Urgent Debates — Fiscal Strategy—Budget Policy Statement and Half Year Economic and Fiscal Update

I have received a letter from the Hon Steven Joyce seeking to debate under Standing Order 389 the Government’s release of the Budget Policy Statement and Half Year Economic and Fiscal Update. This is a particular case of recent occurrence for which there is ministerial responsibility.

The Budget Policy Statement and Half Year Economic and Fiscal Update are regular features of the Government’s financial cycle. The Budget Policy Statement is debated each year, after it is considered by the Finance and Expenditure Committee. In the normal course of events, the regular release of these documents would not warrant an urgent debate. However, there has been a change of Government after three terms. The new Government has a 100-day plan that it is implementing, and has said that the detailed costings for the 100-day plan will be revealed in the release of the Half Year Economic and Fiscal Update. Waiting until after the 100 days are over to scrutinise those plans and costs may not be satisfactory.

I have considered an earlier precedent for a similar situation. In 1990, shortly after the opening of the Parliament, the new Government made a general economic statement to the House before introducing a finance bill; that statement resulted in an extensive debate involving the Prime Minister, the Leader of the Opposition, the Minister of Finance, and several other senior members.

In the absence of any indication of a ministerial statement, I have concluded that this matter does warrant the immediate attention of the House. I am aware that the Families Package (Income Tax and Benefits) Bill has been introduced today. This bill implements some elements of the Government’s 100-day plan. Because of the granting of this urgent debate, the debate on the bill will be more closely restricted to the content of the bill, rather than on the general fiscal and budgetary plans. I invite the Hon Steven Joyce to move that the House take note of a matter of urgent public importance.

I move, That the House take note of a matter of urgent public importance.

It is excellent to have the opportunity to debate in this House a very important document. It’s an important document because we have seen so little up until now of the new Government’s fiscal commitments, of how they are going to pay for their coalition promises, of how they are going to structure their fiscal commitments over the next several years. So this is not just this House’s first opportunity, it is also the public—[Interruption]

💬 Mr SPEAKER: Order! Sorry, I’m going to ask both the Hon Carmel Sepuloni and the Rt Hon Winston Peters to sit down. We did have a slight problem the other day as a result of this.

Thank you, Mr Speaker. This is not just this House’s first opportunity; it is also the public’s first opportunity and the business sector’s first opportunity to have a look at the fiscal and economic plans of the new Government.

I thought I’d start this discussion with the economic plans. There is no doubt that in the short to medium term the Government and Treasury are now expecting softer growth than was predicted just a few months ago in the pre-election fiscal update. More than that, they’re expecting Government expenditure to make up more of that economic activity than we saw just a few months ago, and that is something that we’ll be keeping a very close eye on, because actually substituting the activity of households and businesses with more Government spending leads to long-term problems in terms of increased debt and higher Government activity choking off the private sector of the economy. So we’ll be watching that very closely.

If you have a look at the fiscal numbers that are in this particular update, at first blush they look sort of positive. But, actually, you just have to look a little bit below the front cover of the book to find that they are, let’s just say, “ambitious”, to quote the finance Minister, in the extreme. These are very ambitious numbers. Why are they ambitious numbers? It is because they have only a very small number of costings of the new Government’s plan actually included in the document—a very small number of those costings indeed. Yes, it does identify the tertiary education package. Yes, it does identify the changes to the previous Government’s Family Incomes Package, and, yes, it does include paid parental leave. But beyond that, the numbers are very squishy indeed. We have a whole range of things that this Government has said they will do, but they haven’t included any numbers for them at all in this half-yearly update.

This is interesting, actually, because in the Public Finance Act, if you are making a decision to do something, then actually you are honour-bound to include it in the accounts pretty quickly after you’ve decided. I’ve sat in this House and heard how the new Government is going to spend $8 billion or thereabouts additionally on health over the next four years, and, weirdly, that number doesn’t appear anywhere in this Half Year Economic and Fiscal Update. Similarly, we don’t see anything here about early childhood education.

There are also absolutely no numbers here for the Regional Development (Provincial Growth) Fund. You may recall that the Provincial Growth Fund is a very, very important part of the new Government’s Budget, but there is a little inset box that says, “We’re talking about it. We’re not quite sure how we’re going to do it yet. We don’t know how much of it will be capital or how much of it will be operating. We’re not sure exactly how it’s going to be laid out, but as soon as we get Shane Jones off the couch and actually get him to do some work, then we’ll be able to actually have some understanding of what the Provincial Growth Fund is.” Then he’ll be able to get his nephews off the couch to do some actual work. So it’s a bit of a chain reaction that’s required before we’ll actually get some details of the Provincial Growth Fund in this half-yearly economic update.

There are a few other things that aren’t here. There are a few other things that aren’t included in this document, which is a bit of a concern—I think a genuine concern—for New Zealanders. We’ve heard a lot about, for example, increasing police numbers. There’s been a lot of talk about that in recent times, and also a lot of talk about increasing police salaries and how those need to be funded, but, of course, there is no reference in this document to those commitments in terms of additional money. So we have to assume that the increase in police numbers has been put a bit on the long finger by the finance Minister.

So that’s some of the things, and there’s more. We had a colleague of mine asking about science investment, because the new Government has made a big commitment to increase science and research investment. However, so far, there has been nothing included. Now, the finance Minister, when he stands, will, undoubtedly, point to the new Budget operating allowances, and it is true that he has increased one of those for the next financial year. It’s gone up to $2.6 billion. I think for the previous Government we had about $1.8 billion—

💬 Hon Grant Robertson: $1.7 billion.

Thank you, Grant—$1.8 billion, and $2.6 billion is the actual number that he’s put up now.

However, a very straightforward calculation of his health commitments and his education commitments and his Provincial Growth Fund means that he would have absolutely nothing for anything else whatsoever. That does explain to this House why it is the Government has got very wound up about the fact that it hasn’t allocated $350,000 to KidsCan: because the finance Minister is undoubtedly wandering around to his colleagues and saying, “Whatever you do, don’t move, don’t spend any money, because it is so tight, it’s tighter than it was for the previous Government during the global financial crisis.”

He is expecting to spend so little additional money on the actual operation of Government over the next couple of years that he’s had the agricultural Minister raid the primary growth fund to pay for the rebadging of the Ministry for Primary Industries to please their friends in New Zealand First.

So that’s the problem, immediately, but there’s more. And it’s really interesting, this question of exactly how many fiscal risks are included in this document. I’ve counted 28 new fiscal risks—

💬 Hon Member: How many?

—28—that Treasury has identified at this time that have not actually been included. For example, the Green Party: the coalition partner is very keen on the Green Infrastructure Fund. Treasury identifies that as a specific fiscal risk because no money has been allocated to said Green Infrastructure Fund. While we’re on the Green Party: funding for Department of Conservation. Treasury notes that there’s significant increases required there, but also notes that nobody’s given it any indications, so it can’t include any allocation for it. It’s just a specific fiscal risk.

Then there’s the small matter of the 36th America’s Cup. Now, you’d think, actually, that under the Public Finance Act, once you have David Parker going around measuring up Halsey Wharf and the Wynyard Wharf in Auckland—you know, a layperson might think that that could be the time to put some money into the Budget for the America’s Cup bases, because the new Government is going to invest in those, they’ve made absolutely clear. But, weirdly, it’s included only as a specific fiscal risk. No actual money, no ability to spend any money, and yet it’s just sitting there.

Another one, which is closer to Grant Robertson’s heart, is that Treasury points out that there is a commitment to extend further the “fees-free” tertiary education policy. But there’s nothing in this document about that either, in the out-years. Then we have a whole range of some things that are actually passed. The healthy homes legislation is passed, but it’s still listed only as a specific fiscal risk, because nobody’s got any idea how much it will cost the Government’s housing provider to actually provide the additional money.

