Dunne Peter: Budget Debate 
Dunne Peter: Budget Debate 
[Volume:625;Page:20770] 
Hon PETER DUNNE (Leader—United Future) 
: 
 At the commencement of my speech this afternoon may I pay tribute to those people in the Coromandel and Bay of Plenty area who are suffering considerable hardship at the moment as a result of the torrential rain and who I suspect will have a focus that is far more close to home than the events in this Chamber this afternoon. Our thoughts are with them. I hope that the Government extends the provision that it made in the wake of both the major floods last year and the tsunami event at the end of the year of matching the relief contributions made by individuals on a dollar for dollar basis. That was a United Future initiative at the time of the major floods in February of last year that we were pleased to see the Government carry through in subsequent adverse events and I hope that the same initiative applies when it comes to reconstruction after the events occurring in the Bay of Plenty over the last few days. 
Taking part in a Budget debate today is somewhat surreal because in recent weeks this Chamber has become a place where trivia has reigned. There have been accusations about Iraqis wandering around this country and Ministers’ obsessions with tennis balls and that one member of Parliament apparently does not care for his cats and that has been the standard of debate in this Parliament. So for members to come here today and debate a Budget is actually a welcome change. I suspect that most New Zealanders—whatever they may think of the Budget—will at least be relieved to see that we are taking things seriously for a change and not indulging in the mindless trivia that has characterised this place over the last few weeks. 
I want to make these few points. 
Stephen Franks 
: No one else mentioned cats! 
Hon PETER DUNNE 
: The member says that no one else has mentioned cats which really heightens the fact that he gets so upset about it—it shows his obsession is not with reality but with a very strange world of fiction. 
In 2002 on the last Budget before Parliament adjourned for the election of that year in my speech to the House I bemoaned the fact that the Budget contained no references at all to any aspect of family policy affecting New Zealanders. As a result of the confidence and supply agreement that United Future entered into with the present Government after the last election we saw 15 family-specific policies introduced in the 2003 Budget we saw the Working for Families package introduced in last year’s Budget and today we see over $300 million of initiatives promoted by United Future taking their place in this year’s Budget. What we have seen in 3 years is a restoration of the interests of the families of New Zealand to the centre stage of political consideration in this country. While others have mocked and delved into the trivia this party has got on quietly determinedly and deliberately and has achieved on behalf of the families of New Zealand significant change in that respect. 
I welcome the breaking of the logjam regarding tax thresholds that has been announced in today’s Budget. And I pay an immediate tribute to my colleague Gordon Copeland for his persistence in pushing that issue and persuading the Minister—who acknowledged it in his speech this afternoon—of the wisdom of moving in that respect. It is a case sadly of too little too late but it is a positive start. I observe in passing that the last time there was a movement in tax thresholds in this country was during the term of the National-United coalition and I was the Minister of Revenue at that time. I also observe when people talk about tax cuts—and I was reminded of this during the Leader of the Opposition’s speech—that the last time that tax cuts were put in place in New Zealand was during the term of the National-United Government in 1996 only to see the National Party in 1997 vote to overturn those tax cuts as part of its coalition deal with New Zealand First. I was the only member to vote for the tax cuts in 1996 and for their retention in 1997. So I find the bleating calls today for tax cuts from those who had the opportunity to implement them then overturned them somewhat unrealistic and a little too much to take. I think that people should remember that as this tax debate unfolds during the course of this year. 
What we want to see is steady progress made on the issue of tax thresholds. The situation we have at the moment is that people whom we would regard as good decent upper-middle income earners now find themselves shifted into the top tax bracket and as a consequence the benefit that accrues to them from other income support measures is severely diminished and the incentive for them to do that little bit more to work harder to earn more is severely compromised. This is an issue that has only just started to fester but I am pleased to see the limited progress that this Budget introduces in that regard. 
