Imprest Supply Debate

I move, That the Appropriation (2015/16 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2015/16) Bill be now read a second time. This third reading brings to an end the debate on Budget 2015. I want to take this opportunity to remind the House that the fundamental job of the Budget is to raise taxes and distribute the expenditure—that is, it is focused primarily on the business of the Government. I want to acknowledge all those public servants who apply themselves with dedication and professionalism every day. There has been something of a trend in recent years to acknowledge our front-line public servants and also those who work for other organisations funded by the Government, and I want to do that today because we rely on their efforts to meet the needs not only of New Zealand’s most vulnerable citizens but also of every New Zealander, often in their time of greatest need.

I also want to acknowledge the back-office public servants, because putting together a better kind of Budget that focuses on having more impact on the lives of New Zealanders is proving to be an intensive exercise—resource intensive, intellectually intensive, and challenging. Over the last few years many public servants have provided a great deal of professional support for the Government’s objective of doing more for less—that is, putting together a Budget that has new spending at levels that are lower, even now, than at any time since the late 1990s, and yet, year on year, the Government, along with the Public Service, is producing more services and better services, even though the finances have been tight.

This Budget, which we are debating today, is the second one to show some signs of the impact of the Government taking a broader view of how to support individual New Zealanders to succeed. At the heart of this Budget was, of course, the hardship package—the first increase in benefit levels for families, beyond the Consumers Price Index, for 43 years. [Interruption] And I am not surprised that Labour did not like it. In fact, as I recall, the record of this House will show that the Labour Party voted against the first increase in 43 years, over and above inflation, for New Zealand’s hardest-up families.

Alongside that increase, in this Budget we are also starting to see the impact of the Government’s social investment approach. There has been a lot of discussion in the Public Service—less in the public—about what this amounts to, but it has got some pretty simple principles, and they will certainly be features of the next Budget of the John Key - led National Government. Probably as its first principle, it has a focus on the customer. I use that word deliberately, because it makes people feel uncomfortable but, actually, we should treat every single New Zealander who is in need, no matter how difficult or challenging their life is, as someone who is capable of being hopeful about their future, capable of following their own aspirations from wherever they start, and capable of exercising preferences about how we offer support to them.

I know that it has been profoundly motivating for Ministers, public servants, and politicians to see some of the analysis that shows what happens for children in New Zealand—the 1 percent of them—who are born into the most vulnerable and challenging households, where we know that we will spend up to $1 million in today’s dollars during the lifetime of that child. Of course, that leads to the obvious question: what are we doing now, spending so much money that is not making much difference? How could we do better to change the pretty predictable life course for that young New Zealander or other groups? There are 50,000 New Zealanders who, basically, have bad backs or mental health problems and whose average length of stay on benefits is 20 years. Can you imagine that: being on New Zealand’s lowest income and having musculoskeletal problems or carrying the burden of mental illness. Historically, what we have done is send them to the doctor, give them a certificate that says that they cannot do anything, and then send them home, and that is it.

The lazy welfare State—that is what it has done, and we do not think that that is good enough. So our Ministers have devised a whole new way of bringing up the information about those 20 years and of giving us the tools to enable us to decide what can be done with a 23-year-old with significant depression—

💬 Tim Macindoe: Give them hope.

—give them hope—so that they do not find themselves on an invalid’s benefit until they turn 65, when they go on to New Zealand superannuation, because we believe that that is not good enough for those New Zealanders. So that is what we are seeing the first signs of in this Budget, and that is what the next Budget will certainly focus on.

This is all happening in the context of a softening economy, but the good news for those who do depend on the Government Budget for their welfare is this: we have an adaptable, resilient economy that will enable the Government to sustain the income support and the programmes that get them through day to day and week to week, because in the broader economy, New Zealanders are adapting quickly to events like the sharp drop in dairy prices. They are not sitting around like the Opposition with their head in their hands crying “Panic—where’s the Government?”; they are out there on the dairy farms, in the mud, in the toughest part of the year, getting on with changing what they do, where they can change it, and working out how to get through one or two tough years, because they have long-term confidence. That is where Labour members failed the test. At the first sign of a softening in the economy, did they show long-term confidence in the New Zealand economy and the New Zealanders who make it work? No, they said “Crisis.”, they said “Panic.”, and they said “Where’s the Government?”. Well, no one else in New Zealand is doing that; they are getting on with the job.

The Labour Party used to be a sensible, middle-of-the-road party, as exemplified, apparently, by Stuart Nash. He is meant to be the sensible centre, but he is out there marching against free trade. I never thought that I would see the day when I would see the sensible centre of the Labour Party marching against free trade, because if there is one thing that we used to all agree was at the core of New Zealand’s prospects in the world, as a small trading economy, it was free trade. And now the right wing of the Labour Party is against it. In some respects, I should not be surprised. It withdrew from the bipartisan consensus on the Reserve Bank legislation. The Reserve Bank legislation is gone, free trade is gone, and fiscal discipline will certainly go under Grant Robertson, the spokesman for student unions from the 1980s. In case Labour is not aware, he is still doing it like he was then. He is still doing it, except that students used to be against plagiarism. That was a fundamental principle of university life: do not plagiarise other people’s ideas. Well, I just wish that the Labour Party would plagiarise ours, because then New Zealanders would think that they could support the Labour Party, but, instead, the Labour Party is getting increasingly dragged to the left, opposing free trade, opposing the Reserve Bank legislation, and, oddly enough, also opposing increases in benefits for New Zealanders—increases in the benefit level.

I have asked the question before, and Labour has not answered it: if it opposes increases in benefits, what is the Labour Party for? Increasingly, what it is for is rent-a-crowd for the Greens.

I am sorry to interrupt the member—[Interruption] I am sorry to interrupt the member, but his time has expired.

I begin with a very solemn duty to the people of New Zealand and, principally, to those many people from overseas who may be interested in investing in New Zealand, which is to point out that that, believe it or not, was the nation’s Minister of Finance and that is the best he could do. If there is one thing that has become patently obvious in this Budget, which was obsolete on the day it was delivered, it is that this Government does not have a plan. It has nothing to say to the hundreds of thousands of New Zealanders who are doing it tough, who have been squeezed, and who are looking for a future. Well, they will not find it on that side of the House, and they will not find it in that person who parades as the Minister of Finance, because the Government has no plan. Actually, that is not quite correct. We have discovered, in today’s question time and in that speech, that there is one plan emerging, and it is all around tourism.

We have not heard about tourism for most of the last 7 years, but now a new tourist opportunity has opened up. It is going to involve weekly visits to the Cabinet room and the Government is going to call it “Fantasyland Tours”, because that is all it has got left. Government members have lived for the last 7 years with their heads buried firmly in the sand, with a rising tide of indebtedness by the Government, concern by the people, and falling dairy prices, and they have nothing to say about any of it. It was a Budget, as I said, that was obsolete on the day it was delivered.

The Government’s sole claim to fame is that on 1 April next year, after years of poverty by those who are doing it the toughest, those who are dependent on a benefit to get by, it is going to increase benefits by $25 a week—well, some of them, anyway. This follows its great strategic decision in 1991 to slash benefits harshly, and it now claims credit for half undoing what it did wrong 20 years ago. That is its plan. That is all it amounts to. There is no morality, no principle, and no real looking after of those who are doing it the toughest. That is all the Government has to say and do.

Just remember what the underpinning of the expectation of this Budget was: that unemployment would fall to 5.6 percent by March. What is happening now? It is rising. Government members said that unemployment would be 5.1 percent by next March. Westpac is now saying it is going to be 6.5 percent. The Budget forecast the milk price to be over $3,000 a tonne by now, and now it is less than half that. This is the Budget that got it all wrong. This is the Government that is getting it wrong for New Zealanders every day. There is no plan, there is no idea, and the Government does not know what it is doing. There is spin, there is rhetoric, there is dissembling, and there is obfuscation. That is all it has got left—and Mike Hosking. That is the other part of the plan. It has got him as well. He will look after those members for a while. He will look after them for a while, but it will not last. The truth is this: New Zealanders are far too canny for that. They know a dead man walking when they see one. They see it in that Minister of Finance and they see it in this Government.

We know that Government members are desperate because all of a sudden, 7 years into their Government, when they have stood on the sidelines cheering on dairy, cheering on wood prices, and cheering on the things that they have had absolutely nothing to do with—reducing interest rates, a stratospheric exchange rate, and high dollar—they have started talking about diversification, but they talk about it only when they get the patsy questions in Parliament. They talk about it around here for the first time, only because they have not done a thing about it. They have ignored it. They have ignored what has been happening in New Zealand.

They have ignored for far too long what has been happening around the world and the impact that those things have been having on the New Zealand economy, and now the chickens are coming home to roost. Hard-working New Zealanders are now paying the price. They are losing their jobs. They are losing their jobs in the hundreds, and Solid Energy workers are just the latest. Who knows what is going to happen to Landcorp workers when the Government starts flogging off bits of that successful enterprise.

The truth is this: when this Government took office, it had the strongest balance sheet in the OECD. That is what it had in 2008—zero net debt and the lowest unemployment in the OECD. My, how things have changed. It has been a long 7 years—a long 7 years. The Government has not diversified the economy. It promised that it would lift the proportion of the economy given to exports; it has gone down. The Government cannot even get that right. The Government has scrapped research and development tax credits. It introduced unaffordable tax cuts. It has made housing unaffordable for more people, and property speculation is now running rampant. This is the legacy of Bill English. This is the legacy of the most ideological Minister of Finance we have had since Ruth Richardson, and he was around at that time as well. He obviously learnt a thing or two.

The Government ignored the Goldman Sachs reports last year that predicted a dairy glut that would last the next 5 years. Steven Joyce dismissed it because the Government just does not want to face up to the truth, and now we have had a collapsing dairy price and nothing else to show for it. Well, I can tell you this: what has become very clear in the last few weeks and the last few months is that New Zealanders are sick and tired of the spin and the obfuscation. They are sick and tired of the Government trying to put them off the scent. They do not want a flag referendum. They do not want to spend $26 million on a distraction; they want a Government that is going to deal with the answers to the economy today. They want a Government that is going to stand up for the people who are doing it tough, who now include a large number of dairy farmers who traditionally voted for National. They are the ones who are looking for answers. They are the ones who are looking for the leadership that this Government has proven incapable of providing.

I want to say this also. I want to tell members what the people of New Zealand are also sick and tired of. They are sick and tired of Government support parties that parade around the country criticising a Government that they are part of, telling people that they can do better, criticising it for all manner of things, moralising, proselytising, and saying that it would never happen with them, but then going ahead and supporting the Government. So the challenge is very clear to the support parties to this Government: stick to your own word. Stick behind your words. Vote against this Budget. Show this Government that you stand for something. Do not say one thing to the people of New Zealand and then come around here and slink around and do a different thing in this House. Think very carefully, because New Zealanders are looking for leadership and, most important, they are looking for honesty. They want an honest picture about where things are at. They want an honest picture about their prospects and their hopes, because they are not getting it from here.

The country is calling for a different path. People are calling for a different approach, and they do not want State houses—which are there for the most vulnerable, for those who are doing it the toughest—sold off. They do not want Landcorp sold off. They do not want Crown business after Crown business run into the ground by negligent, reckless Ministers who are asleep at the wheel, turn up and get the salaries, and drive the cars but do nothing for it.

New Zealanders are looking for something different. They want a Government that cares about this country and its economic prospects. They want a Government that is thinking about the future, the future of work, and where those work opportunities are going to come from. They want a Government that is thinking about future investment opportunities. They want a Government that cares about job generation and new investment and investment that generates new wealth. They want a Government that cares about the incomes that New Zealanders are on. They want incomes that mean they can live in dignity and fulfil their dreams and aspirations, because for far too many people that is slipping by.

There are so many New Zealanders now, thousands of them, who cannot afford to buy a house in the city in which they live and work—Auckland—and that is a disgrace. What do Government members do? They bury their heads in the sand: “Not our problem; we do not have an answer.” Actually, what they are saying is that they just do not care. New Zealanders are sick and tired of being treated by this Government as though they do not matter. New Zealand needs a better job. It needs a better Government, and it is on its way.

Better government is here, and it will not be coming from that man, Andrew Little, who is the only dead man walking in this House. The best part of his speech was when he mentioned Mike Hosking. It was the only time that his members actually supported him during his speech. What a pathetic speech by someone who is attempting to lead what was, but is no longer, the biggest Opposition party in this House, because the Labour Party does not stand for what the Labour Party should stand for. It does not stand for those things that the member tried to talk about at the end of his speech. What the Labour Party stands for is division. It is a party of division that wants to pit New Zealanders against each other. It is a party that does not want to see people who do not have English surnames coming to this country. It is a party that does not believe in a free and open New Zealand that can go forward and take its rightful place in the Asia-Pacific region. It is a party of Opposition that has no plan.

That member’s whole speech was about the plan of the National Government, and we will come to that in this Budget debate.

💬 Hon Annette King: What plan?

OK, we will come to that, Annette King. The party opposite gave no plan. It had no plan and it had no direction, but I will tell you what the plan of the Labour Party is. The plan of the Labour Party is to put taxes up. It wants to put taxes up for hard-working New Zealanders. So for those young children out there who are going to school in New Zealand, there is no incentive to get a better education under the Labour Party. There is no incentive to go out there and get a good degree at a university. There is no incentive to become the best you can be in your work. There is no incentive to start your own business. There is no incentive to go out there and make something of your own life, because under the Labour Party everybody will be taxed at the highest levels. That is what the Labour Party stands for. It is a redistribution party. It is not an aspirational party. It is not a party that actually backs people and New Zealanders. It is a party of pain and it is a party of failure, and the public knows that and understands that.

When we look at the plan for New Zealand, I want to take you to Hamilton and show you the plan that is working in that great city. That great city, which is a young city with one of the youngest populations in New Zealand—40 percent of the population is under 25. Those people see a vision for New Zealand. They see a country that is moving ahead. They see electoral responsibility. They see a Government that has delivered for them the greatest infrastructure investment in the Waikato for two generations. They see for the first time that roads that were promised for many generations have actually been built. They see new schools going up in their electorate. They see a hospital that is being redeveloped. They see that there are opportunities in work and employment in that city. They see a plan that is working, so that every young child in Hamilton now knows that if they go to school, they are going to get the best education we can deliver. They know that they are going to get the opportunity to go on to tertiary education. They know that through tertiary education at our fine university, the University of Waikato, they can come out as a graduate and get a job in an area that will be part of the progressive economy of New Zealand. And that is what this Budget delivers. Then they know that they can actually build their own businesses, their own jobs, and their own communities around that hard work. That is what we are doing in this Government.

