Estimates Debate — Vote Finance

I am pleased to be able to take a call on Vote Finance in this year’s estimates debate. The reason is that there can be no more essential vote in the current economic conditions than Vote Finance. I think we all agree that this country and the world are facing the greatest economic slow-down since the 1930s. We have seen up to $50 trillion wiped off world balance sheets. Management through tough times is why New Zealand elected this Government, because New Zealanders knew that National had the skills, the people, and the plan to deliver economic recovery. The reason that Labour members are on that side of the Chamber is that they patently have no plan. New Zealanders knew that; they knew that all Labour would do is spend money, so they turned to a party with economic know-how and economic muscle. They have banked on us to deliver them a way out of the recession.

Let me tell members what we did in Vote Finance to deliver that sort of recovery. The first thing this Government did was set three new priorities for Treasury. We made it clear to Treasury that we were interested in managing New Zealand’s path through the downturn, making New Zealand Government expenditure and investment productive, reflective, and effective, which, quite frankly, is something that has been missing from this House for the last 9 years. We were focused on improving the productivity of this economy, because without productivity growth New Zealand will not recover from the slump it has been in for 9 years, with anyone who is making a living and creating wealth getting kicked. Improving productivity is fundamental to our plans. We will be working very hard on that.

We have laid out six key elements that will help do that, and the first is productive infrastructure. We will not continue the infrastructure drought that this country has suffered under 9 years of Labour. There are bottlenecks all over this country in roading, electricity, health, prisons, and in schools. We are seeing a lack of fundamental infrastructure that stops businesses from getting ahead, so we will address that. We will address our Public Service. If there is one thing that we hear from the people of New Zealand it is that they are sick of the Public Service getting in the way of business and not helping business. When we came into office our excellent Minister of Finance very quickly sat down with the chief executives and made it very clear to them that he wanted a line-by-line review, not only of their expenditure, but also of their productivity and what they would do to play their part in lifting growth in the private sector. Public services are a huge part of this economy. If they are not working well and if they are slow or ineffective, it will slow down our economy, and that is what we have seen continuously. We will see a better, smarter Public Service delivered under this National Government.

We will improve education standards so that we have highly skilled people driving our companies. We will build a world-class tax system to encourage investment in New Zealand. And, importantly, we will improve the regulatory environment for business. [Interruption] The reason that members opposite do not want to listen is they have no clue how the regulatory environment affects business. They spent 9 years putting roadblocks in the path of business through more and more nanny State rules designed to do nothing more than clog the arteries of this country. Members opposite clogged the arteries of this country; this Government will focus on improving the regulatory framework. We have started with the Resource Management Act, we are working on the Building Act, and we are completing a full review of the Overseas Investment Act because we know that we have to have regulation that serves New Zealand and that does not hinder it. If Labour members had learnt that lesson then perhaps they would not be where they are.

We will put money into innovation and business growth, because innovation, development, and technology will help this country reach its potential—the potential that we aspire to, that John Key stood up for, and that New Zealand backed. We know that New Zealand is heading into its fourth quarter of recession, but in fact it is much worse than that. Our tradable sector, which has to be the backbone of our economy, has been in recession for 5 years. What did Labour do about that? It did nothing. It relied on domestic consumption and on spending public money to keep the economy going. The backbone of this economy, the productive sector, was in free fall, and what did the previous Labour Government do about it? Nothing. We now have a plan to do something about that.

Let us address the issue of debt. One thing that this Government is not going to do is burden future generations of New Zealanders with a debt millstone around their necks that will cripple them for years to come.

One of the pivotal moments for me this year was Budget day. I was privileged to be in the Opposition lock-up, which is a fairly scant and tawdry affair lasting about 50 minutes. I was thumbing through the Budget documents, and at about 10 minutes to 2 I had a sudden panic attack because I thought I must have missed a couple of chapters and it was almost 2 o’clock. I thumbed through the documents and, to my relief, and then to my concern, I realised that I had not missed any chapters and that a chunk was missing. The chunk that was missing was the action plan for recovery—the action plan for growth, for jobs, and for giving New Zealanders a clear sense of how to get through this time of challenge.

💬 Amy Adams: Oh, what nonsense.

No, it is not a rolling maul that we need; we need a game plan, and any rugby player can tell the difference. The member is from the South Island; she should know.