And it goes on. I want to focus on one in particular, because I see the deputy leader of the Labour Party over there, the Minister of Corrections. Justice commitments are noted as a specific fiscal risk in this document because the Government doesn’t want to do public-private partnerships anymore, because it’s ideologically opposed, including that finance Minister, to doing public-private partnerships. And so, suddenly, they have created their own little justice hole, and Treasury has noted it as a specific fiscal risk. Those of us on this side of the House who have been involved in this area know that if you’re not prepared to build a prison with a public-private partnership, you’re up for a very big number indeed. And that’s not included in here.

Another one that isn’t included is Mr Twyford’s rail priorities in Auckland and Wellington. They are not included in here at all. You may recall, actually, Mr Robertson earlier this week talking about how he was going to spend $15 billion building light rail, not just to the airport but out to Phil Twyford’s house. They were going to do that and it was going to be $15 billion, but, weirdly, that’s not included in here, despite the absolute assurance from the finance Minister that it was coming. So we have Auckland and Wellington rail priorities to add to the 27 other specific risks, which leads me to believe that it might have saved a tree or two—with deference to Mr Peters—if they’d just listed one specific fiscal risk. They could have just said, “Specific fiscal risk: Grant Robertson, finance Minister.” That would have been the right specific fiscal risk to list in this document, and could have saved us all a huge amount of time.

Then, it’s interesting that, even with the fact that they’ve left out 28 things, that they’ve left out all their other commitments, and that they’ve left out the various Budget things and they’ve only put in a very tight allowance for next year—despite all of this, they are lifting public debt. Despite what they’ve left out, they are lifting public debt.

So, under the pre-election fiscal update just a few months ago, Government debt—the amount owed on behalf of taxpayers of New Zealand—was dropping from just under $60 billion at June of this year, over the next five years, to $56 billion. People said, “Well, that’s actually what we need to do.”, because, as has been pointed out plenty of times on the other side of the House—plenty of times on the other side of the House—debt has built up because of two big events: the global financial crisis and the Canterbury earthquakes. Those involved the Government of the day borrowing money to support vulnerable New Zealanders. That’s what we did. We built that debt, and now, when it’s the good times, it’s time to pay it down—until Mr Robertson comes along. And now, in four years’ time, he plans for debt to be at just under $70 billion. So instead of dropping to $56 billion, it is going to go up to nearly $70 billion, and that is before the 28 specific fiscal risks—before the 28 specific fiscal risks.

Before I conclude, I want to make a brief note on the Families Package that the Government has tabled today. We get to discuss that shortly, when the bill comes before the House, but the documents that come with the Budget make quite a significant point about the number of children lifted out of poverty—and that’s important, because we all want to see that occur. The interesting thing is that the previous Government’s package lifted 50,000 young people out of poverty immediately when the package came into force. So here’s the interesting thing: the Government are now comparing that with a number that is 88,000, which seems a lot better, until you note the fine print, and they’re not talking about until 2021—they’re not talking about until 2021.

So I call on Mr Robertson, when he stands up, to explain to this House why he didn’t compare apples with apples. Why didn’t he actually put the number in and compare apples with apples? Why did he feel the need to embellish it by using 2021? He knows that the previous Government was planning a second Family Incomes Package in 2020.

💬 Hon Grant Robertson: Oh, you were planning it?

That’s right, because we weren’t going to spend all this money on tertiary students instead of actually paying median - wage workers more money so that they would be encouraged to work harder, earn more, and grow the New Zealand economy.

The problem with this half-yearly fiscal update is that there is very little in it. This is like the dance of the seven veils, and this is Grant’s first veil. This is the first thing he has shown us—

💬 Mr SPEAKER: Order!

Grant Robertson’s first veil—sorry, Mr Speaker—Grant Robertson’s first veil. And he’s shown us a little bit, the 100-day plan. He hasn’t shown us all the other commitments. He’s left out 28 fiscal risks and he’s left out the biggest specific fiscal risk of the lot, and that is the Minister of Finance, Grant Robertson.

I never thought I would see Steven Joyce as the Labour sleeper in the National caucus, until today when he actually asks for an urgent debate for us to talk about a Budget Policy Statement and a half-yearly update that we’re proud of, on this side of the House. So I thank Mr Joyce for his generosity in giving me that opportunity today.

It was my great honour to release the Budget Policy Statement today and to sit alongside Treasury’s half-year economic and fiscal update. What we were able to show in our Budget Policy Statement today was that it is possible for a Government to be both fiscally responsible and implement progressive policies. That is a lesson that the previous Government completely forgot.

So when we look at the economic and fiscal outlook that is in the documents today, growth will continue to be solid; it will average nearly 3 percent over the forecast period. I heard throughout the election campaign from the National Party that growth would collapse under a Labour-led Government. It would be all over. There would be no growth in the future.

Well, actually, what the fiscal outlook says today is that next year, growth will be a little softer—or in the second half of this financial year, growth will be a little softer. That’s actually about activity in the second half of 2017. By 2019, when the Government’s policies are being rolled out, guess what happens? Growth goes back up—3.6 percent—and Treasury directly says that that’s the result of having a Government that invests in the economy, having a Government that lifts the minimum wage, having a Government that builds some affordable houses, having a Government that invests in the regions. That’s what you get; you get growth, and this Government is proud of it. It is not the kind of growth that we’ve seen under the National Government, which is driven by population increase and housing speculation. So, yes, the forecast growth for 2018 is a little softer, but in 2019 and 2020 we start to see the transition to a productive economy, and I am proud that this Government will be leading that.

Also in today’s half-yearly update is the news that Treasury expects unemployment to fall to 4 percent by the end of the first term of this Government. That’s a promise. We’ve actually said we want to do that and we’re proud that Treasury realises that that will happen. But it also says—and this is very, very important—that wage growth over the next five years will average at 3 percent.

Finally, New Zealanders are going to get the dividend of their hard work, because the members on the other side of the House seem to believe that the reward for New Zealanders’ hard work should be a tax cut. But, actually, we’re more ambitious than that, because if that’s how you reward workers, where does it end? Where does it end? Do you stop? Do you just keep cutting taxes as a reward? Or do we actually invest in productive growth that lifts wages? And that’s what this side of the House will do. So we will see much higher wage growth under this coalition Government.

Then we come to the issue of surpluses, which Mr Joyce included in his statement. On this side of the House, we have committed ourselves to sustainable surpluses. They’re not surpluses manufactured by underfunding public services. They’re not surpluses manufactured by failing to invest in our infrastructure. They are real surpluses once we have done what New Zealanders need us to do. And by the end of the forecast period, in the half-yearly update we see the surplus reaching $8.8 billion higher than what National’s forecast was, so not what Mr Joyce said; in fact, the opposite of what Mr Joyce said. But, again, as I say, he is obviously now the Labour sleeper in the National caucus.

Then we come to the question of net core Crown debt. This is a very important point because in the last Government, I, as an Opposition member, asked many questions about the issue of debt, and every single time I got an answer from the Minister of Finance about the percentage of debt relative to GDP, because that’s how Governments measure it. And the previous Government had a target to lower that percentage, and they didn’t seem to quite be able to meet it so they pushed it out and pushed it out, and that target was 20 percent. Well, we have adopted that target but we’ve said we’re going to take a little longer to get there, and the reason that we’re going to take a little longer to get there is because of the infrastructure deficit that this country is facing. So in this Budget Policy Statement and half-year update there is extra capital spending from this Government, and that is for the affordable housing programme called KiwiBuild. We can either be a Government that sits on the sidelines and says housing will become more and more unaffordable, the lowest homeownership rates in 50 or 60 years—

💬 Hon Member: They don’t care.

