Imprest Supply Debate

I am very pleased to stand and speak on Budget 2016, this Estimates debate, and I am very pleased to support the Hon Bill English on a great Budget, which, across New Zealand, business and all of the different types of sectors are seeing as a good way and good road forward.

Throughout the extent of this Government, National has focused on building a stronger and more prosperous New Zealand. As we know, we went through some very difficult times at the end of 2008 and 2009 with the global financial crisis. We have gone through devastating times in New Zealand’s recent history that brought tragedy and, of course, around that, not only personal cost but great cost to communities and also to the Government. So building a strong economy and a prosperous New Zealand can sound very clichéd, but in the context of those events it has been a tremendous goal, which I believe this Government has strongly pursued, and we are seeing the fruit of it and the benefit of job creation happening in our economy in a very positive and very gratifying way.

It is great to see that over the last 3 years there have been around 200,000 new jobs created in the economy. This reflects businesses that have confidence, businesses that are doing better and are doing well, and businesses that are prepared to invest in opportunities, particularly for young people to come through into the workforce and also to help people who are repositioning themselves into new positions because of redundancies that have occurred.

I believe that it comes down to responsible management, and, whether it is central government, local government, or regional government, we are put in these places to manage the resources that are given to us through ratepayers and taxpayers, very responsibly. It is also because of the hard work of New Zealanders. It is not just responsible management of an economy and all the settings that that economy needs by Governments, by ministries, and by Government departments, but combined with that is the hard work, the commitment, the trust, and the faith in the New Zealand way of life that businesses have as well, and because of that our economy is performing well.

We are projected to be performing growth of 3.4 percent over this next coming year and the year ahead, and that is better than most countries in the world. We can be very thankful about that because it provides more jobs, provides higher incomes, and ensures that we can provide essential services and support to New Zealand families and have families in New Zealand who have confidence that their young people have great futures here. That is a very good thing. So we are very thankful for many, many things, and it does come down to the smart and hard work of New Zealanders who, through those difficult times, have had to be resilient, have had to push ahead.

One of the areas that we have seen development in is this area of innovation, particularly in the ICT sector but also right across manufacturing and, particularly, in the food and beverages sector, where we have seen great growth, expansion, and New Zealand products in high demand around the world.

It is a very competitive global economy. One thing that we need to be is not only smarter but also more efficient because we know that the costs of getting our products to market are very high. We probably live the farthest away from many of our markets than any other country. Therefore, we have to be efficient. It requires infrastructure that will support efficient transportation to ensure that we do get our products to market in the quickest, safest, and also the most cost-effective way. This Government has invested a huge amount into transport infrastructure and will continue to do so. We realise that the route to market is not just road and not just rail but it is also across the oceans. Getting our products to port is very, very important. We need to get them there on time, and in good condition, and coordinate in such a way with the shipping lines that come and service New Zealand so that we get to our world markets and are able to compete.

New Zealand is a very small nation at the bottom of the world—we all know that—yet around the world the New Zealand story is being heard. It is not just about an economy that is doing better than most, and it is not just about leadership that is consistent, stable, firm, and focused; it is about the innovation that takes place.

I was overseas and I was sitting at a restaurant table—and this is a really interesting story because it is a story that you hear about only when you have those conversations. An Indian gentleman and his wife and family were sitting next to my wife and me. We asked each other where we were from. Obviously, I said New Zealand, and he said Boston. He had been in Boston for 25 years. I said: “Look, you must come to New Zealand. We are a beautiful country. You are here visiting this nation.”—that we were visiting at the time—“Come to New Zealand.” He said: “I know New Zealand. I’ve never been there, but I know New Zealand. Every day when I am on my treadmill I am watching videos of the Great Walks of New Zealand”—this is what he said—“and I run the Great Walks.” There are nine of them that the Department of Conservation (DOC) has produced. What this is is the innovation that is putting New Zealand into the world market place.

So there was somebody who said “I see New Zealand all the time.”—perhaps he has probably seen more of the Great Walks than I have. This is the type of thinking where, if we are going to cross the barriers of distance, we are going to have to be smart about how we market this place. This is the type of thinking that I believe is going to make the great difference. He said: “I am coming, and I am bringing my family.” I gave him my card and said: “Please look me up when you come.” He looked at it and said “Oh, you’re a politician, aren’t you?”, and I said: “Yes, I am.” He said “My wife’s father was a Speaker of the House in India and he passed away.”, and then he said that his wife’s mother then became an MP. So I am sure that when they come we will see them here visiting Parliament, and you will know that that is a true story.

💬 Kris Faafoi: We believe you.

Thank you. It is wonderful when the members of the Opposition have such great confidence in a National speaker. Anyway, in terms of management in the economy, one of the areas that we have done—and it has been very important—is to work through to the place where surpluses become increasingly available for debt reduction but also for the reduction of the tax burden in New Zealand.

Back in 2010, taxation was reduced to 28 percent for businesses, which kept us competitive—more than competitive—with Australia. Those sorts of advantages are important because what we are seeing these days, as I said before, are businesses gaining confidence as they do their business in New Zealand, as they export, and as they employ New Zealanders. All of that—I believe, right across the House we would agree—is very important for our future prosperity. The infrastructure investment, which I touched on before, includes nearly $14 billion for our roads. This Government has also, over this last period of time, invested nearly $4 billion into KiwiRail. So you cannot accuse us of just loving tar and tarmac, and people cannot accuse us of not investing into the mode of transport that is most able to carry bulk loads—such as KiwiRail. We believe that all of these aspects of infrastructure are very important for the New Zealand economy.

