Budget Statement

I move, That the Appropriation (2015/16 Estimates) Bill be now read a second time.

Mr Speaker,

It’s a privilege to present the National-led Government’s seventh Budget.

New Zealand has come through significant challenges and is now a more confident and resilient country than it was seven years ago.

Successive Budgets have sought to put New Zealand on a track to surplus and debt reduction, and as a result the Government’s books are in good shape.

Careful management of public spending has gone hand-in-hand with investment in public services.

The economy has risen from deep recession to solid, 3 per cent growth.

In the 2011 Budget, I mentioned Treasury’s forecast of 170,000 additional jobs by June 2015, and this was treated with some scepticism.

I can report that this target has already been surpassed, with three months still to go.

However, Budget 2015 is about looking forward, not looking back.

This is a responsible and supportive Budget from a responsible and supportive Government.

In this Budget we are providing further support for the lowest-income families and children in New Zealand.

We’ve allowed for significant ACC levy reductions.

We’re strengthening tax rules on property investment.

We’re investing more in the drivers of economic growth.

And we’re supporting health and education with $2.4 billion over the next four years.

This is achieved within an overall expenditure track that sees debt start reducing as a percentage of GDP and helps keep pressure off interest rates.

Delivering this Budget is only possible because of the constructive working relationships National has with the Māori Party, ACT and United Future.

I want to acknowledge their continuing support and contribution to stable government.

Economic Outlook

Mr Speaker,

I want to start by talking about the economic outlook.

New Zealand remains one of the faster-growing developed economies, with conditions supporting sustained solid growth, forecast at 2.8 per cent on average over the next four years.

Growth matters. It means more jobs, higher incomes and opportunities for families to get ahead.

By mid-2019, the number of people in work is expected to rise by another 150,000 and the unemployment rate to drop to 4.5 per cent. The average wage is also expected to rise by $7,000 to $63,000 a year.

New Zealand’s positive economic performance, relative to others, is demonstrated by the strength of the New Zealand dollar and the very low number of people leaving for Australia – the lowest, in net terms, since 1992.

Lower dairy prices are a headwind for growth, however, and global uncertainties remain. Monetary policy easing in other countries is helping to keep upward pressure on the exchange rate.

Unusually, given our current growth, New Zealand is experiencing very low inflation.

Annual CPI inflation is only 0.1 per cent, compared to the Budget 2014 forecast of 1.8 per cent.

This is good news for consumers and workers because their income goes a bit further and they get good value for any pay rises.

Low inflation is also keeping down interest rates. The concerns I expressed in last year’s Budget about rising interest rates have largely disappeared.

But lower-than-expected prices also mean that nominal GDP – the size of the economy in dollar terms – is not rising as quickly as previously expected, despite solid growth in the real economy.

This means tax revenue is not rising as quickly either.

Compared to what was forecast in last year’s Budget, nominal GDP is expected to be $15 billion lower in total over this year and the next three years, and tax revenue to be $4.5 billion lower in total over the same period.

Responsibly managing the Government’s finances

Mr Speaker,

This leads me to the first of our four priorities, which is to responsibly manage the Government’s finances.

The Government inherited a poor set of accounts in 2008. Spending under the previous government had risen 50 per cent in just five years, which was unaffordable. Treasury warned of permanent deficits and debt rising to over 60 per cent of GDP.

Our fiscal strategy has been to support the economy in the short term by running deficits, but to reduce these deficits over time through tight control of spending and a strong focus on value for money.

This approach has succeeded. Core Crown expenses, for example, have fallen from 34.1 per cent of GDP in 2008/09 and are expected to drop to 30 per cent next year.

The Crown’s books are now in good shape, showing operating balances growing over time and debt reducing.

The Government has five fiscal priorities:

Returning to surplus this year and maintaining surpluses in the future

Reducing net debt to 20 per cent of GDP by 2020, including repaying debt in dollar terms in 2017/18

Further reducing ACC levies

Beginning to reduce income taxes from 2017, and

Using any further fiscal headroom to reduce debt faster.

The Government is making good progress on all these fiscal priorities.

While expenditure is firmly under control, tax revenue – as I mentioned – is not rising as quickly as expected.

This is lowering operating balances across the forecast period, compared to Budget 2014 predictions.

But the overall trajectory has not changed. We have come from an $18.4 billion deficit four years ago to seeing steadily rising surpluses into the future.

A deficit of $684 million is now forecast for 2014/15, which is $2.2 billion less than last year’s deficit.

A surplus of $176 million is expected in 2015/16, followed by $1.5 billion in 2016/17 and rising to $3.6 billion in 2018/19.

As I’ve said previously, the Government has no intention of making spending cuts simply to chase a surplus in a particular year.

The surplus target has been successful in applying greater discipline to government spending.

That discipline has turned the Government’s books around, and the fiscal outlook remains very positive.

Net debt is expected to peak at 26.3 per cent of GDP in 2015/16 and to fall thereafter.

Debt rises a bit further in dollar terms until 2017/18, after which there will be sufficient cash surpluses to meet our objective of repaying debt.

Budget projections show net debt falling to 19.7 per cent of GDP in 2020/21.

At the same time, the Government has allowed for significant ACC levy reductions in 2016 and 2017.

The healthy state of the books means the Government is keeping operating allowances unchanged.

These remain at $1 billion for Budgets 2015 and 2016 before rising to $2.5 billion in 2017.

The higher allowance in 2017 provides options for modest income tax reductions should fiscal and economic conditions allow.

New capital spending of $939 million in this Budget comes from the Future Investment Fund, which was set up to distribute proceeds from the Government share offers. $726 million remains in the Fund.

From Budget 2017, around $3.7 billion has been set aside in capital allowances to fund new initiatives over four Budgets.

The Government’s assets are expected to grow significantly faster than its liabilities over the next four years, which means total net worth attributable to the Crown rises by $19 billion.

The Government will continue to focus its balance sheet strategy on improving capital investment decisions and getting the best value possible from the Crown’s existing assets.

Building a productive and competitive economy

Mr Speaker,

The Government’s second priority is to build a more productive and competitive economy that supports jobs and higher incomes.

Through difficult times, New Zealand firms have become more resilient and innovative.

They’ve been supported by a Government that understands that the country’s prosperity is created by private sector businesses, large and small, throughout New Zealand.

Our plan is set out in the Business Growth Agenda, and the Budget adds a number of initiatives to this important programme of work.

Mr Speaker,

Budget 2015 increases the Government’s investment in tertiary education, research and innovation, which are important drivers of economic growth.

The Budget provides up to $25 million over three years to support the establishment of new, privately-led Regional Research Institutes, to support increased innovation in regional areas outside of Auckland, Wellington and Christchurch.

As announced previously, the Budget will also give an $80 million boost over four years to R&D growth grants, which support innovative businesses by contributing 20 per cent of their R&D costs.

The additional funding announced in Budget 2015 will bring the Government’s total investment in science and innovation to over $1.5 billion in 2015/16.

The Budget also provides $113 million over four years, mostly from reprioritised spending, for a number of tertiary education initiatives.

These include increases in tuition rates for some science subjects, an increase in the number of engineering places, and a contingency to grow Māori and Pasifika Trades Training.

Mr Speaker,

The Government has already reduced annual ACC levies for households and businesses by $1.5 billion since 2012.

The Budget allows for further levy cuts of $375 million in 2016 and an additional $120 million in 2017.

Final decisions on the levies will be made after public consultation, but we anticipate the cuts will cover all levied accounts and therefore reduce annual costs for businesses, workers and motor vehicle owners.

As an illustration of how levies are falling, the average motor vehicle levy, including the annual licence fee and petrol levy, could fall to around $120 in 2016, which is about a third of what it is now.

Mr Speaker,

As previously announced, the Budget contains measures to bolster and enforce the tax rules on property.

This is to ensure that people buying and selling properties for a profit – including foreigners – are paying their fair share of tax.

In particular, some people will now have to provide an IRD number when they buy and sell property.

This requirement will apply to all non-residents, and to New Zealanders who are buying and selling a property that’s not their main home.

In addition, if someone sells a residential property within two years of purchase they will now have to pay income tax on any profit they make from the sale.

There will be some exceptions, including for a person’s main home.

The Government will consult on these changes, and implement them from 1 October.

The Budget also contains a funding boost of $74 million over five years for extra tax compliance and enforcement, of which $29 million is focused on property investment.

The new tax measures we are introducing will help to take some of the pressure off Auckland’s housing market.

But the Government’s main focus in Auckland is on increasing supply, including through special housing areas and reforms to the Resource Management Act.

The Government is also a major owner of under-utilised land in Auckland. Budget 2015 sets aside a $52 million capital contingency to facilitate housing development on Crown-owned land in Auckland.

This follows confirmation last month that the Tāmaki Redevelopment Company will build around 7,500 new houses in Tāmaki to replace 2,500 existing properties currently owned by Housing New Zealand.

Mr Speaker,

New capital investment of $939 million is provided from the Future Investment Fund.

This includes a contingency of up to $210 million for additional investment to bring Ultra-Fast Broadband to 80 per cent of New Zealanders.

The Telecommunications Development Levy is also being extended to provide $150 million for major improvements in rural broadband.

The Budget includes a contingency of up to $52 million to replace the Waitangi Wharf on the Chatham Islands, which is a critical lifeline for one of New Zealand’s most remote communities.

KiwiRail receives $210 million in new capital next year, and a further $190 million as a pre-commitment against Budget 2016. This support gives KiwiRail a two-year window to identify savings, as this level of on-going support is not sustainable.

As previously announced, the Budget also provides $97 million in capital for regional highways and $40 million for urban cycleways.

Mr Speaker,

Through Budget 2015, the Government is investing an additional $37 million of operating funding over four years to provide greater national direction and support to councils as they implement the Government’s resource management and freshwater reforms.

High quality analysis and regulation of freshwater is critical to the ongoing success of our primary production industries.

Further expansion in the primary sector will be supported by $13 million over four years for initiatives to improve the productivity of under-utilised Māori land, complementing the reform of Te Ture Whenua Māori Act.

A new grant scheme has been established to encourage the planting of new forests, and the Budget provides $22 million for this scheme over the next six years.

The Government is also investing $32 million over four years to increase the number of labour inspectors and strengthen enforcement of employment law.

The New Zealand Business Number gets a boost from the Budget, with funding of $12 million over four years, including from company fees. This unique identifier will help to reduce costs for businesses when they interact with government agencies.

Mr Speaker,

The KiwiSaver scheme has been successful in attracting 2.5 million members.

It also has considerable costs, with the Government spending over $850 million this year on two subsidies – the annual subsidy of up to $521, and the $1,000 kick-start payment for new members.

To reduce this cost, the Government has decided to remove the kick-start payment, which has cost taxpayers a total of $2.5 billion since the scheme began.

This change is effective immediately, but I want to stress that it does not affect existing KiwiSaver members in any way.

The other incentives in the scheme – matching employer contributions and the annual government subsidy – will remain as they are.

These incentives also provide a strong reason to join KiwiSaver. Removing the kick-start payment for future enrolments will save over $500 million over the next four years, with little or no effect on the number of people expected to join the scheme.

Mr Speaker,

The Government will introduce a new levy to fund passenger-related biosecurity and customs activities at our border. Currently, the cost of these activities – which protect New Zealand from imported pests, diseases, illegal drugs and other threats – are met by taxpayers.

The Government considers it fairer for the cost to fall on travellers, as happens in many other countries. A per-passenger levy also helps ensure that border services are funded to meet future demand.

