General Debate

I move, That the House take note of miscellaneous business. The National Government, led by Prime Minister John Key and Minister of Finance Bill English, is focusing on the things that matter. The Opposition finance spokesman is focused on the mirror. The Opposition leader is focused on the Opposition finance spokesman, who is focused on the mirror. The Opposition leader is focused on his back. Tomorrow’s Budget is a step-up and a step change for New Zealand. It is a step towards real growth, real incentives, and a sustainable, on-growing, and brighter future for the New Zealanders whom Labour punished so badly for so long. Labour hurt so many and sent so many overseas, looking for a brighter future. There were 9 long years of punishment for all, from the “rich pricks” to the poorest, but the game is up. It is over; fairness and equity are coming back. Economic leadership and economic confidence for New Zealanders are coming back, and that will be evidenced in the Budget tomorrow.

As the Reserve Bank noted this morning in its Financial Stability Report, New Zealand’s economy is so much less vulnerable now than it was just 2 years ago. We are in such better straits and such better form than we were just 2 years ago, and we know in a global context, with threats all around the globe, the importance of prudent fiscal management and the management of our debt in encouraging New Zealanders to move away from bricks and mortar investment to financial assets. National’s solid economic credentials are stronger, and it is a responsible economic manager with a growth plan and improved tax system, which will be outlined tomorrow. There will be a tax system that removes the distortions, the imbalances, the shenanigans, and the shambles that were created—and, in fact, encouraged—then ignored by the previous administration.

New Zealand is borrowing $250 million per week, simply to keep the economy turning over and the lights on—$250 million in the current situation. We have no room for any more borrowing, whatsoever. There is a pretty long queue out there. We all know what is going on in Europe, and that situation is also stressing our system. We have already brought spending under control. After crazy, shambolic spending over many years, we are bringing spending under control. We have a $1.1 billion cap on operational new spend and a $1.4 billion cap on capital investment. That is quite a change, a focused change, from the spend of the previous administration.

We inherited a shambles. Over a year before the global crisis hit, the previous Labour Government took New Zealand into recession. In fact, the private sector of the New Zealand economy was in recession in 2004. That is the sector that creates jobs and feeds families, but it was in recession for 4 or 5 years under the previous administration. What an oil tanker we are having to turn round, but we will do it. Can anyone remember Export Year? It was a joke. We inherited a decade of deficits—10 years forecast borrowings to fund the promises, the commitments, and the unsustainable spending that that previous administration had put in place but did nothing about. We will be fixing the tax system, under which anyone earning more than $50,000 was deemed a “rich prick” by the previous administration. Well, I remind members opposite that those supposedly rich pricks included the engine room of the New Zealand economy, such as doctors, teachers, scientists, police, and even journalists.

The previous administration created massive holes in our income tax rates, trust tax rates, corporate tax rates, and portfolio investment entity tax rates, and in the treatment of investment property. Labour members talked about that issue quite a lot, to be fair to them, but they did nothing about it other than perpetuate it and try to put band-aids on it. The tax system is about to be fixed. This Government is about fairness and equity and this Budget is about delivering fairness and equity to New Zealand. This Budget will deliver a historic rebalance of the New Zealand economy; fairness and equity are coming back. We have even pulled a decade of deficits back to about 6 years. After only 18 months, the decade of forecasted deficits is down to about 6 years, and in the current global environment that is very, very good, indeed. The New Zealand economy is already in so much better shape than it was just 2 years ago.

Budget 2010 should be about the many, not the few. It should be about investing in the future, not whining about the past. Tomorrow the Budget excuses will run out for the National Government. After 9 years in the wilderness it did nothing last year except wreck superannuation. A year later the public wants to know what is under the bonnet of its clapped-out car. Tomorrow the public will find out. The National Government promised aspiration, it promised a brighter future, and it promised not to raise GST. The Government promised Tūhoe. What has it delivered?

This Government is becoming known as the Government of broken promises. Tomorrow we will find out what fairness means to the National Government, and I think it is the same as it has always meant—be fair to the top 5 percent. Give them a windfall gain, while rape victims cannot get counselling. Borrow to fund tax cuts for the Business Roundtable, while elderly people cannot get home help. Tell someone on $70,000, who will be getting 50c a week if he or she is lucky, that someone on half a million dollars, who will be getting $350 a week, that that is fair.

National has forgotten that New Zealanders do not like to be told that they are just jealous. Well, they cannot be both jealous and fair. One thing New Zealanders know is that not only is the Government inherently unfair, but it does not have a solution to the underlying structural problems of this economy. The Government promised a step change, it promised courage, it promised leadership to address the savings problem, to rebuild our export base, to lift the incomes of all New Zealanders, and to stop the drain to Australia, which has worsened in the last year. New Zealanders know we are not even standing still; we are slipping backwards. We are seeing our dairy farms being bought up by foreigners. We are seeing private assets being sold to fund the slip-slide away of an economy that does not balance and a Government that is out of ideas as to how to fix it.

