Chauvel Charles: Budget Debate 
Chauvel Charles: Budget Debate 
[Volume:639;Page:9538] 
CHARLES CHAUVEL (Labour) 
: 
 I was very proud to sit in the House last week and hear the Minister of Finance read the Budget speech. It was a bold and strategic speech. It tackled not only the short-term challenges facing this country like inflation and the high dollar but the important issues like managing our ageing population and climate change by building a platform to make New Zealand more resilient and flexible over the long term. That Budget speech and the content of the appropriations provide savings and investment initiatives that will help our economy become more dynamic and responsive to the challenges ahead. 
I was very sad to sit here and hear Mrs Collins’ speech about immigration. The speech echoed the same wrong information rattled off by Dr Lockwood Smith on Friday during his speech. The reality according to Statistics New Zealand material released last week is that New Zealand is in a net gain situation as far as migration is concerned. It is a myth that people are leaving this country in droves. That is the sort of thing we hear from the National Party all the time and the sort of thing we heard on the hustings during the last election. Our net gain from immigration in New Zealand in the year to April was over 11000 people. So let us have some reality in the debate not pretend that things are so bad in this country that people are leaving. Things are looking up and we are gaining people—the sorts of migrants we need to have in order to build a strong future. 
It is disappointing to hear a party try to talk down the prospects of this country. This is a great country with a lot going for it and it will be even greater once the effects of this Budget start to wash through. I think it is a shame when people try to talk down our national prospects just as Dr Brash did in Sydney a couple of years ago when I was working there. He came to Sydney spoke to a group of business investors and told them all the things that he said were wrong with the New Zealand economy. That is just treason. An Australian would never go to another country and do that. We should be talking up the good things about this country not trying to talk down our prospects. I look forward to the time when members opposite start doing that and acting in what is truly the national interest. 
Unlike those pessimists on the other side I can see that this Budget supports families young and old through a continued investment in their health education safety and well-being. The enhanced KiwiSaver scheme is a good example. As we have heard from previous speakers it gives tax credits of up to $20 a week for savers and establishes employer contributions to be phased in over 4 years beginning in 2008 and going up to 4 percent when we get to 2012. Those contributions are offset by a tax credit of up to $20 a week per employee. People whom I spoke to over the weekend are just delighted that the Government is encouraging them to save. It is a habit that we have lost and we needed to reactivate it. There is a public yearning to be encouraged to save. 
As I said last week there are numbers of surveys that show that New Zealanders really needed a leg-up and some incentives to help them get on the savings ladder. It was interesting to read in the  
New Zealand Herald  
of 24 February that there was a survey conducted about people’s superannuation and retirement savings habits and aspirations. The survey asked firstly: “Do you personally belong to a retirement savings scheme?”. The answers were: yes 31 percent; no 68 percent. That is a terrible rate of saving and we plainly had to do something about that. This Budget starts to deliver on the need to address that issue. 
The next question asked: “Will you join KiwiSaver when it starts in July if you don’t already belong to a scheme?”. Of the 68 percent who had said they did not belong to a retirement savings scheme 23 percent said “yes” and 28.4 percent said they did not know. So nearly half the population was either going to do it or giving it some thought. The third question was really interesting: “Do you think saving for retirement should be compulsory?”. The answer “yes” was 63.4 percent. So plainly in that survey Kiwis were saying they really needed incentives to begin to save. This Budget and the alterations and enhancement to KiwiSaver will provide those enhancements and incentives not by placing compulsion on employees but by giving them the encouragement that is required to join KiwiSaver and begin a proper savings scheme. 
I do not want to see these bold moves that the Budget has put in place put at risk. We all know that with Labour in Government universal superannuation will not be questioned. Every New Zealander has a right to a decent publicly provided pension when he or she hits 65. We have tried to ensure that in part by making sure the rates for superannuation are decent and able to be lived on but also by building up a strategic level of investment with the Cullen fund to make sure there is actually a future for superannuation in New Zealand. KiwiSaver is clearly designed as a top-up to superannuation not a replacement. So the dual investment programme—KiwiSaver on the one hand and heavy investment in the New Zealand Superannuation Fund on the other both of which were opposed by members opposite—is all about trying to guarantee a decent standard of living going forward for retired New Zealanders. 
Indeed people should be worried that National has dropped hints about scrapping universal superannuation. It is clear that the only way to guarantee superannuation is to keep a Labour-led Government in office because we remember that the last time Bill English was in Government National cut superannuation rates. Labour believes in a non - means-tested universal pension and the National Party does need to come clean about what its plans are. 
I spoke briefly on Friday about some of the business reaction to the Budget and more interesting reaction has come in since then. I want to read to the House a couple of the reactions from some of the commentators. John Shewan chair of PricewaterhouseCoopers in the  
Dominion Post 
 of 18 May stated: “The Government is to be applauded for having the resolve to reduce the rate in spite of stiff opposition from close quarters. The tax cut will result in more investment growth and productivity.” David Skilling from the New Zealand Institute in the  
New Zealand Herald 
 on the same day stated: “Encouraging savings will have a range of benefits. For individuals increased savings will strengthen their financial position as well as providing them with a more significant ownership stake in the economy helping to ensure a nation of owners not just employees. Increased savings will also strengthen the business environment. Over time increased personal savings will strengthen the capital markets and provide a much larger domestic pool of capital to finance company growth.” 
The  
National Business Review 
 was also interesting on Friday 18 May. There were a number of commentators: John Cantin Paul McPadden Brahma Sharma and Jan Dawson all from KPMG and Donal Curtin from Vestar investments gave very positive commentary about the way this Budget was very positive for business very positive for ordinary New Zealanders and very positive for the country in general. 
It is not just in the area of the economy and in savings incentives that the Budget has a good set of measures. In the education sector there are big gains. The Budget allows for 700 new year 1 teachers the building of 14 new schools and 180 new classrooms. There will also be an increase of 4 percent to schools’ operations grants and an extra boost of $50 million for early childhood education. That is real money being spent in an area that matters to Kiwis. Those operations grants are always stretched but this Labour-led Government has listened to schools and increased operations grants by 10 percent above normal inflation over recent years. 
In health the Budget committed an extra $3 billion over 4 years to the sector—again investing real money on real areas of service that matter to New Zealanders. Some of those initiatives include expanding elective surgery by $238 million worth of expenditure and increasing the focus on obesity and healthy eating by nearly $64 million. The Budget will also ensure that we improve services for people with disabilities and older people including workforce issues arising from low-paid workers. Some of the neediest employees in our society work hard doing some of the most unpleasant jobs and they will benefit by $356 million—again real money. We have increased the pharmaceutical budgets for district health boards by $80 million and expanded the immunisation schedule to protect people from disease with the sum of $68 million. 
As my colleague Mark Gosche has said transport infrastructure is another area to receive a huge boost in expenditure—again real money—with $500 million contributing to the electrification of public transport the Auckland rail network and the upgrade of Wellington’s existing rail system which is actually already very good. The Budget also addresses the area of sustainability in many ways. All in all it is an excellent Budget and I am proud to get up and support it.