We are supporting the vision and the intellect of our people. We are supporting the ability of New Zealanders to make the right choices and to deliver the right results. We are not a party of division, like you see on the other side of the House, where the Labour Party does not know what it stands for and is trying to be everything to everybody but is being nothing to anybody in the process. We see a Green Party that is the far left of communism in the modern society, and the Labour Party is trying to be part of that as well. We see a New Zealand First Party that is against immigration of any sort, and its nationalist approach to this country would be to the detriment of this country going forward. The Labour Party has grasped on to both of those things. It has taken the far-left agenda that the Green Party is talking about and has taken the anti-immigration approach of New Zealand First. That is the Labour Party of new. The Labour Party of old would never have protested about free-trade agreements, as Bill English just said. The Labour Party of old would have been standing up for international arrangements, because it knew that those are the things that are in the best interests of all New Zealanders going forward. The Labour Party of old would not have voted against the welfare reform that was in this Budget—the first time in 43 years that a Government has delivered through that part of the system for those people most in need. And the Labour Party had to vote against it. That is a shame on the Labour Party, and that is not the case of the real and true vision that that party should be engaging in.

I say to you members of this House: look at those hard-working students out there. Look at those people who want to have a future in this country. Look at those people who want to make New Zealand their home, and let us welcome them. Let us put the mat out. Let us say: “If you want to make New Zealand your home, we will enable you to do that. If you want to stay in New Zealand, we will make that happen for you, and if you want to build a more prosperous and dynamic country, we have got a plan. We have got a plan that is working. Come to Hamilton and you will see that plan and you will see that it is working.” The Labour Party members over there know it, and they will not come to Hamilton, because they know it is working and that there is no chance for them there at this stage.

💬 Hon Annette King: Some of us were there long before you were.

Oh, “Some of us were there long before you were.” Oh, Annette King—well, she did nothing for Hamilton. She never has and never will, so good on you. A long time and no achievement—that is Annette King for you. We all know about Annette King, do we not?

When we look at those initiatives in the Budget—a $790 million package to reduce hardship amongst children.

💬 Hon Trevor Mallard: Did you take your drill to him, Annette?

Oh, there is another member over there who at one stage thought that he came from Hamilton. He lasted one term, I think, and got chucked out. He was a great help to Hamilton, was he not? Then he left. He left—he left when got he voted out. He could not handle it. He did not actually believe in the city. He came down to Wellington to try to get a safe seat. That is what happened to Trevor Mallard. When it got tough for him, he left Hamilton behind. He did not think about the people of Hamilton. I imagine that in 1970 he was going around the streets of Hamilton West, saying: “Oh, I’m going to do everything for you. I’ll be there representing you. Vote for me. I’m Trevor Mallard. I’m the bright new face of the Labour Party. I’ll be there.” As soon as he lost, he was out of there. He was gone. He came down to Wainuiōmata, did he not? Yes. What did you do for Hamilton, Trevor Mallard? Nothing. He probably closed a few schools while he was the Minister. That is about all he would have done. [Interruption] Yes, I want to hear from you again, Trevor. That would be great to see.

There is a $790 million package in this Budget to reduce hardship among children living in New Zealand’s poorest families. That is a big attempt, in very difficult times, to do something for the next generation of New Zealanders. It is about finding out the people who need the Government’s assistance, and delivering it to them. That is what this Government is about. We have got a plan. We are looking at what is actually needed for our country and our people, and we are then delivering that kind of careful management of public spending, which goes hand in hand with investment in public services and support for the country’s most vulnerable. That is the difference between this side and the Opposition. This is a Budget that has delivered in difficult times. There is no other way that you can look at it. These are very delicate economic times around the world, and we have—

💬 Hon Damien O’Connor: Rock star economy, we were told.

Pardon? What does this member—

💬 Hon Damien O’Connor: Rock star economy—rock bottom.

Mr O’Connor tries to talk about the dairy industry but he has not milked a cow a day in his life. He would not know what a cow was.

When we look at this, the world economic situation is a delicate situation. We cannot go out there and make wild promises, as the Labour Party would like to do. We have got to be reasonable and rational and do what is right, and that is what this Budget does. It actually enables New Zealanders to have some comfort that this Government is looking after those who are most in need. It is a pleasure to be part of the National Government that has delivered this Budget, a Budget that is fair and that is open. I see that the New Zealand First leader has walked into the room, and I guess we will hear, all through his speech, about his anti-immigration, anti-people coming into this country approach. That is the typical approach that we would get from that member. It is about all he is worth. Half of his caucus came in on the ticket, and I would like to see how they all react now.

We know what the Opposition is going to say. We are going to have the far left saying that we should go back to the Stone Age; we are going to have New Zealand First not wanting anybody in New Zealand, apart from those who were here in 1950; and we are going to have the Labour Party, which does not really know and which just wants to be in between the two of them. That is the Opposition, whereas on this side, we have got a plan—a plan that is working, a plan that has delivered, and if you want to go and see where it is working, come to Hamilton any day.

For those who did not know, the previous speaker, David Bennett, is actually the chair of Parliament’s Finance and Expenditure Committee—a frightening thought. He said that there are things that are working in Hamilton. Well, I can tell you this: the statue of Riff Raff, which stands in the main street of Hamilton, is working harder for Hamilton than the member for Hamilton West is.

💬 Tim Macindoe: I take great exception to that, Grant.

Sorry—that is not true; Hamilton East. I apologise to Mr Macindoe. The member for Hamilton East stands up to take a call in the Budget debate to tell New Zealanders what great plans the National Government has for the New Zealand economy and how it will lift New Zealand out of an economic downturn. But, instead, we have a speech from the member for Hamilton East about the fact that he cannot understand the policies of other parties and that he is unable to articulate what this Budget will do to drive New Zealand’s economy forward. That, unfortunately, is the story of this Budget.

It is very important, when we look at the Budget, to take a look at the downside scenarios. These are the things that Treasury and the Minister of Finance tell New Zealanders are unlikely to happen—the worst possible outcome of this Budget. If we look at those downside scenarios, we see GDP of 3.3 percent in 2015 and 2.4 percent in 2016. Already, the Government has had to admit that the worst possible outcome of this Budget is not even going to be the best possible outcome, actually. The Government’s forecast is telling it that it will scrape towards 2 percent growth in 2015 and 2016. Westpac economist Dominick Stephens has said that it will not even get up to 2 percent in that 2016 year. So the worst-case scenario in the Budget is the very one that is now playing out, and the reaction of the Government and of Bill English is to sit on their hands and to say: “It’s all fine. Watch out for those automatic stabilisers; they’ll sort everything out.” Well, the reality is that they are not sorting everything out. Indicator after indicator in our economy is showing that this Budget is a failure. It is big on politics and big on spin, but very, very small on the policies that will actually grow the New Zealand economy.

We look again at the downside scenario of the Budget. Unemployment is forecast to go down to 5.6 percent in 2015 and to 5.1 percent in 2016. The latest household labour force survey says that we are up to 5.9 percent—146,000 New Zealanders are out of work. Eleven thousand more New Zealanders are out of work at this time this year than there were at the same time last year. Then there is the forecast of 5.1 percent in 2016. Again, commentators right across the spectrum are forecasting unemployment to keep rising. The Westpac survey last week said that the unemployment rate will be 6.5 percent. That is worse than the worst-case scenario in this Budget. So for speakers on the National Government side of the House to stand up and proclaim that this Budget is somehow going to lead New Zealand into a strong economic future simply is not backed up by the facts. They are now going to have to look at all of those forecast scenarios and bring in the downside scenario. That is the story of this Government. That is the story of this Budget.

We were told by the Prime Minister that we were on the cusp of something special and that we were on the cusp of an economy that was going to deliver for New Zealanders. The reality is that that has not happened. There are three legs to the stool of this National Government’s economic approach. The first of those legs has already been kicked out—that was the dairy boom. Make no mistake; the National Government was fully prepared to take credit when dairy prices went up. Day after day, Bill English would come into this House and tell us how well the economy was doing, when farmers were getting payouts at the $8.40 level. But now, when those payouts are forecast to go down to $3.85, it is everybody else’s fault all of a sudden. All of a sudden it is nothing that the Government could have foreseen. Well, that is simply untrue. A Goldman Sachs report that came out in June last year warned of a 5-year global dairy glut. When that was raised with Steven Joyce, he laughed. He laughed at the prospect that the one thing that was truly propping up the New Zealand economy was on its way down. And now, when the chickens have come home to roost—or the cows have come back into the yard—Steven Joyce has no plan B.

That key leg of the economic stool is gone, and all the talk is about the fact that suddenly we have found a tourism industry. Suddenly the wine industry and information and communications technology are the answer. Put together, all of those things will not match what is being lost in terms of dairy. And that is because, after 7 years, the word “diversification” has finally left Bill English’s lips. Finally, he is saying that that is what the economy should be about, and it has not happened. That is why not only the Opposition parties but also groups like Federated Farmers and 75 percent of the chief executive officers in the Mood of the Boardroom survey are calling for a plan B for the economy. They are saying that plan A is not working and are asking where plan B is, and we see none of that from the Government.

That is because the other two legs of the stool still make Government members believe that there is something happening in the economy. There is the Canterbury rebuild. What is now quite clear about the Canterbury rebuild is that it will stop adding to the growth story this year, if it has not already. It does not mean that there are not projects happening in Canterbury. What it means is that new activity is not going to be coming on stream, and economists are now telling us that by the end of 2017 the Canterbury rebuild will actually be a drag on the New Zealand economy, because we have not seen from this Government a proper plan for economic development in Canterbury. The rebuild is not a plan; it is coming to an end, and there is no sign from this Government that it has got any replacement for it. The Canterbury rebuild has been responsible for about one-third of the growth rate in the past few years, and it has gone—and so has the second leg of the stool.

The third leg of the stool of the National Government’s approach to the economy is the one that is remaining, and that is the Auckland housing bubble. In this Budget, we looked for the answers from the Government—that it could respond to the huge supply and demand problem in Auckland housing—and the answers were not there. What we got were half-baked ideas from Nick Smith to build on power stations and in cemeteries, but we saw nothing real in terms of getting the supply of housing that Aucklanders need or dealing with the 20,000 house deficit that Auckland already has—plus the 10,000 a year that it needs to build. There is no sign of that.

The Government could have picked up some ideas from Labour. Government members have talked about plagiarism a lot on that side of the House today. Well, they have plagiarised Labour’s ideas for years: Working for Families, interest-free student loans, and early childhood education, and we had the immigration policy just the other day. Well, I invite them to plagiarise the KiwiBuild policy, because that would actually get some housebuilding going, that would actually stimulate the economy, and that would actually start to deal with the Auckland housing crisis. But, instead, Nick Smith is keeping his head in the sand.

On the demand side is the Government’s great idea of having a register of foreign buyers—except that it is not really a register—and when we come to debate that bill in the House, we will see all of the holes in it. There is no real plan to crack down on the speculators who are driving up Auckland housing prices, and that bubble will burst at some point. It will happen, and that is the final leg of the stool in terms of the National Government’s approach to the economy. So this Budget is not about a plan for New Zealand’s future. It is not about making sure that we build the skills that we need, that we get the technology that we need, and that we have the infrastructure that we need. It is a piece of political spin and of clever politics to be able to stand up here and say “We’ve increased benefits for the first time in 43 years.”, even though that is not true and despite the fact that those on the lowest incomes in New Zealand benefited from Working for Families—that was a significant increase denied. But that is what this Budget is about. It is about spin.

New Zealanders deserve better than this. New Zealanders deserve a Government that will not sit on its hands, that will not sit on the sidelines, and that will actually work as a partner. This is starting to happen in the regions. Every time Labour MPs go out into the regions now, what we hear is: “We don’t want you to come and tell us what to do. We want to work with central government, local government, and businesses in the regions to grow the jobs that New Zealanders want and to grow the jobs that will deliver sustainable wages to New Zealanders.” And that plea falls on deaf ears on that side of the House. All of the mayors and all of the business leaders in the regions—their message is consistent: they want the Government to be a partner. They do not have that from the National Government; they will have that from the Labour Government.

We need a Budget that has a plan to diversify the economy, to grow the regions, to build housing, to build skills, and to prepare New Zealanders for the future of work. None of those things are in this Budget. This is a wasted opportunity from a Government that is out of ideas.

Tēnā koe, Mr Deputy Speaker. Tēnā koutou e te Whare. I rise to speak on the third and final reading of the Appropriation (2015/16 Estimates) Bill, the final reading in the Budget debate.

The Budget is all about priorities. It tells us what the Government really values and what it thinks is important. The Green Party believes that this Budget is very much one of missed opportunity. It is the National Government’s seventh Budget and it demonstrates that what it really values is protecting the status quo.

There are three big economic challenges that are facing us in the long term, and they are what the Green Party wants to prioritise: climate change, growing inequality—that is, the gap between those who have and those who do not—and rebalancing the economy so that New Zealand is actually earning its way in the world. I know that New Zealanders care about all of these and, in particular, in climate change they are already taking actions in their own lives, but, unfortunately, the Government is failing to make it easier for them to make the changes that need to be made for us to respond to climate change in the long term.

I know that New Zealanders want to live in a country that is fair, where everyone has the same opportunities, and where we do not have a growing number of children growing up in poverty, which means that they have fewer opportunities. They end up costing us more in the long run because they are not able to fully participate in society, and we have higher health costs and higher costs in terms in crime. So there are many, many reasons to address inequality. I know that New Zealanders value living in a fair country and, unfortunately, our country is becoming less fair.

Finally, rebalancing the economy is something that the National Government has already promised to do. Bill English used to talk about it when National was first elected. It has completely failed to do that. Not only has the share of the economy that is exports failed to increase; it has actually fallen. We have seen the largest gap ever between growth in the non-tradable sector versus growth in the tradable sector—it is the largest gap since 2000. The current account deficit is still at over $8 billion and is forecast to increase in the coming years.

These are all things that I know New Zealanders care about—and the Green Party has a clear plan and a set of solutions that would address all of these issues—but the National Government has failed to address these issues. I realise that all three of these challenges were problems when National was elected. We had growing carbon pollution emissions back in 2008, we have had a huge growth in inequality in the past few decades, and, of course, we had an even larger current account deficit when National was elected. But what it has failed to do is make progress on any of these issues and that is because, ultimately, it is a Government that is very much focused on protecting and preserving the status quo, not one that is actually going to respond to the challenges and create a cleaner, greener, fairer New Zealand in the long term. It is a very short-term focus.

What are the Green Party’s solutions, which were not included in this Budget? Firstly, to deal with climate change, we have a really clear set of solutions because we know that we cannot continue to grow our carbon pollution for ever, we are not going to be able to have an economy that thrives in the long term if we do not respond to climate change, and, most of all, I know that New Zealanders care about their children and their grandchildren. They want them to live in a world with a stable climate, one where our economy can actually thrive even when we have a carbon-constrained world. In the talks in Paris that are coming up at the end of this year, unfortunately, New Zealanders are not going to have a target that we can be proud of, but, most of all, we do not have a plan in this Budget for how we would actually reduce emissions.