The new Border Clearance Levy is expected to take effect from 1 January 2016 and, subject to consultation, will be around $16 for arriving passengers and around $6 for departing passengers. It will raise around $100 million a year.

At the same time, the Budget expands some border activities, including an additional $25 million over four years for more biosecurity services such as x-ray machines and detector dogs.

The Budget also provides $33 million over four years for more immigration staff at a time of record-breaking visitor numbers.

Delivering better public services

Mr Speaker,

The Government’s third priority is to deliver better public services.

Our approach is to get better results from the billions of dollars of existing spending, and to invest new money where it will make a difference.

Three years ago, the Prime Minister set 10 challenging results for the public sector to achieve, and good progress is being made.

At the same time, New Zealanders’ overall trust in public services has continued to grow as public services improve.

The Government is pressing ahead with its social investment approach, which is about targeted, evidence-based investment to secure better long-term results for the most vulnerable New Zealanders.

We’re willing to pay a bit more upfront to get real, sustainable change, and in doing so we can generate significant long-term savings for the Crown.

Mr Speaker,

The Government is focused on addressing long-term drivers of hardship and this approach is already seeing results. Educational achievement is increasing, for example, and the number of children in benefit-dependent households has fallen by 42,000 over the past three years.

In addition, the Prime Minister said last year he wanted to do more to help children living in the poorest households.

The Budget responds to his call.

This Government believes that the primary responsibility for the welfare of children lies with their parents.

But government actions can, and do, help children whose home lives are challenging.

Two-thirds of children in more severe material hardship have a parent on a benefit, and nine out of 10 of those are sole parents.

The best thing we can do for these children is to get their parents into sustainable, full-time work, where that is possible.

So, as part of a child hardship package in this Budget, we are strengthening work expectations for parents on a benefit.

From 1 April next year, most sole parents, and partners of beneficiaries, will have to be available for part-time work when their youngest child turns three, rather than five as it is now.

In addition, all beneficiaries with part-time work obligations will be expected to find work for 20 hours a week, rather than 15 hours a week under the current requirements.

Part-time work brings more income into a family, and is a stepping stone to full-time work and to going off a benefit altogether.

However, when families do rely on a benefit, it has to be enough for children to get a decent upbringing.

Over many years, beneficiary family incomes have hardly changed in real terms, while those for working families have increased.

On one hand, this gap creates a strong incentive to move from welfare into work.

But the Government is concerned about the effect on children when their family’s resources fall behind those of other households.

In terms of that balance, and with an improving economy, the Government considers there is scope to increase benefit rates for families, to help ensure they can pay for family necessities.

On 1 April next year, benefit rates for families with children will rise by $25 a week after tax.

It will be the first time core benefit rates have been increased – apart from inflation adjustments – since 1972.

Around 110,000 families, with 190,000 children, will be better off as a result.

This increase to benefit rates comes after widespread reform of the welfare system, so we’re confident it will have a positive impact on the lives of beneficiary families and children, rather than contribute to further dependence.

In addition, to make sure the increase is going to the right people, we will require beneficiaries on Sole Parent Support to reapply for their benefit every year, matching the current process for Jobseeker Support.

Mr Speaker,

While two-thirds of children in more severe material hardship live in beneficiary families, the other third live in low-income working families.

So on 1 April next year, there will also be changes to Working for Families, to give more financial support to lower-income working families not on a benefit. As a result:

Low-income working families earning $36,350 or less a year, before tax, will get $12.50 extra a week from Working for Families, and some very low-income families will get $24.50 extra.

Working families earning more than $36,350 will get extra from Working for Families, but it will be less than $12.50 a week, with the exact amount dependent on their family income.

Families earning more than $88,000 a year will get slightly lower Working for Families payments, with the average reduction being around $3 a week.

In total, these changes to tax credits will benefit around 200,000 lower-income working families who are not dependent on benefits. Around 50,000 of these families earn $36,350 or less a year, and will therefore get the full $12.50 a week increase.

The child hardship package also recognises that lower-income working parents need affordable childcare.

From April next year, Childcare Assistance for low-income families will increase from $4 an hour to $5 an hour, for up to 50 hours of childcare a week per child.

The new rate will apply to both the Childcare Subsidy for pre-schoolers and the OSCAR subsidy for out-of-school care and school holiday programmes.

It will lower the cost of childcare for around 40,000 low-income working families and reduce barriers for parents moving off welfare and into work.

The child hardship package has a number of different elements. Its exact impact on any given family will depend on their individual circumstances, including the types of supplementary assistance they receive.

Overall, it will have a meaningful impact for recipient families, particularly for those on very low incomes, and reduce the depth of hardship these families and their children experience.

The total cost of the package is around $240 million in each full year, and $790 million in total over the four-year forecast period.

It follows last year’s $500 million children and families package which included free doctors’ visits and prescriptions for children under 13.

I want to thank the Māori Party for its strong contribution to poverty-related issues over the past few years.

Mr Speaker,

The Budget also provides new operating funding of $36 million over the next four years to support the Children’s Action Plan for vulnerable children.

This includes funding for new and existing Children’s Teams, which bring together social workers, health professionals, NGOs and others, to work with at-risk children and their families on an individually-tailored support plan.

An extra $23 million over four years is being provided to bolster the work of Child, Youth and Family.

The Budget also contains $8 million over four years for initiatives to help vulnerable students participate more in education or training, and lift achievement.

Mr Speaker,

The Budget includes measures to tackle child support debt and encourage parents to pay what they owe for their children.

Currently, large penalty debts are discouraging many parents from paying any child support at all.

This penalty debt, or a portion of it, will now be forgiven in certain circumstances, including where liable parents are meeting their payment requirements.

If maximum discretion is applied, this will result in $1.7 billion of penalties being forgiven over four years.

The cost to the Crown is an estimated $47 million over four years, as most of the penalty debt is already reflected as an impairment in the Government’s books.

There will continue to be no tolerance for parents who deliberately avoid responsibility.

Mr Speaker,

Despite fiscal challenges, a priority in every Budget has been to increase funding for health and education.

This year’s Budget invests $1.7 billion of operating funding in health over the next four years.

As a result, District Health Boards will have around $320 million available next year for extra services and to help meet cost pressures and population growth.

New health initiatives include $98 million to increase elective surgery volumes and help New Zealanders suffering from orthopaedic conditions.

An extra $76 million is being provided for hospices, and to support 60 new palliative care nurse specialists.

The bowel cancer screening pilot is being extended, at a cost of $12 million.

And the Budget provides an additional $16 million over four years to continue support for very high needs students with disabilities after they leave school.

Mr Speaker,

Educational achievement is improving, supported by government investment that is focused on getting better results.

In Budget 2015, early childhood, primary and secondary education together receive an additional $443 million of new operating funding and $244 million of capital.

Of this, $75 million of operating funding over four years is for early childhood education and $42 million is to increase school operating grants.

An extra $63 million over four years will better assist children with special education needs. This includes funding to continue teacher aide support for 1,500 additional students with special needs.

As previously announced, Budget 2015 provides $244 million of capital from the Future Investment Fund to build new schools, expand existing schools and construct around 240 classrooms.

Mr Speaker,

The Government is committed to providing more social housing places, more diverse ownership of social housing, and helping tenants transition to housing independence when they are able to.

As part of our social housing reforms, the Ministry of Social Development has become the sole purchaser of social housing places. The Government also intends to sell some Housing New Zealand properties for use as ongoing social housing run by community housing providers.

Budget 2015 supports this programme with $35 million of operating funding over four years, and $29 million reprioritised from other areas.

The Budget also provides operating funding of $35 million over four years to support the Māori Housing Strategy, which aims to improve housing for Māori families and grow the Māori housing sector.

Mr Speaker,

Whānau Ora is an innovative way of providing health and social services.

Budget 2015 further supports the Whānau Ora approach with $50 million over four years. This will continue funding Whānau Ora navigators to help families tackle problems together, develop whānau plans and access a range of services.

The Budget also provides $2 million over four years for rangatahi Māori suicide prevention.

New funding of $32.5 million is provided over four years to further reduce welfare dependency.

This includes funding for up to 10,000 extra places next year for intensive, work-focused case management, particularly for beneficiaries with health conditions and disabilities.

Mr Speaker,

Police and Corrections will continue to target their resources to prevent crime and make our communities safer.

Budget 2015 provides $164 million over four years for Police to continue delivering more effective frontline policing and crime prevention.

It also provides $8 million over four years for the Serious Fraud Office.

The Department of Corrections receives $6.5 million of reprioritised funding for programmes to reduce reoffending.

And the Budget provides $40 million over four years for other justice sector initiatives.

Mr Speaker,

The Government is committed to strengthening the New Zealand Defence Force and ensuring our country is safe from security threats.

Budget 2015 provides $264 million over four years to allow the Defence Force to meet its domestic and international humanitarian, aid and military commitments.

The Security Intelligence Service and the Government Communications Security Bureau each receive additional funding of $20 million over four years.

Mr Speaker,

Kiwi are New Zealand’s most iconic birds, but numbers are declining every year.

The Budget contains $11 million of funding over four years for breeding and predator control programmes, run by community groups as well as the Department of Conservation.

Rebuilding Christchurch

Mr Speaker,

The Government’s fourth priority is supporting the rebuild of Christchurch.

Since the first earthquake in September 2010, the Government has backed Cantabrians in the initial response, and now the recovery and rebuild.

The total cost of rebuilding the city and surrounding areas has been estimated at $40 billion.

Budget forecasts show that the Government’s share of that cost is expected to be $16.5 billion, of which $7.3 billion will be incurred by the Earthquake Commission, net of reinsurance proceeds.

Good progress is being made on the commercial and residential rebuild, including in the central city.

Large private sector projects are a testament to the positive future investors see for Christchurch, and 23,000 square metres of office space has been completed.

Major Government projects are also progressing. By the end of next year, 1,700 government workers will have returned to the central business district.

It is important to maintain momentum with the city’s anchor projects, most of which are complex developments with multiple partners. The Budget contains additional operating funding of $108 million over four years to ensure these projects remain on track.

This new funding will support land and building clearances. It will also cover the cost of owning and developing the hundreds of millions of dollars of assets purchased by the Crown.

The Canterbury Earthquake Recovery Authority, and the Act that governs it, were established in 2011 with a limited lifespan.

Last year, the Government established an Advisory Board on Transition, to provide recommendations on the future role, functions and powers of the Government in Christchurch.

By the middle of this year we will have a better idea about what the right structure in Christchurch should be, and implementing this structure will help maintain progress towards long-term recovery in the city and its surrounds.

Conclusion

Mr Speaker,

This is the kind of Budget a responsible Government can deliver when it’s following a plan that’s working.

The Government’s finances are sound and the economy is doing well – thanks to the hard work of New Zealand households and businesses.

Under John Key’s positive leadership, the Government has been stable and cohesive.

That has helped build New Zealanders’ confidence, both in their homes and at work.

New Zealand is in good shape, though we’re not complacent.

There are very real risks in the world but New Zealand is much more resilient now than when we took office in 2008.

Our challenge is to secure for our economy and for our communities the hard-won gains this country has made through to 2020 and beyond.

New Zealanders can look to that future with well-deserved confidence and optimism.

Mr Speaker,

I commend this Budget to the House.

