Henare Tau: Budget Debate 
Henare Tau: Budget Debate 
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Hon TAU HENARE (National) 
: 
 I start my talk on the Budget this afternoon with some remarks in relation to Kelvin Davis’ speech. He said that National has never got it in education. I tell the House what National has never got in respect of education: we have never ever got that there are kids leaving school who are unable to read and write. It is fundamental—it is actually a human right—that kids leave school with the basics just with the bare basics. Under the last Government [ 
Interruption 
]—I tell members across the House not to get all defensive—in its 9 years we had more kids than ever before leaving school unable to read and write. Just give them the basics. That is the starting point. We are not talking about rocket scientists; we are talking about saying to “Hone Davis” “Marama Davis” and the like of Moerewa that what we will give them is first and foremost the basics. We will teach them to read and write. But oh no when national standards came in there was a hue and cry from the unionists and from the members opposite who are still paid up members of the New Zealand Educational Institute flicking the money here there and everywhere. 
Sue Moroney 
: So bitter because he failed as a union official himself—so bitter. 
Hon TAU HENARE 
: Oh there we go—we can talk about that. 
I love the Budget debate because it is a time for nationalism. Personally speaking I say that Budget debates are a time for nationalism. When we are talking about nationalism we know that nationalism demands certain things from Governments. I think that the Budget should do four or five things. It should build on the recovery that we are in at the moment. It should strengthen the economy. It should where possible assist every family. We also need to keep people within our borders because the strength is in keeping that capacity that critical mass in our own territory. 
I suppose that one of the last things that nationalism demands is a fair tax system. It demands a tax system where the Government is not always putting its hand in the back pocket. I can understand Labour having its hand in the back pocket of the worker for so many years even when times were tough but I cannot understand what happened during the 9 years the Labour administration was in power. Those were good times. It was not the Depression; it was a boom time for New Zealand. What happened? We had higher taxes higher taxes and more higher taxes. That is what happened. Labour members have stood up in the House today and said that workers need a bit of extra money a bit of extra this and a bit of extra that. Well that is what should have happened in the boom times. Now it has been left up to this administration to come up with a fairer tax system. 
I will quote something that my colleague from Hamilton David Bennett said in his speech on the Budget. He spoke about two remarkable facts. First two-thirds of the cost of personal income tax cuts has gone towards reducing the bottom two tax rates. We have taken the current 12.5 percent rate down to 10.5 and taken the 21 percent rate down to 17.5 percent. In other words two-thirds of the tax cuts apply to people on income below $48000. Secondly 73 percent of income earners will now face a statutory income tax rate of 17.5 percent or less—73 percent of income earners will face a statutory income tax rate of 17.5 percent or less. I tell members that not even Roger Douglas in his heyday as Minister of Finance for that lot over there would have believed that New Zealand could have had such a good tax system. It is the beginning of a good tax system; the beginning of one of the fairest tax systems in the Western World. For those near the top of this income range that tax rate is almost halved. It is down from 33 percent in just 2 years. This rate will also apply to income and savings including KiwiSaver. 
I will come back to the five points that I was making about nationalism. When I talk about the setting of a Budget any Minister of Finance will tell us that it is a pretty difficult job especially when the global economy is not doing too well. We had to make sure that we focused on good fiscal management. Everybody knows that we cannot spend more than we earn so our Minister of Finance has shifted us from a decade of deficits and we are on our way and are on track to record some modest surpluses in the next few years ahead. We are moving in the right direction. It would be a long time in New Zealand’s history since we thought that the corporate tax rate could be as low as it is today and that is thanks to the Minister of the Finance his Cabinet colleagues and the Prime Minister. 
This Budget is all about giving our country the tools to do the job in really tough times. Let me make no bones about it: these are tough times. Our small country of 4 million people is on the other end of the world watching countries like Greece Spain Italy and Portugal and we are doing rather well. We are doing the things that need to be done. What things need to be done? [ 
Interruption 
] Oh OK. I could talk about all the stuff that has been happening over the last week but I will not because that is just a distraction. This country is on the road to a good recovery. This country is on the road towards to coin a phrase getting up the ladder in the OECD. The previous Prime Minister used to rant and rave on about our country going up the ladder in the OECD. Admittedly she did not talk about it too much in the last 2 or 3 years of her reign. But however— 
Grant Robertson 
: How’s the closing the gap with Australia going? 
Hon TAU HENARE 
: It is going great. It is going great; fantastic in fact. We are a small economy. We know which buttons to hit. We know not to put our hands in the back pocket of the workers. We know that every little amount of money that we can give back to the workers says that they have the ability to go and spend it as they like instead of being told by Labour how to spend it. For goodness’ sake! It is Economics 101: let them have their own money. How simple is that? We let people have their own money so that they can make decisions for themselves. The left love to do nothing else but spend other people’s money. It is rampant in the unions and it is rampant in the teachers’ union and Kelvin Davis knows it. The New Zealand Educational Institute with all of its fees loves to spend other people’s money. That is what that mob over there is about: those members love to spend spend and spend and to put it on the card.