Budget Debate

I move, That the Appropriation (2017/18 Estimates) Bill be now read a second time.

Mr Speaker

I move that the Appropriation (2017/18 Estimates) Bill be now read a second time.

It is an honour and a privilege to present my first budget to the public of New Zealand – the ninth of this National-led Government.

In doing so I acknowledge my predecessor and our new Prime Minister Bill English for his hard work and leadership in facing down the decade of deficits, bringing New Zealand successfully through the Global Financial Crisis, and responding to the impacts of the Canterbury earthquakes.

Bill English is widely seen internationally as one of the world’s best Finance Ministers of the last decade.

Mr Speaker, the 2017 Budget is about “Delivering for New Zealanders”.

It is New Zealanders who have worked hard over the last eight years, who have made sacrifices, and who have turned this country around in the most trying of circumstances.

It is New Zealanders who are striving to build a more confident, more robust country.

This budget is about delivering more of the public services, the infrastructure, the resilience, and the incomes that New Zealanders need to get ahead and to provide for their families.

This budget is about the opportunity we have to build on the platform we have all created and deliver greater prosperity for New Zealanders.

Budget 2017 is possible because of the constructive working relationships the National Party has with United Future, the Māori Party and ACT. I want to acknowledge their continuing support and contribution to strong and stable government.

Economic Outlook

Mr Speaker, the New Zealand economy is performing well.

We have experienced positive growth in all but one quarter of the last six years. We are at the moment growing faster than the United States, the UK, Australia, the EU, Japan and Canada.

Our economy is 14 per cent larger than it was just five years ago.

This growth is being achieved by Kiwi entrepreneurs, Kiwi businesses, and Kiwi workers, all taking on the world and succeeding.

Under the Government’s strong economic leadership, New Zealand is shaping globalisation to its advantage. We’ve embraced increased trade, new technologies, innovation, and investment.

We are becoming more confident both overseas and here at home.

When we hit tough times in dairy – our biggest export industry – we got on and diversified.

We’ve grown our tourism industry, education and business services.

We’re selling more apples, wine, kiwifruit and other high-value foods.

And we’re growing an increasingly impressive tech sector, with hundreds and hundreds of competitive Kiwi companies selling their amazing technologies all over the globe.

This is our future Mr Speaker. An innovative outward facing hi-tech country selling high value products and services to the world.

A strong and growing economy is important because of the job opportunities it provides for New Zealanders.

Well over 200,000 more jobs have been created over the last three years.

Our adult employment rate is now its highest ever with 67.1 per cent of everyone over the age of 15 employed. That’s the third highest rate in the OECD.

The strength of our economy in recent years has started correcting some of the imbalances that have worried us for a very long time, notably our external accounts.

We have an unusually low Balance of Payments deficit for this stage of our economic cycle, and the amount we as a country owe the world has dropped from 82 per cent of GDP in 2008 to 60 per cent today. That’s good progress.

We have, however, much more to do. We need to maintain and extend this growth if we are to decisively deal with the long-term imbalances of the past and provide the sustained prosperity that New Zealanders deserve.

The medium-term economic outlook is positive, led by rising export values, high levels of house building and commercial construction, and low interest rates.

Treasury forecasts annual economic growth to average over 3 per cent for the next five years, peaking at around 3.8 per cent in 2019.

The outlook is driven by the Government’s strong economic plan, and confident New Zealand companies who are investing, innovating, exporting, and creating skilled jobs.

Employment is forecast to keep growing strongly and unemployment is expected to steadily decline.

Nominal GDP is now forecast to be a cumulative $23.9 billion higher over the next five years than was expected at the Half Year Update.

Fiscal Outlook

Treasury’s economic projections flow through to increased tax revenues. These are expected to grow slightly more than forecast in last year’s budget, even after the changes I am announcing today.

Included in the tax forecast is $250 million over the forecast period in additional revenue from the Government’s work to halt multi-national tax avoidance.

The Government has taken the decision to increase the operating allowance in this budget to $1.8 billion a year, $300 million more than was previously allocated. This will allow us to invest more in the public services necessary for a growing country. As previously signalled the pay equity settlement for care and support workers is being treated as separate to the allowances.

We have also increased future operating allowances. Next year’s allowance will be $1.7 billion and subsequent years will be adjusted upwards by 2 per cent each year.

The OBEGAL surplus for the 2017/18 year is predicted to be $2.9 billion, rising to $7.2 billion by 2020/21.

These surpluses are significant, but they will be needed to meet the cost of the very large new capital investment the Government has committed to over the next four Budgets.

The Government’s capital spend over the next four years uses virtually all the cash generated from the operating surpluses. When added together, core Crown residual cash over the forecast period is almost exactly nil.

As a result of our responsible fiscal management, net debt peaked at 25.5 per cent of GDP and is projected to fall to 19.3 per cent of GDP by 2020/21.

New Zealand Superannuation Fund contributions are expected to resume as scheduled in that year.

Keeping the Economy Growing

Mr Speaker, the first priority in any budget must be to take the right steps to keep the economy growing.

To improve public services, invest in infrastructure, or boost family incomes, we must continue to have a strong successful economy.

A strong economy can never be taken for granted. It must be nurtured and worked on, or it will quickly go backwards.

While the world economy is growing, there are plenty of risks and plenty of political uncertainties that could affect us.

One of the biggest current risks is the more inward-looking isolationist economic policies being pushed in some parts of the world, and by some politicians here at home.

These people want to be more protectionist on trade, slash immigration, reduce foreign investment, centralise wage bargaining, and increase taxes.

All of these things would slow our industries down, reduce competitiveness and cost jobs.

That’s the opposite of a recipe for growth – that’s a recipe for stalling growth.

The Government’s plan for growth is sensible conservative fiscal policy, strong orthodox monetary policy, and an ongoing programme of microeconomic reform that enhances the competitiveness and confidence of Kiwi businesses.

It is crucial that we pull on all three of these levers.

Our programme of microeconomic reform is called the Business Growth Agenda. It includes measures to boost New Zealand’s trade, lift the skills of our workforce, recruit skilled migrants our companies need to grow, boost innovation, attract new investment especially in regional New Zealand, and build the infrastructure that a growing economy needs.

Budget 2017 invests $1 billion over four years in sustaining the strong economic plan that is getting New Zealand to grow.

First, the Government is allocating $373 million in the second round of our Innovative New Zealand programme.

Innovative New Zealand is a series of science, R&D and skills initiatives that are working together to lift the innovation activity of New Zealand companies.

The funding includes $82 million for the Government’s pre-eminent applied science fund – the Endeavour fund; $132 million for Tertiary Education to ensure young New Zealanders obtain the skills we need; and $75 million for Callaghan Innovation’s R&D grants to help our tech companies succeed.

It’s all about adding more value to our export volumes. Investment in innovation is hugely important for lifting our productivity and providing for our future prosperity.

Budget 2017 allocates $134 million over four years to advance New Zealand’s Trade Agenda 2030, including opening new embassies in Dublin and Colombo, as we work towards our ambitious target of having 90 per cent of goods exports covered by trade agreements.

There is $304 million towards the ongoing development of our screen sector, and $146 million in new funding to grow our tourism infrastructure around the country so every region can benefit from the growth in our tourism industry.

We can’t talk about lifting economic growth in New Zealand without talking about the increasingly important Māori economy which is crucial for lifting not just the economic and social fortunes of Māori, but of all New Zealanders.

The Government’s comprehensive programme for Māori Economic Development is called He Kai Kei Aku Ringa and it is led by Māori Development Minister Te Ururoa Flavell. Budget 2017 contains $93 million in new Māori Development initiatives, including $10 million to support the development of Māori tourism, and $17 million for Māori housing initiatives.

The funding will also allow for an extra 2,500 families to access Whānau Ora, and additional support for the continued revitalisation of te reo and Māori culture.

Better Public Services

Mr Speaker, the Government’s biggest single fiscal priority in Budget 2017 is to invest in the public services necessary for a growing country.

We are therefore allocating $7 billion over four years to sustain and expand public services in health, education, law and order and social development.

This investment reflects our commitment to meet the requirements of a growing population while investing prudently in the core services Kiwis rely on.

The new funding in Budget 2017 includes $3.9 billion over four years for New Zealand’s Health Sector – taking health investment to a record $16.7 billion next year.

DHBs will benefit most, with an extra $1.76 billion added over four years to invest in services, improve access, and help meet cost pressures and population growth. Over $200 million will be invested in Disability Support Services, and $38 million more in primary care.

$59 million will be invested in our ambulance services, across health and ACC, so that all emergency road ambulance call outs are double crewed by 2021.

$60 million more will be provided to Pharmac for access to new medicines for Kiwis that need them.

The Health budget includes $1.54 billion for the pay equity settlement of 55,000 care and support workers. From 1 July this dedicated and predominantly female workforce will receive a significant pay increase. For the 20,000 workers currently on the minimum wage, this increase will be at least 21 per cent which means full-time workers will be taking home at least an extra $100 a week.

Mr Speaker, we are committing $1.1 billion over four years in additional operating expenditure for schools and early childhood centres, including $767 million for roll growth, a $61 million increase in operational grant funding for schools, and $35 million in targeted additional funding for early childhood centres.

$63 million will be provided to support students with additional learning needs including more teacher aide hours and a new programme for parents and teachers of young children with autism.

We are also investing significantly in school infrastructure and I want to come back to this later because infrastructure is a major focus of Budget 2017.

We are investing $1.2 billion in new operating expenditure over four years for law and order.

This includes funding 10 per cent more police staff to reduce crime and reoffending and ensure 95 per cent of the population will live within 25 kilometres of a 24/7 police presence.

We’re also upping our investment in justice, courts and corrections services, and introducing new initiatives in burglary prevention, reducing youth reoffending, and supporting at-risk prisoners.

Social Investment

This Government is focused on helping our most vulnerable people lead more successful lives.

Budget 2017 includes $64 million to help people move off benefits and into work by tailoring interventions to individuals’ needs.

$37 million will be provided to help improve the safety of family violence victims and stop family violence escalating.

We will be providing $185 million to further expand social housing services.

And we are making a $424 million investment in the new Ministry for Vulnerable Children, Oranga Tamariki, including funding for caregiver support, Children’s Teams, Family Start and Youth Justice.

Budget 2017 includes $321 million for fourteen cross-agency social investment initiatives that are designed to tackle long-term issues for vulnerable New Zealanders.

These cover areas like helping kids get a better start in life; addressing barriers to employment and independence; and reducing criminal reoffending.

A big focus in our social investment programme is mental health, so we’ve ring-fenced $100 million in a special social investment fund to support innovative solutions to address mental health issues.

Overall the Government has budgeted an additional $224 million over four years for mental health services.

