Budget Statement — Budget DebateText is subject to correctionBudget Statement — Budget Debate[Sitting date: 15 May 2014. Volume:698;Page:1. Text is subject to correction.]Budget StatementBudget DebateHon BILL ENGLISH (Minister of Finance): I moveThat the Appropriation (2014/15 Estimates) Bill be now read a second time.It’s a privilege to deliver the National-led Government’s sixth Budget.It’s a particular privilege because this is the first Budget in six years to focus on managing a growing economy rather than recovering from a domestic recession and then the global financial crisis.A growing economy supports employment and higher wages. It provides opportunities for families. And it pays for public services that New Zealanders rely on.Budget 2014 looks ahead to build on the hard work done by every New Zealand household and business over the past five years.New Zealand is in a good position.We’ve made significant progress in recent years to deliver more jobs and higher incomes.New Zealand is one of the first developed countries to return to normal economic conditions with a recovery led by the private sector.Businesses are investing wages are rising faster than inflation and our export sector is posting record results despite the headwinds of disruption in international markets and a high exchange rate.Public agencies are working better for New Zealanders and getting better results.On most indicators that matter we’re moving forward as a country.If we lock in the hard-won gains we’ve made there’ll be many opportunities over the next decade to improve our economic fortunes and secure a brighter future for New Zealand families.Each year millions more consumers in the Asia-Pacific region are becoming affluent enough to want and afford the goods and services New Zealand produces.Mr SpeakerOur challenge is to muster the capital the people and the skills to take advantage of this historic change in our prospects and lift the aspirations and prospects of every New Zealander.That requires sticking to our course with careful stewardship of public money with sound proven economic policies and with a determined focus on results from public services.Budget 2014 shows a return to fiscal surpluses.There will be a small surplus next year and increasing surpluses are forecast over time. The Budget also shows the economy continuing to build momentum with employment continuing to grow and wages continuing to rise.But these are just forecasts and there is a lot of work to do to make them a reality.What matters to people and families across New Zealand are the opportunities created by a sustainable economic recovery.So an important part of this Budget is lifting New Zealand’s capacity to sustain higher levels of economic growth for longer grow incomes and support jobs.And what also matters to people and families is that the Government will support them when they need assistance.Budget 2014 continues this Government’s increased investment in health and education – including tertiary education. Next year for the first time we will invest more than $28 billion in these two areas and we are achieving better results from spending every year.This year’s Budget also contains a $500 million package of extra support for children and families.We’re able to do this because of the hard work in previous Budgets to get spending under control and get back to surplus.This package will help young families and those vulnerable children who most need our care and protection. I’ll describe it in detail when I talk about better public services.Mr SpeakerThe Government’s four priorities this term are:responsibly managing its finances;building a more productive and competitive economy;delivering better public services; andsupporting the rebuilding of Christchurch.Across our programme we continue to work constructively with the ACT United Future and Māori parties. I want to acknowledge their support and assistance.I also want to acknowledge the Prime Minister the Rt Hon John Key. His leadership has been instrumental in the success of the Government’s programme and in maintaining the trust of New Zealanders through what has been a challenging period.I now intend to talk about each of the Government’s four priorities in turn. But first I want to summarise the economic outlook for the next few years.The New Zealand economy has recovered much of the ground lost in the recession and the global financial crisis.The economy grew 3.1 per cent in 2013 the fifth-highest rate in the OECD.Growth that was initially driven by low interest rates elevated terms of trade a catch-up in housing supply and the Christchurch rebuild has turned into a broader-based recovery supported by strong consumer and business confidence new investment and higher productivity.Growth is already delivering more jobs and wages that are rising faster than inflation.The Budget forecasts show real GDP growth of between 2 and 4 per cent in each of the next four years with growth forecast to peak at 4 per cent in the year to March 2015.Compared to the December quarter of 2013 Budget forecasts show an additional 170000 people in work by mid-2018 and the unemployment rate is expected to fall to 4.4 per cent.The average full-time wage is forecast to rise to almost $62300 by mid-2018 which would be $7600 more than it was in December 2013.The Government is taking a long-term view of economic growth because some of the factors driving the economy today will peak over the next few years.Export prices are likely to return closer to normal levels housing supply will eventually catch up and the Christchurch rebuild will peak and eventually slow.And the New Zealand economy faces ongoing global risks including uncertainty about the performance of our two largest and linked trading partners China and Australia.But against the background of a growing economy we have the opportunity to do more work on longer-term economic fundamentals like investment skills and productivity.Our aim is a long period of steady growth delivering pay rises and more jobs every year rather than a shorter period of unsustainable growth.Mr SpeakerI turn now to the first of the Government’s four priorities which is responsibly managing the Government’s finances.Budget 2014 shows the Crown’s books continuing to improve as the economy grows and the Government maintains its careful and responsible management of public spending.The Government is on track to meet its two key fiscal targets.First the operating balance before gains and losses is forecast to be in surplus in 2014/15 by $372 million. Surpluses increase moderately in future years.We are achieving our surplus target while still spending $5.7 billion on new initiatives in the current year and over the next four years financed in part by $1.6 billion of savings and revenue initiatives.Future surpluses give the Government choices including paying for new capital investments reducing debt increasing spending and reducing tax.Those choices have to be sustainable – recognising that surpluses rise and fall with the economic cycle – and they must also avoid putting material pressure on interest rates during the upswing.As surpluses grow the Government will be able to conduct a KiwiSaver auto-enrolment exercise for non-members.Currently the number of KiwiSaver members aged 18 to 64 is equivalent to 85 per cent of the labour force and auto-enrolment is expected to increase this proportion even more.The Government’s second fiscal target concerns debt. On an annual basis net core Crown debt is forecast to peak at 26.4 per cent of GDP in 2014/15 and decline thereafter.Longer-term projections show net debt dropping to 20 per cent in 2019/20 in line with the Government’s target. This includes the impact of resuming full contributions to the New Zealand Superannuation Fund in 2019/20.These projections are a far cry from the projections made for Budget 2009 that showed net debt rising to over 60 per cent of GDP by the early 2020s.It was appropriate to run deficits and take on debt to support the economy and New Zealand families over the past few years. But as households know carrying substantial debt is neither comfortable nor financially prudent.Making these projections a reality requires sticking to the Government’s plan of careful spending and responsible public management.After net debt has gone below 20 per cent of GDP we intend to maintain it within a range of 10 to 20 per cent of GDP over the economic cycle while also making contributions to the New Zealand Superannuation Fund.Mr SpeakerThe fiscal position has improved markedly over the past five years.Tax revenue has increased as the economy has recovered. But the biggest contribution to the fiscal turnaround has been considered expenditure restraint that rigorously tests spending for value and results.Core Crown expenses have fallen from 34.4 per cent of GDP in 2008/09 to a forecast 30.3 per cent in 2014/15 and are soon expected to fall below 30 per cent of GDP.In the next four years the Government will continue to focus on achieving better results as the main way of restraining future government expenditure.The Government has set 10 challenging results for the public sector to achieve over the next few years in areas such as reducing long-term welfare dependency supporting vulnerable children boosting skills and employment and reducing crime.We are willing and able to spend more now to reduce the long-term social and economic costs of dysfunction. What is good for families and communities is also good for the Government’s books.To implement this investment approach government agencies must prepare comprehensive four-year plans incorporating data analysis and long-term payoffs.These new ways of thinking have allowed the Government to maintain a track to surplus while delivering better public services.Mr SpeakerAn improving fiscal outlook means there is some room to increase future operating allowances.The Government is aware however that changes in fiscal policy settings can increase aggregate demand in the economy raise inflation pressures and push interest rates higher than they otherwise would be.This relationship was seen clearly in the mid-2000s when big increases in spending by the previous government were accompanied by home mortgage rates of over 10 per cent.Advice from the Treasury is that lifting Budget spending allowances to around $1.5 billion a year is about the upper limit for increased spending or revenue initiatives before they begin to materially affect interest rates.The Government is therefore lifting the operating allowance for Budget 2015 from $1 billion to $1.5 billion growing after that at 2 per cent each Budget.This moderate increase will provide the Government with future options around investment in public services and modest tax reductions.There is room to move some of the allowance between Budgets providing they average around $1.5 billion and economic conditions permit.Allowances averaging around $1.5 billion per Budget remain well below those adopted in the mid-2000s and core Crown expenses will continue to fall each year as a proportion of GDP.The new allowances are built into all the forecasts and projections presented in the Budget.If tax revenue comes in well ahead of forecast the Government’s main priority will be additional debt repayment until the 20 per cent debt target is met.Mr SpeakerThe Government’s second priority is to build a more productive and competitive economy that supports higher incomes and more jobs.A broad-based economic recovery is now well established. Through difficult times New Zealand firms have become resilient and innovative.This has enabled them to secure good prices on world markets despite the headwinds of an historically high exchange rate and lower growth among our trading partners.Looking ahead there are huge opportunities for New Zealand as countries in the Asia-Pacific region develop rapidly and demand more of what we produce.New Zealand can take this opportunity if we are prepared to support people and businesses to invest and grow create new products and services and sell more of them to the world.Our plan for building a more productive and competitive economy is set out in the Business Growth Agenda and the Budget adds a number of new initiatives to this important programme.One focus of the Business Growth Agenda is export markets where the Government is negotiating trade agreements working to expand market access and helping New Zealand exporters compete overseas.Mr SpeakerAs previously announced the Budget includes funding of $69 million over four years including $14 million of reprioritised funding to expand New Zealand Trade and Enterprise’s presence in China South America and the Middle East and to help 200 more New Zealand firms break into overseas markets.Budget 2014 also increases the Government’s investment in tertiary education research and innovation which are crucial for sustained economic growth.This investment includes $83 million of operating funding over four years to raise tuition subsidies in science agriculture and health sciences.As announced last week the Government is providing $20 million over two years to fund 6000 extra places for apprentices.The Budget provides an additional $53 million over four years to establish another three Centres of Research Excellence bringing the total number to 10. This includes a Centre focusing on Māori research.The Budget also provides an additional $57 million over four years for contestable research in science and innovation.As a result of this investment and the investments made in previous Budgets the Government’s total funding of science and innovation is expected to reach $1.5 billion by 2015/16.The Government is also supporting innovation through two new tax measures.First loss-making start-up companies will be able to cash out all or part of their tax losses from R&D expenditure. And second all businesses will be allowed tax deductibility for R&D “black hole” expenditure that is currently neither deductible nor able to be depreciated.These two measures will return an estimated $58 million in tax to innovative companies over four years.Mr SpeakerCheque duty will be abolished from 1 July this year.While fewer people now use cheques they are still common enough for the duty to be a cost for many people and businesses. But the duty doesn’t apply to other methods of payment and is simply a compliance cost.Removing cheque duty will cost $15.5 million over four years.Budget 2014 will allocate $132 million over the next five years to bolster tax compliance chase up unfiled returns and write down the additional tax identified that is unlikely to be collected. Of this $48.6 million is cash for Inland Revenue to undertake these activities.This funding is expected to generate a gross increase in Crown revenue of almost $300 million over five years.Mr SpeakerThe Accident Compensation Corporation’s consistent performance is delivering benefits to New Zealand households and businesses.Annual levies for households and businesses have fallen by close to $1 billion since 2011/12.Budget 2014 indicates ACC is on track to provide further levy reductions of around $480 million in 2015/16. Final decisions on the levies will be made after public consultation by ACC.Depending on the outcome of this consultation the average levy for a private motor vehicle could fall by around $130 a year from 1 July 2015.Mr SpeakerThe Government is continuing its multi-billion dollar programme of investment in modern infrastructure.Last year the Prime Minister announced the Government’s commitment to accelerate key Auckland transport projects.Budget 2014 pushes ahead this commitment by providing $375 million of new capital funding for the New Zealand Transport Agency by way of an interest-free loan to accelerate $815 million worth of projects.These projects will assist in reducing congestion in Auckland improve access to the airport and capitalise on the benefits of major roading projects already underway in the region.Mr SpeakerThe Government remains focused on opportunities to use New Zealand’s natural resources productively while maintaining environmental standards that preserve and enhance the quality of our environment.Budget 2014 provides an additional $20 million over four years for environmental initiatives and to help the management of our natural environment. This includes $12 million to help local councils and communities improve the way they plan and make decisions about managing fresh water.The Budget also provides $15.8 million operating funding over four years and $10.7million capital funding to protect New Zealand’s kauri forests from dieback disease.Mr SpeakerThe Government’s share offer programme was completed successfully last month with the sale of shares in Genesis Energy.This programme met every objective the Government set for it and raised almost $4.7 billion for taxpayers. This has been put into the Future Investment Fund so it can be invested in new public assets.Budget 2014 sets out another $1 billion of new capital investments from the Future Investment Fund.