Bennett David: Debate on Budget Policy Statement 
Bennett David: Debate on Budget Policy Statement 
[Volume:670;Page:17063] 
DAVID BENNETT (National—Hamilton East) 
: 
 Today we are talking about the Budget Policy Statement. I will first of all start by acknowledging the pain and suffering that our whole country and especially the people of Christchurch have suffered in recent weeks. The Budget Policy Statement debate today has tended to focus on the Christchurch earthquake and on the economic approaches that could be taken to deal with such an issue. It will be a focal point of the Budget no doubt but I think we also need to be mindful that fundamental economic policy does not change. What is right for an economy and what is right for the New Zealand economy will always be the same solution. It is the solution that National along with its coalition colleagues will be promoting through the Budget. It is not the solution that Labour and the Green Party have been trying to promote through this House today. That fundamental debate about economic policy has been crucial to this debate about the Budget Policy Statement today. On the one hand we have heard good solid strong economic policy from National and on the other hand we have heard a distributive slightly communist approach from Labour an approach that went into full-blown communism from the Green members in terms of how to deal with such an issue. 
If we go back to what is good solid economic policy we must look at what we need in order for a strong country to go forward and we need savings and investment. We need a country that saves money that invests in its future that provides for its people so they have the signals and incentives to take advantage of their opportunities and that also provides results so that the country through its tax system can take the fruits of labour and use that money for social distribution. We cannot have social spending without income coming into the Government and that income needs to be promoted. The more we promote that income the more money the Government has to spend and the more social spending the Government can provide. 
It is very simple economics. On the left the equation for economics is that the Government can take more in the first instance before actually letting the economy grow. Those on the left believe that by taking more they can redistribute more. That is a very circular and very cyclical argument in the sense that it keeps on going inward. We have a much more open approach which looks at having a greater economy and therefore being able to provide greater Government spending rather than having greater Government spending at the initial point of contact which cannot grow any bigger because effectively the economy is being strangled. 
That is what Labour did to the economy in our best years. It strangled the New Zealand economy. It put us in recession before the rest of the world. Then on top of that we had a world recession that meant New Zealand had to go through some very difficult economic times. National in coalition with the Maori Party ACT and United Future set about a plan to build this country to be stronger and we were making the first steps to achieving this. Now we have had a natural disaster which nobody could have predicted and which is on a scale beyond any comprehension but it does not mean that we have to change the plan. The plan and the answer will always be the same— 
Grant Robertson 
: You haven’t got one. 
DAVID BENNETT 
: —because that is the response we need to have; it is fundamental economics. Labour says we do not have a plan. That is patently not true. We have a plan that is based on savings and investment and therefore on building a stronger economy. We want growth which will mean that the Government through its tax system will have more money to spend. That is the nature of it rather than Labour’s approach which is just to tax and tax and then hopefully work its way through. New Zealand has a plan. We have a good economic plan. It is a plan that does not need to change as a result of what is happening in Christchurch but we need to be mindful of what has happened in Christchurch. Of course the Budget will consider that in our priorities for spending and there will be some balance between that and the need to increase debt as everybody would expect because such a natural disaster had not been anticipated and could not be anticipated by a country going forward. 
The important approach of how we build an economy is to concentrate on the tradable sector. We do not want to see what happened under the previous Labour Government when the tradable sector shrank in the 5 years from 2005 to 2009 when the non-tradable sector grew by 15 percent over that time and when the previous Labour administration increased its investment in Government administration but not in the way whereby we paid our way in the world. There was a large increase in borrowing by New Zealand. Our debt to the rest of the world increased by about $60 billion to over $160 billion and that blowout in debt put a handbrake on our economy especially in the productive parts of our economy and its growth. We need to change that. We need to get back to a place where we have savings and investment and that is the crucial aspect of what National has been doing over the last year or so. 
We also have to be mindful of the fact that we have large assets within Government portfolios. If we look at what happened with the Budget Policy Statement we see that there was also the 2010 Investment Statement of the Government of New Zealand. This document is new in the sense that we have not had them in the past. It shows the assets the Crown possesses and their potential returns in the formats that have been put together in a booklet. That is a starting point for New Zealanders to look at where their investments are and at what rates of return they get on their investments. That can be a crucial point as we go forward and look at the Government’s role in investing and delivering a stronger economy. 
If we look at that statement we see that the Government holds about $223 billion of assets. We are looking at ways in which that holding can be further enhanced in the sense that there are opportunities for New Zealanders to potentially invest in making our economy stronger and those assets stronger. It is one of the things that we look to do in the future as we work towards providing that savings and investment culture. Just like the tax issue one raised many times by Labour today it is crucial in providing that investment and savings culture. New Zealanders now have the incentives out there to get a good education to work hard and to take advantage of the jobs that are in this country and this region. That income will then come through to the Government through the tax system and we can spend it on social and other spending. 
This is contrary to the Labour point of view which is to keep New Zealanders at low incomes then control their destiny and therefore control Government spending. At the end of the day that will never lead to a stronger country and it will actually lead to a country that cannot manage and deal with natural disasters such as the one we have had in Christchurch. Crucially when we look at the Labour approach we see that it would never enable us to deal with the natural disaster we have had; it would be an approach that would stifle the economy further in these times. 
We need to look at a long-term approach that will grow the economy and provide the way to deal with this issue and also build a stronger future for New Zealanders. That is the crucial part of this Budget and the Budget Policy Statement which will be amended to reflect the natural circumstances that we now have as a country. Effectively the heart of it is the same in the sense that economic policy that is solid strong and effective will be employed in the Budget as we go forward. That economic policy is universal. It is not designed to take into account just one situation; it is a policy that will enable us to provide opportunities for New Zealanders. It will enable this country to grow and through long-term growth we can pay for the effects of natural disasters such as Christchurch’s earthquake. Not only can we pay for those effects but we can grow our economy further so that New Zealanders can have those opportunities and so we can have the prosperity we need in this country to deliver the social services and other assets that people want. 
The Budget coming up this year will be an important one for New Zealand. It will be part of that portrayal of how we deal with economic issues and that is the fundamental debate we have had in this House today. But let us remember that there is an answer that there is a plan and that that plan is the one that can work. The Opposition will try to put out something else that is not a plan that is not an answer and that has failed in the past as we have seen from the previous Labour Government. The choice is quite stark and it is the fundamental choice of economics that this House represents.