They don’t care about that, but we’re going to invest, so we’re going to make sure that we invest in the future.

The other element of that increased borrowing is to restart contributions to the New Zealand Superannuation Fund. I am extremely proud that after nine long years of zero contribution to our super fund, finally the Government, this Government, is stepping up to do that, and that first payment will happen tomorrow. So Mr Joyce wants action—it’s happening tomorrow. He can come along if he likes. He can come along and watch as we start again to invest for future generations. And it is the combined commitment of the parties that make up this Government that we will have sustainable superannuation. The very first thing a Government can do is contribute to the super fund, and we are doing that.

So all of that is part of what contributes to the fact that over the next five years we will reduce debt as a percentage of GDP to 20 percent, exactly the same target that National had, but over a longer period of time because there are investments to make.

What Mr Joyce now has is an obsession with the cash amount of debt. Well, let me say this: on this side of the House, we remember the fact that when the last Labour-led Government left office, net debt in cash terms was tiny; it was even under $10 billion. When we come back into Government, it’s at $60 billion. What happened in the meantime? To hear Mr Joyce blame the global financial crisis—I also sat in this House when Bill English said that the global financial crisis was over, in 2012. What happened in the remaining five years? What happened then? The previous Government has no credibility when it comes to the issue of debt. We will pay down debt, reduce New Zealand’s debt, but we’ll do it in a way that is responsible and allows us to invest in the assets that we need to invest in.

The Half Year Economic and Fiscal Update presents a picture of an economy that—yes it was growing, but it’s going to grow more, and it’s going to grow sustainably under this Government. It presents an economy that was drifting along and not delivering benefits to all New Zealanders. We will return to the Families Package, which is a critical element of this Budget Policy Statement. But can I say right now that that is the chance for all New Zealanders to share in prosperity.

There is no point in crowing about high growth rates, if people are living in cars and garages. There is no point in crowing about high growth rates, if our hospitals are turning people away. There is no point in crowing about high growth rates, when the average age of our schools is more than 40 years. We will invest in New Zealanders’ future to give them a share in prosperity, not simply allow ourselves to be comforted by the numbers that are on the sheet. All of this means that the Labour-led Government with New Zealand First and the Greens have delivered on our Budget responsibility rules. All of them have been delivered on, and I am extremely proud of that.

I now want to turn to what Mr Joyce seemed to be obsessing about, which is the question of what is and what is not in the half-yearly update. Mr Joyce has been part of enough Budgets to know that when you actually do Budget 2018, it happens in 2018. What the half-yearly update does is tell us where the books have reached, halfway through the year. Due to the excellent work of the officials since this Government has been in office, we have been able to include in the half-yearly update the cost of the 100-day plan. It’s actually an amazing achievement, in 40-odd days, to be able to put all of those costs in there.

Think about what’s in that package: the first year free post - secondary school training and education—one of the most transformative policies for the productivity of the New Zealand economy that we will see in many, many years. Despite the Opposition trying to make out that that policy is only about universities, we know that the vast majority of people who will benefit from those policies will actually be people who’ve never studied before, who will go and train in polytechnics, who will take up apprenticeships, who will be in the trades. That policy is costed in to the Half Year Economic and Fiscal Update, as is the Families Package, as are the other commitments in the 100-day plan: setting up the Pike River recovery agency; setting up the tax working group; starting work on the independent Climate Commission. All of those things have been costed in, so we’re well in advance of where previous Governments have been. We’ve got that work in there. It’s in the accounts.

And then, we come to the Budget Policy Statement. So the operating allowances that we have and the capital allowances that we have are over and above and beyond what we’ve already committed to in the 100-day plan. So we have an operating allowance for the 2018 Budget of $2.6 billion. Now, we are an ambitious Government. I don’t want any of my Ministers to get ideas that they may be able to spend all of that money, but we are an ambitious Government. We have ideas. They’re contained in the coalition agreement. They’re contained in the confidence and supply agreement. And they are going to be implemented. Right now, all around Wellington and New Zealand, Public Service agencies are working out how those will be delivered. When we come to Budget 2018, all of that detail will be set out.

But those operating allowances and those capital allowances are larger than the allowances that the members on the other side had. So bear in mind that we find ourselves in a position now where, with careful financial management, we can actually make a big difference in the lives of New Zealanders.

I want to finish my contribution around the Budget Policy Statement because this is a document that lays out our priorities for the future. It does something that I don‘t think has been done before inside a Budget document. It talks about the fact that we, as a Government, will measure our success differently in the future. We will not be satisfied simply by having GDP growth. That’s important. We need the economy to grow. We need activity in the economy. But we do not learn about the quality of that activity just from GDP numbers.

So we are going to add to that by looking at how we improve the well-being of New Zealanders in everything that we do. How do we support the environment? How do we improve outcomes on child poverty? The Prime Minister has already said in this House that there will be a piece of legislation that will be introduced very shortly that will mean that when I get up to deliver Budget 2018, I will be obliged by law to report on how we have reduced child poverty. That is exactly as it should be. It’s not just about the numbers on the page; it’s about what good we can do for people with the money that we are privileged to look after in each Budget.

So we will measure our success differently; we will measure our success by well-being. By the time we get to the 2019 Budget, I have asked Treasury to make sure that when I am presenting that Budget, I am able to present it by looking at how we’ve improved health outcomes, how we’ve improved education outcomes, how we’ve supported the environment, and how we’ve reduced child poverty.

This is world-leading work. Treasury have been doing a great job on their Living Standards Framework. I don’t think Mr Joyce has got past page 1 of the Budget Policy Statement, but if he got up to page 9, he would see an excellent table that outlines the way in which we are going to improve living standards. I’d be very surprised if he made it to page 13, but if he had, he would have found a description of the Provincial Growth Fund.

Of course, the detail of that has not been worked out yet. We’ve only been in Government for 43 days. But what is written down here is the plan for reigniting the regions of New Zealand. I want to thank the New Zealand First Party for their contribution to bringing that to the table during the coalition negotiations. When we look at the criteria in that Provincial Growth Fund, it says everything about what I want this Government to be marked out for.

The investments in that fund will be about jobs and sustainable economic development, social inclusion and participation, climate change and environmental sustainability, and resilience. That’s the kind of economy we’re going to grow, one where we are resilient, where we are adaptable, and where we’re inclusive; one where we don’t think leaving out people is right, one where we don’t think child poverty growing is actually OK in this country, but a Budget where we actually try to build a fairer and a better New Zealand, because it’s about what we do with the economy that matters. We will grow this economy sustainably, we will be responsible in how we spend money, but we’ll be ambitious for our people and our environment. We will never, ever, on this side of the House, settle for the status quo. New Zealand is a great country; it will be greater still. It will be fairer and better when we implement the policies in this policy statement.

Thank you, Mr Assistant Speaker. I am proud to be standing on behalf of New Zealand First, a New Zealand First that has proudly chosen to form a coalition Government with this Labour Party, working with the Green Party, here together for the benefit of New Zealand. I stand with pride to speak to this Half Year Economic and Fiscal Update (HYEFU) on behalf of New Zealand First—this fiscal update.

Actually, let’s just slow down a bit, because I want to make this point very clearly to all of the members in this House and the public of New Zealand: New Zealand First made the right choice six weeks ago. We picked the right people, and we picked the right side of the House. We stand here as a Government for meaningful change, and what we see here in these documents—which, clearly, Mr Joyce doesn’t quite understand—is a Government that represents meaningful and sustainable change for all New Zealanders, and it is with pride that I rise on behalf of New Zealand First.