$200 million will be invested in health sector projects including the new Grey Base Hospital on the West Coast.$172 million will be invested in building and upgrading schools including completion of a new school at Pegasus near Christchurch.$198 million will be invested in KiwiRail’s Turnaround Plan and a further $40 million in the design and construction of irrigation schemes to boost agricultural production.Other investments bring the total allocated so far from the Future Investment Fund to almost $3 billion over three Budgets. That leaves $1.7 billion in the Fund for new capital spending in Budgets 2015 and 2016.Mr SpeakerNew Zealand cannot afford another doubling of house prices as occurred between 1999 and 2008.The Government has taken a number of steps to free up housing supply which is essential to improving affordability. These steps include signing housing accords with Auckland and Christchurch councils with the latter subject to consultation.We have reformed legislation to limit development contributions for funding infrastructure.We have increased support for those on low and moderate incomes to get into their first home through increased eligibility for KiwiSaver first home deposit subsidies and by trebling funding for Welcome Home Loans.A Productivity Commission inquiry into housing affordability found building materials for a typical modest family home in New Zealand are 30 per cent higher than in Australia. Duties and tariffs currently apply to most of the materials used to build a standard house.Budget 2014 temporarily removes these duties and tariffs to increase competition and improve housing affordability. This is expected to save around $3500 on the construction of a standard New Zealand home.Mr SpeakerThe Government’s third priority for this term is delivering better public services within tight fiscal constraints.I want to compliment the thousands of New Zealanders who deliver public services for their dedication and innovation in achieving better results for our families communities and businesses.We have learned how much more can be achieved particularly for the most vulnerable and the most dependent by spending taxpayers’ money more carefully and deliberately.For example there is a group of around 2000 six- to nine-year-olds in New Zealand who have had the worst start in life.These young children will cost taxpayers an estimated $750 million in prison costs alone over the course of their lives if we don’t do more to prevent them getting into trouble.The future cost to taxpayers of people who received welfare in 2012/13 will be $76 billion by the time they exit welfare or retire. About three-quarters of that cost is due to people who first received a benefit under the age of 20.These sorts of insights are starting to drive decisions made by public agencies because the cost estimates help to tell the Government in more detail who needs help and what support they need.Mr SpeakerOne of the Government’s key priorities is to support children and families.Even when finances were at their tightest the Government maintained programmes like Working for Families.We increased funding for health and education.And we developed new initiatives like our home insulation programme breakfast in schools rheumatic fever prevention and free GP visits for under-sixes.The fiscal outlook has now improved. That means we can free up money to provide more practical assistance for families and children while still running surpluses.This Budget contains a $500 million package of support for children and families.The package is clearly focused on young families and those vulnerable children who most need our care and protection.It has five elements and I’ll go through each of these in turn.First the Government will extend paid parental leave from 14 weeks to 18 weeks. This will happen in two steps – to 16 weeks on 1 April 2015 and to 18 weeks on 1 April 2016.We have previously said we would support extending paid parental leave in an affordable way when conditions permit. The Budget delivers on that commitment.In addition eligibility for paid parental leave will be significantly extended.For the first time “Home for Life” caregivers and people with similar permanent care arrangements will become eligible for paid parental leave.Parental leave payments will also be extended to people in less-regular jobs including seasonal and casual workers those who have recently changed jobs and workers with more than one employer.These changes recognise New Zealanders’ wide range of family and work arrangements.Expanding paid parental leave will cost $172 million over four years.Second the Government will significantly boost the parental tax credit.This payment was introduced by the National Government in 1999. It is available to working families with a newborn child who are not on a benefit and who are not receiving paid parental leave.From 1 April 2015 the Government will increase the parental tax credit from $150 a week to $220 a week and the payment period will be extended from eight weeks to 10 weeks. This increases the total credit from $1200 to $2200.In addition the abatement rules will be changed to better target the parental tax credit towards low-to middle-income families. A couple having their second child for example will not receive any payments if they together earn more than $99847.Boosting the parental tax credit will cost $42 million over four years.Third the Government will invest $90 million over four years to make doctors’ visits and prescriptions free for children aged under 13.This means that cost will not be an obstacle for families wanting to take their young children to the doctor.Already doctors’ visits and prescriptions are free for children under the age of six. We will extend this to children under 13 so primary school-aged children willbe able to go to the doctor for free any time of the day or night and get their prescriptions free as well.The Government will offer this scheme to GPs from 1 July 2015.The fourth part of this package is an increase in funding for early childhood education.The Government has a target of increasing participation in early childhood education so 98 per cent of children starting school will have participated in quality ECE.The Budget contains funding of $156 million over four years to help early childhood centres remain accessible and affordable meet demand pressures and increase participation towards the 98 per cent target.Finally the Budget contains funding to help the most vulnerable young New Zealanders and protect them from abuse and neglect.This includes funding to roll out eight more children’s teams around the country to identify and work with at-risk children and their families.The Budget also provides funding to screen people who work with children as set out in the Vulnerable Children Bill to help support children in Child Youth and Family care and to provide greater support for caregivers.This new funding comes to $33 million in 2014/15.In total the Government’s comprehensive package of practical support for children and families – including paid parental leave the parental tax credit free GP visits early childhood education and support for vulnerable children – involves new funding of $493 million over four years.Mr SpeakerThrough difficult economic times and through “zero Budgets” the Government has protected funding for frontline health services and education.As a result spending on health next year will reach $15.6 billion and total spending on early childhood primary and secondary education will reach $10.1 billion. In addition the Government will spend just over $3 billion on tertiary education.We have also been focused on doing more for people and their families within existing budgets.A lot more elective surgery procedures are now being performed for example and waiting times for diagnostic tests cancer treatment and emergency treatment have dropped.Budget 2014 continues this commitment to funding and to results.It includes $1.8 billion over four years including $413 million of savings for new health initiatives and to meet cost pressures and population growth within the health system.Apart from free doctors’ visits and prescriptions for under-13s which I’ve already mentioned the Budget contains an additional $110 million to fund more elective surgery and reduce waiting times $33 million for cancer screening and treatment and $20 million to prevent rheumatic fever.The Government is also providing $96 million for home-based support services $112 million for disability support services and $40 million for additional support for elderly people including those with dementia.As previously announced the duty-free tobacco allowance will fall from 200 cigarettes to 50 cigarettes in line with the allowance that applies in Australia.This is a further step towards reducing the harm from smoking which still causes up to 5000 premature deaths in New Zealand each year and I want to acknowledge the contribution of the Hon Tariana Turia to this initiative.Mr SpeakerEducational achievement at school has started to improve after years of spending that failed to deliver better results.In Budget 2014 education receives an additional $858 million over the next four years and the remainder of this year to lift the achievement of New Zealand students strengthen the teaching profession and meet funding pressures.Of this $359 million is to recognise excellent teachers and principals keep good teachers in the classroom and share expertise across schools as the Prime Minister announced earlier this year.Schools’ operational grants will increase by $85 million and as I mentioned early childhood education services get a $156 million increase.The Budget also provides $111 million of operating funding for school property development and maintenance.Mr SpeakerThe Government’s welfare reforms have already made a significant difference with nearly 15000 fewer people on benefits now than there were 12 months ago.The Budget invests an additional $100 million over the next four years to support people to come off benefits and into work including around 8000 additional places in employment and work-readiness programmes.As previously announced the Government is also putting aside $3.5 million in 2014/15 to help up to 1000 beneficiaries take up job offers and move to Canterbury where demand for labour is strong.The Budget allocates $22 million over four years for non-government organisations delivering community budgeting services as recently announced by the Minister for Social Development.And it provides $15 million over three years for Whānau Ora navigators to work with and support whānau and families.Mr SpeakerPolice and Corrections will continue to target their resources to prevent crime and make our communities safer.Police’s core operating spending is being maintained at almost $1.5 billion in 2014/15. A focus on frontline policing and crime prevention has reduced crime by over 20 per cent in the past four years.Budget 2014 also supports the Government’s targets to reduce the reoffending rate by 25 per cent. Reoffending has already been reduced by 12.6 per cent which has meant around 9300 fewer victims of crime each year.The Budget provides $10 million over four years to support sexual violence services including support for frontline crisis response and community-based treatment services.Mr SpeakerThe Government is continuing its reform of social housing. Social housing should be a step to independence for those capable of it not a dependency trap.Budget 2014 provides a $30 million boost to the Social Housing Fund to help the community housing sector provide homes for high-needs families.The Budget also allocates $64 million of operating and $16 million of capital funding to enable the Ministry of Social Development to assess clients’ needs and allocate tenants to both Housing New Zealand and community housing providers.From July this year reviewable tenancies will begin to be rolled out for social housing tenants. Budget 2014 provides $13 million of operating and $2 million of capital funding to find the best housing option for tenants and to support those who are ready to return to the wider housing market.Mr SpeakerThe Government is committed to strengthening the New Zealand Defence Force so it can meet its domestic and international humanitarian aid and military commitments.As previously announced Budget 2014 provides $535 million in operating funding for the Defence Force over the next four years.The Government’s fourth priority is rebuilding Christchurch.I want to pay tribute to my colleague Canterbury Earthquake Recovery Minister the Hon Gerry Brownlee and the many public servants community organisations and families who continue to work so hard to address the many challenges that remain in their community.Since the first earthquake in September 2010 the Government has backed Cantabrians in the initial response and now the recovery and the rebuild.The total cost of the rebuild has been estimated at $40 billion and the Government’s share will be significant.On current estimates the Government’s contribution to the rebuild is expected to be $15.4 billion of which $7.3 billion will be incurred by the Earthquake Commission net of reinsurance proceeds.At the moment the Government is paying an estimated $9 million every working day in rebuild invoices.Demolitions in the central city are nearing completion and buildings are going up.There are now more than 200 private-sector buildings – both commercial and residential – either under way or consented within Christchurch’s four avenues.And construction will begin on a number of anchor projects this year including the $300 million Justice and Emergency Services precinct for which the first sod was turned in January.The Government is also on track to move 1700 staff in about 20 government departments and agencies back into the central city in 2016.Housing New Zealand expects to build 700 new houses and complete repairs on 5000 existing state houses by the end of next year.And the Government is progressing a housing accord with the Christchurch City Council to accelerate development on central and local government land and deliver more social housing in the city.Budget 2014 provides $50 million of additional funding over the next two years for the Canterbury Earthquake Recovery Authority in addition to $19 million funded from existing contingencies established in Budget 2013.As previously announced funding of $13.5 million will be provided over the next four years to continue the Earthquake Coordination Service including counselling services and the Canterbury 0800 support phone line.These