So how could we reduce emissions? Transport spending is a first and obvious one. Without increasing the amount we are spending on transport and simply by redirecting it to the most productive, efficient projects we can massively reduce our carbon emissions for transport. We could also reduce the cost to households and businesses of getting around the country. We could also reduce our current account deficit, because at the moment we are spending over $13 billion on importing vehicles and the oil to run them. If we had a more balanced transport system in our major towns and cities, and between our cities, and if we actually invested in the smart rail projects and busway projects—safe walking and cycling. I know that finally the Government is doing a little bit on cycling, but if we actually invested in those smart projects, we would save households and businesses money, we would save the Government money, we would reduce carbon pollution, and we would reduce the amount that we need to sell overseas in order to pay for getting around. It just makes sense. It is a smart Green solution.

In energy we could have, and should have, a target of 100 percent renewable electricity generation in this country. It is entirely achievable, and we showed a fully costed plan in the run-up to the election last year as to how we could do that. Very small investments by the Government in electric car charging infrastructure, for example, could help to facilitate the switch to electric vehicles, where appropriate. Our climate tax cut was the first change in tax structure that would start to put a price on pollution and return the revenue of that to households and businesses in the form of a tax cut. It makes sense to tax pollution so that we get less of it, and we can return that revenue to households so that they actually get a tax cut. It is just common-sense stuff that this Government could be doing, and yet it is failing to do it.

The next big challenge—also related, and the solutions are related—that the Green Party has proposed specific solutions to is inequality. We found out last week that 45,000 more children are living in poverty. That is an economic and moral failure on the part of this country, and there are some simple, practical solutions we could take that would help to reduce the gap in inequality. One of those is dealing with the housing problem in Auckland by putting in place a capital gains tax. We would start to address the imbalance. Right now there is a loophole, and we want to close the tax loophole on housing so that we get investment in the productive sectors of the economy rather than just in housing, but that would also help to achieve more affordable housing.

That is not the silver bullet. There are a lot of other things that we have to do. Introducing protection for tenants and renters is something that we are very far behind on in this country, and it makes sense to look after tenants. That also helps address the housing affordability issue from the perspective of both the renters and those who are looking to buy, and it ensures that people have access to warm, dry, secure housing, which, surely, is a human right and is one that makes economic sense.

We also proposed our school hubs plan, which looked at ensuring there was a nurse in decile 1 schools, and low-decile schools would all get a coordinator to ensure that kids are receiving the social assistance they have a right to receive. It would put kids at the heart of not only our education policy but also our social policy in creating a hub, which has been demonstrated overseas to work really well. It does not cost a lot of money and it has huge social benefits. Ensuring that children in low-decile schools have enough to eat and that they are not going hungry—not only do we want breakfasts in low-decile schools but hot lunches. It makes sense because kids will learn better when they have access to food and, really, it is something that all of our children should have a right to. Additional things to deal with inequality would include raising the minimum wage. We would start subsidising low-wage employers and would extend the in-work tax credit to beneficiaries because every kid deserves to have that right, whether their parents are in work or not in work.

By addressing the housing issue and by looking at the form of urban development in the cities that have the most growth going on, which are Christchurch and Auckland, we could kill—well, not kill; we could address multiple challenges with a few win-win solutions. We could reduce pollution and reduce emissions and we can reduce inequality through some of these practical, proven policies that are being implemented in successful economies overseas. We would be looking after our people and looking after our environment, but, most of all, it just makes economic sense.

All of the policies that I have just cited do go quite a long way to helping with the rebalancing of the economy, so that we are not so overly invested in just a few simple commodities and that, ultimately, we are not on this rollercoaster, as we are right now with the slump in dairy prices. Having a more diverse economy—additional policies that help with that are investment in research and development, as we are very, very under-invested in this country in research and development, and putting a price on pollution as part of taking that first step toward ensuring that we have a balanced, cleaner, greener future, that polluters are paying the cost of the pollution they are putting out there, and that households and businesses are better off and have more opportunities to thrive in the long term.

The Green Party has a very practical, costed vision, and we are giving voice to those New Zealanders who are already making changes in their own lives to deal with the long-term challenges that the National Government is absolutely failing to deal with. We want to see action on climate change, we want a fairer New Zealand with reduced inequality, and, ultimately, if we address those issues we are going to have an economy that is thriving globally. Thank you.

The National Government’s claim for some time has been that it is a wise economic manager.

💬 Alastair Scott: That’s right—that’s right.

Oh, “That’s right.”? I know that is right. We do not get up and say things that are false. Those members have claimed that they are wise economic managers, that they know what they are doing, and, above all, that they can be trusted. Now all their windy rhetoric has blown away, we have found out about this rock star economy they campaigned on in 2014. They went up and down the country talking about a rock star economy, and others in the political hemisphere, namely New Zealand First, said: “This is no rock star economy. This economy is heading on to the rocks.”

We had the courage of our convictions to go down and tell Federated Farmers before the last election precisely what was going to happen. Their leadership sat there and, against the mass interests of their membership, decided to ignore us. So may I ask my friends in the National Party: who was right then, and who is right now? That party is New Zealand First. We are not late on to the scene, and we know a darned sight more about the fundamentals of this economy than any of that bunch of newcomers over there being misled by their leadership.

The member for Invercargill, the centre of a farming electorate, part of a province that is the biggest exporter per capita in the country, smiles and laughs at the demise of so many people in that part of the world. All those farmers who have engaged in the dairy conversions are now in deep and big trouble. They were in big trouble in that electorate in the first place, but now they are in deeper trouble. It is no laughing matter for those members around the country—Palmerston North, Taranaki, Whanganui, and the Wairarapa—who all swore: “Put me in Parliament and I’ll be your voice.” Oh really—their voice? We have not heard a mutter, nor a syllable, nor a sound or a murmur from these people about provincial and rural New Zealand.

When its windy rhetoric is blown away, you will see a Government of spin and drift. Now more and more National Party people—and they are becoming legion—realise that John Key is no economic genius. Oh no! They realise that the best training to run an agrarian, developed, export-dependent economy is not the Wall Street Journal or Merrill Lynch, and it is not speculating against your own country’s economy and calling yourself some sort of banking genius—no sirree. More and more people out on the farm, because they are hard up against it, are realising that a party with a name called New Zealand First has got it right.

Look, manufacturing, the critical thing for employment, is down against GDP from 33 to 26 percent, and all they do over there is laugh and scoff. I mean, these are jobs, this is employment, this is how local regions build up—how towns and cities in the countryside and the rural and provincial New Zealand areas have a chance of surviving.

Take, for example, exports as a percentage of GDP. Is it up?

💬 Hon Members: No.

No sirree, it is down. And then you have debt. Well, is it down? No, it is up eight times from what John Key and that fiscal genius from Dipton inherited. When he came here it was $10 billion; now it is heading towards $80 billion, and if any other party in this Parliament ever tried that they would be jeered and scoffed at.

So New Zealand First’s message to the so-called power elite of this country, those who have got wealthier and wealthier while the mass majority have got poorer, is that you are not going to get away with this con anymore. We are going to expose you for what you are.

Is homelessness down or up?

💬 Ron Mark: It’s gone up.

It has gone up. Worse than that, you have middle-class people who cannot buy a home. They have got the background, the training and the employment, they have worked for decades, and they cannot buy a home.

Unemployment—Mr Key in the House today got up and he said: “We employ more people now than we ever have.” What a genius—what a genius! Since 1938 every Government has been able to make that claim. Here is the worst thing: our population is massively growing, not from natural growth of our population—no—but from mass immigration. Unemployment is going up, and do not forget that the National Government has the most nakedly hypocritical measurement. One hour of work a week takes you off the unemployment register—just 1 hour a week. There is not one person over there who could survive on that.

Those members are so heartless, and they have so forgotten the principles of that once-great party, National, when the word was spelt with a capital “N” and not the small “n” as it is now, that they think this is OK. They know that the day will come that New Zealanders discover in enough numbers the truth of the way they have mishandled the economy, then they will all be gone—like lightning—in Whangarei and the Manawatū.

💬 Ron Mark: And the Wairarapa.

And the Wairarapa.

They have already gone in Northland, of course. They went down in a screaming heap in Northland, and do you know why? We went up and told them the truth, and people said: “Well, I thought there was something wrong, but now I know—we’ve got an authority. Now we’ve got an authority who’s saying it.”

💬 Tim Macindoe: The vanity, the conceit—unbelievable.

No, it is not vanity. Vanity is the member from Hamilton West sitting there and shouting out when he cannot point to one thing he has done since he has been in Parliament. Just name one thing.

💬 Tim Macindoe: Oh, I can tell you plenty.

Look, I will give you half a minute. I will come back in half a minute’s time. Please find, in half a minute’s time, just one thing that member has done—

💬 Tim Macindoe: Mr Deputy Speaker, I am happy to take the call.

He clearly has not studied points of order either.

💬 Tim Macindoe: I’m happy to take the call. Am I being given the call?

No, he has not been given the call.

💬 Mr DEPUTY SPEAKER: You have not been called for anything. The Rt Hon Winston Peters has got the call.

No, sit down, sunshine. Sit down—there is a good chap.

💬 Tim Macindoe: The member said he’d give me half a minute, and I was happy to take longer.

Sit down.

💬 Mr DEPUTY SPEAKER: Order!

Here is this former teacher. He is now a whip and he does not even know how the timing system works for parliamentary speeches. He gets up and asks Mr Deputy Speaker, who seriously understands the law here, this innocent question.

💬 Mr DEPUTY SPEAKER: Please do not bring me into this.

But then again, I suppose he got his job as the National Party’s whip in a raffle—1 hour a week.

💬 Ron Mark: 1 hour a week.

1 hour a week—exactly. Is unemployment down? No, it is up, and 1 hour a week gets you off the register. So our true unemployment, if you look at the people who want more work, who want more than 10 hours, 15 hours, or 20 hours a week to try to help their family to survive—that is all increasing.

That does not stop the National Government. If it does not turn off the immigration tap, it can carry on with this consumptive economy, but we all know it is a bubble and it is going to blow, and it is going to blow in the Auckland housing market. Why, when you are confronted with such a housing crisis in Auckland, would you not stop artificial demand? The reason is that National’s shallow, venal, egregious policy is all based on consumption. It is not based on exporting. It is not based on manufacturing.

💬 Ron Mark: Donations.

Oh yeah, and massive donations from foreigners.

💬 Ron Mark: Oravida.

Yeah, Oravida—massive donations from foreigners, hundreds of thousands of dollars. National members go into a campaign dripping with money, promising the ordinary people they will look after them, and they do not give a damn. Rock star economy? No, just a lousy one-night stand. A lousy one-night stand. More and more New Zealanders are coming to understand that.

Let me just tell you this: a former US President, George W Bush, said this about this sort of economics. He called it voodoo economics—voodoo economics—and voodoo it is. What have those members done since they have come into power? They cannot talk about anything they have done, other than bail out their mates in South Canterbury Finance, and they were so duplicitous about that. They never capped the underwriting—it blew out by $800 million.

The member for Hamilton West is shouting out there. He is, typically, making a fool of himself. You know what the English say, of course. The English say: “The malady of the ignorant is to be ignorant without knowing it.” He is a prize example. No wonder, after all this time on the backbench, no one is going to promote him to the most junior job, as a junior Minister. He should be in Cabinet. If he were any good he would have been in Cabinet a long time ago. I want to say to that member that if he is not making any progress, he should not blame his colleagues. Look in the mirror. Walking incompetence does not cut it. Walking incompetence does not cut it, and shouting out, unrestrained, unrefined, without any class, is not what the National Party used to do.

Now I come back to my point. Which party said that our dollar was massively overvalued? Only one party said that. Which party said that we are not going to allow our land to be sold to foreigners? And we want a land register and a home register so we will know what we are talking about and not get up like Steven Joyce today. He gets up and he—[Interruption] What is the problem?

💬 Tim Macindoe: Your time has expired.

The ASSISTANT SPEAKER (Hon Trevor Mallard): About 3 seconds ago.

I did not get a bell.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I heard the bell, Mr Peters, because I was out there at the time.

Well, everybody is having so much fun we forgot. But I want to close by saying this: this Government should stop trying to pass the buck and, for the first time for a long time, own up to just how incompetent it is.

Just commenting on the member Winston Peters, who has just resumed his seat, I think some of the words that he used quite often were words like “hypocrite” and “duplicitous”. I am just—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I did not hear a member use those words. At least one of them, if referring to a member of Parliament, is out of order. The member is not allowed to repeat them. Either she has to take a point of order at the time or she has got to let it go. She cannot repeat them.

Thank you for that, Mr Assistant Speaker. I just wanted to remind the House that Winston Peters is the member who used to be the Minister of Foreign Affairs. He actually went overseas, under the Labour Government, touting foreign investment—actually selling New Zealand goods overseas. I have to give him one thing, though. He is consistent—he is just anti-everyone. On that note, and just commenting about that member who has just sat down, I am reminded of a lesson that my mother taught me a long, long time ago. It is a proverb in Korean that says “Bin KKangtong E Si kkeu reop da”, and I think there is actually an English version, which says “An empty vessel makes the most noise”.

I am happy to rise in support of and to praise the excellent, excellent work of the Minister of Finance, the Hon Bill English. The Budget he presented this year will give relief and support to thousands of Kiwi-owned businesses and workers right around New Zealand. It is a great pleasure to speak in support of this aspiration and the needs of New Zealanders.

It was a pleasure also to work with the Minister, caucus colleagues, and my fellow committee members on the Commerce Committee, which is a fabulous committee. I do not know whether you have actually noticed, but we work together very well. We even bring baking to our select committee. It is a very work-conducive and very happy—

💬 Scott Simpson: Collegial.

Collegial—that is right, Mr Simpson. It is a collegial committee. We work very well together. We worked very hard to pass the estimates vote for the issues that my select committee had oversight of. In the Commerce Committee we discussed a wide range of important areas that were being funded through the estimates legislation, which I am sure all members of this House have taken time to read. The appropriation for 2015-16 will give strong backing to the ongoing work of our John Key - led National Government.

The estimates for Vote Commerce are impressive. They see $153 million going into the commerce and consumer affairs sector to support enterprise, small business, and investment.

There will be $250 million for communication innovations in the mobile and broadband sectors, and that is very, very important because most of us tend to use our phones not just for telephone calls but also for broadband, for the internet, for social media, and also for watching television or YouTube and lots of other entertainment as well as using them for information gathering.

There will be $456 million for economic development. Economic development is the keystone issue for our party.

Also, there is $139 million for the tourism sector. Hot off the press, I saw in the press release from the Hon Paula Bennett that 1.4 million visitors—these are overseas visitors—have visited the Otago region. I am sure my colleague Jacqui Dean will be very happy about this.

💬 Hon Member: How many?

1.4 million international visitors, just to the Otago region, and that means they have spent $1.3 billion—not million, mind you, but billion. That is an increase in economic growth in the Otago region of 6.3 percent. That is well above other areas. I think that has to be growth. Someone commented earlier about a rock star economy. Well, I am very jealous that Otago has a rock star economy. Well done you, Jacqui Dean.

The appropriations are sound and reasonable, and are putting more workers in the workplace and businesses into profitable gain. This Government has worked well to support families who are working hard and to support businesses that are working hard, and, importantly, they in turn support the Government to work hard. It is almost a full circle.

I know that Julie Anne Genter talked earlier about the vulnerable people in this country. I think that all of us, right across this House, want to make sure that we provide for the people who are vulnerable.