Social investment is about tackling our most challenging social issues. The combination of these new initiatives and the Government’s decisions about family incomes will allow us to make serious headway with some of the longer-term challenges faced by the most vulnerable New Zealanders.

Mr Speaker, it is crucially important that those delivering core public services maintain a constant focus on lifting the productivity of their sectors.

These are big funding increases, which reflect the needs of a growing country. However it is my expectation that we also achieve a greater return for each additional dollar of taxpayers’ money.

As well as placing a number of requirements on results for the increased expenditure, I am today announcing that the Government is asking the Productivity Commission to conduct an investigation into measuring and improving the productivity of core public services – to ensure all New Zealanders see better results from the investment of their tax monies in these services.

Infrastructure

The Government’s second fiscal priority in this budget is investing in the infrastructure for a growing economy.

This Government has a strong track record as New Zealand’s infrastructure government. Over the last several years we have grown infrastructure spending considerably and commenced some major transformative investments in New Zealand’s public infrastructure on behalf of taxpayers.

We are completely modernising our telecommunications system with the ultrafast broadband and rural broadband programmes. We have embarked upon the most ambitious development of new motorways and expressways seen in several decades, and invested more than $4 billion in our railway system including funding new commuter rail fleets in both Auckland and Wellington. And we are in the process of building more new hospitals and schools than New Zealand has seen in generations.

However Budget 2017 takes New Zealand infrastructure investment to another level.

For the first time, the Government is allocating $4 billion in new capital funding in one budget across the Education, Health, Defence, Justice, Housing, Primary Sector and Transport portfolios.

The new investment includes a further $392 million for more new schools and classrooms around New Zealand – taking our total investment to $1.4 billion over the last four budgets.

The new money will provide for six new schools, two major school expansions, the relocation of two special education schools, 11 new special education satellite units and around 305 new classrooms nationwide.

Budget 2017 includes $150 million in additional capital for the Health Sector, $576 million for Defence Force upgrades, $763 million for new prison capacity, $63 million for Crown Irrigation to invest in new water storage and $100 million for the Crown Land Programme, which frees up more Government land for housing.

$1.8 billion of the new budget spend is in the Transport portfolio. This includes $450 million for KiwiRail for the rail network around New Zealand, $436 million for the first stage in Auckland’s City Rail Link, $812 million for the reinstatement of State Highway 1 north and south of Kaikōura, and $98 million for upgrades to Wellington’s metro rail network.

I am also confirming today the Government’s intention to allocate a further $7 billion in new capital spend in the next three budgets, taking our total additional capital spend to $11 billion.

Through this new capital spend and existing commitments the Government and its key infrastructure agencies will invest a total of $32.5 billion over the next four years in new infrastructure.

That’s a 40 per cent increase on the last four years.

The New Zealand Transport Agency alone will invest $9.17 billion in new State Highways over the four years, and will open over 540 lane kilometres of new highways.

And Housing New Zealand will invest $2.2 billion in the Auckland Housing Programme as announced by Minister Adams last week, which will contribute to the 34,000 new houses that we will build in Auckland over the next 10 years alongside the huge growth in private sector housing construction which is underway.

This is an unprecedented level of infrastructure investment for any New Zealand government, even including the period of funding the Christchurch rebuild.

We intend to extend that investment further with a greater use of partnerships between central and local government, and between government and the private sector. I will have more to say on that subject in the coming weeks.

Resilience

Mr Speaker, one of the most important duties of government is to be able to stand behind vulnerable communities and vulnerable people when the chips are down.

People generally prefer to look after themselves, and for the most part they can.

But when disaster strikes, or a big economic shock happens, families and communities need their government to be ready to help them through.

This government’s definition of ‘resilience’ is the ability to provide that support.

Through the Global Financial Crisis we stood behind New Zealanders. And following the Canterbury and now the Kaikōura earthquakes, we have pledged to rebuild shattered communities.

It is that experience that has taught us the importance of having the financial capacity to respond.

The GFC and the Canterbury earthquakes involved the Government running up debts amounting to around 20 per cent of GDP. It was the right thing to do, and the right thing to do now is to run a strong economy and reduce that debt so we have the room to do the same again, if and when we need to.

That is why I announced a new medium term target of reducing net debt to between 10 and 15 per cent of GDP by 2025, following on from the current target of around 20 per cent of GDP by 2020.

We owe it to our future to take that decision.

Once we reach that target, the intention is to stabilise debt at that level, and use any extra fiscal room for further investment in public services and infrastructure, or further tax changes.

Another important part of the New Zealand resilience story is the role of the Earthquake Commission and the National Disaster Fund.

With the help of international re-insurance, the Fund has so far paid out over $9.5 billion in claims to those affected by the Canterbury earthquakes. It is currently expected to pay out another $550 million in claims for the Kaikōura earthquakes.

Those claims will completely exhaust the National Disaster Fund. We need to re-start the process of replenishing it.

I am therefore announcing that from 1 November this year the EQC premium rate will increase from 15 cents per $100 in cover to 20 cents per $100 in cover.

This will have the effect of increasing home owners’ annual EQC premiums by up to $69 per year.

The change will mean that we are well on the road to restoring the National Disaster Fund to around $1.75 billion within 10 years.

Family Incomes Package

Mr Speaker, it is important that New Zealand families directly share the benefits of strong economic growth. This is the whole point of having a strong, growing economy and a healthy set of Government accounts.

The first and most enduring way we can do that is to ensure that there are job opportunities for all those who want to work.

That is now increasingly the case.

There are more than two and a half million people employed in this country for the first time, and indexes of job vacancies are at near record highs.

Fewer people are reliant on the benefit system. The percentage of people whose income is received through a main benefit has dropped to just 9.6 per cent of the working age population – the lowest level it’s been in the March quarter since 1997.

The number of children growing up in a benefit dependent family has dropped by more than 50,000 over the last five years.

However it is also important to ensure that the income tax system works well for New Zealanders and keeps pace with rising incomes.

It is now seven years since we last altered the income tax system. Over that time the average wage has risen from $49,500 to $58,900.

That’s good news. But because of that change many more middle income earners are faced with a marginal tax rate of 30 per cent cutting in at just $48,000.

We also have a number of lower income people with young families that are struggling to get ahead.

And we have a system that is becoming too complex. As a result of Working for Families and other changes, it can be very hard for people to work out what they are entitled to, and how the work they do is linked to the income they receive.

If the level of complexity is indicated by the number of businesses advertising to do people’s tax returns, then confusion is at near record highs.

Today I am announcing a $2 billion a year Family Incomes Package commencing 1 April next year that will start addressing some of these issues.

The Package will make changes to tax thresholds, Working for Families and the Accommodation Supplement to help Kiwi families get ahead.

It is a first step towards simplifying the income tax system.

The Family Incomes Package is carefully designed to assist low and middle income earners with young families and higher housing costs.

It will benefit 1.3 million working-age families in New Zealand by, on average, $26 per week.

The Package is in four parts.

First, it increases the $14,000 income tax threshold to $22,000, and the $48,000 tax threshold to $52,000.

This change provides a tax reduction of $11 a week to anyone earning more than $22,000 per year, increasing to $20 a week for anyone earning more than $52,000 per year.

A couple with both partners earning the average wage will be $41 a week better off from these threshold changes.

Second, it removes the Independent Earner Tax Credit of up to $10 a week.

The Independent Earner Tax Credit was introduced to provide a tax reduction to lower income people without families. It is only claimed by about one third of eligible recipients during the tax year.

People who lose this Credit will be compensated in full by the lifting of the lowest income tax threshold from $14,000 to $22,000.

The third change is to Family Tax Credits.

Working for Families currently varies the amount each family receives according to the age of their children, with families with children aged 16 to 18 years old receiving a higher rate than those with children aged under 16.

And yet as many parents will tell you, bringing up younger children can be just as expensive as bringing up older children.

I am therefore announcing today that the Government will lift Family Tax Credit rates for young children to those of children aged 16 to 18, also from 1 April next year.

This is a significant change.

The Family Tax Credit rates for the first child aged under 16 will increase by $9 a week, while the rates for each subsequent child increase by either $18 or $27 per week, depending on the age of the child.

At the same time the Government will complete its planned adjustment to Working for Families abatements, with the Family Tax Credit set to abate at 25c in the dollar above an income of $35,000. This will ensure that the Government’s extra assistance is targeted at lower income families.

Approximately 310,000 families will benefit from these increases to the Family Tax Credit.

A couple with two children under 13, and one partner working earning $55,000 a year, will gain $41 per week – $20 from the income tax change and $21 from the Working for Families change.

The final part of the Family Incomes Package relates to the Accommodation Supplement, which assists New Zealanders with high housing costs.

The Accommodation Supplement has not been updated since 2005, and is based on 2003 rents.

Today I am announcing that from 1 April next year the maximum Accommodation Supplement rates for a two person household will increase between $25 and $75 a week, while the maximum rates for larger households will increase between $40 and $80 a week.

In addition, changes to the Accommodation Supplement areas will provide further gains for some families.

These are in addition to the tax and Working for Families changes already announced in the Package.

This increase in the Accommodation Supplement is expected to directly benefit around 136,000 low income households around New Zealand. It will also reduce the reliance on Temporary Additional Support that some families currently receive to top up their Accommodation Supplement.

I am also announcing that the Accommodation Benefit, which is paid to eligible Student Allowance recipients who experience housing stress, will also increase by up to $20 per week.

The Family Incomes Package is a coordinated set of measures to lift family incomes and improve the rewards for hard work.

Each element works together.

While lower income families receive a smaller amount from the tax component, they receive relatively more from the Accommodation Supplement and the Family Tax Credit changes. The reverse is true for higher income families.

The Package particularly focuses on assisting low income families with young children and those experiencing high housing costs.

154,000 families in the lowest quintile will benefit by an average of more than $35 a week, or $1,840 per year.

It is expected to lift 20,000 households above the threshold of severe housing stress, and reduce the number of children living in families receiving less than half of the median wage by around 50,000.

There will also be flow-on effects of this package. Around three quarters of a million superannuitants will benefit because of the link between New Zealand Superannuation and after-tax wages. The couple rate for superannuitants will increase by $13 a week on 1 April next year in addition to the normal adjustments because of wage indexation.

A small number of families may face losses from this package because of the complex interactions of our tax and transfer system. The Government has established a transitional fund of $2 million over the next four years for anyone significantly impacted by the changes.

The total cost of this package is $6.5 billion over four years, rising from $604 million in the 2017/18 financial year through to $2 billion in out years.

Mr Speaker, it is always important for politicians to remember that the money they spend each year comes directly from the pockets of hard-working Kiwis.