initiatives bring the Government’s spending and commitments to rebuilding greater Christchurch to $15.4 billion by 2018.Mr SpeakerNew Zealand is among the first developed countries to achieve a return to normal economic settings.We are on the right track. We are making good progress. And we are looking ahead with confidence.The Government’s books are on track to surplus next year and are the envy of most developed countries.The economy is growing wages are increasing faster than inflation and more jobs are being created every year.The country is seeing the benefit of improved public services that are focused on delivering better results.Our challenge now is to secure these hard-won gains through to 2020.This is a Budget that looks to the future and to the substantial opportunities New Zealand has earned.If we stick to the plan the Government has outlined we can grasp those opportunities and deliver sustainable growth that all New Zealanders can share in.Mr SpeakerI commend this Budget to the House.Hon DAVID CUNLIFFE (Leader of the Opposition):ImoveThat all the words after “That” be omitted and replaced with: “this House has no confidence in a Government that has failed to put people first that has widened gaps where too many of our children grow up in poverty that has failed to provide enough good jobs but has lowered incomes that has no vision for our nation’s long-term well-being but is mired in politics as usual.” At the end of the day this Budget should not be about politics as usual. It should not be about National versus Labour left versus right usversusthem. This Budget should be about those whom we are here to serve about New Zealanders in their work in their homes in their families. It should be about all of us in this country and the opportunities that we all need to live a good life. The Government says the economy is in recovery. Some even say it is booming—a so-called rock star economy. We ask New Zealanders whether that is really true for you. Where is your recovery? Is your household budget booming? Where is your fair share? Or are you being squeezed by higher costs and lower wages power food interest rates?Today I want to show three simple things to Kiwis. The first is that the much-hyped fiscal surplus is not worth the wafers it is written on—it is smoke and mirrors. This is a “fudge-it Budget”. The second is that this Government continues to favour the few at the expense of the many. This is not a Budget; it is a Cabinet club annual report. It will take more than a few election-year cosmetics to change that. The third is that we want for all New Zealanders for New Zealand to be the fairest most decent country inthe world and that will take serious long-term policy change that will create genuine opportunity reduce poverty and lift all our people up in their work in their homes in their families.This is obviously a “fudge-it Budget”. It is a wafer-thin smoke-and-mirrors fiscal surplus possible only because National has asset-stripped Housing New Zealand taking another $90 million out and stripping 40 to 70 percent of State houses out of our regions and is now underfunding Canterbury as well.XXXFO It has cut $567 million out of the Canterbury rebuild relative to last year’s infrastructure budget. It is holding on to $480 million of ACC levies for another year which is more than the entire wafer-thin surplus is worth. And there is an unprecedented $375 million interest-free loan for Auckland Transport which would normally be capital spending. That just happens to be $3 million more than the total surplus. Oh yes and there is a rosy 4 percent growth forecast for the current year.National says the “fudge-it Budget” is “steady as she goes”. Steady as she goes all right—just do not ask where she is going. If you asked John Key what kind of New Zealand he wants to see in 10 years’ time what would the answer be? Just what we have got now but with more inequality more golf courses and a new flag. Six Budgets and still no vision. As Michael Cullen would say the one-trick pony is doing its one trick: the dance of the six veils. And what do they tell you? The teaser is that the tax cut is under the seventh.The numbers actually speak sadly for themselves. Numbers like $56 billion—that is how much new debt has piled up under National. Numbers like $1.2 billion a year—that is the ongoing cost of National’s tax cuts for the top 10 percent. Numbers like $10 million a day—that is the interest we are paying on National’s debt: $10 million every single day. Think about how many kids could be lifted out of poverty for that. Under this Government there is not one New Zealand; there are two New Zealands. One is for a few self-interested rock stars increasingly drunk on power and plenty and privilege and increasingly out of touch with the rest and the other is for New Zealanders struggling to pay the bills and get ahead running harder to keep up and unable to catch the fading Kiwi dream. I ask New Zealanders where your recovery is. Have you got your fair share? Is this Budget about you or about the Government? The Government says that it has balanced its books. Have you been able to balance yours?For too many New Zealanders the answer to those questions is clearly no. Real wage growth is actually forecast to go down—to go backwards—in the Budget the Government has just handed out. That is why the other set of numbers the ones the Government will not be boasting about are so heartbreaking. Numbers like 285000—that is how many Kiwi kids are living in poverty facing small cruelties like having no raincoat not being able to see a doctor or lying cold in their bed. Numbers like 50000—that is how many more New Zealanders do not have jobs since this Government opened its doors to businesses. People are seeing their employers downsize close their doors or just get left to the cold winds of the market. Numbers like 46 percent—that is how many Kiwi workers did not get a pay rise in the last year despite the so-called rock star recovery like the care worker I met last year who told me she had not had a pay rise since Helen Clark was the Prime Minister. And numbers like $3.60—that is the price of a 2-litre bottle of milk which a young mum in my electorate could not afford to buy for a child who had weak bones.And do you know what? It is numbers like that that make the real difference. I would not begrudge John Key $56 billion in debt if he had actually lifted those children out of poverty if he had got New Zealanders back to work if he had given a break to New Zealanders who have been struggling to pay the bills given them a shot at a better job and better pay. But do you know what? None of that has happened because that isnever what this National Government has ever been about. Since becoming the Government National has reinforced the privilege of the well-off. Its major tax changes cut taxes for the rich and raised GST on everybody else.XXXFO It flogged off the family silver to the 2 percent of New Zealanders who could afford to buy it and the foreign speculators who clipped the ticket.This is not a Budget for New Zealanders; it is favours owed to big corporates big noters and the big end of town. There is even a $1 million stage show for Oravida. There is another $40 million of subsidies for irrigation for the dairy industry which has already had $400 million and is literally swimming in cash. It is forgetting about the need for decent taxation of property speculators. It is still open season on them buying and selling homes all across Auckland. There is no help whatsoever for first-home buyers but there is assistance for the building-product companies to get cheaper supplies.Now just a few months before the 2014 election National has brought down what John Armstronghas just said is a Budgetthat rifles through Labour’s chocolate box and finds a few sweeties to call its own. He has called it the “Great Brain Robbery” and I tell you that it is David Parker’s brain that has been robbed. New Zealanders know that after half a decade governing for the few a few cosmetic changes are just a cynical election-year stunt not a new direction. Paid parental leave is 16 or 18 weeks under National but would be 26 weeks under Labour. The parental tax credit is less than under Labour’s Best Start plan. It is what Paddy Gower called a baby-sized bribe. On bowel cancer screening National is finally getting around to rolling something out 5 years too late and about 3 months after Annette King just announced our plan.The announcement of a plan for kauri dieback disease is just in time as Phil Twyford and I have already announced ours.These small concessions are nothing more than a pale imitation of the new direction that a Labour-led Government would bring—a direction where people matter most. It has a very different vision for New Zealand one where we believe that the measure of economic success is whether New Zealanders’ lives are better and whether it is easier for them to get a job pay the bills and raise their kids. I believe we can do better as a country. I believe New Zealanders deserve better than the low expectations and easy cynicism of this Government. That is not what we want for New Zealand. We want New Zealand to be the fairest most decent society in the world.Labour stands for full employment so that every New Zealander who wants to get a job can get one. That is why we are committed to bringing unemployment down to 4 percent by the end of our first term. We have done it before with an average of 3.9 percent over 5 years when we were last in Government. Our monetary policy upgrade will help our exporters create jobs. Our forestry and manufacturing upgrades will reward innovation investment in those job-rich export industries. KiwiBuild our plan to build 100000 affordable homes in 10 years will turbocharge the construction sector. KiwiSaver will help build bigger savings so we are not at the mercy of foreign investment flows. A capital gains tax will swing money away from speculation and towards production and innovation. How about decent employment laws that do not see progress taken off the back of workers and an increase in the minimum wage in our first 100 days?Housing is the largest cost for most New Zealanders and it has never been less affordable. When sofewpeople have the chance of securely owning their own homes when renting has become so expensive and so insecure something is deeply deeply wrong. It is time to take speculators out of the property market and to get fairness back in.XXXFO It is time to build 100000 new homes principally for first-home buyers. It is time to tackle the high cost and low quality of rentals. It is time to lift the quality of houses with a healthy homes guarantee. It is time for measures that will cut foreign speculation on Kiwi homes and make speculators actually pay tax like wage and salary earners do.For our families under Labour you will see decent paid parental leavethanks toSue Moroney. You will see a better tax policy that ensures that everyone pays their fair share of tax. Under National half of the top 100 richest New Zealanders are on the bottom tax rate—shame. Under Labour it will be the best possible start for our kids. That means more money for health more money for education more money for the most vulnerable—hey we are even going to bring back adult and community education.This programme to drive economic growth and improve the lives of New Zealanders will be built on solid fiscal foundations. You know the next Labour Government will run fiscal surpluses every year unless there is a big economic downturn or a domestic disaster. Our policies will be fully costed by this man Mr Parker and we will bring down National’s record debt. Labour has nothing to prove here—Hon Members: Ha ha!Hon DAVID CUNLIFFE: You may laugh but Labour’s 9 years in Government was nine straight surplus Budgets—nine straight surplus Budgets. It has taken the dance of six veils for National to find the first one. It has taken six veils and there is not much under the kimono.In conclusion the next Labour Government a Government that I will lead will be a Government that puts people first. This is a “fudge-it Budget” a Budget of low expectations easy cynicism and cosmetic change. Gone are Mr Key’s days of apparently being ambitious for New Zealand because the rock star economy is apparently for somebody else not for you. Gone are the days of a brighter future. Now Mr Key spends his time talking New Zealand down. He says reducing unemployment to 4 percent is a dream. He says that there is nothing that can be done. Ambition and belief in New Zealanders have given way to snide remarks and political cynicism. That is politics as usual.Labour will build a nation in which every New Zealander has a secure job in which owning a home is not a fading dream and in which we can raise our children in our own country and realistically hope that our grandchildren will live here too so that we can grow old with them not Skype them. We will build a nation in which every New Zealander including the 285000 children growing up in poverty can share in that dream too. Labour trusts Kiwis to build this nation together and we know that a Government that backs them can do it together. Today John Key and his Government have showed once again that they do not have what it takes to make New Zealand the place that all New Zealanders deserve. This Budget proves—and you can tell by the way they are hanging their heads team—that it is time for them to go.Rt Hon JOHN KEY (Prime Minister): Thatwas a bitof awoeful speech from David Cunliffe was it not? The only half-decent line was one written by John Armstrong—it is a shame he did not write the rest of the speech because it might have been vaguely interesting. As for the label that David Cunliffe put on the Budget I hate to tell him the bad news but that was actually the label that Rodney Hide put on the 2002 Budget so if he had stolen a few of the decent ideas from the ACT Party he might have been able to give a half-decent speech but he could not. But let us be honest—it is David Cunliffe. He is doing about as well for the Labour Party as Benji Marshall did for the Blues.David Cunliffe is the man who has about as many supporters in his caucus as Brendan Horan has in his—one. That is it. And here is the winner—he is shaking hishead over there—Grant Robertson. Good news Grant good news son. You are 127 days 3 hours and 55 minutes away from being the leader of the Labour Party. Fantastic—fantastic! There is no doubt that Grant assisted David in the writing of that speech. You see this is what is vaguely interesting at the moment. The Labour Party—and I kid you not; this is an absolutely true story—is out there polling. It is not polling on its policies; it does not have any and you could see that from the speech. It is—truthfully—out there asking this question: is Shane Jones going to be missed from the Labour Party? Well here is a tip: yes actually! He is the only guy who believes in economic development and to quote Shane why would he want to hang around and be economic development Minister in a Government that does not believe in economic development?This was a very very good Budget by Bill English—a very good Budget. It reflects 6 years of hard work by not only the Government but by businesses and New Zealanders from one end of the country to the other. It is a confident Budget for a confident nation. Overwhelmingly across the nation the majority of New Zealanders believe that this country is heading in the right direction. It is a Budget that sees the books back in surplus growth at 4 percent wages rising faster than inflation and there is more money in this Budget for families for businesses and for the most vulnerable.XXXFO This is a Budget that is focused on growth jobs and prosperity. It is a Budget that looks to restore the core