Hutchison Paul: Budget Debate 
Hutchison Paul: Budget Debate 
[Volume:663;Page:11610] 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Talofa lava. Fa‘afetai tele lava. It gives me great pleasure to speak in this appropriation debate following the Budget. There is absolutely no doubt that the Prime Minister John Key and the Minister of Finance Bill English deserve huge congratulations on a very well-researched very well-thought-out highly balanced and forward-looking Budget. It was very impressive that within the first few hours of this Budget being announced the Employers and Manufacturers Association said that this was the fairest Budget for years. It was refreshing to hear Bernard Hickey say: “This is the most comprehensive and coherent reform of New Zealand’s taxation system in more than 25 years. It goes a long way to tilting the economy back towards productive investment and away from property investment.” 
It is highly relevant that the three new major spending initiatives are in health in education and in science and innovation. The new funding in health amounts to over $2 billion over the next 4 years $512 million of which is in this financial year. That amounts to the biggest increase in health expenditure as a percentage of GDP in the history of New Zealand. It points to this Government’s focus on ensuring that health services in New Zealand are kept up. 
Yesterday I heard Kevin Hague from the Greens saying he wanted there to be more spending on health and for there to be more tax. He said that the socio-economic determinants of health were very important and that the poor are particularly badly affected—and he is absolutely right. But Labour and the Greens differ from this progressive National Government in that Labour and the Greens would take away money from successful people would curb incentives and would redistribute that money whereas this progressive National Government wants everybody to benefit from increased economic growth. 
Mr Hague should take note of Singapore. It is a tiny country the size of Lake Taupo with 4 million people to which we gave aid 40 years ago. It now has a per-capita income that is 1½ times ours. The significant thing is that Singapore invests 3.5 percent of GDP in health both public and private compared with our 8 percent but Singaporeans live longer than us and their infant mortality is less than half of ours. It is absolutely clear in that society that Singaporeans have benefited from sustained economic growth. They hugely value individual responsibility incentives and self-improvement. 
Those are vital ingredients for a healthy society and are quite different from the Green and Labour philosophies of redistribution and State dependence. 
National’s investment in health includes an extra $93 million for disability support services which is good and an extra $59.5 million to boost National’s record in improving elective surgery. It is great to hear that there will be 12000 more elective surgeries in the next year following Labour’s record of absolutely abysmal productivity in the field of health. When Labour came into power in 1999 and whipped up the personal tax rate from 33c to 39c it severely distorted incentives in New Zealand. In 1999 there were in the order of 35000 loss adjusting companies. They quadrupled in the succeeding years so that by 2009 there were 130000. That is just how bad the distortionary effect of Labour was right from the beginning. But it gets worse than that. 
Hon David Cunliffe 
: How many now? 
Dr PAUL HUTCHISON 
: There are 130000. Labour called for a taxation report and the Mcleod Tax Review was delivered. It was highly thoughtful but Labour totally ignored it. That is in stark contrast to National’s response when it called for a taxation report about the previous year. The Tax Working Group report said that the current system is “incoherent unfair lacks integrity unduly discourages work participation and biases investment decisions.” This Budget encompasses the main recommendations of that very timely and well-thought-out taxation report. But Labour ignored not only the McLeod Tax Review but also the Knowledge Wave Trust recommendations from 2002 which described the missing billion-dollar investment in science and innovation. For 9 years over the period of the Labour Government public investment in science and innovation remained static at about 0.54 percent of GDP below the OECD average of about 0.68 percent. But worse than that private investment in science and research and development which increased slightly from about 0.45 percent to 0.5 percent of GDP is one-third of the OECD average of investment in those areas. We know that countries with consistent economic growth and consistent investment in science and innovation—countries that are about the same size as us—have consistently shown higher economic growth than New Zealand. 
I acknowledge that Pete Hodgson who was the Minister of Research Science and Technology in the previous Labour Government had some worthwhile initiatives. He initiated the Venture Investment Fund he initiated the Centres of Research Excellence Fund with Steve Maharey and he promoted the commercialisation centres attached to our universities. But the Labour Government failed because it was not until its eighth year that it brought in the so-called Fast Forward Fund and the taxation credits but they were poorly thought out and were far too late. 
It is highly significant that National has focused on increased investment in science and innovation in the early stages of a long and progressive Government. It is highly significant that Prime Minister John Key has said that science and innovation will be at the centre of the new National Government. It is highly significant that the Government is investing in science and research and development its third-largest appropriation of new money. It is the key to driving New Zealand’s economy and the key to economic diversification. It is all about high-value low-volume exports and the enhancement of New Zealand’s human capability. This has come about by the efforts of hundreds if not thousands of scientists throughout New Zealand over a long period of time. I pay tribute to the Royal Society of New Zealand the Crown research institutes the universities and private institutes and a whole variety of individuals such as Professor James Watson Neville Jordan Sir Peter Gluckman Professor Dianne McCarthy and many many others. 
Budget 2010 is a great start for science and innovation but it is only a start. Indeed it is igniting our true potential.