This has not been a good week for the Prime Minister. He told Tūhoe what he really thought of them. He told middle New Zealand what he thinks of them. They are not core and critical. They are just the jealous, whingeing, whining battlers on which his mates stand. He has even given up pretending that tax cuts drive growth. He knows that the literature shows they do not. Anyway, New Zealand has the third-lowest tax rate in the OECD—far lower than in Australia—so why would people go to Australia for lower taxes? They would go there to have higher incomes; to earn higher wages. The task facing the Government is to lift the wages of ordinary Kiwis, to get more Kiwis in jobs, to put more food on the table of ordinary New Zealand families who face—wait for it—higher GST; property taxes, which are driving higher rents; increased accident compensation tax; higher tobacco tax; higher costs for student loans; petrol going up; power prices going up; and mortgage rates going up. And the Government says it stands for fairness. What is fair about that?

Fairer tax cuts would put money in the pockets of hard-working New Zealand families. They would create jobs. They would create the future that New Zealand needs—more jobs and better incomes—by boosting exports, by boosting savings, and by boosting the smart economy. [Interruption] As my colleague Mr Shearer has pointed out, that Government is putting back into research and development less than half of the amount it stripped out. It is preaching savings, after stripping half the funds going into KiwiSaver and half killing New Zealand superannuation. New Zealanders know truth, and they know lies. Tomorrow we will meet the truth.

This week we will have Budget 2010. This Budget will be yet another major step by this Government to fix the economic damage done by Labour. In 2008 New Zealanders elected the National-led Government, for a couple of very good reasons. They know that National is the best economic manager for this country, and that has been proven time and time again. They know that National members do not stand here talking hollow words and crying crocodile tears about jobs and living standards while presiding over an economy, as Labour did, that consistently went south during the best economic times this country ever had. Mr Burns, it was your party that cost every New Zealand family an average of $5,000 a year because Labour mismanaged the economy. You presided in the Labour Party—

💬 Mr SPEAKER: Members need to remember—although I realise they get pretty worked up in debate—that they cannot refer to members across the House by saying “you” did something, because they are referring to the Speaker. The reason for that is to avoid personalising debate. It is in the Standing Orders, for good reason.

The previous Labour Government put in place the structural problems that even Mr Cunliffe now acknowledges. He stood there and asked what the Government is doing about the structural problems. Mr Cunliffe, they are your problems. I can tell you, Mr Cunliffe—

💬 Mr SPEAKER: I realise the member is very enthusiastic in her speech, but she cannot say that they are the Speaker’s problems. Members get into difficulties when they try to personalise the debate. The rules are the way they are because the debate should not be personalised. Members should be debating the issues.

The structural problems that this economy faced were caused by the last Labour Government; that is what we all know. Even today, the Reserve Bank, in its financial stability report, talks about the fact that, to get this economy back on track, we have to address the underlying imbalances. That is what we have seen this Government not only talking about but doing consistently since 8 November 2008, and Budget 2010—

💬 Hon David Cunliffe: I raise a point of order, Mr Speaker. The member on her feet has referred to the Reserve Bank report, which was made public today. I will not seek leave to table it, but I will draw attention to the fact that—

💬 Mr SPEAKER: The member will resume his seat immediately. How does the member believe that that has assisted the order of the House? I have twice tried to make sure the House stays in order by interrupting the debate when a member was speaking, which is something I do not like doing. The member has now just interrupted the debate further with a spurious point of order. How does he expect me to view that? I invite the member to think a little about what he is doing. The House has been too disorderly today, and I will not put up with it for much longer.

Budget 2010 will be yet another step whereby New Zealand will see this National-led Government take control of the economy and get this country back on to the path that it deserves to be on. We are aspirational. We are ambitious for New Zealand. We want, and unashamedly so, New Zealand to be the wealthy country that it used to be and that it should be. We want better jobs for New Zealanders that are sustainable. We want higher incomes. The difference is that we know that those things come from a strong, productive economic base.

For the Government to do its part, we have to put in place the conditions that will allow business to thrive. We have to get a handle on the out-of-control Government spending that was all Labour knew how to do—keep spending, keep throwing the money around, ignore the underlying issues, and pretend everything is fine. It was head-in-the-sand politics for 9 years under the previous Labour Government, and now New Zealand is paying the price. This Government will get on top of the economic challenges. We are seeing New Zealand recover far faster than the rest of the world. We are seeing strong GDP growth. We are seeing excellent reductions in the unemployment numbers. That is just the beginning of what we will see under the economic management of this Government. That is why New Zealanders put their faith in us.