“Wait until tomorrow.”, they said. “One sleep to go.”, which was a bit rich for a Government that spent 7 years sleeping at the wheel. If this is a plan that is working, then why have we seen today one of the biggest spends on alleviating child poverty, which this Government has known of for 7 years and done nothing about until now? Why has this Government been panicked into doing something about the desperate Aucklanders who cannot get to own their own homes? They are hardly features of the Budget at all, and we know why: because the Government cobbled it together in just the last few weeks alone. I move, That all the words after “That” be omitted and the following substituted: “this House has no confidence in a government which has failed to deliver the jobs, the incomes, or the surplus they promised; squandered the golden economic weather; failed to diversify our economy; failed to fix the housing crisis; neglected regional New Zealand; and is tired, out of touch, and out of ideas.”

This is a Government that is demonstrating management by sleepwalk, because that is what this Budget is. This is a Budget that manages the decline. There is nothing in this for the long-term future of New Zealand that will give hope and confidence to those who are working hard and struggling to get ahead. So we see now this surplus of $176 million for next year. Well, just remember—just remember—last time the Government promised a surplus of over $300 million, and the deficit is over $600 million. It is the billion-dollar gap—the billion-dollar gap—that has materialised in 1 year alone. So my message to New Zealanders is this: the Government might have promised it, it might have budgeted for it, but you cannot trust it because it never ever happens. It is a continuation of the dance of the seven veils.

Poor old Bill English there, ever since about 2010 another veil comes off and a promise is made. In 2011 another veil comes off and the promise is made again. We have had that repeatedly. And now we have had another veil removed and we know that there are still more to go. I do not know what he is trying to hide. It is some sort of fiscal gender-reassignment or something. Who knows what it is? He cannot produce a surplus. This is not a real surplus in this Budget, and he knows it. New Zealanders will see it for what it is: a desperate Government that cannot fulfil the core election promise that it made last year that it would return the books to a balance and a surplus. And there is a good reason why: good Governments manage the Government’s books to achieve a surplus.

There is a reason why the last Labour Government managed the Government’s books to achieve nine successive surpluses, because when you get a surplus you do the stuff that builds a nation. You can put in place your New Zealand Superannuation Fund to pre-fund superannuation, because when you take a close look at these books, what you see is that by 2018 the cost of New Zealand superannuation is going to rise—it is going to increase—by nearly $1 billion a year, in just 3 years’ time. And what is this Government doing for it? Absolutely nothing—absolutely nothing. That is the disgrace of this Government: no forward looking, no sense of the future, manage it by sleepwalking, hope that nobody notices, and come back next year and it will all be the same again. That is what this Budget represents.

There is no future in this Budget. There is no hope in this Budget. The next generation, the next Government, and the future generations of New Zealanders are going to have to cobble together and patch up the failures of this Government, including meeting the cost of New Zealand superannuation. This mob over here have no sense of future and do not know what to do about it, so they crib around the edges—a million dollars here, a million dollars there. It is not enough to build a strong, resilient New Zealand. The Government has failed. It has failed. We have had the surplus, we have had the surplus chimera, we have had the ethereal result—it will not happen.

Then we have got the challenge of dealing with child poverty. Well, we will give the Government some credit for that. It has taken a step—it has taken a step. The Government has increased benefits, but it has paid for it by taking it out of the future-building initiative KiwiSaver. It has taken away the kick-start for those future generations of New Zealanders who need—and know they need—to save for their retirement, all those parents lining up to sign their kids up for it because they know that at least if they get that kick-start, then by the time they get into their adult lives, they have got a little nest egg to continue to build on. It is just an incentive when you are a youngster to carry on with the saving. This Government steals from the next generation, and it does not know what to do about their needs. That is what it is doing. It is taking off from the top of Working for Families to pay for it. This is a “fiddling-around Budget”. This is a “fudge-it Budget”. The Government is doing it again. It has no long-term plan.

Then there are the initiatives on housing. Well, this is the biggest rort, of course. This is the biggest rort. It has got new tax plans, new rules that Bill English proudly announced today: “We’ve got new rules on tax.” Two days ago he was saying that they probably will not work. I do not know how they got left in the speech when 2 days ago he was saying that they will not even work, but he has put them in there. I want to say this about the house build programme, because the Labour Party has been saying for some years that the way to deal with the housing supply problem, the way to make sure that more Aucklanders get into an affordable home, is that the Government, the State, must lead the house building programme. So I credit this Government for taking the first step of saying that it will do that, of putting land aside.

But I want to say this: we will support that initiative on one condition. I look at John Key and I look at Bill English and I look at Nick Smith and I look at Steven Joyce and I look at Paula Bennett. None of them will look back. I say to each of you, because you are the ones in charge of housing, you know what is going on: make this promise to New Zealanders. Make the promise to New Zealanders that every single one of the houses built on the land you have released in the announcement today will be an affordable house that ordinary New Zealanders can get into. Make that promise today. You have got a dozen TV cameras around here you can make it to. Make the promise today, Mr Prime Minister. Do not get on your hindquarters in 15 minutes’ time and flap about like a rooster on heat and give your usual dog and pony routine. Make a genuine promise, one that you are prepared to stick by. Be straight with New Zealanders. Tell them: “We are serious about affordable housing.” Make sure those houses are affordable houses.

To Paula Bennett I say: make sure you discharge your responsibilities to all New Zealanders, to good New Zealanders, to the hard-working New Zealanders, who still hold on to that dream of getting their own home. Make sure you deliver. Your failure to deliver will be if you cannot guarantee—

💬 Hon Dr Nick Smith: The member opposed HomeStart.

—if you will not guarantee, Nick Smith—that every single one of those houses will be an affordable home that ordinary New Zealanders in Auckland can get into. Then you will have failed. You will have failed New Zealanders and you will have failed the test that you have set for all Governments, which is to look after average New Zealanders. So far, all you have done is look after your rich mates. That is not a policy. Your home build policy is not a policy for the property developers who contribute so handsomely to National Party coffers. It ought to be a promise to ordinary New Zealanders who want only to get into their own home. That is what I ask you to do. That is what I am asking you to do.

I want to say this about ACC. We have had the repeat of the promise about ACC, and we know that it is not a promise—we know that it is not a promise. It is “It could happen.”, “It might happen.”, “It’s 2 years away.”, “We’ve got further work to do on it.” So I say this to Nikki Kaye, to Bill English, and to John Key: make the promise. Look New Zealanders in the eye and say that you will cut ACC levies.

💬 Sue Moroney: Do it now.

You could do it now; Sue Moroney is right. You could do it now. You have not. You have held on to the cash. You have deprived good businesses and hard-working New Zealanders of their cash, and now you have promised that it might happen sometime in the future. Make the promise now. Mr Prime Minister, look into those TV cameras when you are up there prancing around, and make the promise to good New Zealanders that you will see through to make those ACC cuts so Kiwis will have some money back in their pockets. Make a promise you are prepared to stand by. Make a promise that New Zealanders can rely on and trust. It would be the first one in your political career.

This is a disappointing Budget in so many other ways. This is a Budget where New Zealanders were hanging out, looking for an expression of hope for the future. This is a Government that has been 7 years in office—7 years in office—and that has enjoyed the best of times: record high dairy prices, record high export volumes, and growth of over 3 percent. Now we know it is all going down. You look at the projections and they are all about to go down. This is as good as it gets.

New Zealanders deserve better—New Zealanders deserve better. They deserve a Government that is thinking about the regions, that is thinking about what happens to the regions when that dairy cash dries up and those small towns and hamlets across New Zealand struggle to wonder what to do next. The farmers, the stock and station agents, and all those who contract to the farming sector have to buckle down, batten down the hatches. They are wondering what to do next. They are going to look at this Government and say: “You let this happen. It didn’t have to be like this. You had the opportunity. You had the good times. You could have prepared better.” They will say and we will say that you blew it. Bill English and John Key, you blew it. You have turned up today with a Budget that just continues the same sleepwalking, somnambulant management that we have got used to for the last 7 years. It is not good enough—it is not good enough. New Zealanders deserve better, and we need better.

We are facing some difficult times ahead. The Government knows it; we all know it. New Zealanders know it, and they were looking for an expression, for a statement of vision and leadership such as we have never seen before with this Government. And we have not got it. It has been more of the same—fiddle around the edges, faff around the sides, and carry on as if no one is noticing. Well, they are noticing. What we now need is a Government that is genuinely focused on the future. It is not just about dealing with the issue of making the books give the appearance of a surplus that is not going to happen; it is about a Government that is focused on building a nation and on giving people opportunities. It is fine to lift the benefits, fine to help those people, even though you are making it harder for sole parents with kids at the age of 3 and over. That is going to be the real hardship. How are those folks going to cope?

It is fine to make some of those gestures, but what those people who are out of a job want is a job. What those people are desperately in need of is more work—not the 1-hour jobs that Steven Joyce promotes and encourages; they are not even half jobs, they are sort of minuscule jobs. They want real jobs that mean they can earn a living income and get ahead. That is what New Zealanders want. The Government cannot even keep its promise to add the 150,000 jobs by next year. The Government has had to abandon that one. The Government cannot even meet the promise to lift incomes by an extra $7,000 a year by next year, either. It has had to push that out too. The Government knows how bad things are, and it serves to us this sort of mess of potage today and pretends that it is all sweet and rosy. Well, it is not, and New Zealanders know it.

New Zealanders are hanging out for a Government that is serious about lifting all New Zealanders, serious about what is happening in the regions, serious about what is happening down on the farm, and serious about what is happening in small to medium sized enterprises. There is nothing in this Budget for them, except continuing to hold on to the ACC levies that the Government does not need to. The Government has whacked on a few extra taxes—a departure tax and an arrival tax—and it is going to tax every user of the telecommunication services with a new levy on the operators; $150 million a year. Do you know who is going to pay for that? Ordinary New Zealanders. Do you know why the Government thinks that that measure is an OK thing to do? It is because it does not care about ordinary New Zealanders. That is why for 7 years the Government has shut New Zealanders out of their own homes. That is why for 7 years the Government has not cared about those living in dire poverty. The Government just does not care. We have seen more of that in this Budget today.

New Zealanders need a Government that is focused on a number of core things: diversifying our economy; making sure that the State plays its role in investing and encouraging private investment in other sectors in the economy to boost and diversify it; making sure that our people and our education system are prepared for the future; preparing young people for the jobs of tomorrow, not repeating the jobs of today; and really, genuinely fixing our housing crisis. It is nice to have the building plan, but it will not be fast enough, and there will still be people without a home in years to come.

I think of people like Gene Simmons—not Gene Simmons; Gene Harris. [Interruption]

💬 Mr SPEAKER: Order! [Interruption] Order!

There is Gerry Brownlee. Gerry Brownlee says he was asleep. Well, he has woken up after 7 years now. He has woken up after 7 years and come to life. I think of people like Gene Harris, who is in his 30s and is a marketing manager. He rents a two-bedroom flat in Hillcrest, on the North Shore, with his partner and his baby. He contacted us because he is sick and tired of this Government for its arrogance and its contempt, and for laughing at people like him. He told us this: “The opportunities are few and far between. Even if you’re on a good wage, you can’t get ahead, and there’s something just not right about that.” Like so many thousands of other New Zealanders, a good man is struggling and working hard to get ahead, and he cannot because of the failures of this Government. That is what this Government represents; that is what this Government has achieved. It has let down far too many others. So Gene Harris is looking forward to a Government that is serious about building the nation, building our economy, strengthening it, giving him and his family an opportunity, and letting them realise their dreams of homeownership and a secure future.

