Key John: Budget Statement — Budget Debate 
Key John: Budget Statement — Budget Debate 
[Volume:654;Page:3940] 
Hon JOHN KEY (Prime Minister) 
: 
 All I can say is that if Phil Goff thinks that this Government inherited an economy that was in good shape he must have been asleep when the Labour members were reading the Pre-election Economic and Fiscal Update. You see the truth is we inherited an economy that was in about as good a shape as the previous Labour Government was. 
It is hard to say I learnt anything from Phil Goff’s speech but if I learnt one thing it was this: the Labour Party knows how to do only one thing and that is to spend money. That is all it knows how to do. You see— 
John Boscawen 
: I raise a point of order Mr Speaker. I am sorry to interrupt the Prime Minister but I would like to hear the Prime Minister. At this end of the House we cannot hear the Prime Minister and I think we are entitled to be able to hear what he is saying. 
Hon Trevor Mallard 
: Speaking to the point of order. 
Mr SPEAKER 
: No I do not need any assistance. There will be silence while I am on my feet. The honourable member may be concerned about the robustness of the interaction but he will remember that while the Leader of the Opposition was speaking there was very robust interjection from the Government benches. I think members have to appreciate that this debate is robust because it is about the very heart of Government. Where provocative statements are made there will be reaction to them. If members want there to be silence they should not make provocative statements. I ask members to please keep the noise at a reasonable level but in fairness there was plenty of robust interjection during the speech made by the Leader of the Opposition. 
Hon JOHN KEY 
: What we learnt from the Labour Party is that it wants to spend more money. It is a credit card Opposition; that is what Labour is. Phil Goff has got a plan; it is called “Visa-nomics”—that is what Phil’s plan is. He does not want to defer tax cuts and he does not want to chop any expense; he just wants to spend more money. Out there in New Zealand after listening to Phil Goff people are saying he is “Whack-it-on-the-bill-Phil”. That is what the theory is. The tragedy is that that is not going to cut it. You see whether or not Mr Goff wants to accept the fact the National Government has inherited the worst economic conditions since 1930. That is the truth of it. Our trading partners’ income is collapsing unemployment is soaring around the world our economy will earn $50 billion less in the next 3 years the tax we are able to get will be a whole lot less and the Government needs to do something about it. Labour may be a credit card Opposition it may want to try to spend our way out of it and it may believe that “Visa-nomics” is the way to do it but unfortunately it will not cut it. 
The best point in Phil Goff’s speech was when he said we should not worry about the rating agencies. That is why Labour got voted out. When the rating agency said in the newspapers on Tuesday that a National Government knows how to manage the economy it was saying by default that it knows that a Labour Government does not know how to manage the economy. And that is what Phil Goff proved. He said to hell with the rating agencies. Well this is what that means. The Irish who go off to the pub to have a nice Guinness are paying 1.5 percent to 2 percent more in their interest rates. That is the economic prescription of a Labour Government—1.5 percent to 2 percent more in interest rates. Treasury has done some work on that. A ratings downgrade would mean New Zealanders paying $600 million more a year in interest rates. Well I say thank goodness we have Bill English who knows how to get us through this. “Whack-it-on-the-bill-Phil” would have seen New Zealand running up a quarter of a trillion dollars’ worth of debt by 2023. The servicing cost of that debt would have been $13.8 billion more than the entire health spend today. That would have been the strategy under Labour. New Zealanders tonight will look at this National Government and say that it is a Government that has the right priorities. 
I want to make one final point in relation to Phil Goff’s speech. It was not one of his best speeches but I will let him off. One thing that I will say is that Michael Cullen understood the economics of superannuation. We saw from Phil Goff the worst sort of opposition. It was scaremongering opposition. Labour members know like we know that there will be no change to the age of eligibility for superannuation and no change to the superannuation floor of 66 percent of the average wage—not under a National Government anyway. You see pre-funding of the superannuation scheme already had a formula built into it that allowed the Government to defer those payments if it wanted. Does it make sense to borrow billions of dollars on the credit card to save for tomorrow? I do not think so. “Whack-it-on-the-bill-Phil” might think that that is the way to go but on this side of the House we do not think so. 
