Smith Nick: Budget DebateText is incorporated into the Bound VolumeSmith Nick: Budget Debate[Sitting date: 28 May 2013. Volume:690;Page:10409. Text is incorporated into the Bound Volume.]Hon Dr NICK SMITH (Minister of Conservation): It is with huge pride that I endorse this Budget from Bill English because if you look at all of the vital signs on which you should judge an economy it is a Budget that is making great progress. Let us go through them. What is the rate of interest rates being faced by New Zealand households and businesses today and how does that compare with what the previous Labour Government left? We have got an interest rate in front-page ads today in the paper of 4.9 percent—the lowest mortgage interest rates since I was in nappies in the 1960s. Mortgage interest rates were 9 percent when the members opposite left office and that halving of interest rates is making an enormous difference to families and businesses throughout New Zealand.Let us look at growth rates. How is New Zealand’s economic growth rate comparing throughout the world? The Budget shows a 3 percent growth rate. Name me a country—name me an OECD country—that has delivered a better stronger economy under the most trying conditions since the Great Depression. You look at the UK—0.3 percent. You look at France—0.5 percent. You look at the United States—1.2 percent. There is only one country within the OECD whose growth rate is slightly better than New Zealand’s growth rate and that is Australia. Anybody listening to the Budget last week in Australia or in our own country would know that they would rather be on this side of the Tasman.Another key issue that you should test economic performance by is the cost of living. It impacts on every New Zealander. Members opposite want to highlight the odd element. One minute they were screaming last year: “Food prices are going out of control.” Actually Statistics New Zealand shows that the cost of living for households in the last year has gone up by less than it did at any time in the last 15 years—any time in the last 15 years.Andrew Little: What about power prices?Hon Dr NICK SMITH: Mr Andrew Little is interjecting there—Andrew Little: Five percent. Five percent last year.Hon Dr NICK SMITH: What was the inflation rate after Labour had been in Government for 9 years? It was over 5 percent. New Zealand families could feel themselves going backwards. Their power prices were going up their food prices were going up the Government was spending like there was no tomorrow and their charges were going up. Look at growth look at inflation look at jobs look at mortgage interest rates—this is an outstanding Budget.I was interested in Mr Parker’s contribution in which he said that the Labour Party was good at fiscal discipline—good at fiscal discipline. Well let us look at the numbers. I totalled up how much Labour had spent in new spending in its last five Budgets. In its last five Budgets how much had Labour spent? There was $14 billion of new spending—$14 billion of new spending—over its last five Budgets. I compare that withthis Budget which is Bill English’s fifth Budget. What is the total amount of new spending in each of those five Budgets? If we take the zero Budgets when times were really tough there was a total of $3 billion of new spending. Am I going to take a lecture on fiscal discipline from David Parker when the record shows that the last Labour Government spent like there was no tomorrow and left a huge wave—a decade—of deficits at which Bill English has been beavering away year in year out? And now Bill English is going to balance the books.I want to focus in on that question. How many OECD countries have been able to deliver a Budget in which they are going to balance the books? How many? How many?Hon Craig Foss: Just this one.Hon Dr NICK SMITH: Well actually there were two. There was New Zealand and there was Australia except that Australia delivered a Budget with its hopeless Labor Party—with its hopeless Labor Party—where it had to declare a deficit of $20 billion. We know the UK has been in tough times. Actually the deficit in the UK is bigger than the whole of the New Zealand economy—bigger than the whole of the New Zealand economy. I looked up the speeches from last year’s Budget. There was ridicule—ridicule—from members opposite at the idea that Bill English would be able to balance the books. They said it was a joke. They said he would never get there. You had all those speeches criticising his fiscal approach. Bill English has delivered the goods and delivered them better than any other OECD country.But I want to go further in saying that absolutely Bill English and John Key are sticking to a plan despite all of the rhetoric from members opposite. Let us go through the things they said they would do and how they have delivered. We have got the mixed-ownership model. Yes there have been a few headwinds. Yes the Opposition has disgracefully done its best to sabotage the interests of New Zealand taxpayers in opposing that policy but we have seen it through. We have seen a successful float of Mighty River Power. One thing we understand on this side of the House which members opposite do not is that a strong sharemarket is absolutely crucial to a successful economy. Can members opposite who want to sabotage our stock market—who want to sabotage it—tell me a successful economy that does not have a successful stock market? The silence is deafening. You see we on this side of the House understand what is needed for a strong economy and what it is to deliver goods for New Zealanders.But I also want to tell the story of this Budget in that it does deal with the real issues facing New Zealand. I particularly want to talk about the initiatives on housing in this Budget. I do want to draw a contrast. I listened carefully to Mr Parker saying that house price inflation under this Government had been awful. So I went to the Parliamentary Library and I asked them for the figures on what was the average increase in house price from 2000 to 2008. The answer was an average of 9 percent per year—9 percent per year was what house prices went up by Mr Little when you were president of the Labour Party and Labour was in Government. And what is the average over the last 5 years? It was 9 percent under Labour and what has been the average over the last 5 years? It was 2.1 percent—2.1 percent has been the average increase over the last 5 years.Andrew Little: What about last year? Tell us about last year.Hon Dr NICK SMITH: But it is openly acknowledged that particularly in the last year house prices have moved—so the Budget has responded.The interesting feature is this. The Productivity Commission an initiative that we had with the ACT Party produced a comprehensive report on what was needed to be done around improving house prices for New Zealanders. It said that we had to address land supply; that we had to address infrastructure costs; that we had to address theissues of materials costs and productivity in the sector particularly in the area of skills; and that we had to deal with the compliance costs. Over the last month you have seen the Government on every one of those five areas announcing initiatives in each of those things.I compare that with members opposite. Members opposite have opposed this Government on every attempt to fix the Resource Management Act roadblocks to getting affordable houses for ordinary New Zealanders—every single step—and we then hear the response from Labour. Is it not interesting? It says: “Well if houses are not affordable the answer is for the Government to run it the Government to do it.” Well Labour has got the same approach with the electricity sector. Labour members say: “Oh the way to get good power prices is for the Government to run it.” Well I am just waiting for the next Labour member to say to us that to get better food prices all we have to do is get the Government to buy all the damned supermarkets! It is a lunatic policy. It is a policy that is a huge risk to the future of the economy and we should not have a bar of it.The other thing on which I want to compliment the Minister of Finance is the smart spending—careful but smart spending—in this Budget. Every member of this House knows that we need to grow our exports and our foreign exchange earnings. That is why the Budget commits $400 million to increased tourism increased support for our exporters increased investments in technology and increased investments in areas like skills and apprenticeships—things that will make a difference.The last point I want to make is that in every single area in which the New Zealand economy has opportunities for growth and jobs members opposite particularly with this mixed-ownership business between Labour and the Greens say no. They say no to the convention centre. Right now there is an issue in my area with the industry of aquaculture where we have got the Green Party opposing any growth of that industry and of jobs for my constituents. We have got the issue of Denniston mining where you have had more positions than the Kama Sutra from the Labour Party on whether it supports or whether it opposes that. When it comes to irrigation where does the Labour Party stand on the growth in irrigation? I have heard Mr Parker saying Labour is totally opposed.This is a good Budget. This is a Budget about growth. This is a Budget that will give New Zealanders confidence about their future. We are in better shape than any other country in the world and by goodness we should be proud and pass this Budget.