I want to move on from there to the broader concept that has been debated over recent times—the so-called ownership society which some seem to have discovered and embraced as a new mantra. But in fact it has been a tenet of the Kiwi dream for generations. It used to be called a property-owning democracy. Then I think we referred to opportunity for all. The reality is that the Kiwi dream over a long period of years has been steadily shattered by a whole range of mechanisms some beyond our immediate control. I welcome the moves towards an establishment of the workplace savings scheme. When I was briefed on this by the Minister of Finance he did tell me that it had a rather slick title. I thought something a little more imaginative than KiwiSaver might have been that title but we will leave that be. But the real thrust of this apart from the message that it sends to people about the ability to save the attractiveness of saving and the need to save for their futures is the contribution that it makes to homeownership. The fact that it will be possible for the average family to take up to $10000 out of the scheme as a deposit for their first home is long overdue desperately welcomed and will be a very positive incentive to many young families today who are struggling and who are worried about how they are going to get over things like their student loan debt and some of the other responsibilities they have to bear. At least they will have the opportunity of buying that first home. I was thinking during the speech made by the previous member what it felt like to me when I was able to become a homeowner for the first time. It is a sense of ownership and participation in one’s community and one’s society. It is a sense of belonging and it is an opportunity we should not deny our fellow citizens in the way that we have done in recent years. 
I welcome the fact that the Government is going to introduce a special scholarship scheme for 500 people—as an initial start I hope—of up to $3000 per annum. They will be bonded to work in New Zealand after graduation for the number of years they were on that scholarship. This proposal has two important aspects to it. The first is that it will reduce the cost of tertiary education to those students. The second is that it will stop what has been a deliberative and unfortunate trend in this country over the last decade of our tertiary institutions becoming less places of excellence and scholarship and far more export processing factories sending the biggest number of graduates overseas that they can simply because that is where the opportunities are to pay back their student loans. 
This is a step in the right direction and I hope that it is one that can be expanded upon in the future. It is absurd that we face shortages in key areas of our economy and are importing people from overseas at the same time as we are exporting our own graduates in this area. I believe that a scheme like this small as it is to start with but expanded in the years to come provides not just the block to stop that but also the incentive for many of our young people who are casting about worrying about their futures. It is also a signal for the solidity of families. Many parents today faced with the prospect of funding a child’s tertiary education worry desperately—perhaps a little selfishly but understandably so—about that child’s future. Where will he or she go? Will that family be flung apart because its children are on the other side of the world earning their futures not because they necessarily want to be there but because that is where they see their opportunities lying? 
In that respect I have to pick up the point made by the previous speaker about the voluntary savings scheme that we have promoted and that the Government has put out a discussion paper on. I have to profoundly disagree with his narrow-minded logic. This is a voluntary proposal for people who have the opportunity to put a little bit aside as time goes by towards the education of a child when he or she reaches the age of 18 or perhaps homeownership or superannuation a little further down the track. What is wrong with people who have the opportunity and the ability to be able to behave in this way being able to do so? If I hear correctly the rhetoric of the member opposite he is saying people of opportunity should not be able to exercise that opportunity because others do not have it. That is simply absurd and I think that all we are saying here is that we are giving people a chance. I would have thought that the lines of John Lennon would have had some resonance with the member opposite given his nostalgia for the 1970s. We should give people a chance and we should not penalise them if they want to take up that chance. That is what that scheme is about and I think that it has huge potential—not immediately but in the longer term for all New Zealanders. It is part of helping build an ownership society of which we can all feel proud. 
The Budget continues the trend of the last few Budgets of significant investments in the public health system. While there will be many who will say that that is a good and positive thing and something to be lauded I want to sound a huge note of caution about that continued level of investment. I believe from statements I have seen that the Minister of Finance shares the caution I am about to express. The graph for expenditure in the public health system is a rapidly increasing line. Frankly it is beyond our ability as a country to sustain it at the level that has occurred in recent years. That is because the demand for health services is becoming infinite. We need to throw away some of the ideological shackles that currently prevent our addressing this issue as we ought to. 