We have invested over $2 billion in ultra-fast broadband. It is ultra-fast broadband that connects us city to city—to rural areas with the Rural Broadband Initiative as well—but it also connects us to the world. Why was it that that businessman from Boston was able to sit there and watch those videos of the Great Walks of New Zealand? It is because of the platform that ultra-fast broadband offers, and that is part of the marketing strategy of not only Tourism New Zealand but DOC, which produces those videos. It is part of putting our story out there in a very exciting way.

We have great confidence in our quality trade agreements, and I do look forward to seeing the Trans-Pacific Partnership go ahead. We wait with bated breath, of course, regarding the United States—

Order! The member’s time has expired.

It is good to be taking a call in this Estimates debate. I want to speak about the issue that has been hanging over this Government like a dark cloud all through the preparation of this Budget, the delivery of the Budget, and, in fact, the aftermath of the Budget, and that is the housing crisis. There are many items in the Budget, and Ministers have been along to a select committee and have talked extensively and been grilled on their housing policies. I want to do a bit of an overview, a bit of a summary, of those different housing policies, and evaluate them.

Apart from the members opposite, I think that everybody in this House and, in fact, everybody in the country accepts that we have a housing crisis. Let us just look at the most recent kinds of headlines in the last few days: “26 percent annual house price inflation on average nationwide”—26 percent. That is unbelievable. That actually puts New Zealand’s house price inflation right up there with a handful of the international cities that have the fastest-growing house prices. Any day now, the average house in Auckland is going to hit $1 million in value. One million dollars in value for average houses across the whole Auckland region—you would not have believed it a while back. We have got the lowest homeownership rates in 65 years, and hardly a day goes by without some new revelation of the squalor and homelessness that people are suffering as they are squeezed out the bottom of the rental market.

Most recently, we saw revelations that the Government had been referring desperate people, homeless people, to some of the worst slum landlords in South Auckland, who were charging them several hundred dollars a week to live in unconsented garages. Entire families were crammed into a single room of a shared house. That is the situation we are facing.

What is the Government’s response to this housing crisis that is now enveloping the country? Well, most recently, Nick Smith ratcheted up, for the third time in 2 years, the house price thresholds for the home-buyer assistance scheme HomeStart. It is the third time in 2 years the Minister has had to increase the thresholds, because house prices are increasing so fast. In the last 12 months it turned out that only 9 percent of these HomeStart grants were made to people in Auckland, and that just shows you that this kind of tinkering policy, providing some subsidies for first-home buyers, has been rendered obsolete by skyrocketing house prices in the Auckland housing market.

The special housing areas, which have really been the centrepiece of the Government’s housing policy in Auckland, have been around for nearly 3 years. They have resulted in, we think, about 1,200 completed homes in 3 years. A shortfall of 42,000 homes has built up since National has been in office—42,000 homes. That is how much Auckland is short on dwellings, and the Government’s big policy, the special housing areas, has delivered only 1,200 homes in 3 years—a spectacular failure.

With regard to Nick Smith’s policy to develop vacant Crown land, which he announced two Budgets ago and updated with more money in the most recent Budget, he has been scrambling around trying to find scraps of land: power substations—he even had cemeteries, and he even had the old Government House on the list. He promised 500 hectares in the Budget before last, he has found 20 hectares, and I think he has announced only three development deals for that land—again, promising big, but delivering very, very small.

I want to just say, by contrast, that Labour’s policy in this area is a commitment to build—to actually build—100,000 affordable homes. That is what Labour is going to do—an average of 10,000 new, affordable homes for first-home buyers every year. It is going to create 5,000 new jobs in the construction industry. It is going to ramp up the building and construction sector to the equivalent of the top of the cycle, and maintain it there for a decade. It is a serious policy, designed to change the market dynamics and to revive and sustain a flagging building and construction industry that is struggling to match the kind of red-hot demand that we see at the moment.

Labour has announced that we are going to legislate for an affordable housing authority: a central government - mandated urban development organisation that will maintain the Government’s urban land holdings and set up project-specific urban development authorities to deliver thousands and thousands of new, affordable homes in the context of high-quality, master-planned new developments. We have proposed a whole new approach to managing urban growth that recognises that restricting and stopping cities from growing up and growing out has only one effect, and that is to drive land and dwelling prices up.

Labour is proposing a whole new approach, far more radical, and far more courageous and thoughtful than the kind of business-as-usual approach that we have seen from the National Government with its national policy statement, which came out just after the Budget. It is actually far more of a bold reform than the Auckland Council’s unitary plan, which is just a kind of business-as-usual approach with a bit more up-zoning and a bit more greenfields land. That is the kind of tinkering, business-as-usual, lacking in ambition approach that we have seen from the National Government.

Let us talk about the influence of speculators in the housing market, because that is something that is a big topic for debate when 46 percent of all property transactions in Auckland at the moment are going to speculators—46 percent. The staggering levels of house price inflation that we are now seeing in places like Wellington, Tauranga, Hamilton, and others are being caused by Auckland property investors, who are fleeing the Auckland market because of the Reserve Bank’s loan-to-value ratio lending restrictions and driving up house prices elsewhere around the country. What is the Government’s approach? Last year it introduced a 2-year brightline test, saying that if you flick a house within 2 years of buying it, or a rental property, you are going to pay income tax. Treasury told the Government it would be ineffective. It said it would be lucky if it raises $5 million.

What has Labour promised? We are going to push that out to 5 years, so that if you sell a house or a rental property within 5 years of buying it, you will pay income tax on the capital gain. That is a serious policy. We have signalled we are going to move on negative gearing. Last year property investors pocketed $650 million in tax breaks as a subsidy for speculation. Negative gearing is the practice of being able to write off your losses on a rental property. If you are getting less in rental revenue than you are paying in mortgage interest, you can write off those losses against other taxable activity. Labour is going to put a stop to that.