Then there is Simon Paterson, who has also been in touch with us. He is an IT manager from Mosgiel, who has a family, and, like many other Kiwis who live in the regions, he is sick and tired of seeing the regions neglected. He told us this: “Middle New Zealanders like me are feeling increasingly left out in terms of stuff like health care and education.” We know that those figures today on education are not enough to fill the gap that has been slowly developing in funding for that sector. He said: “There’s been tax breaks for the rich but nothing for anyone else.” That is how he summarises this Government, and it is impossible to disagree with him.

We need a Government that is focused on the future; that is focused on all of New Zealand; that wants to fix the real problems; that is thinking far ahead; that is not tinkering at the edges; that is not sleepwalking around letting more and more New Zealanders down; that is creating those real opportunities; that when it says it is going to generate more housing, seriously does so; and that when it says it is going to lift incomes by $7,000 a year, actually is serious, genuine, and honest about it and does so. Not like this one—not like this Government that loosely makes promises it has no intention of keeping. That is what characterises this Government time and time again. It is time to have a Government that can write a Budget that is good for New Zealand; that is good for all New Zealanders; that makes a difference; that will support the wealth generators and the wealth creators; that sustains the entrepreneurs, the innovators, the dreamers, and the doers—not a Government that faffs around the edges supporting the extremely rich who contribute to the National Party coffers but that does nothing for the vast majority of the rest of New Zealand.

That was singularly the worst reply speech by a Leader of the Opposition that this Parliament has heard. There could be a reason for that. A cynic could say that the real leader of the Opposition has not actually given his speech yet, but let us be honest. Phil Goff would have done a lot better, David Shearer would have done a lot better, and David Cunliffe would have done a lot better and all three of them know it—all three of them know it. That was Andrew Little, and the operative word is “little” because it is a touch kind to say that he has done anything more than “little” in the entire time he has been the Leader of the Opposition. He has done nothing—nada. That is why the speech was so bad. He basically agreed with the Budget. He did not actually have an idea. This man, Mr Andrew Little, is like one of the least favoured contestants on The Bachelor. He knows that he is never getting a rose, that boy. He is not sure why he is there. He is not sure what he is actually doing. He knows that under normal circumstances, he should just say that he is happy to be there. But he is not happy either. He is “Angry Andrew”. He has had 6 months in the job. He is the do-nothing Leader of the Opposition.

💬 Hon Annette King: At least he doesn’t pull ponytails.

Well, actually, you are right. You are right, Annette. You are right. I take it back. He has done one thing—he has done one thing. He has spent a week with Ed Miliband working out how to lead the Labour Party in a general election. And how did that go? It went about as well as Boo’s and Pistol’s holiday in Australia with Johnny Depp. That is how well that went. No, the truth of it, when it comes to the Labour Party, is that the only time it is busy and the only time it is focused—actually, the only time it is any good—is when it is having a leadership contest. And goodness knows it is good at that, because it has them every 5 minutes. There may be another one just coming, because I am telling you now that Phil Goff, David Shearer, David Cunliffe—

💬 Hon Steven Joyce: David Parker.

—David Parker—all four of them know. They are looking down. They will not look up. They will not make eye contact. You could have done a lot better—a lot better. You were good back then, you guys—good back then.

Let us go to the Budget because it is a waste of time with the Opposition. This was another outstanding Budget delivered by a man whom we are lucky to have. The Budget was fair. It was thoughtful. It was reasonable. This National Government is the first Government to raise benefits in 43 years, and I am proud of that fact. There is $25 a week for 110,000 beneficiary families, supporting 190,000 children. There is $12.50 a week in Working For Families and $12 in the minimum tax credit. Fifty-three thousand low-income families and a further 103,000 children will benefit. Tens of thousands of other families will get a bit more. In one way or another, this Budget touches half a million Kiwi kids, and it is fair and reasonable.

There is an increase in childcare in the Budget so that people can go out to work and have that extra support. We have heard it before—it has been said before and it is not new—but this is what I call it: compassionate conservatism. I am proud to lead a Government that believes in that. This Budget is a continuation of the good work of this Government. I think we can all remember that we are the Government that brought in free doctors visits and free prescriptions for under-13-year-olds. We are the Government that insulated every State house that we could. We are the Government that provided the funding for 240,000 other homes to be insulated and to have heat units. We are the Government that supported breakfast in schools. We are the Government that supported low-income schools, or low-decile schools, to have social workers. We are the Government that has provided the new Children’s Teams.

In the worst—the very worst—of the economic conditions this country faced, we stood alongside those vulnerable New Zealanders. We did not reduce their pensions. We did not reduce their entitlements. We were there for them, and we are there for them today. My thanks go to our support parties: to ACT and David Seymour for the leadership he is showing, to United Future and Peter Dunne for the leadership he is showing, and to the Māori Party and Te Ururoa Flavell and Marama Fox for the support and great work they do. Collectively, we provide strong and stable Government for this country, and the results are on display.

Let us turn to the macro-economic numbers for a moment, because you have heard a load of nonsense from Andrew Little about those, and you are going to hear a lot more from his sidekick, Grant Robertson. Well, here are the facts on the table, and Labour will not enjoy them. Mr Robertson, Labour is about as good at running the economy as the Greeks are. Let us get the facts on the table. You know how to do one thing, spend money, OK? You know how to print money and spend money. In seven Budgets, this Government, on average, has spent additional resources of $680 million per year—appropriate for the times. Labour spent $3 billion in each of its seven Budgets. When National is in office, New Zealanders stay in our country. They do not leave; they stay in our country. When Labour is in office, they are off to Australia as quick as they can spell “didgeridoo”.

Let us get a few other economic facts on the table so that Labour can digest them while it is digesting the Budget. ACC: what a mess we inherited from Labour. There were dozens of unfunded programmes. What a mess the books were in—a burgeoning State sector that was out of control. Wages could not keep up with inflation. Interest rates were soaring. Inflation was high. The current account: Michael Cullen from the Opposition benches told us that he would fix it; he made it worse. Productivity was falling. If Labour wants to go head-to-head with National on economic management, bring it on, I say—bring it on. I am more than happy to have that discussion any day of the week. Here are the facts: when we got into office—

💬 Hon Members: Show us your surplus.

Oh, they do not—[Interruption] I will give them one thing: they are animated about my speech. They sure as hell were not animated about Andrew Little’s. Here is the deal: you vote for the Budget, because you know you want to, and I will sit down and we may as well just call it quits. You know you want to.

Under our Government, we have halved the projections of debt. When we are here, it is 26.5 percent. It was going to be 60 percent. Do not take my word for it; go and have a look at the IMF numbers. When it comes to surpluses, our numbers are better than those of the UK, the United States, Australia, and the eurozone. They will be every year until 2020 and beyond. That is what good economic management looks like. And when it comes to debt—

💬 Andrew Little: When will you start repaying the $88 billion?

Oh, at least they are listening, I suppose. When it comes to debt, yes, our net debt levels are lower than those of Australia, the UK, the US, and the eurozone. They will be until 2020, and they will be beyond then. We are creating tens of thousands of jobs. And when it comes to employment—there are 36 countries in the OECD—only four have a higher rate of employment than we do, and 31 have a lower rate than this Government is delivering for New Zealanders. Pensions are rising. Minimum wages are up. Wages are rising faster than inflation. This is good economic management.

Let me turn to child hardship. The fastest way out of poverty is through work, and this Government knows that. I am proud to say that there are 42,000 fewer children in benefit homes today than there were 3 years ago—42,000 children who are getting to see, through their own eyes, the value of work and how it can make a difference to their own lives. Like I did through my mother, they are seeing today, with their parents in front of them, that hard work and enterprise are the way to do things. The sign of a decent society is how you look after the sick, the vulnerable, and those in need. But in return for that, there is mutual obligation—mutual obligation. I say: if you can work, you should work. That is what I say.

I want to thank Paula Bennett and Anne Tolley personally for the great work they are doing now when it comes to the extensive changes we have made to welfare—long-lasting changes, compassionate changes. There is expectation built into what we do; and, yes, we brought in work obligation.

💬 Grant Robertson: Forcing the mothers of 3-year-olds out to work.

Well, that is very interesting. Mr Robertson has just said that someone whose youngest child is 3 years old should not actually have to go out and look for a part-time job. Well, tell that to the tens of thousands of Kiwi families who do that every day. They do that, half the time, after 14 weeks.

I will show you how welfare is working. We have the lowest number of people on the equivalent of the DPB since 1988. Teenage pregnancy rates are collapsing. The attitude at Work and Income has changed. When you go there now, you do not go in to sign up for a benefit; they try to get you a job and they give you the skills and the capability to do all that. There will inevitably be some people who will get up and say that the increase today is not enough. Well, I say this: it is 25 times better than any Government in New Zealand has done for 43 years. Do not even start by trying to tell me that $1,300 a year will not make a difference to the lowest-income families, and that up to $50 per week extra for childcare will not make a difference. It will.

I now want to turn to the issue of debt forgiveness. It is a very important package that Todd McClay will be running. This is a very simple story, I think, because the responsibility of liable parents is to make child support payments—that is the responsibility of liable parents. They have a legal obligation to pay for their kids and they have a moral obligation to pay for their kids, and they should be doing it. But, sadly, too many people are not, and this needs to change. Why? Because, for a start, we need to breathe hope into those 120,000 families and individuals who see themselves in a hopeless position. This is the situation: they owe $3.2 billion. Only $700 million of that is principal; the other $2.5 billion is interest and penalties. What is more, of that $3.2 billion, $800 million is owed by people who live in Australia, and $800 million is owed by people who live outside New Zealand and outside Australia. We are a very pragmatic Government. What we are saying to those 120,000 people is: come back, start making the principal payments to those low-income families that you owe it to, and we will forgive the interest and we will forgive the penalties. That is $1.7 billion over 4 years and more money for those low-income families, and probably even a chance for those 120,000 people to be able to come back to New Zealand one day themselves. That is what a pragmatic Government in action looks like.

It is no great surprise that in all of the seven Bill English Budgets there is always more for health and more for education. We know that when it comes to the health system, it is not just about throwing more money around; it is actually about lifting productivity and about doing things smarter. Actually, I want to take this moment in Parliament today to acknowledge the doctors, nurses, and carers who do such a magnificent job of looking after people in our system. There is more money in this Budget for health—$98 million for elective and orthopaedic operations, $12 million to extend the pilot scheme for bowel cancer screening, and $76 million for hospices to extend palliative care.

When it comes to education, when was the last time you heard the Labour Party get up and say that it did not like national standards? Oh, that is right: those members try to brush that under the carpet because—guess what—they have finally woken up to the fact that if you cannot read and write, it is pretty hard to participate in modern New Zealand. When was the last time that you heard them get up and say that we should not be paying good teachers more and having professional development? We know that our schools are all about having high-quality principals and high-quality teachers. Yes, in this Budget there is more for early childhood education, and more kids will be getting National Certificate of Educational Achievement level 2. And I am proud to say that there are more Māori and Pacific students doing as fabulously well in our education system. There is more for special needs, and thanks to David Seymour and the ACT Party, there is more choice, actually, in our education system. I could talk about so many other issues that are contained in this Budget. From housing and ultra-fast broadband to the plight of the kiwi, to cutting ACC levies, to biosecurity, and to the men and women in uniform, National is delivering on every front.

