Debate on Budget Policy Statement

I move, That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2013. The Budget Policy Statement for 2013 outlines the Government’s plan for Budget 2013 and subsequent years. We heard from the Minister of Finance at the Finance and Expenditure Committee that the Government intends that Budget 2013 will focus on a number of key priorities: managing public finances responsibly, building a more productive and competitive economy, delivering better public services within tight financial constraints, and rebuilding Christchurch.

The statement reiterates the Government’s commitment to controlling spending tightly and returning the public accounts to surplus by 2014-15. I quote from the select committee’s report: “A modest surplus of $66 million is forecast for that year, increasing thereafter, provided there is no further deterioration in world economic conditions.” The Government is focused on getting our books back to surplus by 2014-15, and we will do this through more responsible spending of Government funds, delivering more for less, and looking out for taxpayers and their best interests.

I want to commend a number of Ministers in areas of policy where this is evident to all New Zealanders: Tony Ryall in the area of health, where more people received operations in this financial year than in any time previously under any other Government; and Hekia Parata in the area of education. Hekia Parata has more passion in education than any Minister of Education from the party opposite has had. No member opposite when Minister of Education has had more passion and determination for New Zealand children. She is a Minister who has built on the great work of Anne Tolley over the 3 previous years.

I commend Judith Collins in the area of law and order. She has helped the move forward with reductions in reported crime throughout New Zealand in all electorates, which is good for New Zealanders, making them safer in their homes. I recognise Anne Tolley as our Minister of Police for the great work that she has done delivering more on behalf of New Zealanders, and I recognise the great work our police officers do every day on what is important for Kiwis, making them safer in their homes and safer in their streets.

In this Budget, the Government’s focus will continue to be, as it has been for the last 4 years, on doing away with the wasteful and economically frivolous policies of 9 years of a Labour Government, which caused all sorts of disaster for New Zealand. You see, in the 9 years Labour was in Government it had $20 billion worth of surpluses—$20 billion worth of surpluses—and, as David Clark so often likes to say, it left us with a mess of long-term unproductive spending commitments, some of the worst commitments in 50 years.

I want to quote from the committee’s report again: “Core crown expenses are forecast to fall to 30.3 percent of GDP by 2015/16, having peaked at 35.1 percent of GDP in 2010/11 as the Government sought to cushion the impact of the recession,”. When we came into Government in 2009, the forecast for Government spending for the 2012-13 year was $76.1 billion. The actual spend is forecast to be $72 billion—a $4 billion saving. In 2009 when we came into Government, the forecast for Government spending in the years 2014-15 was $83.3 billion, and the actual forecast today is $73.6 billion. That is tens of billions of dollars of recurrent spending that the Labour Government recklessly put in place that would harm New Zealanders—spending associated with these forecasts under Labour that would be dangerous and reckless for New Zealand.

This Government is about less borrowing, more fiscal discipline, and greater focus on what is important. One need only to turn up to this House on any given day and listen to the drollery from the other side of the House to realise that New Zealanders know this and they get it right. This is a busy Government with a busy economic programme, including reinvigorating and reforming our capital markets, and the mixed-ownership model. Almost 300,000 New Zealanders over the last 2 weeks have expressed interest in these shares to be offered. [Interruption] I say to my colleague the hard-working MP for the electorate of Rodney that that is 300,000 New Zealanders in a 2-week period.

We will be investing in productive assets for New Zealanders with the funds that come from the mixed-ownership model. Can I say that at a time of drought when we find good use for our water it is more apparent that we need to free up funds to invest in productive assets on behalf of New Zealanders, and not to borrow more as parties opposite would have us do. Through the Business Growth Agenda we are working closely with businesses. Work is under way detailing large initiatives across six areas. They include export markets—members opposite do not like it—innovation, and they do not know what that word means; skills; and safe workplaces. There is rhetoric, but not a lot of work on their side. They oppose everything the Government brings forward. The initiatives also include infrastructure, natural resources, and our capital markets.

Where have we come from? We had the global financial crisis. In a speech yesterday we heard that the members opposite in the Labour Party are global financial crisis deniers. We have a recession that saw the worst economic conditions in New Zealand for 50 years. We inherited some of the worst financial outlooks of 50 years—[Interruption] The former member from—what is the electorate that you beat that member over there in?

💬 Hon Kate Wilkinson: Waimakariri.

Waimakariri. You remember where that is, Mr Cosgrove. The member from Waimakariri says that it is embarrassing. Well, what is embarrassing is what was left to New Zealanders after a $20 billion surplus over the period of time you were a Minister in that Government. We were faced with many years of large fiscal deficits and rising debts. We have had the Christchurch earthquakes, we have had droughts, and we have ongoing international uncertainty. I am proud to stand here today as part of the John Key - led Government and say that New Zealand is making good progress. Our economy is growing and we are on track to surplus. Business confidence is improving. Companies are more competitive. Wages are growing. Inflation is lower. Net household disposable income is around 20 percent higher than it was 4 years ago, when we inherited a mess from those members opposite, who seem proud of that here today.

Compared with mid-2009 there are 60,000 more Kiwis who have jobs. Unemployment is dropping but it is still too high, and we on this side of the House are willing to recognise that. Here is another 50-year experience for David Clark. Interest rates are at a 50-year low under this Government, saving New Zealanders thousands and thousands of dollars on their mortgages and on their loans. The $30 billion Christchurch rebuild is now well under way. We are investing in high technology.

We are exporting, and we are negotiating free-trade agreements. We are working for the Trans-Pacific Partnership and the trade agreements that will bring more jobs to this country. We are attracting investment to this country, and I say to members opposite that we are not ashamed of investment from foreigners, creating more jobs in New Zealand. Billions of dollars are being spent on infrastructure: roads, rail, ultra-fast broadband, and rural broadband—members opposite do not know about that because they do not have any rural seats, but rural broadband is important to an important part of this country.

We have 14,000 more apprenticeships over 5 years. Since we launched our new scheme for apprenticeships a few weeks ago, 2,500 young New Zealanders have signed up for apprenticeships straight away. This is a hard-working Government that is focused on what matters: a strong plan for the country and a strong plan for the economy. I commend this report and I commend this Government to the House. Thank you.

I must have been at a different committee from that man Todd McClay. I sit on the Finance and Expenditure Committee and the committee that I was on heard that 180,000 people have gone to Australia, that we have had rising unemployment, that the wage gap has increased between New Zealand and Australia, that the Government has not rebalanced the economy towards exports, and that the current account deficit this year is the second-worst in the developed world after Greece, and that next year, by the IMF’s calculation, it will be the worst in the world. That select committee heard all of that. Where was that member? I thought he was meant to be chairing it.

Do you know what? New Zealanders are disappointed in this Government, and I want the Minister of Finance, when he stands up, to apologise to New Zealand for failing to meet his undertakings to the electorate time after time. In 2008 he was elected on the promise to close the wage gap with Australia. What has happened? It is going up. It is going up and, indeed, now it is so large that an Australian works for 4 days to earn what a New Zealander has to work for 5 days to earn. It has gone up by 50 percent, from $120 a week to $180 a week. Even when you use the measure that the Deputy Prime Minister now uses, which is not the measure that the Prime Minister used to use, but even when you use his recalculation, when you take into account the increases in GST and when you strip out the tax cuts that were already coming in from the Labour Government—even on an after-tax basis, when you do it properly—that wage gap has got bigger.

