Debate on Budget Policy Statement

I move, That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2019.

I am very pleased to present to the House the report of the Finance and Expenditure Committee on the Budget Policy Statement (BPS). Before I commence my comments, I wish to thank those members of the committee who attended the hearings, the Minister of Finance and the Secretary to the Treasury for presenting to the committee, and all of the submitters who took the time to give to the committee their views on the priorities that should be within the Budget Policy Statement, which, of course, has a significant bearing on the Budget that will be delivered and on the well-being and the future of New Zealanders.

The Budget Policy Statement is an important part of the Budget cycle. It is a means by which the Minister of Finance and the Government directly signals its intentions in terms of the priorities in the forthcoming Budget to the Parliament, and, in doing so, it is a way by which the Minister and the Government is accountable to the House for the priorities that it is setting as a part of the Budget.

It was notable to the select committee this year that the Budget Policy Statement before us was quite different from BPSs that have been presented to previous Finance and Expenditure Committees. This was a Budget Policy Statement that wasn’t just focused on the fiscals and that wasn’t just focused on how Government will be spending money, although that is an important part of the Budget, of course. It was a Budget Policy Statement that was focused on the Government’s belief that lifting the well-being of people and communities is what really matters.

The way that this has been explained to the committee over a range of engagements about the well-being Budget and the living standards framework that sits in behind it is that while it is very important that the economy is well managed, that we have economic growth, and that the Government’s books are run well, those things are not ends in themselves. The things that really matter to New Zealanders are things like having a good house, having access to good health and education services, having a sense of well-being and safety within people’s communities, and being engaged with the community and our society. The things that we do as Government should be about supporting those different kinds of well-being: the well-being of people, the well-being of communities, and the well-being of the environment.

One of the things that the Minister of Finance noted in his presentation to the committee was that, actually, this is not a revolutionary concept. If you were to pick up the annual report of most major New Zealand companies or most major organisations in our country and you read through that report, you would not just be confronted with tables of figures about how that organisation is spending its budget. The front of the report will generally focus on the purpose of the organisation, what it is there to achieve, and the difference that it wants to make, and that was certainly the case—and this was noted by the committee—with the Budget Policy Statement this year. The purpose of the Government in delivering the Budget was stated at the outset of the document as being about improving the well-being of New Zealanders. In this sense, what we saw in the BPS was a more holistic set of objectives than in previous Budget Policy Statements.

There was a particular quote that is referenced in the Budget Policy Statement report from the Minister, and it spoke to what has been observed when the Government has been assessing the Living Standards Framework and the issues that arise when we consider the well-being of New Zealanders. He noted that New Zealanders do generally have high living standards, and that’s something that we would all feel good about, but there are challenges and disparities to address. He said, “Too many people are being left out and left behind.”

One of the things the Budget Policy Statement did this year—and, again, this is quite different from what we’ve seen in the past—is it actually made an assessment of where New Zealand is at in all of those important areas. So in areas like human capital, there are objective and evidence-based assessments about how New Zealanders are faring in respect of mental health issues. In the area of social capital, there is an objective and evidence-based assessment about New Zealanders’ trust in Government and public institutions. In the area of natural capital—and this will be of interest to members who represent provincial and rural parts of the country—there’s an assessment about the state of soil erosion, a critical factor in delivering long-term prosperity and well-being in our rural communities. In the area of financial and physical capital, there’s an objective and evidence-based assessment about the percentage of housing costs that New Zealanders face as a proportion of their income.

So the well-being Budget, as was explained to the committee, focused on looking at where New Zealand is at and where the gaps and the deficits are, and then how we can best address those to increase people’s well-being. In respect of this, it was explained to the committee that the Government, in the Budget, has decided on five key priority areas. These are creating opportunities for productive businesses, regions, iwi, and others to transition to a sustainable and low-emissions economy; supporting a thriving nation in the digital age through innovation and social and economic opportunities; lifting Māori and Pacific income, skills, and opportunities; reducing child poverty and improving child well-being, including addressing family violence—that one was quite notable because it was pointed out during the hearing that the Government’s original Budget priority didn’t include the language around addressing family violence. It was on the advice of the sector and of science advisers to the Government that the evidence is very strong that if you want to address issues around child poverty and child well-being, you absolutely have to be addressing and prioritising those issues around family violence as well. So that was quite a good example, I think, of the way in which an evidence-based approach engaging the science advisers and sectors has actually helped to shape the priorities of the Budget for the Government, and I thought that was very, very encouraging.

It was very notable that across the 66 submissions received by the Finance and Expenditure Committee, the vast majority of those submissions were extremely supportive of the direction of the well-being Budget and of the upfront focus on the well-being of people and communities. While, unfortunately, we were not able to have formal oral hearings of submitters, Government members of the committee have had informal meetings with a range of the submitters, and those submitters have appreciated their opportunity to have their say. What those submitters have noted is that some of those deficits are very real, in their experience. Many of those submitters have pointed to deficits and gaps that have built up over a number of years that have not been addressed, and they have been supportive of the Government in addressing those well-being issues, but have really been keen to drive us forward in terms of the specific measures that will help to improve well-being in the identified areas.

One of the other things we heard was about the way in which the well-being Budget has changed the way in which Government Ministers have been engaging with the Budget process. So instead of simply putting in individual bids which focus on an output at a departmental level, Ministers have been asked to work collaboratively to deliver outcomes that actually make people’s lives better, and this is leading to more linked-up, holistic decision-making that should have better outcomes for people and communities.

At the level of the committee, there was very good discussion about the well-being framework. I would note at this point that this has been a matter that the Finance and Expenditure Committee has been engaging itself with over a number of months in preparation for the first well-being Budget, and we’ve had briefings from a range of people across civil society to make sure that we are informed on these matters.

One of the discussions at the committee—and this came up during the hearings—was a discussion about the extent to which we are developing a well-being framework that is unique to New Zealand and takes account of the particular way in which we live our lives and live and work together in this country. I was certainly assured by the comments both from the Minister of Finance but also from the Secretary to the Treasury, Mr Makhlouf, that significant effort over the last five years—during which time the Treasury has been developing the Living Standards Framework—has gone into making sure that we have a framework that is internationally comparable, because that’s important if we want to ensure that the framework is robust but also ensure that the framework does take account of the way in which we live our lives in New Zealand. In particular, we had a good discussion on the committee and at the hearing about ensuring that a Te Ao Māori world view is incorporated into the Living Standards Framework and the well-being Budget.

