Gilmore Aaron: Budget Debate 
Gilmore Aaron: Budget Debate 
[Volume:664;Page:11675] 
AARON GILMORE (National) 
: 
 I want to talk about pigs—a few pigs. The first is the pig of an analysis of the Budget by some members of the Opposition but more important is the situation of “PIGS”—Portugal Ireland Greece and Spain—in Europe and what that might mean for our Budget. 
Despite the fact that New Zealand has come out of the worst recession in my lifetime and in fact in the lifetime of every member in this House this country is still borrowing in the order of $240 million a week for the foreseeable future. That is about $10 billion in change and that is a lot of money. When I was born New Zealand was in a quite fortunate position. It was wealthier than Australia. Our per capita income was higher and New Zealand was a wonderful place to grow up in. But in 35 years things have gone backwards. I am glad to say that this Budget building on Budget 2009 puts us on the road to recovery. 
Opposition members have talked long and hard about what National has done in its Budget and what they would do but I want to talk about some of the risks. Basically Labour would borrow obscene amounts of money that this country cannot afford. Today Moody’s one of the world’s leading credit-rating agencies downgraded the status of Greece’s Government bonds to junk bonds. One might say: “So what! Who cares?”. But it means that the cost of your borrowing skyrockets and every 1 percent increase in the cost of your interest rates costs this country $500 million. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think it is not usual to bring the Speaker into the debate and especially the Speaker’s finances. 
The ASSISTANT SPEAKER (Eric Roy) 
: The member must be more careful with his pronouns. 
AARON GILMORE 
: Every 1 percent increase in interest rates costs this country $500 million which is another $500 million that my children will have to pay back at some stage so getting our finances under control is absolutely critical. You see pages 76 to 84 of the Economic and Fiscal Update in the Budget documents outline pretty carefully some of the detailed issues we have to deal with and some of the risks and scenarios that might arise. For example do members know that if economic growth rises by 1 percent more than we are forecasting if it is 1 percent higher that is an additional $3 billion per annum for us to spend—$3 billion? What would $3 billion do? 
David Bennett 
: Waikato Expressway. 
AARON GILMORE 
: It would pay for the Waikato Expressway. All sorts of lolly scrambles would arise. This Budget is about maintaining our debt profile and getting our economy to grow faster. We believe that the best way to control our expenditure is to put money in places where it makes sense to do so. 
Today as I said we have seen Moody’s give Greece’s Government bonds junk-bond status. There is a risk of other countries in Europe falling over. That is the situation with Ireland with Spain and with Portugal and I can tell members that if any of those countries have the same demise that Greece has had major riots will occur across the whole of the Euro zone and that would be a tragedy. Yesterday a new Prime Minister was elected in Japan. Japan is facing debt levels of 200 percent of GDP. The new Prime Minister has announced massive austerity measures because the Japanese recognise that their financial position is unsustainable. 
This Budget is about creating opportunities—opportunities that were lost under 30-odd years of successive Governments which were maybe a bit misguided. It builds on our recovery and puts us in a position where we will have a Government surplus a proper surplus by 2016. That will allow us to start paying back our debt position and stop us from borrowing more. This Budget is about strengthening our economy and putting in place tax changes that incentivise work and savings and that allow people to do things they really want to do and to spend their own money in ways they see fit. 
I will touch a little on what the previous speaker talked about—early childhood education. I had the massive good fortune of growing up in a neighbourhood that did not have a kindergarten to choose from; I attended playcentre and I was very happy that my brothers did as well. National members respect choice. We respect the ability of people to choose whether they want their children to go to a playgroup a playcentre or a kindergarten. I respect the ability of people to choose. I sent my children to the same playcentre I went to as a child. I had enjoyed it. It was an absolute pleasure that my mother had sat on that playcentre committee I had gone to that playcentre and my children also were going there. It was a parent-led centre and it was about choice. 
Hon Tau Henare 
: Same teacher? 
AARON GILMORE 
: Not the same teacher I tell Mr Henare; she is no longer with us I am afraid. 
Hon Tau Henare 
: Oh! 