The former Minister of Finance does need some form of congratulations, and I note the actual Minister of Finance did acknowledge him for being what seemed to be a plant for the Labour Party, because this is exactly what we wanted to do this afternoon: celebrate success and stand here in front of New Zealand and show, with pride, just exactly what it is that we have been able to achieve in this short time. I say that former Minister Joyce didn’t seem to understand because this is quite an exceptional debate. This isn’t what normally happens. So whilst we are grateful to the former Minister of Finance, actually, what he needs to realise is you need to wait for the actual 2018 Budget before you can start debating those numbers and throwing the apparent lack of those numbers in our face. It doesn’t quite work that way, former Minister.

We have been given an opportunity for New Zealand, and it is in these pages that the—I actually take this opportunity, and I should’ve done this first, Minister, to congratulate the Minister of Finance on his work. It is the reflection of not only the negotiations but the hard-working Ministers who have brought this information together so that we can reflect, at this half-yearly stage, just how we intend to move forward. We’re in a 100-day phase, and the HYEFU is a kind of reflection of the legacy that we’ve been left with, but what we’ve been able to show here is how we would like to move forward.

Speaking of a legacy that we’ve been left with, it has been my privilege to take on the role in the space of regional economic development. I spent three years following regional economic development plans around the country, work from the former Government—and, I put it to this House, work that was kind of shockingly put out there in response to what was then the Northland issue, as they saw it, and their lack of presence in the regions, and that party’s apathy as far as our provinces and our regions were concerned.

I think we’re up to 13 regional economic development plans, and there was, essentially, no money attached. So I’ve had the privilege of sitting in meetings with officials and the Minister, discussing how we’re actually going to put money in these plans, because let’s be fair and give credit where credit’s due: some of the ideas that originated out of the regions are actually good ideas. And we’re not mercurial; we’re not malicious. There are some good ideas and they need to continue, and we will seek to continue them, but now we are part of a Government that actually will seed those ideas with real money, real support, and real resources.

I also have the privilege of working with the Minister of Foreign Affairs. Just by way of brief summary, can I just say that it has been a shock, and slightly disappointing, when we have spoken with officials who have kind of hinted at the decrease in budget, the decline in money—our foreign aid commitments have declined over the years—

💬 Hon Grant Robertson: That’s actually a fiscal risk.

And it was identified as a fiscal risk from them, from the other side of the House. There was $148 million tagged for frigates within our navy, and yet there was no money attached—no budget. There was no forward budget for the youth justice in Oranga Tamariki. So they talked a good talk about looking after our youth and creating systems and programmes to look after them, but you look at the Budget

💬 Hon Tracey Martin: There’s no money.

—there’s no money. There’s just no money. Thirty-eight million dollars missing in addressing the teacher shortage, especially in Auckland—they spoke about it, they made an announcement to New Zealand about addressing the teacher shortage, and there’s no money.

💬 Brett Hudson: There’s nothing in your BPS.

No money, Mr Hudson. And yet they come up with a flag referendum that nobody particularly wanted,

💬 Hon Member: $28 million.

—and that was a resounding response from the New Zealand public. What was that—$28 million, I think; $28 million. We had a showcase Middle East sheep farm—sheep farm in the Middle East. Jeez! So millions of dollars sunk into there, and then business after business being offered money with no return to the Government. I’m not here to attack private business, so I’ll skip over some of the notes I made in preparation.

Mr Joyce spoke about how we’re now in the good times, and, actually, New Zealanders do think we are now in the good times. We are here now as a Government that will be working hard towards that. He spoke about how we needed to—he kept talking about lowering tax. I’m not sure why he keeps talking about lowering tax, but what we’re trying to do is tell New Zealanders that everyone needs to be able to share in the good times, not a few people. So when Mr Joyce talks about the good times, what were the good times for people who couldn’t afford a House—

💬 Brett Hudson: We’re talking about the 1.2 million Kiwis who are going to be worse off now.

—who were living on the streets, Mr Hudson, who were living in their cars and under blimmin cardboard. Don’t give me that. There were lines for the lines into our hospitals. That is the surplus—the supposed surplus that that party was extolling—that we are addressing here in this HYEFU.

This Government is today announcing all this work around the Families Package. We have a Prime Minister who has decided that she will be representative of the children of New Zealand as the reflection back to us about how well we are doing our jobs. We are willing and able to discuss youth suicide and the poverty in our families that they are struggling with every single day. I became a member of Parliament because of increasing levels of inequality within New Zealand, and it is this coalition Government that recognises that GDP as a measure of success in and of itself is like Mr Joyce looking in the mirror and saying everything’s fine. Mr Joyce, everything is not fine. You need to look beyond that mirror.

We are a party and we are a Government that is proud to be presenting a Provincial Growth Fund that represents a billion dollars per annum into the heartland of New Zealand. In fact, Mr Joyce, we did talk about that—we did talk about that. We laid down the guidelines that we’re hoping to work towards, that Cabinet will be addressing very shortly, that the Budget—the Budget, the actual Budget—will be addressing in terms of numbers.

I am proud to be a member of this New Zealand First - Labour Government, in support with the Greens. We will be working for New Zealanders, and, actually, unemployment’s going down, growth’s going up, GDP per capita is increasing, and we will look to other measures to measure that success. Thank you, Mr Speaker.

Thank you, Mr Speaker. I can tell you very simply, and tell this House very simply, why it is that this side of the House wanted an urgent debate on this Half Year Economic and Fiscal Update (HYEFU), and that’s because, for the last few weeks now, we’ve had this big build-up that this was going to be the big reveal when the new Government laid it all bare, showed us the plan, showed us the costings, told us how it was all going to work; it was going to be the mini-Budget, in which all would be revealed. We can see that, because they’ve created this whole dog and pony show about today. Not just the traditional briefing over at Treasury—oh no. This Minister of Finance had to move it all to the Banquet Hall and have the full three-hour lock-up because this was going to be the big centrepiece of this new Government’s programme. They were so desperate to show some sort of fiscal credibility that they tried to build this into a serious attempt to set up their costings.

We heard this afternoon, earlier, from Steven Joyce about the Public Finance Act responsibilities that require Governments to properly include the costs of commitments they have made. So when Governments commit to making a change, it is incumbent upon them to understand the cost. In fact, when we were in Government, in the Cabinet that I was a part of it was incumbent upon Ministers to know the costs long before they took things to Cabinet, not at some point in the months following an announcement to the public. But, none the less, the Public Finance Act requires Governments to make sure that when a commitment has been publicly made, that those costs are included in the fiscal plan.

We awaited this Half Year Economic and Fiscal Update with some anticipation. Finally, we were going to see some of the numbers around the programmes that the Government had been talking about. In fact, all they’ve done is included just enough in this document to cover off the first 100 days and make sure that the numbers just about make sense—that’s it. That is it. There is very, very little information in this at all, and yet Grant Robertson is happy to stand up and crow about how prudent he’s being, because, “Look, the numbers add up.”

The story of this document is what isn’t in here. You have a long, long portion of the document—and I can assure Mr Robertson we certainly have read into it, and for his reference it’s pages 63 to 97; 34 pages—that sets out unfunded, uncosted fiscal cost pressures and policy risks that this Government hasn’t yet worked into the numbers. Every number in this document—this hefty tome that’s come out today—covers only a very small part of their 100-day plan. It leaves out 34 pages’ worth of real fiscal cost pressures, real policy pressures, and none of that, yet, is costed.

Former Minister Steven Joyce talked a little bit in his contribution about some of those. He talked about the billion dollar regional economic development plan—not here. He talked about the 1,800 extra police, which has been announced—not here. He talked about conservation and the like.

