Prasad Rajen: Budget Debate 
Prasad Rajen: Budget Debate 
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Dr RAJEN PRASAD (Labour) 
: 
 We clearly have a very different view of this National Government’s Budget than those expressed by National MPs in this debate. This Budget is driven by the particular ideology of the National Party which includes as an article of faith giving tax cuts to those who are relatively well off financially in order to grow the economy sufficiently to create jobs. National believes that it is just and fair to give tax cuts that increase the incomes of those at the top while giving a very small tax cut in dollar terms to those on low or modest incomes. National believes that it is fair to raise GST to 15 percent which is one of the highest consumption taxes around and that the tax cuts will compensate everyone in the same way thus not impacting on anyone unfairly. National believes that the private sector does everything more efficiently than the State sector. National forgets the many failures. National believes that the State has no business owning assets regardless of the strategic importance of those assets to New Zealand and thus to the common good. National believes that the State sector must be kept small and that if it grows in size with a larger population or with the growing needs of our society it needs to be cut as a matter of priority. National believes that citizens experience problems of living primarily because of the choices they make and thus National takes a pathological approach to the personal issues people face; hence the adoption of a punitive approach to citizens who experience problems regardless of what science tells us. 
Those are a few of the principles that drive this National Government and its major support party ACT. There are many others but that will suffice for the purposes of this debate. 
Pursuing its ideology over the last three Budgets has actually created problems for this National Government that a future Labour-led Government will have to address. Let us look at some of those principles and where it has led this Government. They are facts that the National Government refuses to accept. The Government has created a huge financial hole for itself by giving billions of dollars in tax cuts over the next 4 years. It knows it will not recoup that cost from increases in GST as it anticipated. Although members opposite often say that the tax cuts were fiscally neutral clearly it has not been so. It is a defence of the ideology; it is not smart economics. It has led the National Government to start a borrowing spree second to none. Its tax take is significantly lower and it has to borrow to make up for that tax shortfall. 
The National Government has also been forced into making deep cuts in expenditure to feed its ideology of tax cuts at all costs. It has conducted an unprincipled defence of its ideology in its ensuing programme. It has been neither courageous nor intellectually honest in accepting the impact of its policies and decisions. Every member of the National Government has parroted the same message of inheriting an economy that was a basket case and that they had no option but to embark on the agenda that has unfolded over the past 3 years. 
Sandra Goudie 
: The truth put out. 
Dr RAJEN PRASAD 
: See? Another parrot; there she goes. Despite what members opposite say the public knows that the last Labour Government paid the country’s debt that was left behind by the previous National Government and saved for a rainy day. The National Government could have managed through the recession with the headroom it had in the economy bequeathed to it by the last Government if it was smart about it but it was not. It was not smart. National insisted on tax cuts against all common sense. 
Now National has to preside over deep cuts to the Public Service record borrowing asset sales slashing KiwiSaver and many broken promises. Who would want to trust National? Anybody on this side? 
Su’a William Sio 
: No. 
Dr RAJEN PRASAD 
: The intellectual dishonesty that pervades this Budget and the rhetoric surrounding it was best described by John Armstrong of the  
New Zealand Herald 
 when he casts its growth projections as “A fairytale of high hopes on a frayed thread”. That description actually fits the rest of the Budget indeed. The projection that the economy will return to surplus in 2013 is based on hope unjustified optimism and magic not reality. I wonder how many members of the National Government will give an undertaking—and I am looking—to resign when this projection is not realised. Any? There is not one. They are silent. 
Sandra Goudie 
: I will. 
Dr RAJEN PRASAD 
: That member will be long gone. Maybe the member will come back and apologise publicly. 
Government members have not adequately explained their policies in response to questions from my colleagues this week including questions asked on the projection of the number of jobs created the difference in tax take projections between Treasury and the Inland Revenue Department and the fact that the Government is borrowing to fund the impact of its tax cuts. Indeed this is a fairytale of high hopes on a frayed thread. 
The position taken on this Budget by the Labour Opposition is based on a different narrative about our society. It is one that believes the wealth and resources of a country are created by all its peoples and that benefits are accrued to them on a just basis. Our narrative is based on a conviction that New Zealand is a great society in which we can all do well and in which we all contribute to the maximum that our abilities permit. It is based on a conviction that we ought to invest in the generations that follow us and to leave them all in the best place possible to take this country to new and greater heights. 
So how does this Budget impact on children? This National Government is used to saying that it has taken the hard edges off the effects of the recession and clearly it believes it has done enough. It has not. Although adults might be able to withstand short-term hardships children cannot because for them time takes a different dimension. The development stages that children go through are time-sensitive and they have only one opportunity for brain development in the early years. They have only one opportunity for bonding and forming trusting relationships in the early years. They have only one opportunity to learn in their early years and to meet health milestones. They have only one opportunity to be placed on a positive development pathway in the early years. Children cannot park their development needs until the economy improves. We have to make sacrifices for them now. 
This National Government has no long-term appreciation of the needs of children and of the families that care for them. If it did then some of its current policies on parents and work would be different. Failure to achieve these time-critical development milestones leads children to a life of catching up which is something too many never achieve. Those children populate our negative statistics and impose a heavy financial and emotional cost on the rest of society. 
In three Budgets the National Government has presided over a number of developments that impact directly and indirectly on our children including a significant rate of unemployment rising rates of child abuse—which National does not know what to do with—more and more people struggling to balance their budgets and cope with increases in the cost of living rising youth unemployment a growing underclass and fewer opportunities to be healthy. Cost of living increases are now playing havoc with families especially those with young children. 
There is clear evidence that poverty and hardship is increasing in our families. The cost of visiting a doctor is beyond many the cost of early childhood education has increased the cost of renting has increased and the steep increases in ACC affect many families. Cosmetic changes in services to children and families here and there do not constitute a well-thought-out policy on the needs of our children and of the families who care for them. In fact this Budget does the opposite: it confounds their development needs. If this is the best this Government can do then it stands accused of lacking courage foresight and awareness of what makes for a strong nation in which we lift the life chances of all citizens especially our most vulnerable. 
There is little that is ethical about constantly laying the development challenges of the current climate at the foot of the previous Government. There is little gain in some members constantly promoting the mantra that only the private sector produces jobs and therefore the interests of business are paramount. If our families do not produce the thinkers developers and workers of tomorrow the owners of capital will not have anyone to assist them to extract profit from investments. Although the National Government talks about balance nothing could be further from the truth when it comes to the development frame it is using. 
Clearly there are two narratives around this Budget. Although Labour believes that the economy should advantage all our citizens especially our most vulnerable this Government still believes in laissez-faire capitalism and the unjustified reliance on the market for everything. Labour will demonstrate in the election campaign its response to the needs of our children. Thank you.