finances of New Zealand. It is a Budget that like this Government is focused on the issues that matter. It is a Budget that means New Zealanders will recognise that this is a great country a great place to raise a family and with a Government that is committed to doing everything it can to make that situation even better.This was Bill English’s sixth Budget. As he pointed out yesterday he has had as many Budgets as he has had children which is living proof I think—and I am sure you will agree with me Mr Speaker—of why you should have a Catholic Minister of Finance. What should we contrast this Budget with? I know: let us contrast it with Labour’s alternative because David Cunliffe read out Labour’s alternative on Monday. In fairness it was not really a Budget; it was a wish list. It was mercifully brief but it went a little bit like this—Hon Annette King: Cameron Slater’s line eh?Rt Hon JOHN KEY: Nope. “Dear Santa please please Santa could you bring me 4 percent unemployment and whopping big future surpluses. I have been a good boy Santa even if I won’t tell Mummy and Daddy who the two secret donors to my trust were. Santa I’ve tried really hard. Even if I did muck up the baby bonus and Shane Jones’ departure and a few other things I’ve been a really really good boy. Love David. P.S. Don’t worry I will let the reindeer sleighs go in the fast lane even though I’ve banned the trucks.” That was a summary of Labour’s alternative Budget. Actually—let us be honest—that was actually slightly longer than Labour’s alternative Budget.Hon Member: And more thoughtful.Rt Hon JOHN KEY: And more thoughtful. And I wrote it myself unlike the Leader of the Opposition—always a positive.You see the difference between a wish list and a Budget is here in some interesting questions we might all like to answer. Did Labour support any of the savings that this Government has made to ensure that this country came back to surplus in any of the previous five Budgets? The answer to that is no it did not. Did Labour support welfare reform that will see and has seen so many New Zealanders get back to work? No it did not. Did Labour support tax changes to reduce tax rates paid by every single New Zealander across the country? No it did not. Did Labour support a 90-day probationaryperiod so that small businesses could have the confidence to take on a worker? No it did not. Did Labour support Resource Management Act reform so that people can build houses faster and support the growth of businesses? No it did not. Did Labour support housing accords so that we could have special housing areas? No it did not.And of course and my favourite: did Labour support the making ofTheHobbit movies in New Zealand so that 5000 jobs could be created here? No it did not. Did Labour support saving 3000 jobs in Southland when it came to Tīwai Point? No it did not. Did Labour support and does it support irrigation for our farms so that we can see a significant increase in GDP? Does it support oil and gas exploration? Does it support foreign investment or skilled migrants? Will it even support a free-trade agreement with the largest economy in the world the United States? No it will not.Just before Labour members get a bit starry-eyed about how it all was under Labour let us just run through a bit of a checklist—here are the facts about the situation when Labour when it left office and what we inherited. In 2008 this country was in recession; this year it is going to grow at 4 percent. In the last 5 years of the Labour Government there was a 50 percent increase in Government expenditure; we have got it under control. Mortgage rates for those homeowners whom David Cunliffe was talking about were 10.9 percent under Labour; under National about 6 percent. Food prices—the thing that New Zealanders worry about—were up 10.9 percent in the last year under Labour; 1.5 percent under this Government. House prices went up 96 percent over the 9 years of Labour; 28 percent under this Government. Electricity prices went up 72 percent under Labour; 20 percent under this Government. The current account deficit was 7.9 percent; it is 3.4 percent under this Government. And maybe—maybe—the most telling sign of all is that under the Labour Government 3000 New Zealanders a month got up and packed their bags for Australia. Under this Government that figure it is 350—the lowest since records began in 1986.On Tuesday Australia delivered a Budget. If you ever want to see what an experiment of a Labour-Greens Government looks like it is called Australia. It is called Australia and Tony Abbott is having to pick up the pieces. Here is what the pieces look like. It means less support for families. It means billions and billions less for education and health. It means a pension age of 70. It means higher tuition fees higher fuel costs increased doctors’ charges and thousands fewer employed in the State sector. Despite all of that Australia over the next forecast period will rack up $100 billion of debt at the same time that this National Government will bank for New Zealanders $7.5 billion of surpluses.If members want to talk about the facts I look forward to the debate about the facts because this is a very very good Budget. Its first focus is families. Thereis $500 million for families with free doctors visits for under-13s and free prescriptions for under-13s. We are talking about 400000 New Zealand families having complete confidence to take their young ones to the doctor any time for free. National delivered that for New Zealand families.There is $171 million dollars for paid parental leave—an affordable scheme extended from 14 weeks to 18 weeks and far more flexible than the stuff Sue Moroney was talking about. For the many—and there are many—who miss out there is an extension of the parental tax credit from $150 a week to $220 a week lasting 10 weeks not 8 weeks. It is an affordable package recognising that mothers want to stay home in those formative times with their youngsters and they will be supported by this Government. There is $155 million extra for early childhood education $33 million for vulnerable children and eight new children’s teams around the country.The No. 1 issue that New Zealanders worry about is health. Well in this Budget on the back of the very fine work that Tony Ryall has done as Minister of Health—and willhe not be missed as one of the great Ministers of Health of this country—there is $15.6 billion. There is $112 million for disability support services and $110 million for elective surgery. The difference between National and Labour—and we heard it from David Cunliffe—is that Labour knows how to borrow and it knows how to spend but it does not know how to run things very well. Under this Government there will be 40000 extra elective surgical operations $20 million for rheumatic fever and $6.3 million for cochlear implants. Twenty thousand New Zealanders a year are diagnosed with cancer. Under Labour they go to Australia—where the other 3000 a month are leavingfrom. Under National they get the gold standard of 4 weeks or less. There is more money in this Budget for cancer care.What is more important than education? There is $10 billion in this Budget and $359 million to improve the professional standards of our principals and teachers. This is a Government that is not afraid to measure monitor and report on the progress of a child. This is a Government that is not afraid to put $359 million into making sure that every teacher that stands in front of every student in a class is of excellence. That is something to be celebrated and proud of.In welfare reform what a tremendous job Paula Bennett has done. What a tremendous job she has done. There were 1500 people a week leaving welfare and going into work in the last 12 months. There are 30000 fewer children living in benefit-dependent homes. It was pretty predictable that David Cunliffe would get up and talk about income inequality. It suits his argument butunlike the truth it is not real. You see—Hon David Parker: It is—it is.Rt Hon JOHN KEY: Well you do not like it. When you were in Government you liked Bryan Perry from the Ministry of Social Development who runs the most comprehensive study but when you are in Opposition you do not like it. What Bryan Perry’s study shows is that income has not become more unequal in the last decade. In fact what it also shows is that when we compare ourselves to our peers—Australia the United Kingdom Canada the United Sates—all of those countries are more unequal.Let us also have a look at this situation. This Budget also continues to support the most vulnerable in New Zealand with Working for Families accommodation supplements and income-related rents. But this is also what it shows—and this is an interesting point for New Zealanders. It shows that the top 2 percent of taxpayers in New Zealand pay 22 percent of all personal tax in this country. The top 12 percent of households in this country pay 76 percent of all net income tax before you even account for New Zealand superannuation. Well here is a question for Labour: if 12 percent of households paying 76 percent of tax is not enough how much is enough? How much is enough?The Budget does more for Christchurch more for science and innovation more for apprenticeships more for transport and more for housing. It does a lot more in those very important areas. Let me make this final point. This is a Government—Hon Trevor Mallard: Tell us about Judith Collins. Tell us about Judith.Rt Hon JOHN KEY: That is right—that is exactly what you would say. You are an Opposition that is worried about muckraking and trivia and you have not got a decent thing to say about the economy. Well guess what? I am proud to lead a Government that is focused on the issues that matter to New Zealanders—the economy law and order health and education. That is what we do on this side of the House. We get the job done.On that side of the House they are worried about all sorts of things but they are not the things that New Zealanders at home are worried about. How do we know that? Because the poll that was taken over the last 10 weeks saw Labour fall under 30percent. Why? Because people are sick of hearing about trivia and muckraking and you know what? David Cunliffe might have promoted Trevor Mallard back in the shop and that will lead them all the way to where it took Phil Goff—to 27 percent or less and he knows it. David Shearer knows it too. He knows that it is the wrong way to go.This Government is going to keep talking about the issues that matter. This Government is going to say to New Zealanders that there is a way forward that is progressive and positive. It is about a future where we back New Zealanders to succeed. We back this country to go well. We back this country to be able to sell more to the world than we buy from the world. We are not threatened by being a multicultural society. We welcome foreign investment. There was a time when Labour members used to welcome migrants. Now they stand on a farm with a New Zealand flag.This is a Government that is focused on a New Zealand that is winning on the world stage. That is why we are becoming wealthier. That is why so many people want to come and live here. If David Cunliffe wants to keep talking as the Opposition does about trivia and muckraking we will keep talking about the economy law and order health and education. We are a very lucky Government to have Bill English delivering six magnificent Budgets. And does it not say it all today—we are in surplus; Australia is $50 billion in debt. More people want to live here than ever want to go and live in Australia. This is a Government that is getting it right on behalf of New Zealanders.Dr RUSSEL NORMAN (Co-Leader—Green):Thisis the “Cabinet club Budget”. The Minister of Finance has delivered the “Cabinet club Budget” on behalf of the NationalGovernment. This is the Budget of the 1 percent by the 1 percent for the 1 percent. The wealthiest 1 percent in our country owns 16 percent of the wealth. This “Cabinet club Budget” will make sure that the 1 percent get given even more. But 50 percent of everyday New Zealanders own only a tiny 5 percent of all the wealth in our country. This “Cabinet club Budget” will make sure that they get even less. That is how the Cabinet club works. The “Cabinet club Budget” says to the overwhelming majority of New Zealanders: “You are excluded from the Cabinet club. This is not a Budget for you.” But the “Cabinet club Budget” is a Budget for the polluters. If a corporation pollutes a river then the “Cabinet club Budget” will subsidise that pollution. If a corporation pollutes the atmosphere with greenhouse gas emissions then the “Cabinet club Budget” will subsidise that pollution. If a corporation wants to mine a park or it wants to mine in the spawning ground of blue whales then the “Cabinet club Budget” will subsidise that mining.This is a Budget for those who have the ear of the Prime Minister. The vast majority of New Zealanders who hoped that the Government might stand up for them—well those people are not welcome to be members of the Cabinet club. Just because ordinary New Zealanders are excluded from the Cabinet club that does not mean that they do not have a role. You see ordinary New Zealanders are welcome to pay the bills at the Cabinet club; in fact they are required to. When the members of the Cabinet club gave themselves a $5 billion tax cut they added $5 billion to the Government’s debt and it is ordinary New Zealanders—yes Mr Prime Minister ordinary New Zealanders; everyday New Zealanders who did not get the tax cut and who are not in the Cabinet club—who are the ones who have to pay back the $5 billion debt plus interest. Think of it as their way to be part of National’s Cabinet club. The Green Party believes it is time to take our country out of the hands of the National Party’s exclusive Cabinet club. It is time to steer our country away from debt and borrowing and to build a healthier more sustainable economy that puts our people and our environment at the heart of our economic management. We can have a smarter fairer more inclusive and more sustainable economy but sadly this exclusive “Cabinet club Budget” does not deliver one.I will tell you what the legacy of this National Government will be. The legacy of this Government will be 30 percent of children living in poverty its legacy will be a 50 percent increase in net greenhouse gas emissions and its legacy will be debt mountains and mountains and mountains of debt—fiscal debt economic debt social debt environmental debt. When John Key became Prime Minister in 2008 Government debt was $14 billion. Today that figure has soared to $61 billion and the Budget projects that it will increase to $63.6 billion by mid-2015. That is money that our children and our grandchildren will have to repay plus interest. Let us take a minute to put John Key’s debt into perspective. Government debt now equates to about $13500 for every man woman and child in the country and this Budget pushes that to over $14000 for every person in New Zealand. That is nearly $11000 per person more than when John Key became Prime Minister. The man should get some kind of debt performance bonus. A ball and chain should be awarded to him that he can pass to future generations. John Key has been borrowing money at about $17000 per minute for every minute that he has been Prime Minister including the hours he spends at the Cabinet club—where apparently he is not the Prime Minister but he is none the less building up debt at $17000 a minute while he attends the Cabinet club—and the annual cost of servicing the National Government’s debt has risen by over $1 billion since 2008. That is $1 billion every year that we could be investing in our kids’ health and education or using to clean up and protect our environment.The Government will say that