I am reminded of a comment that the Prime Minister made. He said that to grow our economy, we are never ever going to get rich by selling to ourselves. We have to actually go out there and sell New Zealand produce, New Zealand products, and New Zealand technology to the rest of the world. We have to bring in foreign currency in order to actually grow the economy.

💬 Tim Macindoe: That’s why the South Korean deal was such a good one.

The free-trade agreement with South Korea is a fantastic one, Mr Macindoe—thank you very much for that—and I am just surprised that we actually had a bipartisan agreement across the House where Labour was supportive of our free-trade agreement.

I know that Mr Phil Goff has worked very hard to promote that. I see him at ethnic events promoting the fact that Labour actually supports ethnic communities. But I am very surprised that Labour actually supports members within its own caucus who promote Sino-phobia, almost. National was the first party in New Zealand to elect a Chinese member of Parliament, back in 1996. Opposition members seem, somehow, to make “ethnic” and “Kiwi” mutually exclusive, so that they do not actually go together. It is sort of like water and oil. It is as though ethnic New Zealanders do not actually belong in this country. Whenever those members talk about these things, it seems to bring out that racism actually exists in New Zealand and it brings it to the fore.

Recently, we talked about the fact that the biggest investor in New Zealand came from Canada, but nobody on that side of the House is actually talking about banning Canadian-sounding names. It is easier to just say: “Let’s just ban people with Chinese-sounding names from investing in New Zealand.” It is very irresponsible of those members to say these things, and I fret for the children who are growing up in this country who see that we, as role models in this House of Representatives, are acting in this way—that we are being exclusionary.

People who look like me and maybe sound like me—maybe that is not an excuse—[Interruption] Ha, ha! Although I am not Chinese, often when I walk down the street people assume that I am Chinese, and they make racist comments like: “Gosh, you speak good English for a Chinese person.” I mean, that is racist. That is unacceptable in this day and age, in this country, in which we celebrate multiculturalism. We celebrate the diversity that we have in this country, and it is unacceptable that members of Parliament would actually act in that way.

We are doing a fantastic job as a Government. I look back to when Labour left the Treasury benches in 2008, and I remember having to pay double figures in interest rates for my mortgage. You know, for most New Zealand households, the biggest outgoing is their mortgage repayments. Just on that note, our mortgage interest rates are now almost half—or I think it is bigger than half, is it not? We have actually had a major cut in interest rates, and what that really means is that every household that pays a mortgage is now paying half what it used to pay back in 2008. That is a gain.

This National-led Government is making sure that we actually are trading with our neighbours, we are not being racist, we are actually open to the world, and we are welcoming trade from overseas. We are welcoming investment from overseas. We are welcoming the growth of this nation and this economy for the benefit of all New Zealanders because having a better-performing economy means having better-performing families. It means healthier and more wealthy families, and that is the outcome that this Government is working towards. I think we should definitely congratulate the Minister of Finance on providing that, and on the leadership that he has actually shown on that.

As a National member of Parliament, it is always a privilege to represent New Zealanders from all walks of life and to be able to speak to the advancement of our economy and social interests. I will always be grateful for that opportunity, as I believe that it is actually for the greater New Zealand good. I commend it.

I was waiting for someone from the Labour Party to stand up, but they appear to be asleep today.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member will resume his seat. The member knows that there was confusion earlier, when other members did not take their call. If the member wants to go right through that in the House, we will, but I think he is aware that it is his call. He was relatively slow to get up and call, but I gave it to him notwithstanding a call from my left. He will now leave it.

I am looking forward to speaking on this Budget because this is another Budget that has been led and delivered by Bill English, the Minister of Finance in this country, who is highlighted around the world as the Minister of Finance who is leading this nation through some difficult times but is leading it exceptionally well.

We have a Budget that again delivers greater growth for New Zealanders. We have a Budget that again delivers more jobs for New Zealanders. We have a Budget that again delivers relatively low interest rates for New Zealanders, compared with where they have been in previous years. And we have a Budget that again delivers greater prosperity for New Zealanders. This side of the House is incredibly proud to be supporting this Budget; we just wish that the Opposition would see the good news and come across and support it as well.

The Minister of Finance highlighted during his speech in this debate the incredibly important Budget package that has been put together for families. At the end of the day, everything that we do in this House—everything that Governments do—is about supporting New Zealanders. The thing that New Zealanders expect most from Governments is support for those who are in need and support for those who are experiencing hardship. For the first time in decades, a Government is putting more money into and extending benefits for New Zealanders, and it is a shame that other members on the other side of the House are not willing to support more money in the pockets of hard-working New Zealanders who need the assistance most.

Those families—the 160,000 families—will now have $25 a week more in their pockets. I say to them that they should be thankful that there is support out there, and they should ask themselves as well why the Labour Party is not prepared to support a Budget that does that. To all of the children and their parents out there who are seeing more access to early childhood education because of the hundreds of millions of dollars more that this Government is putting into early childhood education, I say, ask why the Labour Party is not prepared to support more money in the Budget in that area either.

I say to the New Zealanders who are getting access to more elective surgeries under a health budget that that is now at $15.9 billion, where we are seeing 50,000 more New Zealanders getting access to elective surgeries—ask yourselves why the Labour Party is not prepared to support a Budget that delivers this for them. That is a 42 percent increase on elective surgeries, something that New Zealanders are demanding and are proud of.

In the education sector, I say to those parents out there who are seeing their children getting better-quality education through the lifting of standards in the education system; ask, also, why the Labour Party and the Opposition are not prepared to support this Budget, which delivers more money for education and is seeing education standards lifting around the country. This is a Budget with positive economic news. It is a Budget that leads to more jobs and greater growth, and, overall, New Zealanders have been better off in the 7 years that this Government has been in office.

When we listen to the speeches from the other side, you could be led to believe that the economy is going down, that the economy is in trouble, and that New Zealand is one of the countries around the world that is struggling. That is absolutely false. I think we should remind ourselves of all of the good economic news that has come out in recent times. We have seen 11 straight quarters of job growth. We have seen 69,000 more people with jobs, compared with last year. We have got a stable economic outlook, with growth expected to be between 2 percent and 2.5 percent. This is still one of the fastest-growing economies in the OECD. There are low increases in the cost of living. Wages are rising faster than inflation. We have high labour market participation. These are all good things that New Zealanders are seeing, these are all good things that New Zealanders are experiencing, and although there is difficulty for some sectors in the economy, New Zealanders, overall, are far better off than they were 7 years ago.

We know that the dairy industry, which is a cyclical sector that goes through ups and downs and peaks and troughs, is experiencing some difficult times at the moment, but there is still good news on the horizon. Having said that, we should not just believe, as the Opposition likes to portray, that the whole New Zealand economy is based around dairying, because it is not. It is not, and there are sectors in this economy that are doing exceptionally well. Let us take, for example, the information and communications technology sector, which has been growing at the rate of 9 percent a year since 2008. It now contributes 1.7 percent of GDP.

Let us hear stories from that sector. Our international education is now worth $2.85 billion, or around 1.3 percent of GDP. That sector supports 30,000 Kiwi jobs. That is a good thing for New Zealanders. Wine industry exports were around $1.4 billion in 2014, up 8.2 percent on 2013. I could go through more on this list, such as high-tech manufacturing, which has grown from being a $139 million industry in 1991 to a $1.4 billion industry in 2012. Tourism is, again, another good story for this country. Overall, tourism is now worth 7 percent of GDP and is growing strongly, up 7 percent on last year. These are good-news stories about New Zealanders who are achieving; about New Zealanders who are seeing the rewards of a fast-growing economy—one of the fastest-growing economies in the OECD. These are stories of industries that are employing New Zealanders. More New Zealanders are getting jobs through these industries and through these sectors, and New Zealanders are proud of that.

This Government is here because we believe in New Zealanders. We believe in supporting New Zealanders, we believe in the economic prosperity of New Zealanders, and we are seeing the rewards of that growth. Let us not listen to the doomsayers over on the other side. Let us not listen to the people who now no longer support free trade, who now no longer support taking a bipartisan approach to the Reserve Bank, and who now no longer support good fiscal discipline because they are opposed to all of those things that we support and are implementing through this Budget.

I have to say that when one looks at the track record of the 2000s and compares it with the track record of this Government over the past 7 years, the contrasts are staggering. For example, when we talk about housing affordability, let us remind ourselves and always remember that interest rates were 11 percent in 2008. If we want to talk about an export sector going into recession or having difficulties, let us remember that under Labour the export sector went into recession in 2005, during a global boom. Let us remember that before the rest of the world suffered the global financial crisis, this country went into recession—in 2007, a year before the global financial crisis. So when we have Andrew Little and Grant Robertson on their hind legs saying that they would do so much better than Bill English and that they would do so much better than John Key, the track record of Labour is not successful. The track record of Labour pales in comparison with that of this Government.

💬 Scott Simpson: An appalling record.

As my colleague Scott Simpson says, it is appalling compared with the great results that we are seeing delivered under this Government.

Finally, I just want to touch on trade a bit further because it is something that was considered during the estimates process. It is something that has been considered by this House during this Budget debate. I have to say that it saddens me to see that there are parties on the other side that have been marching on the weekend, that have been opposed to trade, and that are no longer prepared to support free trade. There are thousands of New Zealanders who, in the future, will gain jobs under greater free-trade opportunities, just as in the past thousands—tens of thousands, or probably hundreds of thousands—have gained greater jobs through greater free-trade opportunities. They were greater free-trade opportunities that the Labour Party supported and implemented in the past.

💬 Hon Annette King: Tell us what’s in the deal—tell us.

So I say to people like Annette King and I say to people like Fletcher Tabuteau, do not do the wrong thing. Do not start to become opposed to free trade. With greater access to markets abroad, economic opportunities for New Zealanders await. That is a good thing for New Zealand. This Budget is a good thing for New Zealand, and that is why this side of the House supports it.

It is a pleasure to speak in this Budget debate in its third reading, but I do want to correct, before I get into my speech, the malicious fabrication from National members today. I want to tell them that Labour voted for the Support for Children in Hardship Bill; they keep saying we did not. So can we just put that on the record once and for all.

I want to talk about the health budget for 2015-16. I am going to call it the big con job because we were proudly told by the Minister that this is the most money there has ever been in the health budget. Well, if the Government had put $1 more in, it would have been more than it was last year. The questions that have to be asked, however, are: was it what was expected, is it what is needed, and is it what was promised before the last election? I have to tell you that the answer to those three questions is no. It is not what was expected, it is not what is needed, and it is not what was promised. The district health boards got a $300 million increase; they asked for $320 million. They are now required to make $141 million in savings in this year—goodness knows where from. The Ministry of Health asked for $150 million. It got $74 million. It needs to make $30 million in savings this year. So what we have really got on the health budget is a lot of rhetoric and spin.

If you do not believe what I have said about the Budget, what have some other people said about it? Let us have a look at what the Salaried Medical Specialists said. For those who are listening and do not know who they are, they are the specialists in our hospitals who do your operations and checks to make sure you can have an operation, so they are pretty highly regarded. What did they say? They said: “The Government has failed, yet again, to use its Budget to invest in the health workforce …”. They said the Treasury figures that they have received show that total health spending as a proportion of GDP has gone down and is not keeping up with the cost or population growth.

What did Phil Bagshaw, a highly respected person who runs the charity hospital in Christchurch, say? He said the Government’s good news announcements are more like smoke and mirrors, and “that despite more operations there is a burgeoning backlog of unmet need in our health system.” He said: “It seems like the spin machine [is] going in to overdrive again. Well, we’re all adults now, we can cope with the truth.”

We also wanted to know what this Government’s legacy has been in health since National became the Government almost 7 years ago. We knew that the Government would not believe any figures the Council of Trade Unions put out because Jonathan Coleman said that it is the political enemy—a funny thing to say about an organisation, but that is what he said. So, in fact, we got Infometrics—of course, National members believe Infometrics when it suits them—to have an independent look at the funding using Treasury’s own health figures. Infometrics looked at the core Crown expenditure. What did it see over four of the six Budgets of this Government? It found that there is $1.7 billion missing from the health budget since National became the Government. Four of the six Budgets have seen a cut. The Government has put in money for population growth, but it has not put in money for cost. What the Minister did in this House only 3 weeks ago was admit that it has not kept up with inflation in the health budget. It has not put enough in to cover costs in the health budget.

So what does that mean when it comes to health? Well, the Minister needed to disguise, pretty much, what he was doing, so he made big announcements. He put out 20 separate press releases last week about the number of operations that have been done since National became the Government. I am glad more operations are being done. As Phil Bagshaw said, we need to do more. The population is ageing. We have more need. We have to be doing more. But what I did object to was the Minister using selective figures to make his case. He did not need to. He used 2007-08 figures and then compared them with 2014-15. The new members opposite may not know, but the 2008-09 Budget was the Labour Government’s Budget. It was the Labour Government’s Budget of 2008-09, brought in by Michael Cullen. It was our appropriations—Labour’s appropriation for health—that followed in 2008-09, not the National Government’s.

In 2008-09 there were 136,194 operations carried out under Labour, so what does the Minister do? He takes a figure from the 2007-08 year, which was 115,000, and then adds it up, extrapolates it over a number of years, and says: “Look, how good am I?”. Well, let us have some honesty in the figures. We got another lot of dishonesty today on figures in health. The Minister has put out a statement. We had the very good member Barbara Kuriger asking a question in the House today. What the member did not ask was how many people have not got a first specialist assessment—how many have not even got through the door to see the specialist, and had in fact been sent back to their GP without an appointment?

The Minister in this House, when I asked questions about the Waitematā District Health Board about 4 weeks ago, said that no such figures had ever been collected. That is what the Minister said. I was appalled that a Minister of Health does not know what figures are collected. Since 2010 the number of people being sent back from the specialist to their GP has been counted. I took the trouble of asking every single district health board how many they had sent back without an appointment. The Minister did not know and said that the figures have never been collected—he repeated it. So what do we find? In fact, I have got only 15 district health boards that have replied in time, but of those we find 140,000 New Zealanders are not getting the specialist appointments that they need. They are being sent there by their GP, and they are being sent back. They are being played ping-pong with as they go from their GP for an appointment that they never get and back to the GP, who refers them back for another appointment.

You needed only to see this tragic story on the Sunday news on Television One about Graham from Kaikohe, who had been waiting for a specialist appointment at Whangarei Hospital. He could not get an appointment. He was told by Whangarei Hospital to try Kaitāia Hospital. So he tried Kaitāia Hospital. An appointment became available—he was going to have to wait yet another month after waiting almost 6 months for an appointment. He finally got an appointment, only to be told that it was too late—he had terminal cancer. So it is all very well to crow about the number of people getting first specialist assessments when there are so many who are not.

What do they get from the district health boards, which are struggling to provide within 4 months what the Government wants? They get a letter like this—thousands of them sent out every week. The letter says: “You were recently assessed for surgery. The specialist recommends that you have surgery. However, your current condition falls below the level at which we are able to give you surgery.”—it does not say that you do need it, but it says that they are not able to give it to you—“You could benefit from it at a later date, if we have the capacity.” The capacity goes back to the financial threshold that they are operating under.