Let me finish with this: on election night, as I have done in the past, I got up and I said to New Zealanders: “I intend to govern for all New Zealanders.”, and I also said that night that I would focus on children who are most in need. I acknowledged that through no fault of their own they were growing up in some of the most deprived conditions in New Zealand. I believe that in the last 6½ years, we have stood by those families. In the toughest of times, we have protected them as best we could. I know my history. I know the struggle my mother had. I know how tough it is for those low-income families. Today is the day when we are in the position to stand up and just give them a little more—and rightfully so. We have done this in this Budget, and rightfully so, because Bill English’s economic leadership has allowed us to do it and to afford it. This is a great Budget for New Zealand. I am proud to have Bill English as the Minister of Finance of this country. May there be many more Budgets to come.

Today John Key could have kept his promise to reduce child poverty. He could have kept his promise. Today John Key could have backed all of those young New Zealanders out there who are doing it tough. Today children in poverty in this country needed a game-changer, but, instead, the Prime Minister chose to do the barest minimum for the poorest children and to abandon the hopes of our younger generations.

In a classic display of smoke and mirrors, John Key gave to our poorest children with one hand and took away with the other. An increase to benefits—desperately needed and woefully overdue—is eroded in many cases by reduced accommodation and emergency payments. Meanwhile, instead of the Government fixing Working for Families, it remains broken and even more unfair, with only those on the lowest incomes set for an increase, which in most cases will be the price of a block of cheese. Perhaps the cruellest reveal today was John Key’s plan to force young mums of toddlers—parents of just 3-year-old babies—into work. Forcing the parents of toddlers into work is not a solution to child poverty. Those parents will be earning something like $2.28 an hour in the hand as a result of this change yet will be significantly increasing their costs. Denying young New Zealanders the $1,000 KiwiSaver kick-starter, which older generations got, is not going to help them make their way in the world either.

This Budget is not for our kids and it is not for those under 40—the abandoned generation. This is the Budget of a Government that has abandoned those under 40. John Key boasts that he is building a stronger economy, but I want to know who he is building it for, because unless the economy is working for everyone it is not working. When a young couple is trying to save for a deposit on a home and the price of a house is increasing by $1,000 a day, do not tell them that the economy is working. When Kiwis in their 20s spend 4 or 5 years at university but the only job they can find at graduation is in a call centre, do not tell them that the economy is working. When nurses and teachers are getting a 1 or 2 percent pay rise this year but the chief executive officer of ANZ is pocketing more than $4 million, it is clear who in John Key’s economy is working for. And when thousands of our children show up to school hungry every day, it cannot be right to say that the economy is working. An economy that delivers so much for so few, while abandoning the rest, is broken.

But there is an alternative: a strong, good economy, one that works for all of us. And “all of us” includes our kids. The worst of this Budget is the broken promise—the promise that John Key gave to our kids—because despite all the Prime Minister’s promises about tackling child poverty in his third term, today we see the barest acknowledgment of the drivers of poverty: low income and low wealth. A quarter of all New Zealand kids now live in families where there is not enough income to provide the basics. An additional 35,000 children are living in severe poverty since National came to power and John Key took the role of Prime Minister. Those kids deserve family incomes that are sufficient for them to thrive now and they need the chance of a good life in the future. I am sorry, but a $25 benefit increase, which could be eroded to less than half of that by cuts in the parents’ accommodation supplement and hardship grants, will not go far for a single mum with three kids—it just will not. Four or five dollars a week each for those kids is not enough to lift those children out of child poverty, and the Government knows this. Children needed a game-changer today and they did not get it.

The Green Party’s plan for a saving scheme for every child is an example of an inequality circuit-breaker. It is an example of the game-changer. Our Kids’ KiwiSaver policy would offer all newborns a kick-start deposit of $1,000—a kick-start deposit that this Government has just ripped away from children, from future generations—and matching savings contributions would help families save for their children’s future. Under this policy most kids could reasonably expect to build a nest egg of around $12,900 by the time they get to 18 years old, which they could then use to help fund a good education, to invest in an adult KiwiSaver for long-term savings, or use as a deposit on a home.

Maintaining this gap, as National is, between those with a lot and the rest of the country is bad economics. The OECD warned late last year that inequality had inflicted more damage on the New Zealand economy than on any other developed country, wiping 10 percent off our potential economic growth. Poverty is dangerous for children—it is dangerous for children—but it is also clear evidence of an economy that is broken, an economy that is not working for everyone.

Young New Zealanders were promised a brighter future by National some elections ago, but in reality the future is looking darker for most New Zealanders under 40. People under 40 have been abandoned by John Key. They are the abandoned generation. New Zealanders aged under 40 have never been less likely to own their own home, never been more burdened with student debt, never been more likely to be underemployed and, in the case of children, never been more likely to be sick from a disease of poverty or to turn up to school hungry. What amazes me, actually, about young New Zealanders is how often they stay really positive and hopeful despite how much is stacked against them.

Last week, like many of you, I watched the 2014 Victoria University graduates as they paraded down Lambton Quay. Among them was the younger brother of a colleague of mine who graduated this year with an architecture degree. It is quite a thing to get an architecture degree. You need a B+ average just to make it through the first year, and then you have 4 years of full-on study and the all-night grafting that follows. This young man graduated at the top of his class, not just in architecture but in the entire school of design. For all his hard work and his tremendous successes, this brilliant, creative young man has come away with a $40,000 student loan and a job as a cook in a cafe. He earns just over the minimum wage. I am not denying this young man his hope or his pride or his happiness after one of the biggest weeks of his life. He quite likes his job in the cafe. He knows that there are many people who are much worse off than him. But we really need to ask whether this is actually the brighter future that John Key was promising young New Zealanders, or whether it is yet another sign of a Government that has abandoned them.

I am 45. I am lucky enough to have finished most of my degree before the student loan scheme came along, but the average 22-year-old woman who graduates with a Bachelor’s degree today could be 50 years old before she pays off her student loan. It is a staggering thought but this is the reality for the abandoned generations. Then again, if you are young and you do not have a tertiary qualification, if you are a labourer or a shop assistant or a rest home carer, the future looks even tougher. The National Government has abandoned young workers and young families.

I want to tell you about some young New Zealanders whom this Government has abandoned. Sarah and Rob—these are not their real names, because we know what happens to members of the public who critique the Government and how they get treated. These are not their real names, but they are very real young people. Sarah is a young mum aged 30 who, along with her husband Rob, is expecting their second child any day now. Their little girl, Eva, is 5. Sarah volunteers for the Salvation Army helping to feed homeless people, and she worked part-time in a shop before her morning sickness got to be too bad. Rob has a heart condition but he works very hard, sometimes 50 or 60 hours a week just to bring home enough money for their family. But even when both of them were working they were stable but certainly not financially secure. A few weeks after Sarah had to quit her job for her baby’s sake, Rob’s hours were cut from 50 to 60 hours to 38 hours. Even though Rob earns a reasonable hourly rate, they earn just below the median wage. It is not enough to cover their rent in Auckland, their food, their petrol, and, crucially, any unexpected expenses.

Sarah told me, when I talked to her about her life and what is happening with her, that if Rob loses any more hours a week—and it is likely that he will—they simply will not be able to cope. “But we’re lucky,” she says, “because there are places to get things, like the Sallies, to help, but this is not comfortable. I work with those who are homeless, and I worry at how close our family are getting.” Sarah and Rob’s story is by no means out of the ordinary—in fact, it is typical of so many New Zealanders, working hard but barely getting by, and whose prospects for economic security are very low. They are the abandoned generation. They got absolutely no help from this Budget.

Bill English has told us about the increased numbers of New Zealanders in work. What he did not say was that among those he claimed to have a job are people who are working as little as an hour a week and who are doing unpaid work, like on a family farm. A staggering 104,000 New Zealanders whom the Government boasts are in work are officially considered underemployed. That means they are working but they are not earning enough to live and they want more hours. In the past 2 years alone National has overseen a 20 percent increase in the number of Kiwis who are underemployed. Most of these people are young. Disproportionate numbers are Māori and the disabled. Lots of them are parents whose children are living in poverty. Most are blue-collar workers like labourers and carers. The National Government is creating an enormous underclass of the underemployed.

And it gets worse. The lowest-earning half of New Zealanders has seen no real rise in their incomes in the 6 years that John Key has been in power. Last year when the economy grew by 3.3 percent, average wages increased by only half as much, 1.7 percent. I think workers have every right to question where the fruits of their labour are going. The answer is that the fruits of their labour are going to someone else. The economy is not working for half of all wage earners. Half of all wage earners have been abandoned by this Government. They are prisoners of an economy that does not work for them.

It would be easy to say that John Key’s Government does not care about young people—very easy to say that. But I think its greatest sin and his greatest sin is nonchalance. It is fundamentally out of touch with the real lives of New Zealanders. The National Party lives in a completely different world. This is probably news to John Key, who, until recently, considered himself quite in touch with New Zealanders—at least those who had ponytails. But this Budget was clearly drawn up by people who have never sat at the kitchen table with a mountain of bills and agonised over whether they should pay for the power or their son’s school camp—agonised over these daily household decisions. These are people who have never had an enormous student loan, who mostly got their education for free. The Budget was drawn up by a National Party caucus of people who are comfy, with their bountiful portfolios and property, and out of touch with the plight of young first-home buyers.

It was written by people like the Minister for Social Development, Anne Tolley, who actually said that if your kids are hungry, put some bread in the toaster—the “Let them eat toast Budget” approach to child poverty is what is prevalent in this Government. They are people who have no idea how frightening it is to lose a job and then suffer the financial double whammy of losing Working for Families payments as well. This is an out-of-touch Budget, written by the out of touch, for the out of touch.

So let me put you in touch, if you like, with a real family like Sarah and Rob. Sarah and Rob are up against it every single week. Like most young families, they are one large unexpected expense away from financial disaster. About the same time that Sarah had to give up her job their rental home was discovered to be full of asbestos. Their daughter’s asthma was getting worse and worse, and their doctor eventually discovered it was the asbestos causing it and told them they had to leave their home, practically immediately. They were forced to shift and the bottom fell out of their lives. With no savings and no job security, they had no chance of buying a house. They struggled to get any recompense for the shoddy rental that caused their daughter’s illness. Sarah had to drop a legal case that she tried to take because she just did not have the money to fight. She said to me: “Ours is a common story. We spend $400 a week for a two-bedroom house. We can’t get a State house. There are no back-ups for low-income middle-class working families like ours.”

So, Prime Minister, do not insult Rob and Sarah by telling them that the economy is working for them; do something to make it work for them. A good start would be giving Rob and Sarah the same shot at buying a house that previous generations had—previous generations like the Prime Minister’s. Here is a fact: people under 40 are much less likely to own their own home than they were before John Key came to power. Homeownership among people in their 30s has reduced by over 20 percent under National, and it is dropping faster for this age group than for any other. The Kiwi dream of a home—any kind of home—has been downgraded to the nightmare of “Generation Rent”. National has abandoned the homeownership aspirations of young New Zealanders to protect the capital gains of their parents.

There are about 300,000 so-called mums and dads in New Zealand who own two or more homes. I am 45; I am one of them. It is a vast population of people like me and property investors—many who are my age or older—whom political parties are petrified of alienating with a comprehensive capital gains tax. But until politicians have the guts to fully stop the incentives that drive older New Zealanders to invest in property over more productive investments, younger people like Rob and Sarah will never have a chance to own their home. They will never have a chance. When Rob and Sarah get old, they are not expecting to own a home, let alone own two or three. The dramatic decline in homeownership amongst this abandoned generation is John Key’s housing legacy—a policy welcome mat to the baby boomers and an eviction notice to Generation X and Generation Y. I call on John Key to choose to back young New Zealanders into their own home. I call on John Key to be brave and to stop abandoning young New Zealanders.