We spend a lot of time thinking about how we can spend that money. The Families Incomes Package is the first step in allowing Kiwi families to spend more of their own money, to make the decisions that are best for them.

Conclusion

Mr Speaker

This budget is all about “Delivering for New Zealanders”.

It takes four significant steps to bring the benefits of a stronger economy to all New Zealanders. It makes a big investment in public services, it makes a record investment in new infrastructure, it improves the resilience of our country to future shocks, and it strengthens families by lifting their incomes.

It’s important that we remember that the only reason we get to have this conversation is because we have a strong and growing economy built on a strong economic plan.

We must maintain our focus on growing the economy and sticking to the plan.

It is only by doing that, that we can provide for the prosperity of all New Zealanders.

I move, That all the words after “That” be omitted and the following substituted: “this House has no confidence in a government that has had nine years to build a better New Zealand, and yet we have a housing crisis, we have mental health services on the verge of collapse, we have education that is becoming more and more expensive, and we have infrastructure that is unable to cope with the demands of a surging population, and it is time for fresh thinking and real solutions.”

After 9 years—and 4 months out from the next general election—this National Government has suddenly discovered that wages for too many are too low. It has done nothing about it until now, and even then it has not done much about it. Too many people can no longer afford to buy or even rent a home, and it has done nothing about it. Too many people are squeezed into our big cities, schools are overcrowded, public services are struggling, congestion is choking our cities, and it has done nothing about it. Here was its chance, a chance to show that it takes New Zealanders’ concerns seriously, and it muffed it.

Let me just take you through some of the points that come out of this Budget. Let us look at the tax package, shall we? Let us look at the minimum-wage worker. The worker on the minimum wage working 40 hours a week, who was getting the independent earner tax credit and was getting the tax break that the Government gave them—they got $11, and they got $10 taken off them. They got $11 given to them, and $10 taken off them. One dollar. One dollar—here it is. This is the “Dollar Bill Budget”—that is what it is.

It gets worse. It gets worse. Even the Government’s own figures, which it proudly furnished us all with in the lock-up—the little bit of paper that talks about two low-income workers, both on an income of $33,000 each. They lose their independent earner tax credit, so they lose $20, and the tax benefit for them is less than a dollar each. It is less than a “Dollar Bill Budget”. This is the “Dollar Bill Budget”. This is not taking low-income earners seriously at all.

Let us have a look at health. Let us have a look at mental health. The so-called ring-fenced $100 million—that is money that has already been promised and provided to the district health boards (DHBs). Now they are being told that the money they had to spend for general health services they have now got to spend on mental health services, without any expectation of what that is going to go on. This is not fixing up our mental health services. This is a fudge. This is a fudge. The Government does provide for $25 million a year, unspecified, on extra mental health services. It is so woeful in its planning, so woeful in its direction, that it does not even know what it is going to go on—it put it in the Budget. It is so out of touch with New Zealanders’ concerns about mental health right now that it does not even know what needs to happen and it will not fund it properly.

I have to tell you, the biggest health risk this nation faces today is the amount of fudge being rammed down New Zealanders’ throats that they are expected to take in this Budget. It is not good enough. The Government has funded DHBs for the next financial year and, subsequently, more than $200 million less than the DHBs need to keep pace with population growth and demographic changes. It is short-changing and starving our health services yet again, year after year. No wonder they are struggling. It might have double-crewed the ambulances, but it is still the ambulance at the bottom of the cliff.

In housing, there is nothing of substance to address the most urgent, pressing issue facing the nation today, and that is the shortage of housing. The Government says $100 million for purchasing land for—you know how many houses? For 1,200 houses. Remember the announcement a couple of weeks ago of 34,000 houses? That was still woefully inadequate too. Well, it has provided in this Budget for 1,200 houses. That is going to fix Auckland’s 40,000-house shortage, not to mention the rest of the country’s 20,000- or 25,000-house shortage! This is a rinky-dink, short-changing, “Dollar Bill Budget”.

Do not even get me started on the schools operations grant. What an embarrassment, what a disgrace. A 1.3 percent adjustment, at a time when inflation in that sector is going through the roof—that is lower than inflation, and the people who will suffer will be the students, their families, and the teachers, who are struggling to provide a high-quality education in this country as it is. New Zealanders deserve better. New Zealanders deserve better.

We are blessed to be in one of the greatest countries in the world, and to enjoy unparalleled beauty and a sense of security and freedom to chase our dreams. We pride ourselves, like all New Zealanders, on our hard work, innovation, creative thinking, our great artistic expression—that is what we are known around the world for—and our brute determination to get stuff done. But that is not the experience of many New Zealanders today. Too many are missing out, and after 9 years of this Government, New Zealanders now are being shut out of things that have been our boast to the world.

You see, there is something else that defines us as a nation, something that holds us to together. It is the idea that our small, plucky nation faces the world to meet its challenges and that as we do that, we look out for each other. We insist that no matter the circumstances of our birth—whether in New Zealand or abroad, rich or poor, Māori or Pākehā—we will have the opportunity to fulfil our potential, to do our best, to be the greatest, and to do what we can to do great things or to do humble things. Knowing all the time that we will be picked up when we fall, and that we will give back when we have the chance—that is the Kiwi spirit. That is the very essence of being a New Zealander. That is the idea of New Zealand.

Nine years on under this National Government, we ask why we have such a chronic shortage of housing and many young couples who, no matter how hard they work, no matter how hard they save, cannot get their first home. Nine years on under this National Government, a growing number of New Zealanders ask: why do we have New Zealanders who are homeless in this country, living in overcrowded houses, living in cars and garages? Nine years on under this National Government, New Zealanders ask why the rent is rising so fast and why their pay cannot keep up.

Nine years on under this National Government, New Zealanders ask why 60,000 of our fellow citizens could not get hospital treatment last year because the local hospital could not afford to treat them. We ask why our mental health services are stretched to breaking point and why, in this beautiful country of ours, we have one of the highest teen suicide rates in the developed world. That is not right, and what is worse is a Government, 9 years on, that does not take it seriously, does not have anything serious to say or do about it. That is shameful.

Nine years on under this National Government, New Zealanders ask why so many schools are overcrowded and why, with an ageing teacher workforce, so little is being done to grow the next generation of great teachers. Nine years on under this National Government, New Zealanders ask why tens and tens of thousands of young New Zealanders are out of work and not doing any training or are not in any education and are fast running out of hope. Nine years on under this National Government, New Zealanders ask why the regions have been neglected and why they cannot generate jobs to keep their local populations at work.

Today’s Budget is a squandered opportunity. This was an opportunity to do the real social investment—to invest in those things that are the foundation of opportunity and fairness, the foundation of wealth and prosperity for this nation, the foundation of the Kiwi spirit and of the New Zealand idea. No one will say that those on low and middle incomes do not need extra cash at the end of the working week—of course they do. They need it now, not next April. But let us not kid ourselves. Remember Working for Families? Remember when that was first introduced? Remember who voted against it? Remember what they called it? They vehemently opposed it then. It was introduced as a measure to deal with a dysfunctional labour market that was incapable of providing a living wage to many, many New Zealanders. And you know what? Nothing has changed. That remains the case today.

Now the Government is trying to seek plaudits for funding the significant pay increase for home-care and aged-care workers, and I congratulate Kristine Bartlett, E tū and the predecessor unions, and all those who were involved in taking it to court and bringing this Government to justice. That deal happened and that line item is in this Budget because this Government was ordered by the courts to do so. Make no mistake, this is not generosity and it is not part of some big strategic plan to lift incomes of the lowest-paid New Zealanders.

So let us get real. New Zealand needs a fresh approach. New Zealand needs new ideas. We cannot claim success as a nation, nor can we claim we are prosperous, when so many are missing out and when we are setting up a bleak future for the generations that follow.

Labour’s plan is very clear. On housing—we understand. We get that every New Zealander, every family, needs a roof over their head that they can call their own. We need, and Labour will build, affordable homes across Auckland and around New Zealand. We will set up the apparatus. We will develop the workforce. We will deal with the landowners. We will deal with the property developers. We will deal with the councils. We will deal with iwi. We will deal with Uncle Tom Cobleigh and all if we have to, to build affordable homes—100,000 of them. And we will build State houses. Some of them will be for people who, once upon a time, voted for the Māori Party, as well. People will have warm, safe, dry homes, and we will not have 40,000 New Zealanders homeless—that is shameful and that is a disgrace. There was not a single reference—not a single reference—in this Budget to a single solution about that.

On health—we will work to restore the $1.7 billion cuts from health over the last few years. Yes, that is real, and yes, that has happened, and yes, New Zealanders are suffering as a result. People will again have confidence that they can get good, safe treatment from their local hospital, and that will include getting pharmaceuticals that deal with modern conditions and are effective. We will fix mental health services. We will have a primary mental health care pilot that will set us up and set generations up and fix our mental health problem. We will have nurses in schools as well, and we will do the workforce development that goes with it, because what matters most is giving our young people a chance, and hope, again.

On education—we will have an education strategy that is about preparing our children for success and having education available throughout a person’s working life, because, let us face it, the world of work is changing and technology is changing. It is changing what we do and how we do it, and we need an education system that suits. We will lift the funding freeze on schools and we will make sure that there is a plan for school buildings that we will actually follow through on. We will work with teachers and parents and employers so that we have a school system that is fit for the 21st century and beyond. You see, education is so vital—so vital—for that new world of technology and for new ways of working. We have to get education right, and right now it is floundering because it has a lack of leadership and a Government that does not care. Labour—Labour—will bring a fresh approach to education.

On the regions—we will partner with the regions, and we will secure new investments that will generate new jobs, good jobs, skilled jobs, and better-paid jobs, just as we have proposed to do in Dunedin with a centre of digital excellence and just as we have proposed to do in Gisborne with the plant to build prefabricated housing, because it fits our housing strategy as well. Thinking ahead, thinking about the issues that matter to New Zealanders—that is what New Zealanders are looking for. They are looking for a plan. That is what we are going to do.

For our young—it is just plain wrong and just plain shameful that the number of young people not in work, education, or training is growing year by year. We are selling a generation down the drain, and I will not have it anymore. This is a top priority for me and for Labour. We will pay employers the equivalent of the dole whenever they take on a new apprentice. We will set up long-term youth unemployed with a 6-month job doing important work in their communities. Accuse me of job creation—I will wear that badge with pride. I want to look after our young.

On infrastructure—we will get our cities moving again, getting freight and people moving, and it will not just be about roads. It will be about rail. It will be about coastal shipping. It will be about all transport modes, so that we can get the country moving again and get investment that actually makes a difference, and we will partner up with local government to make that difference.