the global financial crisis and the Christchurch earthquakes are to blame for this situation but it is the decisions that National made in response to these crises that have made the debt monster even worse. In the middle of a global financial slow-down National gave tax cuts to the wealthiest New Zealanders. This starved the Government of over $5 billion in revenue and now the Government has to borrow to cover that cost. That is the simple truth. Let me be clear: the Government borrows money that we all have to repay in order to pay for big tax cuts for the wealthiest people in the country. That is wrong. Those tax cuts for the wealthiest have also made New Zealand a more unequal country. The richest 1 percent now owns 16 percent of all the wealth in the country while 50 percent of everyday New Zealanders have just 5 percent of the wealth. If you think about that as a building it is like the top 1 percent having one and a half floors at the top of the building all to themselves while half of the country—1.5 million adults—are crammed into only half of the basement.xxxfo When I asked the Prime Minister about this yesterday he suggested that the Green Party did not have ambition for a more prosperous country. Well Mr Prime Minister we have huge ambition for New Zealand but unlike the Government our ambition is for all New Zealanders not just the 1 percent. John Key’s ambition is to enrich the 1 percent and he is achieving his targets. The NBR Rich List of the 100 or so richest New Zealanders—they have increased their wealth by about 50 percent under National. Great job Prime Minister for the 1 percent. We can see who you work for.Today Bill English announced that he hopes to achieve a surplus by June 2015 a surplus as thin as the ice that Judith Collins has been skating on. But the question is this: who is paying for the surplus? Well Rio Tinto is not paying for the surplus. It received a $30 million Government handout despite making a $3.7 billion profit. Of course Skycity is not paying for the surplus either. Following a dinner with the Prime Minister next thing it got new gambling laws that will see it further profiting off the human misery of Auckland’s problem gamblers. Warner Bros is not paying for the surplus either. It got its publicly funded tax breaks and employment law changes from the star-struck groupies of the front bench of National. And Anadarko and the miningcompanies are not paying for the surpluses either. They continue to get big Government subsidies while paying some of the smallest mining royalty rates in the world.So if the wealthiest corporations are not paying for the surplus who is? I will tell you. It is the people of Christchurch—still waiting for their homes to be repaired their roads to be fixed and their flooded neighbourhoods to be safe and dry. They are paying for the surplus and it is our children who turn up to school with empty bellies sick and not ready to learn who are paying for the surplus. There is nothing in this Budget for poor kids. Paid parental leave although welcome will make no difference to the three out of five children living in poverty whose parents do not have a job. It is the young first-home buyers struggling to repay their student debt while being locked out of the housing market who are paying for the surplus. And it is our environment that is also funding this faux surplus as 50 percent of our rivers and lakes are too polluted now to swim in. Our kāka and our rock wren are paying for the costs of this mythical surplus too along with the other threatened native birds that live in Victoria Forest Park which National has opened up for mining. The Department of Conservation is having its budget decreased once again with a $16 billion cut in real terms while the funds set aside for protecting our iconic wildlife and our most treasured natural heritage have been cut by $7 million. Our health system will pay for the surplus with significant real cuts in the health funding budget in the 3 years ahead. Likewise education has significant real cuts over the next 3 years. National is paying for the surplus out of health and education funding. It is cutting funding in health and education in order to pay for this faux surplus. Our people and our environment are paying for this surplus not National’s Cabinet club mates.The Green Party believes that all our children should have equal rights to the opportunities that this country offers them—opportunities built on the hard graft of generations that came before us. Previous generations built up our power assets but when John Key got into office he sold our power assets making sure that 99 percent of our kids would lose the dividends from those assets while 1 percent would gain from them immeasurably. Almost all New Zealand children paid for the surplus and that is not right. John Key and Bill English appear to have a pathological commitment to saddling our younger generation of New Zealanders with a lifetime of debt and of deficit of opportunity and I say to young New Zealanders: “Don’t accept it.” At this year’s election let us build an inclusive green economy with opportunities for all not just for members of the exclusive Cabinet club. If the news is bad for the Government books then the outlook for household budgets is even worse. The average power bill has risen by $361 a year under National and if that is not bad enough incomes in Ōtaraand some of the poorest places in New Zealand have dropped in real terms by 20 percent under the Government. Families are really really struggling. The truth is that the so-called competitive power market has failed in the same way that the housing market failed our families and National’s response is more of the same.If this had been our Budget we would have introduced our electricity reforms to decrease power prices green our power generation and improve the overall efficiency of the energy sector. If this had been our Budget the Green Party would have introduced NZ Power as part of a smart solution to transition our energy sector into the modern world. If this had been our Budget we would have rolled out clean energy like our solar homes initiative so that families can create their own electricity and reduce their dependence on the power companies. I am talking about giving families real energy freedom. Under our initiative families and households will get low-cost loans to pay for solar power installation which they can repay through their rates—enjoying free sustainable power for decades. The Government has done nothing to ease skyrocketing house prices and that is a tragedy for young Kiwis trying to get into the housingmarket. If this had been our Budget the Green Party would have introduced a capital gains tax on property other than the family home to relieve the pressure on the housing market. If this had been our Budget we would have introduced our Home for Life package which would have put homeownership within the reach of tens of thousands of Kiwi families. We think that renters also need a right to good quality housing and the protection of stable tenancies. These smart green ideas address the very real day-to-day household cost pressures on everyday New Zealanders not just those of John Key’s Cabinet club.There is nothing in this Budget that will propel the New Zealand economy into the 21st century by creating good green jobs and protecting our environment. Creating economic prosperity without trashing our environment and our climate is the single biggest economic and environmental challenge of our time and the potential gains from a low-carbon high-tech economy are too significant to be ignored. There is a glaring gap in today’s Budget where the plan for a cleaner smarter economy should be. In Government the Green Party will create a smarter fairer economy that will deliver prosperity for everyone—one that creates jobs reduces inequality and protects our environment. It is triple bottom-line accounting which is missing from the National Party’s old-school Cabinet club thinking. The estimated potential market share of the global green economy available to New Zealand is up to $22 billion annually. To put this economic opportunity into perspective that figure of $22 billion is double our current export earnings from dairy. Imagine having a truly diversified economy that makes us twice as much money as dairy does employs more people in diverse occupations and does not pollute our waterways. It is a win-win model that through its actions in its previous Budgets National has repeatedly rejected.Instead National has overseen a dangerous simplification of the New Zealand economy. Our economic simplification in dairying is at the exclusion of job opportunities in cleantech and other industries. As the Budget documents state manufactured exports are falling and the current account deficit is widening. The singular focus on low - value-added commodity exports specifically milk powder and raw logs has exposed the whole economy to the risk associated with a single product single market approach. Of course we have been here before. Exporting agricultural products to the UK worked well for a while but onceit joined the EU we were without a buyer. At that time our strategy was to diversify yet here we are again with an economy overly almost singularly focused on dairy into one market—this time China. I agree with the concerns raised by experts that we have too many eggs in the China basket and we need a more diversified export base. Any downturn in the Chinese economy will disproportionately damage ours. This is not a smart way to run a modern economy.All the evidence shows that New Zealand is uniquely placed to seize the opportunities arising from the global shift towards clean energy. In 2011 the world invested US$280 billion in renewable energy and the global market for clean technologies is valued at more than US$5 trillion. We already have expertise in wind and geothermal energy technology and our “clean green” brand holds real economic value. The opportunities are there and the Green Party will seize them 100 percent with open arms. But building a green economy requires new institutions to help drive us there. That is why the Green Party announced the Green Investment Bank this week—to accelerate New Zealand’s transition to a smarter greener economy. The bank will help innovative low-carbon projects and proposals to get finance so they can get off the ground. PricewaterhouseCoopers estimates that the clean technology sector could be worth between $7.7 billion and $22 billion to New Zealand by 2015 with the right focus and the right investment. Despite this and the fact that the cleantech sectoris taking off overseas National keeps funnelling money into carbon-intensive industries like coalmining oil drilling and industrial dairying. The Green Investment Bank will direct investment into the clean profitable investments of tomorrow. It is just one of a suite of announcements the Green Party has announced to make sure wehaveour economy heading in the right direction for a high-tech low-carbon economy.The Greens are committed to changing the old way of doing things in order to build a smarter fairer cleaner world for all of us. This election is our opportunity to embark on that journey to take the destiny of our country out of the hands of the exclusive Cabinet club and put it into the hands of all New Zealanders. It is the journey we must take to ensure that our kids can stay here and work rather than move overseas to get the good jobs that they want. It is our journey towards an inclusive green economy where women and men are paid fairly and earn enough to lead good lives and offer the opportunity of great futures to their children. It is the journey that will see our rivers and lakes sparkling once more. It is the journey that will ensure that our forest parks echo with the haunting calls of the kōkako rather than the deafening din of mining rigs. It is the journey towards a stable climate and a prosperous planet for us and our children. Together we can build an inclusive green economy for all of us. At this year’s election let us end the exclusive Cabinet club let us put an end to the exclusive Cabinet club economy and the exclusive “Cabinet club Budget” and let us build a smarter greener economy for the benefit of all New Zealanders.Rt Hon WINSTON PETERS (Leader—NZ First):Speakingon behalf of the fastest-rising political force in this country New Zealand First I say that in this National Budget cronies get cake; Kiwis get crumbs. This is an exclusive members-only Budget of the “National club”. There is little for the ordinary people. Mr Key got up like a choirboy then went to falsetto then started acting like a comedian which he is not and then he walked off. Unfortunately this Budget will not take the heat off Judith Collins—quite the reverse. It is so boring that it will bring that back on and so fast you could say that it will be over by lunchtime.Here we go. Where is the economic strategy to address the weaknesses of the economy and the growing inequality in New Zealand the shameful inequality which is clear and deeply troubling? The Budget will of course benefit National’s cronies. Everyone from Balclutha to Beijing now knows that the best blue-chip investment to make in New Zealand is a donation to the National Party—absolutely gilt-edged blue-chip.The weakness of the economy is there to see for anyone who lifts up the engine’s bonnet to look at what is happening within the engine itself. Despite the best terms of trade in decades we still have a chronic balance of payments deficit that the Budget pretends is not even there. National members call themselves economic managers. Where is the action on the fact that we have not had a balance of payments surplus for years? You see under National cronies get the cake; Kiwis get the crumbs.Over the period between the end of 2008 and 2013 Australia’s economy grew 13 percent. Singapore’s grew 28 percent. What was National’s record and New Zealand’s record?Hon Gerry Brownlee: I don’t know.Rt Hon WINSTON PETERS: Oh Mr Brownlee says: “I don’t know.” He is No. 3 in Cabinet but he does not know which is no surprise to anyone over here. Well from 2008 to 2013 New Zealand’s economy grew by 8 percent. Do you call that a rock star performance? Do you call that a rock star economy?Le'aufa'amulia Asenati Lole-Taylor: Rock bottom.Rt Hon WINSTON PETERS: My colleague is right. Asenati Lole-Taylor says it means we are heading for the rock bottom. So there is a small highly contrived Budgetsurplus like some back-door bee-keeper’s—bookkeeper’s—balance. Have a look at the facts. Have a look at the facts.Hon John Banks: A bean-keeper’s balance.Rt Hon WINSTON PETERS: It is because they deal in small business. We are talking about a country Mr Banks where the Government’s income is over $65 billion. There are 100 ways to manipulate a surplus. I know because I was the Treasurer when we had real surpluses not these contrived ones.