Budget 2010 will continue to deliver on our goals of financial restraint, and rolling out the infrastructure that will allow this country to grow. In my own electorate of Selwyn, we are looking forward to the roll-out of extensive broadband into our rural communities, which are heartland New Zealand. We are looking forward to the completion of the Christchurch Southern Motorway, which we have waited for for 20 years. My electorate of Selwyn will now get the road that we have been waiting for for nigh on 20 years. That is the sort of infrastructure spending that this Government is committed to, which will see the New Zealand economy finally live up to its potential so that New Zealanders can have sustainable jobs, good incomes, and the public service we want to give them. What we will not do is continue to spend more than we can afford to spend. We will not keep living beyond our means. While Greece and the UK are dealing with the problem of massive debt, what does Labour want us to do? It wants us to borrow more and spend more. Labour members say that we should ignore the problems and just keep borrowing. They say we do not need to worry about production in the economy. No, no; they say we should just keep borrowing. Every other country in the Western World knows the damage done by having crippling Crown debt. Members should remember that if it was not for this Government, we would have a 70 percent debt-to-GDP ratio.

Tēnā koe, Mr Speaker. Tēnā koutou katoa. There are 216,000 children living in poverty in this country. To add to that shame, we have a Prime Minister who says that the poor should not envy the wealthy. I ask the Prime Minister what they should do. Should they be grateful that the wealthy may let them mow the lawn or clean the house for the minimum wage? I ask whether the Prime Minister has heard the expression “eat the rich”, because eating properly is certainly an issue for those 216,000 children.

Tomorrow is another moment of truth for the Government. We do not know all the details yet, but some directions have already been heralded, and they will not do a single thing for the children who are living in that kind of poverty. The tax cuts for the rich have been constantly justified by saying that much of the tax take comes from the rich. It is not rocket science to understand that when a person earns a huge amount of money, paying lots of tax does not affect that person’s standard of living in the same way that it affects people on the minimum wage. Some people who have lots of everything seem incapable of grasping the simple fact that there is in this country a huge and growing gap that rewarding the rich will not fix. The rich—and I include myself right now—do not need a tax cut.

John Key’s Government has already initiated or signalled some very big spending, including $10.7 billion on new motorways in the next 10 years, an estimated $500 million per year from cutting the top tax rate from 38c to 33c, and potentially hundreds of millions of dollars on taxpayer subsidies to protect businesses from the emissions trading scheme. It is a question of priorities. A Green Government would make reducing inequality in this country one of its highest and most urgent priorities. We need a safe and fairer society, where no one feels the need to build barbed wire fences between the haves and the have-nots—hence the Green Party’s Mind the Gap policy, which we launched this week. This Green New Deal on inequality was launched because we have an analysis of the problems and we have some solutions. We do not just stand up in this House and blame each other. We believe that a Government could take actions that would help to close the gap between those who earn the top 10 percent of income in this country and the 20,000 children who currently need to be fed food in school from one of the groups that came to our Mind the Gap launch—a group called KidsCan.

We are not just wringing our hands about poverty; we are proposing some costed items that we could afford as a country if we were to stop building ridiculous motorways to nowhere. Our package believes inequality could be reduced by a series of practical interventions. The total cost would be $4.46 billion, and in the long term it would save us paying for more new prisons, paying more benefits, and paying for more hospital beds, to mention just a few of the benefits of a far more equal society.

Specifically, we are proposing that the first $10,000 of income should be tax-free, that a capital gains tax should be put on property but not on the family home, that an in-work tax credit be extended to families on the benefit with dependent children, and that the special benefit should be reinstated. We should have progressive electricity pricing to address fuel poverty; secure housing, which would mean 6,000 new State houses; and investment in community housing, and we should make changes to create some long-term rental tenure security.

I will not outline the whole package, but I will talk about one issue, which is the extension of the in-work tax credit to all low-income families, including people on the benefit. This single act would help 145,000 of the poorest families to meet the essential needs of their children. It was mean-spirited of Labour to have excluded those families, and it is absurd of National to ignore and punish them through the Future Focus package. It would cost another $300 million per annum, which could be partially offset by the reduction of the supplementary assistance that would be required from the Ministry of Social Development. It would help the families that are in the greatest need. Maybe talking about the children of beneficiaries is not popular and maybe it is not sexy to talk about the people who are really poor; maybe we should just talk about those who are in work. But we need to face up to the issue of who is suffering and who is poor, and that extra $60 a week would make a huge difference to those people.

I will talk about one story, in particular, from my experience as an advocate for the poor in Tai Rāwhiti—Gisborne—when I was working there from 2004 to 2008. The story is about fuel poverty, a term that people in this House may not be familiar with because we are kept nice and warm here. Fuel poverty is a reality for many people.

Tomorrow we will announce the next Budget from this Government, and it will be the Budget that will set the vision for this country in the next decade as we grow this economy. We take pride in the fact that we want to see our country grow and be successful. We do not want to see a country that has stagnated and has not achieved its goals and ambitions, which is what we saw under the previous Labour Government. National sees a future for New Zealanders where they see the strength in getting a good education, in working hard, and in getting value and success from that hard work. We see in the future a country that has a strong economic base. We see a country that competes on the world market and delivers products.