So when this Government crows about how great it is at health, just have a look at the 2,000 replies I have had to emails to people asking what is happening to them in the health sector, and you will get an idea of what is happening to thousands of New Zealanders when they are, one, not getting a first specialist assessment and, two, when they do, they are getting the letter saying that they would benefit from one—“You need one, but we can’t do it for you.”

Then you get headlines like this. This is not the Labour Party putting out these headlines; these are surgeons—surgeons there for service.

💬 Andrew Bayly: That’s the media.

You can laugh at it, Mr Bayly, but this comes out of Dunedin. It comes from an ear, nose, and throat specialist. What does he say? He says that a quarter of ear, nose, and throat patients are being turned away from Dunedin Hospital. I have got many of those. If members want to stick their heads in the sand and pretend it is all OK, then that is all right by me, because the public are certainly telling the Labour Party, and they are certainly telling the Opposition, that in the health sector there is a looming problem. You can call it doomsaying if you like. I believe the people because the people are not wrong. They know exactly what is happening.

We now have a picture emerging of a health sector that has been denied enough money to cover its costs—admitted by the Minister himself—and out of that come the problems that occur. And whom do they occur for? They occur for the New Zealanders who are most in need of health services.

It is a pleasure to be talking about this Appropriation (2015/16 Estimates) Bill. Of course there are so many good things that we could talk about, but I have chosen to talk about three of them today. I want to focus on the Budget outlook, looking after New Zealand families, and the issue of diversification of our economy, which we hear a lot about.

The 2015 Budget builds on an improving economic outlook of sustained growth, rising wages, more jobs, lower inflation, and, of course, lower interest rates. This Government is focused on delivering a financial package and an economic outlook that all New Zealanders can be proud of. In the latest Reserve Bank forecast the economy grew by just under 3.3 percent and for the next 3 years it is forecast to grow at roughly 2.5 percent. This rate compares very favourably, of course, with our international trading partners. Just to put it into context, Australia is currently growing at about 2.3 percent, which is close to America’s growth rate of about 2.5 percent, and, of course, Europe, being in the state in which it is at the moment, is growing a bit slower than that, at less than 2 percent.

What is more, we may even achieve our Budget surplus, which all the naysayers have been going on about and saying: “No, we won’t.” In the 11-month period to 31 May we had achieved a Budget surplus of $1.2 billion. It is not completely assured that we will get a Budget surplus for the financial year just ended, but it would be a fantastic outcome if we did, and one that all New Zealanders could be proud of.

In terms of the financial position of this country, I think it is worthwhile just having a look at our debt figures. As at 31 May 2015 New Zealand’s net Crown debt stood at just at $60 billion, which represented about 25 percent of GDP. I think many of us are aware that this Government is focused on getting our net debt to GDP ratio down to 20 percent by 2020. Interestingly, again, if we do a little bit of a comparison, the Australian debt position at the moment is just slightly higher than our 25 percent, but by the year 2020, when we will be at 20 percent, it is projected to be at 40 percent—i.e., double our debt ratio.

When you turn to the UK, it is currently at 90 percent and will decline over the 5-year period to 2020 to about 80 percent—i.e., four times the rate that New Zealand’s debt is when we look at that same period. If we go to America, it is currently sitting at about 110 percent, and in 5 years’ time it will still be greater than its combined GDP for that period. So, thankfully, through good fiscal management we have got a growing economy with relatively low debt figures and it is heading in the right direction.

The other thing is that we have got a robust banking structure, and, of course, we heard a little bit about that today, with some reviews of our banking structure going on. As some of the more attentive members of the Finance and Expenditure Committee will be aware, last year the Reserve Bank undertook some very detailed modelling of our banking system just to see how robust it actually was. It assumed two scenarios. The first scenario assumed that a sharp decline in growth rates would bring about a catastrophic change in the Chinese market, which would trigger—this is the assumption—a real GDP decline of about 4 percent, unemployment peaking at 13 percent, housing declining by 40 percent nationally, and the agricultural sector falling by about 40 percent. Even for some of our Opposition members, I know that sounds pretty optimistic, but for most of us that is a fairly gloomy outlook. In the second scenario, the Reserve Bank assumed even more significant increases in interest rates.

What was apparent from the financial modelling that this group did was that the loan ratios increased to about 1.3 to 1.5 percent of banks’ total loans, but because of the existing profitability in the banking system the banks could withstand these shocks. Also, through the good prudential management of those banks they were able to be in a position where our banking system, even under those extreme pressures, was in a position where it could withstand the shocks, and that shows what a robust banking sector we have, which is important to us all.

The second area that I want to talk about today is families.

💬 Hon Clayton Cosgrove: Who?

Families—families. We are determined to implement measures that look after and protect our families. Of course, the standout in the Budget was the $790 million package for our families. It is a balanced package because what it does is increase the benefit rates for families with children. It also increases the childcare arrangements for low-income families, and there is also an obligation on beneficiary parents to enter the workforce when it gets apparent that they can and it is appropriate that they should. That $790 million is focused on the 160,000 families, with 300,000 children, earning less than $36,350.

Not only did we spend the $790 million but we also put more money into important areas. The previous speaker, Annette King, was talking about health, of course. A record amount went into health. There is $15.9 billion now being spent on health in New Zealand. Another substantial amount went into education. We are now spending a record $10.8 billion in education. There are the announcements around special housing areas, partly to do with allowing first-home buyers to get into the market, so we have—

💬 Phil Twyford: Special housing areas—what a joke.

Yes, and even in my electorate, Mr Twyford, we announced one very recently—Glenbrook Beach. There are another 800 houses going in there, and 200 of them will be low-cost housing for people, on top of the 4,500 going into Wesley and Pukekohe, and the 700 new houses going into Belmont, probably about 3 kilometres away from Wesley. All are going to generate new, low-cost housing for those first-home buyers whom we are keen to get into the market. The other thing in the Budget was the $500 million that we have committed over the next 3 years from savings in ACC—the fantastic job that the board has been doing there.

The last thing that I want to turn my mind to is the diversification of the economy. And, gee, do we not hear a lot about that from lots of people, particularly from the other side of the House? For some reason—and I do not know why—Labour, in particular, wants to myopically focus on the dairy industry. I have got to say to you that the dairy industry is important and we all know that, but it is not fatal. We want to make sure that we have a viable dairy industry, but it is not fatal. It represents only 5 percent of our economy.

So what I thought I would just do is set out some of the breakdown of the New Zealand economy, just to demonstrate that diversification. The total primary industry represents about 7.4 percent. People love to hit on and say horrible things about the manufacturing industry, but the National Government does not have that view. We think it is a viable industry. It represents 11 percent. Construction is 7 percent.

Services make up 64 percent of this economy. So all the good things—information and communications technology, the smallest at 3 percent, or roughly a billion dollars’ worth of earnings; education 4 percent; and health 6 percent. You keep going up, to tourism, which of course is the largest of the services sector, at 7 percent. What is more, we are also getting good growth rates across all the regions. So we have talked about some of the regions—Bay of Plenty has 4.4 percent, Canterbury has a similar amount, and Auckland has 4.3 percent. But even in the smaller regions there is good, viable growth, including in the region of the member sitting beside me. Sarah Dowie’s region of Southland is at 4 percent—a dynamic economy.

But I also like the recent announcement around the new immigration changes that are going to make sure some of the new immigrants coming into this country move to the regions. So we have got two categories. First of all is the skilled migrants category, where we have said: “We’re going to give you an extra 20 points if you move to a region and get work out of Auckland.”

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

Then, of course, we have got the entrepreneurs category, which means that we are going to give an additional 20 points out of the total of 120, so that if these entrepreneurs coming into New Zealand with good skills and with money want to set up businesses out of Auckland, then they can do so. They will be asked to move to those regions and help create new jobs for New Zealanders. Thank you very much.

I understand that the next call is a split call.

I am pleased to take a short call on this for the Green Party and to follow on from my colleague Julie Anne Genter, who spoke previously and outlined what our alternative vision would have been for this Budget—a mixture of incredibly practical measures to raise revenue, to save money, and to more fairly share the resources that we have. But tonight I would like to focus on one aspect of this Budget and our vision for this society, and that is equality.

I remember on election night that John Key, in front of the nation, was saying that he would lead a Government that would govern for all New Zealanders. Well, this is the first Budget since the election and it is our chance to assess whether he is delivering on that promise to the country. Is this a Budget for all New Zealanders? My premise this evening is that it is not.

New Zealand has had one of the highest increases in inequality in the OECD since 1985. This has resulted in the greatest loss of growth in the OECD. Inequality in this country is estimated to have knocked off more than 20 percentage points of growth in this country. The biggest factor for the impact of inequality on growth is the gap between lower-income households and the rest of the population. We are not talking about just the bottom 10 percent but the bottom 40 percent of this country.

The household income survey that came out last week showed us that this gap, in some ways, is widening. There are 45,000 more children this year living in poverty whose family incomes, after housing, are 60 percent below the median wage. This is showing clearly that the economic gains post-global financial crisis are not being evenly shared. That report also showed that after housing costs, income poverty rates for older working New Zealanders—those aged between 45 and 64 living on their own—have trebled between 1984 and 2007. Those rates since then have remained high and that group is second only to sole parents in terms of poverty rates in this country. This points to the number of vulnerable older New Zealanders increasing into our future, as we have an ageing economy. Significantly, this is about housing and access to being able to buy houses in this country, and we know the Government has not addressed that problem in this Budget.

Also we see the counterbalance of this struggle for the bottom 40 percent of the country when last year the average salary for big business chief executive officers grew to an average of $1.645 million a year being earned by the top chief executive officers. At least 11 executives in this country are now earning over $2 million a year. So we have a group of New Zealanders who earn more in an hour than full-time minimum wage workers can earn in a week and a half. And now in this country 50 percent of New Zealanders own less than 5 percent of the wealth.

Average debt per household in this country is massively increasing. I have been hearing the Government saying that it is pulling that back. Well, actually, it has increased by over $100,000 per household since 1992. That is a phenomenal increase—up from $20,000 to over $120,000 of debt per household. Net public debt has also been increasing since this Government came to power. It has increased from $3,000 per capita to $14,000, significantly because of its investment in job-poor expressway projects that have negative cost-benefit ratios. So it is investing in things that are bad for our climate, bad for our people, and bad for the books. And yet Government members stand in front of us and tell us: “Everything is OK. Don’t worry. This is as good as it gets, pretty much.” Well, I do not think New Zealanders believe that.

When we know that our current top income tax rate of 33 percent is the fourth-lowest in the OECD, that we have no tax-free threshold for people on low incomes, and that we have no inheritance tax, no gift tax, no general capital gains tax to tax wealth, and that, on top of that, we are one of the only OECD countries where GST is levied on all domestic products at a flat rate—including food, which the Government is now looking to extend—we know the Government is not taking up even a smidgeon of the options open to it to be able to reduce inequality. There is an alternative to this agenda.

Tēnā koe. As my colleague Jan Logie said, this is not a Budget for all New Zealanders and it shows how much National has lost touch with everyday New Zealanders. It is building an economy that works for people who already have a lot. In my comments today I would like to focus on the primary sector because the National Government has really bet the farm on high international prices for dairy continuing, rather than building a diversified and a research and development focused export sector. What we have seen with the slump in global dairy prices is that it has highlighted the major pitfalls in putting so many bottles in the dairy basket, because we have seen farmers chasing after those high boom-time prices in 2007 and 2013 and we have seen the Government encouraging that with its very generous subsidies for irrigation in Vote Primary Industries. It is encouraging much more intensification and much more irrigation, which leads to less resilience and more vulnerability to changes in world commodity prices. We see in Vote Primary Industries that some $142 million is allocated in 2015-16 to Crown Irrigation Investments and the Irrigation Acceleration Fund to subsidise irrigation. That compares with the just $70 million in 2015-16 allocated to the Primary Growth Partnership, which is about promoting research and development, product and market development, and technology transfer.

So what the Government is identifying as a priority in the primary industries vote is not what should be the priority for our primary sector, because it focuses on a major sector of the economy being a price taker rather than a price maker and because it increases this drive towards a less resilient, more intensive dairy sector that is very vulnerable to changes in world commodity prices. What we have seen is farmers go chasing after those boom prices, and to do that they have piled on land, they have got more cows, they have piled on debt, and they have got more irrigation. That means now that when the prices are slumped, the rural communities are hurting hard. Yet what did the Minister of Finance say? What did he say in the House today? All he could say was that dairy-intensive provinces have to adapt quickly to market signals—completely overlooking the major hurt that rural communities are feeling in having to make that adjustment.

What the Green Party would do would be to invest much more in research and development through a big package of tax credits and grants for research and development, so that we look at increasing value in our primary sector and at diversifying and getting away from this reliance on dairy, away from this reliance on China as the major market, and away from Fonterra just thinking that it can continue to increase milk supply regardless of the cost that that has to our waterways and regardless of the unnatural focus that that is creating. This Government thinks in its economic plan that dairy prices are going to bounce back and everything will be fine. It has not got a plan B. It seems to think that we can just grin and bear it, and wait for those prices to go back up again, but it fails to recognise that there have been some quite significant policy changes internationally, both to the production quotas in the EU and to domestic subsidies in the United States. That means that things may never be the same again for New Zealand dairy prices, and that means that this hurt that we are seeing at the moment is likely to continue. It means major problems for the economy. The Reserve Bank has highlighted that when we have got 20 to 30 percent of dairy farms so heavily indebted, it is potentially a significant problem for our economic stability. It is a major concern.

The Government needs to step up and accept some accountability and responsibility. Sure, it cannot control export prices, but where it invests money through the Budget helps to grow sectors or it makes them decline. It should be investing much more in added value—that is, not just investing in new products but in making sure that our products have a reputation overseas for coming from a clean, green country, for giving some integrity to that “clean, green” brand, and for marketing products that have a provenance and are products of integrity. That is not what we are seeing in this Budget, when the Government is investing more in resource management, yet proposing to gut the Resource Management Act, proposing to weaken our regulatory framework, and proposing to allow more water pollution by its permissive national policy statement. We need a strong regulatory framework to provide a strong environmental credibility to the products that we are marketing overseas, and we need much more diversification in our primary sector, and much more of a focus on value rather than volume and on increasing the range of products that we market. Thank you.

I would like to focus on a couple of things, initially—export markets and the dairy sector—and to pose a couple of questions. Who is the friend of the primary sector? Who understands the primary producer and the export markets? Who amongst us here has experience in farming or experience in exporting? Across that side of the House there is not one—not one—farmer.

💬 Hon Member: Yeah, there is.

On this side, there is—I have got to admit that Mr Browning has been a farmer of organic produce, but other than that there is not one farmer on that side of the House. On this side of the House, to name a few, we have Ian McKelvie, David Bennett, Amy Adams, Nathan Guy, Stuart Smith, and Barbara Kuriger, who are all involved in producing primary sector products.