AARON GILMORE 
: Yeah well. At the moment there is scaremongering from the Opposition about what the early childhood changes may be. I can tell members that a year or so ago early childhood centres were screaming out that they could not get enough teachers to meet the previous Government’s requirement that 100 percent of teachers be qualified. I sat in a meeting with members of the New Zealand Educational Institute involved in early childhood education who said that they did not believe in choice they did not believe in parent-led education and they did not care about the playcentre movement or the playgroup movement; they wanted a monopoly on providing education to children. Members should ask the head of the New Zealand Educational Institute or come and talk to me in Christchurch. 
We have the ability to put in place tax cuts that for 73 percent of New Zealanders will reduce their marginal tax rate to 17 percent—17 percent. I can go and talk to my brothers and look them in the eye over that. One of them is on the minimum wage but I was able to tell him how much better off he would be. He turned round and said that he did not believe me. Do members know where I went? I went to the website. 
David Bennett 
: The tax website? 
AARON GILMORE 
: The tax website. My brother did not believe me but I showed him the tax website and he said that it was great that he would get a few extra dollars in his back pocket. Do members know what he did then? He rang up his boss and said that he wanted to do an extra shift on a Saturday morning. The tax cuts will give him a few extra dollars in his back pocket and that will help him to get ahead. They will allow him to buy his own little car in this instance and to start saving hopefully for a house for him and his future wife—or maybe for an iPad like the one our great Minister Mr Williamson has. You see the average tax rate—not just the marginal tax rate—that those people will pay is about 15 percent. People who are out there working and earning about $50000 a year with two kids will pay zero tax. Their net tax will be zero. I can tell the House that I would be proud to stand in front of any community anywhere in New Zealand and say to them how wonderfully off those people will be because of the incentives being put in place for them to work. 
Who will pay for that? Who will pay for what the Labour members say is great smoke and mirrors? Well it is those big nasty multinationals—those big nasty multinationals. 
Hon Tau Henare 
: Who are they? 
AARON GILMORE 
: Oh you know the Shells the BPs the ANZ banks of the world. Heaven forbid that they should pay some more taxes through the thin capitalisation regime! I am proud to be part of a Government that is putting up taxes on multinationals in order to give something back to average New Zealanders. What a wonderful thing that is; I cannot believe that the Labour Opposition would be against it. 
Where else will the money come from? Well we have taken out a rort that existed involving trusts and companies. We recognised the incentives to stop it from occurring. Thousands and thousands of trusts were being set up all around the country to earn money that would be funnelled through trusts rather than through individual taxpayers who as workers did not have the ability to do that. I think that it is great that workers will be paying a lower rate of tax and that people with trusts—that unproductive activity run through many lawyers and accountants up and down the country—will have to use them for productive purposes. I think that is the right thing to do. 
I will talk quickly about somebody who came into my office in Christchurch recently. This person lived in north New Brighton. As a result of that visit I investigated how much better off this person will be. This person was a university student who received the student allowance for 40 weeks of the year. They flatted and paid about a hundred bucks a week in rent but got about $40 a week in an accommodation supplement and earned about $9000 a year by working part-time throughout the holidays. This person was ropeable on coming into my office. GST was going up everything was going up and they believed that they could not afford it. Well I had great news for that person. That person was going to be better off by $3.92 a week because of the student allowance going up and would also be better off through a tax cut of $4.85 a week. Yes they would pay a little bit extra GST—about $5.21—but overall they would be better off by $2.66 a week. That is only one cup of coffee a week but it is a start. I am proud to be part of a Government that creates a start and that puts in place the right incentives for people to get ahead and get skills so that they can work and invest. I am proud to be part of a Government that puts in place incentives that allow working New Zealanders to get on. That person who came to see me is not going to take on more debt; they can reduce their student loan a little bit or spend a little bit more on their own education. I think that is a wonderful thing. 
Iain Lees-Galloway 
: A dollar! 
AARON GILMORE 
: It is $2.66 I tell that member over there—$2.66. Students could have got together saved it up and gone to the meeting in Palmerston North where Craig Foss spoke. 
Look I think the incentive is there for people to work a little bit harder—people like my brother. The situation with early childhood education is that parents can have a choice; parents’ choice is respected. I think that is a good thing. I think that it is a good thing we have bent back the debt curve; we will not be like the “PIGS”. Our finances will come under control and we will have the ability one day in the future to again catch Australia’s income stream. I am proud to be part of a Government that enables that.