Parker DavidBUDGET DEBATEDebate resumed from 19 May on the Appropriation (2022/23 Estimates) Bill.Hon DAVID PARKER (Attorney-General): It gives me great pleasure to rise in support of the motion of the Minister of Finance in respect to the Budget delivered the week before last and in opposition to the frankly absurd amendment to that motion from the Leader of the Opposition.Before making a few of my own comments on the Budget and various priorities I would like to quote from what the bank economists have been saying in the intervening week. ASB economists said in its analysis of Budget 2022 that the New Zealand economy is in a strong position and has sound foundations showing remarkable resilience and adaptability. Westpac's economists said Budget 2022 shows the Government accounts remain in good shape and the BNZ economists said that It shouldn't be overlooked that yet again the major fiscal theme is the ongoing strength of New Zealand's fiscal accounts relative to others and the relatively speedy return to fiscal surplus." This of course is on the back of international credit agencies giving New Zealand triple A ratings and Standard & Poor's just in the last day or two—as the Minister of Finance in question time has just said—again gave a strong stable outlook for the New Zealand economy. It seems almost unbelievable that just a couple of years ago in the middle of COVID this country's deficit was 7.2 percent of GDP as we supported New Zealanders to stay attached to their work and had various supports that were so important at the time. This coming year the Budget deficit is down to 1.7 percent of GDP and that is an absolutely remarkable turn-around which says something about the sound economic management of the economy. At the time of that very significant deficit—Hon Gerry Brownlee: What about the debt?Hon DAVID PARKER: —we as a Government were already thinking ahead. Unlike the Hon Gerry Brownlee—who just interjected—at the time of the Christchurch earthquakes when his Government did nothing to train the workforce needed to rebuild Christchurch this Government—Hon Gerry Brownlee: That's not true.Hon DAVID PARKER: Well virtually nothing—that's true. We have had 100000 additional people in work-based training many tens of thousands of them in the trades and that's because we were already preparing for the rebound in the economy that we knew would occur if we kept people attached to their work. We trained people to fill the jobs that we knew would bounce back in the likes of the construction economy. And it's worked: GDP in New Zealand is already back to pre-COVID levels. I think that's remarkable—already back to pre-COVID levels. Economic growth is forecast to go to 4.2 percent during the forecast period and we're reaching an operating balance before gains and losses surplus in New Zealand a year earlier than the National Government managed to achieve after the global financial crisis (GFC). Unemployment is at record lows: 3.2 percent. It's something that we really celebrate on this side of the House. On the other side they complain that as a consequence of that our immigration settings are not loose enough because they think that there are upward wage pressures in the economy. We celebrate wages going up on this side of the House It is a matter of pride for us that every year until this inflation spike wages were rising and salaries were rising faster than inflation. Again it's a subject of joy for us that from this coming year onwards the wage growth is predicted to be higher than inflation again and that even in this current year where we've got inflation predicted to be about 6.8 percent wage growth at 4.8 percent is 2 percent behind inflation and over the whole period of this Government people are well ahead. There have been some highlights in this Budget including the additional measures to support 2.1 million Kiwis to help with the impact of rising prices. The $350 payment goes to 2.1 million Kiwis and it will help them in addition to the measures that we've already taken to slash excise duty on petrol to reduce road-user charges and to halve public transport costs. Those measures have all been extended in the Budget as well. There were questions in the House today about gang activity. There is an additional $94 million in this Budget to target gangs and organised crime to carry forward the work that this Government has had going in recent years to target gang activity and we've heard how many arrests and guns have been seized as well as cash taken off the gangs.Returning to one of the themes that I heard and what I thought was a pretty unsatisfactory debate that we had in the legislation to give effect to the cost of living payment there were claims by the Opposition that New Zealand is a highly taxed country. I dragged out the OECD stats on that over the weekend. There are 38 countries in the OECD. Tax as a proportion of the economy: New Zealand is 24th out of 38. So there are 23 countries who are more highly taxed than New Zealand out of those 38. We are in the lower half of developed countries. In respect of the most recent OECD reports on New Zealand's taxes 32.2 percent of GDP is their most recent report and in comparison the taxes as a proportion of GDP were 31.6 percent of GDP under National in 2012 after the GFC. In respect of another initiative I just want to talk a little bit about: in the Budget there is $179 million for implementation of the reforms of the resource management system. This is one of the measures that the Government has under way in order to improve productivity of the economy. I think this is an issue that we should be celebrating around all sides of the House progress on this particular issue. The Infrastructure Commission recently reported to Government and this has been publicly released that the cost of consenting infrastructure has increased to 250 percent of where it was 10 or 15 years ago—250 percent of where it was 10 or 15 years ago. That is an appalling outcome under the current Resource Management Act (RMA) system. The RMA has failed in a lot of ways. It really does cost too much. Processes under it take too long. They haven't protected the environment. We've had declining water quality increasing climate changing emissions and we haven't properly protected our highly productive soils. All of these are outcomes of the RMA so it hasn't met its environmental purpose and at the same time it hasn't met its development purposes. Its development purposes include making enough land available so that people have got the opportunity to build houses or apartments or places where more people can live. As a consequence in part of failings of the RMA land supply has been very constrained in New Zealand and therefore house prices have spiked. So implementation of the new system is essential to its success.The RMA in its principles was not poor legislation but it was poorly implemented. There wasn't sufficient national direction around things like making land available for supply. New plans were held up for many years in the Environment Court because the Environment Court wasn't funded to hear appeals and there were many other causes of delay. There were no standard plans done there were no common definitions and as a consequence implementation of the RMA was very poor. Now we're in the middle of the legislative reform process but we've got to get on and implement the new system because if it's not implemented any better than the RMA then it would fail just as the RMA has failed. So there's $179 million in this Budget which is for implementation for the development of model plans for the codification of all existing national direction into the national planning framework and for the completion of the part of national direction which relates to consenting of infrastructure. That piece of work's being led by the Infrastructure Commission with input from other agencies including the Ministry for the Environment and together this money will ensure that when the new system is legislated we will be a full decade ahead of where the RMA was at the time when it started to be implemented. Those are the sorts of changes that add to the productivity of the economy as well as meeting challenges like the shortage of affordable housing opportunities that we have in the country as well as meeting the environmental challenges that of course environmental legislation is meant to address including across climate change and water.This is a very good Budget. It has been well-received by the economic pundits and I have great pleasure in endorsing the Minister of Finance's motion."