💬 Kelvin Davis: Come on! I’ve driven my uncle’s tractor.

And then there is—you have driven a tractor, did you say, Mr Davis?

💬 Kelvin Davis: Yeah, once.

But what about exporting? How many have been involved in exporting? How many have got on a plane and tried to sell the product that we derive from New Zealand? How many of them have made phone calls talking to buyers offshore? How many of them in this House have run an export business? On that side of the House, it is none—none. There is not one who is currently running an export business. So it is not a surprise, in a way, that none of them can support free trade, because we are a trading nation and free trade is the key to the success of this little nation that we are.

The Opposition does not understand that the leveraging of an advantage in a competitive environment is what we must do. We must have access to our products in order to enable our economy to grow, to enable higher-paid jobs to eventuate, and to increase the standard of living for all New Zealanders. It is quite sad, in a way, that you have New Zealand First Party people protesting on the steps of Parliament with anti - free-trade people, when they profess to support the primary industries. They call themselves friends of the farmer but their actions speak louder than their words.

The Greens are the same. They do not want trade. They do not want us to grow the economy—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! This is a very broad-ranging debate on the Budget and the Imprest Supply (Second for 2015/16) Bill. The member has now been going for 3 minutes, and I think if he could draw his remarks into the debate, which is not particularly hard, then I would not interrupt him again.

In the Budget we have demonstrated that we are friends of the primary producer because we have not introduced a capital gains tax, we do not support a controlled foreign exchange market—in fact, quite the opposite—and we have not introduced agriculture into the emissions trading scheme, which is all possible in any Budget, and, of course, we support the free-trade agreements.

The economy is tracking well. It is forecast to grow between 2 percent and 2.5 percent over the next number of years. We understand that dairy prices have in fact fallen below the cost of production, and that enables the global market to re-establish itself and to weed out those inefficient producers of dairy product, and, in time, the maths tells you that the price must come up to above the cost of production. What the Government has done in these tough times for the dairy industry is support them by spending or investing another half a million dollars on rural mental health professionals, and that is appreciated in the rural sector.

Despite the rhetoric around dairy prices, we know the economy is diversified and we know it is tracking well. We also know that the safety valves are working. The currency has reduced by around 20 percent. And those in the House who have a mind to think about exporters, or who may have exported in the past, will know that that brings a 20 percent devaluation. It brings a 20 percent increase, in New Zealand dollar terms, to the revenue, the top line, of the exporter.

We have talked about tourism increasing 7 percent year on year. Wine is increasing. Kiwifruit is having a fantastic year. Information and communication technology services and international students are all on the up and will all benefit from the weaker currency and, of course, the lower interest rates—another safety valve in the economy that is functioning exactly as it should. But the long-term prospects are good for dairy. The long-term prospects in the Asian market will continue to be positive, based on the ever-increasing demand for high-quality, safe protein. That has not gone away. That is there and it will continue to be there.

The regions are doing well. Anecdotally, at least, I hear of Aucklanders looking around, interested in purchasing houses in my electorate, from Dannevirke to Featherston, because you can live anywhere in this day and age. Broadband allows accountants in my electorate to service Shanghai customers. Broadband allows rural towns to be connected to the rest of the planet, to sell their services—designers with customers in Los Angeles. The world is your oyster as we roll out the ultra-fast broadband. The plan continues to work, and as the economy grows this gives us a choice.

The well-managed economy allows better investment into the health systems, the education systems, and, as we have already touched on, the social programmes that we are investing in. There is $790 million invested in the most vulnerable, and that is all about nipping it in the bud, nipping it in the bud where we know that statistically it is likely to cause misery and problems down the track. That is what social investment is all about, and that is a fantastic initiative of this last Budget.

Investing in warmer homes is also an investment in the future. Our Warm Homes programme, combined with the minimum housing insulation standards that will be implemented, will be affecting half a million homes—half a million homes—which reduces the risk of health issues and increases education outcomes, because kids are warmer and in a healthier condition when they go to school. These are all good things and part of the social investment programme that we have implemented.

Plan A is in progress. Plan A is working. It is creating a framework for Kiwis to decide for themselves how to invest their time and their energy. It is not a patronising policy, as the Opposition dictates. It is a positive programme that is laid out in the Budget, and I commend it to the House.

The previous speaker, Alastair Scott, was not so much pedestrian as—well, actually, I think that if he had been any more comatose, he would have fallen over at his desk. I want to correct one thing that that speaker said. He claimed that Gerry Brownlee was a farmer. Gerry Brownlee—he is no farmer. He might be a grazer, but he is certainly no farmer.

💬 Hon Clayton Cosgrove: You saved my life then.

Thank you, Clayton Cosgrove. I want to talk about this Government’s housing policies, because in the Budget it made two announcements that are typical in so many ways of this Government’s housing policy. The first was Nick Smith’s now infamous Crown land fiasco in Auckland, where he tried to flog off patches of land that the Government does not even own and claimed that the local iwi had no right of first refusal—and it turns out that they actually did—and he is in court defending the Government’s policy against legal action by Ngāti Whātua.

The second Budget housing policy that the Government announced, after having denied and denied for the last 3 years that property speculators are even a problem in Auckland, was the so-called 2-year test, designed to catch a few property speculators. Flying in the face of all the evidence, the Government denied that property speculation is a problem, yet it announced in the Budget the 2-year test, which is basically an invitation to property speculators in Auckland to hold on to their properties for 2 years and a day and then flick them off. Why are this Government’s housing policies so token, so superficial, and so ineffective? That is the question that everybody in Auckland is asking, because, basically, this is the “see no evil, hear no evil” housing policy, and it is obvious that this Government is in denial. It is complacent and in denial that there is a housing crisis in Auckland.

The housing market in Auckland is obviously completely out of control. The average house price in Auckland in the last 12 months went up $135,000—18.8 percent. That is the average, and yet this Government says that there is no housing crisis. Generation Rent is locked out of the housing market—it is obvious for anybody to see. It is impossible for that generation, except for young people who were born with a silver spoon in their mouths, to ever hope, realistically, of owning their own home in Auckland. We have a rise in homelessness across the city. There are people living in cars, in garages, and in camp grounds. There is ballooning inequality between the young and the old, between people who own property and people who are landless, and between people who live in Auckland and the rest of the country.

You would think that Government members would be worried. In fact, it is hard to find anyone who thinks that this is not a major social and economic crisis in Auckland. The OECD has told us that Auckland housing is among the most overvalued in the world. The Reserve Bank has repeatedly cautioned this Government and said that the Auckland housing crisis is a threat to financial stability. It embarrassed the Government by saying that it had not done enough, and that it needed to do more to increase supply and to deal with property speculation. Chris Parker, the chief economist at Auckland Council, said in the last few days that Auckland’s housing market was not far away from being a bubble. He cited independent research by the New Zealand Institute of Economic Research that showed that Auckland’s house prices were one-third overvalued compared with future rental incomes—one-third overvalued. Chris Parker, of Auckland Council, says that we are not far away from it being a bubble.

Then there was the final indignity for this Government’s housing policy. Standard and Poor’s, the international credit rating agency, on Friday afternoon downgraded the credit rating of all the major banks in New Zealand—the six largest banks. It cited the increased risks from Auckland’s housing boom. It left its issuer credit ratings at AA-, but it lowered the stand-alone credit profiles by one notch for each of the four major banks. It said that the actions “reflect our view that New Zealand financial institutions face heightened risks because of an increase in the country’s overall level of economic imbalances over the past 3 years. In particular, we believe the rapid rise in house prices in Auckland during this period has amplified the risk of a sharp correction in [the housing market]”.

Standard and Poor’s is one of the leading international credit agencies. It has said that the housing crisis in Auckland is posing a significant risk to our banking system. It is plain; everybody can see it. Aucklanders know what is going on. But why is this Government in denial? Well, the answer was revealed inadvertently in an interview that the Prime Minister gave on Newstalk ZB a week and a half ago, where he said that Aucklanders are happy because they are getting wealthier because their house prices are going up. It was the most candid this Prime Minister has been in the last few years about why it is a do-nothing Government when it comes to housing policy.

The Prime Minister revealed that he is comfortable with Auckland house prices going up on average $135,000 in the last 12 months. He is comfortable with that because he has made the cynical political calculation that he can harvest enough votes from homeowners who are watching their paper wealth increasing by the year, by the week, and by the day, and he is willing to throw under the bus the more than half of all Aucklanders who actually live in rented accommodation, and a generation of young Aucklanders who, under this Government’s housing policies, face no prospect of ever owning their own home. That is why—it is that level of political cynicism by the National Party—this Prime Minister has condemned a whole generation of young New Zealanders to being Generation Rent. In his words, they are becoming landless tenants in their own land, and this National Party is happy to stand by and watch that happen. That is why Nick Smith is the worst Minister for Building and Housing in living memory. He is the Minister of photo ops, of stunts, and grudging half-measures.

I come now to Nick Smith’s Crown land fiasco. He promised 500 hectares of new land for housing development. Where is that now? Where is that land? Where are the houses? Where are the thousands of houses that were promised in his special housing areas in Auckland? At last count, the Auckland Council—18 months after it announced the housing accord in Auckland—confirmed 300 houses. Three hundred. Auckland needs 13,000 houses just to stand still, just to keep up with population growth. Yet, as the Productivity Commission, this Government’s pet thinktank, pointed out, at current build rates Auckland is slipping behind by 5,000 houses every year. There is a shortfall of 32,000 houses at the moment in Auckland. That shortage is one of the main reasons why house prices continue to go through the roof. Yet under National we are 5,000 short every year, and the Productivity Commission predicted that by 2020 that 32,000 shortfall will have blown out to 60,000.

The housing crisis is getting worse by the day in Auckland and this Government does nothing effective about it. It is in denial about the rampant property speculation that is driving house prices higher and higher. According to Quotable Value, 45 percent of all property transactions in Auckland are to investors with multiple properties, and yet the best that this Government can do is that grudging half-measure, that 2-year test, which its own most respected tax adviser, John Shewan, said will do nothing to rein in house prices. It will do nothing to deter house speculators. It is a housing crisis that is having huge economic and social consequences for this country, but this Government is out of touch with what people want and it is refusing to listen to the demands of the public of New Zealand for serious action on the housing crisis.

I would like to thank the member who has resumed his seat, Phil Twyford, for reminding me of why the last time I voted Labour was 1984. He has reminded me of 1984, when Labour was in Government, and what happened when there was the last housing crisis in Auckland. That is when the house prices plummeted, people ended up with negative equity, and interest rates were at 28 percent. That is, in fact, exactly what would happen if a Labour Government gets to the Treasury benches again. You need to be sensible about this issue, and the issue is the matter of supply and demand.

The fact is that in 1984 people left this country in droves to get away from a Labour Government—and a very sensible move it was for them too. Some of us who stuck it out were grateful for a National Government coming in in 1990. But what has happened is that the metropolitan urban limit in Auckland, under a Labour-led Auckland Regional Council headed by Mike Lee, put in place an artificial limit on the growth of Auckland, and that was in the late 1990s. That has been the major issue around what has happened in Auckland—that and the fact that Aucklanders are no longer leaving Auckland. They are staying put and people are coming to Auckland, because Auckland is a great place to live if you can get around the transport issues, which I hope will start to be alleviated once the expansion of the southern motorway starts in October this year—right through my electorate.

I have to say that in speaking about this particular issue and the measures in the Budget—as I think the Budget is a very measured response—the last thing we want to do is to actually end up with a situation where Aucklanders cannot afford their homes any more and their interest rates go up, which is what happened under a Labour Government. It is really important to think about a balanced Budget. It is a bit like balancing the budget of a household, actually. Most of us know we can spend only what we have. We cannot go off spending money we do not have, and if we continue to do that we are going to end up in a very difficult position.

In this particular case one of the things that having a balanced Budget does for the economy is that it actually keeps interest rates low. The Government is not competing so much with private enterprise or business to actually take money to get money to spend on schemes. The Government is actually not playing a part in putting up interest rates. Interest rates are now the lowest that they have been in 60 years. So what that actually means is that despite the doom and gloom from those who want to talk down our economy—despite that—we have actually seen households in New Zealand, Kiwi households, saving every single year in the last 5 years. The last time that happened was in 1995—it was before the Labour Government—and that actually tells me that this Government is balancing its Budget, not overspending, and leaving more money with people, which means that people can actually afford to keep paying their bills and we are not getting into debt like we used to.

When I look at some of the very smart things in this Budget, one of the smartest things, I think, was actually giving a $25-a-week increase in benefit rates for families with children, realising that people on benefits with children are the most vulnerable people we have in this country. It is not the children’s fault that their parents are on benefits, and what that measure is doing is giving people just a little bit more help, at the same time putting huge measures and effort and funding into helping parents get to work and getting off benefits, because work, as we know, is actually the secret to getting ahead in life.

I listened to some of the discussions this afternoon and particularly one from Mrs Eugenie Sage. She says she wants more exports. Well, unfortunately she does not believe in free trade so, unfortunately, that is not going to work. She also said that prices will never get better in dairying. Well, I beg to differ. I look at the world’s population. Is it getting smaller? No, it is getting bigger. Guess what? People like protein, and the richer that countries get and the richer that people get, the more protein they want. Yes, dairying is going through a difficult time at the moment, but, actually, those of us who come from the dairying industry know that that happens in the dairying industry every 10 years or so anyway.

Farmers are incredibly resilient. They are, however, not supermen or women. We have to give as much help as we can, and one of the best things we can do for these farmers is to keep interest rates low. That is the biggest thing we can do, because many of them will have expanded, bought the neighbour’s property, and they will have been thinking about the prices that they were then, at that stage, getting for their product.

I listened to all the rhetoric around trade and exports and I have heard the New Zealand First people talk about exports. Apparently, they like exports. I just do not know who they want to export to, because they are certainly against the Trans-Pacific Trade agreement. So let us have a look at that as a free-trade agreement, just on the basis of the Budget, and why it is important for this Budget and for those coming forward.

This is a free-trade agreement with the No. 1 economy in the world: the United States. That is actually the reason why a lot of the people are against the Trans-Pacific Trade agreement—the people like dear Professor Jane Kelsey, whom I know from my university days. We get on very well personally but are on completely opposite sides of this. I do not hate the United States; I am really grateful for the United States in this world. As I said, there is the United States, and New Zealand—obviously. There is Australia—oh well, Australia—Brunei, Chile, Malaysia, Peru, Singapore, Viet Nam, Japan, Canada, and Mexico.

Really, would we seriously contemplate not being part of that sort of agreement with the biggest economy in the world, and with Japan, the fourth-largest economy in the world? Would we really not be part of that? Would we, in fact, be like those people in the UK who suddenly think that they do not want to be in the European Union now? I mean, really? Do we really want to be there? Do we really want to be selling all these products to ourselves? Would we get rid of the free-trade agreement we currently have—CER—with Australia? Would we get rid of the one with China? What about the one with Korea? If we are going to be principled about it, would we not get rid of them all? The fact is that none of those members would really want to do that. They say: “Oh, well we don’t know what’s in it”. Well, actually, we did not know what was in those other agreements either until they were signed, because that, strangely enough, is how negotiations are undertaken.