The biggest contrast is with the Government’s dodgy manipulation of the foreign buyer data that Land Information New Zealand has been gathering for the last 9 months, claiming speciously that the data shows only 3 percent of people in the market are foreign buyers. It is obvious—and the Government was ridiculed and laughed out of town by the commentators and by the media when it released this data a couple of weeks ago—that is it much more than that, probably two or three times as much.

Let us look at the rental sector, finally. More than half of New Zealanders rent. We have seen that Nick Smith’s policy to set insulation standards has a giant loophole in it, allowing redundant insulation standards to continue in rental properties. We are seeing a systematic selling-off of State houses. In the middle of a housing crisis, the Government has reduced the total number of State houses by a net 2,500—in the middle of a housing crisis—while it has pulled $500 million in dividends out of Housing New Zealand while people are living in garages and campgrounds. It is unbelievable.

Labour will set standards for healthy, dry homes. We will make it illegal for landlords to rent out cold, damp, mouldy homes—and this Parliament will have a chance to vote for that when Andrew Little’s bill comes back to the House. We are going to revitalise State housing in the 21st century. We are going to stop National’s sell-off. We are going to bring Housing New Zealand back into the core Public Service with one job, and that is to put a decent roof over the heads of people in this country who need it. We will build more State houses and increase the total number of State houses by at least 1,000 a year until demand is met, and we will more than double the current funding available for emergency housing. Paula Bennett made a great show of saying that she was going to spend $10 million a year to fund emergency housing for the homeless, but she has had to come to this House and admit that it would not generate any new places. Labour will do the job properly.

It is a great pleasure to rise to take a third reading call in the Estimates debate for 2016. I was going to mention to Phil Twyford, the member who just sat down, that normally people say “You had me” at something, but I would say you lost me in terms of the Auckland housing crisis. I thought he was actually going to blame me, the person with a Chinese-sounding surname, for being singularly responsible for the rise in Auckland house prices, but he did not quite go there. He did sort of talk about the issues.

I think that one of the great things this Government has done is help the average Kiwi improve their situation by improving their salaries. The median wage will actually go up to $63,000 a year in 2020. That is actually what we are going to be doing. I mean, that is a $16,000 increase on when we came into Government in 2008. I think that when you look at what Mr Twyford was talking about in terms of house affordability and the housing issue, it is when we have a low interest rate that people can actually get a cheap mortgage. It is an opportunity for average Kiwis to own their own homes.

I remember some years ago when the mortgage interest rate was well into double figures, and even then we were dreaming about buying our own homes—that quarter-acre section—or owning our own villas or townhouses. I remember a long time ago, when somebody actually gave me big advice—that I should buy a home in Queenstown. The price was $30,000. This was some years ago, obviously. I thought: “Queenstown, $30,000—I could probably afford that.” There were huge interest rates back then, and the cost of flights to Queenstown was absolutely astronomical. I thought: “Who would actually go and live in Queenstown?”. A few years ago that $30,000 home sold for $3 million. So it is not just Auckland that has increasing house prices; it is what is called advancement.

💬 Todd Barclay: Even Gore’s up. $208,000—the average there.

Thank you, Todd, for contributing there.

The issue is about the modernisation of cities. Global cities around the world are have housing issues. There is also the issue of people wanting to come back to this country. We used to have a problem with New Zealanders who did not want to live in New Zealand. They wanted to go across the Ditch or overseas because life was so difficult in New Zealand. Now we have people wanting to move back because New Zealand is such a great country. We should be celebrating that success—people thinking that New Zealand is doing great. We need to build more houses—we do actually admit that, and we are doing that. The fact that this Government is building more houses than the previous Labour Government is a testament to that.

During the previous debate on the Estimates—and I have to say that I have enjoyed the speeches of the Ministers and my colleagues from this side of this House particularly—I did not have time to raise the great work that Minister Joyce has been doing to support rural economic growth across New Zealand. His work as part of the Business Growth Agenda has been helping to revitalise job growth and better infrastructure around our regions. The regional programmes that the Minister and the Ministry of Business, Innovation and Employment have been working on are great.

Just a few days ago, at the start of this month, my colleague from Kaikōura, Stuart Smith, and I met with a group of rural Korean students who are studying in different New Zealand regions as part of joint initiative between Education New Zealand and the South Korean Government’s educational enterprises. It stems from the free-trade agreement (FTA) that was struck between Korea and New Zealand. There are about 150 students here, and they are given the opportunity to experience New Zealand’s rural lifestyle. In Korea the rural lifestyle is actually very different.

The fact that we are giving them an opportunity to learn from New Zealand—and they will take their experience back to Korea—is something we are providing as part of the FTA. It is not just about trade. It is not just about the dollar signs or selling our products. We are also having people-to-people contact. The fact is that those students are living in Kiwi homes, in homestays, and they are also providing Korean culture and Korean etiquette. These are the things that they bring with them to the Kiwi families they encounter.

When talking about those kinds of encounters, I think I have to talk about the success of the tourism industry. The tourism industry is thriving in this country. I know that my colleague Jonathan Young talked about the people whom he had met and how wonderful it was that they have high regard for New Zealand. I have to also espouse the same experience when I recently took my son back to Korea. When they heard about the fact that we were from New Zealand, they had these dreamy eyes. Apparently New Zealand is the dream location for their holiday plans, especially with the issues of threats of terrorism in Europe and also recently in Asia—terrible things.

People are frightened, and they look to New Zealand as a safe place for them to travel to. It is such a wonderful environment where they can experience nature. They talk about the great rides, the great walks, and also the ability to ride their bicycles. There are more hotel rooms being booked. There are over 88,000 more visitors from China alone visiting our country. There is more funding being made available for medium-sized tourism ventures, such as the world-class cycle trails all over our country. There is $25 million in additional funding over the next 4 years to help those cycle trails deliver a world-class experience, and other similar projects supported by this Government are helping to support local businesses, local economies, and grow New Zealand’s economy as a whole.