I have heard commentators say how embarrassed they were when the Prime Minister made international headlines after pulling a cafe worker’s ponytail, but for me the Prime Minister’s hair-pulling antics are nothing compared with the embarrassment I feel at his decision to not feed hungry kids at school—to not feed hungry kids at school. This decision, more than other, symbolises how much the National Government has lost touch with what really matters to New Zealanders. The Green Party’s Facebook post on this on the day that he denied kids lunch was viewed by 1.2 million people—1.2 million people. More than a million were shocked that their Government would deny hungry kids a meal. An apple, a yoghurt, and a Marmite sandwich can unleash the potential of a child. How hard is that to support?

There is an alternative to National’s economy for the few. There is an alternative, and it works better. New Zealand will succeed only if all of us are succeeding. The Green Party will back young New Zealanders, women, Māori—all of those who started behind on John Key’s race to the top and have never been given a chance to catch up. Because we can pay families a decent wage; we just have to choose to. We can feed children when they are hungry at school; we just have to do it. We can reduce our carbon emissions; we just need the commitment. And we can eradicate child poverty, because the alternative—to keep children poor—is simply unacceptable. What this country so desperately needed today was imagination and leadership, the courage to make change and hope—genuine hope—for something so much better. It is possible for our small country to be run on the principles of sustainability, fairness, and community; we just need leaders who are prepared to do it. This is the new alternative; it is not only possible, it is proven. When our economy works for everyone, we are all better off. Thank you.

This is a “Split Enz Budget”. Everywhere you look, there are deficits, and as the group Split Enz sang, “I see red, I see red, I see red.” Mr Key got up and talked about his State house experience, where a great society helped him out. And then he promptly forgot about it. Some of us remember our backgrounds, and we do not intend to forget the background we came from. We know what poverty smells, tastes, and feels like, and we do not pay it lip service of the type that those National backbenchers were saluting and clapping today. What did they do? Well, there is some lip service to disadvantaged families, but nothing to address why they have no income, or real low income—nothing in the Budget at all.

Here are the stand-outs. There is going to be a holiday tax: $6 if you leave the country, $16 if you come back. The Kiwi KickStart: well, the only people who got a kick in the guts today were middle-income New Zealanders. The Government is going to throw a further $50 million at a Whānau Ora programme seriously condemned by the Audit Office. No, no, National will just ignore that and forget about real Māori needs. It will go along with these Māori sociologists from Auckland University and dish up the money, and never deal with real people.

And then we are going to have an extra $320 million in the district health board budget. If you think about the growing population and the growing ageing population in this country, and then you look at almost $200 million of unpaid debt from foreign hospital patients, this is a decline. Can these people not add up? But back to my point: every year they promise to get on top of the debt, and to reduce the country’s economic vulnerability. They have made that promise again, for the seventh time today, because six times they have never kept it. This Government is in deeper debt, the surplus is always tomorrow, and the balance of payments deficit is worsening. What does that mean? Well, mum, if you are spending far too much of the money that is coming into the household, you and your family are going to go broke, and so is New Zealand.

Whatever the Budget claims, it does nothing to solve any of the pressing problems facing New Zealand. And what a hysterical rant from a Prime Minister—he has had 7 years to become a speech-maker. That was just dreadful—the histrionics and the “sieg heil” - like behaviour of his caucus jumping up and saluting him. Those members from the provinces—the provinces have got nothing today whatsoever, but, just like the Black Shirts, there they were saluting because they know no better.

There is nothing in this Budget that will fix the Government’s finances.

💬 Hon Members: Give Ron Mark a go!

It is no use ranting and raving at me; it is too late. Your day of reckoning is coming. You saw it in Northland. Prepare to see Northland over and over again around provincial New Zealand. The notion that the Minister of Finance is in any way competent and capable of managing New Zealand’s economy is just risible. It is laughable. This is the deficit, you see: we start with the red in the public finance deficit. National has failed to get the country’s finances in order, and all the boring, tedious, worn-out, over-used platitudes and excuses will no longer wash.

Net core debt has risen consistently under National, heading to $70 billion. It was $10 billion when National came into office, and it is $70 billion now. Part of that is from the Canterbury earthquakes, but the rest is just incompetence. And there is worse on the horizon. And National’s doctrinaire partial privatisation of the power companies—did you hear Bill English yesterday? He said: “Despite the fact that we sold 49 percent, we are getting greater dividends.” He did not say: “We’ve allowed them to boot the prices up so high that they’re price-gouging households all over the country.”, and that, to him, was good economics. How smug and arrogant can you possibly be? The fact is that Bill English has never, ever delivered a surplus. He has never, ever delivered a surplus, in stark contrast to the 14 years of surpluses under previous Governments, one of which I was the Treasurer—[Interruption] Ha, ha! We got hit by the Asian financial crisis, but then, of course, we had experience. We are not doctrinaire. We understand economics. We are not just devoted to one theory of economics. I will make this prediction right now: Bill English will never, ever deliver a surplus. He will never, ever deliver an honest surplus. He is running out of words. His tenure of claiming competence in an ocean of failure will soon come to an end.

We see red. We see red in the balance of payments deficit. All those farming and provincial members, all those farming and provincial—[Interruption] Oh, it is danger time. It is serious danger time. It is tinder-dry. You see all of those provincial members up there? The balance of payments deficit is about us failing to export enough to pay for our imports. And all of those gentlemen up there come from export electorates. And what are they doing for those people in the countryside in terms of exporting? Not a mutter, not a murmur, not a syllable, not a sound. They will not raise a finger. It is “sieg heil” to the front bench—“whatever you say”.

Here we go, here we go. Balance of payments: last year, December 2014, our balance of payments deficit was $7.8 billion.

💬 Chris Bishop: Tell us about “manual labour” again.

Our net international investment debt: what is being invested offshore into our country versus our country investing back into those countries offshore? It is a staggering $154 billion, Mr Bishop. That is what I am going to tell you about. And no amount of your nervous knee-knocking is going to change it. Let me tell you: you are a list member. There will not be a list by the time this gets out. You are a goner. Get all of the experience you can, because you are going on furlough. That net international investment debt is the equivalent of 65 percent of our country’s GDP. This is PIIGS territory. This is PIIGS territory.

I want to tell you this: we also see red in the provincial deficit. All over provincial New Zealand today, in the hamlets and on country roads, and in the villages all over the countryside in the provinces, there will be despair about this Budget. There is nothing in this Budget for provincial New Zealand, unless, of course, you live in the province of Auckland. No response for regional problems and no regional development strategy mean that the regions are stuck in the economic and social doldrums.

Unemployment in Northland: 9.9 percent.

💬 David Bennett: What are you doing about it? You’re the member.

What I am doing about it is getting rid of you, and as soon as I can. My promise to the people of Northland is very sound: salvation is on its way. But the Bennetts of this world we are going to wipe from the political framework, because they see you as obstacles to their future. Bay of Plenty: 7.8 percent unemployment. Hawke’s Bay: 7.3 percent unemployment. In Manawatū and Wanganui—or Whanganui, if you want to be politically correct—it is 7.4 percent. It goes on and on and on. Farming prices: all are falling; fishing prices: falling; and forestry prices: falling. Gentlemen, when are you going to stand up for the provinces? Come on—can I hear you now? No, all we have got is a deafening silence—a deafening silence. Boy, they are going to regret it very shortly when their careers are over. They are going to say: “I wish I had listened to New Zealand First. I wish I took the warning. I might have saved my province and myself.” But seeing as they are only about themselves, well, they should save themselves now.

Do not forget that we over here understand what work looks like. We understand the toil, the sweat, and the agony of exporting offshore in order to keep a family going. These people bring money home to the family New Zealand, and we should salute them, not jeer and laugh at them, not ignore them. Does the Reserve Bank of New Zealand Act reflect that? No. Paul Glass of Devon Funds Management pointed out recently: “… New Zealand has some of the”—listen to this—“highest real interest rates in the developed world …” He went on to say this—what New Zealand First has been saying for years—“Our interest rates have artificially pushed up our exchange rate which is damaging the productive part of the economy.” New Zealand First says: “Amen.” to that. But what are these people doing about it? When farmers are going to the wall, when they go to the bank, and four out of 10 will be in trouble, what will these provincial members from Hamilton do then—the Bennetts, Mr Mitchell, and, dare I say it, the man from the disclosed zombie town Whangarei? What is he going to do? What are all those Māori members who know that their people lie at the bottom of the economic heap going to do? You cannot go around hobnobbing with those people over there for their fellowship. You are going to have to make a stand for your people, and as soon as possible.

The productive part of the economy is the provinces, and National wantonly goes on abusing their loyalty. Will National change the monetary settings to help those provincial seats that it represents? No, National will not raise a finger. The Salvation Army came out the other day about overcrowding, low incomes, and unemployment in regional New Zealand, and some of the commentariat were surprised.

The Prime Minister is full of promises. Recently, he skulked back up to Northland, to the Bay of Islands, and he said that he was “going to actively work to regain your trust and confidence.”

💬 Hon Member: What did you say, Winnie?

I said: “I expect that to mean that it will be in the Budget.” So there I was today going through all of the Budget and looking for the 10 two-lane bridges, the Pūhoi to Wellsford highway, the ultra-fast broadband roll-out, taxpayer-paid cellphone coverage, doing up the Auckland to Whangarei railway line, and investment in the most obvious port in this whole country, Whangarei. And was there anything in the Budget? Doughnuts—nothing. The Prime Minister was going to actively work to regain your trust and confidence. Up north, we are not stupid. Forgiving we have been for so long, but stupid we are not.

We see red in the public services deficit. Look at this: the reality is that many New Zealanders are faced with having to go on the unofficial waiting list in public hospitals before they get on the official one. Everywhere public services are being cut. Police numbers are capped at 2009 levels, and they claim to be getting on top of crime—except that if you get caught now, you get a warning. You do not get charged; you only get a warning. Spending on police numbers has been capped since 2009. Write to the police and ask: how many policemen or women, front-line, were on duty in any given town on any night in this country, and they will not answer you. They say that they do not keep information in that form. Oh, really? Well, what form do you keep it in—because we would like to know? For example, take the local police station in Kohukohu, in north Hokianga. It has been closed, meaning that there will be no police presence in the whole of north Hokianga. Just like that.

💬 Hon Michael Woodhouse: Rubbish!

Oh, I know what that Minister’s specialty is. The Minister’s specialty is rubbish, because he has got a rubbish house and he will not fix it up, and the family cannot stay any longer. It is so bad that you would not put a dog in it. Yes, it is rubbish, Minister, but get off your backside and do something, for the first time. Do not sit there on your highly overpaid income, on your highly over-enhanced life, charisma-free as you are, and claim that you are doing something. “Rubbish” is the right word. It is rubbish. Will you fix it, Minister, rather than taking that essentially arrogant view so smugly portrayed by the National Party today?

💬 Hon Gerry Brownlee: What’s he talking about?

There is no use in the man from the woodwork lathe getting excited either. We know that his tutelage in respect of Christchurch has been disastrous. He is now the Minister of Defence. He knows nothing about defence, of course, which probably qualifies him for the job.