Some of the ones he didn’t highlight, which I want to turn to, are commitments that this Government has made to the public; formal commitments they’ve made that remain uncosted, unfunded, and untransparent. The gender pay gap is a great one, and the living wage. So I have taken the opportunity to say to the Minister, “Well, OK, you’ve made a commitment to remove the gender pay gap in the core Public Service and to ensure that everyone in it is paid a living wage.” That is a commitment that this Government has made. So I, of course, looked to this document to see, with interest, what it would cost. When I asked the Minister what the expected cost of those was, the response that I received was, “Well, we’re just starting a piece of work to figure that out.”

So here is the story of this Government: make an announcement with absolutely no idea what it’s going to cost to implement and then put out a fiscal plan that is absolutely silent on the cost of any of that. Fundamentally, we are being told by this Government that they will tell us the cost of things after they’ve done them—after they’ve done them. It is an appalling way to manage Government and to manage the public purse. This is a Government that is full of all of the sound bites in the world, but doesn’t understand how they’re going to pay for it or even what it will cost. Now, how the public of New Zealand can be expected to have any confidence in any fiscal update that leaves 34 pages’ worth of announced commitments completely uncosted and unfactored-in is quite beyond me.

This afternoon in question time, the Deputy Prime Minister himself acknowledged that the HYEFU is, fundamentally, a reflection of the state of the economy that the new Government inherited—and I agree with him. I agree with the Rt Hon Winston Peters. This document, one of the things that it absolutely does do is reflect, very clearly, what the economy was that this Government inherited. What it shows us—and even Mr Robertson has been forced to grudgingly and somewhat mean-spiritedly but none the less acknowledge—that he was left with a strong, growing economy where incomes have been rising faster than the rate of inflation, where 10,000 extra jobs have been created, and where the National-led Government—every month, every month on average for two years—got us through some of the toughest fiscal conditions in the global financial crisis and the earthquakes.

The reason that New Zealand needs to have low debt levels is because when those sorts of shocks hit, we have to be able to respond. We were in a position—and I acknowledge that we inherited a low debt level and that has been critical to New Zealand’s ability to survive those shocks. If I go back to my farming roots—every good farmer knows that when the sun’s shining you put hay in the barns for the bad times. That’s what this debt picture is all about. It’s not some esoteric economic accountants’ argument. When the times are good, you put the feed in the barn to feed out when times are rough. These are New Zealand’s good times—this is New Zealand’s sunny season, our harvest time, where we need to be getting our economic ship in order so that when the next shock comes we’re in a position to respond to it.

Instead, we’ve got a Government—and I was going to say, you know, generously, sort of two months in. In fact, as the Minister of Finance noted, we’ve got 43 days in—43 days in, and they’ve blown the lot. They have blown the lot. We left a strong economy with strong surpluses and a growing economy, and already it’s gone. What this HYEFU shows us, in terms of the Government’s plan, in just in what they’ve done already—in 43-odd days—they have blown the lot. They had one idea for how they were going to generate revenue, and that was to cancel the tax package; cancel New Zealanders getting a thousand dollars of their own money back to keep, to spend it. That was it. And, OK, we disagree, we think it’s a terrible idea, and we’ll have that debate over the course of the next few days. But, legitimately, a new Government gets to take that approach. But that’s it. That is all they wrote for how they will fund their commitments, and that, as of today, is gone. It’s gone on their baby bonus and their untargeted fully funded gap year for students while they figure out what to do next.

What’s really interesting is you’ve had both the Minister of Finance and the New Zealand First Party getting up and talking about the children and housing and health and education, and yet none of that is funded—none of it is funded. They have spent all of the surpluses we left them. They have spent all of the money created from the one idea that they had for generating income for them—which we oppose; but that was their one idea—and they haven’t spent a single cent in those areas that they claim to care so much about. That’s not in the first 100 days.

If this is a Government that’s going to be all about putting money back into health and education and transport and more police on the beat—if they really cared about that stuff, why isn’t it the 100-day plan, and why have they left no money for it?

Now, Mr Robertson, in his contribution, said, “Well, that’s all right, because we’ve got our out-year operating allowances in the Budget to provide for that.” But let’s be really clear. The operating allowances are only sufficient to cover the regional development fund. Take that out and there is not a cent; not a cent for the pay rises, not a cent for the 10 or 15 percent increase in pay that the social workers at Oranga Tamariki are going to be looking for, not a cent to pay for the extra police, not a cent to pay for the transport commitments.

So, again, even after we’ve had the big reveal—even after Labour has had their three-hour lock-up and big dog and pony show—New Zealand is still none the wiser about how they’re going to pay for a single one of their promises that wasn’t in the 100-day plan or how much it’s going to cost. And what we’ve found out today is that the Government doesn’t know. The Government has got no idea what it’s going to cost to pay for what they’ve promised New Zealand or how they’re going to pay for it, but already we know from the history of the difference in the blowout between their pre-election fiscal numbers and this that they can’t be trusted to have any idea of what it will cost, where the money will come from, or how they’re going to do it. New Zealand should be very worried.

Thank you, Mr Assistant Speaker. I’ve been quite enjoying this debate, particularly with the Hon Steven Joyce’s opening kind of volley, I guess, when he was suggesting that the central complaint about this Half Year Economic and Fiscal Update (HYEFU) is that he doesn’t know what’s in the Budget. I was just sort of reflecting on the time that I spent in Opposition—three Budgets—watching Mr Joyce and Mr English say, in the week leading up to Budget day, to the then spokesperson on finance for the Labour Party, “Well, Mr Robertson, there’s only three more sleeps to go.” or “There’s only two more sleeps to go before we reveal what’s in the Budget.” Well, Mr Joyce, I’ve got some news: there are only 183 more sleeps to go before we tell you what’s in the Budget—only 183—and if you want to ask the question every single day, I’m quite happy to count down how many sleeps there are until we tell you what’s in the Budget. That seemed to be the central complaint that Mr Joyce had in his opening statement—that is, that he doesn’t yet know what is in Budget 2018. And I note that it isn’t even 2018 yet, but there are only a few sleeps to go before that starts.

The other complaint that Mr Joyce seems to have is about the nature of what’s termed the fiscal risks that are outlined in this document, which are the things we are flagging that we say we are committed to in next year’s Budget, right. In next year’s Budget—not in this document; not in this major mini-Budget, but in next year’s actual Budget.

I just want to reflect on the use of that word “risk”, because one of the things that he is saying is a major risk to this country is the idea that women will get paid as much as men for the same work. That’s a massive risk, which he has a huge complaint about—the idea that we’re actually going to—finally, after decades—close the gender pay gap in this country. What a huge risk that is that we need to take care of!

There also seems to be a massive risk that we are actually going to build, in this country, infrastructure that is resilient and adaptable to climate change; that we are going to deal with the huge shortfall, particularly when it comes to three waters and public transport and all of those things that we are currently exposed to as actual risks because we haven’t invested in those things in recent years; and that there is a massive risk, somehow, that we’re actually going to close that massive, multibillion-dollar infrastructure gap in this country.

There seems to be an enormous risk that people will get paid the living wage! How about that? That’s a huge risk, especially if you’re currently on the minimum wage. There is a massive risk that you will actually suddenly be getting paid enough to live on in this country! It seems to be a huge complaint of Mr Joyce: that there is a massive risk that people will actually get paid enough to live on, which might mean that they are able to move out of their cars and into some houses. What a risk that would be to this country if we actually did that! So those are the complaints that Mr Joyce has about next year’s Budget, which he hasn’t seen, and there are only 183 sleeps to go.

He also has a complaint about the fact that the tax cuts that he legislated for in last year’s Budget are going to disappear, and the thing about this major mini-Budget that Mr Robertson is presenting here is that there will be 83,000 kids lifted out of poverty over the course of the next couple of years as a result of the Families Package that is being introduced later today.