National members do not see the future that Labour sees, where one just borrows money for whatever one needs to buy an election with. We do not see a future in killing growth in our country during our best economic times. We do not see the future in the way that Labour did. Labour spent recklessly and bought things on the basis of the ideological visions it thought this country should have. National members look at the economic reality—we need to build a country and deliver results for New Zealanders.

I have great confidence in this Budget, because finally we will have meaningful tax reform in New Zealand. We will give the right incentives to those people out there who work hard and who get a good job. They will get the rewards from tomorrow. They will know that the signals and incentives are there to do that. Under the previous Government, the signals and incentives were not to work hard; the signals and incentives were to take advantage of the system. That is what the previous Labour Government set up.

Labour’s finance spokesman talks about delivering for the many, not the few. When did Labour deliver for all New Zealanders? Never. Labour members delivered only for those who got them back into power each time there was an election. That is all that they cared about, whereas we are looking at what is constructive, what is right, and what is in the best interests of the New Zealand economic system. The tax reform that will come tomorrow will be crucial to delivering that future for New Zealanders.

We have seen a country that has not achieved under Labour, but we now have a country that can achieve under National, and it will. We will see the investment in infrastructure pay dividends. Infrastructure investment is going on through all areas and sectors of the economy, from broadband to roading infrastructure, to rail, and to public transport.

We have seen the investment in the Waikato region, in the Waikato Expressway—that great road that Labour did not deliver on and still would not have delivered on. It took a National Government and the National MPs in the region to deliver that great road and to provide that infrastructure, so that we can grow the export heart of New Zealand. The people of the Waikato will also be pleased to know that, as exporters and hard-working Kiwis, they will get the rewards they deserve from this Government. They know that they go out there and earn some serious dollars for this country. This Government will enable them to earn more and to invest that money in this country, not in things that are there just because of the way the tax systems and structures have been put in place.

💬 Kelvin Davis: Tell us about unemployment.

OK, I will tell members about unemployment. The unemployment rate is coming down, because we are growing this economy. Members should look at the most recent unemployment figures. They are coming down.

Let us look at what Labour did. It put this country into recession before the rest of the world went into recession. It increased debt before the rest of the world increased debt. It is only because we have had prudent financial management since the election that New Zealand has come through, and it will deliver in the future. I look at what Labour would have done if it had been putting together a Budget with its Green colleagues. It would have borrowed incessantly just to keep its social spending going, while thinking it was leading the country. Well, New Zealand would have been in the category of Greece and those other countries because of Labour’s economic management. In fact, Labour does not know what it would have done. It would have been listening to the Green Party, because it cannot work out how to manage an economy since Dr Cullen left. Labour has no vision. It has no strategy to grow this country.

We look forward to a successful Budget tomorrow. We look forward to a Budget that will show New Zealanders that there is a future that is based on hard work, education, and success. We believe that that is crucial for growing this country. It is a different message from that which New Zealanders have been given in the past by previous Governments.

It is said there are two certainties in life: death and taxes. Two additional certainties arise from National’s Budget tomorrow. The first certainty is that it will not be fair, and the second certainty is that it will not work to give decent jobs and better incomes. How can National Government members sit there and talk about fairness and equity, when their own leader, just a day or two ago, was cautioning New Zealanders not to be envious or jealous? How does that possibly square with an idea of fairness or equity? It does not. It asks all New Zealanders to let the rich off the hook and say yes, the rich may be getting hundreds of dollars a week more in a tax cut, but they will not be cross with them about that, because, of course, the rich are the wealth producers of the country. I remind members opposite that the wealth producers of this country, who may well be amongst the most wealthy, have not done that—not achieved that—on their own. They have typically achieved it with the work and effort and cooperation of people who earn a lot less than them. So let us see where fairness and equity fall tomorrow in this Budget.

I will pick up where the last inadequate speaker, David Bennett, left off, and that was in the area of education.

💬 David Bennett: I raise a point of order, Mr Speaker. That member is an established member of the House, and I find offence in her last comment. I would like her to withdraw and apologise.

I withdraw and apologise.

💬 Mr SPEAKER: I am very grateful to the honourable member for saying that, although, really, I think we are getting a bit too sensitive altogether if we consider “inadequate” to be highly offensive. But I am grateful for the honourable member’s goodwill.

The inadequate speech of the member who spoke previously is where I wish to pick up from. I am concerned about the signals or the policies that have already come out and been announced, depending on the extent to which one wishes to trust Mr Joyce, that apply to tertiary education. Where is the fairness in making it harder to get into tertiary education? It will be harder to get in, because some of the institutions’ funding will be pegged to their pass rates. That will create a disincentive for institutions to enrol the very students who need to be better equipped to cope with the recession and our emergence from it.