Why should the Government apologise? Because it is mismanaging things, including in the Minister’s own department, Treasury. There has been egregious mismanagement of the Crown Retail Deposit Guarantee Scheme, where for the first 5 months after the Government gave a guarantee to finance companies, it did not even ask one question as to whether they were increasing their lending and their deposits by hundreds of millions of dollars on the back of that guarantee at the cost of the guarantor taxpayer—did not even do it. Then, last year, we had scandal after scandal. We had ACC, we had Dotcom and the Prime Minister having his brain fades, and we had the Deputy Prime Minister forgetting to talk with the Prime Minister, so he was beset with that issue rather than managing the economy. We had the Banks donation scandal, and it is scandalous that we have a member in this House who broke the law in respect of campaign donations to try to get elected. That man, who, of course, supports the Government, tripled council debt when he was last Mayor of Auckland. We have had the Skycity bungle, where some parties had the inside running—crony capitalism, where the insiders got the deal—and everyone else did not know about the deal, and so the Auditor-General found that it was not fair. What is the impact of the Government dealing with scandal after scandal instead of doing what it does? The economy is not doing as well as it should.

The latest scandal is the Government trying to say that it is not its fault that Solid Energy is as far in the shtook as it is. I have got a letter here from the then Minister for State Owned Enterprises, Simon Power, to Solid Energy in 2009. First off, it noted that there is a “significant decline in forecast coal prices,”. So this is the Government acknowledging in 2009 that it knew of that issue—2009. Then it said: “I would like all SOEs to increase their gearing from current levels,”. So the Government wanted it to borrow more. Solid Energy had, we heard in question time at that time, debt of $12 million or $15 million, and in the period after that, at the request of the Government, it borrowed an extra $300 million—

💬 Rt Hon Winston Peters: How much?

—$300 million, Mr Peters; an astounding amount—with the approval of the Government, knowing that the coal price was going down. It was putting some money into things like lignite, which we had the Prime Minister and the Deputy Prime Minister—

💬 Hon Clayton Cosgrove: Who opened the lignite?

Well, they actually took the photo op. That was after Gerry Brownlee was elected, saying “sexy coal” in that pre-election video, pushing Solid Energy into further developments, despite the decreasing price of coal. The Labour Party—and it is a matter of public record—was quite opposed to the lignite development. The Government ripped the rug out from under Solid Energy on biofuels, which it had invested in, by Gerry Brownlee changing the legislation and completely ripping away the market, but the National Government says that that is not its fault.

The incompetence of this Government in economic matters can be judged from the fact that its central economic agenda for this 3 years is selling off the electricity State-owned enterprises. Selling what already exists does not increase New Zealand’s output. It is this lack of an economic plan, this failure to do what it promised to do, which was to move New Zealand towards an export-led recovery and export jobs, that is at the heart of New Zealand’s problem. Government members refuse to do what everyone agrees they need to do except for them. We need a capital gains tax to encourage people to invest in our productive enterprises rather than in speculative land banking or whatever is happening in Auckland. We need people to be saving more through a universal KiwiSaver scheme. That would grow the economy, but, no, National will not do that. We need to change monetary policy. There was a good article, I thought, today by Colin James. In his syndicated article he was saying that it is time for the Government to wake up and realise that the rest of the world is intervening for the benefit of their exporters and New Zealand should be too. But, no, the National Party members have got themselves into a corner on everything.

They are left doing little things. Some of them are good; actually most of them are Labour Party policy. You know, we have got them coming out in the coming Budget with something that other parties in this Parliament agree with, like a warrant of fitness for rental houses. They are actually now saying that they are going to do something with Government procurement—too little, too late, and absolutely inconsistent with what they have done in respect of closing Hillside railway workshops and their other refusals to support local manufacturers and local IT providers, but none the less adopting at least a small part of Labour Party policy. They are adopting loan-to-valuation ratios after they said that that was just silly. That was just silly a year ago—

💬 Hon Annette King: Did they say that?

They said it. In fact, the sorts of things that are now being done were described by Steven Joyce as voodoo economics. Of course, he is “Mr Fix-it”. If you pronounce it like Simon Bridges would, it would probably describe it, because what has he done to ultra-fast broadband—3,000 connections? Four years into his period in office and we have got 3,000 connections. We have got them trying to rewrite the regulatory framework, we have got them making money off poor people in poor suburbs to line the pockets of the shareholders of that company that is not doing as it ought to, and is the Government enforcing that contract? No.

I want an apology from the Minister of Finance for not meeting the undertakings that he gave to this country in advance of the 2008 election. Why is it that we keep having downgraded forecasts of growth? We now know, because today we have got a letter at the Finance and Expenditure Committee, that Treasury admits that a third of all growth—modest though it is—is coming out of the Christchurch rebuild. They claim that is a problem, yet it is a third of all growth. That is only the first-round effect. Treasury would not tell us what the second-round effect was. This Government is failing in its economic duties.

Well, I think Labour is learning that until it apologises for its mess, the public will not take it seriously. That is becoming increasingly evident. Labour thought it was going to bounce back into the start of the year and start looking like an alternative Government. In fact, it is struggling to look like the alternative Opposition at the moment. It is still the Greens ahead of Labour by a long neck in the Opposition stakes. So that would be my advice to Labour: first, apologise so that the public know that Labour understands why it was thrown out, because it still has not acknowledged that 5 years on, and, second, put a bit more effort into trying to head off the Greens on credible economic commentary, credible education policy, credible climate change policy, and credible views about just about anything else the Government is doing.

That is the job the Labour Opposition should be putting itself to, and I will just tell the House a bit about the job the Government is putting itself to. In the light of the pretty extraordinary economic circumstances that have occurred around the world, the Government has set out in the Budget Policy Statement four pretty straightforward priorities: first, to responsibly manage the Government’s finances; second, to build a more productive and competitive economy; third, to deliver better public services within tight financial constraints; and, fourth, to rebuild Christchurch, which is, after all, our second-biggest city.

This programme comes from the Government following a couple of rules of thumb. The first is that we should focus on those things we can control. It is easy to get diverted and confused by the many events around the world that are intriguing and interesting and relevant to us but over which we cannot have any control. A most recent example of that, which has upset prospects for Europe, is the result of the Italian election—something over which we can have no control whatsoever.

Secondly, the Government is continuing on a pathway of moderate and considered change. Too often it has been the case in New Zealand that Governments have rushed into changes of one sort or another, lost public support, failed to win the arguments, and seen those changes undone, simply not accepted by the New Zealand public, or accepted very reluctantly. The effect of that has been the country deciding that change is not good for us and that we need to go back to where we were. That is one of the things that have underpinned our patchy economic performance compared with Australia over the last 30 years. This Government has been determined to advance change as required in the economy at a pace and of a kind that can be broadly supported by a New Zealand public, who, in my view, are more understanding of the economic circumstances and more understanding of the need for successful and profitable business than I can recall at any time in my adult life. So that is the context in which we have set out those four priorities.

I will not go through all of them, but I will focus on a couple of aspects of the Government’s priorities as set out in the Budget Policy Statement. The first is the Business Growth Agenda. There is much loose talk about jobs—a kind of magical thinking that somehow if the Government wanted jobs enough, there would be a lot more of them. Well, of course the Government wants jobs, but wanting them is not creating them. The Government creates jobs by employing, and, of course, we are restricted in whom we are going to employ by our finances and by the fact that we are finding that, actually, with a few less people we can offer better public services. So when the Government is not employing people, someone else has to, and that someone else is the private sector. I know that businesses are regarded by the Greens and Labour as nasty, exploitative, profit-wrenching people who should be punished if at all possible, particularly if the value of their business goes up. That is actually where the incidence of a capital gains tax would fall: on successful businesses. That is who would pay it, because housing is, to a large extent, exempt from the capital gains tax.

There is only the Government and the private sector to employ people. We are limited. In fact, we are shedding numbers very gradually, so it is up to the businesses. The Business Growth Agenda focuses on a very simple decision: the decision of a workplace to employ another person and invest another dollar, usually investing the dollar first and employing the person who comes with it. There is no silver bullet to make that decision a whole lot easier, particularly when our export markets are not in great shape, our exchange rate is relatively high, and New Zealand consumers have been pretty careful with how they are spending their money. It is just not easy to create jobs in that environment, and plenty of people would like to. They would like to see their business expanding.