So you’ve got a choice, Mr Joyce: either you can lift 83,000 kids out of poverty or you can have your tax cut, right. Do you really want to do that? It’s like, no, actually, Mr Joyce would rather pocket his tax cut than lift 83,000 children out of poverty. Here’s a question: do you want to invest in the kind of infrastructure that this country needs in order to cope with climate change or with the risk of rising seas, or with the fact that we’ve got a creaking water infrastructure that, in some parts of the country, is at great risk of making thousands of people sick, or do you want to cut debt two years earlier than we are planning to? Twenty-four months—all that takes is 24 months—and we’re able to invest billions of dollars in this country’s economy.

There is a good question here about debt, which was raised by Amy Adams in her contribution earlier. It was about maintaining low levels of debt in order to be able to borrow or leverage up when another crisis hits, and we know that other crises will hit. It is a good question: what is a prudent level of debt? I have to say that this Government is committed to paying down debt to precisely the same level that the last National Government was prepared to pay it down to—20 percent of GDP—but only two years later.

There are two views of debt. There are two completely valid views of debt. One is, as Amy Adams pointed out, that you get it as low as possible as soon as possible so that when a crisis hits, you can borrow up to deal with the crisis. That’s one view of debt. The other view of debt is, of course, that at a time of historically low interest rates, when you’ve got a massive infrastructure deficit, why wouldn’t you borrow to invest in the future? So you borrow to invest in the future. That is what businesses do all the time. It’s actually what families do when they get mortgages to buy houses. They’re borrowing to invest in the future.

So you’ve got those two views, and where we came down was we said, “Yeah, 20 percent seems like a pretty reasonable number.” Compared to the rest of the OECD, it’s actually incredibly low—20 percent of GDP is incredibly low. What that allows us to do, if there is another crisis, is be able to borrow to fend off the crisis, but also we actually do want to invest in our future, because the last Government sucked so much money out of the economy in order to hit these magical numbers of theirs that, actually, they’ve left us with a multibillion-dollar infrastructure deficit in water, in housing, in schools, in hospitals, and in transport in particular, and especially in Auckland. If you look at the infrastructure deficit that we’ve got to pay for, I think we’ve got it absolutely right there.

I wanted to reference, in the time that’s available to me, some of the other good news about this. Obviously, one of the things that everyone kind of obsesses about is gross domestic product, and, in Opposition, one of my criticisms of the then National Government was that the GDP growth rate does not tell you how good things actually are. It doesn’t tell you anything about how good things are. You can have an earthquake that actually drives up GDP. If someone breaks a window and replaces it, that adds to GDP. GDP is only an economic measure of activity; it doesn’t tell you if that’s good activity or bad activity. Crime adds to GDP. Building prisons adds to GDP. Building warships adds to GDP. But that does not tell you anything about the people who are living in cars and garages or about the kids who have got respiratory illnesses and hospitalisations, and all of that kind of thing.

So one of the things I am delighted about in this HYEFU here is the commitment to measuring our success more holistically and more sustainably so that we have a much greater range of information about the nature of what actually makes a country well and what our measures of success are, and the idea that, as part of the Budget process, the Minister of Finance will be responsible for reporting on genuine measures of progress in this country, not just a number that tells you virtually anything. And while we’re at it, there is a number in this HYEFU that I’d like to talk about briefly, and that is GDP per capita.

Under the last National Government, GDP was growing, but GDP per capita was not. In other words, people were actually going backwards in this country while the economy was growing—right—because our GDP per capita was falling. Under this HYEFU, what it shows is that that gap is narrowing. It will narrow under this Government. Our GDP per capita will increase and the gap between GDP growth and GDP per capita growth will narrow at last. That means that, while there is an economic adjustment that we are going through, at the end of it, we will have a more productive, higher-wage economy than that which was presided over by the National Government previously. I think if there is one reflection for why they ended up on the Opposition benches, it would be that.

So I’m very delighted with the Budget statement. I’m proud that we are a part of it. I’m glad that we were given the opportunity to debate it, and I’m looking forward to the legislation that accompanies it shortly. Thank you, Madam Assistant Speaker.

Thank you, Madam Assistant Speaker. I just want to take a couple of minutes in my contribution to explain the reason that we have the release of the Budget Policy Statement and the Half Year Economic and Fiscal Update at this time of year, for the benefit particularly of the member who has just resumed his seat, the Hon James Shaw, leader of the Green Party. Mr Shaw spent a lot of his time talking about policies that are proposed by the Government, the merits or otherwise of the policy, and that’s a debate for another day. The reason we have these documents presented to Parliament today is the result of two important pieces of legislation: the Fiscal Responsibility Act—I think, of 1994—and the Public Finance Act.

Both of those pieces of legislation came about as a result of the Labour Government of 1984-90, when, at that time, the incoming National Government found that the books had, effectively, been cooked and that an incoming Government could not rely on the financial information that was entered to it—totally unfair for any Government to come into that situation. Consequently, over time, we’ve developed a very transparent position whereby Governments have to outline the true financial position of a country prior to an election, so that an incoming Government can appropriately cost its policies and work out what it can promise in an election campaign with some transparency and some accountability to the voters of New Zealand. So that is the purpose of these two documents that we are debating today.

I’ve got to say, looking particularly at the Half Year Economic and Fiscal Update, that on this occasion I don’t think I’ve ever seen one presented to this Parliament in the time that I’ve been here that is so empty of information and outlying risks, and I’ll go through some of those risks in a minute. But I just want to say that I feel very sorry for the Secretary to the Treasury having to put his signature to the first few pages of this document and then to have to outline the financial risks that exist throughout the document simply because policy hasn’t been adequately costed at this stage. I note that Mr Robertson had no hesitation putting his signature on the same page as the Secretary to the Treasury. But I suspect the comfort zone of the Secretary to the Treasury was not the same as the comfort zone of the Hon Grant Robertson.

What we see in these documents presented to Parliament today is that we have a typical Labour Government—now associated with the Greens and, of course, with “Mr 7 Percent” New Zealand First. It’s a high-tax, high-spend Government. That is what every Labour Government has been in the time that I’ve been watching politics. It’s a high-tax, high-spend Government. And if you look particularly at the tax revenue—

💬 Hon Tracey Martin: Not the Lange Government. Not the Lange Government. The Lange Government wasn’t high-tax, high-spend. They stripped the—

Well, let me just explain to the Hon Tracey Martin what I mean by “high-tax Government”. If you look at the tax revenue here, Crown tax revenue grows, under these documents, by $22.2 billion—that is a 30 percent increase in Crown tax revenue over the next five years. Now, a 30 percent increase in five years is a high-tax Government, and it is then noted, in my expression of a high-spend Government, that one has to look at the debt figures. Again, debt grows. Now, Mr Robertson comes in and only wants to talk about debt as a percentage of GDP, and I know that when we were previously in Government, we were quite keen on that same statistic. But when you look at the actual figures, debt grows from $59.5 billion to $66.8 billion by 2022. That is a substantial increase in debt.

Now, you can argue that it should only be expressed not in absolute figures but as a percentage of GDP, but if you accept that argument, why don’t you do the same with health expenditure? When you look at page 36 of the Half Year Economic and Fiscal Update forecasts, health expenditure, under the former Government, went up by a huge amount—a huge amount—106.1 percent increase in the dollar spend on health expenditure, which this Government now criticises, but as a percentage of GDP, it goes down with this Government from 5.9 percent now to 5.0 percent.