But my concern relates not only to the recession but also to the plan that is needed for the next 10, 20, and 30 years. That is what I will be looking for in the Budget tomorrow. Already Mr Joyce has shut down the options. It will be not only harder to get into an institution of tertiary education but also harder to stay there. There will be time limits on student loans. There will be fees applied by the lifting of the cap to those institutions, so it will cost more to stay there. It will cost more to pay off a student loan, because a little administration fee will go to everybody who has a loan. So whom does this hit the hardest? The thing that is important, which this Government continues to overlook, is that the number of Māori and Pasifika people in this country will double between now and 2050. Māori and Pasifika combined have the highest youth population.

Last year, this Government took $638.5 million out of tertiary education funding. That does not bode well for tomorrow’s Budget, because everybody, including the Institutes of Technology and Polytechnics of New Zealand, anticipates that the cuts will be just as severe again. That provides us with no hope, no future, no fairness, and no equity in this country. If that comes to pass, then this country will reap a decade, two decades, and three decades, of unfairness and inequity, as we see Māori and Pasifika young people piling up in unemployment, and being unable and unassisted to succeed in tertiary education. Therefore, when those members opposite have retired, there will be nobody to support them.

It is my pleasure to take a call in this debate this afternoon. It is very interesting to listen to Opposition speakers say that it will be a bad day tomorrow when Budget 2010 is delivered, and that it will be horrific for this country. I tell members this: a million people voted for this Government and they are waiting for this Budget. A million people believe that the National Government is a better economic manager than the previous Labour Government. A million people believe that this Government can deliver a much brighter future for them, their parents, their grandchildren, and their children. A million people want to see their children come back to New Zealand, because we offer globally competitive salaries, we offer cutting edge jobs, and we have cutting edge industry. This Government understands business and knows how to get that growth.

This country was tricked for a very, very long time. It was tricked for 9 years into believing that we were prosperous, and that because we were in surpluses, we were doing well. But we were not. This country was tricked. This country was held up by excessive Government spending with very poor outcomes. This country was held up with the promise that we were doing better, when, in fact, we were not. One of the key indicators that this country never heard about was our exports and the way they were trending down. For 5 years the Labour Government hid the fact that our exports were declining. What can this country do without exports? Nothing. We borrow and we get more and more into debt.

This Government is backing businesses in New Zealand. This Government is bringing back highly technical, recognised people from other fields to grow our economy. This Government is backing the people and the businesses of New Zealand to make a difference. We will not hide it like the previous Government did. We will not keep on spending and spending and spending, because we do not have surpluses. We have responsibility for taxpayers’ money and how we spend every dollar. We want good outcomes when we spend that taxpayer dollar. We know that when people pay their taxes, they have worked hard to earn that money. We should give that money the respect that they give it in their own homes, and we should spend it as wisely as they do. We should not spend it on pet projects. We should not worry whether it will produce any good for this country.

This Government, in the 2010 Budget, will send some very clear messages to New Zealand. It will send the clear message to New Zealanders that we want them to invest, we want them to save, and we will reward them for working hard. That is the clear message this Government will send.

The previous Government did not do that. It said that it was fine to spend money: “You earn it; you spend it.” But what did we end up with? We ended up with a country where people believed that they could borrow money off their property increases and then spend it. So a society was created in New Zealand that thought that debt was OK and that it was OK to spend money on consumables when one is in debt, when we all know it is not OK. Debt is good if people can get an income off it and if it can create an asset, but it is not OK to get into debt to purchase consumables.

This Government is sending a clear message to New Zealanders that we will reward them if they invest, if they save, and if they work hard. The Government will show constraint along the way, and will look after people’s money, but we want people to look after their money as well, and we want them to invest wisely. The Government has already put a huge range of regulations in place to ensure that people can invest and feel safe in New Zealand.

This Government has done a lot of pre-announcements for this Budget, which is pretty new, such as some research and development announcements. We are growing the economy.

It is has been a great pleasure to be part of this Government, to support this Government, and to work with the many fine Ministers on public policy and the Budget. A particular pleasure has been the opportunity to travel around New Zealand, to speak at National Party functions, and to meet the many decent hard-working people, good people, who support the National Party. And I stand up in this House on behalf of the hard-working National Party membership and make their case for them—what they are telling their MPs, what they are telling their chairman, and what they are telling their leader of the National Party.

National supporters are asking National to defer the emissions trading scheme. They do not understand why their party is leading them ahead of the rest of the world. They know that Nick Smith is wrong when he says that there are all those countries implementing an emissions trading scheme, because in Europe it is only big businesses that are paying, and then there are so many exemptions it affects only 4 percent of their output. The National Party membership, who are the dairy farmers, the small-business owners, the householders—the backbone of the productive economy of New Zealand—do not understand why their party in Government is moving to put a tax on them through the emissions trading scheme that will hit every business in New Zealand, touch every household in New Zealand, reach every family in New Zealand, and extend its tentacles into every New Zealander’s pocket. On 1 July electricity will be going up 5c a unit, petrol will be going up 4c a litre, and in 2013 that will double.