[Interruption] Oh they hate to be shown by comparison to be incompetent.Look at the facts. When National came into office guess what the Crown debt was? That is the debt the Government owes to the rest of the world. Well it was $10 billion. What is it now? It is $60 billion—up six times. That is all the work of the brilliant money trader from Merrill Lynch and the economic genius from Dipton who is so incompetent that a 24-year-old child can replace him. The debt went up six times because of a money trader and a brilliant economic expert who for 6 tawdry years have presented Budgets that take us nowhere. This is a “steady as you go when you are going nowhere Budget”. It begs the question of how the surplus was generated. If this was a private company the auditors would be in jail. If this was a private company with a balance of payments crisis and massive debt up six times—the national debt which includes everybody the public included is $150 billion. That sounds like Spain. It sounds like Portugal. If this was aprivatecompany the auditor would be in jail.Lots of smoke and mirrors and all sorts of cuts and devices have been used. We have a massive problem with hundreds of rotting school classrooms. Did the National members mention the rotting schools they must fix up first before they make this investment in education? Not a word but we all know they are there andthe numberis rising. There have been scores of cuts in crucial public services such as conservation and biosecurity. We are in grave danger on the biosecurity issue because as anybody inside customs and border control will tell you they are up against it—undermanned underwomaned and underfunded. But the National members sit there and say they are the ones who can be trusted to run New Zealand and our security.And what of forgotten Christchurch? What sort of Government holds back money deliberatelynakedly and secretly from the Christchurch rebuild so that it can manipulate a surplus in Wellington? What sort of country—Hon Gerry Brownlee: That is a lie.Rt Hon WINSTON PETERS: It is not a lie Mr Brownlee and if you will close your big mouth I will explain how I got there.Hon Gerry Brownlee: The man is a liar.Rt Hon WINSTON PETERS:Oh I see I struck a nerve. See when you arrest somebody in the street for burglary they get upset. When you catch a thief in the night they do not go calmly. Ask the police. When you tell Mr Brownlee “You’ve been stealing the money from the Christchurch people and staggering the rebuild so you can get an artificial surplus.” he goes berserk and starts shouting out.Hon Gerry Brownlee: Because you’re a liar.Rt Hon WINSTON PETERS: He cannot say that of course but I do not mind. It would take one to know one would it not? I will leave it to you Mr Speaker. Is that fair? Thank you very much. And Mr Brownlee smiles in confession—he smiles in confession.What about Christchurch? The Government holds back money to manipulate a surplus from the people in Christchurch. They have been suffering year on year on year with a man called Brownlee in charge of it. Is that any surprise?XXXFO You do not have to tell the people of Christchurch who are facing another terrible winter. They know that they have been sacrificed so the Government can boastabout its books and the member from Christchurch in charge of the Canterbury Earthquake Recovery Authority is the No. 1 culprit here. Tell the Christchurch people—Hon Gerry Brownlee: Come and stand against me you wimp.Rt Hon WINSTON PETERS: How can you stand against Gerry when there is no room? Alongside him about a metre away maybe but I cannot stand against him. Tell the Christchurch people whose homes are flooded every time it rains that the federal books are more important than their lives. Go and tell the Christchurch people why the Government is staggering the rebuild. This is now a growing contempt for the Minister himself and for the system itself. [Interruption] Here we go—that is how they got there. [Interruption] Oh! I see I have struck a nerve. The truth always has that effect whether it be in a court of law or in Parliament. It strikes a nerve.Holding back on the vitally needed money to rebuild Christchurch to generate the so-called surplus amounts to a crime. It amounts to a crime against our own people. The facts are clear. The Government has jacked up the numbers from an insurance deal when AMI was taken over. AMI was turned into Southern Response Earthquake Services and there the fiddling started. The proceeds from that sale amounted to—listen to the figure—$252 million which was placed in Government bonds rather thanbeing usedto settle insurance claims. Do you smell a rat here? I do. The Government deal with Southern Response Earthquake Services requires it to put surplus cash on its books into Government bonds as well. This has been boosted by money coming in from reinsurance companies also going into Government bonds. How much? It now holds over half a billion in Government bonds. Does that sound a bit close to the surface to you?The surplusis $375 million and here is half a billion dollars in Government bonds. Bill English boasted of a surplus today. Mr Brownlee go back to Christchurch and apologise to those people because you know who is guilty of having fiddled the books.Hon Gerry Brownlee: Come and stand against me.Rt Hon WINSTON PETERS: Stand against Mr Brownlee? Mr Brownlee I do not like taking candy off a baby. Let these economic gurus from National’s cronies club go and tell the Christchurch people in broken homes begging for relief what is happening to their relief. Under National cronies get cake; Kiwis get crumbs.What about jobs? Where is National’s real measurable action plan for jobs? There are still almost 150000 unemployed people in this country. If you add to that those who want to work but who are underemployed or who have just given up trying you get to 250000 or a quarter of a million people but the National members had the audacity to clap for the Minister of Finance. Unemployment is our single biggest problem. Kiwis cannot get jobs but tens of thousands of foreign students and immigrants are getting work visas in front of them. How does that work? Well under National cronies get cake; Kiwis get crumbs.Where is the action plan in the Budget for the cost of living? Over half of those employed in New Zealand had no pay increase last year —no pay increase. Wages are stagnating. Costs are going up. Electricity prices are soaring gouging the public without restraint. It will be another cold winter for pensioners and low-income families under National of course. Why would National care? Their cronies get the cake and Kiwis get the crumbs.There is a fire sale on assets that we used to own. The Budget does not take into account the loss of our productive asset base. Much of our primary agricultural land has gone to foreign ownership. Many New Zealand workers have ended up on the cheap scrap heap of labour for overseas investors to exploit. Why is there no action?Tim Macindoe: He can’t even read.Rt Hon WINSTON PETERS: Why is there no action? The man from Hamilton tells you it all. He used to teach about ethics and principles in a school once upon a time. Of course he had to read it from a book because he did not know about it himself. He could not understand anything about it.Where is the admission that the housing crisis is due to National’s incompetence? Where is the admission that the housing crisis is all National’s fault? For almost 6 years it has blatantly ignored all the underlying causes. Anyone with half a brain—which rules out Gerry Brownlee—knows that tens of thousands of Auckland houses have been gobbled up by overseas buyers. It is a bonanza for foreigners. Foreigners come here and there are no restrictions on buying no requirements no taxes—come one come all.Treasury predicted just the other day that migration to New Zealand would go up by 41000 per year from here on in. The Government has got no plan to address the crisis—no plan at all. That is utter madness. It allows people to scoop up homes—50 60 or even 77 in one man’s case—and Mr English got up in the House yesterday and said “I know how many landlords there are.” but he has not got the wit to say how many properties each landowner owns. Even a moron could work that out. We have got 22000 landowners from abroad but how many properties do they have? Is it 22000? No siree. No siree. Treasury and now the Reserve Bank say we need a survey of overseas ownership. That is the last thing National wants because now it is exposed by its duplicity. It does not want facts; it prefers dogma. Under National cronies get the cake; Kiwis get the crumbs.Where is the real infrastructure plan that goes beyond building more motorways? There is nothing significant. Auckland is deep in infrastructure deficit. What happened to the rail loop? Nothing. What has happened to provincial New Zealand? Nothing. Where is the vision? National has not got one. No as usual National has taken the easy way out and kicked this vital project of the city rail loop straight into the long grass. Where is the plan to promote regional growth? Why is this Government busting the heart of heartland New Zealand? Again there is nothing substantial or meaningful from the Budget for the regions. They produce export wealth and in return they get exploited. Under National cronies get thecake; the Kiwis get the crumbs.This Budget has been weighed and has been found to be failing. It is shallow and it is empty. New Zealand deserves better and after 20 September—here is the good news everybody out there in TV land—Tim Macindoe: 3.7 percent—you won’t be here.Rt Hon WINSTON PETERS: After 20 September that man over there will not be here no because he is hopeless. You know what? I could ask the whole of Hamilton whether they know who he is and they would say no. I could ask “Do you know a guy called Tim?” and they would say “Well he can’t be our MP.”After 20 September New Zealand First will ensure that we get a real economic strategy for the challenges our country faces. We are going to go back to the glory days of New Zealand in the past to give you a better New Zealand for the future. We know that we were once the greatest country on earth. We know we still have the same people. In some ways we have still got the same political parties but they are barely alive now. Mr Banks is smiling. He knows what I am talking about. If Holyoake was around today he would not believe what he was watching. If Fraser or Savage were around today they would not believe what they were watching because they wanted back then what we want today.We want our resources to be used by New Zealand people to build New Zealand’s wealth and to expand the happiness of every New Zealander not this Cabinet club which is elitist where the wealthy get wealthier and the poor get poorer—dog eat dog law of the jungle. That is what National members stand for and they should be damnedashamed of themselves. They think they are going to win this campaign. Well stand back and watch because there is lots of motivation now for a lot of people who in 2011 had given up hope to turn out for this election.This party believes in some things that used to be ordinary beliefs but that are special today. We do not believe in selling our land to foreign interests. We believe that State-owned assets belong in trust to the people. We believe that the Government’s role is to protect and defend New Zealanders to be the guardian of the country’s resources. We must help people reach their full potential through enlightened policies—health education housing employment and above all sound economic policies. They all say it of course but New Zealand First believes in it and acts on it.We also believe in special obligations to the old and the young to society’s most vulnerable. We believe in one law for all irrespective of ethnic background. Others give a dog whistle when the election comes close but this is the party that stands by it. We were founded by these principles not by the crumbs of tokenism from the cronies from the “National Club”.XXXFO We believe that Māori needs are the same as all New Zealanders’ needs: good education good housing good health facilities and most of all First World - paying jobs in our own country. New Zealand First believes we must train skill educate and employ our own people first. There is no excuse for the hiring of cheap labour from overseas when so many of our unemployed are on the scrap heap back here. On the issue of foreigners speculating on housing for New Zealanders we have got the courage to say it and to stop it. New Zealand suffers economically from not having a practical plan for its people and blind ideology is not a substitute.In the quiet of the National members having been sublimated by sound argument I want to close by saying that the current economic vision is simply the Auckland housing bubble increased immigration creating consumer demand the staggered and retarded Christchurch rebuild and milk powder to China. We cannot survive without a much more diversified economy. Very soon there will be an election and I want to tell everyone watching this debate today that no matter how difficult and tiring and troubling things have been no matter what sacrifices you have had to make just hang on a bit longer. Just hang on for another 2 months because help is soon on its way in the form of New Zealand First.TE URUROA FLAVELL (Co-Leader—Māori Party): Tēnā koe Mr Speaker. Kia ora tātau katoa. Me tīmata ake i taku kōrero mā tētahi mihi ki te uri oNgāti Dipton. Tēnā koe e whakatakoto nei i tēnei kōrero ki mua i te aroaro o te Whare Pāremata otirā mō tāu mahi i te taha o te Pāti Māori.[Thank you Mr Speaker. Greetings to us all. Allow me to begin my speech with an acknowledgment of the relative from the clan of Dipton. Congratulations to you in respect of this speech that you presented before the House of Parliament and particularly your work with the Māori Party.]CanI start by congratulating the Hon Bill English on working positively with the Māori Party to support initiatives that matter. I also want to acknowledge the leadership the courage and the hard work of my colleagues Tariana Turia and the Hon Dr Pita Sharples who have been focused in their pursuit of real tangible improvements in the lives of all of our whānau. Budget 2014 is a testament to their absolute belief in whānau. I mihi to them both for their lifelong journey and standing up for what is right; for believing and acting in ways that inspire us all to know that we can make change happen.Yesterday a young girl Crystal Te Moananui asked me a question that got me thinking. Crystal and her classmates from Thames South School were in Parliament on what she described as a politically inspired hīkoi. She asked me what some of thedifficulties were that made me who I am today. My instant response was to reflect back to the time when I was 10 years old and I lost my dad. As I think about that time I recall the intense sadness that I had the sense of loss and yet with that there was a powerful challenge to become someone who would have made him proud. The point I am making is that every single one of us in this House—and indeed in this nation—goes through periods of crises in which it is hard to see tomorrow. The Māori Party hears stories every day of everyday whānau who are suffering loss experiencing conflict and are looking for a way forward.Our focus for this Budget then has been on keeping it real. We have listened to the stories of the heroes amongst our communities who tell us in plain language what will make a difference. Our Budget package is built around three strategic themes: building resilience within our whānau hapū iwi and communities; maintaining the momentum that we have created while being in a position to do so; and advancing into new spaces for innovation and development. If there is one thing that every New Zealander knows about the Māori Party it is Whānau Ora. Whānau Ora at its essence is about providing every opportunity for our families to thrive to live the life they dream about and to make their aspirations real.This Budget extends upon the commitment to Whānau Ora by a new investment in Whānau Ora navigators. This is the logical next phase of the Whānau Ora approach. The first phase was building the capacity of health and social service providers to actively respond to whānau goals. We have succeeded in enabling over 47000 New Zealanders to benefit from creating their own whānau plans and to move to greater self-reliance by doing it themselves. The navigator role is now providing support directly to whānau to determine how best to achieve their life goals in areas as wide as income generation healthy lifestyles jobs