Key John: Budget Debate 
Key John: Budget Debate 
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JOHN KEY (Leader of the Opposition) 
: 
 I move  
That all the words after “That” be omitted and the following words inserted: “this House has no confidence in the Government led by Helen Clark because New Zealanders have had to wait far too long to see any changes to personal tax thresholds or any lowering of personal tax rates and over nine Budgets this Government has presided over a decline in New Zealand’s standard of living compared to the rest of the world.” 
So there we have it: Michael Cullen’s ninth and final Budget. It may have been his election-year Budget but it was also his valedictory. You see he read the Budget speech but he did not believe one word of it. He did not believe one word of it. And did it not just smell of desperation? After 9 years of putting off tax cuts it hurt him to read out the words. He did not believe them. But it was a giant acknowledgment of the failure of his Government’s leadership when it comes to the economy. 
When it came to the tax cuts it was far too little and it was far too late. It is pretty interesting that this is the finance Minister who has been telling New Zealanders for 9 years that they cannot have a tax cut. For 9 years he has been saying that they cannot have a tax cut. But guess what? In 4 or 5 months’ time there will be an election and 2 weeks beforehand Michael Cullen after 9 years will give a tax cut that he does not believe in. It will be the only chance of a tax cut. 
The sad bit about the whole speech—because it was pretty sad—is when people start to reflect not just on the tax cut but on the price that New Zealanders are paying for the economic leadership shown by the Labour Government—or lack of leadership as the case may be. You see they were led to believe by Michael Cullen that he would keep interest rates under control and he has not. Interest rates have doubled under a Labour Government. There was no apology in the Budget this afternoon to the hard-working couple who borrowed $200000 and now find themselves paying $150 a week more in interest—no apology to that family. There was no apology to the families and other New Zealanders to whom he said: “Don’t worry your wages will go up.” 
But he did not tell them that the cost of living under his leadership would rise faster than their wages. The same people reading his Budget tonight are the people who picked up the  
New Zealand Herald  
today and saw that cheese had gone up 112 percent who had just gone to fill up their car and paid over $2 a litre for petrol and who cannot afford to buy butter in the supermarkets of New Zealand because Michael Cullen has not managed to produce wages that can keep pace with those price rises. 
There was no apology to the 1700 people who have lost their jobs in the last 2 months and to whom Ruth Dyson said: “Don’t worry about it because we’re all doing OK.” There was no apology to those people and no apology to the thousands of New Zealanders who every day go to a hospital and ask why after 9 years in which spending on health has doubled they still cannot get their operations why they still have to go to Australia to get cancer drugs and why if they take Herceptin they are funded for 9 weeks and not for 52 weeks. There were no apologies for all of that. 
You see the interesting thing about this Budget is that it is ideologically opposed to everything that Michael Cullen believes in. He believes in taking people’s money off them and spending it at a faster rate than they can. That has been the strategy. But let us be honest: we have heard over the last 9 years a lot of talk from Labour but we do not hear so much of it these days. 
Gone is the talk about New Zealand getting into the top half of the OECD. That was where Labour started 9 years ago: “We will be in the top half of the OECD.” Michael Cullen does not tell New Zealanders that we are not 20th any more which was the placing out of 30 that we had when Labour came to office; we are 22nd. The only OECD rating where we have literally gone up is for being more heavily taxed—we have moved from 20th to 12th. So gone is that talk. 
And gone is the talk of closing the gaps. Do members remember that? That was in 2000 when the average Maori family earned an income equivalent to 82 percent of a Pakeha family’s income. Has that gap closed? No! It has widened; a Maori family earns only 73 percent of the income of a Pakeha family. So gone is the talk of closing the gaps. 
Then there was talk of the knowledge wave. There was no talk about the knowledge wave in this year’s Budget and no talk about the hundred information technology companies that would have a turnover of $100 million. That has gone—no talk of that. 
Does anyone remember the talk of economic transformation? I remember listening through speeches where we heard it about 30 times—economic transformation. We are still waiting—New Zealand is still waiting—for economic transformation. What about growth and innovation? That was the talk. 
And last but not least was carbon neutrality. Did we hear that mentioned in the speech? No. You see Helen Clark has finally worked out what carbon neutrality means and that is that if we lead the world in it we lead the world in costs we lose jobs we lose people and we lose opportunities and most of all all that we do is export carbon dioxide emissions around the world. 
So let us turn to the centrepiece of Michael Cullen’s Budget—tax cuts. Well it has finally happened. It has been a long long wait but it has finally happened. I can only say that I hope they last longer than the ones he announced in 2005. They may not be supported by Michael Cullen but that is OK—we will come back to the legislation that will lock them in in a minute. But do they not just reek of cynicism? They come in on 1 October. We can put a ring round the date for the election: 18 October. But do not worry Labour thinks it will have a revival before going to the polls having given the average worker of New Zealand a family-size block of cheese. That is what the tax cut is worth. After 9 years of waiting New Zealanders get a family-size block of cheese. They will get two blocks before the election and they are meant to be grateful. That is the message—they are meant to be grateful. 
While they are being grateful they should think about this: the next time they get a tax cut—theoretically under this Budget—will not be for 2 years. It is a long time between toasted sandwiches. It is a long time between servings of macaroni cheese. People will wait 2 years. They will not get tax cuts in 2009. Do any members know why? It is not an election year! Actually it is not within cooee of an election year so in 2009 people are not allowed tax cuts. 