The Government has also invested an extra $37 million in upgrading the infrastructure that is underpinning and supporting growth in the tourism sector. Part of this funding is to help regional mid-sized facilities through a new fund that will help them to be able to enhance visitor opportunities to enjoy our nation and to grow the number of tourists, both local and international, visiting all parts of our great country. Supporting our tourism industry supports community well-being. It helps communities to grow in a healthy way, where jobs create more houses, create more local industries, and also offer new opportunities to the people who live in those regions.

A strong plan supporting the tourism industry in rural communities is a great initiative by this Government, and one I am happy to support. Just on Saturday I was able to travel up to Whangarei to meet with my Korean community. I was accompanied by the wonderful MP for Whangarei, Dr Shane Reti. One of the comments that the Korean community made was the wish to have more visitors coming up to Whangarei, so those people can grow their businesses. I think tourism is something that we should encourage in all fields, and we should encourage more infrastructure to be built in those regional cities also. I totally support that.

One of the things that I talked about with the Korean community up in Whangarei was those people’s ideas and views about how this Government is actually working and what they would like to see. One of the things they talked about was the new initiative in terms of provisional tax. Provisional tax has been a large burden on small businesses, and they thought that this Government was doing a great job of introducing a way to reduce the burden for small businesses. They congratulated me on a job well done, so I shall pass that on to the Minister who is introducing that measure.

The Government’s fiscal priorities have been to maintain rising surpluses and reduce net debt in this country. I think this National Government has actually delivered on that. The hope is that we can reduce debt to 20 percent of GDP by 2020 and work to reduce taxes, and overall help Kiwi families and businesses to get ahead. I think we are in good heart. I commend these bills to the House.

It galls me to hear the contribution from the last speaker, Melissa Lee. Let us put this in perspective. She quoted all these fantastic tourism numbers and spoke of growth in tourism in New Zealand. As a member of the House who grew up in tourism and who is our tourism spokesperson now, I say that in terms of the numbers that were quoted, you cannot fault the statistics. But the implication that the Government had anything to do with it, with regard to the appropriation debates that we are having now, is misleading in the extreme. It is farcical that the member would imply—and that is all she is doing; she can only imply—that this Government had a hand in tourism growth in this country. It is patently untrue—untrue.

The reality is that tourism around the world and here in New Zealand is growing. It is a fantastic thing to see—and, thank goodness, for those Government members who do nothing but just sit there and cherry-pick something to talk about in the House. They are not talking about dairy any more, are they? They dare not talk any more about what is happening to the dairy market. They were, a couple of years ago, when it was going strong, and they had nothing to do with that either. But now they are talking about tourism like they had something to do with it.

To contrast the contribution from the previous speaker—the take from the Government in terms of GST revenue alone totalled nearly $1 billion. The Government spent approximately $300 million, nearly $400 million, on funding Tourism New Zealand and other projects, which is—I do not know, shall we go so far as to say “commendable”? But then the Government talks to New Zealand about the tourism infrastructure fund like it is going to solve the problems that regional New Zealand, especially, is experiencing with regard to capacity issues with tourism numbers that we are experiencing right now.

Not only will seven to 15 new public toilets, to be built over the next 4 years, do nothing to help New Zealand’s severe infrastructure shortage in terms of coping with these tourism numbers, but, in fact, what we are hearing now from the tourism industry itself is that unless there is a greater investment—and we are talking big, big numbers; not $12 million over 4 years—our New Zealand brand is going to be affected negatively. Our brand is going to go backwards. That will affect our tourism dollar take, and the Government is literally doing nothing about it except coming up with a $12 million fund and spinning it as though it is solving New Zealand’s problems. It is just completely unacceptable.

With regard to monetary policy and the juxtaposition we have with regard to that and the appropriation debate we are having today, let us get real about the situation. The Reserve Bank Governor has come to the limits of his power. No longer is he wielding a blunt axe; actually, just about anything he does can be damned if he does it, and damned if he does not. The problem we are experiencing, and—excuse the pun—the flip side of the coin, is that this Government’s fiscal policy is bereft of ideas, bereft of forethought, and is simply reactionary in nature, and not even sufficient at that.

The reason I say that is that if you look at spending on health, spending on the police, spending on education—just the big things that come to mind as I make this contribution—although the money number for those has gone up in relation to the number of people living in New Zealand, those real numbers have fallen, and it is hard for some on that side of the House to appreciate the very, very big difference. This Government is spending less on education, less on health, and less on—I think there were 19 or 20 appropriation sections, and I think 18 of them went backwards in real terms. So that is the legacy of this Government. It is reacting, but it is not reacting well enough.

As for the previous speaker making a statement around debt going down—she did not specify what; she said “debt”—when the last Government left this House and this Government took over, the debt was around $8 billion. It is a big number in the average Kiwi’s head, but that number has gone beyond $80 billion and is screaming towards $100 billion. That is the legacy of this National Government. That is the acuity—these are the responsible money managers whom we are supposed to believe, and that is what they call themselves. That is their legacy. It has grown more than tenfold, and, in anyone’s books, that is huge. With regard to debt, that is completely unacceptable.

I really wanted to talk about only two things in my contribution, but the previous speaker got me fired up, as those on that side of the House are wont to do. I want to just point out that the Budget and these appropriation debates highlight two points: the first is that this Government has no idea where regional New Zealand is, and the second one is that it has been asleep at the wheel for 8 years over the Auckland housing market. Just unbelievable. Actually, it is two points, but it pretty much covers the entire New Zealand economy.