I said before that the well-being Budget focuses on well-being, but sitting in behind that are, of course, the fiscals as well, and what the Minister of Finance made very clear in the hearing that we had is that yes, this is a Budget that is about the well-being of people and communities, but we also do need to ensure that we’re running the books well so that the Government has choices and has the ability to make the investments that do enhance well-being. In that respect, he confirmed that the Government remains committed to its Budget responsibility objectives, and he also confirmed that, largely, the Government is on track in those areas. Growth, in the Budget Policy Statement, is forecast to track at around about 3 percent; wage growth over the next few years at around about 3 percent; and net debt is forecast to fall below the Government’s target of 20 percent of GDP by 2021. So, certainly, the indication from the Budget Policy Statement is that the Government is on track to meet those objectives.

My concluding comment is this. In my observation as a constituency MP, our families, our communities, our faith, and our community groups all understand the concept of well-being—that we are all better off when the people around us are better off and have the ability and the capability to improve their own lives and reach their potential. It is encouraging that this Budget Policy Statement confirms that those are the objectives of the Government, as well. Thank you.

Thank you, Mr Speaker. Yes, look, I am very pleased to come down and take a call on the Finance and Expenditure Committee’s report into the Budget Policy Statement (BPS). I want to start, actually, on the core business of Budgets, which is to address the economic situation of the Government and, frankly, the ability that we have to pay for all of this well-being rhetoric that we are hearing continually from the Government—no doubt, frankly, because the Government is more interested in slapping well-being stickers on everything and standing around and singing “Kumbaya” than actually addressing real, measurable outcomes. But I do want to talk about those fiscals, because here’s the hard, cold reality that Labour is happy to ignore: if you don’t have an economy that’s growing well, you don’t have tax revenue to pay for the well-being initiatives.

So you can talk about kindness and caring as much as you like, but if you’re presiding over an economy that is slowing, the ability of a Government—any Government—to do anything for its citizens is reduced. I’d very much like to hear anyone on the other side get up and tell me that’s not right—that, actually, it doesn’t matter whether or not the economy is growing well to provide revenue.

So here’s the number I want to start by highlighting in the Budget Economic and Fiscal Update, and it is this. Before the election in 2017, this current year we’re in, the year ending June 2019, was expected to have New Zealand growing at 3.7 percent—so 3.7 percent at the Pre-election Economic and Fiscal Update. At last year’s Budget, that number had already dropped to 3.3 percent. In the BPS, it’s dropped to 2.9 percent, and, actually, most commentators are saying it’s far more likely to be 2.5 percent. So that is the first real year under this Government’s economic management, and we are seeing about a third whacked off the growth rate of this country.

So while Grant Robertson wants to stand up and talk about well-being and mention very little about the economy, the hard, cold reality is that under his stewardship, the economy is slowing down, and that means our ability to do things for our citizens—to provide healthcare, to provide education, to provide police—is going backwards, and that matters more to the long-term well-being of New Zealanders. Do they have a job? Do they have good incomes? But we’re not allowed to measure that any more or talk about that; it’s all got to be about how many friends they have made and what clubs they have joined. Actually, by the way, even that is only going to be reported every four years. So every four years, Treasury, this Budget Policy Statement tells us, will give us an update on how well-being’s looking.

So if you want to talk about accountability, this is a Government that is getting rid of accountability day by day by day, and now, once every four years, they’re going to have Treasury putting out an update on well-being. Well, my question to the Government is this: where in that framework is there any proper assessment of how you’ll make different choices within that Budget planning process? Where is the framework that says if we want to address mental health—as the Government’s acknowledged they have—which initiative is the best place to do that? And how will we as a Government—I’m speaking for them. How will they hold themselves accountable to the public of New Zealand for what they’ve done? None of that—this well-being Budget has none of that. It has high-sounding, virtue-signalling, and lovely words while the economy slows and the Government gets rid of accountability.

The Budget priorities that the Minister of Finance has come up with include one that talks about helping a productive economy transition to sustainability—and blah blah—and one that talks about building a thriving nation. Well, my first message to Mr Robertson on his Budget priorities: if you want a productive economy, if you want a thriving nation, don’t load up our economy, our small businesses, and our farmers with more taxes. Don’t punish the productive sector by saying “Everybody who gets up, goes to work, saves, invests, and risks their own money to build something to create jobs, we’re coming after you because you’re all rich little nasty people.”, or a word Cullen used that I won’t repeat in this House. That is not how you build a thriving economy. You don’t build productivity by saying to New Zealanders “The harder you work the more tax you’re going to pay. The harder you work the more we’re coming after you.”, and that is the clear message that this Government is giving to the people of New Zealand. That is not about having a productive economy.

Let’s talk about one of the most productive parts of our productive sector, and that’s agriculture. Well, we put out some figures earlier this week because the Government has had none—put out none. They tell us they’ll do that after they make their decision, which is interesting. I would’ve thought you’d normally do the numbers as part of making the decision, but no. Apparently, according to Damien O’Connor, they haven’t bothered with numbers because they’ll worry about that after they make the decision. But our numbers said that farmers are going to be hit significantly by these extra taxes being proposed. Well, do you know what Federated Farmers came out today and said? They said that, actually, National are a bit light: the numbers are much tougher than that. Get this: Federated Farmers quoted a report from another group that said that just one of the new taxes that Grant Robertson is considering, just one of them, could eat up 123 percent of the profits of an average sheep and beef farm—123 percent of the profits. That is just one of the seven or eight taxes that are now under consideration by this Government, and that’s before they take—

💬 Brett Hudson: Oil and gas wasn’t enough for them.

—quite right, Mr Hudson—billions of dollars out of our productive economy through their reckless, ill-considered, poorly communicated ban on oil and gas exploration. So, Mr Robertson, if you truly believed in making a thriving nation and building a productive sector, you wouldn’t be loading this country up with more taxes that go right to the heart of the people who create opportunities in this country, who create wealth.