The Business Growth Agenda sets out in the most transparent way possible every policy move, every policy idea, and every policy decision the Government is taking to focus on making it easier for businesses to invest and employ. The publication of the documents laying out those 200 or 300 different items is an open invitation to the workplaces and the businesses of New Zealand to tell us the next thing we can do, in addition to what is already on the list, to make their workplace more successful and more likely and more able to employ another person.

A couple of aspects of that have been highlighted recently. One is the tidying up of the apprenticeship scheme, which was left in a disgraceful mess by the previous Government.

💬 Hon Members: Ha, ha!

Well, the Labour Government was actually training dead people—it was training dead people. It was paying for dead people. It was paying for tens of thousands of young New Zealanders who got no qualification credits at all—not just a handful. There were a lot who got a handful, but there were tens of thousands who got none, after the taxpayer had spent millions on training them. So out of the savings we have made from tidying up that system we have been able to relaunch 14,000 new apprenticeships with a $1,000 or $2,000 bonus to assist with the purchase of tools and to encourage employers to take on young New Zealanders.

Another example that has flowed out of the Business Growth Agenda is the Government’s determination to address the longstanding and complex policy problems around the Resource Management Act and, more important in the long run, the management of water, because water is New Zealand’s most important strategic asset. Previous Governments have either not addressed it or failed to address it. We are now probably about halfway through a 5 to 6-year process that is going to give New Zealand the tools to manage its water for both environmental and economic benefit.

One other initiative I will mention in this context is Callaghan Innovation, which is a new attempt—and I believe that it will be a successful one—to work with the business community to reshape the Government’s intervention and support for innovation in business in a way that focuses it more on enabling new investment and new jobs, because much of the spending has not been focused tightly enough on that objective.

We are also managing the Government’s finances responsibly. As a member who spoke recently pointed out, if you compare, for instance, the expenditure forecasts for 2014-15 back in 2009, it was going to be $83 billion. In that year we are forecasting to spend $73 billion. Public services will be better—significantly better—even though less money is going to be spent, because the way we have approached the spending of taxpayers’ money has empowered and enrolled the whole Public Service in doing a better job with the resources it has. It has risen magnificently to the challenge, as has the rest of New Zealand.

That was the National Party leader who achieved the worst result of any National Party leader in our history that we know of—

💬 Dr David Clark: In the last 50 years.

—no, no, in excess of 50 years—in 2002. I will tell you what is hilarious about the Budget Policy Statement. Bill English was so desperate to get some support for this document that he rang up his brother, who works for Federated Farmers—the National Party in gumboots—and said: “Come on, bro. I need somebody to put a submission in to support this.” And what did we have? We had one submission from the National Party in gumboots, Federated Farmers, in support. No one else even bothered to submit—no one else. I say to that member his brother did a good job.

I say to that member I do not know what the strategy of the National Government is apart from asset sales and unleashing the dogs of war on the poor and unemployed at the same time that Joan Withers, the chair of Mighty River Power, and her board get 1,200 bucks a day, as Solid Energy’s directors get another 30 grand, as does Meridian Energy, and as do others. These guys are great, of course, at looking after their own, but when it comes to the poor and unemployed they will try to scratch out $10 here and $10 there. But, my word, they will look after their own. So what we have got is flogging off the family silver, taking a bit of tax off paper boys, stealing a few of the shift workers’ car parks—that is a cracker, is it not, and even John Hayes knows it is a loser, an absolute loser—and selling assets. That is the strategy. That is the strategy over there. They unleash the dogs of war on the unemployed. They say to the unemployed: “Get a job.”, and unemployed folks should get a job, but the problem is there are no jobs created by this Government. There are 163,000 people unemployed, and 90,000 young people not in work, not in training, and not in education. That is the legacy. There are 1,000 people a week going to Australia. Remember the political campaign ad? What was it, Eden Park or somewhere? You know, John Key, ambitious for New Zealand, was going to fix all that. There are 1,000 people a week going across the ditch. He was going to close the wage gap between Australia and New Zealand. It has widened.

Nothing has happened with this Government. It tinkers. Bill English actually admitted it himself. He said: “We want to maintain the support of mainstream New Zealand, so basically what we are going to do is we are not going to do anything bold. We are not going to make any major reforms. We are just going to keep the ship of State paddling along. At some point some magical hand will come and prevent it from crashing into the rocks.”, as we are doing now. We are second to Greece in our current account deficit and soon to be first.

So that is the legacy of Bill English. That is the strategy. He should apologise, as David Parker said, for all the promises he made to all who are ambitious for New Zealand. He should apologise today because he has broken his promises. He has told porkies to the people of New Zealand. Is this guy hands-off? This guy is so relaxed that he is horizontal. He is hands-off in terms of Solid Energy. Not his problem. An award-winning export company for 9 years under the last Government, and it is a basket case under him and Tony Ryall. He knew everything that was going on there, with month-to-month reports. Now what happens? The poor old taxpayer is up the kazoo for $389 million—that is the legacy that Bill English has left the people of New Zealand. An award-winning exporting company is now a basket case while that man over there and Tony Ryall, with his limp answers, were asleep at the wheel, as was Steven Joyce, of course, the Associate Minister with delegation for State-owned enterprises. But it is everybody else’s fault. So I say to Bill English: apologise, apologise, and apologise again to people.

I want to use my speech to talk about three particular areas that I think are important areas on which to judge the Government’s performance. One is around external imbalances and looking at the challenge that Bill English set himself in order to rebalance the economy—the external accounts. The second one is around sustainability, and the third one is around inequality. I think those three areas are good areas to judge how the Government has performed.

If we look at the external imbalances, Bill English rightly said that New Zealand had a major problem in its external imbalances. Essentially, that is manifest in the current account deficit. The current account deficit is running at about 5 percent of GDP, or $10 billion a year. The way that we finance the current account deficit currently is that we borrow more money from overseas collectively as a country—not just the Government, but the whole country—and we sell assets, such as land, in order to cover that large current account deficit. Bill English identified that this was something that needed to be dealt with, and yet what we are seeing now is that the current account deficit has become large again and it is projected to keep growing. It will keep growing upwards to at least 6.5 percent of GDP, and possibly more. So on the Government’s own terms, which are dealing with the external imbalances in the New Zealand economy, it has failed. That is why the Government does not like to talk much about the external imbalances problem.

If we were to take just a microcosm, if we were to look at, say, oil imports, in 2002 New Zealand spent $2 billion importing oil—for transport, basically—which was about 2 percent of GDP. In 2012 that had increased to NZ$8 billion, or about 4 percent of GDP. So what we have seen is a doubling of the relative cost to the overall economy of importing oil for transport. That is why a strategy of reducing our oil dependence not only makes sense in terms of greenhouse emissions but also makes sense in terms of the external imbalances. We are having to spend more and more of our export earnings importing oil to pay for our transport oil costs. According to the IMF, the International Energy Agency—you name it—oil prices over time are predicted to increase. So in New Zealand, as a result of the Government’s policies to lock us into road-based transport systems, our imports of oil are likely to increase.

That will put further pressure on our external imbalances as we have to pay for that imported oil, and more and more of our exports will have to be spent importing oil. That is one microcosm of where the Government has got this problem fundamentally wrong. It has got it wrong in terms of the external imbalances, so we have seen a big growth in the external imbalances around oil imports for transport, but it has also got it wrong in terms of sustainability. Obviously, in terms of greenhouse emissions, increasing our oil dependence increases our greenhouse emissions.

