Dunne Peter: Budget Debate 
Dunne Peter: Budget Debate 
[Volume:647;Page:16247] 
Hon PETER DUNNE (Leader—United Future) 
: 
 For many New Zealanders this Budget was all about tax cuts. That was partly brought on by media hype that that was going to be the central theme of the Budget and partly also brought on by the fact that New Zealanders have had to wait 12 years since they last had a cut in their personal taxes. In the event the calculation they will be making right now is whether those cuts have measured up to their expectations. I think that the moves announced this afternoon are a step in the right direction. They are a logical flow-on from the moves we made last year with the  
Business Tax Review 
. But with petrol having hit $2 a litre early this morning and with the dollar having gone up this afternoon in the wake of the Budget—thus suggesting that early relief from rising mortgage rates is unlikely—it is more than likely that those many New Zealanders who are hanging out for this afternoon’s tax cuts announcement will conclude that they are just a step in the right direction but that they have not over the 3-year period given them the type of relief they were expecting. And when they factor in on top of that that we still have the impact of the emissions trading scheme to come and the likely boost to household living costs that that will bring on without any clear indication in this Budget of compensation to households they will be even more concerned. 
It is interesting that when the emissions trading scheme was first postulated last year the talk was that households would be compensated for the increase in costs. Over ensuing months that has become refined to “vulnerable” households would be compensated for “some” of the ensuing costs. And in this afternoon’s Budget we heard that the SuperGold card provisions for the elderly in respect of electricity charges will take effect at the time that electricity enters the emissions trading scheme. I have no problem with that aspect but I have a huge problem with the fact that those New Zealanders who have got a tax cut this afternoon may now be forced to view that not as the dividend for the economic good years but as the down payment on the cost of the emissions trading scheme to come. I do not think that New Zealanders will tolerate that for one moment. 
We take this Budget; United Future welcomes the positive steps in it towards addressing tax issues. They are a start but there is a long way to go yet. We still have a tax system that requires fundamental adjustment to its basic integrity. We have long argued for and will continue to support the alignment of the top personal business and trust rates at 30c in the dollar. We have long argued for and will continue to support couples with dependent children having the right to split their incomes for tax purposes to make it that little bit easier for them to get around their daily circumstances. The changes in this Budget do not go that far but they enable us to hold on to the possibility of achieving those goals in the future and we will certainly push all we can for that—and we will get there. I am reminded of this fact. 
We were part of the Government the last time personal taxes went down and it is no coincidence that we are supporting the Government this time when they go down. We just want to make sure that they go down that much further and we will. But beyond that there is a fundamental lesson that is implicit in this Budget and implicit in any debate about New Zealand’s economic performance in future—that is we have to boost incomes to boost our national prosperity and to boost our opportunity. That can come only through policies designed to boost productivity to make it easier for New Zealanders to go about their business and for their businesses to prosper and succeed. In that respect there are some good things in this Budget. 
We welcome the improvements in terms of the investment in physical and intellectual infrastructure—I will come back to that in a moment. We also welcome the significant moves made in terms of softening business compliance making it much easier for those in our small to medium sized enterprise sector to get on with the job they want to do rather than being unemployed tax collectors as so many of them feel they are these days. Those are good steps. The international tax review foreshadowed in 2006 which was announced in preliminary detail last year and is now to be introduced in legislation in the next month or so is an extremely positive step forward. It aligns us with many of our trading partners. It makes it possible for New Zealand businesses to expand overseas but to retain their operating base in New Zealand. The introduction of the active/passive distinction in terms of investment and manufacturing income will be extremely positive and beneficial and it will be welcomed by many. 
I spoke before about physical and intellectual infrastructure. It is good to see the investment that is going into our transport system—into road into rail into shipping and into all modes—because that is as much about helping us to be competitive economically as it is about meeting our obligations in terms of the Kyoto Protocol and other international commitments. We welcome particularly the adoption of United Future’s policy regarding the reduction in the age at which the parental income test applies for student allowances. The reduction in age from 25 to 24 is a good step forward. As far as we are concerned it is the first step along the way towards having a universal allowance system. That is something we will continue to push for and we welcome the fact that we have been able to take that step in this year’s Budget. 
We note that the Budget will provide for 5000 more elective surgery procedures to be funded. That sounds good and to those people who will benefit I say “Good luck and well done.” But it is a drop in the bucket. It is about 3 percent of the number of elective surgical procedures currently performed in the private sector. We need to do much much more than that if we are to make a significant impact on waiting lists in New Zealand. The only way we can achieve that is by effectively utilising all of our resources public and private to best advantage. Five thousand is a drop in the bucket; a drop in the bucket that is beneficial but it is not nearly enough to turn around the mounting waiting lists in New Zealand. 
We also welcome the fact that the Budget makes provision for about $22 million of expenditure towards the implementation of various aspects of  
Medicines New Zealand 
 the national medicine strategy that we announced at the end of last year. As a result of this we will now move towards the establishment of a national formulary for medicines in New Zealand. We will have a much more effective system for making sure that patients in hospital actually get the medicines that they are properly prescribed to be getting. Believe it or not we have a big problem at the moment of patients not always getting the medicines that they are prescribed for various reasons. We have put in place programmes that will ensure that happens and that in turn is part of leading to a much healthier much better and much fitter society. That has to be a good and positive step and it is also one of the critical goals of the  
Medicines New Zealand  
programme. 
Overall this Budget continues a trend that I think has been apparent through the life of this Government of a series of quite significant building block changes that have been made and often not noticed because although the Government has been good in my view at putting the building blocks in place it has fallen short in terms of its ability to articulate a vision for the future of New Zealand. I think that as we look back on this Budget and at the eight previous Budgets introduced by this Minister of Finance we can see what has been his underlying objective: an economic transformation of New Zealand. But one has to go sifting through all the bits of the jigsaw to find it. I think that where New Zealanders are at today—and maybe this is why the approach of the Leader of the Opposition which is all fluff and no substance has some appeal—is that they are looking for that vision that sense of hope and that sense of optimism. 
This Budget is full of detail. There are a lot of positive steps within it. The challenge that the Minister and his colleagues face over the next little while is to go out and sell that to New Zealanders as being a coherent consistent rational and positive programme for the future. I think that in many steps it is a step in the right direction. But in so many other steps more work needs to be done and that will be the preoccupation of whoever occupies the Treasury benches next year.