It is so good to be able to speak about some of the positive things in this Budget, because when I listen to the Opposition members—and I have been listening very carefully—it has been very disappointing, except, as I say, to remind me about why I should never vote for that lot. I have been thinking about things that we have been able to deliver—$1.5 billion in ACC cuts in levies for businesses and for individuals. So everybody who is working for a living gets a cut in their ACC levy. I am really pleased to see that that work is continuing. We fought very hard to make that happen.

But when you are looking at things like, for instance, how we can make business cheaper, better, and more efficient, with more jobs and better use of money, let us have a look at the Resource Management Act. The National Party went into the last election on a platform of reforming the Resource Management Act, and we would, as a party, like to see that happen. Unfortunately, the balance of power on the Resource Management Act these days is held by a party run by Mr Winston Peters. The members of that party travelled all around Northland saying what they would do for farmers, but not once did they tell them they would never do a thing, would not lift a finger, and would never once give us one vote to help bring about reform in the Resource Management Act—not once.

Nobody expects the Labour Party to because, after all, the Resource Management Act was its stupid baby. No one expects the Greens to because we all know where they are. But not once will a party that makes out that it likes small business—well, it does, really, does it not? It wants them to get smaller. Not once would that party help out this party to bring through Resource Management Act reform, which is something that would help Northland and the very people whom those members supposedly represent. Not once would they go off to Tauranga, not once would they go to Napier, and not once would they go to Palmerston North and to all these provincial areas and tell people about their laziness and their absolute lack of fortitude in getting up and supporting Resource Management Act reform.

So if you want to see change in this country, if you want a Budget that is even better than the fabulous Budget we have got, then bring about reform in the Resource Management Act. Bring about hope for farmers, bring about hope for businesses, and stop being against everything.

I would just like to start by saying that these Budget and appropriations are based on principles coming straight out of “Planet Key”. The Budget has no bearing on reality; the appropriations were assigned based on assumptions made when National was wearing those rose-tinted glasses. The Budget claimed at the time—actually, quite wisely, Mr English did not claim that this Budget would do anything in particular; its byline was simply “A plan that’s working”. There was no actual plan, but we were told that the “no plan” was working. Without doubt there is nothing in this Budget that will fix this Government’s finances and secure New Zealand’s economic prosperity and security. What was one of the main cornerstones of this Budget? Higher commodity prices. Not stable or slightly decreased commodity prices, but higher commodity prices—that is what the Budget was based on. Fonterra has slashed its forecast payout for milksolids for this season to $3.85 a kilo—far below the break-even point for many farmers—and it will continue to decrease. New Zealand First warned this National Government back when the Budget was released that it was living in a dream world. We warned this Government then that milksolids prices would decrease significantly. Back in the original Budget debates New Zealand First said that this Government had its head buried in the sand and had no plan or idea for any other quite plausible eventualities arising here in New Zealand or around the world. We said that there was a real world that needed to be taken account of.

Here we are today in the real world, quite distinct and quite different from the Budget that was presented to us a while ago, with appropriations that now have no bearing in reality. Now, because of this Government’s ineptitude, this country is suffering, with Ministers stumbling along, making up policy on the fly. I say that, but it actually probably will not pan out to be policy, because this Government and its leader are particularly skilled at smiling in sympathy with the people of New Zealand, agreeing that there is a problem, and then going away and doing absolutely nothing about it. This Government was sent a message from the regions. One of those regions in particular sent a powerful message that the previous speaker, Judith Collins, has chosen to ignore. It changed the very composition of this Parliament because Government Ministers were not listening to the people of New Zealand—the heartland and the working backbone of this country, creating the majority of this country’s wealth. This Government is still not listening. Ministers bob up here and they bob up there, telling everyone how wonderful things are. The people have been ignored, and now it has been put right in the collective Government’s face. Ministers go around bobbing their heads up in places talking about the regions. It is talk, talk, talk—managing a media crisis and not dealing with the real crisis facing New Zealand.

I do not think that most New Zealanders believe this Government when they are told that Mr English has a plan that is working. Firstly, they will ask “What plan was it that you were actually talking about?”, and, secondly, “If you had a plan, surely it was a plan to create wealth and boost incomes for all New Zealanders. Was that the plan?”. Mr English, everyday New Zealanders cannot see what you are forcing down their throats right now, but they are absolutely choking on it. What are the consequences of having “A plan that’s working”? They are $3.85 a kilo for milksolids—far below the break-even point, as I said earlier. This puts a huge question mark on New Zealand’s dairy industry and its ability to handle its debt, which has trebled to $34.5 billion in the last 10 years, and the National Government made it worse.

This Government, with its support parties such as ACT, sent out signals and distorted the market, which ACT rails against, and now all of us have hell to pay. It will be real farmers though—real men and women—who will be faced with the devastating loss of their farms because the banks will come to collect. We now have mortgagee sales as evidence of that. They have jumped nationwide in the past quarter as lower dairy prices have already hit provincial New Zealand. Support industries are already shutting down. They are shutting up shop and laying off staff in the hope of seeing this cyclical or structural downturn through.

The member before spoke about how they saw it coming—that it happens every 10 years. So why are our farmers suffering through it now? Where was the plan? What did this National Government do about it? We were just told that they saw it coming. Now, the number of mortgagee sales has jumped nationwide. Experts are warning of more foreclosures outside of Auckland’s surging property market as financially strapped homeowners in regional New Zealand start defaulting on their mortgages. Where are the appropriations and where is the policy to deal with the loss of our New Zealand assets? What will it serve us if reluctant—and they are reluctant; they have told us—cash-strapped farm owners, pushed to the wall by their banks, sell their farms to cash-rich but asset-poor overseas investors?

The National Government has been selling the line about being aspirational, supposedly meaning that selling our assets to overseas investors will create jobs—or save them, as the case may now be. How is simply having a job aspirational? How is this Government policy to sell our productive assets and all of our productive land to foreigners—not new New Zealanders, but foreign investors—aspirational? The National Government is telling the people of New Zealand that National’s definition of “aspirational” is to just be content and consider yourself lucky that you have got a job. How can the Government call the sale of New Zealand assets to foreign investors an investment? It is for the overseas investors, but then the profits all go offshore. How can that be an investment for New Zealanders? How is it aspirational to be lowly paid serfs in our land?

The Budget denied the facts when it was written. Most of what we are seeing today was a very real probability on the horizon, and New Zealand First spoke about it then. National did not account for today’s reality in the Budget, and so the estimates for the appropriations are an absolute farce. All the while National Ministers bob their heads up, telling New Zealanders how wonderful they have it. All the while unemployment continues to grow in real terms, despite protestations from the other side of the House. Real unemployment is increasing and we are seeing it in our regions. Regional economies are going to be shutting up shop if we do not do something about it, and, more important, if this Government does not take ownership of the problem, stop living in denial, and actually do something meaningful. Get off “Planet Key” with your “plan that is working” and come back to the real world. Start listening to New Zealanders instead of talking at them. After 7 years of doing nothing, surely even your media spin doctors are asking you: “Is it not time for you to do your job?”. Thank you.

I am not sure I will be taking economics advice from “the Professor” any time soon. I am just going to throw that one out there for the House. This Budget that we are debating this afternoon, coming to the final stages of the debate, was a confident Budget delivered by a confident Government in charge of an increasingly confident country.

In my contribution to the debate I want to focus on the three major themes that I see coming through from the Budget: firstly, the continuation of a sustainable economic plan that is working; secondly, the continuation of the Government’s focus on creating an outward-looking, confident country that is connected to international markets and is welcoming and accepting of migrants, both foreign capital and labour; and, thirdly, the thing that the Opposition does not want to talk about, which is the social investment approach at the heart of this Budget.

On this first theme, the sustainable economic plan that is working, this Budget builds on the hard work of previous years. It locks in and continues to lock in a sustainable programme that is growing the New Zealand economy, creating wages that are rising faster than inflation, and creating jobs. It locks in things like ACC levies falling by $1.5 billion a year, overseen by my good colleague Nikki Kaye—[Interruption] That is right. It locks in extending ultra-fast broadband to over 80 percent of Kiwis. It locks in building skills for industry—things like the ICT Graduate Schools, which I know are going to be very important for our very fast-growing information and communications technology sector. It locks in increased innovation funding through Callaghan Innovation, based in my neck of the woods in the Hutt Valley, which I am very pleased about.

In short, this is a confident Budget that does all the things that New Zealand needs to grow and get ahead in the 21st century. Also it locks in things like a fast-growing economy, wages rising faster than inflation, and over 200,000 jobs created since 2011. As my good colleague Judith Collins pointed out just a few moments ago, we have positive household savings in New Zealand. We have had those for 5 years now, and the last time we had a rate like that was in 1995.

So what has been the response of the Labour Party and members opposite to this very good Budget? Well, the first response, which came right at the start of the Budget debate all those months ago, was Andrew Little’s pitiful response speech. I know it was a long time ago, but it really was absolutely pitiful. It was just hilarious to sit there on this side of the House and see Labour members opposite. They realised, I reckon about 5½ minutes into the speech, that it was going to be probably the worst Budget reply speech since David Shearer’s speech 2 years before. I reckon they realised about 5½ minutes in. I think he realised it too, actually, to be honest. I reckon Andrew realised it was going to go pretty badly, and that is when we got the references to Gene Simmons, the constituent—you know, the terrible joke that annoyed Young Labour and everybody else about “fiscal gender-reassignment” surgery and all of those lame attempts at humour. So that was the first response from the Labour Party.

Then in the weeks afterwards we had the obsession with the surplus. You will note that members opposite stopped talking about the surplus, but for the initial weeks following the Budget there was this obsession with the surplus and that the previous Budget, in 2014, had forecast a very small surplus, and then Budget 2015 comes along and it forecasts a slightly small deficit. That is absolutely hilarious, because the Labour Party has spent 7 years opposing every piece of fiscal restraint that this Government has enacted. It opposed every cut, even of things like Moroccan cooking courses and subsidised macramé classes—all of those very sensible and prudent things that the National Government has done. Sue Moroney tweets away about how it is a human rights violation to stop somebody from having a $3-a-week macramé class or a Moroccan cooking class. Members opposite have opposed every single cut and then they turn up and say “Oh well, you should have got back into surplus. I mean, tut, tut, tut! Naughty you, National Government. You really should have got there sooner.” Right?

Also, members opposite spent the first year after the 2008 election calling for fiscal stimulus. David Cunliffe used to issue very serious press releases about the global financial crisis that was happening in the world and that the National Government must respond in a resolute and forthright manner and immediately massively increase deficit spending. If we had followed that path—and we did run a deficit; we have run a deficit for a number of years—and massively increased spending, we would be in far more of a hole.

Of course, we should never forget that it was the Labour Party’s reckless fiscal mismanagement of the economy that caused us to go into recession before the rest of the world, before the global financial crisis. Its mismanagement pushed up Government spending, pushed up interest rates, and pushed up inflation, and caused us to go into a recession before the rest of the world, caused us to have 11 percent mortgage interest rates and 5 percent inflation in 2008, and caused the tradable sector of the economy to be in recession for 5 years. Having caused the problem in the first place, the Labour Party then has the temerity to turn round and complain about the measures we put in place to try to tackle that deficit. Then it has the temerity to turn round and complain that we should have got there sooner. So I think that was a pretty silly response. But it quickly realised that was not a good idea.

Then we moved on to the diversification argument. Labour became obsessed with diversification, ignoring the fact that this Budget, like Budgets previously, has been precisely about diversifying the New Zealand economy. That is why we have been investing in things like research and development—and those members often complain about that. This panacea of the New Zealand economy is research and development tax credits. Well, there is more spending on research and development and science and innovation by the Government than ever before. It has increased at a rapid rate under this Government—a 70 percent increase since 2008. So we are doing that, and that is why things like the kiwifruit industry are doing well. That is why things like the information and communications technology sector are doing well. That is why the red meat sector is doing well. That is why tourism is doing very well. This economy is diversified.

Then we have the argument that it is all about dairy. So along come some price shocks in the dairy industry and then the Labour Party goes: “Well, you’ve gotta do something—you’ve gotta do something. We don’t know what—we don’t know exactly what, but you must do something.” This is the classic response of social democrats everywhere, of socialists, and of left-wing parties: “The Government must do something. You have to do something. We don’t know what. We need a plan B. We don’t know what that plan B might be, but you must do something.” So now the Labour Party is obsessed with dairy and forgetting about the diversification argument.

Then we get Andrew Little saying that we need foreign investment in New Zealand, literally an hour after railing against foreigners investing in New Zealand. I mean, these guys seriously do not know what they believe any more. They really do not. So the Labour Party has not very much to say about one of the central themes of the Budget. That brings me very nicely to the second theme, which is about an open and confident New Zealand. This Budget increases support for New Zealand Trade and Enterprise. It increases support for our international education industry. It increases support for the Ministry of Foreign Affairs and Trade to negotiate things like free-trade deals.

I want to make a very serious point about the Trans-Pacific Partnership here, because there is a very serious question for the Labour Party in the next few weeks and months, I hope, with the conclusion of the Trans-Pacific Partnership talks, which I hope will happen. It actually is almost an existential question to the history and reality of what the Labour Party is. It is almost a crisis inside the Labour Party.

The question for the Labour Party is this: is it going to be a responsible party of Government that continues the bipartisan consensus actually started by its own party in 1984, which is that New Zealand’s future is one that is connected to the world, that is connected to the global economy, and that does not try to insulate itself from global competition and market forces? Is it going to be that responsible party, or is it going to be a party that harks back to the worst excesses of 1970s orthodoxy, of big government, of repressive insularity, of a Government that tries to shield New Zealand away from the rest of the world? This is “Jane Kelsey-onomics”. Jane Kelsey has never seen a free-trade deal that she thinks we should sign. She was opposed to CER, she was opposed to the China free-trade agreement, she is opposed to the Trans-Pacific Partnership, and she is almost certainly opposed to the Korean free-trade deal.

This is the big question that confronts the Labour Party, and the question for the Labour Party is this: are Phil Goff and Clayton Cosgrove and all of the moderate people who know that that is in New Zealand’s interests—and who, in the case of Phil Goff, actually helped start the Trans-Pacific Partnership negotiations back in 2008—going to win the battle inside the Labour Party? Or is the hard left, the Jeremy Corbyn - supporting Clare Curran and her acolytes—in so far as Clare Curran could have acolytes—going to win the battle inside the Labour Party? This actually goes to the heart and soul of the Labour Party and of New Zealand’s future.

💬 Kelvin Davis: Sorry, can you just clarify what you’re talking about?

My point is we need bipartisanship on the Trans-Pacific Partnership deal. We would like the Labour Party to support this very important deal for New Zealand’s future. Sadly, it seems like the hard left is going to win this battle inside the Labour Party, and that will be to the detriment of New Zealand’s future.

This is a Budget that locks in an open and confident New Zealand that is welcoming of foreign investment, is welcoming of foreign migration, and does not seek to demonise Chinese people like the Labour Party opposite seeks to do. Because of that, I am very strongly in support of this Budget.

