Foss Craig: Budget DebateText is incorporated into the Bound VolumeFoss Craig: Budget Debate[Sitting date: 28 May 2013. Volume:690;Page:10413. Text is incorporated into the Bound Volume.]Hon CRAIG FOSS (Minister of Commerce): We have an interesting contrast here in the House. An earlier Labour speaker was talking about a two-speed economy or something like that. Well I think that member may have been half right. There are two speeds going on at the moment. There is forward and reverse. The National-ACT-United Future-Māori Party coalition Government is in forward mode into growth looking to the future to build a sustainable real job growth real export growth economy. We have a Labour-Greens Opposition or where the fruit meets the loop or where the Greens are leading Labour—we are not quite sure at the moment—backwards to reverse to recession to printing money and to experimenting with all sorts of weird and wonderful things those members have read in the latest book somewhere.This Budget continues the momentum towards solid and prudent management of the Crown accounts or the taxpayers’ account—the taxpayers’ balance sheet. The momentum continues towards surplus towards actual surplus the surplus that was laughed at by Opposition members not 1 year ago the surplus that they questioned the surplus that we are achieving that they blocked and voted against. They opposed every measure to achieve that surplus. The Opposition voted against every single measure toachieve surplus to achieve an economy that can weather economic storms around the world. I am surprised that Mr Parker had the audacity to say in the paper: “Oh yes but Labour would have achieved a surplus itself anyway.” How could that be? How could those members have done that when they have voted against every single measure to help achieve the surplus that is coming to fruition as the documents show next year?The polls are showing that New Zealanders believe this Budget. They trust this Budget. They are continuing their support for the National-led Government and its prudent management of our accounts of our economy in these tough tough times. Our economy needs to pay its way. New Zealand needs to pay its own way around the world. How do we do that? We have to manage our way through economic storms; we have to grow our economy through exports exports exports. Commentary over recent weeks has actually been very positive about the Budget. It has been very positive indeed and I will come back to that in a moment. But actually what was reflected in the polls the other night from both TV channels was that they showed an average sustainable and solid improvement in polling for the National-led Government.Interestingly though just as an aside when was the last time members saw a poll with National versus Labour? I cannot recall the good old days if you like of National versus Labour. It is now always National versus Labour-Greens or National versus Greens-Labour. Which party is leading the charge and the debate in the Opposition? When was the last time any member of the public who is listening saw a poll with National versus Labour? There has not been one for quite some time. The Labour-Greens potential—well the Opposition coalition—is a scary scary thought indeed. The recent lurch to the far left in the joint politburo announcement about the nationalisation of the power industry has gone down like a cup of the cold proverbial not only with most of New Zealand but actually with core traditional Labour supporters. I actually do think some of them realise that and are wondering quite how they can get out of it.Let us test some of the current rhetoric of Labour against what it was saying the last time it was in Government. The Hon Nick Smith was pointing to some of these points in his speech. We need to remember that Labour took New Zealand into recession 1 year before the global economic crisis—1 year—yet now it is talking up GDP growth and it has got all the answers. We must remember that because that is what we should test some of its announcements on. Labour led New Zealand into recession 1 year before—before—the global economic crisis. Let us contrast that with New Zealand’s running at 3 percent GDP growth; contrast that with one of the best growth rates in the OECD.It is quite interesting to actually just test the numbers. The pre-election update or the December update—I cannot remember which one it was—in December 2008 revealed the decade of deficits of the previous Labour administration so we must test Mr Parker’s rhetoric that “Oh no we would have got into surplus of course as well.” yet the fiscal independent forecast in December 2008 was for a decade of deficits. Those cannot both be true. We have to test it. Interestingly and quite weirdly actually inflation at the time under Labour was running near 5 percent—5 percent inflation under Labour. Currently under National it has been 0.9 percent for the last year. That means that the cost of living under Labour in its last year in Government was nearing 5 percent per annum. Under National it is under 1 percent.The cost of living is much cheaper under a National Government. Take mortgage rates for instance. When Labour left office floating mortgage rates were near 10 percent. Quite how Labour got floating mortgage rates through 10 percent when growth was in recession I do not know. I do not really know how it managed it but it did. So New Zealand families’ mortgages under Labour were near double figures at 10 percent. Currently those same mortgages are under 5 percent. What an awesome result in 5 short years. That is what prudent management and solid economically and fiscallyresponsible Budgets mean. They simply mean lower interest rates for longer for New Zealanders to afford their mortgages: National—sub - 5 percent mortgages; Labour—plus 10 percent mortgages; National—cost of living 0.9 percent per annum; Labour—cost of living 5 percent per annum.All that means is that families struggle under Labour. Their mortgage rates are always higher under Labour. Thank goodness for our children—thank God—New Zealand voted those members out in 2008. They are still in denial. There were 240000 children in poverty under a Labour Government when it was running surpluses and it was in recession but inflation was at 5 percent and mortgage rates were at 10 percent. How dare they get up and talk about poverty when they were running an economy rampant with 10 percent mortgage rates. Absolutely outrageous!So what are their latest solutions? Well Labour has given up on having itself run the economy because now it is joint Labour-Greens far-left announcements. Printing money—that will solve it. I do not know why Dr Michael Cullen did not think of that when he was the Minister of Finance. Printing money will solve all the problems as the Labour-Greens coalition has recently announced. Quite why that was not offered when it was in Government I do not know. Perhaps it was because most of them truly realised that it is absolute madness it is inflationary and it is essentially theft from future generations.I just want to comment on one thing in particular. New Zealand owes the world about $200 billion. It is incumbent on all of us that there is confidence in our capital markets and certainty about the New Zealand state of affairs so that the interest rates that we have to fund that are as low as possible for the Government for our companies and of course for our families. The economic grenade that Labour and the Greens threw all but 2 or 3 weeks ago about their crazy far-left power policy actually adds to the risk premium of New Zealand. So that announcement actually means that mortgage rates for New Zealanders may well be slightly higher than they need to be because of the risk—the scary risk but the risk none the less—of a far-left Labour-Greens coalition Government.I go back again to my earlier point. When was the last time any poll showed Labour versus National? That is the record that should be tested. At least the Green speakers are leading the debate. They are making their points. Labour comes in quickly and behind now and tries to join but we are now seeing what a Labour-Greens coalition Government could look like to the far left. This is a solid prudent manageable Budget continuing the momentum towards surplus real growth and real jobs. It is good for our families—interest rates are half what they once were under the Labour Government. There were 10 percent mortgage rates under Labour. They are at 5 percent under National. National is by far—by far—a better manager of the New Zealand economy.