Nash Stuart: Budget Debate 
Nash Stuart: Budget Debate 
[Volume:673;Page:19109] 
STUART NASH (Labour) 
: 
 It was with interest that I listened to the last National member Nathan Guy give his talk because he spent 7½ minutes of his 10 minutes discussing the wonderful things that Labour will do when it becomes the Government after the next election. I would think that someone who is a Minister in this Government would have spent at least three-quarters of his time talking about what the National Budget was going to deliver for New Zealanders as opposed to what Labour will do for New Zealanders. But no he spent about only 2½ minutes on the Budget and 7½ minutes on Labour’s manifesto. I am pleased that it has gripped him. I am pleased that he sees the wisdom of it. We will just reinforce his message that the things that a Labour Government will deliver will benefit all New Zealanders not just the very very few at the top. 
There are only three points that I would like to make in this speech. The first one is that this Budget is based on a whole lot of assumptions that are simply not correct. The second point I will make is that there is a $4 billion difference in the revenue figures over 5 years between the Inland Revenue Department and Treasury and that is something we should be really concerned about. The third point is that I would like to outline after Nathan Guy did what Labour will do to rectify the dreadful situation we have found ourselves in. 
The Budget as read last month is of concern for a number of reasons. We have heard about cuts to KiwiSaver and Working for Families. Those are just two examples where the Government has yet again taken money from those who can least afford it. For example in the Hawke’s Bay region Working for Families contributes about $120 million a year to the local economy. Taking money out of the pockets and therefore out of the stores and services of the economy which is already going backwards under this Government is simply not a way forward for the people of Hawke’s Bay. In fact the bay is going backwards under a National Government. This is of huge concern to me as well as to a number of constituents who have come into my office and people whom I engage with everyday. 
There is no plan for growth in this Budget. There is no incentive for businesses to seek export opportunities. There are no plans for addressing the massive inequality that has crept into society over the last couple of years. In large measure the tax cuts of $25 billion are seeing the most wealthy citizens do incredibly well but the vast majority who have seen an increase in the cost of living receive next to nothing. They have not been adequately compensated. I think the thing that really epitomises this is that the 600 to 700 New Zealanders who earn $1 million a year received a tax cut of $1000 a week yet someone on the median wage got about $10 a week. The level of unfairness around that is so stark as to be obscene. 
Bill English said in his speech that the Government was going to create 170000 jobs. In fact many of the National speakers have reiterated that figure of 170000 jobs. No one in this House wants to see that more than me. I would love to see 170000 jobs created. When the Minister of Finance was questioned about where those jobs would come from he had no answer. He simply had no answer. Then he said that there had been a commodity boom and he thought that that would create jobs. 
Let me give one example. In the forestry sector international log prices have boomed. It has been great for forest owners but it has caused immeasurable concern for our local processors. The Minister of Forestry is well aware of this. What is happening is the domestic industry simply cannot afford to purchase logs at an export parity price. So instead of jobs being created in the forestry sector jobs are being lost. I am not saying we should subsidise this at all. I am not saying that at all. I am merely pointing out that a commodity boom is not creating jobs. We are not going to see 170000 jobs created in this economy because of a commodity boom—quite the opposite. 
Let us have a look at the farming sector if we may for a second. It has $42 billion worth of debt—$42 billion worth of debt. This is of such concern to the Governor of the Reserve Bank that he has increased the liquidity provisions around rural debt. I do not think there are going to be many jobs created in the rural sector because of the commodity boom. So the question I have is where these 170000 jobs that Mr English said would be created out of the commodity boom are going to come from. There are not going to be any. This is a “borrow and hope” Budget. Not even the Minister of Finance himself can tell us where these jobs will come from. 
My second point is around the significant difference between the revenue forecast of the Inland Revenue Department and that of Treasury. Treasury’s revenue forecast is $4 billion higher than the Inland Revenue Department’s. I have had dealings with the department over the last couple of years through the select committee process and through my spokesperson role in the revenue portfolio. I can say that I have found Inland Revenue Department officials to be very reliable diligent and hugely competent. When they undertake forecasting I trust their numbers because they tend to be prudent if not slightly conservative. We are talking about the Government’s tax collector here. It is a department that has spent literally millions of dollars over the last couple of years on new systems and it is a department that understands tax and revenue because that is its role. Treasury officials however in my experience over the last 2 years have often been far too aggressive in their forecasting regularly overstating revenue predictions—much to the anger no doubt of the relevant Ministers of Revenue and Finance—and have often got it wrong. So when the Inland Revenue Department and Treasury differ by $4 billion we should have grave concerns. We should have absolutely grave concerns because $4 billion is a significant amount of money. I for one cannot understand such a discrepancy and why the Government went for the outrageously high number rather than the conservative figure. 
This demands a huge “please explain” from the Minister of Finance but he refuses to justify the assumptions behind the Treasury figures. Instead he states that there may be risks due to this discrepancy. There may be risk. That is the understatement of the decade. There is huge risk. This is very much a “borrow and hope” Budget without a plan. If this was a business plan presented to a board it would receive a fail mark. It would be thrown back at the chief executive officer and he would be told to sort it out because it was not good enough. I suspect that if the people of New Zealand were that Government’s board they would say the very same thing to Mr English on 26 November. 
My third point is that Labour has a plan. Labour has a plan for growth—for business growth and for social well-being—and it does not include selling State assets. That is not a plan for economic growth. What we are going to see over the next 5½ months is a series of well-costed initiatives rolled out that will create a vision and capture the imagination of the people of New Zealand. They are not going to be negative policies. They are not going to be selling State assets they are not going to be cutting KiwiSaver and they are not going to be taking money out of the pockets of those who can least afford it. 
There are three points I have made in this speech and three points I would like people to take out of it. The first point is that this Budget was based on assumptions that could not be quantified and the No. 1 assumption is that 170000 jobs will be created. We have seen absolutely no plan for where those jobs are going to come from. The second point is that there is a $4 billion discrepancy between the revenue forecast from the Inland Revenue Department and the revenue forecast from Treasury and that is hugely worrying. The third point is that Labour has a plan; this Government does not. Labour has a plan. Thank you very much.