This Government is just ignorant of what is going on around it in the bulk of the country. It staggers the mind. It truly staggers the mind that some of those MPs are only just realising now—as is the New Zealand public, as the polling figures come out. New Zealanders are only just realising now that the Government has no idea what it is doing. It has no plan. It is reacting poorly from case to case, and as for “A plan that’s working”—which is not even a byline any more; it was the big statement around the last Budget, if I remember rightly—well, there was no plan, and nobody understood what it was, because the Government would not, and could not, tell us.

With regard to the housing crisis, I think it is fair to say that unless you are over what I have coined the “rich line” now, it is no longer about middle-class New Zealanders—you have got to be rich to live in Auckland, basically. Let us put that into perspective. Principals in New Zealand are in the top 10 percent bracket of income earners in New Zealand. So, principals—top income earners, top 10 percent—were told by the Prime Minister they would have to downgrade their expectations when it comes to buying a house in Auckland if they want to live there. That is the top 10 percent earners in this country being told to downgrade their expectations by the Prime Minister and a group of people who are doing nothing to address the issue of the housing crisis in Auckland.

And it is spreading. It is spreading like a virus. Down into Hamilton, up Whangarei, down into the electorate of Rotorua, prices are getting out of kilter with reality. It would be awesome if house prices were going up because there were increases in New Zealanders wanting to live in Rotorua, there was a huge growth of jobs there, and, you know, normal economic factors were contributing to growth, which was leading to an increase in house prices, but that is not the fact. We are getting that Auckland market coming down and speculating in the local housing economy. It is distorting reality, and the very real nature of the problem is that rents are becoming unmanageable for the average Rotorua household that does not own their own house, and, more and more, Kiwis cannot even get into a house. That is the legacy of this National Government. That is what is happening.

No matter what these Ministers say, they are failing at doing their job. The Government’s lack of action and its short-term focus is literally killing the future of New Zealand and the people in it. We have watched our economy being propped up by poor immigration policy—a “short-term-itis” fix to a long-term problem—and National is reluctant to do anything about it. This Budget has done nothing to address those issues. Thank you.

I am delighted to take a call in this appropriations debate and delighted to take a call after the last speaker, Fletcher Tabuteau. I will endeavour over the next 10 minutes to educate him about the regions and about what this Government is doing to support our economy moving forward, but not only that but also to support our families and the most vulnerable in our society, to move them on to independence and to achieving their hopes and dreams.

I am going to start by congratulating the Hon Bill English on delivering his eighth Budget. I think it was a very, very good Budget and one that builds on this Government’s record of responsible, sensible, pragmatic, and compassionate governance of this country. So not only is this Government supporting businesses to do what they do best—to grow the economy, to grow their markets and, of course, to take those risks, to take on extra staff, and to employ the extra person so that they can grow their own skill base and support their own families—but it is supporting the vulnerable, as I said earlier. This is evidenced by the statistics. We have heard that statistics do not lie, and there is forecast growth of about 3 percent over the next few years and unemployment is forecast to drop below 5 percent in the upcoming year. So we are the envy of the OECD.

Not only are we in Government going to continue to deliver on our fiscal priorities, to maintain surpluses, and to our reduce debt by 2020 but we are continually looking at the economy as a whole. So, yes, I acknowledge that we do need to focus on our larger centres. Auckland will always beat the likes of Invercargill in GDP and the money-go-round, but we have a lot going for us down South as well, and this is a Government that looks to the regions to support our economy and assists the regions to do well.

💬 Dr David Clark: Neglecting the regions. The Southland economy has shrunk 10 percent in the last year—shrunk 10 percent.

The Southland economy is doing exceptionally well. It is still producing 14 percent of New Zealand’s total exporters’ receipts and boxing well above its weight—and I will continue to educate you, David Clark, along those lines.

💬 Hon Michael Woodhouse: Speak slowly.

Ha! I will—I will, Mr Woodhouse. I will speak very slowly so that the Opposition can pick it up. With regard to regional economic development, I am very, very pleased that this Government has come up with the Innovative New Zealand fund. The Innovative New Zealand fund is a whopping $761 million that is going to encourage entrepreneurship and business growth, and that has three parts.

The first is $411 million—and that is over 4 years—designed to develop and promote high-tech, clever ideas so that people can expand in that science sphere and come up with new ideas to commercialise, build markets, and do well.

The second is $257 million, and that is in respect of building apprenticeships in the areas that we need. We are looking at sectors like science, engineering, and agriculture—and, certainly, down in Southland we need more of that. We need more agriculture and engineering experts down in Southland to help support our primary industry.

The final one—which I am really pleased about—is supporting regional economic development with initiatives that are going to unlock business opportunities and have real tangible benefits for our regions. These are tailored to our regions, to build on each region’s individuals strengths so that each region can continue to diversify its economy, create jobs for its people, and do well.

In that regard, I want to talk about our SoRDS group—the Southland Regional Development Strategy, otherwise known as SoRDS. Some regions are more developed than others in respect of taking the lead and owning what goes on in their region, and, with the SoRDS group, Southland is one of those. It is a 2-year programme of a group of business people coming together to develop an action plan for Southland, and its target is to attract 10,000 more people to Southland by 2025. Funnily enough, migration plays a really big part in that. So the Opposition talking about reducing immigration leaves a bad taste in Southlanders’ mouths because we are crying out for skilled migrants in Southland. We are crying out for skilled people to come to our regions and take up our jobs that exist. We have a very low unemployment rate. We have a very high labour participation rate—74 percent—

💬 Dr David Clark: Unemployment’s doubled since 2008.