We need a fresh approach. New Zealand needs a fresh approach. New Zealand needs a plan that works, a plan that is about working for those who cannot work at the moment. One thing I can tell you that is absolutely guaranteed is that our party has signed up to Budget responsibility rules. That means planning not just for the next financial year but for all the years that follow. Being responsible about the present and the future—that is what we will bring to it. We will not write out any cheque that cannot be cashed.

This Budget is an election year Budget. That should come as no surprise when you make your finance Minister your campaign manager too. That is what is in this Budget. That is what is reflected in this Budget. This is about a National Government, 9 years on, that is out of energy, out of ideas, not knowing what to do, and desperate to convince people that it wants to do something—realising what the real problems are: that it has not listened to New Zealand, for too long. On 23 September New Zealanders will have a chance for a fresh approach, for new ideas. They will be voting Labour.

It was interesting to see the Leader of the Opposition reading off an iPad. I think he logged on to the wrong part of the Labour website, because that was Mike Moore’s speech from the 1993 Budget. I know that because I heard it. On a sunny day in New Zealand when hundreds of young New Zealanders this week have taken up their first ever apprenticeship, when exporters are looking forward to opening new markets behind the trade agreements that have been negotiated, when innovators are finding the capital to start their online business—on a sunny day here comes the Labour Party like a cold, wet wind and rain, because that is how it thinks New Zealand is. Well, it is not. It is a confident country going ahead with real momentum and more confidence about its place in the world than it has had for a long, long time.

The Labour Party is more like a kind of tattered old red phone box, watching the traffic go by, wishing the world would stop and wind backwards so it would become relevant. But I have to tell the Labour Party that the phone is off the hook. The phone is not going to ring. The traffic is only going to speed up and get faster, and the Labour Party, after 9 long years of Opposition, is like its policies: worse than when it started.

This is a Budget that represents, and presents to New Zealand, looking out ahead, one of the best opportunities in a couple of generations to build the benefits of sustained growth. It could be delivered only by a National Government, and I will tell you why: it is because we are confident about New Zealand. The Opposition parties simply are not. They do not believe in our families and our communities and our businesses. We are confident about New Zealand, about the growing assurance of its place in the world. We are confident about our increasingly respected economic performance, growing faster and more sustainably than most of our peer countries, if not all of them. We are confident about the courage and the hope and the aspirations of so many New Zealanders who in the last few weeks and months have got off benefit, and whose children therefore are among the 50,000 fewer who are in welfare-dependent households.

We are confident about the young women who get on with starting their online business, selling to the world in a way that probably should not happen, in theory, but in practice they are making it happen every day. We are confident that our primary production sector can deal with the environmental challenges that will help to reinforce our “clean, green” brand around the world and drive up the value of our products.

We are confident because we are going forward. For the next 5 years 3 percent growth is in the forecasts—3 percent growth for the next 5 years. We have under 5 percent unemployment, the lowest numbers of people on benefit in 20 years, the highest proportion of New Zealanders in work ever—ever—and rising surpluses and falling Government debt. This is better than the good old days. This is better than the good old days, particularly because so many people have work, and particularly because the economy consistently keeps delivering not just lots of new jobs but more than we expect. Of course, the Opposition parties sneer at it. The person who got off benefit and took a job at the rest home—that is low productivity. Apparently, we would be better off without that, and instead have high productivity. Well, that person will not get to be high productivity until they get their first job. The thousands of young New Zealanders who have gone into apprenticeships—more than ever; better than the good old days—yes, they are low productivity. I agree. If you are 17 and you have just gotten on to the building site in the biggest construction boom this country has seen in two generations, yes, you are low productivity, but I want to say to that apprentice: “Girl, we’re proud of you.”

The other reason this could be done only by a National-led Government is the political stability that this Government represents. I want to acknowledge the Māori Party, United Future, and the ACT Party. We have some hard-edged discussions, but over a period of time we have been able to create ways of looking ahead, making decisions, and getting things done that are good for New Zealand, that represent a higher common purpose, despite our sometimes quite divergent views. I want to pay respect to the integrity and the transparency and the honesty that those parties bring to this stable Government.

This year New Zealand gets to think about the alternative. I am looking forward to it: a Labour-Green Government led by Winston Peters. We know that because he is going around telling everybody, but for good reason—for good reason. There has not been a leader of the major Opposition party that has polled fourth as preferred Prime Minister. And I have been wondering—[Interruption] It is not a matter of what the public thinks about it or what we think about it; it is what Andrew Little’s own party thinks about it.

I have been watching the performance of two of the best-educated, smartest, apparently most dynamic politicians of the left in the last generation, Ms Ardern and Grant Robertson, and it has been pretty poor. It has been pretty poor. They are not trying. Surely they are better than this—surely. But the plot is unfolding, because the wise head of the Labour Party, the balanced, wise, considered Annette King—they dispatched her, and now they look like nothing more than two happy undertakers, the double-crewed ambulance that is going to wheel off the leader of the Labour Party.

That is why Winston Peters feels like he is on a roll: he is watching the Labour Party sink under the weight of its own mediocrity, inertia, and irrelevance. [Interruption] Well, if the Labour members want to make themselves relevant, they should work out how to vote for at least parts of this Budget. Are they going to vote for 1,125 more police staff? No, no, they will not. Are they going to vote for double-crewing ambulances? No, not now. Are they going to vote for 20 to 30 percent pay increases for the minimum-wage rest home and home-care workers? No, they are not. Are they going to vote for building 34,000 houses? No. What they are going to do, apparently—we have spent a bit of time on this—is build four times as many houses, with less money than we have allocated on land, which they do not own. So that will work! So that will work! And that is actually before I have got to the announcements made today.

I want to congratulate the Minister of Finance on the announcements made today. We have worked closely together on all the other Budgets, and it is fantastic to see Steven Joyce delivering a Budget that seizes the opportunities. And it is different now. We have a lot more positive choices, but the same discipline, and that is where Steven Joyce understands absolutely how Government runs, how the economy runs, and where the money can and should be spent. And, actually, it is harder to manage surpluses than deficits. As a finance Minister, I could just say no; he has to find 53 ways of saying yes, and today he has managed to find them. I want to acknowledge his huge effort.

Today 1.3 million families will be, on average, from 1 April next week, $26 a week better off.

💬 Carmel Sepuloni: Next year.

Next year—I agree. The lowest-income 150,000 families will be, on average, $36 a week better off. In addition to that, on 1 April next year 750,000 superannuitants will get a bigger increase than they expected, couples will get an extra $13 a week, and singles will get $8 extra a week. Why? Because after-tax incomes are higher. That is why you do not listen to anything the Opposition says about after-tax incomes. They are higher. That is how superannuitants got twice the rate of inflation increases over the last 4 or 5 years. The other reason is that you have a Government that can run all the expenditure it needs to run and have lower taxes. That is why. That is the only way you get those sorts of increases.

Let us look at the impact that a strong and growing economy can have for a family, say, since 2014: free doctors visits for under-13s. Let us think about Josie in Lower Hutt. Her older children are now more likely to achieve NCEA—actually, particularly if they are Māori or Pasifika, where the rates have gone up from the low fifties to the mid-seventies. There has been around a 40 percent increase in the number of those children who achieved NCEA level 2. If she was on a benefit—1 April last year—there is $25 a week extra for every beneficiary household with children. Her chances of getting work are greatly increased because of 200,000 new jobs over the last 3 years. Let us say she got a job in the rest home at the minimum wage, which has gone up every year, and she now faces the prospect of a 20 to 30 percent wage increase and a path to qualification and skill levels in the growing aged-care industry. When she did that, her children became some of those 50,000 fewer children from a benefit-dependent household. If she had more children and was paying higher rent, particularly if she had very high rent in Lower Hutt, the benefits of the accommodation supplement could be $50, $60, or $70 a week.

In this Budget, Steven Joyce has made sure that those with the highest housing costs get the biggest benefit. It is that simple. One figure he did not mention is the OECD measure of low income—that is, households below 50 percent of the median income. Today we have made announcements that mean that from 1 April next year there will be 50,000 fewer children under that threshold—by 1 April. This amounts to about a 30 percent reduction in that measure of child poverty, although there are many other measures; that is just one. The families benefit from that.

A whole lot of other people are going to benefit as well, because one of the big debates in this election campaign is going to be between those who think that spending money shows you care, which is the Opposition, and those who think you show you care by changing lives. That is us. It is that basic.

We heard it in the Leader of the Opposition’s speech. Here is the difference. The National-led Government wants—

💬 Carmel Sepuloni: Kids in cars, doing homework. Yeah, that’s a life-changing thing to happen!

—no, listen to this carefully—by 2021, to have a 25 percent reduction in the rate of hospitalisations of children for preventable conditions. We all know that is a huge challenge. We are learning how to take it on from the rheumatic fever project, with the thousands of kids who turn up with respiratory diseases, cellulitis, asthma—all things that are avoidable. What does Labour want? Labour wants a demographically adjusted, Consumers Price Index - adjusted real increase, with the technology factor and the population bit, for more money. That is what it wants. We want healthier children; Labour wants more money.

In education we want to deal individually with the kids who need more help to get over the line. Labour just wants more money. [Interruption] That is right—you are right. You are right. Sometimes it is not more money; the other one is a review—a review. So “Mental health is a really big issue, I have had 9 years to think about it, and I thought: ‘We’ll have a review.’ ” That is how the fifteenth Labour health spokesperson justifies Labour’s policy.

It is the same with serious crime. What I am very pleased about in this Budget is, as a result of the tools we are using—called social investment—we are getting into very granular understandings of not just who has got a low income but exactly what types of other issues trap them there. One big motivation for that is that when you have got a growing economy, you want everyone to be able to get on that bus. The fact is that even with some of our households—even if they have more income, it still will not change the toxic mix of offending, welfare dependency, and family violence that traps them where they are.

We are unashamedly addressing the hard core of New Zealand’s longest-run social problems, and in this Budget there are 14 initiatives that do that. I want to pay tribute to public servants who, I know, find it difficult to fit the model. It creates a lot of tension and sometimes a bit of frustration, but we are making some progress because what is the point of having a Government if it cannot deal with the most complex, the most vulnerable, and those who under Labour’s model of mass funding, run by their union mates, get forgotten as they did under the last Labour Government?

So as Steven Joyce said, the only reason we can have these conversations is that we have got a strong economic plan that is underlying a strong economy. If we can have 3 percent growth for 5 years, that would give New Zealand one of the longest periods of 3 percent growth it has had for a long time. In that context we can achieve things in the next 5 years we could not have even thought of 5 years ago. We can achieve more in our markets, more in our innovation, more in our growth of employment, more in our infrastructure, where we are making a huge investment, and more for the most vulnerable New Zealanders, who, of course, want to come along for the ride. [Interruption]

Order! [Interruption] Order! [Interruption] Would members please resume their seats.