The mystery was explained to me this week when it was my privilege to meet with a very senior non-parliamentary member of the National Party hierarchy. After a couple of drinks he leaned across and said: “That John Key is quite a nice guy, isn’t he.” I said: “Yes, he is quite a nice guy, actually.” He said: “He’s a good tactician, isn’t he.” I said: “Yes, he is a good tactician.” He said: “He’s not much of a strategist though, in truth, and that’ll probably be his undoing.” I said: “Sir, I believe that you’ve hit the nail on the head.” John Key can read a map, but he has no compass. There is no compass in the Budget.

At the end of the day, Vote Finance is not about us; it is about them: the New Zealand people. Let me read a few stories about the New Zealand people. In recent months we have heard that we can expect another 60,000 to 79,000 job losses. We have been told that over 1,000 New Zealanders are joining the dole queue every week. In the last few weeks we have seen 60 fellmongery workers in Dunedin lose their jobs through redundancy, 190 workers in Gisborne, 17 workers in my old town of Timaru at Duncan Ag, 33 at Unilever, 50 at Formway Furniture, 40 at Freightways, and 20 at South Canterbury dairy shed builder Anderson and Rooney Engineering. And the Public Service Association says 2,000 civil servants have lost their jobs.

As unemployment grows and job prospects shrink, we expect to see coherent action from the Government, but we have not seen it. The reason the cycleway was emblematic in Vote Tourism was not, as Mr Coleman would have us believe, because we are trying to spin that it is a bad idea; it is just an insufficient idea. Anybody who says that a cycleway that reduces 1 day’s worth of job losses for $50 million is an answer to the recession has to think again.

Budget 2009, the subject of these estimates, proves that the Government has no ideas. National was in Opposition for 9 years. One would have thought that it had used that time to set direction. But, as people unfortunately said of the Labour Government in the mid-1980s, why do they not cut out the middle man and vote for Treasury? The only ideas we have seen came from the distinguished officials themselves. Leadership at the political layer has been so thin that National has had to rely upon officials to at least ask the hard questions. We may or may not agree with the prescription, but we sure as heck agree that the problem is real.

The Government member who just resumed her seat, Amy Adams, asked why the Opposition does not solve the recession. Excuse me! National was elected. New Zealanders are fair-minded people. They will give the Government a chance to lead and govern, and if it is done well, then they will give it another chance. Kiwis are fair and decent people. But if National blows it, like it is doing, by omission, then they will let the Government know at the ballot box.

Budget 2009 did precisely nothing to protect jobs. It failed to invest in people. It failed to develop research, science, and technology, and training. Members on both sides of the House have come from humble beginnings. They are the hard-working children of working-class or challenged families—

💬 Aaron Gilmore: Like you, mate.

Mr Gilmore is one. But the difference between this side of the House—and I include the Greens—and the Government side, as has been amply demonstrated in the area of social development, is that when we climb the ladder of social mobility we do not pull it up after ourselves. We are here to make sure that the next generation benefits from the opportunities we have had. That is what we believe—not that we should sell State housing.

Above all, the Government has fundamentally undermined the well-being of our future by deferring New Zealand superannuation for a decade. The superannuation scandal was the big story of Budget 2009, and it is at the heart of Vote Finance today. The solution the Government came up with for the $10 billion problem was to simply kick for touch, suspend, and put on to future generations—Generation X and Generation Y—the burden of superannuation in the future. Right now one in 7.2 people is drawing that benefit, or 7.2 workers for every superannuitant. When the scheme resumes, the number will be one in 3.7. If we cannot afford the tax now, we will not be able to afford the tax burden then.

A decade of deferrals has left what will be nearly a $38 billion hole by 2030 and a $60 billion hole by 2050. It cuts in half—by 50 percent, according to Treasury figures—the total ability, at its worst, of the New Zealand Superannuation Fund to pay into the benefit stream required. It cuts the ability to pay by 50 percent. The truth is that superannuation was always going to be difficult. It will now be extremely difficult unless the Government takes the lead and says we have to start it earlier, otherwise the problems will come home to roost for our young.

Labour’s position is clear. We should continue to pre-fund, because through pre-funding we continue to invest dollar cost averaging in markets when they are low. As they build up, we will ride the benefit of that investment. Here is the acid test for the Government: it allowed a boat to be floated 2 weeks ago about using the Superannuation Fund capital for investing in social infrastructure. If the Superannuation Fund is such a good idea, why does the Government not keep paying into it so it stays strong? National cannot have its cake and eat it too.