Another way to cut the external imbalances is to look at the value of the New Zealand dollar, which is radically overvalued compared with other currencies. The Green Party has put out various proposals around this. The export sector and the tradable sector are saying with one voice that the Government should be intervening to lower the level of the New Zealand dollar. The options on the table include a lower official cash rate. To make that possible, we need to de-link housing market inflation from the rest of the larger inflation issue, so that there is more space for the Reserve Bank to lower the official cash rate. That means using complementary measures to control house price inflation, which the Greens have been talking about since at least 2006 and probably earlier. There are such things as loan devaluation ratios. There are such things as capital adequacy ratios, which try to target housing market inflation and so enable the Reserve Bank to have a lower official cash rate, because the housing market inflation would be being controlled separately.

Another option on the table is the use of quantitative easing, which most of our trading partners are using. They are using Government-created money in order to drive down the level of their currencies in order to make their tradable sectors more competitive. Most of our trading partners are doing this, and the effect is that the New Zealand dollar is getting higher. We have opportunities to use quantitative easing or Government-created credit in order to pay for the Christchurch rebuild. It is, of course, exactly what Japan is doing in order to pay for the rebuild after the tsunami and earthquake up there, so this is a very mainstream policy internationally. Of course, when you look at all of this together, what you realise is that we have a major problem in terms of our external imbalances, and the Government has simply failed to grasp the nettle. As much as I think Bill English genuinely wanted to deal with this issue, he has failed to do so.

The second area I want to just touch on is around sustainability. There are a number of dimensions to this, but climate change is probably the right one to start with. This Government has championed coal and lignite, which of course have very high greenhouse emissions. The Government has lowered the proper price on carbon. By continually weakening the emissions trading scheme, it has withdrawn from binding commitments under the Kyoto II agreement, and, of course, it is subsidising fossil fuels and transport. The effect of all of that is that instead of de-linking our economy from greenhouse emissions, we are actually linking it much more closely to greenhouse emissions, and that is a major problem. When you look at New Zealand and you think how vulnerable we are to drought because a large part of our economy is agricultural, New Zealand and the New Zealand primary sector have a specific interest in addressing climate change, and yet this Government is doing the exact opposite. So it is undermining efforts internationally to deal with climate change and it is reducing its own domestic efforts to deal with climate change.

If we were to look at water, of course it is a terrible story. New Zealand under the Yale University study, which the Prime Minister used to quote a lot, has gone from having the second-best water quality to the 43rd-best water quality. That is under the Yale University study, so the Government has now stopped quoting from the Yale University study. So whether you are looking at external imbalances in the New Zealand economy in the performance of this Government or whether you are looking in terms of the sustainability indicators, like climate change or water quality, it is all going in the wrong direction, and it is all going in the wrong direction pretty rapidly.

The third area I want to touch on is inequality. Inequality is important. It is important both economically and also, I think, morally. We have one of the most unequal societies in the OECD now, and our inequality rates are rapidly increasing. The Ministry of Social Development’s report from August 2012 reported that New Zealand now has the highest level of inequality ever recorded. That has happened over the course of this Government. What it reported was that middle and lower income workers saw incomes fall sharply, while the top 10 percent saw their incomes rise sharply. You know, that was in part a result of the Government’s tax cuts, where the rich got a very big tax cut and the poor got virtually nothing. We have seen this big increase in inequality in New Zealand. So that is what the Ministry of Social Development’s report found when it looked into it—the Government’s own report. Of course, this is reflected in the fact that we have a quarter of a million children living in poverty, which is a shameful statistic about our country.

So when you are looking at inequality, the reason why all of this matters—aside from it just being wrong that we have taken a strategy that has resulted in this massive inequality in our society—is that it also has these downstream effects. Unequal societies have more crime. They have more ill-health. You have all these impacts in terms of education. More unequal societies have less movement and less social mobility, so the more unequal a society, the harder it is to move from the bottom decile to deciles higher up. In some of the most unequal societies on the planet, such as ours or that of the United States, it is very difficult to move between the different decile units because the levels of inequality are so high. Having a more equal society gives people the chance to get ahead on their own efforts. Of course, this is one of the ideologies that the National Party promotes, yet it is specifically introducing policies to stop social mobility, so it is very difficult for those at the bottom of the heap to get ahead under the kind of policies it has introduced.

I think, really, after 4 years, there is no more blaming the Labour Government for the record of this Government. Obviously, National has made a great deal about blaming the previous Government, but I think now, after 4 years, we can actually look at the record and judge the Government. The external imbalances have got worse under this Government. Sustainability indicators have got worse under this Government. Inequality has got worse under this Government. So whichever particular criteria you choose to use, the Government has failed. I think that is sad for this Government, because there are some good people in there, but it is particularly sad for New Zealand that we have a Government that has been unable to address these critical issues for our future, and it is why we need a change of Government.

I was very interested to hear Russel Norman, the previous speaker, talking about social mobility. I would have thought that the best way to achieve social mobility is to grow the economy. That is how you give people the opportunity to get on to the ladder of work, to make some money, and to get ahead. Everything that that member’s party stands for seems to be against economic growth, and so, by my reckoning, is against economic and social mobility.

This Government retains the support of so many New Zealanders at a time when many Governments around the world are struggling, because it has maintained a strong and consistent economic policy. The pillars of that policy are, first of all, returning to surplus and getting this country’s books back in order. The Budget Policy Statement we are looking at today forecasts a modest operating surplus in 2014-15 of around $66 million, which is a huge achievement, taking it back from the $18 billion hole we had 2 years ago. That means we will stop borrowing for operational expenditure and we will be able to start repaying debt before too long. Why is that important? Because countries that meet spending and debt problems head on, with control, inspire confidence amongst investors. That reduces the costs of borrowing over time, it increases the chances of investment in New Zealand, and it better positions this country to grow. So I am very pleased.

I am also very pleased that the bulk of the work in returning this country to surplus has been achieved by constraining the size of government and Government spending, which is forecast to drop from a peak of around 35 percent of GDP down to 30 percent of GDP over the next 3 to 4 years. It is worth remembering that the previous Labour Government lifted us from Government spending of about 29 percent of GDP in 2003-04 all the way up to 34 percent by 2010, which is what we inherited. This was during the upturn of a cycle.

We had a bit of a debate this morning with David Parker in the Finance and Expenditure Committee, where he questioned those figures and claimed that most of the increase in Government spending was due to the earthquake and to Working for Families tax expenditure. [Interruption] I am hoping, Mr Bennett, that you might listen to my speech. We were debating about the effect of Working for Families. What I would like to point out to Mr Parker is that I checked the figures, and even if you take Working for Families tax expenditure out of it, core government spending had increased from 28 to 33 percent during the time of the Labour Government, which was a 5 percent increase. Putting it another way, Labour grew the size of the core government by 18 percent, or by nearly a fifth, over only a few years. So that is the sort of thing that you do.

I think that if anybody was going to apologise in the House today, it should be the Labour Government for that massive increase in the size of government. Why is that important? Because basically I think the economy is divided into that part that is based on voluntary decisions—that is, the private economy, where people choose to either buy something or buy a service—and that of the State part of the economy, which, essentially, is based on compulsion. I believe that we should be having a smaller State than we have got at the moment, and this Government is very focused on getting it back to a reasonable balance, after having an ever-expanding Government, such as we had in the 2000s, that was appropriating for itself the funds that entrepreneurs could have used to grow the economy. That is what we need in this country.

We have talked about the other areas, about rebuilding Christchurch and about getting better value for our public services, but, more important, the fourth pillar of the Government’s work is building a more productive and competitive economy through a wide-ranging programme of microeconomic reform, which we call the Business Growth Agenda. Also linked with that are the welfare reforms, which are not meant to be mean or to save money, but are there primarily because we believe work is a good thing—that seeing people getting out there and working and having earned success is an essential part of fulfilment in life. That is to free people from the dependency that FDR used to call “a subtle destroyer of the human spirit.” So welfare reform is one of the most important things that this Government is doing.

