Joyce Steven: Budget Debate 
Joyce Steven: Budget Debate 
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Hon STEVEN JOYCE (Minister of Transport) 
: 
 I am very proud and privileged to serve in this John Key - led Government and to stand up to support this Budget. It is a fantastic Budget from a Government that is determined to help New Zealand grow faster. It is a Budget for building a brighter future. It is a Budget that delivers the statistic the Opposition does not like to hear—170000 new jobs over the next 4 years. 
I welcome unexpectedly the contribution of the previous speaker David Clendon about businesses because I think that far too little is spoken about businesses in this House. Last week and the week before I was privileged to attend and speak at two award ceremonies: the New Zealand Hi-Tech Awards and the Wellington Gold Awards. Both ceremonies were full of entrepreneurs innovators and ideas people. Being at both events reminded me of why we do what we do. It reminded me once again of how jobs are created and growth is achieved. 
Governments do not create many jobs. We can help a little in the short term with the initiatives we have such as Job Ops and Community Max but Governments cannot hold up the sky. Ultimately jobs are created by businesses and not just any businesses but businesses where we have a competitive advantage in this country to create ongoing jobs and wealth. New Zealand is a small country at the bottom of the world. Just about everybody who is here has ancestors who came here and survived on their wits and their ingenuity. As a country we traded to get ahead. We are a nation of traders. 
The previous Labour Government forgot that. It thought that New Zealand could grow and grow by increasing the size of the public sector and that the traders would look after themselves. The Government sector the services sector and the household sector all grew and grew while the people who traded went backwards and when the global recession came so came the financial reckoning. As a country we were up the proverbial without a paddle. 
Warren Buffet has a saying about recessions: when the tide goes out we see who is swimming naked. As a country we surely were. Suddenly at the apex of the biggest Government spending boom in this country companies and people had stopped paying taxes and we inherited a huge fiscal hole and a decade of deficits. We had to act and we did last year with a very careful Budget. It was done carefully and well. As a result we had a milder recession in this country than most countries and we have borrowed one of the least amounts of additional funding for stimulus packages. And Labour criticised us. Then we set to work to help the economy grow faster and to encourage our traders so they trade more goods they trade more food they trade more resources and they trade more bits and bytes. 
How do we do that? We do that by building a tax system that encourages initiative and rewards hard work. It is done by reforming regulations and ensuring the country’s laws give more people more room to do more things to encourage industries to grow and add more jobs. It is done by unlocking responsible mining opportunities for jobs unlocking irrigation opportunities for jobs and unlocking more aquaculture space. All those things are challenging to do but we are determined to do them and in so doing get New Zealand to grow faster. 
Meanwhile Labour is in the rut that it led New Zealand into. Labour members lecture the Government about creating more jobs but they did nothing to tackle any of these issues. On tax they are even worse. They remain completely in denial about the impact their 39c envy tax had on New Zealand. They made everybody pay it if they earned more than 60K a year. The Labour Government started a raft of tax avoidance a flight of skilled workers across the Tasman and it removed any incentive for people to better themselves and get ahead. It choked growth in the tradable sector and New Zealanders know it. A majority of New Zealanders know that that tax should go and that is what has happened. 
What are Labour members saying now? Have they seen the error of their ways? No. They say they would keep the GST increase and put the envy tax back on. They have not learnt a thing. It strangled growth in the productive sector it created massive incentives for people to spend their time avoiding it and it sent record numbers of Kiwis overseas but they say they would bring it back. 
What do Labour members say about Government expenditure? Surely they would support the Government’s reasonable efforts to stop the growth in Government spending in the face of the world economic recession. Have they seen that uncontrolled increases in Government spending have to stop? No they have not. They have criticised every single Government move to curb spending every decision to stop low-quality spending and every move to put fiscal discipline back in the Public Service. They oppose every move to cap the massive rise in the size of the core Public Service that happened under their watch. They oppose it all. They still bleat on about Labour programmes that we had to stop a year and a half ago. 
The only conclusion we can come to about Labour members and spending is that they have not learnt a thing. Controlling public sector spending is one of the key ways in which the Government can help to get the tradable sector to grow. Uncontrolled public spending means more borrowing borrowing means higher interest rates than we would have otherwise and higher interest rates make it harder for firms to invest and raises the cost of living. 
Higher than necessary interest rates from higher than reasonable public spending means something else too: it means higher exchange rates. So here is the irony. The Labour Party decided last year that exchange rates were too high. It declared that it would break the consensus on monetary policy which is a bit like breaking the consensus on gravity. It does not know what else to do but it is raging against high exchange rates. What is the main lever that Governments have to achieve sustainable interest rates? It is Government spending. That is right. If we keep spending under control we keep interest rates on a lower track less money flows in and over time the exchange rate is lower and more sustainable. That is how one does it. So that is the irony. The party that is the last of the big spenders rails against the exchange rate yet wants to turbocharge Government spending and increase our debt again. 
God forbid that Labour gets back in charge of Treasury with David Cunliffe as the finance spokesman. That is the Labour Party—it has not learnt a thing. Labour members still think that losing the 2008 election was a cruel hoax. One would think that they would be over it a bit by now. They have not woken up to the stifling effect they had on the New Zealand economy. 
This Budget does four crucial things. Firstly it rebalances our economy for growth and it encourages more money into savings and investment and less into property and consumption. That is the first and very important thing it does. Secondly it lowers tax rates to encourage more people to work hard and get ahead. It lowers the marginal tax rates. Seventy-six percent of New Zealanders now have a marginal tax rate of 17.5 percent. It lowers the top marginal tax rate—and that is important—to keep more skilled workers in New Zealand. 
Thirdly it keeps Government debt under control and puts more of the money that we do have into health and education. It emphatically does that. The health budget from next year from 1 July until 30 June will be $13.6 billion. That is the highest health budget ever but also the highest ever percentage of New Zealand’s GDP to be spent on health. Yet members opposite say that it is a cut. That just goes to show that they cannot count. We have also invested a huge amount in education. Health and education have been the big beneficiaries in spending in this Budget and that is what spending on core public services is all about. 
Finally the fourth and most important thing that this Budget does is invest in and encourage sectors that will help New Zealand grow faster like the science sector the transport sector the communications sector and the tourism sector. Extra money has gone into tourism marketing. The Budget also signals other things we are putting effort into such as reducing regulations providing more opportunities to private businesses and putting more resources into aquaculture. These are the things we need in order to get New Zealand to grow faster. 
It is so important that this country grows faster because unless we get a faster growth rate we cannot afford all the things that members opposite rail on about at all times. But no matter how fast the country grows we cannot afford undisciplined public expenditure and that is what members opposite have to offer. This Budget is a fantastic Budget for its time. It has been acknowledged by New Zealanders to be a good Budget for this country. I am obviously happy to support it and I commend it to the House.