Do members not love the pledge card? The pledge card was the signed promise from Mr Key that he guaranteed 3 years of tax cuts. That promise was made 6 weeks after Lehman Brothers folded. It was after Merrill Lynch, the Prime Minister’s old firm, got in trouble, but he kept the charade going. National threw Parliament into urgency before Christmas to deliver a third of the benefits to the top 3 percent of income earners, and to pass a law that stated that 71 percent of New Zealanders get nothing. I repeat: if people did not earn over $40,000, they did not get a penny out of the incoming Government. It was all to be in the next 2 years, but that suddenly melted away. I believe that in their heart of hearts the incoming National Government knew that it could not deliver those tax cuts, hence the urgency to get the charade bedded in before Christmas.

Budget 2009 lifted the veil of ignorance from the eyes of New Zealanders, and most Kiwis, being decent people, said that the tax cuts were a bad idea at the start and good riddance to them. They realised the pledge card promise was a con, but now they ask themselves how if that promise was a con they can believe anything the Government says. If its credibility looked a bit shaky after the broken tax promise and superannuation promise, it was not looking too crash-hot by the middle of this week, for reasons we do not need to go into today. The Government’s credibility does not look too crash-hot this week, does it?

New Zealanders are starting to lose trust in the integrity of a Government that came in promising them that nothing much they liked would change, except KiwiSaver. National thought KiwiSaver was a good idea, but it gutted it in half. It liked economic development, but it cut the vote.

Following that speech from Opposition member David Cunliffe, who attempts to know about finance and tell the world how things should be done, let us just have a look at what Labour left the New Zealand economy after 9 long years. It left us with some of the highest interest rates that we could find, and what has National done? We have reduced interest rates for New Zealanders. Labour left the New Zealand public with negative growth, but we will go into the next election with an economy that is growing through the toughest economic times we have seen in this generation. Labour had the commodity boom of a generation, but it delivered our country negative economic growth. Labour squandered the perfect chance for New Zealand to go up the next level of the OECD, even though that was its promise. We went down. Labour did not deliver for the New Zealand public or the New Zealand economy, and it gave us Budget deficits into the future to pay for its election promises.

National, on the other hand, will work towards a strong economy that will give us the ability to fund our social services and deliver a future for New Zealanders. That is what Bill English did in the Budget. He delivered a Budget that brought certainty and security to a public that needed it at the most uncertain time in our history. He brought in a Budget that will give New Zealanders confidence in their future. It gives them direction and lets them know they have a Government that is competent when it comes to financial matters. This is a Government that wanted to see the best for them, and maintained social spending at the same time as delivering an economic future. That is a very difficult balance to get, and no other country has managed to get that. We got an upgrade from Standard and Poor’s the afternoon of the Budget. No other country in the world was able to do that at that time. That shows great economic management, and that we are willing to look after our people not only by delivering them consistency but also by showing them a future. That future is bright and strong. It is one that New Zealanders voted for and are happy with. The public has shown their acceptance of and support for the Budget, and their support for this Government through the polls. The Labour Party needs to look at what the people are saying, because they love the Budget, they understand it, and they support it.

The interesting part is that the Labour Party is going around and saying that we should be spending more. Those members come into this House and say, with regard to some of our initiatives, that we should be spending more, because, in the words of Mr Cunliffe, this is “an insufficient idea”. So he wants to spend more money at a time when we have not got any money. Where will he get this money from? Before members tell me where he will get this money from, I have a question for them. I want to know how much more money he will spend. If he is the economic genius he purports to be, he needs to put some numbers on the table. He will not do that; he is not putting any numbers down, and he is not saying where he will get the numbers from anyway. He does not know. He has no idea. Labour members have no strategy. Labour’s strategy is to spend more and do more. Well, Labour members do not show us what they will do, and they do not show us how they will fund it. They do not know what they are doing, and they would not be able to deliver anything more.

The National Government has delivered key infrastructure for this country, and a productive region like the Waikato is getting the biggest payback we have ever had from a Government, and it is from the National Government. It is the building of the Waikato Expressway, something that the Labour Government would not do. It had 9 long years and would not do it. We made a commitment to do it, and we will deliver on it. That will be one of the biggest infrastructure spends in our region, and it will deliver economic growth in the heartland of New Zealand for our export economy. It will provide the incentive for people to invest in those regions. It will link us with Auckland and take advantage of our economic reforms. That is the opportunity.