Secondly, when we look at the Business Growth Agenda it is ultimately about breaking down barriers to entrepreneurship. All of this is designed to give businesses the confidence to invest, to grow, and to create jobs so that we can build a more productive economy.

So let us have a look at the sorts of things we are doing. Well, funnily enough, we hear from the Labour Party all about the crisis in manufacturing and the lack of jobs. I spent last weekend down in Hamilton, celebrating the 75th anniversary of Gallagher Group, one of New Zealand’s more successful manufacturing exporters. In fact, it is a group that I wrote a book about, before I was in Parliament. That company has a very interesting story. It is doing very well in a difficult time. It is continuing to succeed in an export manufacturing business, despite the high dollar, and is not complaining. It is getting ahead.

When you look back over its history, it went through massive times of transition from the 1970s and 1980s, when, as an exporter, it basically paid no tax—in fact, it received tax back from the tax department in the late 1980s—until a sudden transition in the late 1980s and early 1990s to a situation where it began paying the full 33 percent tax on its profits. So the Gallagher Group survived that transition, and now it goes on dealing with a fluctuating dollar, which is something that exporters face all around the world. It has learnt over the last 15 to 20 years how to handle those fluctuations—to be careful, to hedge internally, and to make sure that there are a lot of components bought in US dollars. It all makes it possible for the company to survive.

So when we look around, despite the stories of gloom in the manufacturing area, there is actually growth going on in manufacturing in New Zealand. There are plenty of companies that are doing well and plenty of jobs are being created. We have just to look at the food manufacturing area, for example, where there are more than 1,000 jobs in constructing, and working in, Fonterra’s new Darfield milk-processing plant. There are 300 new jobs at Tegel’s new factory in west Auckland. Yashili New Zealand Dairy Co. Ltd plans to create a Chinese-owned milk-processing plant in Pōkeno.

So there are lots and lots of manufacturing jobs being created in this economy right now, and this is why I have every confidence in this Budget Policy Statement. It reflects a Government that is thinking very carefully and guiding this country safely through a difficult period, on to what will be a brighter future round the corner for all New Zealanders. Thank you very much.

I take a call on behalf of New Zealand First. Is it not interesting to speak after the person who will be the next member of Parliament for Epsom when the National Government finally pulls the plug on the ACT Party and sends it off into political oblivion? That particular member of Parliament might stop interviewing his typewriter and might stop looking in the mirror for his answers. He might actually go out and not just interview people like the Gallaghers, whom he wrote a book for, but, as we have in Opposition, sit in the likes of Christchurch, Dunedin, Wellington, and Auckland and listen to real manufacturers and real companies that are having a real problem in this economy trying to survive and trying to keep their workers in jobs—not the Gallaghers of this world, who basically pretty well have the market all to themselves.

Is it not interesting that this Budget Policy Statement—it is not about what is in the policy statement, but it is more about what is not in the policy statement. Is the Novopay shambles, the omnishambles of the Novopay debacle, in the statement? No way. It is not in the statement. Is it, as the honourable Todd McClay would say, as he is leaving the House—

💬 Mr SPEAKER: Order!

—delivering better public services within tight financial constraints? Is the Novopay system delivering better public services within tight financial constraints? I do not think anyone in New Zealand would think this is a Government that is delivering that.

How does the manufacturing sector in decline contribute to building a more productive and competitive economy, which this Government continues to talk about? The manufacturing inquiry has revealed in stark detail the crisis in the manufacturing sector. What has been left unsaid also is the stealthy tax hikes that are planned in order to achieve the miserable $66 million surplus in 2014-15—$66 million, which is almost below the smallest margin of error. In an economy turning over some $200 billion a year, a GDP of $200 billion, $66 million could literally go in a quarter of an hour if the wrong button is pressed. But that is what this Government is hinging itself on.

It is hinging itself on finding money, little scraps of money, wherever it can, such as was announced this week. It is looking at imposing a fringe benefit tax on company car-parks in Auckland and Wellington, and on iPads, for goodness’ sake. It is starting to try to tax the fringe benefit of having an iPad. What an absolute nonsense. We hear that it is going to cost companies perhaps up to $30 million in compliance costs in order to pay the Government something like $17 million or $18 million in the car-park tax. It is just a complete nonsense, and, again, like the schoolboy and schoolgirl pocket money tax last year, it really is showing a desperate Government that is grasping at straws.

There is the latest Solid Energy debacle—what a debacle—of hundreds of millions of dollars. Where is that all being factored into the Government’s books for 2014 in this Budget Policy Statement? Certainly, when Bill English drew it up some time ago, they had overlooked what was happening in the likes of that State-owned enterprise.

New Zealand has not had a balance of payments surplus in nearly 40 years. What a disgrace that this country has not had a balance of payments surplus in 40 years. Given the current policies of this Government, when will we ever return to a real surplus in our balance of payments? What is missing is any real indication of the progress, if any, that has been made in reducing the level of New Zealand’s net international indebtedness.

The Government relies on things such as the Christchurch earthquake. We heard today at the Finance and Expenditure Committee Treasury saying that a third of the small growth in the New Zealand economy was as a result of the Christchurch earthquake. Well, just imagine, if this Government had not been let off the hook and there had not been an earthquake, how much worse off it would be in terms of the books if it did not have the Christchurch rebuild to assist its fiscal position.

At the end of 2012 almost 90,000 New Zealanders under the age of 30 were not in work and not in training—almost 90,000 New Zealanders. The number of people receiving the unemployment benefit has gone up a staggering 74 percent in the past 4 years. If it were not for the 50,000 people leaving each year and going to Australia to live, imagine what the unemployment figures would be today. Again, a bit like with the Christchurch earthquake, this Government is thanking its lucky stars that so many New Zealanders are leaving to go to Australia, otherwise the unemployment figures would be really, really, really grim.

New Zealand First is looking at new measures, and we will do this by ensuring that New Zealand companies are first in the queue for Government contracts. Our New Zealand First “Buy New Zealand” Government procurement policy will create a legal requirement for all Government departments, all State-owned enterprises, and all local authorities in New Zealand to give first preference to New Zealand companies when they tender for supply, based on the overall financial impact report that is given in terms of that tender. Why should there be a situation where the New Zealand Transport Agency gives a $2.5 million steel contract to China to build the new steel bridges for the Waitaki River—a tender price that was only 5 percent cheaper than tenders from local New Zealand steel contractors, and no consideration was given to the amount of tax the Government would get from that contract, the amount of PAYE that the workers would pay, the number of people it would employ, and the number of subcontractors who would be employed? No consideration was given by the New Zealand Transport Agency to all of that. All it did was take a price 5 percent cheaper than those of the New Zealand suppliers, and all that money—$2.5 million—that could have been spent in the Canterbury area and the North Otago area all disappeared off overseas.

Why did the Government not step into KiwiRail and look at ways of keeping the Hillside railway workshops open? It is the largest foundry in New Zealand, the largest workshop in New Zealand, and was keeping the capability, the expertise, and the knowledge of heavy, heavy engineering in this country going. Why did it not look into, as was suggested again—and members over there would have heard it had they been at the manufacturing inquiry in Dunedin on Monday—that, for instance, there could have been a joint venture with the Chinese suppliers and it could have been done in a flat-pack arrangement, as was done on the old days in New Zealand with CKD—complete knock-down—construction of cars. The heavy steel could have been produced in China. It could have been produced in such a way as to be sent to the Hillside rail workshops for them to then physically put the carriages together and put them on the tracks, commission them, weld them, and send them out. That was not done. The total tender went offshore. We have discovered this week at the manufacturing inquiry that the steel welding of many of these railway wagons is insufficient—apparently a lot of the welding looks like bubble pack—and the brake system on these railway wagons is technology from the 1970s that they stopped putting on railway wagons in the 1970s in this country but that is turning up on the Chinese wagons. All this sort of nonsense is going on.