That speech said everything about the National Government’s priorities. It now regards the Labour Party’s 9 years in Government as reckless. So what is it that it regards as so reckless? Nine surpluses in a row is clearly reckless, according to the National Government—nine surpluses in a row. Record low unemployment—that is a reckless idea! What a reckless idea that we get people into work! That is recklessness, according to the National Party. Record low debt in New Zealand’s history—that is reckless, according to the National Government. What a reckless, irresponsible Government that would deliver those things for New Zealand! It says everything about the National Government’s current economic management, that it thinks that that is reckless—that it thinks that that is reckless.

Chris Bishop railed against the idea that the Government must do something—that the Government must do something. There are 59 people sitting over on that side of the House who have clearly adopted that strategy. They do absolutely nothing to justify the salaries that the taxpayer is giving them. They believe that the role of Government is to do absolutely nothing—absolutely nothing. Increase taxes—yes, the Government has done that. It increased GST for New Zealanders. Decrease spending in key areas—yes, the Government has done that in a whole host of areas, on a real terms, per capita basis. This is a Government that does not actually want to do anything and does not want to confront the real issues that are facing New Zealanders. This is a Government that thinks a debate about changing the flag is more important than the looming dairy crisis. In fact, it is not even looming any more; it has arrived.

We have a major problem. There were 500 jobs lost at Fonterra. We have got 1,100 jobs lost so far at Solid Energy, with the prospect of more to go. There is 7.5 percent unemployment in Taranaki. Remember the days when the National Government was going on about how great Taranaki was? This was an icon of what provincial New Zealand, regional New Zealand, could be. Taranaki was highlighted there. There is 7.5 percent unemployment in Taranaki under this National Government, and things are getting worse. That is the highest level of unemployment in Taranaki in 21 years, and it has happened under this Government. We reached record low unemployment under the Labour Government, and now we are seeing more and more people unemployed under this Government, while Chris Bishop and the National Government are adopting their mantra of “Government should do nothing.”

The biggest message in that 10-minute contribution was Chris Bishop’s saying that the idea that the Government should do something was preposterous and that the Government should, in fact, do nothing. There are 50,000 more people unemployed today than when John Key became Prime Minister. That is one of the many legacies that this National Government will be leaving New Zealand. The Government’s priorities are all wrong. It wants to change the flag, not fix the dairy crisis. The Government wants to put sun decks and $140,000 televisions in head offices, not deal with the housing crisis. The Government wants to pump up the Beehive salaries, whilst turning a blind eye to the fact that unemployment is going up under this National Government. This is a Government that is breaking so many of the promises that it made to New Zealanders.

Of course, there was no more privatisation under National. The privatisation agenda has ended, unless, of course, it is a State house or some land or it is all of those other things that the Government is selling off. Apparently that is not privatisation, despite the fact that something that was owned by the Government is no longer going to be owned by it. Somehow under National that does not fit the definition of privatisation any more. Of course, what we know about the National Government is that if it cannot sell it, it will cut it; if it cannot cut it, it will restructure it; if it cannot restructure it, it will try to contract it out; and if it cannot contract it out, well, goodness knows what will happen then. The Government simply tries to ignore it. It is a Budget of broken promises.

We spent a lot of the Budget debate talking about the surplus, and then, goodness me, a surplus just sort of popped up. It was only a temporary surplus, but it did pop up. Do you know what one of the biggest contributors to the surplus was? The underspend in education. The money that the Government had budgeted to spend on education, it did not actually spend on education. That was one of the biggest contributors to this tiny, little surplus, which just popped up out of nowhere. The Government stopped spending money that was budgeted for education. Where did the Government stop spending it? The Government released this breakdown, which accounted for about 40 percent of the underspend. Where is the rest of that money? Where is the rest of the money that the Government did not spend on education but that it had budgeted for? I have found out. I know where it is. It is in Investing in Educational Success.

This is the flagship programme that the Government has in the education area, and the Government is underspending on it. The Government cannot give the money away. It cannot give the money away for its flagship education programme. That is how the Government ekes out a surplus—by stopping spending money on health and education. These are the areas where New Zealanders know that money is sorely needed. This Government is so determined that it will eke out some kind of face-saving surplus for Bill English by underspending on education. I think that that is totally and utterly wrong, and it says everything about the Government’s priorities.

I want to talk about the sell-off of State housing, because that will bite in an area like the Hutt Valley, where we have a lot of State houses. It will hurt people in the Hutt Valley—and it is hurting them already. What we are seeing is the wholesale sell-off or demolition of State houses throughout the Hutt Valley. In areas where there were high concentrations of State housing, there is now vacant land—empty land. And what happens to that land? It gets sold off, and new houses get built. Here is the real rort—and this is just amazing—the Government will not release the figures on this, because it knows that they are so damning. The Government gave away over 100 houses in 4 months—literally gave them to a developer and said: “You develop, and you give us back some houses.”

The Government has now admitted that it is buying back the houses. So, basically, the Government gave away the land and the houses, and what did it get back out of it? Absolutely nothing, because the Government is now buying the houses back off the developer. How is that, in any way, a good use of taxpayers’ money? Of course, the Government will not release the information—it is commercially sensitive. The prices are all commercially sensitive. The Government, having given the developer all of the land and the houses that were previously on it, which it then trucked off and used elsewhere—the taxpayer is now having to buy back a small percentage of the houses that exist on that land. How is that good? How is that possibly being accountable? How is that possibly justified?

And that is happening not just in Pōmare; it is happening up and down New Zealand. When I think about these commercial geniuses in the National Government, I tell you: private interests see them coming. Basically, the housing developers see them coming, because they know that they are going to make money. Rio Tinto sees them coming. Skycity sees them coming. It was $30 million for Rio Tinto. Skycity—goodness knows how much money it is finally going to get out of them. They see them coming—the commercial geniuses over there. Such good negotiators they are, that every time Steven Joyce sits down for a meal, the taxpayer ends up forking out more money. He is that good a commercial negotiator that the commercial sector—the private sector—sees him coming and it hooks more and more money out of him.

This Budget is not good for New Zealand. It continues to overlook the very big issues that we have—the housing crisis. The average price to buy a house in Auckland will be $1 million within a short space of time. That is outrageous. It means that there is a whole generation of people who will not be able to buy houses in Auckland. That is something that the Government is ignoring—the lack of diversification in our export industries and the huge potential that exists, were the Government willing to be more active and to be a partner to our export industries. There is enormous potential there. But no, this Government is willing to look the other way. Of course, it is willing to spend $14 million buying an apartment for someone to hang out in in New York, but it is not willing to get in behind and back exporters who want to grow the export market. The Government is willing to allow contracts to companies overseas for significant Government procurements—that is, the Government buying stuff—without even giving New Zealand manufacturers and New Zealand firms a look in. That is just wrong.

There is so much opportunity in the New Zealand economy—so much opportunity to turn things round, to create jobs, to go back to those days when Governments produced a surplus, when we paid back debt, when we had record low unemployment, and when people could actually afford to buy a house. Gosh, what terrible days they were, under the Labour Government! We could go back to those fantastic times for New Zealand if the Government were willing to take so many of the opportunities that exist before it. But it will not, because, as Chris Bishop has pointed out, the National Government believes that Governments should do nothing—as he so clearly articulated in his 10-minute speech, which said everything about the National Government’s priorities. The Government should do nothing—the Government should do nothing. I disagree. I think that if we are going to have Governments, Governments should do something. They should make sure that the conditions are right for job creation, for people to be in work, for people to be buying houses, for housing to be affordable, and for our export industries to thrive. I believe those are functions that the Government should undertake. Not under this National Government—that is not happening, and New Zealanders are being short-changed.

But New Zealanders are seeing through it. New Zealanders have had enough. New Zealanders want to see the Government stepping up, and they are not seeing that. They are growing tired of the National Government, and they are growing tired of the arrogance of the National Government. They want a Government with vision, and they know that they have not got one. Well, I tell you what: they will get one soon, because we are only 2 years away from an election, and there will be a change of Government in 2017. We will deliver for New Zealand the prosperous economic conditions that will create jobs, that will increase incomes, and that will give New Zealanders a foot on to the property ladder, so that they can buy their own homes and so that we can see our social services like health and education really thrive.

It is a pleasure to speak on this Appropriation (2015/16 Estimates) Bill and the Imprest Supply (Second for 2015/16) Bill. This Government has been all about forging a resilient and adaptive economy, and it is working extraordinarily well. What we have seen over the last 4 years, for instance, is 194,000 further jobs created—69,000 of those jobs in the last 12 months—and we have got a forecast of a further 128,000 jobs across the next 4 years. The outlook for growth is stable, at a moderate level of between 2 and 2.5 percent, despite the softening conditions we have seen in commodity markets, particularly in the dairy market. Wage rises have been well ahead of inflation. Average wages grew at about 3.6 percent in the last year; inflation was a mere 0.3 of 1 percent. Average wages have grown 15 percent over the last 5 years. The average wage has risen to $57,000, which is $10,000 a year more than when this Government took office in 2008.

Interest rates are low and will remain lower for longer. There is talk about, potentially, another cut in the not too distant future. But if we look at the record of the previous Labour Government there, when Labour exited, it had interest rates running hard, trying to reach 11 percent, and actually winning the race. Under this Government they are low and they will remain lower for longer. Under this Government we have also seen now 5 years of positive household savings. That is the first time the country’s seen that in 20 years. That is all a good-news story. It is good news for the past few years and it is still a good-news story looking forward. We have developed a resilient and adaptive economy.

But if we listen to the Opposition members, all they want to do is talk down New Zealand and its prospects. One only has to look across to the Opposition leadership seats to see doom and gloom. In fact, the only person smiling on the Labour benches is Grant Robertson, because he sees his leadership hopes rekindled with every day and every speech that Andrew Little makes. I think that Gene Simmons probably agrees with him.

In this Budget this Government has delivered on its pledge for New Zealand, for the next years to come, including a $790 million package to help reduce hardship to the children and their families in greatest need. It includes a $25-a-week increase to benefits for families with children. That is a $25-a-week increase. That is the first increase to real benefits in 43 years.

💬 Sarah Dowie: How much?

In 43 years. And in 43 years there have been two Labour administrations. Neither of those did that—neither of them. We had long years, some might say insufferable years, under those two Labour administrations, and neither of them were raising real benefits, as this Government has done.

But we recognise that the way out of hardship is through work. We do recognise that low-income families can find times tough. So we have included in the Budget assistance for them too—$12.50 a week for low-income families who are receiving Working for Families subsidies but not benefits. We have also increased childcare support allowances for low-income families. These initiatives are targeted at around 160,000 families, covering approximately 300,000 children. This is from a Government that cares, a Government that is prepared to tackle things that are often seen as intractable problems and that takes real measures to help those in need.

Along with that, we recognise that New Zealanders are living longer. We want them to live healthier lives as well as longer lives. So we have increased health spending by $1.7 billion. The annual spend in health is just a shade under $16 billion. In education there is a further $680 million, because we understand and appreciate that if we want a better life for our children in the future, that effort starts at home with the way they are raised at a young age and its continued strength, and it is really reinforced through good education. So there is another $680 million in the compulsory education sector, and that brings that spend to over $10 billion—in fact, almost $11 billion a year. There are significant reductions in ACC levies, helping to reduce costs for businesses, helping to reduce costs for people, and, believe me, a lot of New Zealanders have experienced, and are still looking forward to, the reduction in the ACC levies on their next motor vehicle registration.

As well as that, having heard lots of noise from the other side about property speculation, we took steps to strengthen the tax rules on property investment, the tax rules that have existed in this country for decades. We have applied a brightline test to make sure the courts and the Inland Revenue Department can more readily address those people who are speculating with investment properties, but what we did was strengthen what was already there.

There could be a number of reasons as to why people might say to themselves that the Opposition is not fit to govern. Formulating public policy on the basis of what someone’s surname sounds like is reason enough alone for the Opposition to remain on the Opposition benches for decades to come. [Interruption] But beyond that—it might be based on analysis, but it was poorly directed policy, I can tell you that. So if that is not reason enough on its own that Opposition members should stay there for decades to come, they do not even understand the existing tax provisions in New Zealand. There is already a capital gains tax in New Zealand for people who speculate on property, and what this Government has done is strengthen the measures to make sure that it can be applied more readily in court and by the Inland Revenue Department. And members opposite oppose it. They scream black and blue about property speculation and then oppose measures to do something about it. Well, that is just simply a party that is not fit to govern at all.

Along with this we have been doing a lot around building this resilient and adaptive economy to make sure it is diversified, and we have seen the results of that. So over the past year the information and communications technology sector now comprises about 1.7 percent of GDP. On its own, the information and communications technology sector is one-third of the dairy sector, and we appreciate that dairying is going through a tough time. The information and communications technology sector has grown 9 percent per year since 2008, and now it is a third of dairying at 1.7 percent of GDP. International education is $2.85 billion a year and 1.33 percent of GDP. The wine industry, wine exports, is $1.4 billion. That is up 8 percent over the last year. It is about 0.7 percent of GDP, and growing. High-tech manufacturing has gone from $139 million in 1991 to $1.4 billion in 2012. Tourism is now 7 percent of GDP. It is larger than dairying. Beef exports—we have heard a lot of people talk about how although dairy is down, beef is up. It is at $3.1 billion. It has gone up 34 percent over the last year alone.

I would like to spend a couple of minutes, just within this diversified economy, talking about information and communications technology. We have announced in the Budget an additional $360 million around ultra-fast broadband and the Rural Broadband Initiative broadband infrastructure. There is $100 million in a contestable fund to expand rural broadband coverage across the country, $50 million to address some mobile black spots, and an additional $210 million to expand the coverage of the ultra-fast broadband programme to 80 percent of the population. Together, when they are complete, we will be covering almost 100 percent of the population, but probably about 49 percent of the geography, which is why we have announced that $50 million to deal with some black spots. It is a real issue, given the geography of New Zealand. That will bring our investment to broadband infrastructure in New Zealand to around $2 billion.

What we are doing is investing in capability for New Zealand businesses to grow, to employ more people, and to take their goods and services to markets across the country and around the world. What we have seen there, if you look at what ultra-fast broadband has already achieved—look at Timaru. There was a software development company in Timaru that, before ultra-fast broadband, employed one person; now it employs 12. It is able to deliver its services to customers not only across New Zealand but outside of New Zealand. And now the information and communications technology sector is the third-largest sector in Timaru. That is a fantastic result.

Or in Whangarei, where a doctor used to have to book clients into the local hospital for retina scans. He now does them in his practice and sends the results over the internet to the hospital. It is much easier and quicker for him and better for the patients. It is a far better health service. Or the panel beater in the North Shore, who has got a 15 percent productivity improvement by taking photos and videos of the damage, sending them through to the assessor, getting the job done and approved much quicker, and getting the customer out the door.

This is a good Budget for New Zealand. It is a great economy that we have developed for New Zealand. It is one we intend to continue to develop. I commend the bills to the House.