Now the other thing we hear continually from this Government under the well-being Budget and in the Budget Policy Statement is this notion of needing to address disparities to create fairness. Well again, it’s all lovely, waffly-sounding words, but here’s something they don’t tell you: New Zealand is in the top half of the OECD for the fairness of our wealth distribution—the top half of the OECD for the fairness of our wealth distribution—well ahead of Australia, well ahead of the UK, and well ahead of the US, and yet we’re being told that somehow we have this tremendously unfair system. Well, a few hard cold facts: the top half of taxpayers already pay all the net income tax in this country—all of it, all of the net income tax—and yet we’ve got Michael Cullen saying those under $48,000 need to be given huge numbers of more subsidies—

💬 SPEAKER: Order! Order! I’m going to interrupt the member and ask her to come back to the debate. It’s a special debate. It is a relatively narrow debate and it is on the report of the Finance and Expenditure Committee on the Budget Policy Statement. I’m giving this member a bit of warning but the rest of the House a bit of warning as well. This is what the debate is on.

Thank you, Mr Speaker. I refer the House to the Budget Policy Statement where the Minister of Finance specifically talks about this Budget being about addressing disparities in the economy, and as part of considering distressing disparities in the economy, it is important context to understand exactly where we sit. Now I am debating very definitely on that issue because the reality is you cannot continue to whack those who actually try and build that thriving nation Grant Robertson says he cares about at the same time as looking to support the half of the taxpayers who are not contributing to that net income tax take. That is the reality, but it doesn’t fit with Grant Robertson’s well-being, fairness bumper stickers, and so he doesn’t want to talk about that.

But let’s be really clear. Mr Robertson, if you keep smacking the productive sector, if you keep making it harder and people less incentivised to go out and build a business, you will continue to see what you have seen over the first year of your time as Minister for Finance, and that is an economy slowing down, with more people on the unemployment queue, more people waiting for State housing, and more people needing assistance. That is the reality. The rhetoric doesn’t live up to the reality.

Now, in my final minute, I just want to touch on this well-being Budget framework because we’ve seen over the last little while just how shabbily put together this is. The Living Standards Framework is put together on Statistics New Zealand, the people who brought you the success that was the last census—their Indicators Aotearoa New Zealand framework. Now that framework had some of the most pitiful, pathetic consultation I have ever seen to inform it. What we have is the OECD telling us in New Zealand what a good life looks like, and then the geniuses putting this together telling us things like having a friend or moving house is apparently more beneficial to you than avoiding diabetes. Now there’s no issue with having a CBAx—we’ve had them; they can be useful tools—but when you’re saying that moving house, which is supposed to be one of the most stressful things you can do, is of more benefit to a New Zealander than not getting diabetes, then you know you haven’t done the job well.

So stop telling us about well-being, Mr Robertson. Start doing things that actually improve it—

Order! Order! The member’s time has expired.

I’m very keen to take up the member’s invite to talk about the Budget Policy Statement. Perhaps we’ll kick off where she ended, which is that, yes, the process that agencies and departments are going through in preparing their bids for this year’s Budget is indeed the most rigorous it has ever been in New Zealand’s history. That’s actually what’s happening, because agencies and departments are now required not just to put up a bid and say, “Here’s what we think we’ll be able to do. Here’s how many services we think we might be able to provide as a result of putting the money in.”. It actually asks those agencies and departments, “What’s the impact of this going to be? How will this affect people over a period of generations? What will the distribution of the impact be? How will it actually affect who gets to benefit from it?” Tim Ng, who is the chief economist at Treasury, actually said, “This is the most rigorous approach we’ve ever seen to a Budget.”

So Amy Adams is actually completely wrong in her assessment of this, and in her final comments around the cost-benefit analysis tool, she is in fact misrepresenting that tool, because what she’s doing is comparing the way that tool measures cost to Government for a service and private benefit of something that a person gets. They are two completely different parts of the tool, and they have existed since the member was a Minister. She knows that, and I actually think it really does undermine what is world-leading work by the New Zealand Treasury on their Living Standards Framework which began under the previous Government, and suddenly, now that the National Party is in Opposition, they decide that this is not worthy. Well, I think this is a huge advance for New Zealand in terms of the way we put Budgets together and the way that we measure the success of our country.

We also heard from the member her concern—and the Budget Policy Statement does cover this area—about where New Zealand is going in terms of its growth rates. It may have escaped the member who spoke before me, but, actually, New Zealand’s GDP began to slow at the beginning of 2017. That trend had started then and it was part of a global trend, and, actually, just today, Australia has released its fourth-quarter GDP numbers from last year, which have 0.2 percent growth for that quarter and 2.3 percent growth for the year. That is a slowdown. It’s happening across the world. I’d encourage Ms Adams to get out and about and see what’s actually happening in the world. The IMF have said that advanced economies for this year, in 2019, are projected to have growth around 2 percent. New Zealand is projected to have growth well in advance of that, so, in actual fact, New Zealand continues to outperform those other economies. But we don’t exist in a vacuum. We’re a small, open trading nation that has to make sure we’re resilient and robust when things do turn down in the world, and the good news is that we are.

Ms Adams cherry-picks a few statistics out in her speech, but it would be fair to say that the people I’ll listen to about the strength of our economy are Standard & Poor’s, who upgraded their view about the strength of the economy in New Zealand last year, and Moody’s, who continue to say that we’re in a strong position. So Ms Adams can take the political stance, but the truth is that on those core economic indicators, New Zealand continues to do well. We are part of a global economy—we have to understand that—but the reflection and the negativity on the other side, I guess, is now something that we’re coming to expect.

This is a very different Budget Policy Statement, the report of which is in front of the House today, because for the first time, we have within it a well-being outlook. That outlook includes information about the state of our core finances. It shows that the Government is on track to meet its Budget responsibility rules around issues like having a surplus and managing our debt. It shows that the growth track of the Government is steady and solid and, as I say, is outperforming some economies that we would normally compare ourselves to. It shows that unemployment is heading towards its lowest levels in a decade—indeed, is actually already there at the moment.

So those core economic indicators are part of our well-being outlook, but in addition we’re actually describing the state of New Zealand. Our people—how educated are we? How healthy are we? How secure do we feel? We’re talking about the state of our environment. Are our rivers clean enough to swim in? Can we have air that we can breathe? And we’re talking about the strength of our communities: how much people trust the Government, how much they trust the people around them, how they feel about their own culture, and who they are as a person. Those are a wider set of indicators of success for our economy, but they recognise a fundamental principle: the economy is a means to an end, but it’s not the end in itself.

The problem we get ourselves into as a country if we see it as the end is what we experienced in the last nine years. Yes, the growth rates were higher, but the OECD told us we had the world’s worst homelessness. We’ve got rivers that we can’t swim in. We’ve got child poverty indicators getting worse. So that’s what we’re trying to address through this Budget Policy Statement—a much wider picture of what success looks like.

