Shirley Ken: Budget Debate 
Shirley Ken: Budget Debate 
[Volume:618;Page:13619] 
Hon KEN SHIRLEY (ACT) 
: 
 During question No. 2 today I asked a supplementary question of the Minister of Finance about whether he accepted that a tax cut for business and a cut in the top tax rate would boost the economy and if he did not think it would boost the economy why he thought that a 20 percent cut to those tax rates would not boost the economy. It was interesting that he refused to answer that question. He was not prepared to answer it because he knows that all the advice he has received shows overwhelmingly that the best thing that could be done for the New Zealand economy—[ 
Interruption 
] 
I raise a point of order Mr Speaker. It seems that some of the members on the Government benches had a very enjoyable dinner and we are just having a barrage and a tirade of shouting from them. I ask that you stop that. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the member for his contribution. I had looked at the member interjecting but the member on his feet was himself out of order in suggesting something otherwise. Running commentaries are out of order. It was getting very close to that and I refer members to Speaker’s ruling 56/1. I ask both members to recognise that they are out of order. 
Hon Rick Barker 
: I raise a point of order Mr Speaker. I take objection to the implication that was made by Mr Ken Shirley and I wish him to withdraw and apologise. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I did call Mr Shirley to order on that and the member will withdraw. 
Hon KEN SHIRLEY 
: Because the Minister had an enjoyable dinner break? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member is a very longstanding member in this Parliament. He has served in this Parliament for a considerable length of time and he knows what was implied as do many others. I ask the member to withdraw and continue with his speech. 
Hon KEN SHIRLEY 
: If I have caused offence I certainly withdraw and apologise. 
The Minister of Finance would not reply to my question today because all the advice he has had tells him that a cut in the tax rate would indeed benefit the economy. Instead in his reply he said that the last time we had a big cut in taxes was in 1988 when both he and I were members of the Government and he went on to imply that that had not helped the economy. Is that not extraordinary? I think that all economists recognise that the courageous reforms done by that Labour Government—of which I was a part along with Roger Douglas and Richard Prebble—laid the foundations for reforms— 
Hon Rick Barker 
: No wonder this member was fourth in the run for leadership. 
Hon KEN SHIRLEY 
: I raise a point of order Mr Speaker. I asked you before to intervene and I ask you again. I do not expect a tirade from that side from the same person you brought to heel just a few moments ago. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The debate is rather vigorous and the member probably invites some of the comments. However I say to members on my right that under Speaker’s rulings 56/1(3) running commentaries are out of order and I ask the members to desist. 
Hon KEN SHIRLEY 
: It is widely recognised amongst economists and people who understand these things that the courageous decisions taken in that 1980 period along with the progress made by Ruth Richardson have set this economy on track. Indeed the surpluses we have today—the low fruit that this Government is picking and enjoying—result from the hard yards done during those reform periods. It is interesting that Government members on the one hand rail against the reforms yet on the other hand are happy to pick the fruit of the benefits and squander and waste it. We even had Lianne Dalziel in this very debate criticising the National Government for introducing the student loan scheme. Has Labour undone the student loan scheme? I do not think so. Has Labour undone GST? I do not think so? Has it undone the corporatisation of the public sector? I do not think so. Everything that Labour rails against it has carried out. It has enjoyed the benefits and the fruits of those hard yards and is now squandering them. 
There is no virtue whatsoever in a Government surplus. All that a Government surplus means is that the Government has taken too much money in revenue. And where does it get that money? Governments do not have any money. These socialists talk about Government money and Government spending. The only money Government has is the money it takes off hard-working New Zealanders hard-working families and enterprising businesses— 
Russell Fairbrother 
: From people who have jobs. 
Hon KEN SHIRLEY 
: —in the pretence that the Government can somehow spend it more wisely than people like Mr Fairbrother from Napier. Is that not extraordinary? One just needs to look at the waste in Government spending like the Government throwing money at hip hop trips through North America and deciding to subsidise Auckland’s purchase of the Auckland marina so that wealthy people can have Government-sponsored moorings of their yachts. It is bad for any Government to get involved in things like that. 
No country in the OECD has improved its economy performance by increasing taxation. I put a challenge out to that lot over there on the Government benches to name one country in the OECD that has improved its economic performance by increasing taxation. There is not one. Conversely every country in the OECD that has cut its tax rates has leapt ahead in economic performance. That is a reality. The problem is that members of Labour socialist Governments can think only in terms of a static model. A dynamic model is just a bit too complicated for them to get their heads around or possibly their rhetoric and their dogma precludes them from thinking in those terms. The only money the Government has is what it takes out of the economy and I have already mentioned the wastage. This Government is using this Budget to buy votes. It is a pork-barrel Budget—nothing but a pork-barrel Budget. The Government is bribing people with their own money and the public have seen though it. The Government has fired its salvo and has played its big card. The polls tell us overwhelmingly that the majority of New Zealanders recognise the Budget for what it is and would have far preferred a tax cut in the first instance. 