—when the national average is 64. We have an unemployment rate of 5 percent, which is still below the national average. So we are doing very, very well, but we need more people to increase our production and keep our production up. So, yes, we need to look overseas for those skills, and we were very happy to have our Minister of Immigration, Mr Woodhouse, come and visit us recently so that we could talk about the challenges that we face.

💬 Hon Michael Woodhouse: What was business asking for?

For more people—for more skilled people. So I think that our point system that we have at the moment, and the changes to the point system to encourage people to the regions, is going to stand us in good stead moving forward.

Along with that goal of attracting 10,000 more people to live in Southland by 2025, we are looking at new industries and at expanding existing industries. Currently, we have 20 percent of New Zealand’s aquaculture in Southland, producing salmon and, of course, oysters on Stewart Island. We want to expand on that. The Government has, thankfully, come in behind that, in a partnership with the Ministry for Primary Industries, our SoRDS group, Ngāi Tahu, and local government, and we are undertaking preliminary research to look at the Southland coastline as to where aquaculture could be viable. It is very preliminary at this stage, but we need to undertake some good science so that we can establish where there is potential and then look to invest in that potential. If you look at some of the statistics, for every hectare of space in aquaculture there are 22 jobs and around about $13 million in revenue. That is going to support our families moving forward, it is going to create more jobs and more revenue for our region, and I am pleased that the Government has come in behind that and is supporting Southland.

The other thing that Budget 2016 has done is invest in infrastructure—$2 billion in faster, better internet across the country, with a goal to connect 97 percent of people on the Rural Broadband Initiative or ultra-fast broadband by 2019, and that is so important for Southland. Schools were some of the first to be connected, and I want to talk about Stewart Island again, because the students at Halfmoon Bay School get to enjoy a wonderful island lifestyle—out recreating in the natural bush, enjoying an island lifestyle—but they want to go school, they want to learn, and they want to have a well-rounded education. With that connection to fibre, they can Skype to learn different subjects. What they do at this stage is that they Skype a teacher in Blenheim to learn music, and I think that that is fantastic—that these young students can stay on the island and enjoy an island lifestyle, but still learn and have a well-rounded education.

I want to end with Battle for our Birds—$20 million invested into Battle for our Birds. You only have to look, again, at Ulva Island. It is pest free, and the birdsong on Ulva Island is absolutely fantastic. Having Battle for our Birds and keeping our conservation efforts up increases tourism. Tourism has now overtaken dairy. It is one of our largest earners in the country, and we want to continue to promote ecotourism in Southland, to grow that pie for our people, and, again, to create more jobs and more wealth for our families. This is a Budget that is growing the economy but it is also supporting our families, and I am very, very pleased to be part of a Government that is doing that.

I cannot avoid, now, using Southland as an example of how this Budget has failed—it is something I want to come back to. That speech there shows just how out of touch this Government has become. The member for Invercargill, Sarah Dowie, tried to paint economic development in Southland in a good light, when it has dropped by a whole 10 percent—a whole 10 percent—in 2015. I hope it is simply a coincidence that that has happened in the time since she was elected the member there.

I do not think it is entirely her fault that it has dropped 10 percent, but you do begin to wonder, when you hear a speech like that one, which was so disconnected from the reality of people living in that city—when they are living with a health system where funding has been cut by $1.7 billion and people in Southland are missing out on operations, and when roading funding in Southland has been cut by 23 percent. National has cut transport funding for Southland by 23 percent—$14 million—and that is just since 2010. That is how disconnected that member is, and it is a real shame to see someone so out of touch when her constituents are crying out for support. The average household income in Southland fell by $49 a week last year—the average household income fell $49 a week in Southland last year. It is extraordinary.

I spend a bit of time visiting Invercargill. I wonder whether the member herself has ever been there, because with that kind of reality—it is an alternative reality. It is not how things are going in that city right now. There are lots of great people in Invercargill. I have met loads of great people with great ideas. The transport museum is going ahead. There are people who are working hard on their farms trying to make a crust, risking their shirt every day, and then you have got a member there who is trying to pretend that everything is rosy, when 10 percent is knocked off the economy there in just 1 year. Unemployment, she said, is very low. Well, it has doubled—it has doubled—since 2008 in that part of the world, under this Government’s watch. It is extraordinary. National has also cut, let us not forget, $109 million just from the Southern District Health Board budget, in real terms. That is under this Government’s watch. This is a real example of regional neglect.

I am glad the member Sarah Dowie has brought up Southland, because it is like a poster for regional neglect under this Government. Burglaries in the Southland police area—my colleague Stuart Nash has been looking into the staff cuts in policing and the effect that that is having. Burglaries in the Southland area rose by 11 percent in the past year—an 11 percent increase in burglaries. We have got assaults up by 41 percent—up by 41 percent—in the Southland area, and that member over there says that everything is perky.

That shows just how out of touch and arrogant that Government is becoming. It can look at that situation and say: “Everything’s fine. All of you people in Southland who are doing it tough—nothing to see here. You’re imagining it. You’re just imagining it.” The burglaries have gone up. The assaults have gone up. The funding for the hospital is going down and roading has been cut by 23 percent, but Southlanders are just imagining it. The economy is down 10 percent, but they are just imagining it. The Government is doing a great job, if you would believe that member.

Well, this Government is too focused on those at the top. That is the reality. It has become more and more focused on the super-rich. I am not talking about middle New Zealand, those people who are working hard every day. It is not interested in them any more. It is interested in only the super-rich. We have seen it, of course, with the tax haven investigation it did not need to have and then was forced—embarrassed—into making. We have seen it in numerous areas. The Government has crept up the health funding a little bit this year—just nearly keeping pace with inflation—because it is so embarrassed by that $1.7 billion it has cut out of the health budget, but middle New Zealand knows the reality is different from the way the Government is painting it.

