Bennett David: Budget Debate 
Bennett David: Budget Debate 
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DAVID BENNETT (National—Hamilton East) 
: 
 It gives me great pleasure to follow on from that great speech by Aaron Gilmore a man who is making big inroads into Labour’s vote in Christchurch. He will be the member for his seat at the next election because this Budget sets up the National Government to take to the people at that election a very successful economy—an economy based on prudence but also on the individual ability of people in New Zealand to be successful and have a better income and a better lifestyle. That is what people have been looking for. We have worked through the hard years of the recession that Labour brought upon us and we have gone through that. We have started to turn on to the road of recovery and success and that is the success that New Zealanders have been long waiting for. 
I think that the salvation note of this Budget is the tax reform package that was part of the Budget. That is the bit that has been I guess the stunning point; it has actually stunned Labour members into silence. Over 9 years they had the ability to deal with the property sector and to set the right signals for New Zealanders but they did not do it. Time after time we heard about interest rates going up because of the property sector. That was the previous Government’s excuse. Never did it do anything to change the tax system or even to talk about it. It just spent money on buying elections by giving out false hope to New Zealanders— 
Craig Foss 
: And golf clubs. 
DAVID BENNETT 
: —yeah and golf clubs and other things. The thing is that the National Government has tackled the hard issues. We have looked back and seen the inequalities in the economy and the tax system and dealt with them. We had to deal with some of our own people in doing so. That is hard but it shows a fair-minded and successful Government. I think that is what the public have liked about what they have seen from National in this Budget. They have seen a Government that is willing to tackle the hard issues and put the right signals and incentives in place and one that is not afraid to make the right call for New Zealanders. This Budget will go down in history for setting up the direction that we need. 
Let us look at some of the directional facts. Two-thirds of the tax cuts have gone towards reducing the bottom two tax rates taking the lowest rate from 12.5 percent down to 10.5 percent and the 21.5 percent rate down to 17.5 percent. In other words two-thirds of the tax cuts apply to people who earn less than $48000. Basically those on an income of less than $50000 with two children do not pay any tax in New Zealand. In what other country in the world can people say that they do not pay tax if they are part of a hard-working family and need that support from the Government? We are very proud as a country and as a Government to be able to offer that to our New Zealand citizens. 
The other thing is that 73 percent of income earners will now face a tax rate of 17.5 percent or less. Nowhere else do we see those kinds of figures. That is great for people. It gives them the opportunity and desire to succeed. We are putting in place the structures that will ensure New Zealanders can compete and have the lifestyle they desire. That is something the previous Labour Government ignored. Its policy would have been to increase taxes and make people pay more so that the Government could redistribute money. That policy is made on the basis that Labour knows how to spend somebody else’s money better than that person does. That is the philosophy that a Labour Government would have brought into its Budget at this time. It would have increased taxes so that it could spend more money. The last thing that the economy needs is increased taxes. What is needed is the right incentive and that is what the National Government has done. 
Some people may ask why we would make tax cuts at this time. That is the question Labour has been asking. It is done to send a signal. A lot of young New Zealanders out there have a choice between staying in New Zealand and going to Australia. That choice will be determined by a number of factors. Some of them will be financial; some of them will be social. On the financial factors the Government can have a big influence through providing the right dynamics in the economy. We want to see those young New Zealanders stay here and make their home and future in this country. To do that we are giving them an environment where they feel valued rewarded and on a par with their colleagues in Australia. We will catch up with Australia because we are making the right financial decisions at this time whereas unfortunately Australia is not and it will pay the price in terms of its economic growth. New Zealand’s economic growth will be better than Australia’s on a per capita basis as we go forward looking at the position we started from. That is the success that we see and that New Zealand will inherit as a result of this Budget. 
There will be some impact on those who have invested in the housing sector for reasons other than basic income growth and that is understandable. But at the same time it is something that people who have made that investment are very much aware of and they are not necessarily finding it so problematic. They would rather have had that than the potential of a capital gains tax or something similar which had been floated earlier in the year by other parties and which just would not be a reality in the present economic environment. 
Taxation was a huge part of the Budget but there were other very strong features in it. In health and education the National Government continued to increase expenditure. Today at question time we heard from the Minister of Health Tony Ryall that the highest-ever percentage of expenditure on health has been made this year. That is a very strong statement to be able to make in recessionary times—to be able to say that we are spending more on health than any previous Government has ever done. That will deliver the kinds of services in surgery primary care and tertiary care that Kiwis have been looking for in their health system. 
In the education field changes to the operational grant for schools have been very welcome. Schools like the idea of the 4 percent increase but more important they like the idea of staggered funding which means they can get paid throughout the year rather than having to wait for one lump-sum payment. That is called listening to the sector delivering for the sector and making practical changes that provide some reassurance and delivery for the sector. Those are things the sector has long been waiting for and now it has been delivered. 
We are also strengthening our investment in infrastructure. Infrastructure is key to building growth because we have to give New Zealanders the tools for growth. A lot of the work on infrastructure will be related to the technology for growth. Our investment in broadband and other technology will deliver an environment where New Zealanders can work and take part in the global village we could say in a way that will deliver to them a prosperous future. 
We are also building on the future that we see for families and working New Zealanders in this country. We are giving them incentives through the tax system. We are giving them structures through things like infrastructure so that they can take advantage of those incentives. We are giving them the social services that they desire in education and health care and which are crucial to maintaining the future they wish to see. 
New Zealanders are seeing that the brighter future is becoming a reality. The brighter future on which we campaigned is now becoming the future of New Zealand. The National-led Government can take a lot of pride in this Budget because it is a Budget that delivers results. It delivers what we said we would set out to deliver for New Zealanders and it does so in a manner that most New Zealanders have found exciting and beyond comparison with the previous Government which just went out there from election to election. This is a long-term Budget. It sets up a long-term direction and it will be a strong point for National as we work towards long-term success in Government. Thank you.