information technology—whatever our families seek for themselves. While they are determining what it is they need the Government also has a role in removing any barriers that get in their way.In this year’s Budget we are extremely proud of the focus on families and children. This is an emphasis that we have championed over the last 6 years in Government and what we are particularly proud of this year is to see that emphasis carried across into key ministerial portfolios. I want to highlight three specific initiatives we have promoted. Firstly there is a need for paid parental leave to be brought in so that more permanent guardians and parents can also benefit from flexible work arrangements. What we know from labour market researchers is that many Māori and Pasifika women tend to be overrepresented in areas that exclude them from being able to receive parental leave payments. This Budget and the subsequent legislation will address that gap.This Budget secondly increases the parental tax credit which has not been raised since 1999. This is a practical means of supporting low and middle income working families who do not currently receive paid parental leave when they have a new child. Thirdly we highlighted the investment of $90 million to offer free doctors visits and prescriptions for children under the age of 13. Opening up health care has been a huge priority for us. Building resilient whānau is also about healthy homes and $16 million has been injected into Māori housing with a particular focus on Māori social housing and rebuilds and repairs in rural communities. [Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): Could I just ask members to show some courtesy to the member who is trying to address the House.TE URUROA FLAVELL: The additional $20 million invested in rheumatic fever prevention brings the Government’s total investment to more than $65 million over 6 years. I say it is an outstanding approach which the World Congress of Cardiology also noted last week. Our relationship accord with the National Party is also committedto helping those most in need to live in warmer drier healthier homes. At last count 112000 low-income homes had been insulated which is making a huge difference across all of our communities.Keeping it real is also about making it possible for mokopuna to participate in early childhood education. An additional $155 million has been invested in this area. It is about reading writing and arithmetic. I can also say that one of the greatest projects that Pita has inspired in his role as Associate Minister of Education is Reading Together which has now expanded into more than 140 decile 4 and 5 schools helping parents support their children to read. What can be better than enabling all of our tamariki to have a great start on their education pathway?The second key theme for the Māori Party in Budget 2014 is building on those hallmark initiatives that tangata whenua have created. A key announcement for us in this Budget is the establishment of a Māori-focused centre of research excellence. There was huge outrage across the country when funding was cut for Ngā Pae o te Māramatanga. The Māori Party picked up the challenge and has worked to create the means by which our own mātauranga our knowledge and our tikanga our ways of being can be preserved protected and advanced. We are really excited about this new initiative rewarding and growing the amazing talent of our Māori research community to help shape our future.Another major win for us was in securing $12 million of new funding to support iwi radio to continue the vital work in connecting Māori communities. We have also negotiated funds to achieve precious Māori language content with the support of Te Māngai Pāho.Finally the last tranche of initiatives we highlight in Budget 2014 are those we describe as advancing into new spaces for Māori development. This Budget builds on the Māori economic strategy He Kai Kei Aku Ringa by investing new funding of $8 million to support Māori businesses to encourage innovation strengthen our economic independence and achieve positive social and economic impact. The Māori Innovation Fund will help establish the support and institutions we need to lift productivity and our collective performance. The Budget sets in place $6 million for New Zealand Māori Tourism to support industry capability and branding and leveraging Māori tourism and trade.I am not one to leave the best for last but I am really excited about the project called Moving the Māori Nation. We have announced $10 million over 4 years to establish a contestable fund to focus on Māori sporting and cultural activities with the goal of contributing to havingwhānau ora healthy families. It is now accepted wisdom that the Māori world view of well-being is inclusive of physical spiritual and psychological well-being. This project will support a huge range of traditional Māori games and physical activities such as ki-o-rahi and more contemporary sports and physical activities such as Iron Māori and Tri Māori and so on.In keeping with the theme of being real there are still huge areas to focus on. The Māori Party has long advocated for a living wage to lift the minimum income of families. We are proud we were able to negotiate $5 million for te mana o te wai but there are still many other areas of care for our environment that we want to invest in. We have placed enormous priority on cadetships and trade training and are pleased that this Budget adds another $20 million to establish 6000 apprenticeships but we still need ongoing investment to address the longstanding employment disparities between Māori Pasifika and other New Zealanders. And of course there are a huge raft of issues that we in the Māori Party call social hazards and we would like to see more focus on alcohol reform addiction treatment and gambling prevention. In the end theseare positive initiatives that the Māori Party is seeing in Budget 2014. We look forward to building on this into the future.HONE HARAWIRA (Leader—Mana):Kia ora Mr Assistant Speaker. On behalf of the Mana movement I rise to speak to what I call a “more or less Budget” presented by the National - Māori Party - ACT - United Future Government. When I say “more” I mean things like more unemployment than we had when this Government took office in 2008 with official figures showing that the unemployment rate is now higher across all ages for nearly all New Zealanders—Māori Pacific Island and Pākehā included. The Māori unemployment rate alone is up by 8500 to more than 40000. More young people are out of work and not in school training or higher education with Māori youth unemployment unacceptably high at 22 percent nearly four times higher than the latest population-wide unemployment rate despite all the pūru tūtae about opportunities and all the rūkahu about trade training and cadetships.There are more people earning unsustainable wages with statistics confirming that nearly three-quarters of our entire workforce are now earning less than the average wage. There is more of a wage gap between here and Australia. In fact the wage gap between the two countries has increased by a full 36 percent over that time. There is more income inequality between the rich and the poor with National’s policies creating an environment where the richest 1 percent of New Zealanders own 16 percent of the country’s wealth while 50 percent of New Zealanders own less than 5 percent and where the income of the top 1 percent has risen nearly 10 times faster than that of the bottom 10 percent. There are more children living in poverty—up from 270000 to 285000 in 2014. There are more kids going to school without breakfast and although KidsCan and KickStart Breakfast are helping more than 100000 New Zealand children are still going to school hungry every day.There are more evictions of State housing tenants to help private developers buy up Crown land to build high-end housing for wealthy families and foreign investors driving prices up and driving low-income families out. There are more families being made homeless through the Government imposing unrealistic criteria on poor people needing a home and using reviewable tenancies to push State tenants out of their homes and into the private rental market and increasingly because they cannot afford to pay those rents into homelessness. There are more children hospitalised with rheumatic fever and other diseases that The New Zealand Children’s Social Health Monitor report says are caused through poverty; living in cold damp houses; not going to the doctor because they cannot afford to; and when they do not picking up their prescriptions because they cannot afford to pay for them. There is more of a gap between the achievement levels of kids in low and high-decile schools with Ministry of Education figures showing that the gap has risen now to where fully 52 percent of kids in decile 1 schools leave without any qualification compared with only 10 percent of kids in decile 10 schools. And there are more people in prison and on home detention especially Māori with prison rates up for both Māori men and Māori women and Māori now making up 50 percent of those in prison and 40 percent of those on home detention.That is where the “less” comes into it because all of these problems arise as a direct result of less spending and less funding being spent where it is needed most—on creating jobs with decent wages building good-quality homes for low-income whānau and making the health and education of our young people an absolute priority. The Government makes a big deal about having to cut spending to get the books back in the black but all we have seen are massive cuts to core public services like housing health and education and increasing inequities between rich and poor as a direct result of those cuts. What we are seeing is financial racism imposed upon the poor to feed thewealthy—more to the rich and less to the poor. There is less funding for housing with Housing New Zealand shutting up shop offering people an 0800 number that nobody answers and offloading tenancies to Work and Income and the Government stripping $400 million out of the purchase and upgrade of State houses and providing limited funds for social housing providers which are expected to develop their own capacity provide new homes repair old homes maintain homes on an ongoing basis and then cop the flak when the money runs out.There is less funding for education leading to cuts in quality poor results in international tests the dropping of tertiary courses the axing of Māori research funding and an increase in course costs and student loan debt. There is less funding for health leading to higher doctors fees and prescription charges; worse health outcomes for those in low-income families especially Māori and Pacific Island kids; and greater costs for society down the track. And there is less funding for those health providers that work in the poorest communities addressing the most acute health needs every year for the past 5 years.So what do we get from this Budget? Well what we get are massive cuts to primary and preventative health care and the ridiculous sight of National and Māori Party MPs crowing about spending money on rheumatic fever. Although that is great because rheumatic fever is a killer in poor Māori and Pacific families all over Aotearoa it is also important to note that rheumatic fever is a Third World disease and we are supposed to be living in a First World country. Spending money on rheumatic fever is not something to crow about; it is an embarrassment that we should be cringing about. What we get is a social development allocation whose signature policy initiative for 2014 is—wait for this—a $1 million kutu chair. How is that for innovative targeted spending? A kutu chair for God’s sake. Oh yeah and some money for budgeting services to cope with the growing queue of beneficiaries struggling to get by.All we are getting is the same old National - Māori Party - ACT - United Future Budget that we got in 2009 2010 2011 2012 and 2013—Budgets with neither strategy nor funding for the eradication of child poverty no plan for low-cost housing no community jobs programme and no plan to raise the minimum wage or to introduce a living wage. Even though the Māori Party talks about being at the table the cold hard reality is that in all the key social areas of health education housing justice welfare and employment on Budget day 2014 Māori are worse off than they were when the Māori Party first signed up with National in 2008.xxxfoOn Budgetday 2014 the only places where Māori continue to soar are in unemployment low wages homelessness hospitalisations educational underachievement inequality child poverty and prison numbers.If a Budget is about how we set our priorities and outline the financial strategy to achieve those priorities then we must be strong enough to identify the important ones courageous enough to allocate the money needed to achieve them and then unwavering in our determination to realise them. Those priorities define what kind of a society it is that we want and the resources we dedicate to them in a Budget are an expression of our commitment to achieving them. For Mana those priorities are simple because they speak of a society we would want to leave for the next generation: a commitment to feeding the kids building homesfor every family—The ASSISTANT SPEAKER (H V Ross Robertson): Order! Courtesy is contagious.HONE HARAWIRA: —providing jobs for everyone and paying for it all by taxing those who can afford to pay for it. We have the means and we have the capability; all we need is the political will. That political will can only come when enough people in this country—Māori Pākehā Pasifika tauiwi all those in genuine need inAotearoa—are determined enough to want to change the Government strong enough to demand that we change the priorities and committed enough to the view that we must always put people before profits. Tēnā koe Mr Assistant Speaker. Kia ora tātou katoa.Hon JOHN BANKS (Leader—ACT):The ACT Partywill be supporting this Budget and the two associated pieces of legislation. I congratulate the Minister of Finance on bringing to this House his sixth Budget and on arriving today at a surplus albeit a fragile forecast at just over $370 million. I was in this Parliament when our Minister of Finance gave his maiden speech. That man from the south has really come a long long way and his contribution to this country as Minister of Finance has been great. It has been great.Achieving a surplus is one of the economic objectives that most New Zealanders clearly understand. It is the proper measure and test of whether a Government is fiscally prudent. On behalf of the ACT Party and the people of Epsom I am particularly pleased that this Budget marks the end of deficits and of borrowing the savings of others for current operating expenses. Debt is forecast to decline from 24.4 percent of GDP to 20 percent of GDP by 2020. If New Zealand cannot maintain the welfare State within our means we cannot expect workers in other countries to prop up our welfare State.Never forget that any Government big enough to give you everything you want is a Government big enough to take from you everything you have. It is essential that future Budgets remain in surplus while cutting taxes to promote sustainable growth. Cutting taxes equals sustainable growth. It is essential that debt racked up to lessen the effect of the global financial crisis by maintaining the welfare State is repaid—that the $60 billion is repaid. That means continuing the pattern of spending restraint. My friend who lives with me in the electorate of Epsom and who works on the Finance and Expenditure Committee Paul Goldsmith knows that well and understands the economics of this country and the importance of