There we go; that was Michael Cullen’s tax cuts Budget. It was motivated by one reason alone: not the belief of Michael Cullen in tax cuts but his belief in electoral survival. That is the reason those tax cuts are there. The reason they have taken so long to get there is that Dr Cullen never wants to deliver them. He does not want to deliver them. 
What will be interesting to New Zealanders as they go home tonight and reflect on Michael Cullen’s Budget is the thought that they have waited for over 3000 days under a Labour Government to get a tax cut—3000 days. If they are paying the top personal tax rate which kicks in at $60000 and will eventually move up under today’s Budget they have to wait for only 125 days from go to whoa for their tax rate to go up. You see under Labour one waits 125 days and one’s taxes go up and one waits for over 3000 days for one’s taxes to go down. 
Earlier this week Michael Cullen told us that tax cuts that delivered a reasonable amount to New Zealanders were reckless and unaffordable. Maybe Dr Cullen should have looked over the road over the Tasman to the Australians. 
Hon Dr Michael Cullen 
: These are bigger than the Australian tax cuts—miles bigger. 
JOHN KEY 
: Then the design is terrible I say to Dr Cullen. We will come back to that in a minute. Let us look at it. During the same period of time that Labour has been in office in New Zealand people in Australia earning $47000 a year have got a tax cut of $100 per week whereas under Labour people in New Zealand have got zero and 2 weeks before the election they will get their block of cheese. In Australia they get $100 a week and in New Zealand they get zero until they are within 150 paces of a polling booth when they will get $16. That is the difference. If anyone is wondering why 44000 people left New Zealand last year and went to Australia I can tell that person that it is because they were looking for economic leadership. It is coming but not under a Labour Government. 
What else did we learn when we heard what was in the Budget? There will be an urgency motion tonight. The House will go into urgency. Why? To legislate for the tax cuts that will come in on 1 October. Actually the real reason is that Michael Cullen—and he admitted it earlier in the week—does not trust himself to deliver his own tax cuts if he does not legislate for them. He is like a chocoholic who loves Caramello and has to hide it in a box on top of the wardrobe so that he cannot find it. He is legislating for his own tax cuts because he does not trust himself. What is actually worse than that is that his own colleagues do not trust him. They want the House to go into urgency. What do Governments do? They change legislation. That is what Governments do. Beyond 2009 if New Zealanders trust Labour to give them a tax cut Michael Cullen will be whipping it away. 
Well enough of Michael Cullen. [ 
Interruption 
] Well we will get to some policy actually. I want to talk about National’s plan. I tell the members opposite to listen up because they may well be beneficiaries of it. This is the message to New Zealanders: under National tax cuts are a priority; under National personal tax cuts are a priority. It is a pretty simple message: under National New Zealanders will do better. The plan will be better the structure will be better and the delivery will be better. Most of all New Zealanders will be able to believe our tax cuts they will be able to trust our tax cuts and they will not wait 3000 days to get them. They will not be doing that. Most of all our tax cuts will not be just about putting dollars into the pockets of hard-working New Zealanders; they will actually be about delivering the right incentives in the economy. [ 
Interruption 
] We know that Labour members do not believe in tax cuts and they are admitting that. They may not like to hear it but tax cuts deliver the right incentives. Tax cuts let New Zealanders get ahead in their lives. They encourage New Zealanders to work hard to get extra responsibilities to save and to get further education. You see we believe in tax cuts we believe in the power of tax cuts and we will deliver them. 
What is more we can afford to do it. I will tell New Zealanders how we can afford to do it. This year the Government will spend $60 billion and not one of those dollars is being reviewed—not one. The Labour Government has for 9 years wasted money hand-over-fist and it does not care. One needs only to look at what is happening in Australia to know that tax cuts are possible. The Labor Government in Australia came in after 9 years of tax cuts and it still found savings and it still found the ability to do things. 
I want to make one last point about Michael Cullen. He has laboured on about interest rates but this is the simple point: if Labour and Michael Cullen care so much about interest rates why has he let them double under his watch? Let me say this very clearly: we have a plan for New Zealand. It involves tax it involves infrastructure it involves curbing the bureaucracy it involves having proper planning legislation and it involves having the right future. 
But most of all let us answer the real question. This is the difference between Labour and National: Labour is stuck in the past; it is the past. Helen Clark and Michael Cullen care more about the Viet Nam War and the Springbok Tour than they do about the big issues facing New Zealand today. They do not want to front up on a decent emissions trading scheme they do not want to front up on the big issues of globalisation they do not want to front up on the issue of why so many New Zealanders leave and they do not want to front up on how to lift economic growth in New Zealand. What they want to do is meander around in the past. 
National will not do that. National will take New Zealand forward on a high-growth environment where our young people know they have a future where they know that we as a Government will back them to succeed and where we will deliver them the tools they need. We will deliver fast broadband so that they can be connected to the world; a future-looking Government that knows where it is going; and a country that is not afraid of itself where winning is part of the national conversation where it is not just about participation but also about succeeding and where there is aspiration hope opportunity and ambition—most of all ambition. 
New Zealand deserves a lot better than what it has had in the last 9 years. New Zealanders deserve a National Government and in 5 months’ time and two blocks of cheese that is exactly what they will get.