Roy Eric: Budget Debate 
Roy Eric: Budget Debate 
[Volume:631;Page:3312] 
ERIC ROY (National—Invercargill) 
: 
 The debate we are having right now is on the Appropriation (2006/07 Estimates) Bill; it is the debate that follows the Budget. The only thing National can say about this Budget is that it is a Budget in which the Government appropriates more than its share of the hard-earned cash of the mums and dads the workers and the investors of New Zealand. That is absolutely the case with this Budget. 
I represent Invercargill. Signs leading into Invercargill state: “Invercargill a place where dreams are possible”. There is a photograph of Burt Munro on the billboards. He is a man who had a dream and achieved things. Burt Munro was around in the 1950s and 1960s and I have to say that the dreams are still there. Invercargill achieves in so many ways not because of the Government but in spite of it. Its Southern Institute of Technology is fee free. This coming Friday the only covered velodrome in New Zealand will be opened there. I bet that a whole host of Government people including the Prime Minister will be falling over themselves to try to be a part of the success that is Invercargill. Not one thing in this Budget will help Invercargill. Invercargill has done things on its own initiative. 
I have read the Budget Speech. I listened to it and then I read it again to see if I had missed anything. Before delivering the Budget Dr Cullen said it would be a low-key Budget. He exceeded his own low standards; it was an extraordinarily low-key Budget if we were looking for something to get excited about. 
I will give the Government credit for two things in the Budget. The investment into roading infrastructure is a plus. Government members are trumpeting that as some great stroke of generosity. I have to say that this is the Government that imposed the 5c tax on the people of Invercargill in order to pay for Auckland’s roads. In the 6 years since it did that not one road has gone into Auckland. It was all very fine for the previous speaker Mark Gosche to criticise other members but we in Invercargill—the city where dreams are possible—are paying for Auckland roads and not one road has gone in since we started paying for that. If we are to say that this roading shift is a huge positive thing that has occurred let me just say that in the last year the tax take for the Government from the price-increased GST on petrol has increased 10.5c a litre. The Government is trumpeting this as some stroke of generosity in the Budget. This is just another measure whereby the mums and dads the investors and the hard workers of this country are indeed overtaxed. But the Government is investing into the roading infrastructure and that is a positive thing. 
There is another thing in this Budget that I would say the Government got half right. Socialist Governments in the past overtaxed and overspent. This Government is now only overtaxing; it is certainly not overspending in relation to the tax take. So it is a positive thing that the Government has not overspent. 
Let us look at the first page of the Budget Speech which we have all heard. I want to make a comparison. The Government is extolling its virtues in terms of the prosperity we have had in the last 5 or 6 years—and yes we have had that. Certainly it has been the most prosperous time in my working lifetime I acknowledge that. But the Government is certainly inferring alluding and even saying that it created that prosperity. The Budget Speech states that there will be a lessening of the pace of economic growth and it refers to growth coming down to 1 percent. If the Government created the prosperity of the previous 5 years it also created the downturn; it cannot have it both ways. 
History will judge this Budget and this Government. It will judge the Government’s fiscal management and its vision. I believe that history will say that this Government goofed. It presided over this country at the time of the greatest prosperity for half a century and what is the legacy it has left? There really is no legacy. The legacy the Government has left has been to draw out of the mums and dads the working people and the people of Invercargill—where dreams are possible and people have an expectation—more money than it needed. I consider this to be hugely immoral. 
The previous two speakers from Labour talked about the investment into research and development. That is good but Government research institutions are not the only entities that invest in research or in the future. Just as 20000 or more young people are leaving each year to live across in Australia we have companies now that are finding it more attractive to invest in research outside New Zealand. They are finding that it is much more prosperous and better for them to do business outside New Zealand so they are moving offshore as well. The kind of growth the Government is extolling itself for has come largely out of the increased price for exports which is something this Government has had nothing to do with. For Government members to stand in this House after years of prosperity and declare a $8.9 billion surplus is a disgrace. 
I make another point. If the Minister of Finance was in control and this great prosperity was due to him how come at the last fiscal update he predicted a $5.6 billion surplus? We have had a blowout of over 50 percent in the surplus which illustrates again that the Minister of Finance is not in control. Because of factors outside of him and what he is doing—in fact in spite of him—we are having this very prosperity. 
It is of concern to me that the legacy of this Government will be to have grown the public sector at the cost of the private investor. This Budget is taking us nowhere. There is no expression of vision. Yes the Government talks about the transformation of the economy but the transformation of the economy has been to overtax to limit the individual and to say that it must be the Government or the State that controls all of the investment into research and that dishes out the money in the Working for Families package. It just has to have that area of control. 
This is an immoral Government. It has created a dependency for our families. There are now 350000 more dependent families. The Government has carefully tried to couch Working for Families as some kind of targeted tax relief. It is not tax relief and there is no way of saying that it is tax relief. It is the creation of dependency. If it were tax relief then taxes would have been reduced and all of the people who make up the bureaucracy that manages this Working for Families package with all the handouts and dependency would not be necessary. Again that would be a saving for the taxpayer of New Zealand but it would be targeted at the individual. The Working for Families package takes away initiative. It kills initiative. It creates thresholds that are above where people are actually sitting. There is no incentive to work harder to invest more to achieve greater or to earn more because the Government now gives out a great dollop of money. If there were tax relief every single dollar earned after that point would go to the individual families the working mums and dads and those who are creating the wealth of this country. 
There is another way other than the Government handing out money. This is about creating a cake that gets bigger. If we really want to help New Zealand in health and education and if we want to deliver those things that are crucial and important then it is absolutely essential that we grow that cake. We see a diminishing cake and all that is happening is that the wedges of that cake are being changed around. By far the biggest slice now is the slice of tax that goes to the Government. This is immoral and it really is a lost opportunity. This Government has had the most prosperous time. It has sat on its hands and its legacy is that it has done nothing with the prosperity that has come to this country.