It is with pleasure that I take a call on Vote Finance in the estimates debate. There are a number of issues that I could talk about in this particular debate: the chronic current account deficit, the trade balance, and overseas debt, which is now at about 100 percent of GDP. But I want to focus on the relationship between climate change and New Zealand finances and the New Zealand economy. I think this is one of the most pressing issues we face.

Today we have a climate change Minister who has tried to obscure the debate by talking about a $15 billion cost to the New Zealand economy of meeting a 40 percent responsibility target under the Kyoto Protocol, based on a whole bunch of crazy assumptions. But I will put that to one side, because regardless of the exact outcome of the Copenhagen meeting and regardless of the exact reduction target for which New Zealand ultimately takes responsibility, one thing is for certain as a result of this ongoing debate and the international agreement that is coming our way. We will need either to reduce our domestic emissions, increase our domestic greenhouse sinks, or we will have to purchase credits from overseas. They are the only three options New Zealand has. All of those three options have significant impacts on the New Zealand economy and New Zealand finances.

Those who think there is some magical way out of this, that somehow New Zealand can put its head in the sand, that somehow through politics we can make this whole greenhouse problem go away, are kidding themselves. It will not go away. We have only three choices. We can reduce domestic emissions, we can increase sinks in New Zealand, or we can buy overseas credits. All three of those options will have significant impacts on the New Zealand economy.

If our objective is for the New Zealand economy and society to prosper in the world, then we need to reduce our greenhouse emissions domestically or increase our sinks domestically. That has to be the first option, because every tonne of emissions we cut in New Zealand and every tonne of sinks we have in New Zealand is a tonne of carbon dioxide we do not have to purchase overseas, at great cost to the New Zealand Government and/or the New Zealand economy. Every time we reduce emissions in New Zealand, it is an advantage for the New Zealand economy and the New Zealand Government. For a country with a persistent trade deficit in goods and services, for a country with a net international investment position that is now approaching a 100 percent negative position—100 percent of GDP—it is incredibly important that we do not add to our international obligations by having to purchase more and more carbon credits from overseas.

There is no way we can fudge and weave, and pay lip-service to this issue. There is no way we can go to the United Nations Framework Convention on Climate Change and pay lip-service, without it costing us. There is a way of thinking in New Zealand, which has been promoted by National and by the ACT Party in particular, that somehow we can dodge and weave our way out of this. There is a reason why New Zealand farmers are going around saying: “This is all bunkum. We don’t have to do this.”, and it is in part because National and ACT are telling New Zealand farmers that this thing is all bunkum. Well, it is not bunkum. There is no way out of it. The only question for New Zealand now is whether we reduce emissions domestically and save ourselves some money or whether we will have to purchase emission reductions from overseas, and have to pay for it.

If we want to have a prosperous economy in the future we have no option but to go down a low-carbon route. The sooner we get our heads around that and stop prevaricating and trying to avoid it, and saying we will try to have a low target or whatever, and the sooner we get our heads around the fact that we have to have a low-carbon economy if we wish to be a wealthy society, the sooner we will start going down that path and actually put ourselves on a path to having a prosperous economy. Currently, we are hoping this thing will go away, but it will not.

A few days ago the Green Party put out a study that showed the ways in which New Zealand can have a low-carbon economy, reduce domestic emissions, and increase domestic sinks. Roughly speaking, the way we said we could have a 40 percent target was that a quarter of it would come from overseas—we acknowledge that—a quarter of it would come from forestry, a quarter of it would come from the better management of the Department of Conservation estate, and a quarter of it would come from a whole bunch of other measures. If we implement those measures we will put our economy on a low-carbon direction, which means having a prosperous economy.

I am reminded of some words said by John McCain, the senator who ran against Mr Obama in the presidential election. He said many years ago—I think it was during Ronald Reagan’s election campaign—that elections have consequences. The summary of his words was that the winner gets to pick, and he is right. Elections do indeed have consequences, and the winning side gets to pick. But it is very interesting to look at what is going on around the world in respect of the global recession, and at Mr Obama, Mr Rudd in Australia, and Mr Brown in the UK. They have a thing called a plan and a strategy. It is very interesting that each of those leaders, especially Mr Obama, is using the recession as a tool to motivate their populace to make some structural change and some positive reforms within their economies, and those reforms are needed. Whether they are in the banking industry or the environmental field, they are needed. This recession, which is the worst in our lifetime, serves—because it is here with us—as a tool that they can use to promote positive reforms in their economies.