E Te Māngai o Te Whare, tēnā koe. Ki a koutou, huri noa i Te Whare, ngā mihi o te wā ki a koutou katoa.

[Greetings, Mr Speaker. Acknowledgments to us all throughout the House.]

The Steven Joyce who stood up to give that speech looked and sounded like somebody who actually wanted to do something for low- and middle-income New Zealanders. But the Steven Joyce who wrote the Budget—who actually filled in the detail below the headline—was an entirely different person. So would the real Steven Joyce please stand up?

The big headline in today’s Budget is, of course, this $2 billion family income package. After 9 years of making lives harder for low-income families, now, in an election year, National makes yet another headline-grabbing announcement to make it look like it is doing something about it. It sounds great, but a quick glance at today’s announcement suggests the following things: on the one hand, it says that it is increasing family tax credits for some people, but, on the other hand, the abatement rates will be higher and they will cut in earlier. It gives with one hand, and it takes away with the other.

The changes to income taxes go well beyond simply resetting thresholds to take account of inflation. As always with these guys—as always—the largest share of the tax cuts go to those on the highest incomes. Families who are on more than $127,000 a year get a tax cut of $33.22 a week, whilst those on $24,000 a year or less get $5.34 a week. I am just going to say that again. Families on $127,000 or more get $33 a week back in their tax cuts, whilst those on $24,000 a year or less get only $5.34, and that is in their package.

This so-called $2 billion Family Incomes Package is just another tax cut for those on the highest incomes, in disguise. It reminds me a little bit of Budget 2015, when National announced so-called benefit increases of $25 a week. That sounded great too, until we realised later that fully half of all beneficiary families with children did not get the full $25. In fact, some—many—got nothing at all. That is the thing about this Government. It is the master of the shell game. Steven Joyce’s first and final Budget, along with unprecedented waves of pre-Budget announcement, shows one thing: National may be out of touch, but it is very in tune with its polling data. So it has set about to look very, very busy indeed. But looking busy is not the same as actual results. So let us talk about this Government’s actual results. It wanted to be tested on its record; let us talk about its record.

Climate change: National says it is super ambitious on climate, but in the last 9 years since it came to office, New Zealand’s greenhouse gas emissions have risen 19 percent.

💬 Rivers: National says that it is cleaning them up, but after 9 years of a National Government you cannot swim in 62 percent of our rivers without the risk of catching some horrible disease.

💬 Conservation: National says it is doing everything it can to save our endangered species, but it has got no problem with a coalmine in a Kiwi habitat on conservation land.

💬 Transport: National says that new motorways will drive productivity, but after 9 years of a National Government, Aucklanders now spend as much time sitting in traffic as they do on vacation every year.

💬 Energy: National says it wants 90 percent renewable electricity, but New Zealand gets a lower percentage of its electricity from renewable sources now than it did in 1980—1980.

On productivity: National says it is spending more on R & D grants in this Budget, but after 9 years of a National Government we are still spending less than half of the OECD average on R & D in this country.

In the Māori economy, National says that it is improving well-being and job opportunities for Māori, but after 9 years of a National Government, Māori unemployment is still twice the national average. It has not budged in 9 years.

On housing: after 9 years of a National Government, New Zealand is the most unaffordable country in the world to buy a house. We have 40,000 homeless people in this country—40,000. Today’s increase to the accommodation supplement is an admission of failure. It is a failure to build more houses. It is a failure to keep housing affordable. The accommodation supplement that takes taxpayer money and gives it to private landlords—if the Government had actually built more of its own social housing stock, that money would come back to the Government to be reinvested.

Steven Joyce says that he wants New Zealanders to judge National on its record, and it is a broken record. Housing—broken. Our rivers—broken. The climate—broken. Transport—broken. But we can change this. New Zealanders can change this, and we just need to change the Government. This Government reminds me of one of those tired old bands that keep touring the world, playing their old hits, talking about the good old days with that old lead singer that they used to have. The problem is, the songs were not even that good the first time around. It is time to give it up, guys, there is a new super-group in town.

Kiwis are generally a pretty happy and tolerant lot, but 9 years is a long time to put your trust in a Government that is big on announcements and short on results. I mean, can we really trust National to make our rivers swimmable again, when after 9 years our rivers and our lakes and our aquifers are even more polluted and degraded than they were when they came to office? Budget 2017 sinks another $90 million into subsidies for industrial irrigation, which will only make things worse. The braided rivers of Canterbury are on the verge of vanishing for ever. Coes Ford is an ankle-deep puddle. More than 60 percent of our monitored rivers are now unsafe to swim in.

The Land and Water Forum has broken down under National. It no longer trusts this Government to act in good faith, saying, on the one hand, that it wants to clean up our rivers, whilst on the other hand it is subsidising the very things that make that impossible. Instead of trying to fix the problem, National is doing what it always does: trying to wring a few more dollars out of a broken system before the public catches on. Our rivers are too precious to be spoilt in National’s short-sighted pursuit of a quick buck.

What of our children’s future? Can we still trust National to protect our climate and move our economy towards a low-carbon future? Yes, sure, they signed up to the Paris Agreement, committing us to a low-carbon economy. But at the same time, under their stewardship, New Zealand’s greenhouse gas emissions have been getting steadily worse. They are now 19 percent higher than when this Government came to power, and they continue to rise and rise and rise.

Budget 2017 makes things worse. These guys are still stuck in the 1950s, thinking that they can spend $9 on motorways for every $1 they spend on rail—more pollution, more congestion for Aucklanders. The National Government’s failure to take meaningful action on climate change means that we are going to have to pay other countries to reduce their pollution, so that we do not have to. That is going to cost us a fortune.

The Green Party revealed this week Cabinet briefing papers that estimate that the cost of National’s inaction on climate change is going to cost us at least $14 billion over 10 years. That is nearly $1.5 billion every year just to buy carbon credits overseas. It is a massive transfer of New Zealand wealth overseas, and that is at today’s prices. When the price of carbon increases, we will be stuck with a bill that makes our looming superannuation goal look teeny by comparison.

We still have a small opportunity to act. New Zealand has got the resources and the clean energy expertise to meet the climate challenge and to show the rest of the world how it is done. This is, in fact, one of the greatest economic opportunities in at least a generation, and one that National members are simply letting slide on by while they have their heads buried under the sea, looking for oil. If you want to live in a country that is not crippled by climate debt, one that is truly sustainable, with innovative, meaningful, well-paying jobs, you need to vote to change the Government before that window of opportunity closes.

This year we estimate that the Department of Conservation (DOC) will have $53 million less to invest in protecting nature than it did in 2008. That amounts to a cumulative budget cut of $422 million since National started cutting. These long-term budget cuts have resulted in fewer front-line rangers on the ground protecting our most precious and vulnerable birds from further decline and extinction. It also means we have fewer scientists discovering new ways of doing conservation smarter.

After 9 years, can we really trust National to protect the wild spaces that we love, when they are happy to starve nature’s front-line defenders whilst handing out fat subsidies to oil companies to drill in the Maui’s dolphin sanctuary? Give me a break. Only a vote for the Green Party in 121 days’ time will restore DOC funding for nature and create a whole lot of good jobs out in the regions where they are needed the most.

There has been a lot of talk about social investment. National’s big idea is to use big data to target social spending more accurately, especially when it comes to our most vulnerable children, in order to reduce future Governments’ fiscal liability. Children are not a liability. They are our greatest asset. And you do not target children; you care for them. Everyone knows the old saying, that it is better to build a fence at the top of the cliff rather than have an ambulance waiting at the bottom. The Greens have argued for decades that investing a little bit more up front, in things like early childhood education, will enable our children to grow up to be thriving adults with strong families and good jobs.

Social investment has the potential to be the Holy Grail of social policy—an evidence-based approach to building a 21st century welfare system that actually does what it is intended to do, which is to lift families out of long-term, intergenerational cycles of poverty and exclusion and into ever-increasing cycles of inclusion and opportunity. But how can you trust a National Government to deliver on that promise when, at its heart, it is simply using the language of social investment to cloak 9 years of cutting social spending in order to deliver Steven Joyce’s small State dream. National is not building a fence at the top of the cliff. It is leaving a tangle of barbed wire on the edge and hoping that nobody trips over it and falls over.

If Steven Joyce truly believed that people mattered, National would have curbed its instincts to blame and bully beneficiaries. If Steven Joyce truly cared about our most vulnerable families, National would have reacted very differently to the stories of indifference and bureaucratic blockheadedness that are regularly encountered in Government agencies like ACC, or Child, Youth and Family, or Income Support, and in our prisons.

When times are, at least theoretically, so good for the New Zealand economy, explain to me why people who are working, who have jobs, and are doing more than 40 hours a week in those jobs, are living in cars. Why are people who are working 40 hours a week, or more, living in cars? Why are New Zealand’s houses so cold and so damp that there are 40,000 visits by kids to the emergency rooms every winter because their homes make them sick? Why do 1,600 people die in the winter months every year, compared to the rest of the year?

New Zealand’s homes kill five times more people every year than the road toll, and this Government killed off the very home insulation scheme that was designed to save those lives. Social investment—give me a break. The home insulation scheme had a benefit-cost ratio of 6:1. This Government understands the cost of everything and the value of nothing.

Yesterday the Prime Minister posted a survey on his Facebook feed, asking his followers what sort of pie he should eat today. The answer is humble pie. Budget 2017 disappoints in its lack of a big vision for our great nation and a lack of self-belief that we can actually solve the great challenges of our time if we change the direction that we are heading in. We can have rivers that we can swim in. We can lift tens of thousands of children out of poverty. We can fix the housing crisis. We can show the world what it takes to have a truly sustainable economy that works for and includes everyone. Budget 2017 will not be the defining political moment of this year. That moment belongs to the people of New Zealand at election 2017. After 9 years of a National Government, it is time to change the Government—and change is coming. Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.

These—[Interruption]

💬 Hon Gerry Brownlee: He’s brought his ashtrays in!

No, these are not for you, Gerry. These are tins—t-i-n-s. There is no surplus. Any fool can see that. What we had today was a wilful, wanton, weak, wobbly, woeful Minister with a wilful, wanton, weak, wobbly, and woeful Budget, and National is going to lose the next election, big time. The most worried people watching me right now are those good, hard-working, loyal National Party voters who know this will not cut it. Out there in their homeland, and in the provinces and in the regions, there is nothing for them at all.