We see red in the standard of living deficit. You see, here is the point. Under National, one thing is incontrovertible and inarguable: the poor have got poorer and the middle-income people are getting poorer as well, and many old and retired people are now stressed out about how, if they keep on living, they are going to be able to afford to live. That is the real social condition in this country—one of the greatest countries on earth, which used to be called Godzone. It has now, under National, under this economic theory, descended to this. The National Party members should be ashamed of themselves. Just because they get about $200,000 a year and most of them have got four homes somewhere around the country—some have got 10—they do not want to change anything, because they are on the pig’s back, and everybody else is getting what is under the pig’s tail.

The standard of living deficit is dramatically bad. Then we have got this really significant thing, which is not in the Budget today. The Minister of Finance talked about GDP growth, but he never matched it with population growth. It is axiomatic that if GDP was to rise to a certain level and the population rose to the same level, at the same percentage, there is no progress at all. That is exactly what is not here. What is the GDP growth per person? What is the income per capita—the measurement that every other country understands. Oh, no—no mention of that whatsoever. Why? Because the moment that people knew that, they would know what a miserable failure at running this country this mass immigration party is.

💬 Hon Gerry Brownlee: And that from the refugees’ friend!

Well, you see, again, he does not understand the difference between refugees on humanitarian grounds and mass immigration. We are a cultured party. We are people who understand international obligations. We are not as smugly arrogant—sitting there in the boat, saying “I’m in the boat, Jack; forget about you.”—but we do understand about focused, planned immigration, which every Asian nation understands but not these sell-outs to big business.

There is the resilience deficit. You know, things are so bad that if we have one hiccup internationally with our commodities, we are in trouble. This is what the Reserve Bank Governor said the other day, on 30 April—and I love this phrase; it is what is wrong with modern New Zealand politics and our institutions, and it is about the character of our nation—“House price inflation is elevated in Auckland.” Really, that statement is about as bleeding obvious as “The Pope is a Catholic.” That is what he said. That is New Zealand’s present problem. We have people cosseted away with high incomes and salaries, many on the taxpayer’s back, failing to tell the country honestly what is going on.

I want to make it very clear that we are going to fix up the Reserve Bank of New Zealand Act at the first chance we get. New Zealand First is going to make sure that we have research and development, and regional policy taxation, and that immigration is, for the first time, a sound policy. We are going to govern for New Zealanders and for all those who are here legally. We are going to ensure that the exporters in the provinces and those people who make this country go and who build on production, not consumption, get a fair go.

It is a time for a reality check. Where is National’s strategy plan and vision? It has not got one. The blunt truth is that there is absolutely no room for complacency about the New Zealand economy, because National has failed to look ahead and plan and invest for the future. Nothing in this Budget warrants any confidence in the National Government’s management of the New Zealand economy. This is a Budget with deficits everywhere. Examine them carefully, and like Split Enz and Tim Finn, you will come to the same conclusion: “I see red, I see red, I see red.”

Tēnā koe, Mr Speaker. Kia ora tātau katoa. Ka mihi rā ki a tātau e hui nei i tēnei rā, Māori mai, Pākehā mai. Ka nui te mihi.

[Thank you, Mr Speaker. Salutations to us all. My acknowledgments indeed to us assembled here today, Māori and non-Māori. I appreciate it greatly.]

Firstly, can I start off by congratulating the Minister of Finance on working extremely well with the Māori Party leadership. It is sad that some will moan because they have got nothing. They have delivered nothing to the people of this country, and throughout this last year the Māori Party has been able to work constructively with the National Government. I am usually a humble man, as most people know. I am very humble—I am very humble, but not today. I am ready to rumble today because the Māori Party has helped deliver some goodies to the people of this country. Marama Fox is like that—very humble—but just for today we are going to speak up. We are going to speak up.

Since the Māori Party was created 11 years ago, whānau have been at the forefront of our thinking. We have been dedicated to improving the lives of whānau and to breaking the intergenerational neglect and poor policies of previous Governments, which have failed abysmally to improve the lives of our most vulnerable families. The Māori Party created history when it became the first political party in this country to call for a Ministerial Committee on Poverty. It brought into sharp focus the dire and complex issues raised by the most vulnerable families in our country, of which a fair, disproportionate number are Māori. I can say, too, that the Māori Party is extremely proud of the work that the Government has undertaken as a result of the recommendations from the Ministerial Committee on Poverty set up by the Māori Party—and I pay tribute to the former leader of the Māori Party Tariana Turia.

Today the Government announced $790 million, which will reduce hardship among tamariki in greatest need—$790 million. Why? Because the Māori Party rumbled up—that is why. Today I say to Aotearoa: “It’s OK. Don’t thank us too much. The Māori Party rocked up and we delivered beside this Government.” I want to put it all in a bit of context. Benefit rates for families with children will rise $25 a week, after tax, which is the first time since 1972 that core benefit rates have been increased by more than inflation. That is what we have done—pulled it over. We pulled it over the line. These measures will support around half a million children—half a million children. So it is a bit rich for some to rock up here and say: “Do more for children.” Hello—you do more for children, and then you still get it wrong. There is something wrong there—something seriously wrong.

Most of this country will be surprised, I think, that a National administration would offer increases to core benefit rates. I think the Prime Minister alluded to that. Here is the truth, though: National and Labour have held the Treasury benches for roughly an equal amount of time—over about 43 years—and neither of them have made any moves to increase benefit rates. So who made the difference? The Māori Party made the difference, that is who—the Māori Party. The Māori Party made the difference. It has been through the work of my former co-leaders, Dr Pita Sharples and Tariana Turia, and my co-pilot here, Marama Fox—the only MP who continues to be on the Ministerial Committee on Poverty and who has talked about nothing, nothing, except alleviating hardship and poverty. That equals $790 million, and that is how it came about.

Today the Māori Party has made history. It has taken 43 years—nearly half a century—for core benefits to rise. Who did it? The Māori Party did it, with some help from National. In addition to this hard-fought gain, the Māori Party has also secured about $100 million worth of funding for whānau, whare, and whenua. What is that? That is families, that is housing, that is land. New operational funding—$49.8 million over the next 4 years—will support Whānau Ora navigators to work with whānau, aiga, and families. Do I hear “Amen”?

💬 Marama Fox: Amen.

Thank you, sister.

Navigators play a hugely important role in linking up whānau with their vital services and information. The new funding will allow the continuation of current levels of navigators in Kaitoko Whānau, and for Ōranga Whānau workers to be maintained. [Interruption] Thank you, thank you. This is a 29 percent increase in the current funding for Whānau Ora, and although this revolutionary approach of working with whānau to help them find the solutions for themselves has been attacked by some Opposition MPs, the Māori Party and this Government have seen the outstanding results of Whānau Ora. Mr Peters, you need to talk to your older sister. She knows what Whānau Ora is all about.

The Budget has also provided $2.1 million of new funding for research on rangatahi Māori suicide prevention. I have to say that too often I have seen the devastating effects of Māori suicide on whānau. The Māori rate is about 22.5 times higher than the non-Māori. This fund will contribute towards taking a Whānau Ora approach to reducing youth suicide. It will prevent youth suicide and will hopefully provide support for prevention workers who are working directly with rangatahi Māori in crisis situations.

Moving to housing: housing is such a crucial and critical factor in breaking the cycles of poverty, dependency, and poor health outcomes for whānau Māori. A new whānau housing response fund will focus on addressing housing deprivation. A Māori housing network will be established to provide practical assistance to whānau and to progress the housing aspirations of Māori. Budget 2015 provides an additional—hold on—$8.8 million per annum for Māori housing. What do I hear?

💬 Marama Fox: Amen.

Thank you, sister. This is in addition to existing funding for Māori housing of around $7.5 million per annum, bringing the total amount to $16.2 million per annum in 2018-19. A new Māori network will provide an analytical role in implementing and evaluating He Whare Āhuru He Ōranga Tāngata—the Māori housing strategy—which sets out the Government’s commitment to improving housing outcomes for Māori and to growing the Māori housing sector.

I move to whenua—from whare to whenua; it makes sense. There is a new fund of $12.8 million over 4 years to help Māori landowners improve the utilisation of their land. It is also in this year’s budget. What do I hear?

💬 Marama Fox: Amen.

Thank you, sister. The fund complements the current reform of Te Ture Whenua Māori Act. The issues that the fund will investigate are genuine, and I am talking about rates, valuation, and aggregation of small land blocks and landlocked land. It has got to be good.

💬 Hon Gerry Brownlee: Tell us more.

I will. Hold on, there is more. There is $3.2 million per annum in a fund that will support targeted initiatives in areas with significant underutilised land, such as in Northland, East Coast, Bay of Plenty, Manawatū, and Whanganui. Help is on its way. Help is on its way. It will address longstanding issues that have generally inhibited Māori whānau, hapū, and iwi from releasing and realising the benefits of their land.

As a partner in this Government, we have been criticised for getting only the crumbs. That is a blatant lie—a blatant lie. The Māori Party has had a real and profound impact on this Government, in the tangible gains we have made for whānau. Over the last 7 years as a support party we have led initiatives to tackle poverty. They include Warm Up New Zealand, rheumatic fever prevention, free GP doctors visits, and the expansion of paid parental leave. I could go on, but I am a humble man; I will hold it back. The Opposition will argue that the merits and benefits increased today are pretty minimal. They get nothing. They have delivered nothing to this country. Why? Because they are in Opposition, and here we are at the table getting gains for our people. Today the Māori Party can, and will, take every bit of credit that comes its way. Why? Because we have done it. The Māori Party has done it.

I close by saying that the Budget is a win for whānau who work hard to bring up their tamariki with the necessities of life. It is a win for all of those who fight day in, day out to make the lives of our people better. It is time for this country to realise the huge and valuable contribution of the mighty Māori Party in this House. That is what we do: we look after the families and we look after the lives of our people—not just Māori but all of this country. This Budget gets us on the move. We say: “Let’s get it on. Let’s move it, and move it now.”

Can I begin by congratulating my colleague to my right, Te Ururoa Flavell, on his impassioned address and on the contribution he makes to this Government. I must say also, in respect of David Seymour to my left, that the three support partners work remarkably closely together. We do not always agree on issues, but we take a common approach on a number of things and I find it a real pleasure working alongside these colleagues to achieve real gains for the people of New Zealand. And that is what this Budget is all about.

One of the reasons why the Budget is able to do the things it has been able to do is not part of the Budget at all. There was a reference in the speech from the Minister of Finance to the Prime Minister’s 10 key result areas. They are a vital part of shaping the direction and the delivery of government and its services to the people, because for the first time—this may sound strange to people—the Government actually has clear measures of the impact of its policies. It sets objectives about what it wants to achieve in the justice sector or the education sector or the health sector, and then it is able to measure its expenditure and its policies against achievement in those areas. As a consequence of that, it is able to move out of areas where it is not making progress and into areas where greater gains can be achieved.

One of the reasons why in this Budget, for the first time since Sir John Marshall was Prime Minister, there has been a lift in basic benefit levels is the much more strategic approach and focus that the Government has been taking to the whole area of its expenditure. It used to be the situation—I suspect we have heard it from some of the parties that have spoken earlier in this debate—where government was all about dishing out the largesse and all about leading the charge and spending the money. In this environment, where this country is much more diverse and pluralistic, government is about working alongside communities, working alongside groups in communities, to achieve specific outcomes. Those outcomes may not always be achieved by direct intervention by the Government, but are part of outcomes achieved because of an overall sense of leadership.

That is where those 10 key result areas are so important. They give the Government the flexibility and the drive to be able to pursue objectives that were not thought possible some time ago. It used to be the mantra at every election since 1990 about restoring basic benefit levels. We have had a National Government since then, we have had a Labour Government, and now another National-led Government. And only now, nearly a quarter of a century later, has it been possible to restore levels not to where they were in 1990 but beyond that, and to make the first significant change in over 40 years. That is because the Government, for the first time, really has a clear understanding of the impact of its policies.