Then we come to the economic outliers, one of which is this country. I have to say that the National Government is consistent in using the recession, but not as a tool to motivate. National uses it as an alibi to put forward and boot around the most vulnerable. Let us look at National’s great set of achievements, which the member David Bennett, who is from Hamilton, I think, waxed eloquently about. He talked about the uplifting of our rating by Standard and Poor’s, but 24 or 48 hours later he had forgotten about the word Fitch. Fitch dropped our rating, but the member had selective memory about that. He forgot that the employment platform his Government inherited from Labour was around the 3.4 percent to 3.6 percent mark. It will be very interesting tomorrow to see whether the unemployment figures move past 5.3 percent, 5.5 percent, or 5.7 percent. We wait and we hope that they will be more positive than others suggest.

This Government uses the recession as an alibi to make deep cuts for the most vulnerable. I talked this afternoon about special needs funding, and Government members rolled their eyes. Mr Quinn said “Rubbish!” when I talked about a 12-year-old constituent in my area who has cerebral palsy and who will be on the scrap heap because of a $2.5 million cut in the Budget. Mr Quinn rolled his eyes and said “Rubbish!”. I invite him to lose his arrogance and to go and see Brittany Graham. I invite him to look that 12-year-old and Julie Baker, her mum, in the eye and tell them that they are rubbish. Oh no, there is a bit of silence over there. There is a bit of reflection, perhaps. Oh no, I do not think I will see that. I will be dead before I see that member retract what he said about that family.

Then the Government is making other cuts, using the recession as an alibi. If there ever was a need for training in this country, second-chance opportunities for older folk and for those on scrap heap and down the road, it was a thing called adult and community education. But, oh no, Anne Tolley gets up and wears it as a badge of honour that in her Budget she has slashed 80 percent of the funding. She almost says it with pride, with a robustness. She is proud of the fact, and she belittles people like those in Oxford, in my electorate—for example, a man who was made redundant some years ago who did what she would term a “hobby course”. It was a DIY course. That gentleman today has a home handyman business and is surviving. He is not on the scrap heap. And, by the way, the taxpayer is not paying him a benefit.

Another example is a woman in Kaiapoi who did another Tolley special “hobby course”. She did cake decorating. She is now employed in one of the biggest bakeries in New Zealand, which is involved in producing bakery products that are sent all around this country, and the bakery is looking to export to Australia. She has got a job out of that course.

Another example is a woman in Rangiora who did another Anne Tolley special “hobby course”, quilt making. The member over there Mr Gilmore has done more in his short lifetime than three or four people have. He has conquered Mount Everest and invented rugby. He has done everything, that boy. The woman from Rangiora did a quilting course—a hobby, the National members would say—and is now working full time making quilts and selling them in her own business.

National is using the recession for an alibi to make cuts. We have the example of 2,800 apprentices. When the Labour Government left office, 14,000 young people were in trade training. Back in 1995 the previous National Government abolished the Apprenticeship Act. Thanks to National, 2,800 young people are on the scrap heap midstream in their apprenticeship.

Then we get to the jobs package. I am in favour of any resource being put in place, especially for young people, to try to keep them in jobs or to get them in jobs. But here is the rub: with the money that was put up, 9,000 young people may be lucky to get a job for 6 months out of that jobs package. If we look at the statistics, information, and data we see that that leaves another 49,000 people between the ages of 16 and 24 who will be in exactly the same position as they are in today: down the road.

I say to the Government that there is goodwill on this side to join with National with appropriate policies to assist the young, the aged, those out of work, and those who need support. But I say to that side that they should not con the public. A jobs package of $152 million that will eventually help 9,000 young people to get a job for 6 months—maybe, if they are lucky—is trumpeted as being a huge, great event and a silver bullet, but nothing changes for those other 49,000 people aged 16 to 24. I am after a policy, I am after a solution, and I am after an answer from National.