I keep saying to audiences that we must never forget that New Zealand is three-quarters the size of Sydney and Sydney is only a medium-sized city by international standards. But unlike Sydney we are trying to run national health national education national defence and national policing systems on the income of that 4 million - plus population. We cannot afford to continue to do so and at the same time ensure a reasonable standard of living for our people. 
We also cannot afford to continue to run essentially two parallel health systems a public system and a private system with that quaint notion of ne’er the twain shall meet. There needs to be closer integration. There needs to be much more effective working together. I have been very disappointed when asking questions of the Minister of Health over recent months about this issue to see the blinkers come down in an almost unwilling inability to recognise that there is even an issue there. Meanwhile New Zealand patients face day in and day out week in and week out the absurd situation of going to see their specialist for non-acute surgery and being told to go on the waiting list but if they pop up to his clinic he could do it next week. We have a mismatch of resources and a small country of our size cannot afford that to continue. I am not opposing the increases in funding for public health announced in this Budget; I am simply warning that they are unsustainable and without an integrated system we will get to the point in the not too distant future of the potential collapse of both to the detriment of all New Zealanders. 
While I am talking about health I want to make a few comments about the Government’s drug-buying agency Pharmac. I have been extremely critical of that agency and remain so. I believe that it has lost the plot. Its focus originally was on ensuring that we got the best deal for the taxpayer in terms of the cost of pharmaceuticals that were being obtained. It is now moving into areas of public education. It is even conducting a survey for the most spurious of reasons of voluntary health organisations asking them about their links to pharmaceutical companies. That organisation is out of control. It has lost the plot. In previous years it has actually done a good job of controlling pharmaceutical benefit expenditure. It is time it went back to its knitting and it is time that the Minister stopped sitting on her hands pushing things Pharmac’s way and accepted her responsibility. 
But it is also time we developed a national medicines policy whereby pharmaceuticals hospital care voluntary care outpatient care primary care and so on were all laid out on a continuum so that we could see where the interactions were and what the future might hold. At the moment we have no idea. Last year when I raised the issue with the Prime Minister the Minister of Health and ultimately Pharmac the answer I got was: “Are you not happy with the way things are at the moment?”. The point I was making was: what is the thinking over the next 5 10 or 20 years as technical knowledge increases as public knowledge increases and as demand increases? What is our strategy? The really sad thing is that no one whom I have spoken to can tell me because there is none. Meanwhile we are surveying voluntary agencies about their relationships with pharmaceutical companies. If Pharmac wanted a critical long-term role it would address the issues I am focusing on not the spurious ideologically driven politically correct nonsense that it is indulging in at the moment. 
I will make a comment about law and order. I want to demonstrate two very important points. This party has always taken the view that a decent and constructive law and order policy has to be based on being tough on crime but also on being tough on the causes of crime. I draw to the House’s attention two strands of this Budget that demonstrate that point very well. We welcome the increase in police staff—there will be 245 new staff I think; a combination of sworn and non-sworn. It is not enough but it is a start and we welcome the resources that have been dedicated to that. I also welcome the $4.4 million that my colleague Marc Alexander has secured for a special programme to help recently released prisoners integrate back into the community and to make sure they get work opportunities so that they will not become recidivist offenders and return into the system. It is about being tough on crime it is about upfront detection and enforcement and at the same time it is about being tough on the causes of crime to prevent the next generation of criminals coming through. The policy has to be balanced and constructive in that regard. 
This Budget is the last Budget before the general election. It is the last Budget of this phase of the confidence and supply agreement between Labour and United Future. I believe that it demonstrates two things. Firstly it shows that political stability can achieve results. United Future has contributed to that in measure—we are the only small party to have survived the distance under MMP. Secondly it shows when one looks at the initiatives in this Budget and over previous Budgets that a small party determined to be constructive and unfailingly positive in its outlook can have a significant impact on the course of policy. I am proud of the fingerprints that United Future has over today’s Budget.