We also heard at the manufacturing inquiry that the broadband roll-out in this country is being supplied out of Sweden, and all the cabling—including even the plastic outside cabling, which can be produced in this country—is coming from Sweden. So these billions of dollars that have been rolled out to put broadband through New Zealand by this Government spending all this money are all disappearing offshore.

The Inland Revenue Department is spending up to $2 billion on a computer system to update the antiquated inland revenue system. Again, it is all going to France. The whole contract is going to France when we have some of the smartest IT people in New Zealand and they are missing out. It goes on and on and on.

I can assure members that when New Zealand First returns to the Government benches, or is in a position to influence the Government, we will bring in measures to look at all these aspects, including overhauling the Reserve Bank of New Zealand Act, which has not been looked at in 26 years.

💬 David Bennett: Remember all those pamphlets you got done in China?

In 26 years, Mr Bennett—your Government has not looked at the Reserve Bank in 26 years. That will be reviewed so that the New Zealand dollar can be looked at in terms of making it more competitive for New Zealand exporters to operate around the world, so that New Zealand companies can get back on a proper footing and get jobs back into this economy, get proper growth back into this economy, and get New Zealand moving again. New Zealand First has policies that will work in this area. This Government does not.

Twenty-six years ago that last speaker’s leader was part of a Government led by one R D Muldoon, who took this country to the top of a financial cliff. If we listen to what he said this afternoon in this House, it is clear he wants to take us back to the days of a command economy: “We’re going to run railways. We’re going to put plastic on wires. This is what we are going to do.” Well, I am really sorry, but since you have come down from Auckland you seem to have—

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

Since the member has travelled down to Wellington, from Auckland, he seems to have lost touch with the fact that in this economy the Government sets the rules for everybody to operate under equally. The Government is not meddling in the business community; it will not do that.

Let us go back to 2008 when this party, the party led by John Key, came to power. At that point New Zealand was struggling out of a recession because we discovered when we got into power that, actually, the recession had been going on for 2 years before that. Guess how it was camouflaged? The then Government, which that member’s leader was a party to, was busy employing more and more civil servants, using borrowed money to do it, and camouflaging what it was up to. We did not know it at the time, back in 2008, but we were soon to be hit by the devastating Christchurch earthquakes. That member says: “Oh, yes, but if it wasn’t for the earthquakes your economy wouldn’t be moving forward.” I have to say to you that that is nonsense. Where does the $30 billion come from that is repairing the damage from those earthquakes? It is substantially from taxes. This was absolutely unexpected expenditure.

Although the global economic situation remains uncertain at best—and I make that judgment having been to Europe late last year and I could see what was going on there—here in New Zealand we are making really good progress. The economy is growing and we are on track to surplus by 2014-15. Business confidence is improving and our companies are becoming more competitive. [Interruption] Come to Metalform in Dannevirke. I have told you about them before. Metalform exports locally produced wheelchairs that sell in the States for US$25,000 each. It is selling wind-generator motors into Turkey, and doing all sorts of interesting things.

Wages are growing and inflation is low. Net household disposable income is around 20 percent higher than it was 4 years ago. Compared with mid-2009, over 60,000 more Kiwis have more jobs, although I agree that the unemployment rate is still too high. Interest rates are at 50-year lows, and I am old enough to know that, and households are saving more. In Christchurch there is $30 billion on the rebuild, which is well under way. Over the past 4 years the Government has embarked on a huge range of sensible economic and fiscal management options, like investment in infrastructure, like rebuilding the Rimutaka hill road.

We have identified the ingredients needed to attract the productive investment required to support jobs and higher incomes and help families get ahead. Your command economy, Mr Williams, will not do that. We have chosen a moderate but a persistent pace of change that has allowed us to take the community with us. Furthermore, this year the Government is going to move to make significant changes to the Resource Management Act, it is going to introduce new housing policies, and it will implement a new framework for water management.

There has been criticism of the Government in the House this afternoon. What I can say is that it has come from people who were not at the Central Districts Fieldays, because if they had been there they would have found amazing resilience amongst our farming communities, despite the drought. If you talk to any of the businesses that were selling there, you will find that they came away, by and large, with record sales.

The drought is going to have an impact in my electorate. It is probably going to knock incomes by about 20 percent. About $60 million of that will be from the Tararua district, about $60 million of it will be from the north, in Central Hawke’s Bay, and about $60 million of it will be from the south, around Masterton.

💬 Andrew Williams: A resilient economy would be growing anyway.

I know that the New Zealand First Party has no support or contacts there, so I am bringing this to the House for your information, so that you know a little bit about some parts of New Zealand other than Auckland.

I am really impressed by the resilience of businesses in my electorate. I was in Ōringi on Monday—you would remember the freezing works there closed. There are now more people employed at the old Ōringi works than there were in the days of the freezing works. There are more people employed because they have set up a whole lot of businesses there. Look at Fonterra. It is about to expand its operation in Pahīatua, creating 300 new jobs. There are brilliant things happening in my electorate. There is forestry. On Monday night I was driving down here from Dannevirke and what did I pass? A huge train carrying logs from my electorate through to Napier. These things—getting our logs on to rail and off roads—are very good. Yes, it would make a lot of sense to have more forest being processed in my area, but we are up against the Greater Wellington Regional Council, which is busy trying to sell off forest-cutting rights because it is broke. When it took the South Wairarapa forests it had no debt, and now it has a $16 million debt. That is an absolutely terrible outcome for a facility that was given to it without any debt at all. We need to keep those assets in our communities. We need to attract foreign investment to grow jobs. It is important to point out that the labour market is very dynamic. Every year in New Zealand there are around 250,000 jobs created and 250,000 lost. There are a number of indicators as to what is currently happening in the New Zealand labour market. All the surveys point to job growth.

This is a very good Budget. I congratulate the Minister of Finance and John Key on leading us through these very difficult economic circumstances very sensibly and very stably into new, calmer water. I can tell you that we are doing better than any country in Europe—

💬 Andrew Williams: It’s called a stagnant pond.

—as we go forward with this economy. We are doing better than Japan, and we are doing better than the US. I am just disappointed that the member from New Zealand First does not have the intellectual capacity to understand how well this economy is growing. Thank you.

On the question of intellectual capacity, we will now see day from night. I would like to acknowledge the contribution made by that former foreign affairs official, John Hayes, who does have certain redeeming features. However, that is for another day and many drinks later.

I would like to direct our attention to a few facts. We had the unedifying sight recently of the joystick of the National Party, “Mr Joyceification”, saying there were five things that he was responsible for to drive forward the economy. No. 1 was improvements to the Resource Management Act. Of course, he did not refer to the fact that the current Minister driving that reform, the Minister for the Environment, will turn into being the most unpopular, ill-prepared, and insulting politician who has ever held that portfolio. The first thing that she did was that she broke a longstanding constitutional convention and attacked personally the Parliamentary Commissioner for the Environment, who reports to this House. That person is a noted academic of international repute, and Amy Adams took it upon herself to try to stigmatise and demean not so much that woman but her position. That is reflective of how hopeless and highly personalised she will be in taking forward this reform. That is the first thing that “the Joystick” has claimed credit for.