Then we get to the great lie and the great con. Again, the recession is being used as an alibi to rip the guts out of the Cullen fund. I have said in a speech before with regard to that crew over there that over the last 40 years the biggest con was Muldoon, when he pulled out the rug and bribed people with their own money in the 1970s. Then we had the Bolger Government, which said it would not raise the age of eligibility from 60 to 65—“no ifs, no buts, no maybes”—and then what did it do? It did it. Then we had Mrs Shipley in the late 1990s, aided and abetted by Bill English, her Treasurer, who cut the pension three times, did not inflation-proof it, and ripped the guts out of support for pensioners. National members sit there today congratulating themselves that National has not altered the age or entitlement for superannuation—yet—but what it did was to nip round to the back door and suspend payments into the Cullen fund for 11 years.

We had Dr Bollard saying last Tuesday that we need to encourage a culture of saving in this country in order to offset our reliance on foreign funds. Of course we will always need foreign capital, but he said that we need to try to provide some balance. What is the Government’s response to that statement? National does not need superannuation. National will never need superannuation, and its core constituency will never be reliant on national superannuation in the years to come, will it? But the core constituency, the vast majority of Kiwis themselves—a quarter of a million of them—had 10 years of certainty and knew the rules. Those people were generous and stepped up through KiwiSaver and were prepared to put up their dough and make their contribution. But now, after a decade of certainty, of people knowing what their retirement plan would be and what the Government would come to the party with, we are having debates in National about age and with commentators. Now we have people in their late 40s and early 50s saying “Hey! What about me? What do I do?”. The Government has changed the rules. Will there be a superannuation scheme for people when they retire?

I say to that crew over there that there is no reason to do what National has done. It has used the recession as an alibi to put the boot into future generations. In fact, some could say that this is privatisation of superannuation by stealth, because we know what the debate will be. The debate will be whether we tax future generations. National members will ask: “Do you want us to tax you to reinforce the fund and repay the money we did not put in? Or shall we just forget about it?”. We know what the populace will say in those circumstances.

The Government should not be so smug after 9 months in office. People are listening to the Government and they are not particularly happy with some of the things they are now learning about it. I have seen polls going up and down; they are all over the show. But I tell the Government that it is not about Standard and Poor’s and it is not about the polls. It is about the people aged 50-plus who are worried about superannuation. It is about Brittany Graham, a 12-year-old, whose mother, Julie Baker, is worried about how the hell she will look after her daughter when the special needs funding gets ripped out from under them. It is about people, actually. It is not about crowing about numbers and Standard and Poor’s; it is about people.

I rise to take a call on Vote Finance. I am calm; I am not going to get angry, like the previous speaker, Clayton Cosgrove. I am not going to comb my hair during my speech, but I am going to talk about the legacy that that mob over there left this country. The previous Labour Government left behind falling economic growth. We are in a recession, but that gentleman over there did not hear that we are in a recession and that we have to be prudent in our finances, not tax and spend. We are not going to borrow extravagant amounts of money in order to fund a superannuation fund or social programmes that do not work.

From that party over there we were left with rising unemployment, some of the highest inflation rates in the world, and a promise to take us to the top 10 of the OECD countries. After 9 years, where did we languish? Clayton Cosgrove is silent now. We are 22nd on the list of OECD countries. The legacy that that mob left us was 5 consecutive years of tradable sector contraction. That is right. The Labour Party does not realise that it is about both the public and private sectors leading us out of the recession.

I am not here to talk about Labour and its $1.5 billion hole in the Accident Compensation Corporation, but I will talk about the programme that this National Government—this Government of action—is proposing and putting in place. After 9 months we are quite proud of the fact that we can boost health spending by $3 billion over the next 4 years. We are focusing on education, which is the critical plank to productivity in the future, and on upskilling people.

💬 Paul Quinn: They can’t take it.

No, they cannot; that is right. What makes me sad is that that lot, who profess to speak for working people, have totally neglected working people. They have turned their backs on them, as Mr Cosgrove has turned his back on me. That shows what little respect he has for other members of the House.

What is National focusing on? We are focusing on infrastructure spending that will increase the likelihood of productivity in this country. We have transport programmes and roading programmes that will enable our businesses to operate in more effective ways. We also released over the weekend a package aimed at reducing youth unemployment, because we care about those youths who are underprivileged and underskilled, and we want to fund them to get into jobs. It is about jobs.

