Key John: Budget Statement — Budget DebateText is incorporated into the Bound VolumeKey John: Budget Statement — Budget Debate[Sitting date: 16 May 2013. Volume:690;Page:10030. Text is incorporated into the Bound Volume.]Rt Hon JOHN KEY (Prime Minister): That was truly awful. It was like watching MY SKY on half speed. I found myself desperate to change the channel but under Labour you are allowed to watch only one channel. That is the way it goes. That contribution from the Leader of the Opposition was a contribution he made after he recently returned from his economic fact-finding mission to North Korea. You see I thought that the days when a Labour leader no longer wanted New Zealand to be a Polish shipyard were gone but in fact it is quite the contrary. Mr Shearer yearns for New Zealand to be a Polish shipyard. But I have got a bit of bad news for Mr Shearer. Firstly Poland has already moved to partial privatisation. It has abandoned the single buyer of electricity and by the way it has a convention centre. Anyway credit where credit is due.The Labour Party has finally adopted one of the very sensible policies of the National Government and that is the mixed-ownership model. That is right. These days the Labour Party is 51 percent owned by Labour and 49 percent owned by the Greens. Yes these two parties have come together in this happy little place where fruit meets loop. That is where they are. Like one of the most famous combinations of all timeSherlock Holmes and Dr Watson it is “Sherlock Shearer” and “Dr Norman” in search of solving the mystery and this one isThe Hound of the Baskervilles. According to them Bill English is the devil-beast that haunts the moors that New Zealanders live on. Sadly for our two would-be crime solvers it turns out that the devil-beast is not only a thoroughly competent Minister of Finance but the envy of the Western World. Far from being someone who wants to haunt the moors he wants to build tens of thousands of homes well-insulated and affordable on the moors. He has got this funny quaint little notion. He wants New Zealand to earn money not print it. That is the way he wants to go. He wants to support enterprise. He does not want to regulate for monopoly. He is a man who supports businesses big and small. He is a person who cares about individuals rich and poor and that was on display in his Budget here today. Like all great Sherlock Holmes mysteries there is a twist in the tale and the twist is as simple as this: the devil-beast is the Opposition not the Minister of Finance.Let us have a little history lesson because you did not get any of that in David Shearer’s speech. We came into Government in late 2008. This is the fifth Budget that has been delivered by a National Government and by Bill English. It is a sensible and thoughtful Budget and I do want to start by thanking the Government’s support partners John Banks and the ACT Party Peter Dunne and United Future and of course Tariana Turia Pita Sharples and the Māori Party who have worked hard for solid stable progressive Government in this country.But let us put a bit of a reality check into this debate. The Opposition members have got their heads down because they do not want to acknowledge the facts. They have got their heads down because they do not want to know what really happened. We came into Government in late 2008 and Treasury said to us: “This is what’s happening—there is a global financial crisis.” Actually it turned out to be the worst crisis since the Great Depression. That is what happened. We came in and inherited basically a decade of mismanagement by the previous Labour Government and wasteful spending it could not afford. We came into office when economists were saying the unemployment rate would rise to 10 percent or maybe 11 percent. And all of that happened before the Christchurch earthquakes which we now know cost the economy north of $40 billion overall. That was before there were droughts before there were floods and before there was a recession so deep that it claimed yet another victim in Europe earlier this year in the form of Cyprus.So what does Budget 2013 tell us? It tells us that this Government and this country will be back in surplus by 2014-15. Actually next year the deficit will be under 1 percent of GDP. This is a country that will have a deficit of $2 billion. In case no one noticed I point out that a couple of days ago in Australia they announced a Budget deficit of $20 billion and they have had commodity prices rising much faster than we have had in New Zealand.But it gets a little more interesting than that because when we came into office—and Labour members know it; that is why they are looking in their books because they are trying to work out where they went wrong—Treasury said: “This is the way it is: a decade of deficits. You’ll never be back in surplus. Debt to GDP in this country will be 60 percent by 2020.” What does Budget 2013 tell us? Under the economic leadership of Bill English this country will be back to having a debt-to-GDP ratio of 20 percent—not 60 percent but 20 percent. So when David Shearer says that Bill English and the National Government do not care about the people of New