There is no getting away from the fact that these are difficult conditions for the Government but we had three objectives for the Budget and I believe we have met all three of them. The first of those objectives was to get through the recession and to take the rough edges off the recession. Let us talk about the entitlements that we are borrowing to preserve. No student in New Zealand tonight has to worry: the interest on his or her loan is zero percent. No family in New Zealand that is getting Working for Families has to worry: its entitlements are fully preserved. No one in New Zealand who relies on superannuation relies on the unemployment benefit or relies on the widows pension has to worry: those entitlements are preserved. Let us understand that for a second. We are in the worst economic conditions since 1930 and Bill English has preserved every entitlement for every New Zealander. I say that we are lucky to have Bill English; that is what I say. 
Let us turn to the issue of jobs. Phil Goff said that no jobs were created. What about the 600 police we are adding? What about the 800 professionals in the health system? What about the hundreds and hundreds of people we are hiring around the economy on the back of this Budget? 
This Government knew absolutely the areas that were critical so let us turn to a couple of those. Let us start with the health system. We are in the worst economic conditions since 1930 yet this Government is putting $3 billion into health over the next 4 years. When the previous Government had all the money in the world all it did— 
Hon David Cunliffe 
: Big clap for no change! 
Hon JOHN KEY 
: Well David you happened to be the Minister of Health and under your watch all you did— 
Mr SPEAKER 
: Order! 
Hon JOHN KEY 
: All Mr Cunliffe did when he was the Minister of Health was to wander out to the airport and wave bye-bye to the nurses the doctors and the midwives. I will tell members what Tony Ryall has done. Tony Ryall has introduced voluntary bonding for nurses doctors and midwives and they are signing on in their hundreds. Tony Ryall has had to deal with swine flu. Well he has not made a pig’s ear of it which the previous Labour Government would have done. He has done something about it in the health system. While he is at it he has put $103 million into maternity services—$103 million. A National Government in the worst economic conditions since 1930 rocks up with money so that there is more time for young mums to stay in hospital with their babies. Labour rocked up with a food voucher. For New Zealanders who want to have elective surgery this Government has delivered 20 new elective surgery clinics under this Budget. 
Let us talk for a moment about health and social outcomes. When I became Prime Minister 7 months ago the first thing that the Department of the Prime Minister and Cabinet said when it wrote to my office was that if I wanted to make a difference to the social and health outcomes of New Zealanders I should heat and insulate homes. That is what the department said—that I should heat and insulate homes. The previous Labour Government waited 9 years and did zero. It has happened in the first Budget under this National Government thanks to the Greens. 
I thank Russel Norman and Jeanette Fitzsimons from the Green Party. They have worked very hard to get a very good plan: $323 million over 4 years and 180000 homes heated. They have delivered $1800 to insulate and heat the home of any New Zealander who wants it whose house was built pre-2000 and nearly double that amount for low-income New Zealanders. That will make a difference to social and health outcomes. It is a great result for New Zealand. 
The Leader of the Opposition had the audacity to say that there was nothing in this Budget for Maori. Well I want to thank the Maori Party for what it has done: standing up strongly and fighting for the rights of Maori New Zealanders—for fighting hard. 
Hon David Cunliffe 
: Where are the Maori seats in Auckland? What are you going to do in Auckland Mr Key? Where’s the koha for the brothers? 
Hon JOHN KEY 
: Well that debate is not over. I tell Mr Cunliffe that we will sort out Auckland; that is another thing that Labour sat around for 9 years and did not resolve. Tens of millions of dollars are going into whanau ora services for Maori education for Maori New Zealanders the extension of kohanga reo and early childhood education. The Maori Party has come into this House joined in a partnership with National and delivered for Maori New Zealanders. I thank and congratulate the Maori Party members on what they have done. 