I am proud of the fact that this Government has put an investment into the Tāmaki Transformation Programme. We did not talk about it for 6 years, writing business cases and holding false consultations with the community. The community just said: “Give us some action!”. So what did we do? Three weeks ago the Prime Minister, the Minister of Housing, the Minister of Māori Affairs, and myself were at Ruapōtaka Marae, saying to the people of Tāmaki: “We support you. We believe in you. We will give you jobs, we will give you opportunities, and we will give you the standard of housing you deserve as New Zealanders.”

It is not about hot air and promising things that Labour did not deliver on over its 9 years. It is about the fact that we made promises and undertakings around entitlements. We made promises and undertakings around benefits. And we have kept our promises. We are happy to keep our promises, because we are a Government of integrity and honesty. We will not set up false inquiries, bringing in QCs in order to give bogus decisions. We will not do that. We are a Government that keeps its integrity and its honesty in what we do, every day.

It is about demanding much from our public services. It is about saying that we cannot increase prices and decrease return on investment, and expect to get away with it. We will hold the Public Service to account. We will demand of the Public Service the same rigours as would be demanded in the private sector. We are a Government that cares. We are a Government that listens. We are a Government that is out in the community hearing what the people of New Zealand have to say. We are not about bagging other people. We are not about accusing other parties of making false promises. We are about keeping our own promises. Thank you, Mr Chairperson.

I was very pleased to hear Mr Sam Lotu-Iiga say that we are a Government that listens. Well, I say that we should listen to the 91 percent of people who tell the pollsters that they are National supporters, that they will be voting in the referendum, and that they will be voting “No”. I say that if the National Government does not listen to those people, then it does not listen at its peril.

💬 Hon Clayton Cosgrove: Point of order—

The CHAIRPERSON (Eric Roy): I do not think the member needs to tell me. When we began this debate, I prefaced it quite clearly with what the rules of the debate would be—that the debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. I think the member has strayed well beyond that.

Thank you, Mr Chair. I actually intend to continue. It was interesting that Mr Cosgrove should have a point of order—

The CHAIRPERSON (Eric Roy): The member cannot refer to a point of order once I have ruled on it. We just need to keep these things tidy.

I was going to congratulate Mr Cosgrove and the Labour Party, because earlier this afternoon we heard from David Shearer. He said that the Labour Party was a bold party, and that it was a party of reform. He said that most major reforms had taken place under a Labour Government. I do not totally agree with that, but I certainly support what the Labour Government did in reforms from 1984 to 1990. In particular, I support the reform of introducing KiwiSaver.

I will address my comments on this discussion to pages 213 and 214 of the Estimates. Those pages relate to savings and the contribution to Government superannuation, or the Cullen fund, as Mr Cosgrove called it. The Finance and Expenditure Committee, of which I am a member, questioned Mr English at length on the issue of savings, and I found it very interesting that Mr English said the Government had made a commitment to reduce its contribution to KiwiSaver from 4c in the dollar to 2c in the dollar. The reason Mr English gave for reducing that contribution was that the Government should not have been borrowing large sums to fund New Zealanders’ savings. The Government should not have been borrowing large sums of money to fund New Zealanders’ savings. Well, I say there is a far more important reason to reduce that subsidy, because that subsidy is a subsidy from the have-nots to the haves. It is a subsidy by way of tax from people who cannot afford to save but who are still required to pay taxes. Those people cannot afford to contribute what was 4 percent, and is now 2 percent, to KiwiSaver. Previously we had a massive subsidy to save from those who could not afford to save. But I give full credit to the Labour Government for introducing KiwiSaver; it has laid the foundation. But the subsidies were far too generous. They have been reduced. But the foundation has been laid of over a million people who have joined that scheme.

I also find it interesting that Mr English, in his evidence to the select committee, went on to say that New Zealanders should increase their savings by reducing consumption. They should increase their savings by reducing consumption. I say to Mr English that a very simple way to increase savings in this country is to look at the experience overseas. We have to look no further than our near neighbour Australia, which has a compulsory savings scheme that stands at 9c in the dollar for every dollar earned that is paid into a savings scheme. The scheme is compulsory. It was interesting to hear from Mr Ralph Norris, when he was speaking at a function on Monday night. He told me that he was previously opposed to compulsory savings. Having been the chief executive of the Commonwealth Bank of Australia for the last 4 years, he talked about flexibility. He has seen so many people retire from the Commonwealth Bank in the last 4 years, and he talked about the flexibility with which they left. So I say to Mr English and the National Government that they can reduce that subsidy further. They can reduce it from 2c to zero cents. They can cut it out. The Government can cut out the subsidy from taxpayers who cannot afford to save, who are subsidising taxpayers who can afford to save. In my view, we should cut that subsidy to zero and we should make KiwiSaver compulsory.