Helen Clark, as Prime Minister, was keen to look good, as far as the UN went, and she wanted New Zealand to lead the world in climate change policies. One of the reasons people swapped their vote from Labour to National at the last election was that they were sick of the nanny State and they were sick of a Government that was telling them what to do. They were sick of a Government that wanted to lead the world who knows where, and they voted for the pragmatic, honest, decent National Party to put an end to that. The membership of the National Party cannot understand it. Whether in Invercargill or Kaitāia, at every electorate meeting that is being held people are asking why we cannot follow the rest of the world, why we cannot tuck in beside Australia, why we cannot take account of the evidence and the facts that are now apparent and stop the madness of the Labour Party’s emissions trading scheme for New Zealand, which will—and I see Jacinda Ardern with a big smile on her face—put farmers out of business in this country. It will tip farmers over in this country.

Jacinda Ardern might think that is funny but I see that no National member thinks it is funny, because they know that on this issue the ACT Party speaks the truth. The ACT Party is reflecting what the National Party membership is telling the National MPs, and the ACT Party is reflecting what New Zealanders want, which is the emissions trading scheme stopped, deferred, postponed, ended, and not introduced on 1 July this year. Why we should be ahead of the rest of the world is beyond comprehension. The member for Pakuranga knows it, the member for Waimakariri knows it, the member for the West Coast - Tasman knows it, the member for Coromandel knows it, and John Key knows it. Why on earth are we heading off to put this intolerable cost on to New Zealanders?

Tomorrow we get to learn the exact nature of the betrayal. Tomorrow we get to know the exact nature of the betrayal of preschool and early education children. Before the election it was a high priority, and even into last year John Key still said that early childhood education was a high priority. But suddenly the sentence slipped out of his speeches. Suddenly that went, and what has it been replaced by? It has been replaced by the Minister of Finance telling us that it now constitutes low-value spending and must be cut. It must be cut in tomorrow’s Budget because suddenly our 3 and 4-year-olds constitute low-value spending, when once they were a high priority under this Government. The families and the parents of those children believed the Government, but they are about to be betrayed.

Let us listen to what the National members said prior to the election about early childhood education. I quote Paula Bennett, who said before the election “we want to assure parents that our policy is not going to mean an increase in fees for them”. That was Paula Bennett, National spokesperson on early childhood education before the 2008 election. But what has changed? This week the Prime Minister, John Key, confirmed that some parents will pay more for early childhood education. “All I can tell you”, he said, “is that some parents may be affected in the Budget but certainly not the majority … some may pay more.”

Well, let us have a look at what that majority might look like. One of the things the media has been speculating on is that the funding cut for early childhood education will come for those centres that employ 80 to 100 percent of qualified staff. What would that mean? Currently, 2,211 early childhood education services access that funding band. So what does that mean for families? It means 108,000 children—I say that again, 108,000 children—and their families will be affected if that funding cut is made to early childhood education tomorrow. I notice that all of the National Government members across the way have gone quiet, with the exception of Paul Quinn. He may think that it is OK for 108,000 children and their families to face the prospect of increasing cost to their families, because that is what will happen if that funding cut goes ahead tomorrow. Sixty percent of all the children in early childhood education services in 2009 were in services that would be affected by that funding cut.

If National goes ahead with that funding cut, could it still claim that it has not touched 20 hours’ free early childhood education? It could not. Parents with their children accessing 20 hours’ free early childhood education, if they are in one of those 2,211 centres, will face the prospect of higher fees, even for those 20 hours. That is the nature of the betrayal that we could well be seeing tomorrow. What will we see in return? We will see the wealthy getting wealthier. That is a thing that I think is disgraceful about the prospect of cutting funding to early childhood education. Suddenly, all we hear from National is that that is too costly. It used to be a high priority, but, suddenly, it is too costly. What is it too costly for? It is too costly because the Government wants to give whopping-big tax cuts to the wealthiest people in this country. That is where the money will be going from early childhood education. Make no mistake about it: it will be money out of middle and low income families for their children’s education, into the pockets of the wealthiest people in this country. That is what we will be facing.

I was interested to hear National members talk about how they will judge their own Budget on fairness and equity—well, so will I. The fairness and equity I will be looking for is where the money goes from early childhood education—how many millions. The prospect I am laying out is that possibly 108,000 children and their families will be affected by this. That is on top of, and as well as, the 11,000 families we already know that the Government has made a decision to disadvantage by cutting the childcare allowance. That is a totally different entitlement, but it affects the same group of families as well. Tomorrow we will learn just the extent of the betrayal.