What the Budget Policy Statement also indicates is that in doing so, we will then have better information to address the real challenges to our well-being and our living standards. I’d really encourage members opposite to take a look at the Living Standards Dashboard that is available, because what that shows is that we’ve developed this Budget on the basis of evidence. So the member who spoke before me spoke about the fact that she had a study where New Zealand was ranked in a particular place on disparity. Well, take a look at that dashboard—take a look at it and input Māori and Pasifika people, and on most indicators on that dashboard of living standards, which covers issues like homeownership and income, Māori have a far worse performance on those indicators than the average population. The ones where they don’t are around issues of social connectedness and the community coming together—something that is a strength of our Māori and Pasifika communities.

So we’ve got that evidence and we’ve made it a Budget priority. We’ve said that the priority in this Budget will be lifting Māori and Pacific income, skills, and opportunities. We chose that priority because the evidence told us that that’s what we should do. So for the Opposition to stand up and tell us that this is somehow or other fluffy or woolly, it’s not—it’s based on evidence. We have prioritised the things that the evidence has shown us will lift the living standards overall for New Zealanders. That is different from the past—I understand that—but it is a better way, in my view, of ensuring that Budgets actually reflect back to New Zealanders both what’s important to them and the evidence that we have about what we do need to invest in.

Within those other Budget priorities that are in the Budget Policy Statement are two critical elements to lifting the productivity of our economy. The first of those is investing in a long-term transition to a sustainable and low-emissions economy. It’s time for everybody to get into the 21st century and understand that not only is this the right thing to do for our planet; it is where economic opportunity lies. We have huge opportunity to be able to be leading the world in new and clean technology in a fair and just transition to a lower-carbon economy, and that is what that priority is about investing in. The second priority is about investing in innovation and in social and economic opportunities in a digital age. This is the future of work. This is making sure that New Zealanders are actually prepared to be able to adopt and adapt to technology and that businesses are able to take that on and use that to improve their productivity. To my mind, these are the two big economic challenges facing New Zealand: how we make that transition and how we lift our productivity, particularly through new technology.

The other three priorities I’ve already mentioned—lifting Māori and Pacific income, skills, and opportunities. The other two are around reducing child poverty and improving child well-being and supporting mental well-being for all New Zealanders. These are critical issues to our success as a country, and it was interesting to note that the member opposite, when she spoke, suggested that there wasn’t an accountability for this Government on these measures. As the Minister of Finance, I am now required to report every year on the Government’s progress to reducing child poverty against a specific set of indicators. I would have thought the member who spoke before me would have known that because her party voted for that legislation. That is accountability. That’s standing up and saying, “We know that the economy is not an end in itself and that we actually have to talk about what it means for people and, in this case, for children.” So there are specific indicators. We will report on them every single year, and, as the Minister of Finance, I will report on them every single year in terms of the way we do the Budget and the Budget outlook.

So I am very proud of this Budget Policy Statement. It represents a significant advance and step forward in measuring the whole of the success of New Zealand society. It includes critical measures around making sure that we continue to have a prosperous society. It focuses on being fiscally responsible, but what it also shows is the sign of a Government that doesn’t care just about prosperity for prosperity’s sake. It cares about who shares in prosperity, and that is a vital step forward for New Zealand.

Thank you, Mr Speaker. It was very interesting to hear the speech from the Minister of Finance. I don’t think there’s anybody in the world, or certainly in this party or in this Parliament, who thinks that the economy is the only thing that we should be concerned about. Nobody would say, “Oh, it’s only the economy that matters. It doesn’t matter how people’s well-being is or how connected they are with their community or how the environment is.” We all care about the quality of life for all New Zealanders. That’s why we’re in Parliament here, because we want to improve the quality of life for all New Zealanders, whether it’s the things that we regard as special in terms of the strength of our institutions such as this Parliament, or open, transparent Government, which we’ve heard a lot about from this Government. We haven’t seen it so much, but, nevertheless, we’ve heard a lot about it. When we’ve heard such things as the quality of our environment and our tradition for low corruption and high levels of trust in our society, all those things are critical to what it is to be a New Zealander. So we in Parliament, in the many ways that we go about legislating across this country, are very focused on improving New Zealand’s reputation and experience in all those levels.

What we’re talking about at the Budget, however, primarily, is how we spend our money, and there’s no suggestion that’s the only important thing, but it is an important element of what is a successful society and an economy. Why is a strong economy so important? Well, I’ve never met anybody yet who if contemplating the thought of them or one of their loved ones getting cancer or some terrible disease is not interested in having access to the latest technology and the latest techniques in solving those sorts of health remedies, and those, ultimately, come back to cost. You have to buy them, they don’t come for free, and a strong economy enables us to have access to the latest technologies, not just in health but in every element of society, and a strong economy enables us to have good quality jobs paying good incomes, and good opportunities for ourselves and for our families, such as we had during the era of the last National Government. In the last two years of the National Government, 200,000 new jobs were created in this country, providing opportunities for young New Zealanders and old and for Māori, from all parts of the economy and country, with every region doing well and providing new opportunities for New Zealanders.

Now, we’ve heard a lot about this Government’s great concern about well-being. Well, actually, how many new jobs were created in the last three months? Is it 10,000 a month, like what was happening under National? No, it’s only 667—so a calamitous drop in the number of new jobs being created by this economy. So what we’ve seen and what we see in this Budget Policy Statement is forecasted growth in New Zealand slowing down. It’s not collapsing. Of course, the economy had huge momentum that this Government inherited at the end of 2017—huge momentum had built up—and so we continue to have relatively good times and good opportunities for New Zealanders. But the point is that it is slowing. The growth is not accelerating as fast as it was.

So in the 2017 Budget, we were predicting growth of 3.5 percent in 2018 and 3.8 percent in 2019. Now, what have we got? Well, that 3.5 percent in 2018 has dropped to 2.7 percent and the 3.8 percent in 2019 has dropped to 2.9 percent, and nobody believes that it’ll get to the 2.9 percent. So we’ve seen growth in this economy drop back substantially. That means fewer opportunities for New Zealanders to get ahead and look after themselves and their families, provide jobs, and have access to the latest pharmaceuticals and drugs and opportunities for health and welfare, and there are fewer opportunities to invest, ultimately, in infrastructure and to grow this economy.