So the point I’m making is that anybody who wants to examine these figures and take out the facts that suit them can do so. Mr Robertson has attempted to do that today by arguing that debt should only be talked about as a percentage of GDP and not in absolute terms. I suggest that if he wants to adopt that attitude, he have a look at his own figures here in this and the way the last Government should be congratulated for the huge increase—huge increase—in health expenditure. This Government, despite making it a so-called priority through the election campaign, will actually cut the expenditure on health in percentage of GDP terms, and I think the public need to know that.

I want to now talk about policy change risk by portfolio, because this must’ve been a huge concern as this Secretary to the Treasury picked up his pen to sign those pages, knowing that he had written such comments as this: “ACC Impacts of Changes to Accident Compensation … Each such area could generate options with fiscal impacts in excess of $10 million to cash claims per year or to the Outstanding Claims Liability. The combined effect of the policies identified could … exceed $100 million per year.”

💬 Hon Tracey Martin: Could.

And the Hon Tracey Martin yells out “Could.” That’s right. It’s the very point I’m making. We have got no accuracy in this document at all. Listen to this one, Tracey Martin, “Broadcasting”—

💬 Hon Tracey Martin: Honourable—honourable.

Well, yes, the Hon Tracey Martin. I’ll give her that. She won; we lost, and we’re sucking it up. But it doesn’t change what’s in here: “Broadcasting, Communications and Digital Media … The Government has committed to transform Radio New Zealand into a multi-platform provider dedicated to quality New Zealand programming”—etc.—“The total costs … are still being finalised.”

“Conservation … The Government has committed to significantly increase the Department of Conservation’s funding. The exact quantum of such an increase is yet to be determined. Any significant increases in funding may have an impact on the operating balance and net core Crown debt.” That is symptomatic of this Government. It went to the election campaign ill-prepared for a campaign, certainly ill-prepared to be the Government, made promises liberally right around the country, has had 40-odd days to price them and come in here with a Half Year Economic and Fiscal Update 2017 with some real credibility, and it has failed at the first test.

The other thing that I noted: why are we doing it today? Would it possibly be because the press gallery is having its function tonight and the journalists won’t be bothered to exam this? And then we’re going into urgency for legislation to come in to effect on 1 July next year. Why the urgency? And then we hear in the Business Statement today, despite the fact they’ve said we’ll sit till Thursday next week, they’re pulling the plug on Wednesday—one less day for examination.

This is a Government that’s not prepared to let us examine its fiscal position at all. They’re about curtailing debate in this Parliament because they know full well they’ve made a mess of this document. They’ve sat around now for 43 days and have dealt with only legislation advanced by the former National Government—legislation they criticised when they were on this side of House, and now they’ve spent the last four or five weeks passing it. As soon as we get on to their policy—their legislation—we’ll do it in urgency to avoid scrutiny. We’ll do it on the night of the press gallery party so that the journalists won’t give it the scrutiny, and then we’ll get out of Parliament a day earlier because they don’t want scrutiny.

Well, I say to the Hon Tracey Martin: look out; this argument won’t go away. We’ll be back early next year vigorously enthused to hold this Government to account. It’s got only, at a maximum, three long years and then it’s all goodbye to the Hon Tracey Martin.

I call Michael Wood—you have five minutes.

I want to commence my remarks with a couple of sets of congratulations in the spirit of generosity that pervades the Government benches on this very positive day for New Zealand. The first congratulations are to the Minister of Finance for delivering a set of figures and for delivering a vision for our economy and society that balances fiscal responsibility with a willingness to invest in the people and the infrastructure of New Zealand to make this a better and a fairer country.

I also want to congratulate, actually, the previous speaker, David Carter, for giving the best Opposition speech of this debate so far. I would go so far as to suggest that he is a good Opposition member who actually engaged in the facts and actually engaged in the Budget Policy Statement (BPS) and the Half Year Economic and Fiscal Update, unlike Steven Joyce, who led off the Opposition’s contribution.

I might say, there was a pretty extraordinary omission from Steven Joyce’s comments in this urgent debate, which I do believe he called. For about three or four months up until the election, we heard an awful lot about an $11.5 billion fiscal hole. Every single day: “the Labour Party is going to deliver an $11 billion fiscal hole”—bang, bang, bang, through every single medium. Did we hear anything about the fiscal hole today when the Government presented its accounts? Did we hear anything about it from Steven Joyce? Somehow that has dropped from view.

The reason that it has dropped from view is that when the facts get put on the table it is absolutely clear that this is a Government that is acting within the fiscal responsibility rules that it set down. This is a Government that is delivering growth of over 3 percent every single year. This is a Government that is going to do what that former Government could not do in its nine years in office and get unemployment down below 4 percent. This is a Government that is going to get net Crown debt down below 20 percent. And I do have to just reflect on one of the comments from the previous speaker, who said that this Government will be achieving those things under a high-tax regime. Well, that’s interesting, of course, because the tax rates that this Government is confirming through this process are exactly the same tax rates that we had under the previous Government.

This is a Government that is going to invest in people and infrastructure, and what this Budget Policy Statement identifies are the very different priorities of the new Labour-led Government. I want to acknowledge there our coalition partner, New Zealand First, and support partners in the Greens, who share a common vision of investing in people and infrastructure.

Let’s compare those. Over the next five years, what do we see in the BPS? We see that whereas the National Government was going to throw away $8.3 billion in tax cuts, a huge proportion of which went to the already well off, this new Government will invest $5.5 billion in the families of New Zealand—$5.5 billion that will go towards making sure that our old folks aren’t shivering through the winter, through a winter payment; $5.5 billion that’ll go towards make sure that every single child gets a best possible start in life, because we will not tolerate the stain of child poverty in our country for one year longer.

I’ve yet to hear a member from the Opposition benches say anything meaningful about the fact that this Government’s package will pull 89,000 of our precious tamariki out of poverty—89,000 children out of poverty. That’s the kids in my electorate who are living in cars, who are living in shabby run-down hotel units that that previous Government spent $150,000 a day putting people up in because there is simply no decent and affordable housing for them. So this Government, instead of that $8.3 billion on tax cuts, is going to put $2 billion into KiwiBuild, because we fundamentally believe that every single Kiwi family deserves a decent, healthy, and affordable house to live in, and that is what we are showing through this Budget Policy Statement.

Do you know what else? This is a Government that is about the future; not just about today, not just about the political moment. So I am very proud to be able to round off my statements by affirming that this Government, over that five-year period, is going to invest $3.3 billion into the New Zealand Superannuation Fund—something that that former Government did not lift a finger towards in its nine years in Government.

💬 Brett Hudson: That’s only speculation, Michael.

“It’s speculation”, says Mr Hudson. I call it maths, sir—I call it maths. I call it investing in the future, and when you look at the figures, we know that that’s going to be an investment that makes sure that the children of today can have superannuation in the future.

I’m extraordinarily proud of this Budget Policy Statement. It’s about a Government that is managing the books well and investing in our people and our infrastructure, and I thank the Opposition for the debate about.

Thank you, Madam Assistant Speaker. Relentless positivity: that’s the catch cry of the people on the other side of the House, and the last speaker, Michael Wood, got up and said that this was a very positive day for New Zealand. Well, actually, it’s not a very positive day for New Zealand, because if you look at all the confidence surveys that have been coming out over recent times, the confidence level of New Zealand is going down, down, down. The reason is that this Government is dreaming. This document is a wish list. Every time they’re asked how they’re going to do something, they come up completely lacking. This document today has completely added to that doubt.

Grant Robertson talked before, when he got up to speak, about it being not just about the numbers on the page—“It’s about what we can do for people.” Well, guess what? What you can do for people depends on how well you can develop this plan, and the way we read this document is that this plan is not very well developed at all. We can go through 28 points where there are risks. I mean, it was mentioned before about conservation—significantly increasing the Department of Conservation funding—but the exact quantum of this money is as of yet unknown.