Zealand well guess what? We care enough to make sure that they do not have an additional $60 billion or $70 billion worth of debt around their necks. That is how much we care. We care enough to ensure that we have now got an unemployment rate that is 6.2 percent—the 11thlowest in the developed world. We have a growth rate that was 3 percent last year and ispredicted to be 2.5 percent or 3 percent. We have an inflation rate under 1 percent and we have interest rates at 50-year lows.Mr Shearer had the audacity to get up and try to argue that under a Labour Government New Zealanders got more money. Well no they did not. It all went away in inflation—the whole lot. They paid interest rates twice as high as under this Government. They went backwards. The only reason Labour could finance its wild spending patterns was that New Zealanders borrowed tens of billions of dollars. The party is over and it is New Zealanders who are having to pay it back because they did not get any progress under a Labour-led Government. You did not hear David Shearer saying what external analysts think of this National-led Government—not a word not a peep not a sound out of him about what the rest of the world is saying. When Christine Lagarde the chief executive of the IMF came out and said: “I like what this Government is doing. This Government is getting the big issues under control.” there was not a word from David Shearer about that.The week before last something pretty interesting happened. Standard and Poor’s said this country is the ninth least risky country in the world to hold Government debt in—the ninth least risky. That does not sound like failure to me.So let us just take a moment to talk about some of these policies. Let us go to housing and I mean a real solution to housing not some illusion that is purported by people who started at one position said something was affordable and they would deliver at one rate and backtrack within 5 minutes before they could even get anywhere near there. No no I am talking about a real comprehensive solution. So what has the Government announced today?Phil Twyford: Tinkering with the RMA.Rt Hon JOHN KEY: Well OK let us talk about that then. So now we are going to have a National-led Government that with the support of Auckland Council will produce 39000 new dwellings—real dwellings—in the next 3 years. That is way above what is currently being delivered. In terms of social housing and helping people in need Labour reckoned it cared about those people but it did not care enough to insulate their homes. It did not care enough to make sure there was not mould on the walls. It did not care enough to make sure they were actually upkept. Labour members just said: “We’ll come into the Parliament and tell people we’ll build a few more houses and we will just forget about the fact that 70000 people are living in homes that are not fit to be lived in.” Labour members did not care about those people.This week this Government announced Project 324. You did not hear that from David Shearer but this Government stood up and said we will be building 2000 extra bedrooms on existing houses in Auckland which will help ensure that larger families have more accommodation so that issues of overcrowding and rheumatic fever can be dealt with. It is worth hundreds of millions of dollars. This Government cares about all New Zealanders. This Government when it came to the issue of insulation did not just talk about it. We did not just talk about it. Oh Labour had plenty of money to spend on all sorts of wasteful things but when it came to New Zealanders being warm oh it did not care about that. It had 9 years in Government and did basically nothing. This Government will have 230000 homes insulated in 4½ years. And what is more $100 million in this Budget with the support of the Māori Party is going out to the most at-risk families in New Zealand with 46000 extra homes to be insulated. But oh no that did not get a mention from David Shearer because he does not want to admit to those families that actually a National-led Government cares about all New Zealanders—it cares about all of them.If we want to talk about homeownership the fastest way to ensure that someone can afford a home is to make sure that they can afford their mortgage and to do that youneed good fiscal management. You need to make sure inflation is under control. You need to make sure that interest rates are low.This is a Budget that cares about growth. It puts $158 million into tourism and attracting more tourists from new emerging markets like Latin America Indonesia and China—high-end tourists tourists coming for business tourists coming to a convention centre. So let us just talk about that convention centre. That is right. Labour had 9 years where it sat around and did very little. Oh that is right—no it did do one thing. It built a convention centre which Helen Clark went out and opened which was paid for by 230 pokie machines and Labour members all celebrated because of the economic measures. But when National gets one which by the way is three times larger and a way better deal it is an outrage—an outrage. I will tell you what: Helen Clark will come to the opening of