Goff Phil: Budget Statement — Budget Debate 
Goff Phil: Budget Statement — Budget Debate 
[Volume:672;Page:18865] 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I move  
That the words after “That” be omitted and the following substituted: “this House has no confidence in the National Government led by John Key which has borrowed heavily and created a record deficit of $16.7 billion; has no plan and no vision to improve New Zealand’s economic performance; has broken its promises not to cut entitlements to KiwiSaver and Working for Families; has made cuts that will hurt but will not solve New Zealand’s economic difficulties; and has failed to act fairly in the interest of all New Zealanders.” 
Today New Zealand needed a Budget that gave it a shot in the arm. It needed a vision for a better future and how to get there. We got neither. There is nothing innovative or transformative in this Budget to address New Zealand’s economic problems. In fact this is the worst Budget that I have seen in 27 years in this House. It is the least imaginative and it is the most lacklustre. 
This is not a zero Budget; it is a subzero Budget. It has frozen New Zealand in time. It seeks to balance the books on the back of broken promises and on the flogging off of $7 billion worth of assets that New Zealanders built up and paid for with their taxes and that belong to them. The Government has banked the proceeds from those sales and from the broken promises without any mandate to do so. It has broken its word and no amount of verbal gymnastics will disguise that fact. This Budget leaves the country with a record $16.7 billion deficit and an unsustainable borrowing level of over $300 million a week. It is a Budget that hurts; it does not help. 
Today we needed a Budget from a Government that had the guts to make the right decisions however tough those decisions may be. We needed a Government that was absolutely committed to ensuring that everyone paid their fair share no matter what they do for a living and no matter where they live or how much they earn. This Government has failed on both counts. We needed a Government with a plan but this Budget makes it clear that National has no plan. It is not only the Opposition and the trade union movement saying this; the business community is saying this and even National’s ally the ACT Party. 
John Key has made a lot of his economic skills but in this Budget he has failed absolutely to deliver. Today’s Budget does nothing to address the real problems facing our country: high debt low wages low productivity high unemployment and poor economic growth. When I read these books I see that the total debt of New Zealand public and private is currently 86 percent of GDP. Where does it go by 2015? From 86 percent to 85.3 percent. That is the achievement of this Government in reducing New Zealand’s debt. That is a failure. 
This Budget was meant to be about saving. That was to be the centre point of this Budget we heard from the Minister of Finance. But all this Budget does about saving is to cut the entitlement that National sincerely promised New Zealanders it would never cut. 
This Budget will do nothing to help hard-working New Zealanders who are struggling to pay the bills every week because their incomes cannot keep up with the cost of living. That is because John Key and National have failed to face up to the big problems. The Government keeps promising that the good times are around the corner. Really New Zealanders do not believe that. It is tinkering around the edges. It wants to play it safe but right now this country needs a bold plan to fix a broken economy. 
The legacy of this Budget and this Government is a $16.7 billion deficit. That is seven times higher than the 2008 prediction by Treasury of what the deficit would be this year—seven times higher. In November 2008 National inherited one of the lowest Government debt levels across the developed world from a Labour Government that ran surpluses for 9 years not deficits and built up $14 billion in the Cullen superannuation fund. Yes there was a global financial crisis in 2008 but that was over by 2009. What did Mr English say in December 2008? He said: “New Zealand starts from a reasonable position”. That is where he started in December 2008 but there is no way this Government can claim that New Zealand’s debt today is in a reasonable position. 
Why were we in a reasonable position according to Mr English in December 2008? Because the Labour Government had saved for the rainy day. The fact that New Zealand is better than it might be owes much to the careful management of the previous Labour Government. We should be in a better position. Our economy should be booming. The returns that we are getting from our exports to thriving markets such as China with which I negotiated a free-trade agreement are the highest they have been in 35 years. We had earthquakes in Christchurch which did not help but $10 billion in reinsurance money will flow into Christchurch over the next couple of years. I am informed that only 10 percent of the deficit owes anything to the earthquakes. The fact is that the New Zealand economy was in trouble from the time of Mr English’s last Budget—long before the earthquakes struck. New Zealand in the 6 months after Mr English’s last Budget was failing to achieve the projected growth. In fact we had nil growth rising unemployment and the highest quarterly inflation in 20 years. 
The problem is that the National Government has no vision of what a successful economy looks like and no plan to get there. Gimmicks will not do it—gimmicks such as job summits that create no jobs cycleways that create 200 jobs Mr Brownlee’s promise to mine our national parks which did not run at all and of course the increase in GST which did not help growth but just made it harder for families to meet the rising cost of living. 
The truth is that National’s three Budgets have failed to deliver a real plan for prosperity and they have failed to meet the fairness test. Top earners have done very well getting hundreds and sometimes thousands of dollars extra in tax cuts each week. In fact the top 10 percent of New Zealand took 40 percent of all the money for the tax cuts. What did the bottom 20 percent get? They got 1.4 percent of the money. That is neither fair nor smart. Spending $2.25 billion every year on tax cuts for the top 10 percent of earners simply does not make sense when the Government is borrowing $300 million a week. 
John Key and Bill English made reckless election promises in 2008 in the middle of the global financial crisis knowing full well that this country could not afford the promises they were making. What is more while they were making those promises about the big tax cuts they made some other promises. They promised they would not cut KiwiSaver; they did. They promised they would not touch Working for Families; they have. And the biggest promise of all was John Key saying: “We will not be increasing GST.” We know what happened there. 