Then we look at the Healthy Homes Guarantee Act. Now, I know that up until this point this Government has largely been doing the previous National Government’s legislation, but this one here was actually the Healthy Homes Guarantee Bill (No 2). It was a member’s bill of one of their members, and even when you read around this today, it talks about up to $2,000 per dwelling to pay for up to 50 percent of the cost of insulation upgrades, double glazing, etc., to meet the building code, and yet further work’s going to be required to determine the scope of the policy. So even on bills that were currently before the House that have now made up part of this current Government’s focus—

💬 Brett Hudson: The missing billions.

Yeah. So, again, it’s going to depend on what this Government decides it can finally afford when it actually gets its total numbers together. There is no plan here.

Then, again, we talk about 1,800 new police officers. It talks in here about the extent that this is not able to be funded within baselines—that new funding will be required. And guess what? It depends on the focus on community prevention. It depends on a greater use of alternative resolution and a reduction in remand prisoners. It all depends. Everything depends.

Then we go to this Regional Development (Provincial Growth) Fund. Now, this one intrigues me because we keep talking about the billion-dollar growth fund. Well, it keeps remaining a billion-dollar question—very similar to the trees—because the scope of such a fund has not yet been designed. So it talks about “small-scale”, “mid-scale”, “large-scale”, “large infrastructure investments”—I’ve got communities out there, all over the place, asking, “How’s this going to work? How do we apply? What are we going to get?” Oh, sorry, the scope has not yet been developed. There’s a fund there, but I have got no idea as yet, because the Government has not yet told us how you are going to be able to apply for it. So then, again, it’s another wish list, another dream, something that’s extremely poorly thought-out.

Then the Government has committed to increased funding for primary care services, and that’s really important out in our regions because we can’t all live next to a big hospital. So they’re going to increase the funding. This document talks about funding extra places to train GPs and it talks about free health checks, but the implementation details and funding arrangements for all of these commitments are still yet to be finalised.

Everything we read, as we go through this document—all of these risks—exactly lines up with all of the questions we’ve been asking for the last—how many was it, Grant Robertson? Forty-three days? We are still asking questions, and, obviously, the answers are going to be very slow.

So all of the promises this Government has made depend on its ability to do the maths, make the plans, and fund the proposals and the dreams that are on its wish list. It depends. Thank you.

I just want to start by saying happy birthday to Willow-Jean Prime. We’re not singing it, because that would take up too much time from my speech, and I’ve got too many important things to say here today.

I just really want to start, because I have been part of this process with the Families Package, by acknowledging our finance Minister, who has done a fantastic job. So Grant Robertson, our finance Minister, can I just acknowledge you for the work that you’ve done on this. It’s fantastic to have a finance Minister who is focused on the well-being of New Zealanders and on making that a priority. It’s great to have a finance Minister that understands the economic benefits of New Zealanders being well. That’s what we’ve been lacking for the last nine years, so I do want to acknowledge Grant.

I also want to acknowledge the rest of the team, because working alongside Grant have been myself, Minister Tracey Martin, Minister Stuart Nash, and Minister Phil Twyford. We have been supported by some very able officials from the different relevant Government departments, and I want to acknowledge the work that they have put into this.

Unlike what the previous speaker said—that speaker being Barbara Kuriger—I’m going to disagree with her. She said that today is not a positive day for New Zealand. Well, actually, it is a very positive day for New Zealand—

💬 Mr SPEAKER: Order! I will ask the member to address the member—I accept that it’s a misunderstanding as to the member’s name, rather than deliberate. It’s “Kurijer”.

“Kurijer”? Apologies, Barbara.

💬 Brett Hudson: It’s Kuriger. Hard “g”—Kuriger.

💬 Mr SPEAKER: Kuriger? Well, I apologise if I got it wrong as well, but I think the member was worse, which is a pretty—

Thank you, Mr Speaker. Can I just say that it is a very positive day for New Zealand, and I want to point out a number of reasons why.

Today, we have announced our Families Package. It is a transformational families package, and one of the biggest, most positive aspects of this Families Package is that 88,000 children will be lifted out of poverty. How can the Opposition say that that is not positive? I guess, after nine years, with the fact that they did nothing—nothing—to actually address the issue of child poverty in this country, they are in a position now where they’re looking across the Chamber with envy that now we have a Government, and it’s not them, who is actually capable of doing something to address that.

I want to say that it is also positive that we’re going to have 384,000 families in this country better off. These are 384,000 families with children better off in this country by an average of $75 a week. How can that member say that that is not positive? We have had families on Struggle Street coming to us over the last nine years, increasingly with issues around housing and with issues around food security. We live in a First World nation, and yet we have people living in our country with issues around food security. Now we are putting more money into those families’ pockets, and that side of the House says that that is not a positive thing to do.

I want to touch on some of the changes that we’re making and introducing and to talk about the positive aspects to those. And I want to start with the Best Start tax credit. This is an evidence-based policy. We didn’t pull this out of thin air. Those first three years of life are crucial, and making an investment into one- to three-year-olds is essential for us if we want to make sure that, moving forward, we have a positive future as a country. So, today, we’ve introduced the fact that we will be giving an additional $60 per week to families—to every family—in this country that have a zero- to one-year-old. How is that not positive? Then, after that, we will make it more targeted for the two- to three-year-olds. That supports low to middle income families, and that supports those one- to three-year-olds, whom we should be investing in for the future of this country.

Working for Families—we’ve made crucial changes. We’ve lifted the abatement threshold. Before, you could earn only, I think it was, 37,000 and something or other before it started to be abated. Now families are going to be able to earn $42,700 before that threshold kicks in. That’s positive. We’re opening up Working for Families to more people. When, in question time, I was asked how what we’re doing will make things more sustainable for work for New Zealand families, it’s because, actually, when you take into consideration the cost of childcare when you’re working and the cost of transport when you’re working, supporting families to be able to work is actually a really positive starting point. They want to care for their children. They want to work. We as a Government need to support them to do that, and that’s exactly what we will be doing.

Some of the other changes we’ve mentioned are the winter energy payment. People have questioned—well, that side of the House is questioning—why we would do that. Why would we not do that when we have something like, I think Minister Martin was telling me, 9,500 senior citizens admitted with pneumonia or bronchitis every year? Actually, that was just in the last year. So why would we not want to help them heat their homes?

💬 Brett Hudson: You took away their increase.

Why would we not want to help them heat their homes, Brett Hudson?

Can I also say that we’ve talked about the fact that there will be a million households that benefit from this, but I need to also point out the fact that there will be 184,000 children who live in households that will be receiving the winter energy payment. That is positive. It is positive that we are going to have heated homes and be less likely to have senior citizens and our children admitted into hospital over those winter months for respiratory problems, because they are warm. How is that not positive?

Can I also point out the accommodation supplement changes that have been implemented, and I do need to acknowledge that they’re the same changes that the National Government were also going to implement. It is just unfortunate that we’ve had to make these changes because of the housing crisis. They are one way—it is not the most desirable way, but it is one way—in which to support New Zealanders with the high cost of housing that they’re experiencing after having been under the watch of the National Government for the last nine years, who did nothing to address the housing crisis. Hence why we are in this position.

I’m not going to continue on, because I think I’ve made my point, along with my colleagues, but I do want to say that today is a very, very positive day for New Zealand. The Families Package is incredibly significant and will make a huge difference to thousands of New Zealand families and will lift—again, I have to say this—88,000 children out of poverty. And I, for one, and, I’m sure, everybody else on this side of the House—that side of the House should be—are very proud of what we have in front of us today.

The debate having concluded, the motion lapsed.