One of the big aims of this Budget was to grow productivity. What did we hear from the Minister of Finance? This Budget provides for $7.5 billion worth of additional capital in the next 4 years. That is $7.5 billion for building the productivity capacity of this economy. That is something that has been going backwards over the last 9 years. 
We saw $1 billion a year allocated to State highways. The debate over the Waterview extension has brought it all to a head has it not? [ 
Interruption 
] Mr Twyford does not care much because he was drop kicked by his leader from having a chance in the Mt Albert electorate. The people of Mt Albert understand what I am talking about because— 
Hon David Cunliffe 
: Melissa’s back. 
Hon JOHN KEY 
: Well I actually back my caucus but that is a different story. [ 
Interruption 
] Opposition members want to make a lot of noise because they do not want anyone to hear this. If they were to quieten down for a second we could run through it. If they want to debate the facts I am more than happy to have that debate. Here are the facts—no imagination. Labour allocated $650 million to State highways; we have allocated $1 billion. Labour had $650 million; we have $1 billion. We will build the Waterview extension—60 percent of it underground—for $1.4 billion. Labour promised a mythical tunnel which would have cost $3.2 billion—5 years’ worth of everything it had available for State highways. 
Hon David Cunliffe 
: 10 years no super! 
Hon JOHN KEY 
: Mr Cunliffe does not understand economics which is quite worrying for Labour given that he is its finance spokesperson. The interesting thing is that if Labour is to be believed it would have spent every State highway dollar for the next 5 years on the Waterview extension and zero on every other State highway across New Zealand. There would have been no Transmission Gully road but we do not hear anything from Darren Hughes now. There would have been nothing for the South Island and nothing for anywhere else. 
I want to thank the members of the ACT Party for what they have done. I thank them for the great work they did in helping with the line by line reviews. This Government has saved $2 billion. That has allowed us to spend on other areas of greater importance and greater productivity to the economy. And those members have played an important role in the development of Auckland. I thank ACT for what it has done. 
Safety and security has always been a priority for this Government. We have delivered 600 extra police and 300 of them will go to South Auckland. I say well done to Judith Collins for getting those extra police officers as well as 246 probation officers 26 psychologists and hundreds of millions of dollars for extra beds in prisons. That is a great result. 
I would be remiss if I did not mention the cycleway for a moment. So much joy for $50 million—so much joy! The Minister of Finance tried to give me $100 million but I said I must not be greedy and $50 million would be enough. We will build that cycleway across New Zealand and it will provide great opportunities. Tourists will flock from overseas to enjoy it New Zealanders will bike on it and jobs will be created. It will make New Zealand a wonderful country. 
This Budget has been put together in difficult conditions. It has been put together against the backdrop of rising unemployment around the world. But when one looks at the Budget one realises that in the worse scenario gross debt would top out at around 43 percent of GDP in about 2016 or 2017. We can compare that with the situation in the United Kingdom or in the United States where debt will be 100 percent of GDP by 2012 or in Japan where debt will be 220 percent of GDP. Unemployment in the United States is at 8.5 percent and even in Australia it is at 5.7 percent. When one looks at all of those factors and considers— 
Hon Trevor Mallard 
: What does your mate Jeremy Baker say? 
Hon JOHN KEY 
: Gosh it is duck-shooting season again so someone should deal with that member; he is on the lake of despair and hope over there! 
We are not in the easiest of conditions but when I look at the billions of dollars going to health and education and to preserve entitlements at the balancing of the Budget and at the sending of a strong message that we are a Government that absolutely supports enterprise ambition and hope all I can say is although New Zealanders will go to bed tonight knowing that the conditions are not easy they will also be saying thank goodness for that little town of Dipton and the young man it produced all those 47 years ago Bill English.