this one if she is in town because she knows that it is good for the economy. She knows that it is good for New Zealand.Hundreds of millions of dollars in this Budget will be pumped into science and innovation—for example to Callaghan Innovation. Right across New Zealand $200 million over 4 years will be put into science and innovation. There will be more money for research and development grants for National Science Challenges and for the Marsden Fund.Let us move to the mixed-ownership model and what a success the float of Mighty River Power was. What a success. We hear all this nonsense that New Zealand has given some asset away. New Zealand has given New Zealanders a chance to invest. Majority control has been retained by the Crown. By the way it is the same model under which Air New Zealand has been operating established under a Labour Government. It never ever campaigned to buy back the bit that it did not own even in the 2011 election. Mighty River Power has more retail investors in it than any other stock on the New Zealand Exchange. And where do we want those New Zealanders to invest? Well I say New Zealand. I say New Zealand. David Shearer wants them to invest in Australia. He wants them to invest in other markets. He does not want them to invest in New Zealand.The doozy of all the statements in his speech came when he said: “Oh by the way the accounts are going to get worse because the Government won’t be getting the dividends.” Does he remember that about 3 weeks ago he announced a policy with his mate there “Dr Watson” that he is giving away the dividends? They will not be arriving in any form to a Labour-led Government. Oh yes the Labour members talk tough about Mighty River Power Meridian and the other shares but will they talk tough to the people of Christchurch who are getting a state-of-the-art hospital facility? No no no no no—that is all OK. That magically appears when Russel Norman prints some money. That is all fine. It does not really matter.What about the $50 million that is going into internet connections for our schools up and down the country so that young learners can get internet connections? You will not see David Shearer or Grant Robertson going out to those schools and saying: “Hey kids you can just have dial-up.” Because that is what you would get under a Labour-led Government. It is like MY SKY on half speed. Do not worry because the Labour Party will not mention that. You will not get the $80 million going to irrigation around New Zealand. There is a lot happening in this Government.Let us look at health and education for just a moment because they are critical issues. In health this is a Government that has delivered. This is a Government that has hired 1000 extra doctors and 2000 extra nurses. There is more money for rheumatic fever more money for maternity care and more elective surgical operations. This is a Government that has spent health dollars well. This is a Government that has gone out there and said that we care about that. This is a Government that is also going out thereand saying to the most at-risk New Zealanders that we care about them. There will be insulation for their homes. We will be making sure there is money for rheumatic fever. Yes there will be some money for hungry kids. Yes there will be money for better budgeting services. Yes there will be a whiteware procurement policy that helps people out.This is a Government that says to business that we will get on top of those ACC costs that you inherited under the mismanagement of Labour and we will cut them to the tune of $1.5 billion. And in education we will carry on the great work we have done of getting more kids into early childhood education and more kids into National Certificate of Educational Achievement making sure that our schools have 21st century learning capability and literacy.Let me finish with this. Budget 2013 shows that after 5 years of a centre-right Government this is what building a brighter future looks like delivering for New Zealanders. And by the way guess what happened today? That is right. The manufacturing numbers came out and the Performance of Manufacturing Index showed that the sector is expanding again month after month after month. The only crisis I tell you is not in the manufacturing sector; it is in the leadership of the Labour Party. But do not worry because there is only 51 percent of its leadership. It has got 49 percent over there with Russel. And speaking of Russel Norman when the unemployment rate dropped to 6.2 percent from 6.8 percent he said that that was an epic failure. I would hate to think what he thinks success is. It is as simple as this: the election will be fought in 2014 on the economy. Bill Clinton once said: “It’s the economy stupid.” People will be looking at a Government that has managed to work its way through by making sure that this country earns more money and does not have to borrow it or print it.This is a Government that has delivered competitiveness to our economy. This is where real jobs are delivered and where real growth takes place. The election will be about National versus that devil-beast. I know whom I will be voting for and it will not be the devil-beast.