Roy Eric: Budget Debate 
Roy Eric: Budget Debate 
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ERIC ROY (National—Invercargill) 
: 
 Mr Deputy Speaker I think it is good of you to note that I am the 60th speaker. I say to those listening on the airwaves that this is a long debate where most members get an opportunity to participate on issues around the Budget that are of interest or concern to them. 
I want to be a little bit thematic in what I say. I listened with great interest to the Budget speech last Thursday in order to hear exactly what its flavour would be. I wrote two words on the copy of the Budget speech that I received. Those words were “desperate” and “valedictory”. I will explain why I have chosen to label the Budget speech in such a way. My memory of Budgets goes back many decades to when my father used to get quite anxious in the 1950s. In those days Budgets consisted of a series of line items. There were limitations on how far one could cart things on a truck and we found out what the subsidy would be on fertiliser and all that sort of thing. This was of great interest. In recent years the Budget has changed and I think that is good. I do not think that Governments should be prescriptive in that way. We really want to have a blueprint that does something. That is what a Budget should do. It should be a blueprint that drives the direction of the country. 
Nine Budgets have been presented by this Labour Government. In the previous eight Budgets we have had new-wave economies sustainability a carbon-neutral direction and a goal to get New Zealand into the top half of the OECD. But in this Budget we did not have a theme. The themes were “desperation” and “survival”. Labour said: “We must give some tax cuts. We have kind of resisted it all the way along and now that we cannot afford it we are going to do it.” That is the same for many of the things that have occurred in this Budget. 
This Budget does not have a theme or a direction that I can identify other than that it is one that is supposed to get Labour over the hurdle of the next election by handing out some lollies at a time when that can be least afforded. I am not saying that National is against the tax cuts. We voted in favour of them. But I am saying that there should have been a planned progressive reduction of government in people’s lives. The amount of money that the Government has taken off the good hard-working citizens of New Zealand—because it thinks it knows how to spend the money better than the individuals do—should also have been reduced. These citizens should have been getting their own money. 
I am ambitious for New Zealand. There are some things I want to see happening in New Zealand and I was looking for these things in the Budget. I want our young people to choose New Zealand as the place to live not Bondi Surfers Paradise Perth or somewhere else. I want them to engage in the New Zealand society. I want a growing economy. 
Hon Darren Hughes 
: Give us some policy then. 
ERIC ROY 
: I tell the member to keep calm because our policy will knock his socks off when we announce it. Let us talk about themes; I made it quite clear that this would be a thematic speech. I want to see a growing economy so that we can pay for the critical services that we need. We need a realistic environmental policy. We need to break the cycle of dependency. We want New Zealanders taking the initiative and responsibility for themselves. So those are the sorts of things that I looked for in this Budget. I could find no key drivers that this Government is really focusing on. 
We are an export-led economy. We live and die by the effectiveness of how we perform internationally. 
Hon Darren Hughes 
: Fast Forward. 
ERIC ROY 
: That is a good point. Why after 9 years when the key driver in our economy in terms of the export industry has been agriculture and when we have had billions of dollars worth of surplus have we suddenly come out with Fast Forward? Why has there been a delay if the scheme is so good and so cunning? 
Hon Darren Hughes 
: Why are you against it? 
ERIC ROY 
: Because I support investment in research. 
Hon Darren Hughes 
: But John Key doesn’t. 
ERIC ROY 
: Yes we do but we have a different process for delivering it and a more generous one. 
Hon Darren Hughes 
: What is it? 
ERIC ROY 
: Mr Hughes will just have to wait and see. We are going to invest in research—make no mistake about that. The agricultural economy gets a mention in only one line of the Budget in connection with Fast Forward. There is nothing else. 
Hon Darren Hughes 
: A billion dollars! 
ERIC ROY 
: It is spread over a few decades. It is very very easy to put a figure like a billion dollars in a Budget when it is bulked up over several years. It is quite misleading to say that a billion dollars has been put into the Budget because a Budget applies only to 1 year. 
Hon Darren Hughes 
: No it doesn’t. 
ERIC ROY 
: Yes it does because Labour will not be here. 
Hon Darren Hughes 
: Yes we will. 
ERIC ROY 
: It is quite quite arrogant for Mr Hughes to say Labour will be here. 
I want to take up with this Government another matter of arrogance in relation to this Budget. This Labour-led Government has been quite immodest about claiming its success. It has presided over the most prosperous period we have had in the last half-century. When all was going hunky-dory sailing along and going well and when the economy was growing and the unemployment rate was going down we were told that it was all due to the policies of this Labour Government. How immodest it was about that! But now that the economy has started to go pear-shaped and belly up we see that the third line of the Budget states: “A very large part of this challenge is generated by international forces which are well outside of our control.” During the times when the economy was sailing along and things were going very very well there was no admission that the prosperity had anything to do with international forces yet when things become a bit grim the Government has said that it is not its fault but the fault of international forces. A severe credibility gap arises from that kind of approach. 
I will dwell for a few moments on some of the things I expected to see in this Budget that would have had a direct impact on the economy of Invercargill and Southland. I mention agriculture briefly. The worst thing affecting the meat and wool sector at the moment is the cost of money—the high interest rate and high exchange rate. That is why this sector is largely uneconomic at the moment. If a fiscal policy delivers a very high interest rate and we do not do anything about it then we do quite significant damage to the meat and wool sector. It is very easy just to give some numbers about the effect of high interest rates. High interest rates give us a high dollar. Every 1 percent increase in the exchange rate reduces our income from the land by a dollar. Every 1 percent increase in the interest rate reduces prices from the land by $1 in terms of the time it takes to process and sell things. 
Sloppy ineffective Government spending is one of the things that causes the dollar to go up and it creates inflation. In the last 9 years the Government spend has gone from $36 billion to $62 billion. The Government believes in growing the economy but if it had worked in tandem with the general operation of the economy all New Zealanders would have had a similar proportional increase in their own net wealth and turnover. We would have expected New Zealanders to earn 90 percent more in that period but that has not happened because most of that 90 percent is in the Government coffers and being spent very very poorly. 
This Budget clearly does not have a theme other than survival. I say again quite clearly that I am ambitious for New Zealand. I want New Zealand to be a place where our young people want to settle down raise a family engage in the economy and not head overseas. In many respects this Government has produced a Budget that falls well short of the expectations of all New Zealanders.