When I was a kid I was pleased to be told something, which I remember vividly. I was told I should leave New Zealand a better place than when I inherited it. That was one of the vivid things that stayed in my mind when I was living in a State house with my grandmother. This Budget is not about rich and poor; it is about getting our economy growing and leaving it better than when we inherited it. It is not right that one-third of New Zealand’s tertiary-qualified people do not live in New Zealand. It is not right that when I was born New Zealand was richer than Australia on a per capita income basis but now it is not. It was not right that under the prior Government we were looking at bloated State sector employment, ballooning deficits, and ballooning debt. Back in November 2008, people decided that that was not right and they voted in a National Government.

They want New Zealand to grow and prosper. Budget 2009 set the platform. It set the platform for us to prosper. We made some big calls in Budget 2009 in curing what was the worst recession New Zealand had had in 70-odd years. We made some tough calls. Yes, we deferred expenditure into the Cullen fund. Yes, we changed the expenditure on the research and development tax credit, because it was not working. Yes, we refocused large amounts of money into infrastructure to unclog the arteries in our towns and cities up and down the country, into our roads, into our electricity supply, and into our communication networks. Economic growth means that incomes increase for all. It means more dollars for health care, education, and welfare. It means more and better jobs. It means choices.

Since Budget 2009, despite the worst recession in 70 years, what have we seen? Well, I was recently given a book called Rescuing the New Zealand Economy: What Went Wrong and What we Can Do to Fix It, authored by that well-known Tory Bryan Gould. This book was published in the dying throes of the previous Labour Government. He knew that the economy was broken then, and we have gone out of our way to fix it. After years of stagnation the economy is now growing, employment is growing, migration to Australia is down 22 percent in the last 12 months, and incomes are growing from jobs funded not by taxpayers but by real businesses up and down the country.

There is a plan. We have a plan to stop borrowing and, instead, to invest. Tomorrow in Budget 2010 members will hear Bill English talk more about some of those plans. We have heard of some of the great plans we have already. We have heard more about the road to recovery and what we will see. We have already heard that $1 billion dollars—$1 billion dollars—will be spent on fixing leaky homes by the great Minister sitting behind me, Maurice Williamson. We have heard that $30 million will be spent on tourism by the Minister of Tourism, Prime Minister John Key. We have heard that $134 million will be spent on Whānau Ora. I was pleased to be at a meeting only last week in my part of Christchurch where 650 people came to hear the Minister responsible for Whānau Ora, Tariana Turia. They heard what she had to say about that policy. No Labour Party members were there, because they do not care. We will spend $24 million on fighting bowel cancer. I think that that is a wonderful thing. As a son of somebody who went through that horrible disease, I think that greater testing and things in that area will be wonderful, and it will help some people get through it. All we have heard from the other side has focused on tax reform. The issue that we care about is refocusing in the productive sector, encouraging investment in production and not in consumption.

This is a Budget on a path to prosperity. Tomorrow we will see another step along that path, so that the time will come in the future when my children will decide that they want to stay in New Zealand and that they want to raise their children in New Zealand. They will look back at our Budget tomorrow and say that it made steps that put New Zealand on a path to prosperity, put in place incentives, and did not leave them with a decade or more of deficits or with a mortgage before they even started high school—let alone got into the workforce. The investments that we have made and have announced already will do that. We have announced that $321 million will go into the research, science, and technology sector. That is $321 million to allow our smartest New Zealanders to stay here and to create more wealth. But what do we hear from the Opposition? We hear bluster and rubbish that all we care about are tax cuts. I think those members may be surprised tomorrow. We have heard that $250 million will be invested in KiwiRail—the thing that Labour tells us we are going to shut down. Yesterday we heard about a plan to invest $4.6 billion in KiwiRail. I think that is a wonderful thing.

That performance by the previous speaker, Aaron Gilmore, indicated to me why his senior members are lobbying hard so that he will not have a safe seat in the upcoming election.

For the past 18 months this Government has sat on its hands, pointed the finger, and blamed the Labour Party for its inadequacy to address the struggles of the working population of New Zealand. I say that tomorrow will be judgment day for this Government. The Government’s first Budget was a slash-and-burn Budget, despite the words that it would be mana-enhancing. So tomorrow’s Budget will be one that I suspect working-class New Zealanders throughout this country will say is not fair. The rest of this country will say that what the Government is about to implement will not work for New Zealand. Tomorrow’s Budget will be about this Government giving more money to people who already have money, but giving very little to those who are struggling with unemployment and struggling to make ends meet.

