Donnelly Brian: Debate on Budget Policy Statement 
Donnelly Brian: Debate on Budget Policy Statement 
[Volume:629;Page:1592] 
Hon BRIAN DONNELLY (NZ First) 
: 
 Yet again National leaders are proclaiming that our economy is in a tailspin and that depression is just around the corner. In fact the reality is that the economy has grown—that is indisputable—by around 25 percent in the last 6 years compared with the OECD average of 16 percent. Admittedly it was off a low growth base but who was in Government during the previous 9 years? In reality if it had not been for the astute handling of the Asian crisis by the then Treasurer the Rt Hon Winston Peters the growth rate would have been at an even lower base 6 years ago. 
It is also indisputable that we have historically low unemployment rates—at 3.4 percent the lowest rate in the OECD. It is debatable as to what degree those economic statistics can be attributed to the Government of the last 6 years. What however is not debatable is that gross sovereign-issued debt as a percentage of GDP has fallen and is predicted to drop further to or lower than 19.3 percent by June 2010. Dropping the level of debt has to be seen in terms of future-proofing the economy against future shocks. I refer to National’s policy which would increase debt to fund tax cuts. That would hardly future-proof us. 
New Zealand First supported Labour’s introduction of the Cullen fund. New Zealand First differs from the current administration not over whether there should be compulsory savings—anyone who ignores the need for decisions to be made now condemns our elderly population to disaster in 30 to 40 years’ time—but we believe that such savings should be held in individual accounts to future-proof those savings against the rapaciousness of certain parties that may God forbid win the Treasury benches in the future and raid the Cullen fund. 
However for us to assess the economic performance of a Government purely and simply in terms of economic indicators such as growth and surpluses is simplistic. It gives no indication of how decisions relating to economics impact upon people’s lives. I was fascinated to hear Don Brash say that the Working for Families package may make Labour voters feel good but it does nothing for growth. I say to Dr Brash that I am happy I grew up in a period of time—and it was totally under National Governments with the exception of the 3 years of the Nash Government—when Governments were committed to a redistribution of wealth to families and particularly to families with children. I am really glad I grew up under that sort of regime. 
When Jenny Shipley and her National - ACT - Mauri Pacific - Alamein Kopu Government reduced the floor of superannuation payments to married couples to 60 percent of the net average wage it probably assisted the traditional economic indicators. However not captured in the figures was the suffering of superannuitants. Therefore the reference in the Budget Policy Statement that next April’s annual adjustment to the rate of New Zealand superannuation will lift the married couple rate to 66 percent is in fact joy to the ears of those of us in New Zealand First. A large number of superannuitants have told us how wonderful that $10 per week in their pocket will be to them. For many it will mean that they will be able to interact with their grandchildren—surely a fundamental expectation in our society—by simple things like buying them birthday and Christmas presents. 
New Zealand First is also proud of the role it has played in creating the statement that more resources are to be applied to the justice sector including the boosting of police staff numbers. I commend the Minister of Police who happens to be here who ensured that what we thought was in the agreement was reflected in reality—that they are to be front-line police. What is the point for example of having the best economy in the world if people feel insecure in their homes and scared on their streets? National would have given tax cuts so that the rich could hire their own security guards while at the same time it would have slashed police numbers and left the ordinary citizen with no protection from rape burglary assault and all those other sorts of violations. 
I also take note of the statement on page 81 of the  
Half Year Economic and Fiscal Update 2005 
: “The Government is in the process of developing options for a new immigration service delivery strategy that would allow better management of the risk surrounding immigration decision-making.” I might state that for the last 3 years of the previous Parliament the Labour-led administration denied that there was any risk. But in the end the strength of New Zealand First’s argument has prevailed. Out of this strategy will come a strong immigration policy based on meeting the needs of the country rather than on aiming at creating a population of 10 million which is the policy that the previous National administration had on a policy that satisfied a feel-good factor for those of Green persuasion. 
I also note that on page 85 there is a reference to a new taxation regime for the racing industry. This is under way and will have a major impact on rescuing this very important sector of the economy from incipient collapse. We note with satisfaction reference to a review of arrangements for the payment of superannuation to New Zealanders residing overseas and the treatment of overseas pensions paid to recipients of New Zealand pensions and welfare benefits. 
The reason I mention these references is that they all derive from the confidence and supply agreement between New Zealand First and Labour following the last election. I ask one question: what impact has National had on this Budget Policy Statement? The report raises questions about the quality of Government expenditure. This must always be a concern of Parliament and there will always be debate about that quality regardless of which party is in power. New Zealand First for example would consider that interest-free loans for students is poor expenditure. The interest rate should at least be set at consumer price index in order that students repay the true value of what they borrowed and possibly even higher to encourage payback. 
Finally the report notes the commitments to the development of infrastructure including transport infrastructure. I want to make the point that the National Opposition is being extremely disingenuous over the funding of transport infrastructure. It has long been a New Zealand First policy that all roading taxes should be directed to transport infrastructure. During the 1990s National strongly opposed New Zealand First’s position. It voted down a New Zealand First member’s bill. Even when we were in coalition with National from 1996 to 1998 in preparation for the 1998 Budget we wanted an extra 4.2c per litre to go into transport infrastructure from roading tax. Bill Birch with the support of the then Minister of Transport—the Hon Maurice Williamson I might add—totally opposed that initiative. In the end a compromise was reached so that the Budget allowed for an additional 2.1c to go into the transport fund from the consolidated account where it was being siphoned off to. Then to get up to 4.2c an increase of 2.1c per litre was required. In other words National insisted on a tax increase. National is now saying that we should be putting all the funding back into roading. We believe that that is disingenuous given its record over the 1990s. It should say purely and simply that it has flogged yet another policy from New Zealand First. 
We cannot deny—and I do not think that the present administration is denying—that over the next few years the economy will not be as rosy as it has been over the last 6 years. As I said we have to ask questions about whether the positive growth that has occurred has been totally allowed for by Government policy. As a result we need to recognise that huge demands for additional expenditure will not be made over and above what has already been agreed to. If the public and members of various different lobby groups think that that is going to be true then I think they should think again. Nevertheless it is the responsibility of the present administration to ensure that it manages the economy as well as it possibly can over the next few years. Certainly the commentators are saying that it is not going to be anywhere near as bad as the leaders of the National Party Don Brash and John Key are predicting. The pessimism that those people are putting out into the market place can be nothing more than for political purposes being potentially destructive of any advantage that the New Zealand economy may have. We should ask that they consider whether the national interests are being best served by the pessimism they are promoting for political purposes.