So where has that loss of momentum come from? Well, this Government has been systematically undermining some of the foundations of the strong economy that we enjoyed, such as predictability around Government decision-making—such as the way that it went about oil and gas, which was a shocker. Now, in terms of the quality of spending, I do acknowledge that this Government’s desire to keep the core Crown expenses below 30 percent of GDP and to maintain surpluses, and they have, so far, achieved that. I think they could be more rigorous, but they have achieved that, and we acknowledge that. They are making some progress and they are still continuing to focus on reducing net Crown debt to 20 percent of GDP or less.

But it’s the quality of the spending that concerns us, because if we look back to the first decisions that this Government made, the first decision was to do away with the tax cut that they had inherited from the previous Government. They did that because they said giving $1,000 to wealthy New Zealand families with inappropriate and they weren’t going to do it. Then the second decision that they made was to give those very same families $6,000 worth of free tertiary education. Most people struggled to put those two things together. You take the tax cuts away from the wealthy families and then you give them $6,000 worth of free tertiary education, with the result that no more people actually have gone to university since then and all the extra resources that they’re spending on tertiary education have drifted away from investment in the quality of the institutions to—

💬 Hon Shane Jones: Relevance?

Yeah, well, the point I’m referring to here is the desire to keep core Crown expenses below 30 percent, and I’m saying that the quality of the spending that they’re putting in that area is not very good. If we look at the Provincial Growth Fund (PGF), we heard from the Minister of Finance, saying that this is the most rigorous debate they’ve had over Budget bids. Well, it’s interesting. Anybody that doesn’t make it through that vigorous debate gets sent off to the Provincial Growth Fund, and that’s where the money is spent. So we’ve seen the Provincial Growth Fund that Mr Jones looks after, which I thought was about creating jobs, is now about killing possums, which is very interesting. It’s about killing possums rather than creating jobs, and beyond that it’s about employing people in NEETs programmes. I mean, all these sorts of programmes that were part of general Government spending—suddenly, $80 million is moved out of the NEETs thing into the PGF funding because there’s a billion dollars a year just floating around for that member to spend as he likes, in cahoots with a number of other Ministers and his Cabinet when it gets big enough.

But the point is that when we were in Government in 2015, for example, there was only $1 billion allocated to new spending right across the whole of Government. That’s the scale of what has been put in the hands of Shane Jones for his Provincial Growth Fund, which we call a slush fund, and some people think that’s a little unfair. I’m sure he thinks it’s a little unfair, but we have to go back to what he said. What did he say when we asked him about why most of it was going up to Northland? He told us, here in the Parliament, “Well, to the victor goes the spoils.” That explains what it’s all about. New Zealand First chose who was going to be in Government and, as a result of that, they got the $3 billion and they’re going to spend it where they like. So that quality of spending, or the lack of quality in spending, is one of the reasons why we’re not getting the results that we want to get out of this economy.

When we’re spending however many billion dollars on trees and you ask the simple question “What are we getting for that?” and we’re told we’re going to get a thousand jobs, and then you look into the details of what actual jobs there are, it’s a very murky and slippery set of figures that you’re confronted with. So I’ll be very interested to hear from the Minister whether he’s come any closer. We looked at the number of jobs that had been created so far out of the whole Provincial Growth Fund and we found 54 and 118 bureaucrats. The Minister has subsequently told us that in fact there are 560, and I’m very much looking forward to the breakdown of that list of jobs. I think there might be five or six of them, including the gentlemen that went up and did the mulching up in Northland—mulching the seedlings for an hour—but they will probably be counted as five jobs and there’ll be another 15 somewhere else doing something else.

Anyway, if we get back to the question of taxes, what we’ve seen is more taxes, more fuel taxes, and New Zealanders are getting less for it in terms of roads. We’ve got very ideological decisions, so anybody who is sitting on the southern motorway at the moment—there’ll probably be a traffic jam there now—you can rest assured that there’ll be traffic jams there for a long time to come because this Government is not spending anything on Mill Road, a second critical arterial route out of the city. They don’t want to do that. They’re going to extend that in 10 years’ time. They’re not doing the East-West Link, but they’re—strangely enough—doing a light rail project at the cost of $4 billion. I just heard today that the Swedes and the Danish have managed to build, I think, a 12-kilometre bridge between their two countries for US$2 billion. So they can get a lot of bangs for their bucks over there, but we’re going to spend $4 billion on a slow tram to the airport that nobody can work out.

So that quality of decision making is what we are dealing with, with this Government. So the only question I would make at the end of this speech is, yes, they’ve made some progress in keeping the Budget in surplus and keeping the overall spending limits in check, but the quality of the spending just isn’t there. We think they can do a lot better if they apply themselves a little bit more. Thank you very much.

I fear that the last contribution may have offended the Standing Orders, because it would not be proper for the list member from Epsom to compare his leader to a possum. Not only the fact that it’s a possum in the headlights; he hates the fact that we have spent money on getting rid of a pest that they were prepared to promise to get rid of but never put a penny in the purse. Now, the reality is that’s a characteristic of the last regime which is inversely related to the fact that we have made a promise under the cloak of well-being to fund our rhetoric. I, with characteristic modesty, wear the cloak of having to spread that message, and with my Cabinet and ministerial colleagues, we enjoy the mandate to ensure that the pūtea is delivered into those regions.

Now, I need to acknowledge—

💬 Hon Maggie Barry: The member’s overshadowing the message.

Ah! I fear that we might need to increase the dispute resolution employment service bill with more contributions from that particular member, but I’ll leave that point alone for fear of being pulled up yet again by Mr Speaker for bringing colour and character back into the House. But let me move on.

There actually has to be made by me an acknowledgment that there are people on the Finance and Expenditure Committee who do wade through this material, who do wade through the various financial aspects of the State’s administration. My colleague Fletcher Tabuteau—I have to mention him in memorable dispatches because I have a dim and distant memory of being the chairman of such a committee. For a brief period of time I had two mentors as to how I should conduct myself on that committee, one being the current Speaker and another being Doug Woolerton. Doug Woolerton gave me lessons on language—I failed them—and a certain former Minister of Education gave me lessons on diplomacy. That’s a work in progress—a work in progress.

