very best trade rules we can for New Zealand. 
I say with confidence that this Budget will take New Zealand even further ahead. It is a Budget that is good for families. It is good for the economy. It is a Budget that keeps a balance between economic and social investments. It keeps a strong operating surplus. It is a Budget that is all about growth and opportunity. It is a Budget for getting Kiwis back into work and making work pay. I say it is a Budget that only a Labour-led Government in New Zealand can deliver and I am proud of it. 
Mr SPEAKER 
: Before I call the next party leader I want to say that an undertaking was given which I appreciate that party leaders’ speeches will be heard in silence. I think that is important.