Banks John: Budget Statement — Budget DebateText is incorporated into the Bound VolumeBanks John: Budget Statement — Budget Debate[Sitting date: 16 May 2013. Volume:690;Page:10047. Text is incorporated into the Bound Volume.]Hon JOHN BANKS (Leader—ACT): I rise on behalf of the ACT Party and thepeople of Epsom to support the Appropriation (2013/14 Estimates) Bill. ACT will support this Budget and associated legislation over the next couple of days.The Minister of Finance Bill English’s Budget represents an oasis of fiscal sanity in the faceof Opposition parties whose primeval instinct is to spend to regulate to impose new taxes and to print money.The Budget is a good Budget in very difficult times for this country but it is not a great Budget. On the OECD’s measure the Government sector is spending about 43 percent of everything that New Zealanders produce—that is 43 per cent. In Australia it is 34 percent. The Government is taking too much and is making us poorer. We have lost many of our productive young people to Australia because their economy offers a better future. The 2025 Taskforce found that the income gap with Australia was 35 percent in 2008. The latest statistics for 2011 indicate that it has risen to 41 percent. The gap is unprecedented. Unless we close this gap we can expect to see more and more New Zealand grandparents crossing the Tasman to visit their grandchildren. There is no mystery. They are richer in part because more of the wealth of Australia is left in the hands of the people yet the Labour Party wants even more spending. You would have to go back to the 1970s to find a Labour Party less ready for Government. Labour is not serious about addressing the challenges faced by New Zealanders. The future is not about outbidding the “old dudes” and “young fogies” of the Green Party.When I first came to Parliament all those years ago—10 Parliaments ago—the Government of the day was trying a command and control approach to the economy. It did not work then and it will not work today. How does this Budget measure up in terms of getting the Government off the backs and out of the pockets of hard-pressed hard-working taxpayers? Well first the good news. The size of the Government is set to decline under this Minister of Finance providing we can continue to restrain expenditure. Spending growth has been reined in despite the Christchurch earthquakes. This Budget continues that trend. The Government has not blown out the fiscal deficit like so many other countries and the last reckless Labour Government. The Government has stayed the course on partial privatisation despite court action and the dodgy referendum by the Labour Party and its mates the Greens.There have been significant welfare reforms. We are starting to tackle the culture of dependency and hopelessness. There is no tampering with the Reserve Bank of New Zealand Act. There is a willingness to improve the quality of regulation. We will have a regulatory standards proposal for this House to consider in the very near future. There will be meaningful change to the Resource Management Act. The Government recognised that house prices are too high because land values are too high. The Government is moving to free up the supply of land which ACT has long called for.In education partnership schools are on the way. The Budget provides just under $19 million over the next 4 years for partnership schools. Partnership schools will be a paradigm shift in education and opportunity for our poorest families. I want to thank Cabinet and the Minister of Education for making partnership schools happen. The Government will spend $9.7 billion on education in this Budget. The annual funding for partnership schools makes up less than 0.5 percent of that $9.7 billion. From 1999 to 2008 Labour increased spending on education by 47 percent. It spent billions and had no significant impact on the tail of underachievement in our schools—47 percent increase in spending by the Labour Government and no significant increase in the outcome for our most vulnerable the bottom 20 percent who are consigned to oblivion.Partnership schools are a new and innovative option specifically focused on raising achievement for our most disadvantaged students and I am glad to be associated with that. The only fear that the trade unions in the school movement have and schoolteachers up and down this country have is that partnership schools could be a great success. Anyone who opposes spending less than 0.5 percent of the total education budget on a new initiative to raise achievement for our most disadvantaged students is playing petty politics—petty politics.So now for the not-so-good news. The macro outlook—growth and unemployment—is still mediocre. We look good because most member countries of the OECD look bad. We will not close the gap with Australia without lifting growth and productivity. The balance of payments outlook points to an international competitiveness problem. Taxes are too high because of wasteful and unnecessary Government spending. The more expensive the Government the poorer the citizen. Let me say that again for the record: the more expensive the Government the poorer the citizen. The Government needs to roll back Labour’s poor-quality programmes—interest-free student loans and Working for Families to name just two.Here is what the ACT Party will be urging National to do in a great Budget. We regard $78 billion of gross public debt to be far too high so we need to reduce debt through less spending as the first initiative—less Government spending. We need to put the “avgas” into asset sales programmes. I welcome the announcement that Meridian Energy is up next. Air New Zealand is performing well. Running an airline is a risky and tough business. We do not need to issue a prospectus. Why not sell the Government’s shares immediately? National should dump the Cullen fund. Let us use it to pay off our debt. No one has savings in a bank account at home while they have a big mortgage on their house. Progressively raising the age of eligibility would help make superannuation much more affordable. If you want to save $1.7 billion a year every year year after year then raise the age of eligibility for superannuation from 65 to 67.We have stopped the growth in Government spending. That is good. It is time to start tackling the size of the Government. We have to aim for around 30 percent of GDP on OECD measures. That means confronting middle-class and corporate welfare. We need to confront middle-class and corporate welfare. The 2025 Taskforce found that given the surpluses at that time reducing core Crown operating expenses to 29 percent of GDP as it was in 2009 would allow a top personal and company tax rate of 20 percent.The Budget projections through to 2017 start to make this lost opportunity available again and that is good. That is a long haul but it is a goal worth pursuing. Spending reductions and partial use of surpluses could fund tax cuts. Tax cuts would improve economic growth and international competitiveness. The risk with future surpluses is that they simply are used to expand the size of Government.Finally this House needs to be more brave on regulatory reform. Further regulatory reform would help New Zealanders to understand how dopey policies like the nationalisation of electricity would be. Regulatory reform would highlight how poor policies lead to poor laws and that results in poorer citizens. We have the Regulatory Standards Bill on the Order Paper and that is on its way. The ACT Party and the people of Epsom back this Budget. We say it is a good Budget in difficult times but in order to tackle the challenges New Zealanders face we need great Budgets. Unfortunately the most significant risk we face is from bad policy and bad politics generated from the Opposition benches. My job indeed is to ensure that they do not get their hands—that is the Opposition parties—on the levers of power.