Here was the claim by Mr Joyce: 200,000 more jobs in the last 3 years. To get on that list you have to work just 1 hour a week. Who can possibly believe in that sort of hypocrisy? Then they talked about their growth rate. It is actually 2.8 percent, and if you take out the 2 percent of population growth, that is 0.8 percent, and that is down the bottom of the OECD. You cannot believe these people. I know those National supporters out there who remember the likes of Holyoake and Holland and all those other people, when National was a worthy party. Know that these people—and the polls show it—are just a bunch of useless, hopeless, lazy, idle, and, in the main, old “use-by date well gone” members of Parliament. And they have got something to do with tins; they have got a tin ear. They do not listen. They do not care, and this Budget showed it.

Budgets are meant to be about philosophy; they are meant to be about what demarcates a party against all the others. They are meant to be about a plan—a vision—which every sporting, cultural, or business enterprise knows you must have, except for the National members, who came in today with no plan, no vision, no idea. They are just trying to hang on for 3 more years so that Gerry does not have to do any work and so that some of them do not have to go back to their tawdry, hopeless, former lives, where they never had a real job in the first place. Those members do not know what it is like to make a lot of money in business, at all. They came here because they are political and business failures.

💬 Hon Member: Ha!

Oh, do not laugh at me. I do know. I have got a record of making some serious money when I had a practice in a law firm. [Interruption] Ha! I made more than anybody over there did, and I can prove that with the greatest of ease. But I gave up that life for the people and for the cause of this country, and I have never regretted it—never regretted it.

Did you like the way Steven Joyce reeled out billions and billions and billions of dollars, all over 4 years? He never gave a comparison against 2008. He never gave a comparison against what they do in Australia, Canada, Scandinavia, and all the First World countries. No, he thought he could confuse people with big figures, and then the cacophony of clowns got up, and what did they do? They clapped him—unbelievable. I have never seen so many sheep going to the slaughter and clapping their way to it—not one Judas goat but about 25 of them; all of the backbench, and they will not be here after the next election.

Those members believe—and they said it again today—in globalisation. They believe in mass immigration. For 65 million people the UK target is net 100,000. New Zealand today has 4.7 million people. Our target? It is 72,000 as we speak, all cramming into Auckland—spilling over—and every social service under massive stress, with a housing crisis that today says to a young student at university: “When you leave, it’s going to be three times as hard as it was for your parents to get a house.” That is the legacy of this party. Oh, the Government members are not smiling now, are they? Oh no. I can tell you at home that they are all looking down at their notes. They are all fascinated by their correspondence. Some of them are reading the Budget again, trying to make head or tail of it, because they can see it might have been the longest suicide note in history for them. That is what is going on here.

Let me tell you how bad these globalists are, because, you know, they do not pay attention to the rest of the world—whether it be Brexit, whether it be the United States, or whether it be Australia. The Chinese Government has recently changed regulations to put a capital gains tax on properties held overseas, and, guess what? Just the other day Chinese investors were rushing to buy land in New Zealand. Two examples: Massey University sold land to Whyburns, which then onsold to a Chinese investor at a massive profit. They did not care what the profit was; they wanted to get that land in New Zealand and they got it. An Auckland golf course sold land to Mansons, which onsold to a Chinese investor at twice the market value. These are just two examples. And we sold more land offshore last year—five times more than the previous year. Those members are land agents for a foreign culture and for foreign economies, and the very last thing they will ever do is stand up for you.

When we sought to have a register of land and homes in this country so we might know what is going on, these people over here opposed it because they want you to be like their caucus. They want the mushroom principle. They want you in the dark permanently, and our job here is to shine some light on what is going on in this country.

That was a hopeless Budget speech—appalling. And then, to top it off—usually they go from the sublime to the ridiculous, but this time it was from the ridiculous to the pathetic. Up gets Bill English. When you see people standing in a certain way, you know, psychologically, how they are. When somebody crosses his arms like that, that means he is open to all sorts of attack because he knows he has got something to hide—and he did for most of that speech.

💬 Hon Simon Bridges: Well, you’re doing it now.

Yes, I am just showing—oh, for the benefit of “Simple Simon”—

💬 Mr SPEAKER: Order!

For the benefit of “Simple Simon” of Tauranga, I am showing those people there the way Bill English was standing. And do you know what he said? Do you know what he said? “You’re doing it now.” I mean, do these guys become Ministers in a raffle? It is unbelievable.

He claimed a surplus of $1.7 billion. He claimed a surplus of $1.7 billion. If I am looking at roading, that is $1.7 billion short already. If I am looking at railways, that is $1.7 billion short already. If I look at the Cullen fund, which the Government is not contributing to, that is $2 billion short already. If I look at our hospital system, that is $1.7 billion to $2 billion short already—and the Government claims a surplus. Whilst out there, where the struggle is real, it does nothing whatsoever, and that is the reason why it should lose. National has forgotten what it stands for. That party used to be called the National Party, with a capital “N”; now it is the “International Party”: the puppets of every other society and every other people but ours. That is how bad those members are, and if they think they are going to win the next election—as Muhammad Ali would say, if they even dream they are going to win the next election, they should wake up and apologise. Unbelievable—unbelievable!

There is family poverty; mental health services are in disarray; the conservation estate and services are in dismay because the only work that is going in is if it can help tourists, and to hell with New Zealanders and their legacy; there is social housing in motels—$100,000 a night now—and science, research, and technology is in disarray. Were there any figures today about what it is going to put into science and technology as against GDP so we can have a comparison with Singapore and all the smart countries? No—no comparison at all. There is runaway immigration, house-price inflation going through the roof, infrastructure deficits in every town and city, and over the regions and provinces there is utter neglect—utter neglect. And the New Zealand Superannuation Fund—as I say, if we were contributing $2 billion a year, then there would be no surplus. We would be down $300 million today. That is the truth. That is the truth—unbelievable.

💬 Hon Gerry Brownlee: So you borrow to save. Brilliant! Absolutely brilliant! Borrow to save!

And here we go—oh, here we go. The person shouting out here is a man called Gerry Brownlee. If you are down in Christchurch, you will know who he is, because down there they call him “Mr Useless”, “Mr Do Nothing”, “Mr Slow as You Go”—and National made him a foreign Minister. The most amazing thing about that is he does not even know where Canada is. The first thing he did was insult one of our old friends—unbelievable. And then he goes over to Australia, and I bet the Aussies thought: “Good God! What’s coming here? What have we got here?”. And then he calls the foreign Minister the Prime Minister. Unbelievable! Not trained—been here for years. He has been here for years. Unbelievable!

The real figure New Zealanders wanted to know today was what our GDP growth per person is. When you know that, you will know whether we are going that way or that way. And with all those economists and all those high-paid people in Treasury, why would anybody not tell you what the GDP per person growth rate is so that you will know against the rest of the world how you are doing? Not a word, not a syllable, not a sound, not a mutter, not a murmur in this Budget, because the Government believes in the Budget of mushrooms as a principle. Do not tell the New Zealanders anything!

Do not tell them, for example, that in most trades and most professions, if you are in Australia—

💬 Hon Gerry Brownlee: His party’s funded on mushrooms.

Look, do not try to shout me down; I am having a conversation with real people. I am having a conversation with the people of New Zealand. I am not talking about people who spend all their time thinking about their next meal; I am talking about the people who are thinking about the next bill they have got to pay, because out there the struggle, Mr Brownlee, is real, and one party knows it and understands it and has answers for it.

Did the Government tell you how it is going to grow the economy? Did it tell you, for example, that manufacturing against GDP in this country is declining? Did it tell you that exporting as opposed to GDP is declining? Did it tell you, for example, some of the most amazing things in this Budget—and I will get around to it very shortly. Then it got on and said it is doing things for the Māori people, as though the Māori people are not like the rest of us. In this country we have got red tape, and under the National Government we have got brown tape. That is what we have got: racism, separatism. But let me tell the Māori people out there—and there will be a lot watching right now, up there in Hokianga, in Kaitāia, because they would love to vote on our roll, and they ain’t going to be voting for the National Party. But let me tell you this: after all the work that the Government said that it had done, and money that it has given to the Māori Housing Network—$14.4 million in 2015-16, $17.6 million in 2016-17, and more in this Budget—I want to ask those two members from the Māori Party here, who are here for the next 3 months, how many houses they have built.

💬 Marama Fox: Hundreds.

See what Marama Fox says? She opens her mouth and lets the wind blow her tongue around. But the answer out there, Marama, if you are concerned about this, is they have built 11—11 houses. That is at $2.8 million a house, and they are not in Paritai Drive or Remuera. No, they are around the country. And they have consented 63 houses. That is, they have given them the consent. Now let me ask you: can you live in a consent? How many people do you know living in consents? This is a sham. It is separatism, racism, an endless campaign. The people of this country and those in Māoridom—the followers will be legion, because the mass majority of Māori do not want your policies; the mass majority of Māori want a safe, affordable house. They want a decent health system should they fall ill. They want an education system to give their children an escalator for progress in life. They want First World wages and First World jobs. Those four things are what Māoridom wants, and, come to think of it, that is what everyone wants, all around the world and in this country. One party alone understands that, and that is why Māori will be lining up in their tens and tens of thousands in this campaign to back a party called New Zealand First.

But, of course, see, we are not separatists. We do not look at our race. We are not gender-biased. We do not look at people’s religion. We take on people because they have got a thing called talent, and it starts at the top.

Let me just say that Mr Joyce got up and he said that all these people—1.3 million families—are going to be $26 better off. You know that famous line from the movie The Shawshank Redemption? “The colossal”—I cannot say the next word—“The colossal [so-and-so] even managed to sound magnanimous.” Twenty-six dollars!

Ladies and gentlemen, in 2006, 2007, and 2008 we gave the minimum wage people $3 extra. We took it from $9 to $12 in 3 years flat. Multiply that by 40—how many extra dollars is that a week? Even Gerry should be able to work that out. Even Gerry should be able to work that out. That is $26; we gave them over $120—if they are working Saturday as well, much more than that—per week. We did that 10 years ago. If you give us a chance, we will do it again. But we will make sure that business, because of sound tax policy, is able to pay for it. That is the difference.

You know, Mr Joyce talked about economic growth. He said the economy today—and I am glad he said it—is 14 percent larger than it was 5 years ago. We have looked behind the figures. Take out inflation and that means it is 9 percent growth in 5 years—that means 1.8 percent per year. Now take out the population growth of 2 percent, and we are not even growing at 1 percent per year. Now more and more economists are beginning to understand that.

But we have got people like somebody in the New Zealand Herald today—you know the clown who wrote this. He said that the Government was swimming in money. Tell that to the people in mental health institutions, the people who are looking for a home, and the people who are looking for a job—a decent job; some of them have got three jobs—who want to get rid of secondary tax and have a decent life.

But here is the real rub, for the benefit of the Māori Party, and it is this—

💬 Marama Fox: We’ll take it—$354 million.