Second, he says that there is a new borer that will make a tunnel in Auckland. That reflects the mole-like impression that he leaves when his head is in the wrong position. That project, Waterview Connection, was started by no one other than my senior colleague on my left, the greatest Minister of Transport to have graced the corridors of this institution, the Hon Annette King. But the notion is that the arrival of that great big piece of machinery—German patented, apparently, and made in China—is somehow going to change the fortunes of the New Zealand economy. That boring machine is going to drill further down so the proverbial head of this ostrich-like Government goes where it belongs.

Third, it has been pointed out to us that the Prime Minister has been in Latin America. I do observe the convention that when the Prime Minister is away, irrespective of what partisan hue he wears, he represents the interests of the country. I am prepared to abide by that. But then his colleague the Prime Minister in waiting says that, because our leader is away with the agriculture Minister and is actually too busy to come home and talk to the long-suffering Kiwis about the drought, somehow that trip is going to turn the fortunes of the country round on some sort of agricultural basis alone. Mr Joyce has left only one thing out: the dung beetle. I am surprised that he has not sought to own the new sudden scientifically positive qualities of the dung beetle. There is a certain resonance between what he contributes and the capacity of that beetle to chew through refuse.

There is very little in this Budget Policy Statement that is actually going to change the fortunes of the people from Kaitāia right through to Invercargill. The large economy of Auckland, we are prepared to accept, has its own dynamic. But go to Whangarei, Tūranga-nui-a-Kiwa, Ngāmotu—otherwise known as New Plymouth—or Invercargill and see that people down there have been neglected. People down there have been forgotten about. National is a party that holds those constituency seats and believes that the voters down there are like chooks—a few bits of wheat now and again and they will always vote in that direction. Without a doubt, that is a dangerous and repulsive approach to take to regional New Zealand. Regional New Zealand, our main settlements and our main centres there, not only need an injection of capital and of ideas but, most important, need a friendly face that is willing not only to take on board their priorities but to change the priorities of the Government so that it serves the needs of those regional areas. We govern for the entirety of Aotearoa, not just the narrow caste of economic tsars hoping to profit at the troughs of these State-owned enterprise sales, but the entirety—the nurses, the farmers, and the schoolteachers, who are, unfortunately, all about to become Baycorp. This is a hopeless document and a grossly inadequate attempt to turn the fortunes of the country round. Wait. Taihoa. Help is on the way. Kia ora tātou.

We know that Shane Jones is back in this House, because he gave us a glorious speech in which he was going to go through five points, but he did only three. What happened to the other two? What about that, Shane? Leave the House now—I know, he cannot remember the other two. He does not know what the other two were. The Labour Party does not know what the other two were. It got through only three. That is about the limit of the Labour Party at this time. It is good to see Shane back. Shane is—

The ASSISTANT SPEAKER (H V Ross Robertson): Order! The member knows that he must use the member’s full name or his title.

It is good to see Mr Jones back. He is a respected member of this House. It is just that we want to hear the full plan, Mr Jones, not just part of the plan, the next time you get up to speak.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Order! The member is now bringing the Speaker into the debate. He has been here long enough that he should know the Speakers’ rulings and the Standing Orders.

But he did say one thing that was very interesting. He said there needed to be an injection of capital, ideas, and a friendly face. He is talking about the Labour Party when he is saying that. That is actually about the Labour Party. It needs an injection of capital, ideas, and a friendly face. Mr Jones knows that. He knows what the Labour Party needs. He has been on the backbench. He has seen what it needs. He knows what the Labour Party needs, and he said that today. He talked about three things today: the Resource Management Act, roading, and Latin America. The Latin American bit—once he got on to the dung-beetle, that was the end of the speech. I know that that is about the limit of it, but, you know, good on the Labour Party for at least trying through Mr Jones in that speech.

We heard from the New Zealand First Party. The New Zealand First Party wants to bring in its own form of communism, where everything in this country is made by the New Zealand First Party, everything is done by the New Zealand First Party, and New Zealand is self-sufficient in every way and in every manner. Is it not glorious to have a New Zealand First Party that can deliver everything for everybody all the time, and not have to pay for a thing?

And with the Green Party, well, we have not really heard much from the Green Party today, but that will be coming up in the next speech, I would imagine. The Green Party is the party of the Opposition parties in this House that actually says what it thinks. The Green Party, out of all the Opposition parties, actually comes up with an idea. The Green Party comes up with the idea of printing money. The Green Party goes out there and says that we can print money and it will solve our problems. Why not? The Japanese are doing it. The Spanish are doing it. The Portuguese are doing it. The Greeks are doing it. Why not do the same as all those countries that are in the poo? Why not do that? The Swiss are doing it, and that is all we need. The Swiss are doing it. We should do it because the Swiss are doing it.

💬 Peseta Sam Lotu-Iiga: Afghanistan’s doing it, too, I think.

Is Afghanistan doing it? It probably is—printing someone else’s money. In essence, the Green Party has a plan. It is dodgy, it is wrong, but it has a plan. The Labour Party and the New Zealand First Party are going to support that plan because they do not even have a plan. The New Zealand public understands that that plan is wrong and they understand that it will not work.

The National Party, on the other hand, has a plan, and the Budget is where we put that plan out.

💬 Andrew Williams: A cunning plan.

And it is a cunning plan. If we have a look at that great city of Hamilton—that great city that is booming in this country—it is a great example of that plan. It is a plan where we have delivered the infrastructure for that city—the link to Auckland. The growth that you see in the north of Hamilton is the result of the infrastructure this Government has delivered for the people of Hamilton.

💬 Andrew Williams: Best thing to come out of Hamilton is the road to Auckland.

That is the road to Auckland. The road to Auckland is the link to Auckland—this member from north Hamilton, it is very good to have you in this House now. That is the essence of growth: a Government that provides the infrastructure and provides the environment for people to grow and to prosper. That is what we are doing in Hamilton and that is what we are doing for the whole of New Zealand.

💬 Le’aufa’amulia Asenati Lole-Taylor: What about the houses?

There is a lot of housing going on in Hamilton, and it is great. Come and see the electorate and you will see that growth.

New Zealand has a good plan. It is a plan delivered in this Budget. It is a plan that is working. New Zealand is in the best position of many of the Western countries in the world. We are doing well. The public knows that and they support this. The Opposition does not and it does not have any plan. There is nothing you can find on the Opposition side. Thank you.

I call the honourable member Dr David Clark. Just before the member stands up, I inform the House that this is a split call, and I will give the member the bell with 1 minute remaining.

Well, that speech was certainly a triumph of style over content, and that is certainly saying something. This Government has the worst economic record in 50 years. That is something we need to put on the record right from the start. We have this picture building of a Government with an awful, awful, awful record of achievement. We see the unemployment rate up to the highest levels it has been at since the 1990s. We had 30,000 jobs out of the economy last year, and we have 1,000 New Zealanders a week leaving for Australia. The statistics will be worse for that.

Why is it not working, we ask. It is because this Government does not really seem to have an economic plan, and that was laid bare in the Finance and Expenditure Committee. We saw a Government whose only plan currently is to sell down our best revenue-generating assets. Treasury says that will take us backwards by $100 million a year. That is its plan. Its previous plan was to mine national parks. That is gone. It does not have any ideas, so it is selling off farms, it is selling our assets, and it is trying to do crony deals for pokie machines. It is cronyism that really sits at the heart of this Government’s economic policy, and it simply is not working. The facts show it is not working. The wage gap with Australia is growing. It has gone from $120 a week to $180 a week in the last 4 years. So this Government is simply not meeting its promises. It is disappointing New Zealanders. But that cronyism that is their economic policy, it seems, is something that is being laid bare.