Working families under the last Labour Government—and I was not there, so I cannot claim credit for this—got 50 percent of the value of growth in the economy, and it grew, of course, a lot faster under the last Labour Government. Under this Government that portion of the economy has grown by just 37 percent. Working people got just 37 percent of the benefit of the minimal growth that there has been. So a smaller and smaller and smaller portion of the value of economic gains is going to working people. Most of the money, unfortunately, is going to a very few at the very, very top. That is whose interests the Government is looking out for.

So under this Government what we are seeing is the Kiwi Dream slipping away. The aspiration to own your own home—I speak with students in my own electorate who say they cannot now imagine owning their own home. When I was a student, I think pretty much every student thought that if they wanted to one day and if they worked hard, they could own their own home. Well, there is now a generation of students who cannot imagine that. They are burdened with student debt, and homeownership rates have plummeted. The homeownership rates used to be over 50 percent for 25- to 40-year-olds. Now they are down at just 25 percent. That is on this Government’s watch, and those inequalities are growing.

Those at the very top are getting wealthier, but, actually, 99 percent of New Zealanders are doing it tougher than ever under this Government. They are working hard. They are trying to get ahead. They are doing the right things, but this Government keeps putting roadblocks in the way. It is not supporting rural aspiration. It is neglecting the regions, and that is what we looked at, of course, with these Estimates. The regional neglect was evident there in the tiny pot of money set aside for regional development. There is nothing that will change the dial. There is a little bit of window dressing here and there. That is Steven Joyce’s style. He wants people to think he is doing something. There is a little bit of busy work there, but there is nothing to change the dial in the regions.

Of course, these members, when they do go and visit their regions—if they do get out beyond Wellington—will see that people in the regions are crying out for support. The understanding of regional neglect is very real when you go to a town like Gisborne. There are people there who want to get ahead, who are working hard, and who have aspirations, but the Government just is not coming to the party. The Government is not coming to the party.

💬 Meka Whaitiri: It’s absent.

It is absent. My colleague is absolutely right, and she is there on the ground working with those people. It will be a good day when she is a Minister in the Government making the change that matters for those people. It looks like it is coming closer, because these people on the other side of the House are getting so out of touch.

We on this side of the House would do things differently. We would invest in people. We have said that we want to have 3 years of post-secondary education for free. We will not be getting there in our first term. We have laid out a plan. Some people say “Look, you want to do it faster.”, but we have set out a plan that is affordable, where New Zealanders can get 3 years of free post-secondary education so that we as New Zealanders can retrain as we need to, so that people in the regions can access education, and so that education provides opportunity for everybody, not just the super-wealthy. That is part of the Kiwi Dream.

We have said that we will, over time, get that money back—the $1.7 billion that the Government has stripped out of the health system. We will make sure that people do get the operations that they need. We will make sure we have better public healthcare. We will make sure that the economy is there to support those changes and aspirations that we have, because we know that more equal economies tend to do better. Where you support people to have the basics, where you make sure that every person has a decent education, where kids go to school with food in their tummies, where they have access to quality education, and where the infrastructure is there to support opportunities in the regions, countries get ahead.

Under this Government, unemployment is going to be up—by its own projections—by 45,000 at the next election, since it took office. It set itself a target of growing exports. It said exports would grow to 40 percent of our gross domestic product. Well, where is it now? It is actually back behind the starting line. It was around 30 percent when it started. It is now at less than 30 percent and going backwards. That is a sign of a Government that is failing to meet its own goals.

What we would like to see, of course, is our regions succeed, because New Zealand cannot afford a two-speed economy. We cannot afford to see one or two cities in New Zealand getting ahead—and they have got their own problems—whilst the regions are left alone to suffer in silence. That will not get our country ahead. We need every part of New Zealand to be succeeding if our country is to get ahead. We want to make sure that wage and salary earners get their share of the gains that we are getting in our economy. They are very small, and we want to grow them, but we want to make sure the wage and salary earners get their fair share, too.

In 2015 the fact that that share of the economy was going more and more to the very, very wealthiest meant that the average family in New Zealand got $50 a week less in the pocket, in real terms. That is huge. That is absolutely huge, and families are noticing it because they are not having the kind of disposable income that they used to have.

We have an aspiration for New Zealand. We are calling it the Kiwi Dream. It is about making sure New Zealanders have the opportunities they need to get ahead. It is making sure healthcare is properly funded. It is making sure the regions are supported in their aspirations. It is about making sure all New Zealanders get a fair suck of the sav. Thanks very much.

I am pleased to be following that member, David Clark, so that I can remind the House that that is the member who has led the Labour Opposition to the position of opposing trade and opposing future export opportunities for New Zealanders. He is the man who has led the Opposition towards a position that is completely divorced from what any Labour Government has ever held as a position previously in terms of trade. For anyone who was listening to David Clark talking in the House about trade and about exports and about growing the economy, do not listen to a word he has said. Do not listen to anything he has had to say about growing the economy or growing exports or growing trade, because we know that Labour is the party that no longer supports trade.

Labour no longer supports the export sector in our country. It no longer supports people in New Zealand who are trying to get ahead by wanting to export more goods and services overseas, and David Clark is one of the architects of the Labour Party’s new opposition to trade and opposition to supporting New Zealand businesses. It does not support them any more. It does not support the workers in this country any more. The proud tradition that it held previously is no longer one with credibility.

This Government is one with credibility. This Government is achieving good things for New Zealanders. It is a Government that is balancing the books. It is a Government that has led New Zealand through some difficult times and some difficult periods, and we are now seeing the fruits of New Zealanders’ hard work. We are now seeing the results of a country that has been prepared to go and work hard through the tough times, supported by the Government, and now we are seeing better opportunities for New Zealanders. We are seeing higher wages for New Zealanders. We are seeing more jobs created in this economy under a National-led Government, led by John Key, ably assisted by our Minister of Finance, Bill English. We are seeing more achieved for New Zealanders and greater outcomes for New Zealanders.