No, no, I saw you get up and clap. But only yesterday the overseas merchandise trade statistics came out, and they revealed the stunning success of National’s much-vaunted, tiringly boastful export agenda. Guess what has happened. In the 12 months to April this year, New Zealand merchandise exports grew by a staggering—listen to this—0.2 percent. Multiply that by 10—that is 2 percent growth for a decade. And the Government members get up here and say that they have got a plan. They are a joke. Underneath the hype and misinformation it is a fake Budget that delivers nothing meaningful for ordinary New Zealanders, and nothing to make our economy go faster. It does not tell New Zealanders how they compare with the rest of the country.

Ladies and gentlemen, there is an election on 27 September.

💬 Carmel Sepuloni: The 23rd.

Sorry—23 September.

💬 Hon David Bennett: Get it right!

Ha, ha! You see, that is how I know they are listening. That is how I know they are listening. I was thinking about the day we are all going to be down here as a huge caucus, and I got a bit ahead of myself. I got a bit ahead of myself. But there is an election on 23 September, and in that campaign, on that day, in that vote, and in the 2 weeks beforehand, people are going to have a chance, whether they are going to vote for their province, for their families, for their communities, or for their politics. Right now all the signs are showing that New Zealanders realise that they had better put their hand up for their provinces, for their regions, and for their communities, because if they do not do that, then nothing will help them now.

I have never seen such a disparity between the rich and the poor, now creeping into the middle class, in all my life. The great dream of people like Holyoake and others, when that party was a proud party, was a property-owning democracy with the greatest level of egalitarian equality of any society on earth. Look at it now: divisions everywhere. Now even in wealthy families there are people who are poor because they are students, with no chance of ever buying a home unless mum and dad can give them $300,000 or $400,000 to get a start. How many families who thought they were comfortable can afford that? But National has no plan for housing. It is going to bring in the population of Rotorua every year for the next 10 years, but it will not build the infrastructure. If you look at the motorways in Auckland now on a Saturday morning, you will know what a catastrophe this all is.

This has been a day of bad and sad news. The people in this Parliament and those watching on that TV station and listening out there in New Zealand have had to put up with 45 minutes of sad, bad news. But I have got one piece of great news for everybody watching and listening today. I have got one piece of great news for everybody out there who is watching, and it is this: that was Steven Joyce’s first and last Budget.

Kia ora tātou katoa. That speech was beautiful—that speech was beautiful. It was touching. I was almost moved to tears—almost, but no. That was sad, sad news for Aotearoa. If that is what is coming round the corner, we are in trouble, e hoa mā. We are in big, big trouble. I am pleased to stand on behalf of the Māori Party today to declare support for this Budget and, indeed, support for the honourable Mr Joyce for delivering, I think, a good job—a good job. It must have been because the Māori Party was beside him.

As we say in Te Arawa—and this is a very important saying—the singer may have changed, but the waiata is exactly the same. The Minister of Finance may be new, but with the help of the mighty Māori Party there are some real goodies in this Budget for whānau. Whānau have always been at the heart of what we have been about as a Māori Party. From the first time we came into this House, we have talked whānau at all times, above all. We have promoted whānau, we have been looking after whānau from day one, and the Māori Party, by the sounds of it, has had our sticky fingers all over this Budget, because its focus has been on whānau.

While it has been a National Party Budget in some ways, I can say that the huge footprint of the Māori Party is over this part of the Budget in looking at supporting whānau. Like his predecessor, he sees the value of innovative approaches to tackling issues affecting Māori. Bill English, the Prime Minister, in his time as Minister of Finance, worked closely with the Māori Party, and I am pleased to say that Steven Joyce has done a similar approach, recognising that we as the Māori Party are all about tackling issues upfront and head on. We want to contribute, not get angry, not go wild, not lose our head, not do the spin, but, actually, we want to contribute in a positive way.

So I am saddened by the fact that Mr Peters voted against Treaty settlements again and again and again—because that is what he does. He voted against housing projects like Point England, voted against—oh, anything to do with Chinese names, he is up for it, because it is election time. As soon as we heard it was election time—uh, oh, pull out the racism card; it is a winner every time. So that is the sort of sad approach that has happened.

I want to say this: you have got to be in the game—you have got to be in the game. You cannot play the game from the sidelines; you need to be in the game. Sometimes we need someone to blow the whistle a few times, attract a bit of attention, and get results. But you cannot get anything unless you are on the field. And so, as I say, at the table we are, and we will continue to be and support any initiatives that assist Māori people.

Being at the table as a support party for the National Government, we have secured and influenced—hold on, here it is—more than $2 billion worth of gains in the Budget. It is only $2 billion—

💬 Marama Fox: Is that all?

No, no, hold on; there is more. Actually, it is more than $2 billion.

💬 Kelvin Davis: Two percent of the Budget.

Those in Opposition who are yelling at me at the moment—hold on, what have they gained over the last 9 years? Kore, nothing, zilch, zip, naught, nothing—that is what they have achieved, and yet they have got the cheek to come into this House and have a go at the two Māori Party members of Parliament, who sit next to the Government and get more than $2 billion. It is a good day to be in the Māori Party.

That means $2 million more in Whānau Ora in this year’s Budget—$2 million. That is $10 million. And it is $10 million more than that lot have got, I will tell you that. But hold on, there is more. That is right. Hold on. That is the difference between us, eh? We just talk to each other; they have got to ask Willie. They have got to ask Willie—

💬 Marama Fox: Or Andrew.

Or Andrew. Either way they have got to ask somebody, not like you and me.

💬 Marama Fox: No.

No, that is right. Back off, back off, get down the back. Settle down, boys—kia tau. So that is what happens.

We have got more: $10 million for marae. Let us hear it. Is somebody going to speak up about $10 million against marae? Hold on. Shh! Shh! [Interruption] Oh, they are; they are going to speak up against marae. They are going to speak up against marae.

Hold on, here is another one: $21 million—$21 million—for Māori language and culture initiatives. Hold on—[Interruption] Oh, they did it again—they did it again. They spoke up against Māori language and culture, because that is what they do in the Labour Party: they speak against things Māori.

Gains for Māori, that is what we are on about. Every day, every month, and any dollar we get today is better than the dollar we did not have yesterday, so we are on a roll, and we are here to make gains. So watch this space.

Just in case there is any doubt, for the people of Whanganui, I need to tell them that there is $122 million in this Budget, Mr Deputy Speaker. I know you are the Deputy Speaker, and I know you would want to clap, but I will let you off today. There is $122 million in the Budget.

At the heart of this Budget, we have pathways to allow people to move into homeownership. Hold on. Let us see whether they talk about moving into homeownership. Shh! Shh! Let us listen. [Interruption] Oh, they did it again. Not again! They spoke against homeownership. It is so sad. My people—whakarongo; listen to this—unbelievable. Here is the point: if you want to have people speak against things Māori, look (1) to New Zealand First and look (2) to the Labour Party, because that is what they do. I am really sad about that because we are all different, we all have different shapes and sizes and are, clearly, in different political parties. Our solution is to look across the board, to try to find solutions for our people. Man, there have been so many gains in this Budget—unbelievable.

But we expect—and I will be clear here—that Māori are overrepresented in some statistics, some statistics. But you do not just moan. The idea is not to moan about it; do something about it, and for too long—in fact, for 9 years—the Labour Party members have moaned and moaned and moaned. And what has the Māori Party done? We have moved and moved and will continue to move forward. That is what we are about. In fact, I can say this: an extra 2,500 whānau will be reached by Whānau Ora through this Budget, and that is on top of the 11,500 who have already been supported just in this last year. So we are supporting looking after whānau. So hold on—some more whānau are to get help in this Budget. Let us listen—[Interruption] Oh, they did it again. Not again! That is four times. That is shocking. It is unbelievable.

Let us just check on one more—let us just check on one more. So we got Te Ture Whenua Māori Bill going through the House; we have got $32 million to build a Māori Land Service, which is going to look after Māori land—$32 million all ready to go. That is just the first part—that is just the first part. Hold on. Shh! Shh! [Interruption] Oh, No. 5. I have got five. I would go for six, but I am running out of time. In fact, I am pretty sure that, no matter what I said, that lot would speak against it—against more than $4 billon of money for Māori communities in this land. There is $4 billion. That is right—over the length and breadth of the time that the Māori Party has been in here. But hold on. Let us see whether they know how much money they got in the last 9 years. Shh! Shh! Let us just check.

💬 Kelvin Davis: Where?

Oh yes, where? Oh no, where? Where did you see any money around, at all, from the Labour Party for this country? Nowhere; that is where—nowhere. So I can say this is a good day; this is a good day to be in the Māori Party. And, hey, the main thing—and here is the big pitch—all by two people; all by two people have the gains been made. So I am looking forward to the election, because the Māori Party is on fire when the shark and the fox rock your House.

They say that the definition of insanity is to do the same thing again and again expecting a different result, and I am not sure whether Te Ururoa Flavell is guilty of insanity by having far too much hope in the Labour Party.

I rise in support of this bill and this Budget, and I support this Budget and this Government because I have seen the alternative. Andrew Little, for the first time I have ever seen, failed to even use his allocated speaking time—he had so little to say. New Zealand First—we just heard from Winston Peters. It was a comic routine, but there was no substance behind it. What a joke. Look at his op-ed in the New Zealand Herald this morning. Raising R & D expenditure to 2 percent of GDP—well, the Government can very easily do that, but simply pursuing a certain amount of money spent on something is not the same as getting a result.

This Budget has one very good aspect to it, and that is relief for taxpayers. Raising the thresholds is a victory for ACT and ACT’s thinking, because we have been on this for over 2 years, relentlessly saying that bracket creep, which has taken money out of hard-working New Zealanders’ pockets week after week after week in greater amounts every year, is fundamentally wrong. So we applaud the Government for doing that. But once you get past those minor tax adjustments, which are going to take around about $1 of expenditure for every $7 of new expenditure that the Government is bringing in with this Budget, there is not much more good news.

I look from Labour to National and from National to Labour, and then all the way back to National again, and it gets very hard to see any difference. This is a Budget that is a tax and spend Budget, it is a vote-buying Budget, and it is a Budget that is designed to buy votes with other people’s money. The transfers to Working for Families, a policy once described by the National Party as “communism by stealth”—well, finance Minister Steve is wearing the hammer and sickle proudly on his sleeve today, as this Government expands transfers from taxpayers to recipients of middle-class welfare.

And what about the transfers that will take place from taxpayers to landlords in the form of the increased accommodation supplement? If you do not have a large—or even, really, any—increase in the number of properties being built in New Zealand, and if you give more money to people to rent the same properties, you know what is going to happen. Prices are going to go up and, in this case, rents are going to go up. It is an enormous transfer of wealth from the taxpayer to the holders of all-too-scarce rental property.