We know that there has been a very cosy relationship and a costly relationship between this Government and its State-owned asset in Solid Energy. We know—we know—that the shareholding Ministers had facts at their disposal and they did not intervene. Either they trusted too much or they did not ask the hard questions or they thought that if they threw a bit more money at it—at the directors’ fees—it would go away. What we know is that they did have a very cosy relationship. They are not talking much about it now, but this picture tells us that they had a pretty cosy relationship. Here we see the Minister of Finance with the then Chief Executive of Solid Energy, Don Elder, developing one of the now mothballed projects. At the same time, it was borrowing hundreds of millions of dollars—hundreds of millions of dollars—at the taxpayers’ expense. I am picking that tomorrow, when the State-owned enterprises come in, when Don Elder comes in to talk to the select committee, we will see New Zealanders asking then whether Bill English will be sitting with him and whether Bill English will have his hand on Don Elder’s tool tomorrow. That is what New Zealanders will be asking.

So we see this cosy, costly relationship with the State-owned assets. We see a Government that is failing to deliver jobs, and there is no hope. We have got an economic development Minister who is no better, and a Ministry of Economic Development that does not even have a Minister in charge of it. The closest thing we have got is Mr Joyce, who is called the Government’s “Mr Fix-it”. If you say that with a strong Kiwi accent you get a lot closer to the truth, I reckon. This is not delivering jobs. This Government is not delivering jobs, and Kiwis are feeling it. Kiwis in the regions are really struggling right now and they know that this Government is not delivering. Despite it promising to close the wage gap with Australia, that has grown. Despite it saying “Your loved ones won’t go offshore”, the number leaving is 1,000 a week—record numbers to Australia. It is a short-sighted and petty Budget that it has delivered, picking the pockets of paper boys and increasing class sizes. But it has no new ideas to grow the economy. That is why it is going wrong. That is why it has got the worst economic growth record of any Government in the last 50 years.

Tēnā koe, Mr Assistant Speaker. Tēnā koutou e te Whare. Firstly, I would like to acknowledge that the Budget is about choices. All Government policy and spending makes trade-offs that reflect its priorities. This Government has some very clear priorities. It likes to pretend that any criticism of these priorities is simply saying “No”, full stop. But that is not the case. The Government has, in choosing its priorities, said “No” to many sound, sensible policies that would lead us to develop a smart, green economy that works for all New Zealanders. My question to this Government is: why is the Government not prioritising a smart, green economy that works for all New Zealanders?

John Key and Steven Joyce are not governing in the interests of all New Zealanders or the wider New Zealand economy. In fact, they are mismanaging the economy and blaming the global financial crisis. It started several years ago with tax cuts that largely benefited top income earners, which cost billions and contributed to growing the deficit. Now the Government is using Government debt as an excuse to sell off public assets. This is another example of a wealth transfer from all New Zealanders to just a few. Most likely, the sell-off is going to result in large amounts of foreign ownership of our strategic energy companies, and it will, according to Treasury’s own numbers, leave the Government books worse off.

Instead of looking after our “clean, green” brand, John Key and Steven Joyce and their Nat buddies have said “No” to investing in clean technology and harnessing the power of our public State-owned energy enterprises to develop green jobs that would allow New Zealand to respond to growing global demand, to respond to climate change, and to reduce greenhouse gas emissions. This was a proposal that the Green Party put forward before the last election, but the Government would rather say “No” to creating green jobs and then sell off our public assets. That will not even leave the New Zealand Government books better off, but it will enrich the Government’s mates—the top income earners who have the spare cash to buy shares in these companies.

The Government is not looking after all New Zealanders or our “clean, green” brand, but it is happy to lay out the red carpet for big international mining and drilling companies by offering tax breaks, tens of millions of dollars in free research, maintaining low royalty regimes, and refusing to put in place decent protection of our coasts in case of a catastrophic spill resulting from risky deep-sea drilling. The mining and oil drilling business will create very few jobs for New Zealanders, and it certainly will not make us more wealthy, but it will put our “clean, green” brand at threat. Drilling and fracking will worsen climate change and will actually undermine our transition to a “clean, green” economy that works for all New Zealanders.

This is a Government that claims to be about building a competitive economy, when action after action shows that it is systematically protecting its mates, like Skycity and Fletcher’s and the private bus companies, from having to compete. Any economist can tell you that what is good for private monopolies is not good for the economy.

Finally, if I could get to rebalancing the economy, the Budget Policy Statement clearly shows the account deficit worsening. It is going to be much worse, according to Treasury’s forecasts, in 2017 than it actually is in 2013. There are at least two Government policies that are directly contributing to the worsening of the current account deficit: firstly, this Government’s high dollar policy, which is effectively killing off our manufacturing sector and reducing the number of good jobs for New Zealanders; and, secondly, its insane transport policy.

This Government talks a lot about investing in infrastructure. What is clear is that it is building big motorways that have no business case. We know from the New Zealand Transport Agency’s own numbers that these projects are not going to result in any economic benefit over their cost. Here is this opportunity to apply rational economic theory to transport and actually get better outcomes, but do we see this Government pursuing rational economic policy when it comes to transport?

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Can I just remind the member on my right that backbench interjections on each other in close proximity to each other, which is across benches, actually have an effect on the microphones. The member is out of order—Speaker’s ruling 63/1.

💬 Hon Tau Henare: I raise a point of order, Mr Speaker. I am on your right but it was not me.

The ASSISTANT SPEAKER (H V Ross Robertson): I am well aware of that, Mr Henare. I did not use any names. One could say that we think he still doth protest too much, but I will not.

This Government’s transport policy is not backed up by rational economic analysis. Unfortunately, it is not even going to benefit road users and it is not going to benefit the economy; it is just going to benefit its mates at Fletcher’s.

So, once again, we see that this Government is about protecting its mates from having to compete. It is about shifting wealth from all New Zealanders to just a few. And we are certainly not going to see a transition to the “clean, green” economy that works for all New Zealanders, which the Green Party is working towards. Thank you.

I am very proud to rise to take a call on the Budget Policy Statement, and I am going to concentrate in my call today on the outstanding environmental and conservation policies that this John Key - led Government has put forward. We understand only too well that this economy needs to grow, and that these Resource Management Act reforms and also the discussion document that we released at the Bluegreens forum at the weekend—and I have got both of them here in front of me and have read them carefully—are the things that will promote growth. Earlier, the Minister of Finance, Bill English, laid out the Business Growth Agenda, and in his call he mentioned the importance of the Resource Management Act reforms and the vitally important water management. That is what is important to the economy long term, and job growth—as we know, and as the Opposition benches are clueless about—emerges from a strong economy.

In my electorate on the North Shore, the Resource Management Act process, I am told by my constituents all the time, is cumbersome, costly, and time-consuming. I get a lot of feedback from the North Shore. It is a part of the country that encourages businesses. These people are business-friendly. They know how to grow their businesses. They tell me that the Resource Management Act system is difficult to understand and use, and that they believe that it is actively discouraging investment and innovation, and I agree. It is no surprise to me at all that when it comes to customer satisfaction, Resource Management Act matters rank the lowest of all public services in the Kiwis Count report. Why is that? There are just too many occasions where the view of one well-funded party manages to derail the decision of a community.

Looking at some of the things that have gone wrong has been something that this Government has done carefully. We have had plenty of examples for those dark 9 years where Labour predominated on the Treasury benches. Over and over again we have seen with the Resource Management Act process, in particular, planning happening almost by default, as decisions are fought over on a consent by consent basis, blow by blow. It is a big waste of time and money. Fundamentally, the reforms that Amy Adams, the Minister for the Environment, outlined at the Bluegreens forum on the weekend will help to resolve that. They will provide greater confidence for business growth and creating jobs, greater certainties for communities to plan for their areas’ needs, and stronger environmental outcomes as our communities grow and change. There is no time today to list all of the reforms, but I would recommend that you read these documents, to be familiar with them, and to make submissions on them. That is a cry to the public. I am absolutely wholeheartedly behind our Resource Management Act and water management reforms. Thank you.