Cunliffe David: Budget Debate 
Text is incorporated into the Bound Volume 
Cunliffe David: Budget Debate 
[Sitting date: 16 June 2004. Volume:618;Page:13690. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Minister of State) 
: 
 I do not know about other members but I really enjoyed the adjournment after the Budget. I had the opportunity to go and brief a whole lot of schools in my electorate of New Lynn. I was able to visit old folks’ homes like Crestwood and Pinesong and tell them about how we are protecting superannuation by partial pre-funding. I was able to visit lots of family homes in Maioro Road New Windsor. I met a young couple with two children who will be $100 a week better off as a result of this Budget. I met a woman with seven children whose husband died last year. She may be up to $200 a week better off because of this Budget. The lives of those people have been transformed. So I am happy to say that it was a great adjournment. 
What a great honour it is to be debating this Budget. Why? Because it is a Budget that is true to this Government’s core values. It is a Budget that demonstrates our strengths as stewards of the economy. It is a Budget for getting Kiwis into work and for making work pay. It is a Budget that invests in the future of New Zealand. It is a Budget that makes sure that low and middle income families get the help they need. It is about a future that includes rather than excludes. It is about a future where we move up the value chain to create wealth for all New Zealanders. 
This Budget is possible only because of the economic success of the last 3 years. The proof is that under National from 1990 to 1999 growth averaged a meagre 2.6 percent per annum—well below the OECD average. Since this Government has been in power that growth rate has increased to an average of 3.4 percent per annum which is well above the OECD average of only 1 percent. It is because of that growth that we have been able to keep such a strong fiscal position with healthy surpluses at the same time that debt is falling. By 2007 for the first time since Vogel borrowed for the railways New Zealand will be a net creditor nation—the first time in a century. 
This Budget targets those people who really need it. National’s tax cuts would target those who would benefit as high-income earners. We do not apologise for thinking it is more important to look after children who need help. We do not apologise for looking after those who will put food on the table thus benefiting more than those who will simply upgrade their hotel during a weekend in Queenstown. 
That is why the Working for Families package boosts the income of working families more than any tax cut ever could. As Dr Cullen said in question time today the $15.9 billion it would take to give the same tax cut to a family on $55000 would be the same as all the spending on health law and order defence—we know how National loves that—transport communications primary health care culture and heritage recreation housing and community services. Eat that! 
There is no need really to examine what Dr Brash has said about this Budget because he has not said much. But let us look at what John Key said this morning at the Finance and Expenditure Committee. It was his big moment. The cameras were lined up. The Minister of Finance was there for an almost unlimited time of questioning. What did he ask? His lead question was: “How do you see debt trending in the medium term?”. The answer was: “Down because we are good managers of the economy.” Well I wish Mr Key better luck next week. 
But let us turn to the arguments the National Party has put up in this debate. The first is that this Budget is too narrowly targeted. Too narrow for whom? Is it too narrow for the 60 percent of all families with kids who will benefit over 4 years by an average of $66 a week? Is it too narrow for the Waihi family of six featured in the  
Sunday Star-Times 
 
who will benefit by $150 a week? 
Georgina Beyer 
: How much? 
Hon DAVID CUNLIFFE 
: By $150 a week. Is it too narrow for the 70 percent of New Zealand children who will be lifted above the poverty line they currently lie below? It is time the Opposition came clean. What they are really saying when they say the Budget is narrowly targeted is: “What about me? I earn over 100 grand and I want some too.” If that is the argument it is bankrupt. I know that we will be a three-term Government because I know that New Zealanders are basically fair and decent people and they will vote for a party that stands for the good values New Zealanders hold dear—that is giving the ordinary bloke and blokess a fair go. 
Georgina Beyer 
: Bloke and what? 
Hon DAVID CUNLIFFE 
: Blokess—sort of like the member. 
The Opposition says that this Government punishes the hard working. Let us look at that argument which fails on a couple of grounds. The argument about marginal rates is essentially the same as it was under the tired old National Government of the 1990s. It is all about family support and it does not matter at what income level the rate changes because the marginal rate issue will be exactly the same. All we have done is give low-income families a break by lifting that level of change a little higher up the income table. The Budget specifically makes work pay by ensuring that people who are working will always without exception benefit by more than people who are on welfare. 
But that does not worry the National Party because what National members are really saying when they say that the Budget “punishes the hard-working” is that it does not give a tax cut to the rich. Judith Collins calls those people “good New Zealanders” and the implicit assumption is that if people are not rich they are not good. Well I have news for the National Party. It is not just the wealthy who are hard working; it is the ordinary mums and dads who live in my electorate of New Lynn who go to work and work hard all day and who need a hand to raise their families put food on the table and give their kids school books. Those are precisely the families that this Budget helps. 
I kind of enjoyed the contribution by Muriel Newman. 
Clayton Cosgrove 
: Who? 
Hon DAVID CUNLIFFE 
: Muriel Newman. She was once a contender for the leadership of the ACT party would members believe? She said—and I love this bit—that “$6 billion in tax is more surplus than needed.” What part does she not understand about the $2.1 billion we are putting aside to fund superannuation? I think it lays the fact bare—and ACT’s agenda is the same as the National Party’s agenda—that there is no security around that superannuation fund if the right ever gets back into office. It ignores the $2 billion that we are investing in infrastructure—repairing the infrastructure deficit we inherited from the 1990s. It ignores advances in health and education and it ignores the need to keep our currency stable by supporting the Reserve Bank. 
Brian Fallow got it right in the  
New Zealand Herald  
when he said: “… major tax cuts require one of three things—equally major spending cuts a retreat from the debt target (risking adverse market reaction and higher interest rates) or scrapping the Superannuation Fund.” So it is time the Opposition came clean and rather than dithering told us exactly which one of those three options it backs. 
Mr Key said: “This is the largest Budget surplus that any Government in New Zealand history has had. It is over $6 billion and it is an enormous opportunity to deliver relief.” Well as I have said there is no pot of gold. Dr Brash said on the subject of taking on more debt: “Well that’s certainly one option. Most Governments do borrow for capital expenditure so it appears they haven’t written off the debt option.” On the superannuation fund he said: “We haven’t reached a decision on that one.” but surely senior citizens in all our electorates deserve to know. The reality is that any person who needs to rely on Government superannuation would be mad to vote for anything other than this Labour-led Government because there is no security if that other lot ever gets into power. 
I liked the argument that company tax cuts are needed because we are a high-tax economy. People should talk to Ralph Waters of Fletchers who said he would rather invest in New Zealand any day because when we add up GST and sales tax we see that the Australians are taxed way higher than us. Besides there is absolutely no evidence that a cut in company taxes will in and of itself provide a significant growth stimulus. I give an example: in 1988 we cut the tax rate from 48c to 33c and that was followed by some of the most miserable years New Zealand has ever had. In Australia company tax rates are 4.5 percent of gross domestic product (GDP) but in New Zealand they are only 3.8 percent of GDP. So I ask any business that says it wants to go to Australia in order to pay less tax: “Which Australia are you talking about?” because in the Australia I know businesses pay more tax. 
In summing up let me say that the people in my electorate will benefit significantly from this Budget. It is a Budget that delivers on Labour’s promises. It is a Budget that is true to Labour’s core values. It is a Budget that I am proud to support.