Maharey Steve: Debate on Budget Policy Statement 
Maharey Steve: Debate on Budget Policy Statement 
[Volume:615;Page:11534] 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I should say to Mr Copeland as he takes his seat that the Government always listens very closely to all the good ideas that come from United Future. We are working on one together at the present time in the form of the Families Commission. We are a listening Government. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I am sorry to interrupt the Minister but I remind members that running commentaries are out of order. 
Hon STEVE MAHAREY 
: The report card for this Government that comes through from the Budget Policy Statement is very good. It tells us we have growth in the economy. We have companies doing things they could not do in the 1990s—that is grow and employ people in their firms. On the social side we are able to report that in almost every measure we are better housed better educated healthier—one after another we can tick off the social progress we are making and it is reflected in this Budget Policy Statement. 
Prior to this Government coming to power in 1999—I refer back to the period that people like Rodney Hide a supposed economist would tell us was the heyday of the kinds of policies he stands for—we were performing as an economy below the OECD average. We are often told this was just bad luck. It went on year after year after year but the National Government was the unluckiest Government. Right through the 1990s year after year its luck just did not change. It seemed to not be able to get above that OECD average. With all the good things it was doing nothing seemed to change. In 1999 National tells us luck changed. National says that we were an extraordinarily lucky Government and that if we really want to say why things have been so good we should say that the 1980s and 1990s policies of Rogernomics Ruthonomics etc. were the policies that really laid the foundation for the growth. I have to say that that is just absolute nonsense. 
In 1999 the thing that changed was the Government and the changes were the changes in the policies the country followed. Instead of just running the kind of free-market neo-liberal policies that someone like John Key wants to run we had an interventionist Government that maintained an open trading market economy but was prepared to do the things to make that economy profitable—employing people growing firms and growing the economy. That was the change. It was not luck but a change to the kinds of policies that people on this side of the House had been arguing for frankly right through the 1980s Rogernomics era and through the 1990s. 
There is one last statistic worth leaving with the House. People who argue against these policies say they want to return us to the top half of the OECD and that we would do it by returning to those very policies we have left behind. The fact of life is that the last time we were in the top half of the OECD was 1985. We introduced the kinds of policies these people wanted. We dropped below the OECD average and stayed there until we changed them again and then we went above it. When we approach this kind of debate let us talk about what works not what is supposed to work. People like Mr Key are the kinds of theorists and academics who like to say: “By God the model would work if we would just go further.” We should go a little further says the academic Mr John Key who is out of touch with the real world. He says: “If you just go a little further you would get this kind of growth.” I am saying to him that he should stay in his cloistered academic gown hopelessly out of touch with the real economy. He should carry on doing that and on this side of the House we will spend our time on policy that really works. We are in touch with reality. 
One of the things that we were left with in 1999 as a result of the failed policies of people like Mr John Key was a social deficit. One of the things that that National Government would not do was invest in social issues because it said we should get the economy right first and then all the social investment could take place. It was a case of “Drive the engine”—unfortunately the Government could not get out of first gear—“and once we have got up to full speed we will start paying for health and education and all those social investments.” Unfortunately that Government not only failed to drive the economy but also left us with a social deficit in housing health and education. There was a lack of spending and investment. 
The OECD said something very interesting the other day. We need to understand it said that if we do not have social development we do not get economic development. In other words it comes first it said. We have to have a healthy educated population. Otherwise we do not have the foundation for the kind of modern economy we are trying to form. So what has this Government done? In the last 4 years we have begun to re-invest in social areas. We have invested in childcare we have invested in early childhood education and we have invested in schools universities and polytechs. We have invested in the health system in housing and in families. It has been for the last 4 years an absolute revelation for the country to finally have back a group of people who understand that investing in people is the first step towards getting the kind of future we want for this country. It has been signalled that in this Budget we will carry on with that pattern of investment in jobs health education housing families and children. It will be another Budget for that. 
Specifically as Mr Copeland just pointed out one of the major features of this Budget will run under the title of Future Directions—it will be called something different by the time we get there but it is running under that title right now. The Ministry of Social Development has been leading that policy development for the last couple of years. Members will remember that during a previous term we said that in this term we would have a major focus on these kinds of issues and we are going to do that in this particular Budget. I am delighted to hear United Future members on the back of the discussion they had with Dr Cullen at the select committee saying they fully support what they are hearing. They are hearing that four key things will happen in that package. One is that we will be having a look at the level of income of working families and other low-income families in this country. We are going to say to those families that it is time they got a share of what is going on in this country’s growing prosperity. We want to make sure they feel better off when they go to work that there is money in their pocket that they feel their kids are well fed and that there is enough money coming into the house. We will begin addressing that issue in even greater clumps in this Budget. We have done it before with income-related rents. We have increased incomes but in this Budget we intend to go further. 
We intend to have a look at affordable housing. We have said that is our second bit. We want to make sure that we do have affordable housing particularly in areas like Auckland and Nelson where people have found a lot of housing pressure driving up the costs of housing. We want to address that kind of issue. We want thirdly to make work pay. It must pay people to take that step into work. It is not an ideological thing; it is a practical thing. If people go to work and find suddenly that the cost of transport feeding the kids and making sure someone is around to look after them after school takes up all their wages they begin to drift back into the benefit system. Work must pay. It must put money in people’s pockets and in this Budget we want to make sure we are doing something about that. 
Fourthly we have said we want to simplify the benefit system. When benefits were changed in 1991 and people’s incomes were reduced by about 30 percent and they were expected to live on that and could not—the food bank industry came from the cuts from Jenny Shipley and the National Party—even that Government could not sustain them and it had to introduce other tiers of the benefit system. We now have a three-tiered complicated mess of a benefit system that we want to begin seriously changing at this Budget time and over the next 3 years so that we finish up with essentially a single benefit system with people having additions to their benefit for their specific circumstances. So we will see those changes start then. We are targeting this assistance. The National Party and the ACT party would like tax cuts. They want trickle-up. They want to give out the money in tax cuts—they want to tell people who are well off that they can have another $160 a week and tell people who are getting an average income that they can have 19c a week. That is what we figured out Dr Brash was operating on. We are not going to do that. We are going to make sure this money is focused on low-income families so that they get the money the kids get the money and they get the money to go to work. 
That is where we are going to put our money and I know what New Zealanders will want. How would the country pay for what Dr Brash wants—tax cuts? I guess one of the things he has told us already is that it will be superannuation cuts. He has already signalled heavily to older New Zealanders that superannuation cuts are coming. He has already warned people that if they are under 50 they should get ready for these kinds of cuts. They will happen. People should not trust the National Party. They have to find money from somewhere they are saying to be able to pay for these tax cuts for the rich and they will take it out of superannuation. But by extension it is coming out of social services—the old place. People should look for it to come out of health education and all the other areas of large spending and investment by this Government. 
We have a clear choice now. They have demonstrated on that side of the House what they do when they are in. They create a social deficit. We have spent 4 years beginning to restore that and we have made a very real difference. New Zealanders can look at this Budget Policy Statement and know this Government will do even more for investing in people. Dr Brash has told them his intention is to do less.