It is clear why this country’s deficit has blown out of control. Firstly the National Government spent $14 billion on tax cuts when it could not afford to. The second reason is the failure of the New Zealand economy. When we do not get growth when incomes are actually falling and when unemployment is going up the Government’s revenue fails. It falls. That is exactly what has happened. 
I remember well in 2009 John Key promising the country that New Zealand was coming aggressively out of recession—coming aggressively out of recession. He had hardly uttered those words when we went back into recession. So New Zealanders will be sceptical today about the heroic Budget forecasts that predict economic growth and higher wages around the corner—or at least that is what John Key told us. When I look at the Budget forecast for growth I see that actually that growth will be below the long-term forecast levels. If we take the Rugby World Cup 2011 and the Christchurch reinsurance out of that forecast growth will be about 2.2 percent. That is a pathetic level of growth coming out of a recession when normally a country’s growth would be up around 6 or 7 percent. 
We have a real problem: the big debt built up by this National Government. That means prudent financial management for an incoming Government. It will mean reprioritising. It will mean efficiencies. Existing spending is not sacrosanct but I tell members that if cuts have to be made they must be both justifiable and fair. They must help the economy to grow and they must lift incomes. If they do not they just hurt and they do not work. 
Hon Dr Nick Smith 
: What would you cut? 
Hon PHIL GOFF 
: Despite the massive borrowing this Government refuses to reconsider the affordability of the billions of dollars in tax cuts to top-income earners. I tell Dr Smith that I would cut the $200 or $300-a-week tax cuts that members of his Government gave themselves in the last Budget. That is where I would start: at the top. Not on the people who are losing their Working for Families payments: the mum and dad on an average wage of $35000 to $40000 a year working hard to try to bring up their kids. John Key and Bill English have taken $2000 a year out of the support those families were getting. That is what happens if one is a middle-income person but if someone is a top-income person I tell Dr Smith that person will keep the money. John Key will keep the $1000 a week that he gave himself. 
Labour is not in favour of giving a privileged position to the wealthy and the powerful; it is in favour of looking after low and middle income New Zealanders who need and deserve that help. That will be what a Labour Government does when it delivers the Budget this time next year. I thank Dr Smith for his question. While top-income earners have become richer over the last few years those on middle incomes have become the new working poor and those on low incomes are simply struggling to survive. Should the top-income earners not be leading by example? 
I want to know from the Prime Minister why it is OK that his Government has cut home care for so many elderly people which is provided so that they can live independently in their homes while Cabinet Ministers get record levels of payment to live in their own homes. What about Ruby Martin? The Prime Minister said the other day that he did not know of any such people. I can tell the Prime Minister that Ruby Martin lives in Timaru. She is 86 years old. She is so crippled with arthritis that she cannot even hang out her washing but the Prime Minister’s Government took out of her pocket the $30 a week that she was getting in home care while Mr English put in a claim for $45000 a year to live in his own home. That is not good enough—that is not good enough. When people are struggling to put petrol in their car each week why is the Minister of Foreign Affairs taking a $75000 plane flight to Vanuatu when he could have got there for $4000? Middle-income people are working hard but they are finding their incomes dropping below the cost of living.  
The lower-income people are suffering. I was in McGehan Close the other day. The residents there wanted to know when Mr Key was going to come back to their street where he was before the election and explain to them why he had broken every promise he made about what he was going to do to help.  
This Budget has nothing on helping the 77000 young people who are out of work. When young people leave school they should go on to learning or earning not be thrown on the unemployment scrap heap not be a lost generation and not be part of a social disaster waiting to happen. I want to know where in this Budget was the provision for trade training. The building industries tell us they need 90000 people over the next year in building and construction trades. I want to know why the training package for Canterbury is less than the $55 million cut in training that the Government made last year. I want to know from Mr Brownlee why 9 months after the earthquake not one extra person has gone into a training programme. Mr Key might think it is a good idea to recruit from the Philippines and Malaysia for skilled work but Mr Key should give a chance to the 10500 unemployed 15 to 24-year-olds in the Canterbury region. Mr Key should give them the chance first. 
I want to know why when this Budget was meant to be about saving the Government has cut savings. Every KiwiSaver will be losing $520 a year. Even Standard and Poor’s says that that policy which is cutting a successful Labour Government scheme will risk damaging New Zealand by pushing it further into debt. I want to know why this Government thinks it can keep moving the goalpost—reversing the reversal it made 2 years ago—and New Zealanders will still have trust and confidence in the savings scheme. 
I want to know why this Government thinks it is sensible to sell State assets when no individual or business would do anything as stupid as selling efficient and profitable enterprises. National has learnt nothing from history—nothing from history. This election will be about whether National has a mandate to sell off those assets which in the majority will end up being foreign-owned. 
This Budget is a failure. The Government is simply tinkering around the edges with the problems that are hurting Kiwis. It is not making a difference. We need bold and courageous action; we did not get it. We did not get it on skills training. We did not get it on research and development. We did not get it on taxation and monetary policies that would help the productive sector instead of favouring the speculative system. We did not get policies to relieve the pressure on everyday families who are finding it hard to make ends meet because of the soaring cost of living. 
I give the House the pledge that a Labour Government in the next Budget will put hard-working families at the centre of what we do. We will be driven by the belief that our country can be better than this. We can turn things round with vision and courage. There is a different and a better way of doing it. This Budget offered not one idea not one plan and not one suggestion of how this country can go forward. This Budget fails.