Some 20-odd years ago, this Parliament passed a fiscal responsibility Act, which set the stage for the Government better monitoring its accounts, and it is no coincidence that fiscal performance has improved markedly since that time. In coalition with National in the mid-1990s, United Future proposed the complementary idea of a social responsibility Act, so that we could measure the impact of the Government’s social policies and make changes accordingly. That proved far too difficult for officials to comprehend. I think the result areas are the next best thing to achieve that objective. So alongside fiscal responsibility we now have the Government much better able to measure and move in the areas of social responsibility as well. That is why you see the package in today’s Budget. That is why you see the ongoing improvements in health and education at a time when Government finances are genuinely constrained and are likely to be for some time in the future.

It is almost a paradox that at a time when revenue is falling, when the Minister of Finance can give this House a warning that because of international conditions the revenue track may not be as strong in the foreseeable future, the Government, on the other hand, is able to make such significant social progress and still face the prospect of a surplus this year, burgeoning to a greater number in the years ahead. That is not beyond possibility. It is certainly the sort of thing people would not have dreamt was possible just a few short years ago. That is how the transformation has occurred, and that is the backdrop that makes this Budget, I think, such an important stepping stone for New Zealand.

I am delighted that as part of the Budget one of the smaller but significant infrastructural issues facing this country has been addressed, and that is the decision to rebuild the wharf at Waitangi on the Chatham Islands. The 600 Chatham Islanders identify as New Zealanders, they are New Zealanders, but they struggle sometimes to get their voices heard. The Minister for Treaty of Waitangi Negotiations and I have done a bit of work over the last year to get this wharf to the point where it can be renewed. It is a small step but for them it is a mighty one and will do a lot towards securing their future.

In the time that is remaining to me I want to address one issue that was mentioned in the Budget but is still unresolved, and that is the question of the Resource Management Act. I think this is a case of missed opportunity. For too long this Government, in my view, has tried to achieve its cake and eat it too, in terms of the changes it wants. It is not going to get support to change the principles of the Resource Management Act.

💬 Denis O’Rourke: Hear, hear!

But there is a significant mood right around the House, I think, for addressing a number of the process issues, and I say to the House that I suspect that there is sufficient momentum here that were the Government to come forward now and say that in the context of Auckland or whatever it wants to do we are going to focus on those changes, we could make substantial and real progress very quickly. But that point needs to be understood. It was September 2013 that the Government first announced its intentions in this regard. We are now nearly 2 years down the track and substantially no further ahead.

There is a way forward, and I am pleased to have the intervention from the member on the right of me, metaphorically speaking, that confirms the level of support for changing the Act in that way, because many of the complaints that New Zealanders have about the Resource Management Act are about its implications and about how it applies to them. They are not actually about changing the principles. In fact, everywhere I go, that is the one thing people say we cannot do, we must not touch. So I say to the Government that given the commitment in terms of the broad infrastructure package around housing alluded to in the Budget, it is time to forget those notions. It is time to actually start working on the changes that will improve and speed up the process under which the Act operates and get a majority in this House, which I think would be substantial, for driving those through to implementation.

What the Budget says at its heart is that the Government is getting its house in order in so many different areas. The Government is now looking to provide opportunities and challenges for New Zealanders, whether they be struggling families, whether they be families of school-aged children, or whether they be families in other situations. As a consequence of that challenge, it behoves us to make sure that, for its part, the Government is there to help. It used to be sort of a throwaway slogan: “I’m from the Government; I’m here to help.” I think it actually has some substance as a point these days, because the Government is not holding to the vain belief that it can do everything. It is really taking the view about its strategic role in a society and how that can best deliver assistance. So if I come back to my Resource Management Act example, that is a strategic approach it can take that will benefit people and that will achieve a large part of the objective that it has set for itself.

I want to acknowledge the work of the Minister of Finance. I think he is someone who has quite a deep vision about where he wants this country to head. It is not just a numbers game for him. He has a heart and a real sense of social commitment, and I think that comes through in many of the things that are part of this Budget and many of the assumptions that underlie it. Who would have thought that we would be standing in this House today seeing a National-led Government increase benefit rates? Who would have thought a little while ago that we would see in previous Budgets a National-led Government increasing health and education expenditure? The paradigm has shifted because this Government, under the leadership of the Prime Minister and the Minister of Finance, understands that the nature and role of government in a modern society has also shifted. It is not the scorched earth free-market economics of the Thatcherite era, nor is it Big Brother socialism, which we used to see in the 1970s and 1960s and earlier; it is a new environment. This Government is smart enough to have adjusted to that. It has put out the challenges to New Zealanders, and the Budget today, I think, reflects a sense of real opportunity for people to advance and make progress. I am very pleased to support it.

What a debate. Could I also pay tribute to the fabulous speakers who went before me. I reiterate what Peter Dunne said. I greatly enjoy working with the other support parties. Kia ora, and thank you. I also would like to pay tribute to the Minister of Finance, following on from what Peter Dunne said. He is a man with a heart and with a vision, and he is changing the way the Government operates, from handing money out, here, there, and everywhere, to having the Government as an organisation focused on outcomes.

This Budget is an example of stable centre-right Government. In the Epsom electorate that is what we vote for. In the Epsom electorate we are quite comfortable with choosing the Government. The fact is that that is what we have done for two out of the last three elections. But that is also why Andrew Little’s speech was so negative and so barren. You would think he was speaking in the Parliament of a sub-Saharan country. He had no policy, because he has waged a scorched earth policy on nearly every policy that his party had at the last election. Some of the members opposite should check—there are so many of them away, they may well be having a spill as we speak.

I remember once upon a time when the Greens were a party focused on the environment. I think we saw very, very clearly today that that is no longer the case. It was not mentioned once in that speech. I always enjoy the speeches from the leader of New Zealand First. How fitting that he should be back with Split Enz in the 1980s—a time when he himself showed great promise. Today he sits with a group of people who probably, up until today, thought that “Budget” was a brand at Countdown. Too bad; so sad.

But there is one positive I would like to really emphasise—

💬 Denis O’Rourke: He won his seat. He doesn’t need to be gifted one.

Oh, we have got him going now. There is one positive that I would really like to emphasise and that is the announcement in this Budget that there will be funding for two new partnership schools, kura hourua, as early as next year. This policy has been a litmus test for one of the darkest elements of our otherwise green and pleasant land: how we treat people who make tremendous sacrifices to go out alone, to swim upstream, to do something different to help the next generation of children.

The sad thing is that the Opposition, some members of the educational sector, and some members of the press have shown us the darkest underbelly of our tall poppy culture. They have had a litany of false claims to try to knock down these heroic and innovative New Zealanders opening up new schools. They said the model failed overseas, until they were overwhelmed by evidence to the contrary everywhere else that this model has been tried. They said that the schools would skim the most able students. What we have discovered is that they have taken some of the students who were not even attending a school the previous year. I opened my maiden speech with a quote from one such student, who said to me: “I never thought I was smart until I came here.” Last I heard she was well on track for a university scholarship. That is what these educational innovators are doing.

But then the critics said that they would be under-resourced, and then they said they would be over-resourced. Once again we presented the evidence to comprehensively demonstrate that that was not the fact. What the facts are is that we are taking some of the most vulnerable New Zealand children and putting them into environments where they are engaged, where they learn, they get skills, which lead to qualifications, those qualifications lead to jobs, which will turn into careers, and ultimately allow those New Zealanders to feel good about themselves. That is what it is about. That is one of the ACT Party’s answers to the difficulty of child poverty. Would not it be nice if, from time to time, some of those opponents, instead of showing us the darkest underbelly of the tall poppy syndrome, could actually be a little bit supportive. But I digress. I will take the time to salute some of those heroic New Zealanders in this movement—Alwyn Poole, Nick Hyde, Sita Selupe, Raewyn Tīpene, Catherine Isaac, Michael Jones, and even Willie Jackson. They have joined the movement for more choice in education for the most vulnerable New Zealanders.

The Opposition goes on—

💬 Meka Whaitiri: How’s the roll going?

There we go again. There we go again—nit-picking, the negatives. The fact is that all of the schools that have been open for more than 1 year are above their guaranteed minimum roll, except one, which is a primary school where children start throughout the year. Opposition members cannot handle the facts, but their negativity is bottomless. You should be ashamed. You should be supporting this initiative, instead of giving us bottomless nit-picking and negativity. Shame on you.

We had many complaints in the lead-up to this Budget about whether or not the Government would make surplus. What an approach of short-termism—an approach that unfortunately I have to say the Government has bought into somewhat as well. How many people remember whether the Government was in surplus 15 years ago? Well, I will tell you what people will remember about this Budget 15 years hence, and that is what superannuation is looking like. As people live longer, about 1 extra year per decade; as we go from five workers per retiree in 2006, down to two by 2060; when Government debt is forecast to approach 198 percent of GDP by the time current university students retire, people will be looking back at this Budget and asking whether we were prepared to look into the future and confront our challenges, or whether we kicked the can down the road for 1 more year. The solution, which some members around this House are keen to support, is to put it to the public to put up some options and let the public vote on the future of superannuation. If we can afford $26 million to do this for the flag, then we can afford to have a public referendum on fiscal sustainability and intergenerational fairness. If only the Green Party would also support that.

We could have sent a message to business about the future of capital investment and productivity, instead of continuing to issue corporate welfare, which fundamentally assumes that people in Wellington know best how to allocate resources and deal in complex ventures. We could have reduced new spending allowances by 10 percent a year, and that would have allowed us to send a message to business, in a country where we have one of the highest effective tax rates on capital, so that every year, for the next 8 years, we will drop company tax rates one point, until we get to 20 percent and become competitive with where other countries, such as Scandinavian countries, are now in terms of company tax.

What about income tax? We have heard so much about people in poverty, and people bringing up children in poverty. How about sparing just a moment for the hundreds of thousands of New Zealanders who have saved, sacrificed, waited, delayed, and had children much later in life? What about relief for them? What we could have done, at a time when the Minister of Finance is complaining that there is so little extra revenue from fiscal drag, is we could have gone and indexed tax thresholds for income to inflation. What that would have done is it would have had a very small impact in the years to come, but as inflation resumes it would have reduced the tax burden on working families in the higher tax bracket and it would have made taxation more honest. Instead of stealthily taking $1,036 out of the average household in the last 4 years, the Government would have to be open and honest about its tax changes. None the less, we have not had that initiative today. We will have to hope for it in the future.

But most fundamental is the Resource Management Act. The fact is that “inappropriate subdivision” is a phrase that appears 156 times in the 900-page document that governs land use in New Zealand. It is good to discover that the Government is the largest land speculator in Auckland. It is good that the Government is releasing 430 hectares. But what about the other 270 million hectares of New Zealand, 0.7 percent of which have actually been built on and are deemed inappropriate subdivisions? What about unleashing some of that land? Unfortunately, I have to disagree with my friend and colleague Peter Dunne. That phrase appears three times in the principles sections 6 and 7. It is a small wonder that there is a shortage of land on which to build and that the housing affordability problem is real.

I would like to finish by thanking my National Party colleagues, particularly the Prime Minister, the Deputy Prime Minister, and the wonderful Minister of Education, with whom it is a pleasure to work. Thank you very much.

I move, That the debate be now adjourned.