Foss Craig: Budget Debate 
Foss Craig: Budget Debate 
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CRAIG FOSS (National—Tukituki) 
 I will endeavour to wake up the audience—those listening and those in the gallery—after the previous speech by Mita Ririnui. 
Hon Mita Ririnui 
: I said nice things about you. 
CRAIG FOSS 
: The member did say mostly nice things and I thank him but he spent about 5 minutes talking about the Mt Albert by-election. I cannot find Mt Albert mentioned in the Budget at all. 
Firstly I would like to put into  
Hansard 
 my acknowledgment of and congratulations to my colleagues. I am referring to the now Hon Nathan Guy my colleague Jo Goodhew our new junior whip and of course my good mate from the mighty Hawke’s Bay Chris Tremain who is now our chief whip. I am sure that all those people who are watching and listening in Hawke’s Bay will join me in celebrating and congratulating the great Mr Tremain. 
Hon Members 
: Oh! 
CRAIG FOSS 
: He is now the whip; he grants the leave! There is just one thing regarding the gentleman who has resumed his seat and his talk of Mt Albert. We are most interested and intrigued about Labour’s member-to-be David Shearer. He is not a member yet but we are looking forward to the Labour Party’s new defence policies once he is sworn in. We are presuming that those policies will be about privatising defence subcontracting defence and doing an efficiency audit. I think Mr Graham Scott is quite intrigued and looking forward to doing a bit of work on behalf of the party opposite because previous papers from Mr Shearer are very very interesting and perhaps point to a whole new direction under the so-called leadership of the Hon Phil Goff. We look forward to that. 
I also note and it should be on the record that the best shearer is already in Parliament. 
Iain Lees-Galloway 
: Oh that was on your Twitter the other day! 
CRAIG FOSS 
: Yes it was. I thank the member; I have found a follower. The best shearer is Colin King a champion New Zealander shearer. But with all due respect I look forward to meeting the new member. 
The economic naivety and the Budget naivety of the previous speech is quite fascinating. This Budget which I hold in my hands is a fantastic Budget. I have spoken on it a few times and on the bills in and around it. It is the “Road to Recovery Budget”. It is in blue. It is a blue-covered Budget and how long we have waited for that. Unfortunately it is full of red ink from the previous administration of 9 years which was full of misspending misappropriation unaccountability and good photo opportunities. At the end of the day they cost hundreds of millions of dollars. The public noted this and last year on 8 November they booted the previous administration out for those various reasons. 
These are extraordinarily tough economic times. It is a once in a sixty year co-ordinated recession around the globe. At least our Minister of Finance the Hon Bill English has put together a structure a plan to help ease New Zealand through and to avoid the sharp edges of the recession. It is working; that is right. I contrast that with the Labour leader’s comments in the  
New Zealand Herald  
recently. His plan was basically to cross his fingers and hope we get through the recovery. 
Hon Member 
: Rubbish! 
CRAIG FOSS 
: Yes it was noted in the  
New Zealand Herald  
that he wanted to cross his fingers and that hopefully New Zealand would not suffer too badly or something along those lines. That quote came hot on the heels of his giving two fingers to the credit rating agencies and that showed his naivety and lack of nous in terms of how important the upgrade was and how important at least maintaining our credit rating post-Budget was to New Zealand families New Zealand workers and New Zealand jobs. If that particular member’s policies had been followed through we would have a new “Goff tax” that would be about 1.5 percent on interest rates which would cost about $650 million in this economy per annum. I say well done to Mr Bill English for the Budget that we have. New Zealand has already applauded it and New Zealanders understand that some of the decisions and prioritisations had to be made in this very very challenging environment. 
I note that up until this time over $1.5 billion of personal tax cuts has been shared by New Zealand under this new Government—$1.5 billion. To help small to medium sized enterprises and most employers in New Zealand to ease them through this recession $500 million per annum is now out there. When I hear those somewhat unusual speeches from the other side I say to them that there is actually $2 billion helping the economy through this recession. 
