Twyford Phil: Budget Debate 
Twyford Phil: Budget Debate 
[Volume:673;Page:19208] 
PHIL TWYFORD (Labour) 
: 
 The previous Government speaker would like to portray this Budget as a balanced sensible compassionate Budget. But I do not think so; nor do the people of Te Atatu. The Minister of Finance has demonstrated with this Budget his higher calling as a bean counter which I say with apologies to bean counters around the country. This Minister’s goal his big goal is visionary. He wants to balance the books. Not for him are the idle dreams of nation-building of building great things and of liberating the potential of our young people. No the fantastic vision of this finance Minister is to balance the books. He is determined to do that by 2014 and to do it he will make cuts. He will make cuts that will squeeze the life out of low and middle income New Zealanders. His reflexes as a Minister of Finance are to cut borrow and hope and I say to this House that those cuts will hurt hard-working New Zealand families. The cuts are not trivial as the members on that side of the House have tried to say. They will add to the enormous financial burden and pressures that are being felt by people all over the suburbs of west Auckland and around this country. 
Let us look at the cuts: $2.6 billion has been cut out of KiwiSaver. That is money being taken out of the pockets of hard-working New Zealanders. That is breaking a contract the Government made with those New Zealanders to save for their retirement. Government members are breaking a contract. It was a partnership between savers the Government and employers but this Government has ripped the guts out of it. The $10 a week cut out of the tax credit is $10 a week out of the pockets of savers. 
The Minister says the cut to Working for Families is miniscule but it will be felt by 50 percent of the families who currently benefit from Working for Families. The Government has cut $440 million by changing the abatement thresholds and rates—a $448 million cut but the Minister of Finance says that is miniscule. A family of 4 earning $80000 a year will lose up to $50 a week. This Government is taking $50 a week out of the household budgets of families earning $80000 a year and the Minister says that is miniscule. But I tell members on that side of the House that plenty of families in Te Atatu who are in that position and who earn $80000 a year in household income are losing fifty bucks a week because of this Government’s cuts. 
Let us look at health and education. There are $1.2 billion in specified cuts and another billion dollars in unspecified cuts. That is how this Government manages the economy. The Government has said to the heads of the Public Service that they have to cut a billion dollars out of their budgets. The Government does not care how they do it but they should just make the cuts. Well I say “Watch out Rangeview Intermediate watch out Tirimoana Primary School and watch out Massey High School because you are going to feel it!”. Those schools will feel it in their operating grants next year and that is a fact. I say “Look out Waitakere Hospital!”; it will feel the edge of those cuts in the next financial year. 
Who is taking the hit in this Budget? Who is picking up the tab for the corporate bail-outs? Who is paying the bill for the rebuilding of Christchurch? The cost is being laid fairly and squarely at the door of low and middle income New Zealanders by this Budget. No matter how much members on that side of the House grizzle moan and roll their eyes they cannot avoid responsibility for what this Budget is doing to low and middle income New Zealanders because those New Zealanders are the ones who are struggling to save for their retirement. They are the ones who rely on the extra dollars they get from Working for Families and they are the ones who rely most heavily on being able to send their kids to a good local school and not having to drive them across to the other side of town. They are the ones who rely most heavily on being able to afford to get their kids to the local doctor when they are sick. But all those things will be squeezed by this Budget. 
Last weekend I talked to a young couple who live in Larissa Avenue in Henderson. He is a security guard and she works in customer service. Their rent has gone up $60 a week. They have had to move across town because they could not afford the cost of petrol to get to work and back every day. Worst of all they have not been able to get their 3-year-old son into early childhood education because the fees have gone up and they simply cannot afford it. This Budget does nothing for that family. It does nothing to help them. This young couple is paying the price of a failed economic policy by this National Government. 
We know that New Zealanders are reasonable people. We know that they are patient. They understand that the money has to come from somewhere. They know that the Government’s finances have taken a hit from the earthquake in Christchurch. New Zealanders are patient they are understanding and actually all of this would be OK if they at least knew there was a plan to get the economy moving together. It would be OK if they knew that this Government had the slightest semblance of an economic development strategy for New Zealand. But that is the thing: there is no plan—there is no plan. 
The other thing that would make it bearable is for people to pay their fair share of the burden. But people instinctively know that this Government through this Budget is laying the cost of Christchurch and the cost of the recession at the doorstep of low and middle income earners. The idea of people paying their fair share is a foreign concept to this Government. 
The Budget has major credibility problems. As the days have passed since Budget day it has become increasingly clear that the Budget is built on very shaky foundations. The numbers are dodgy and the growth forecasts are optimistic to say the least. The Budget relies on a billion dollars of unallocated cuts to public services. It relies on revenue predictions that are $4 billion more optimistic than those from the Inland Revenue Department. How irresponsible is that? The Government had one set of projections from Treasury it had one from the Inland Revenue Department and there was a nearly $4 billion difference. What did the Government do? Did it choose the more fiscally prudent option the conservative option? Did it choose a sensible middle way? No. What did this Government do? It chose the most blatantly optimistic assumptions to base its Budget on. 
This Government is relying on an economic growth track that it has not once delivered on in its 2½ years of economic management. Looking at the growth curve after the last Budget we see that the Government predicted that the curve would go up. But what did it do? It went down. If we look at the growth curve from the last 6-monthly update we see that the Government said there would be growth in jobs and the economy would go up. What did it do? It went down. But with a touching faith in its own projections the Government is predicting yet again that growth will go up on the basis of this Budget with nothing—nothing at all—to substantiate that prediction. I think this Minister of Finance is the mañana Minister. Growth will always come tomorrow—mañana mañana. 
Finally this Budget relies on dodgy accounting for unmandated asset sales and that I think is perhaps the worst thing about this Budget. It is the thing that really sticks in the throat of the people I talk to in the electorate day by day. By two to one the polls tell us people oppose this Government’s policy of asset sales. Based on the conversations I have been having in Te Atatu over the last few weeks I say that in that area it is more likely that people are nine to one—nine to one—against this Government’s policy of asset sales. They know that this Government is trying to sell them something they already own. They know there is no economic logic in selling off our highest performing State assets the income stream of which the Government relies on to service the national debt. They know that saying that mum and dad investors will be at the front of the queue is a nonsense when it is clear that these shares will end up before long in the hands of foreign investors. They know that inevitably when we hand over a natural monopoly to private interests it is an invitation for price gouging. Power prices will go up when these assets are sold down; make no mistake about it. 
The really galling thing is that Mr Key and Mr English deny their broken promises. They deny that the Budget has already banked the $5 billion to $7 billion in income from the sales. They have banked the sales but in this bizarre National world they have not made any allowance for the lost dividends. That makes no sense and it will not do a thing for the economy.