J F Kennedy a Democrat was what we might call a socialist President of the United States in relative terms. He made a rather interesting statement. He said that the best way to secure revenue in the long term was to cut tax rates in the short term. I think that President Reagan gave us an even better quote when he was Governor of California. When he was asked what he thought about Government spending he stared down the camera and in that classic Reagan voice said: “Thank God we don’t get all the government we pay for.” I think that really summed it up. 
This Government commissioned the McLeod report. Soon after coming into Government in 1999 Michael Cullen commissioned the McLeod report on taxation. He got that report. His officials gathered around in his office up on the seventh floor as it was presented to him. He read it and I am told by a number of people who were there that he threw it across the room and said: “I’ve just spend a million dollars getting an endorsement of the ACT party’s manifesto.” Overwhelmingly the experts who looked at the New Zealand tax system said that on all accounts to improve the taxation system to improve the economy and on all the indicators that drive the economy the best thing one could do would be to lower the taxation. But through dogma and rhetoric this Government was not prepared to do that. 
I raise a point of order Mr Speaker. Can I have an assurance that the interruptions I received from that side of the House do not come out of my time? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I have taken that into consideration. 
Hon KEN SHIRLEY 
: So I am in injury time. We have also had the Scully report. That came to the same conclusion. It recommended that the optimum tax rate for this economy is 20c in the dollar. That is the ACT party’s policy. That is the way we will leap ahead. 
This is a wealth-sapping Budget. Government members can think only in the static situation of a pie. They want to cut the slices differently and we get crumbling and wastage when we do that. Anybody who thinks in terms of a dynamic model recognises that the best way is to go for growth and a bigger pie so that everyone can enjoy a bigger slice—not just a redistribution model which epitomises this Labour Government. That is very regrettable because we had a golden opportunity with the surplus to recognise that it should have been given back to the people who had paid it. That is the way we would attract investment in this economy. That is the way we would get growth. That is the way we would be going down a pathway to being a more prosperous nation. Past Governments have recognised that. The Labour Government in the 1980s recognised that. The National Government at the start of the 1990s recognised that. ACT recognises it. Unfortunately the current Government has no idea. 
RUSSELL FAIRBROTHER (Labour—Napier) 
: 
 I am delighted to follow on from that exile from the Government. I am delighted to follow on from that man who grasped upon the unwise spending of a hip-hop tour but who has spent 6 weeks jetting around the country with his three fellow colleagues vying for the leadership of the eight-man ACT party. He has spent 8 weeks jetting around the countryside and I bet the bill for that exceeded the unwise hip-hop spending of $54000. ACT is a party that cannot select its own leader without its members flying around the country at great expense vacating their responsibilities in this House to preen and parade themselves amongst their few paltry members who are all seeking tax avoidance schemes. ACT members came here and had a bitter fight on Sunday after reading the Sunday newspaper to select their leader. As the learned Winston Peters said: “You can Hide but you can’t run.” 
What that last speaker tried to do was to run away from the truth of this economy. He threw out the challenge about the OECD and I think it is probably apposite to bring him right back to OECD figures. What was delivered in this Budget could not happen without economic success. From 1990 to 1999 economic growth averaged a rate of 2.6 percent per annum below the OECD growth rate. Then this Government came to power. Our annual growth rate of 3.4 percent on average in the past 3 years compares well with the OECD average rate of 1 percent. Under Labour the economy has expanded by over 15 percent in 4 years. It is no wonder that the National Party ACT and those acolytes of the right want to talk about anything but the economy. It is no wonder they want to indulge in their fantasies about hip-hop while jetting around this country trying to decide who their leadership should be—and the success of that endeavour is for all to see. 
This is a country that when compared with the countries in the OECD achieves amazing growth without tax cuts and without raising taxes and provides a Budget that is sustainable and meeting need as opposed to pandering to the greedy in this society which is what Opposition members want to do with their harping carping avaricious claims. They want to say that they will increase the bill of $1.1 billion which provides $150 per week - plus to middle-income workers and their families and children to a $5.5 billion bill to give the tax cuts they promise to provide of just $35 per week. Those contrasts are staggering yet Opposition members do not address them in their speeches in this House. 