I have some quotes from the other side about the recession but I would like to go straight to the superannuation fund. The fear that is being portrayed out there by the other side in the various confused press releases and speeches is something I think we should have a look at. Superannuation entitlements are unchanged—66 percent at 65 years. Working for Families entitlements are unchanged. All benefits are unchanged. 
Hon Steve Chadwick 
: For now! 
CRAIG FOSS 
: There they go again; they just do not seem to get it through their heads. We noted that the speech Mr Goff thought he was going to give post-Budget was not the one that was going to work. He had convinced himself that all these things were going to happen but that just shows how off the mark he was. I have a couple of quotes from Michael Cullen’s first reading speech when the New Zealand Superannuation Fund legislation came in. I note that some members call it the Cullen fund and a fund that has lost over 30 percent to 40 percent of its value—probably $6 billion or $7 billion over 9 months—is a fund that I am quite happy to call the Cullen fund under that measure. I also note that a certain former member wrote to a newspaper asking that it be called something along those lines. I quote the previous Minister of Finance from the Labour Government’s first speech on the introduction of the Superannuation Fund: “Should a Government decide not to contribute at the required level reported in the Budget and Economic Fiscal Update the Minister will be required to include in the Fiscal Strategy Report an explanation for the departure.” There is no problem with that. Right back then the person who set up and designed the fund and who negotiated with officials and various agencies acknowledged the fact that the fund should be paid out of cash surpluses full stop. Right here in the previous Minister’s first speech on the New Zealand Superannuation Bill he talks about any reasons for departure and the processes that should be followed if in fact full contributions cannot be made. He also outlined the process for partial contributions to be made. So those somewhat deluded members who have been saying that this situation is something new and that contributions to the Superannuation Fund should not be suspended in any way shape or form—in fact that we should borrow to fund them—should go back and look at the previous Minister of Finance’s speech on it. 
I note—and this is particularly important—that “Where the Government of the day decides to pay less than the required contribution to the fund it will be required to pay in at least sufficient funds to provide for the current costs of the New Zealand superannuation entitlements in that year.” That is a pragmatic reflection that superannuation is actually paid out of cash. It is “pay as you go” and earn as you go and it is paid out of cash. Previous speakers have given statistics about how much the Superannuation Fund would contribute to New Zealand superannuation entitlements 10 15 or 20 years out but right here the previous Minister of Finance—the person who put this construct in place—puts paid to all the accusations from the other side because he allowed for and described the methods by which any contributions could be pulled back held or made less. Here is a very interesting quote from the same Minister’s questions and answers when he was launching the fund. The question on the Beehive website was: “Can’t the Government borrow when the future cost of NZS rises?”. Here is the answer: “If the government tried to borrow to cover the rising cost it would have to look at permanently-escalating debt which is clearly unsustainable.” That answer was from the previous Minister of Finance. Good grief! 
I go back to the Budget. I point to page 1 of the Executive Summary of the Budget which is the key point of the Budget. I am talking about permanently escalating debt. If we look at this graph we see that the blue line shows debt if the policies of the previous administration were to continue. The black line is the figures—the statistics—from the Budget as read by the Minister of Finance recently. That gap between the lines is the credibility gap of the previous administration. If we did not have a Budget like the one we have right here New Zealanders continue to leave in droves and we would continue down the OECD rankings. The graph shows debt reaching 70-odd percent of GDP without the Budget 2009 policy response; under this Budget the debt is at about 36 or 37 percent of GDP and we have a credit rating hold—in fact an upgrade—from Standard and Poor’s. I cannot emphasise enough the importance of that credit rating upgrade to New Zealand now and in the future and to New Zealand’s ability to raise the funds to get us through this recession. We do not necessarily want to borrow the funds but we have to in order to get us through this recession. This Budget gives one of the best funding tracks—debt tracks—in the OECD. 
Finally perhaps there is a bit of a turn in New Zealand’s slide that it has been sliding down for the last 10 years in the OECD. This is a most excellent Budget. Let us wait and see how it pans out.