Those are the criticisms of this Budget. It is a tax and spend Budget. It is a politically calculated Budget. It is the kind of Budget that we used to expect from Michael Cullen. The fact of the matter is that what this Government should have done is cut taxes, and, specifically, it should have cut them by the $24 billion of forecast surplus that the Budget estimates tell us are coming down the line in the next 4 years. Rather than taking all of that money off hard-working New Zealanders and their businesses, we should have given it back to them by allowing them to keep the money they earn in the first place, through tax cuts.

The ACT Party has shown how New Zealand could have a top income tax rate of 25c in the dollar without cutting any spending. In fact, we would not only not cut spending; we would allow it to increase by $14 billion, as forecast in the coming 4 years. We would deliver a top tax rate of 25c, we would drop the bottom tax rate to 10c, and we would drop the 17.5 percent rate to 15 percent. Three tax rates: 10, 15, 25. Nobody should pay more than a quarter of their income in taxes, and that was completely possible in this Budget, just by giving back the surplus that this Government will now keep for the next 4 years. Just remember that a Government surplus is a taxpayer deficit.

But what about infrastructure? We have a huge problem in infrastructure because we cannot build enough homes, and we cannot build enough homes because we do not have enough infrastructure to get to the sections and the land where people would like to build them. Well, in ACT’s Budget, we would have given half the GST on construction to the council that consents it—a simply beautiful way of achieving the outcome of transferring an extra $1.2 billion in infrastructure spending, all within the Budget figures that I have just presented. With a 25 percent top tax rate and money left to spare, it would have given $1.2 billion to councils to build infrastructure so that people could build homes. It is so beautifully simple, it is automatic, and it would not require any photo opportunities. It would just transfer money to the councils, which get on with consenting and building. That is what this Government should have done.

The other thing it should have done was think about business, because the fact of the matter is that there is nothing in this Budget for business at all—at all—unless you happen to be one of the few favoured businesses that provide enough photo opportunities to get grants from some of the honey pots this Government likes to keep, largely for publicity purposes, and that is a shame. ACT would have reduced the company tax rate to 25c, and we would have done it by cutting the $1 billion of corporate welfare that this Government hands out in return for photo opportunities for Ministers each and every year.

But there is something much bigger that is not in this Budget that should be, and it is of great concern to New Zealanders under 40—that is, the question of making superannuation sustainable. I now stand here as the only Millennial political party leader and as the only person in this House prepared to say that superannuation as it stands is not sustainable and that we need leadership, rather than to be putting our heads in the sand on this issue. The Retirement Commissioner, whom the taxpayer pays for, and Treasury, which the taxpayer pays for—in fact, every time the Government pays for a report on the sustainability of superannuation, these people tell us that we have to make adjustments, and you have to wonder why the Government does not either take their advice or stop paying them to produce these reports. The fact of the matter is that there are currently four taxpayer-aged New Zealanders for every superannuitant, and in 20 years’ time there will be only two. That is not sustainable.

The ACT Party, in this Budget, which has a 4-year time frame or forecast, would have begun to raise the age of entitlement to New Zealand superannuation by 2 months a year in 2020, taking that age to 67 by 2032. That would be fair. That would mean that all generations would be involved in an adjustment that has to happen, instead of what the current Government is saying to Millennials, which is: “We acknowledge there’s a problem. We’re going to make an adjustment, but we’re not going to make it until 2037. That means we’re going to tax your generation $58 billion to give superannuation at 65 and 66, and then we’re going to pull the rug out just as you become eligible.”

This Budget is far better than anything the Opposition could possibly have put forward, and yet it still carries so many imperfections, so many long-term issues in housing and infrastructure funding. It lacks a commitment to the basic proviso on which the National Party was formed, which is that people’s property belongs primarily to them and the Government takes it only where necessary. That is what the $24 billion of excessive taxation—of surplus—is about. If this Government stayed true to its principles, then what it would have done is taken that money, taken those forecasts, and let people keep it, with a maximum tax rate of 25 percent.

People might be interested in what that means to them in practical terms. If you want to find out how much money you could have saved under ACT’s tax policy, go to www.ACT.org.nz/tax, punch in your numbers, and find out just how much this Government’s reluctance to stick up for the taxpayer has cost you. Thank you.

Can I begin by expressing my congratulations to the Minister of Finance, Steven Joyce, on the production of his first Budget. I know how much he has been looking forward to today and how much effort has gone into its preparation, and I just want, at a personal level, to congratulate him on that achievement. He is one of very few members in this House who will get the opportunity to present a Budget, and he should savour every moment that he has, in that respect.

The next thing I want to say is that no Budget is prepared in isolation. Every Budget is a reflection of the context of the time, and the context that lies behind this Budget is a very fragile one. Since about 2010-11, this country has been going through a period of steady economic growth—about 6 years. That is one of our longest periods of sustained growth in the last half-century, or more. Six years—it is not very long, which shows the frailty of the economic cycle.

This Budget projects growth over the next 4 years. Time will tell the accuracy of those projections. But, effectively, what we have is a Budget that is a moment in time, and I think that the approach taken has been a prudent one of saying that there are areas where we need to spend more, where we need to make adjustments, and where we can afford to because we have a surplus at this time, but that cannot be where it begins and ends.

I see this Budget as a “building blocks” Budget. The work that has been foreshadowed, in terms of the increased social expenditure in health, education, welfare, and justice, is good, generally, but it needs to be sustained year in, year out while the surpluses remain. The family assistance package—the four steps outlined there are, again, positive, but there is more to do in the future. We do need to be looking to a more fundamental reform of our tax system, both in terms of thresholds and rates and the interface between the tax and benefit system, for want of a better term. If you took the totality of expenditure across the family assistance package—Working for Families, tax changes, the income tax system, etc.—there is the capacity for much more radical structural reform over a period of time, but that needs to be well founded, on a base of good economic outcomes.

We have talked in this House for years about the infrastructure deficit. We know where the problems are. It is good to see a substantial commitment being made to addressing those. But, again, we have got to be very careful that we do not fall into the trap of saying: “We did all that in Budget 2017; we don’t need to be worried about these issues for the next number of years.” The point is that continuous improvement is what is going to continue to see this country progress and, perhaps, address that very short window of about 5 or 6 years, being our maximum period, in recent times, where we have enjoyed economic growth and prosperity. I accept that a number of those factors are external and beyond our control, but it does highlight the fragility that this economy is constantly exposed to and the need to benefit productively from the gains while we can. I think this Budget strikes a good and proper balance, and I think what it does is foreshadow the types of improvements that could be made in the future.

It has been a sobering contrast to listen to the debate this afternoon: an essential air of optimism from this side of the House—perhaps stated quietly, but none the less clearly—versus a sustained barrage of negativity from the Opposition. The Opposition has no clear policies, no sense of direction, no purpose, and a sense of bitterness that the areas that those members traditionally saw as their babies are being addressed today. I do not think that bodes well for the future of this country, because there will come a time—there will come a time, many years from now—when the political spectrum changes. If there are no ideas, no optimism, and no positivity, then this country’s essential economic frailty will be exposed and we will begin the process of restructuring all over again. I think if we are going to have an election campaign—as we are this year—it needs to be focused on a debate around sound ideas, not about how we recreate a better yesterday.

I was in Christchurch recently talking to social service providers down there, and they told me of an experience they had with two senior members of the Labour Party about the social services that they were providing in Christchurch, and the things that were being done. They said that these two senior members, the deputy leader and the finance spokesman, said to them: “Look, that’s all very well, but you shouldn’t be doing it.” When they asked who should be doing it, the Labour Party members said: “The Government.” So butt out community, butt out local people—big Government takes over! That idea went out in the 1930s, and it is being recreated by the Opposition in a time when we have well moved on from that. If you contrast that type of big Government approach with the much more strategic approach that the Government’s investment strategy ushers in, where we focus on results and outcomes, not on the quantum of expenditure—where we focus on the risks, not on the silos of how Government services are delivered—the contrast becomes absolutely striking.

What New Zealanders expect is a Government—it does not matter what its political hue is—that will deliver the services that they need in a way that they want them delivered, not a Government that tells them: “This is what we think you need, and we will deliver for you.” It is the other way round, and if the people opposite do not understand that, they should look at the campaign recently fought by Emmanuel Macron in France. That is exactly what he did, and look at the way he broke the political nexus in that country and stormed to power. There is a very important lesson in that—that the reaction to the extremism and the nationalism that is occurring in a number of countries is not to reinvent the past, but to respond in innovative and flexible ways. We see signs of that in this Budget. Much, much more has to come, and the Government faces some huge challenges over the years.

I will give you one example where there is a conundrum to be resolved. We do need to spend more to upgrade our prisons, because we have more people going to prison and they deserve to be housed in dignity. But, at the same time, we have got to adopt a longer-term approach to make sure that the conditions that lead to people being in prison in the first place are being reduced. You cannot play the game of saying “We’re going to be tough on law and order.” by dealing solely with the consequences; we have to actually deal with the causes. What this Government has done, and is starting to do more clearly through the investment approach that it is focusing upon, is to address the deficiencies in the short term but also put much more emphasis upon progress in the longer term. The Opposition will not like that, because those members’ whole approach to politics is essentially a grievance approach: find an itch, promise to resolve it, make sure that you do not actually eliminate it—because you need a political cause for the future—but just resolve it, keep it happy, and hope it keeps bubbling for next time. The last thing they actually want is to see substantial social progress made, because that actually addresses the fundamental problem that many people face.

I do not think that this Budget is the absolute answer. I think it is a very positive step in the right direction. It deserves support for what it does, but more importantly for what it foreshadows: the opportunity to use hard-won surpluses effectively, for the benefit of New Zealanders; the opportunity to make sure that this economy is resilient to international economic shocks; and the opportunity to start to see big deficits in infrastructure and social spending addressed in a way that will benefit the people of New Zealand. Against that backdrop, it is very hard to see any rational reason for any political party that claims to be credible seeking to oppose the Budget. But we will—we will find every sort of manufactured excuse to find it unacceptable; we will find every way in which we can say: “This is not what the people want.”

The reality, if you look at the reaction so far that is already coming through, is that people are welcoming the initiatives that are being foreshadowed in the Budget. They want to see them happen, and they appreciate that they are getting some dividend for the struggle that they have been through in recent years. They are supportive, and what they expect their parliamentarians to do is to give them the opportunity to enjoy those well-earned fruits of recovery, not to be constantly saying “We’re going to take those away from you.”, or “You’re not really entitled to them.”, or “We don’t really think it’s fair that you get them because others get them as well.” They are the politics of a bygone era, and the really sad reality is to see them played out in the House this afternoon.

I move, That this debate be now adjourned.