I just want to take us to page 7, and just want to quickly run through the elements that the Prime Minister regularly talks about, along with our leader. Civic engagement: we are prepared to embed in our narrative and meet the pūtea obligations so that people are not atomised any longer, so that people who don’t capture the attention of the big end of town or don’t capture the attention of the rūnanga or don’t capture the attention because you’re not a favoured caste of voter by a Government are brought right back into the middle of the social equation.

Now, if that requires additional pūtea and if that requires us to defend the fact that we can’t immediately monetise the upside of that, that’s called democracy. That’s called civic engagement. Now, I’ve heard Mr Grant Robertson suffer some unwise and largely inaccurate remarks from the other side of the House, but that is called social capital. If we don’t have social capital, we are trading away the birthright of New Zealanders to be in it together, to integrate our effort for gated communities. That was the regime that’s gone. We are not the gated community Government. We are an inclusive, integrated Government, and if it comes to pass that we have to bring the provinces up by taking a risk and increasing the amount of capital that goes into overdue infrastructure projects, whether they be human capital, financial capital, or restoring natural capital, we will do it in a heartbeat, and we will defend it at the end of next year, when judgment day arrives.

Let me just carry on. Income and consumption: the reality is for the last nine years, every week we heard about woeful and awful cases. Now, what do we hear from the list member from Epsom? A celebration of the fact that they were willing to confine themselves to $1 billion, as if that’s some sort of religious, zealous mark of respect. The public deserves to have politicians that are willing to invest in public infrastructure, in public capital, and will gladly stand shoulder to shoulder, pāpāringa to pāpāringa, face to face with the characters on the other side of the House, because that’s what we’re doing. That’s what this public document actually outlines.

Let’s go to another one: housing. Now there’s been all sorts of depredations upon our colleague Mr Phil Twyford. What are the three things that the Government’s doing which will contribute to well-being? We are going to create an uber-authority. Unlike the other Government, we’re not going to tolerate the endless reams of red tape in Auckland that have frustrated housing outcomes. I need only mention the words of Bill English, who surrendered to the planners in Auckland Council, who said that they had more authority than he did as a Cabinet Minister—an abject statement of failure. Mr Twyford’s not going to let red tape in Auckland frustrate the ambitions of Kiwis to enjoy affordable housing and a transport system that we can afford to use because we have the ability to pay for it.

Now, on the question of such infrastructure in Auckland—I need to repeat it again. The last entity otherwise known as the Government under John Key, they promised infrastructure delivery, pipelines, and we had a thousand-page document that no one ever read. It was holding the doors open of Treasury and it was holding the doors open of the bureaucracy, so we’re going to create an independent entity called an infrastructure body because the private sector want it. Although we wear the cloak of well-being, we’re actually working a lot more constructively with the private sector, and they have a champion in the industrial prince of the regions—my good self. So not only are we going to create that entity; we’ll turbocharge the ability of the State housing apparatus to deliver properties at a pace a lot quicker, and in locations that were overlooked by the last regime.

Now, of course, people might say “Oh, this is evidence of profligacy.” and also that the $3 billion over the period of the Government is evidence that we’re not keeping a tight grip on the fiscal tiller. It was so tight under the last regime—the reason we were elected, the reason that we enjoy power, is that people want to see reciprocity. They don’t want to see this flinty, ACT-like approach to how the State should relate to its citizens. They don’t want to see this anaemic, half-starved approach of only those people who represent constituencies that are close to a particular ideological view as reflected under the last regime, such as the recipients of all the agricultural funding and the irrigation funding. No, they want it widespread, because when things are widespread, the net brings the various elements that comprise both our economy and our society closer together. That is worth fighting for, and fight for it we will.

Now, let’s talk a little bit about the 20 percent debt figure that Grant Robertson has announced in terms of our rules, the Budget responsibility rules. That’s to ensure that if—God forbid—we should suffer either an international calamity or a further natural disaster, there’s enough freeboard for the economy to immediately respond and meet the cost of sudden expenses. So that 20 percent figure—from time to time, I debate with myself as to whether or not such a figure is sustainable, given the deficit in infrastructure and the huge need in our communities after a period of neglect. But we do have to maintain good qualities and a good sense of direction and discipline with the international agencies, which this Government is doing. Do we need evidence as to whether or not we’re doing it well? Well, it lies there with the continual high gradings—much higher than Fonterra, I might say—that we enjoy on this side of the House.

So where capital decisions are made—and capital will be required to deal with the rehabilitation of KiwiRail. Capital will be required to meet the full costs of the project committed to, unwisely, in terms of the conditions, by the last regime, otherwise known as Auckland’s railway loop. These things will all take and require capital. The Budget Policy Statement, on page 25, outlines the size of the permission space as a fiscal envelope. That’s why this document is not only very lucid; it shows that we’re willing, within those strictures, to make the hard decisions. We have more pūtea, we have more options, because we cancelled the narrow, the very stingy tax cut regime that the last Government campaigned on—[Interruption] If you thought it was so good, how come you’ve got no power and we’ve got the privilege of governing? That’s how good it was. It cost you the election.

💬 SPEAKER: Order!

It cost them the election. So we have recycled that pūtea and we are touching those constituencies long since neglected, and they will reward us accordingly in 2020.

Thank you, Mr Speaker. I think that last minute of the member Shane Jones’ speech speaks volumes about New Zealand First and whose well-being they really are interested in. We’ve heard the use of this “well-being Budget” term a lot, and it’s being bandied about as if it is somehow a new concept, but every Budget is about well-being. There isn’t a single dollar that is spent by any Government that they don’t honestly believe is going to improve the well-being of New Zealanders. If there’s any failure, I would suggest, of the previous Government, I could say that the idea of well-being was so obvious, so fundamental in the raison d’être of that Government, that we didn’t speak about it enough.

But I want to talk about things like the Better Public Services targets. There were about 10 of them, I think—120 separate individual targets under 10 categories. They were categories like reducing long-term welfare dependence, reducing crime, and improving skills and employment. Every single one of those targets was a well-being target. The national health targets: access to better cancer treatment, faster emergency departments, better immunisation—these are all about the well-being of New Zealanders, and if the previous Government didn’t speak enough in the language that we’re now using, it is because it was so self-evident it wasn’t felt necessary.