The Government talks about a step change, and Mr Foss says that the Government’s focus is on the things that matter. I ask the Government what are the things that matter. It is jobs, I say to this House—it is jobs, it is jobs, it is jobs. It is jobs that provide an income that can sustain families now, and into the future. But what has happened to the unemployment rate? Under this Government it has ballooned to 7.3 percent—it has ballooned under this Government to 7.3 percent. Sure, there was a 1 percent drop in the last quarter, but there are still about 140,000 people who are unemployed. Highest amongst that unemployment number are Māori and Pacific peoples. The Pacific unemployment rate moved up to 14.4 percent. So how will that ensure that the rest of the population will be able to sustain a quality life in this country? That is why Labour will continue to hold this Government to account, and continue to ask it what it is doing for the many New Zealanders; this Government is about only the few.

Mr Foss has said that the Budget is a step up and a step forward. But I ask where the step up is for Pacific communities when the Government raises the taxes on tertiary education. Where is the step up for Pacific communities when nine early childhood centres have closed in Manukau and in Māngere since this Government came into power? Where is the step up for the Pacific communities who are working in factories, who are working in jobs that are essential for the economy, and who are being paid the minimum wage of $12.25 an hour? Where is the step up for that population, the many who earn $48,000 or less a year and who will not get anything out of the tax cuts that this Government is proposing?

Mr Foss has also said that the Government’s Budget is about fairness and equity. Where is the fairness in those who are earning $70,000-plus getting the bigger tax cut, while those who are earning $48,000 do not get anything at all? Where is the fairness that those earning $14,000 or less get the same reduction in taxes, when this Government is proposing to increase GST by 20 percent? The Government will increase GST by 20 percent. That means that the rest of the population on low incomes will see increases in goods and services that will far outweigh any proposed tax cut that this Government wants to give.

Mr David Bennett says that workers can get ahead under this Government and under tomorrow’s Budget. I ask this Government how workers can get ahead under this Government when there are no jobs and many are struggling to find work. There are families where only one person is now working, whereas before two people were working. They are now at risk of losing their houses, they are at risk of being evicted, and they are at risk of having their power cut. How does a worker get ahead when there is no workplace training and no skills development, and the rate of GST is rising?

I will not stand here and talk about the previous Labour Government, because there is much to say about this National Government, which is actually doing things. I must respectfully disagree with the previous speaker, Su’a William Sio, who said that this Government is sitting on its hands. It is not. I will outline a few things that we have accomplished over our last 18 months of Government. We inherited an economy that was in trouble. We inherited an economy that had 5 consecutive years of negative export growth. We inherited an economy where the recession had taken a great chunk out of the Kiwi psyche and confidence. On 8 November 2008 the people of New Zealand spoke; they wanted change, they wanted hope, and they wanted jobs. That is what this Government will do for the people of New Zealand.

Under the previous Labour Government we had uncontrollable bureaucratic growth. Government spending doubled in the 9 years of the Labour Government, yet some of the outcomes went backwards in a number of areas. The previous speaker talked about Pacific unemployment and Pacific aspiration. Under the previous Labour Government, we did not improve in terms of housing, in terms of income, or in terms of education. I challenge the previous speaker and say that before Labour members throw the barbs they should take a hard look at their record. This Government has kept core bureaucracy as $2 billion has gone towards the front line. That means that every day there are more police, more nurses, and more doctors. That is what the people of New Zealand demanded and that is what this Government is delivering to them.

Billions of dollars are going into critical infrastructure in this country. The previous Government bought a train set for just under $700 million. This Government has undertaken to invest in that train set for it to be at least profitable and at break-even level. In my own electorate of Maungakiekie, I am proud that this Government is finishing off State Highway 20. It is a 10-lane highway, and guess what? It is going ahead 6 months ahead of schedule—6 months ahead of schedule. I thank the Minister of Transport for putting the emphasis and the energy into getting such projects done. I stand next to the Minister of Housing, who put $53 million into the Tāmaki transformation project. This Minister of Housing believes in the people of Tāmaki and Maungakiekie. He believes in investing in the so-called poorer people whom previous speakers referred to. We believe that we have an obligation to look after those people through their housing means.

Last year we had a $500 million relief package to make life simpler for small businesses. As I travel through Mount Wellington, Penrose, Te Papa, and Onehunga, and meet the people running the light industrial businesses and manufacturing businesses that operate in those areas of Maungakiekie, I see a glimmer of hope in their eyes. The manufacturing numbers and the primary agricultural numbers in the latest Financial Stability Report from the Reserve Bank, which was released this morning, do not lie. The economy is expanding under this Government. We inherited a recession but now the economy is expanding. For the first time in 6 years, we have a trade—

💬 Dr Cam Calder: A surplus, we call it.

We have a trade balance that is positive. Current account deficits have halved since this Government has been in place, and that is the only way that this country will get out of the situation we inherited as a National Government.

This Government has also reformed the Resource Management Act’s processes. When we talk to developers and builders, we hear that the Resource Management Act had become an imposition on them. Tomorrow is a historic day; we will see a Budget that will make a difference on the road to recovery. Mr English will do that for this country. Thank you very much.

The debate having concluded, the motion lapsed.