reducing debt and running prudent financial management. I take this opportunity today to wish him well in the next Government.No able-bodied New Zealander should be put on the scrap heap at age 16. The clear expectation is that everyone should contribute whatever their talents and however humble their origins. The taxpayer should not enable lives of hopelessness idleness and despair. The taxpayer should not fund lives of idleness hopelessness and despair. The self-esteem self-respect and independence that come from work are the birthright of every New Zealander. Every New Zealander deserves the opportunity for work and the gratitude that goes with making a contribution. If we were to couple these changes with the abolition of the minimum wage even more young low-skilled New Zealanders would be able to get their first jobs. The challenge is to display similar courage and boldness in other parts of the welfare State—in education health and superannuation. The ACT Party believes in responsibility and choice. The ACT Party believes in responsibility freedom and choice.The medium-term challenge is the affordability of the welfare State which has not gone away. Rolling back the welfare State is inescapable due to the demographics of an ageing population. It is a matter that we have to come to grips with. We will make the adjustments or go bust. This week the Australian federal Treasurer signalled a lift in the Australian retirement age to 70 by 2035. On current announcements that will put the Australian retirement age amongst the highest in the OECD. If Australia—a country a third richer than New Zealand with a means-tested pension and a huge superannuation industry—cannot afford a retirement age of less than 70 a New Zealand retirement age of 65 has no prospect of surviving. The only question here is when thisParliament will do the right thing and give New Zealanders enough warning of the inevitable change so that they can arrange their lives.The ACT Party believes in smaller Governments more opportunity less regulation lower taxes less borrowing and less taxation. A welfare State where around 25 percent of GDP is removed from taxpayers and delivered in services back to those same taxpayers and others is unsustainable and wasteful. To have 25 percent of our GDP redistributed is unsustainable and wasteful. Although this Budget rolls back some of these services the principle is a good one. We should also look at expanding co-payments. The taxpayer delivery of free goods and services costs more because those consuming them have no clue of their value. If someone consumes something that has cost them nothing it is probably valueless. That is why so-called free services cost more and more and result in much more waste and less accountability.In the long term ACT’s alternative Budget released this week squarely addresses the challenge of lifting long-term growth well above the forecast range of under 2.5 percent. The only way we can achieve a higher than forecast growth rate is if the Government gets out of the business of middle-class welfare and corporate welfare. Less middle-class welfare and less corporate welfare mean that we can let New Zealanders keep more of what they earn by lowering their taxes. I believe that people can spend their money much more wisely than Governments can. By having highly competitive personal and corporate tax rates we can attract overseas investment which results in more employment and more growth. This country desperately needs more employment and more growth. There is no problem that New Zealand faces that would not be easier to deal with if our nation was much richer. The only way we can be richer is if Governments take less and meddle less—Governments take less and meddle less—and leave the money of the hard-working taxpayers in their pockets to spend and invest as they choose.These big issues are not adequately addressed in this Budget—they are issues for the next Government and future Governments—but they must be addressed. We cannot continue to live beyond our means and the fiscal surplus in this Budget is an indication that Bill English and this Government are committed to living within our means. I want to give full marks to the Prime Minister and the speech he delivered in this House today. In 10 Parliaments I have never heard a better speech in the House from a Prime Minister than I did today from the leader of the coalition on this side of the House. We are truly fortunate to have John Key as our Prime Minister of New Zealand at this time and we are indeed grateful in this House to have Bill English as a prudent manager of the funds—the desperately short funds—this country has to make sure that we get through the global recession and move on to more prosperity.I was asked a question by a young girl from Diocesan School for Girls in the centre and heart of my electorate of Epsom when she visited Parliament recently. “Mr Banks” she said “what would you have been if you had not been a politician?”. It is a good question that I put to all members. I said to her that if I had not been a politician I would have been an astronaut.xxxfo This is a land of opportunity. This has always been a land of opportunity. I first came here 45 years ago as a 13-year-old. I came and visited this Parliament as a 13-year-old and the Hon Allan McCready sat me in a seat up the back here and told me: “One day John if you’re good to your mum and you work hard you too could be a member of Parliament. You too could be a member of Parliament.” The day I was elected to this Parliament I sat in that same seat. That was 33 years ago. Anyone can achieve anything they like in this country and that is the mantra that we want to respect for New Zealand.The young people of this country give me hope. The farmers the nurses the police officers and the entrepreneurs are as motivated and committed today as they were when I came here in 1981. This is a country of goodness a country of hope and a country of opportunity where even the son of a burglar can become the Minister of Police. This is a country of much opportunity. Despite all our challenges we still live in the golden times of opportunity. Unconditional love from the home and a world-class education are what we need. Unconditional love in the home and a world-class education in the classroom are the key to success. The ACT Party believes in that. This is a Budget of opportunity. The Budget continues to give us much hope and this country much opportunity.Hon PETER DUNNE (Leader—United Future):Oneof the principles on which United Future was founded was to promote a better deal for New Zealand families and that is exactly what we see in this Budget coming after many years of challenge as the country confronted and then overcame the obstacles posed by the global financial crisis. We do not realise the extent to which that crisis impacted around the world on the standard of living of various populations. And it is true to now observe and even contrast with our near neighbour Australia the impact on this country which has been far less because of the good stewardship over the last 6 years of the current Minister of Finance. Today in a Budget that brings in a small but significant surplus and forecasts more to come the pathway is laid for a long-awaited dividend to be paid to New Zealand families.I am particularly pleased about a number of aspects of the Budget especially the increase from 6 to 13-years-old for free doctors’ visits and free prescriptions. We know according to all of the evidence available that our most vulnerable people are our young people our very young people. Anything that we can do to enhance their access to health services when they need them and to make it easier for their parents to take them there day or night to get that care has to be important and I applaud the decision to extend free medical care up to the age of 13 for those children. I hope that we see a significant uptake of that policy and I look forward down the track to improved health status occurring as a result.Similarly the $156 million more invested in early childhood education is a significant step forward and recognises the reality that many children today—indeed most children—will be in some form of early childhood education. That is consistent with the Government’s long-term commitment of moving to around 98 percent of children in early childhood education by about the year 2020. So they are good moves. So too is the extension to paid parental leave. We know the arguments. We have had them back and forward across this Chamber for a long time. The opportunity for parents to bond with their new children in those early months is critical to their future development. In just the same way as access to good health care through the medical system is important so too the time that a parent is able to spend at home with a new child is important as well and the extension announced in the Budget is a positive step forward in that regard. As an ideal United Future would like to see us move over time to 52 weeks’ paid parental leave because that is the ultimate opportunity to provide a good start for our children and a good positive future for them to embark upon.If you look at a number of other moves in the Budget you see that they are all progressive andthey are all about building a pathway down which the country can advance for the future. I welcome for instance the additional transport investments. Transport infrastructure is a huge issue not just for our major cities but for many of our families in getting about and doing the jobs that mums and dads do with kids day in day out and out of school on weekends. So having good networks and having good ways of getting around our major cities is an important part of strengthening the roleand importance of families in the New Zealand framework. I applaud the Minister for what he has been able to achieve in that regard. In the Wellington area we have our own range of projects we look forward to proceeding with very soon and I am sure the Minister knows exactly to what I am referring.There are some issues though for the future that do need to be addressed. There has been the veiled hint around this week’s Budget announcements that tax cuts for the future are now a possibility and I applaud that. I think there is huge scope for a number of significant changes to the tax arrangements for New Zealand families. I would like to see a top tax rate for top income earners of 30c in the dollar. I would like to see a middle income tax rate of 20c in the dollar and a low income tax rate of 10c in the dollar—a progressive 10c 20c and 30c rate. The threshold points can be developed as we look at income rates over time but setting that goal I think is a very important part of not just giving a dividend to New Zealand families but also pitching us very competitively with other nations particularly our neighbour across the Tasman. It would give us a huge advantage in that respect.I also think that in the context of family income and family support—and this argument has been had a little earlier in the year—there is merit in picking up again the United Future bill regarding income sharing which still sits on the Order Paper of this House. When the Labour Party earlier this year with its Best Start policy proposed assisting families with a household income of up to $150000 a year and then introduced a raft of exclusions that meant most families would not qualify it reminded me that income sharing which has its benefit of assisting families earning up to $140000 per year as a household is a much simpler and more straightforward way to go. It is a fairer way of recognising the equal contribution that both parents make to raising their children and I think that is an idea whose time has now come and ought to be pursued more fully. I look forward to that being part of the tax debate that we will have inevitably as a result of the good economic conditions being foreshadowed by this Budget.At the other end of the scale my colleague from Epsom referred earlier to the issue of retirement. I take a different view. It is important though that we do have an ongoing discussion and debate about the way in which we support people who are in their retirement picking up their pension income. United Future will continue to promote its Flexi Super policy where the basic age of entitlement for New Zealand superannuation will remain at 65 but people will have a choice of a lesser rate from the age of 60 or a higher rate if they defer to the age of 70. We would supplement that by making KiwiSaver a compulsory savings scheme. So what you would have in the future moving forward is most people—and the figure in the Budget today was 80-odd percent—in a KiwiSaver scheme guaranteed a payment from KiwiSaver at the age of 65; the possibility if they choose to do so of picking up their New Zealand superannuation at 65; but also having the capacity to bridge that if you like by going earlier at a lesser rate and therefore having a dignified retirement income platform.That is a popular policy. What it does is recognise that the choice of retirement income rests not with the State to determine the age of eligibility but with the individual to make that choice for themselves. What the Labour Party and those who argue for a higher rate are effectively doing is telling working people that they have to work longer to get their pension. What they are doing is telling people that they have to work longer to get the pension to which they say they are entitled. Flexi Super actually puts the choice into the individual’s hands about how they make their retirement plans and that is a good thing that most New Zealanders support and that we want to see progressed.I spoke yesterday in the general debate about some changes that could be made in the longer term in the tertiary education area particularly in terms of encouraging entrantsfrom families where previously there has not been a history of tertiary education but also looking to whether we can deal with the issue that we now have about significant tertiary education costs through fees. I think there are some other things that we should look at in the future as well in terms of our conservation management. I am particularly keen to see us establish a national planting programme along the riparian strips of flowing waterways in order to prevent erosion to help clean up those waterways and to get us back to a swimming standard for most of our rivers. I also think that there is scope for establishing a national pilot programme for hunting and trapping for possums for fur purposes as part of our national pest control strategy.Thekey point about all of these things is that we have to earn the income to pay for our dreams. What today’s Budget returning to surplus is all about is demonstrating in an ongoing way this country’s capacity now to earn its income and to pay its way. That then in turn creates the leeway to give opportunity for some of our dreams to be implemented. The contest of ideas in the future will not be around this degree of pessimism versus that degree of pessimism. It will be about optimism and hope for the future. The pathway and the platform that the Minister has laid in this Budget means we can constructively and positively look to the best options for our families in terms of New Zealand moving forward.United Future will campaign this election on the points that I have outlined in this address this afternoon. We look forward to engaging with the public of New Zealand and with other political parties around those ideas and we look forward to being in a position to advance them when this Parliament reconvenes given the platform laid in this very laudable Budget this afternoon.Hon STEVEN JOYCE (Minister for Economic Development): I moveThat this debate be now adjourned.Motion agreed to.