That is an issue that I intend to talk about into the short, medium, and possibly long-term future. I see Mr David Carter looking at me, but I need to convince him and his Cabinet colleagues that we need to go down the route that was taken in Australia. We can also look at Singapore, which has had compulsory savings since 1952. Those savings laid the foundation for the redevelopment of Singapore following the Second World War.

Mr Cosgrove talked about cuts in the contributions to the New Zealand Superannuation Fund, dubbed the Cullen fund. Some members on the Finance and Expenditure Committee have said to National members that now is the wrong time to cut those contributions—now is the wrong time; the market is at an all-time low.

I am glad of the opportunity to make some comments on what should be a very important debate. It would have been a golden opportunity, I think, for the Committee to hear some sensible criticism, some constructive ideas, from the Labour Opposition, but on this occasion we did not. I can offer some advice to Mr Cosgrove and to Mr Cunliffe: when members have very little to say, it is silly to take a second consecutive 5-minute call and continue the shrill.

I congratulate our members—Amy Adams, David Bennett, and Sam Lotu-Iiga—on brilliant contributions to the debate. I also pick up on the contribution from Dr Russel Norman. He correctly pointed out that one of the biggest challenges we have to face in the near future is around climate change. He correctly analysed the three things the Government must consider: ways to reduce our emissions, ways to increase the sinks in New Zealand—in other words, the planting of trees—and our preparedness as a Government to buy credits from overseas. Dr Russel Norman is quite right.

But I take exception to his comment suggesting that ACT and National MPs are going around the agricultural sector saying that climate change is “bunkum”. The ACT Party can speak for itself, but under no circumstances is any National member of Parliament I know of going around the country telling farmers that they have nothing to worry about with climate change. That is simply not fact, I say to Mr Norman. I probably have more contact with farmers than any other member in the National caucus, simply because I am the Minister of Agriculture, and I can tell members that farmers are on board and prepared to face the challenges. They know that the climate is worsening. They know that they face challenges. What they are looking for is solutions. At this stage, we can cut emissions in agriculture in one way and in one way only, I say to Dr Norman, and that is to cut the number of stock we run in New Zealand. I do not advocate that, which is why this Budget seriously addressed the amount of money we are putting into research. We are putting money into this area through the Budget. Funding the Primary Growth Partnership was one of the most important things we faced in the Budget. We need time to find solutions. They are not available now, but in no circumstances can that member argue that the National Government does not accept climate change as being one of the most important challenges we face.

We had Mr Cosgrove saying that National was using the recession as an alibi. I say to Mr Cosgrove that he needs to wake up, smell the roses, and realise where we are. Whether or not the member wants to recognise it, we are facing the most incredibly challenging economic conditions the world has faced for 80 years; I tell Mr Cosgrove that there is no way—no way—that New Zealand is immune from that. In fact, the situation for New Zealand is worse, in that after a decade of mismanagement and lost opportunities by the previous Labour Government, we were in a recession even before the rest of the world had caught up. We do face challenges, and this Budget was a very balanced Budget in order to accept those challenges and to face them. So for Mr Cosgrove to come into the Chamber and suggest that the current Government thinks that the recession is an alibi, shows how out of touch the Labour caucus is. He suggests that we are being smug on this side of the Chamber, but I suggest that he will remain in Opposition for many, many decades yet if he remains as arrogant as he was in his contribution tonight.

We must deal with reality. What Dr Michael Cullen presented to the nation in the pre-election fiscal update was the revelation that we faced 10 years of deficit. That was the legacy of the management of the economy by Dr Cullen and the Labour caucus. So it was important that we balanced this Budget carefully, and that is why it was balanced. It still increased borrowing, but it did it with care to make sure that we were not downgraded by Standard and Poor’s, because that would have affected every business in New Zealand. It would have affected every homeowner with a mortgage.

💬 Hon Steve Chadwick: That’s who it was for—not the people of New Zealand.

Steve Chadwick may not care about that, but I, as a member of the National caucus, care about it deeply. There are a large number of measures. Those members opposite who are interjecting are also critical of superannuation.