The appropriations in the Budget, which we are talking about today, are all about turning our economy more towards the next steps and future opportunities for New Zealand. When we talk about the likes of the education system, we can talk about the additional investment that our Ministers and our Government are putting into education infrastructure. When we talk about the likes of the health system, we cannot believe the numbers that the Labour Party has talked about in terms of funding. Funding for health has gone up every single year. It is not just about additional money going into the Budget; it is about getting better outcomes for New Zealanders as well.

We can also point to the fact that New Zealanders are voting with their feet. We are not seeing tens of thousands of people leaving the country, as we did when Labour was last in office. When Labour had the opportunity to govern the country, a whole rugby stadium full of people was leaving the country every single year. That has turned around. That has reversed. New Zealanders are voting with their feet. [Interruption] We do not have to listen to what those members want to say in the Parliament; New Zealanders are voting with their feet and they are deciding for themselves where they want to see their future opportunities for New Zealand.

Under Labour the future opportunities for New Zealanders are in Australia; under National the future opportunities for New Zealanders are in New Zealand. They are coming back to New Zealand in their droves. They are coming back here because they see future opportunities for their children. They see future opportunities for their families. They see that we are creating more jobs in this economy and they see that wages are going up. They see that the education system is leading to more children getting National Certificate of Educational Achievement level 2, and they are seeing that the under-investment in education is being reversed. They are seeing that their children and their families have more access to elective surgery under a National-led Government. They are seeing that their children have greater access to immunisation under this National-led Government. They are seeing that there are future opportunities for New Zealanders as well.

I also want to point to the fact that the cities and the regions in this country are doing very well, as well. Yes, we have some housing difficulties in Auckland that we are working through. Yes, there are challenges on the horizon. But let us just point out that much of the challenge that we have in Auckland is a challenge based on the results of success for New Zealand. We are dealing with these challenges because we have been successful as a country. We are dealing with higher migration in Auckland because people are choosing to move back to New Zealand. We are dealing with housing issues in Auckland because people are choosing to move to this country and they are choosing to live here.

We do have a comprehensive plan of action for housing in Auckland, and we do have a lot of work under way to deliver more supply, but I say to the Labour Party and I say to those opposite who have been attacking the Government throughout speeches in this debate that if they really care about housing in Auckland, and if they really care about the first-home buyers in Auckland, come on board. Come on board with the plan to open up Auckland and open up land for more supply. Come on board and support Resource Management Act reform for New Zealand. Come on board and support getting more people into skills and into the workforce and the construction industry. Come on board to the fact that the answer to housing in Auckland is that it is not for the Government to try to build houses; it is for the Government and for the Parliament to create an environment so that New Zealanders living in Auckland who want to build, and who want to have land available to build on have the opportunity to do that.

I want to say something that is not said very often in this Parliament or even in Auckland. I want to say congratulations to the Auckland Council. I want to say congratulations to the Auckland Council on the leadership it has shown on the Auckland Unitary Plan recently, because whatever the question is around housing in Auckland or anywhere else in New Zealand—whatever the question is and whatever you want to solve in the housing space—it all comes back to one answer, and that is delivering more supply. Whether it is through the Auckland Unitary Plan, which will deliver more supply; whether it is through the housing accords that we have had in place, it will deliver more supply; or whether it is the infrastructure fund that we are putting aside for councils to work with us on, it will deliver more supply, and that is the way to get better housing opportunities for New Zealanders living in Auckland.

I also want to say congratulations to Nick Smith on the HomeStart scheme. There are thousands of people, thousands of first-home buyers across New Zealand, who will have greater access to buying their first home through that HomeStart scheme set up by this Government, led by Nick Smith. I know my colleagues Sarah Dowie and Todd Barclay and others from the regions far divorced from Auckland are also seeing their communities benefit from the HomeStart scheme, where people can use their own savings through the KiwiSaver scheme to get access to funds to be able to purchase their first home. We are seeing the numbers slowly ramp up in that particular scheme, and about 90,000 people will have access to their first home under that scheme. I think that is a brilliant thing.

We can combine that with the fact that New Zealanders are seeing their wages growing, the fact that we have delivered tens of thousands of jobs in the past year and the years before that, and the fact that we are going to see another 170,000 jobs created in this economy by 2020. We can combine that with the fact that we are seeing more funding going into skills training, the fact that we are seeing a healthier workforce, and the fact that we are going to see future trading opportunities—which the Labour Party opposes—under the Trans-Pacific Partnership. We can combine that with the fact that we are seeing a New Zealand that now has a balanced Budget and better opportunities for children in the future. We are now seeing a New Zealand that is willing to invest up front in the early years of a child’s life so that they get better outcomes in their later years.

We are seeing a Government that is now mature enough to say: “These are the areas we need to invest in early on so that we can both save money for the taxpayer in the future and, more importantly, get better outcomes in people’s lives.” These are the factors in which we can invest so that there is less connection with corrections, so that there is less opportunity for people to fall through the cracks, and so that there are more children who are able to succeed and achieve in their lives, and that is a good thing for New Zealand.

💬 Dr David Clark: 8 long years.

8 years of success, Mr Clark. We have had 8 years of success in which we have been able to lead a Government—we have John Key and Bill English at the helm—and in which we have delivered good, stable government that has invested in the important areas of New Zealand, balanced the Budget, and delivered a better New Zealand for future generations. I wholeheartedly endorse the Budget delivered by Bill English.