I want to talk about what this Budget does for Hawke’s Bay. This is a Budget that unifies Hawke’s Bay. It brings our communities together and it reinforces the family as the basic unit of our country of our province and of my electorate. 
The Budget tackles the needs of education. The last speaker wondered why this Government had not dis-assembled the terrible changes of the 1980s but that is because this Government offers a sustainable Budget. It offers reliability and predictability and it offers growth for the future. One does not get that by see-sawing between policy variation and policy variation. One picks up what one has to do works with the tools one is given beavers away honestly and earnestly and lets the results speak for themselves. What are the results in Hawke’s Bay? As a result of this Budget each student is better off by about $80 in real terms. That is a real benefit to the people in this country a real benefit to Napier a real benefit to families and a real benefit to students. Was there any mention of that by the last speaker in his diatribe? No he avoided that issue. 
Let us talk about Modern Apprenticeships which my colleague Mr David Benson-Pope referred to. He told us about the folly of National’s attitude to apprentices. It would abolish schemes for them. As I move around my electorate knock on doors visit schools and visit old folks’ homes one of the repeated underlying concerns is the lack of trade training and the lack of availability of tradesmen. The days of craft and skill appeared to be long gone until the Labour Government came over the horizon and brought back to this country an apprenticeship scheme. What does that mean for Hawke’s Bay? There are currently 181 modern apprentices in Napier. That number is up from 32 a year ago. Let me repeat that. In 12 months there are almost 50 additional modern apprentices—up by 50 to 181. The growth is exponential it is better than we hoped and the signs for this country are good. So one day when people ring for a plumber or a carpenter they will get a qualified plumber or carpenter on time and on price. 
One of the issues that right-wing parties in this Parliament often bleat about is law and order. They believe that by spreading fear and insecurity they will gain more votes but what really counts in this country is how we look after our young families and provide for our young children. Because of the great “reforms” praised by the previous speaker most families in this country are now double-income families just to survive. As a result of that the need for early childhood training is essential. This Budget delivers to Napier and Hawke’s Bay. There are 17 private and 51 community-based early childhood education services in Napier and they will each receive a boost in funding. That is not a giveaway; it is not a lolly-scramble; it is investing in families. It is making this country a better and safer place in which to live. It means that “the day after tomorrow” is not a phrase we should be frightened of but a time to smile at the future as it is unveiled before us in the hands of our young children. 
However the really good news in this Budget is perhaps described in the health vote. There are some staggering figures for Hawke’s Bay. The number of orthopaedic operations currently runs at about 264 this year. As a result of this Budget that number will increase by 55 in the coming 12 months. That is a 20 percent increase in actual orthopaedic operations. But it does not just stop there. This is a sustainable growth Budget so that in 5 years’ time—that is the 2008-09 year—we will have an additional 188 orthopaedic operations. That is 70 percent more than the current year’s number of 264. 
Darren Hughes 
: And they’re against it. 
RUSSELL FAIRBROTHER 
: And they of all people will have creaky joints and damaged knees as they genuflect to the tax-cutting elite in this country. They may need those orthopaedic operations and they will welcome retiring in Hawke’s Bay—the land of plenty—to enjoy those operations in 5 years’ time. 
This is a Budget that makes every person in Hawke’s Bay proud and they welcome it. I called at a door on Sunday afternoon and I met a chap in his seventies. I asked him how things were going and whether there was anything he wanted to say to a mere politician. He said: “Yeah the Government should be doing things.” I said: “Like what?”. He said: “Superannuation.” I said: “It’s guaranteed. Are you enjoying that?”. He said: “Yeah that’s great.” I said: “What else?”. He said: “Oh it’s pretty good really. No this Government is really good.” 
So that is the message I bring to this House from the electorate of Napier. This is a Budget that people who have been spending their hard-earned dollars and trying to get their children educated know is a good Budget. This is a Budget that makes the sun shine in Napier just an extra hour longer. This is a Budget that makes our sunsets in Napier a beautiful pink and orange and then go to green until finally the day settles to a peaceful evening. This is a Budget that we in Napier are delighted to usher in for the next 12 months. 
But the real surprise about this Budget is that it is just the beginning. It is the basis on which we can build an improved economy and improved social services. We can get our people back to work and into proper training. We can keep our children in schools where they can be educated at levels that suit their abilities so that they come out with meaningful qualifications. That is what this Budget is about. And no bleating by members on the other side as they appeal to the avaricious—no bleating on the other side with their sound bites—is going to undermine what has been a remarkable recovery and celebration of success in this Budget.