The disappointing thing about where we’re at now is that this Government has dismantled massive machinery around well-being for one reason and one reason only, and that was it was the previous Government’s framework. That is deeply disappointing because, effectively, we’ve gotten to a point of stasis where we’ve been here for 18 months on things like mental health, where there were specific, measurable well-being targets to improve the mental health services for, particularly, young New Zealanders, and because the previous Government had come up with them, they were dispensed with and we started again. We didn’t start again with new initiatives; we started again with a review—a review into mental health and addiction, which has spawned I don’t know how many other reviews. But we’ve got more committees than you can shake a stick at, all talking and thinking about mental health but not acting on it, despite the fact that mental health is one of the five priorities specifically listed in the Budget Policy Statement.

Before I go on more about the health well-being challenges, I just want to reflect on a couple of things that the Minister of Finance made, because he did make two important points. He said firstly that he, as Minister of Finance, needed to report on well-being matters annually, and he used the issue of child poverty targets as an example of a well-being target that he’ll need to report on. But, simultaneously, with the introduction of the child poverty targets, was the dispensing and non-replacement of any health targets.

He also said that this Government was going to use evidence. I was fascinated by that use of the term “evidence”, because on the basis of evidence, I wonder what the evidence was for the investment into the education system of $2.8 billion of free fees for tertiary students. If one was to spend $2.8 billion today in education, does the evidence show—

💬 Hon Chris Hipkins: We didn’t spend that. That’s not how much the fees-free cost.

Over four years? I’m pretty sure that’s what it was.

💬 Hon Chris Hipkins: No, that’s not how much it cost.

Well, the Minister was talking it up big time when he announced it. Now he’s trying to make the target as small as possible, actually—

💬 Hon Chris Hipkins: No, because he’s adding in the student allowance increase.

Oh, OK, so that doesn’t matter. That wasn’t money that was taken out of one taxpayer and given to another, so it doesn’t count—only that’s exactly what he did. So my question remains: if one is to invest $2.8 billion in the education system, does the evidence show that well-being is served by giving free fees to the children of millionaires, or by increasing the number and remuneration of our secondary and primary school teachers, the number and quality of the teaching and learning resources that they have, the number of teacher-aides that we have in our schools, or the number of special education services? The evidence, I would suggest, is that the well-being of this country and its young would be much better served by investing those billions into a different part of the education system, and let’s hope, actually, that the next Budget is less about pork and more about well-being, because that’s my perception of what Budget 2018 was.

In health, the same question needs to be asked—that is, how is the well-being of our population enhanced by the complete removal and non-replacement of any health targets? What has that done? Well, it’s done a couple of things. Firstly, fiscal discipline is gone, and the Minister of Finance, before he even gets to look at new spending in Budget 2019 on health, has to work with his Minister of Health to find out how on earth they’re going to stem the flow of what could be as much as half a billion dollars of combined district health board deficits—complete blowouts. This is before they even look to replace the $100 million of mental health funding that was ripped out in Budget 2018 and before they remedy the issue of the savings in pharmaceutical purchasing that could’ve been reinvested into new medicines so that cancer patients don’t have to have a Givealittle page set up so that they can have their modern cancer drugs paid for. Instead, that money went back into the slush fund to stem the flow.

Where is the well-being of New Zealanders when independent midwives are leaving the profession in their droves because the Minister of Health has sat on a report that says that these fantastic female professionals are worth far more than they are being paid, and the Minister has done nothing but pay lip-service about that? What about the well-being of the adults who are going profoundly deaf and would benefit significantly from cochlear implants when the $6.5 million that the previous Government put in to increase and double the number of adults who would get those implants was taken away? What about the well-being of every single New Zealander who was promised by Jacinda Ardern and David Clark that they would get discounts in their GP fees, only to find in Budget 2018 that that did not happen and there is no prospect in the future of that coming back? A broken promise.

So as we approach Budget 2019, and as we look at this Budget Policy Statement and hear the wonderful warm, fuzzy, virtue-signalling words about well-being, what New Zealanders really want to hear is: “What’s going to happen to my health services and my education services? Will I be protected at home and on the streets? Will my well-being be better or worse as a consequence of this Budget?” It’s a question they may not articulate using those words, but they have done so every year since Budgets were set, and the idea that well-being is something new is completely wrong.

Now, I’ve laid out a few of those very, very profound fiscal challenges in the Health vote alone—and, actually, in education—and what that means is that in order for the Minister of Finance and Cabinet to stay within their own spending disciplines, something else has to happen, and that is that revenue has to go up. The way the Government, clearly, has chosen to do that is to put a tax on the capital increments of the hard-working New Zealanders in our small businesses, on our farms, our cribs, our baches—the things that have been worked at over many, many years—without any recognition of the time value of money and inflation, and without any recognition that the tax gained could’ve been accrued over 15, 20, 25 years and that the actual marginal tax rate at the time of realisation is probably going to be far, far greater than if that impost had been put in over each successive year, which is a reality that other jurisdictions in the OECD represent by simply having a lower tax rate for capital gains.

But these Ministers are so desperate to fund their high-spending promises and their fiscal irresponsibility over the last 15 months—particularly in the health sector—that they are not able to do that. They’re not prepared to do that. In order to keep this fiscal envelope the way they describe it in the Budget Policy Statement, there is a tax coming to a pocket near every single New Zealander, and that can only harm this economy.

Tēnā koe e Te Māngai o Te Whare. I wish to congratulate our Minister of Finance on his work to prepare this well-being Budget. This is a very exciting development for our country. This is a completely different approach, one that we have long been in need of, especially off the back of a previous National Government which left us with embarrassing, shameless levels of homelessness, environmental degradation, polluted rivers, suicide for young people at a level which we should not even dare to speak about that is happening in our country, and so many indicators that said far too many of us were being left behind. So this is the first time that we as a country are taking a small step towards looking at the real value of things and not just their simple price.

The Green Party has always championed a new way of seeing our economy as part of our society and our natural environment and not just the boss of all things, because that has led us completely down the wrong track. My predecessor Jeanette Fitzsimons said in her valedictory speech that her main goal in Parliament had been to find better ways of measuring our economic success and that the aim should be a better economy, not just a bigger one. The work, also, that my colleague James Shaw is doing to establish genuine well-being indicators might be the single biggest change we can make to how our economy is run for the better of the many and not just the few. So we are delighted—the Greens—that our Government is starting to move towards this holistic approach. It’s something that tangata whenua have always known, have always wanted to protect. We see our economy run in a way that should protect the natural world that we all rely on in a way that enhances people’s well-being and not just short-term profits for the few. We have to allow the model to develop in a way that will truly value all the contributions that are often not counted. This year’s Budget is based on interim measures that are good but that don’t yet have the wider perspective that the Green Party’s well-being indicators aim for.

I want to talk about kauri tree as an example. If I go to the Budget Policy Statement, I was pleased to see a statement that said that, additionally, data on New Zealand’s natural capital and research into the natural environment could be improved. Our majestic kauri trees are ancient, living, breathing taonga that, while living, provide a bastion for humans in the air we breathe and the whakapapa we hold dear, because kauri are actually our elders. Kauri are great atua of our forests, and their well-being depends on our accountability to protect our natural world. Kauri both feed off and provide nourishment to the ngahere ecosystem around them. They mark the independent relationship between insects and birds and shrubs and all plant life, and so, as living inhabitants since hundreds and thousands of years ago, kauri have adapted to the soil and bugs and climate in a way that introduced species never will.

Yet with all of this exchange, with all of this value, these elders of our forests, under our outdated system, are valued more when they are dead and being ripped out of swamps and shipped off as goods overseas, sometimes illegally. So I welcome the acknowledgment in this Budget Policy Statement, because if we had been taking proper care of our kauri like we should’ve been and if we had been measuring their value as we should’ve been, we would not be facing the spread of kauri dieback today that threatens these rangatira. I cannot come to grips with a future world that has lost kauri tree to extinction. Instead, I imagine an economic system that properly values all parts of our environment, and this Budget Policy Statement is hopeful in marking and indicating that value.

Imagine an economic system that counted the likes of the kapa haka leaders and performers and volunteers who dedicated a collective thousands of hours of unpaid work to bring just next door here in Wellington a festival featuring Māori arts and cultural excellence second to no other festival in the entire world. Imagine a system that could capture that. Imagine an economic system that counted the time that nanas and koros and parents have spent caring for their families and nurturing children. Imagine a system that asks: are the things that we are doing to increase our well-being today adding to or detracting from the ability of future generations to increase their own living standards? These are the value indicators that the Greens have always stood for and will keep pushing for.

Now I go to the members opposite and their addresses today. Certainly, their leader Simon Bridges and his so-called Bluegreen agenda still cannot see beyond the narrow lens of price and dollars, and they keep upholding that. It’s quite bizarre. They continue to stand and uphold that outdated system that has done nothing but ruin and that has actually decimated the future outlook, unless we start acting now. For example, the National Government starved the Department of Conservation of funding and imposed a model where business groups got to sponsor our native plants and animals. Simon Bridges has promised to restart offshore oil prospecting. He’s said that four-lane highways are good for the environment. How green is actual Bluegreen, though? This is narrow thinking in pursuit of short-term gain, at the expense—the expense—of the environment. There is no green in there.

He won’t support the brave kids standing up for the future of their environment in the climate strikes next week. His entire caucus just pooh-poohed them and rubbished them yesterday out on the tiles—dismissed them, looked down their noses at kids standing for their environment. This is the Bluegreen agenda of the members opposite. Simon is buying into the narrow idea—

ASSISTANT SPEAKER (Adrian Rurawhe): It’s the Hon Simon Bridges.

The Hon Simon Bridges is buying into the narrow idea that school is simply to train kids up for low-paid jobs so that they can keep paying rents on their mouldy flats to their landlords. That’s what the Hon Simon Bridges has as his idea of education.

I’m actually looking forward to seeing these young people exercise their power and their voice to call us to account. We know that the National Party cannot understand why they are doing that. They don’t get why they would want to exercise their civic duties and raise one of the most important issues facing us here in this House and in the world today. They would rather block the public from a select committee hearing on this very statement that we are debating right now, just to score some meaningless, cynical political points, than hear from genuine submitters about how excited they are with this new approach and what ideas they might have to make it a truly good one. There’s your Bluegreen agenda right there.

We have many examples of Government initiatives with wider benefits—more than what the initial price suggests—and that’s what this new approach is all about. For example, home insulation brings huge social and environmental benefits that go beyond the simple price of a few Pink Batts. It prevents illness, it reduces energy demand, it reduces power costs for households, and it creates jobs in a green industry. With this precedent, we establish a better way of looking at the economy.

We need to do more. We need to find more ways of delivering these benefits that simply go beyond the dollar price of them. I’m pleased that this Government has made a start. Thank you.

Thank you, Mr Assistant Speaker, and it’s a pleasure to be talking on the MPS—the Monetary Policy Statement—because—

💬 Matt Doocey: Finally, someone is.

Yes. It’s nice that we actually talk about the Monetary Policy Statement, which is, of course, a very important document issued by the Reserve Bank of New Zealand. That document, together with the reports that we get from Treasury—

💬 Kiritapu Allan: The BPS.

The Budget Policy Statement (BPS). The issue around this is that it gives a clear view of what’s happening with the economy. I’ve got to say, increasingly, I’ve got to look at the economy with some alarm because whilst the Government wants to talk about growing the economy and creating fairness, the issue about this economy is that it’s not actually growing as fast as it should. That is the travesty of what’s going on.

If you look back to the last three years of the National Government, we were growing the economy at about 3.3 percent. That was driving forward, and that’s how we were starting to make sure that we were getting the money to be able to invest in the core services that we need in New Zealand. But the most worrying thing about this—the most worrying thing about this—is that since this Government has come into place, it has slowly, through its actions, reduced the GDP growth rate in New Zealand. This is an issue of lost opportunity for New Zealand, and that’s the thing that’s worrying me.

I know the Government wants to sort of paper over it, but, actually, even the Reserve Bank said in their report that there is a risk that growth and potential output is slowed by more than we assume, contributing to a slowdown in GDP. To put that in context, every 1 percent, roughly, is worth about a billion bucks in lost revenue to spend on hospitals, to spend on education, to spend on mental health, and to actually do all the things that we want to do. Through this Government, we are seeing not only a slowing GDP growth rate, which is quite important, but also what we are seeing is an increase in debt. I keep asking Mr Grant Robertson, every time he comes to the Finance and Expenditure Committee, what’s happened to the GDP on a per capita basis and debt per capita, and, of course, he’s all gone silent on that over the last 14 months.

So it’s interesting. If you go to the latest financial statements of the Government of New Zealand, the debt now has actually increased. In fact, even in the last month, from the December figure, it went up by another $6 billion. So at the moment, the debt is sitting at roughly—this is gross debt—about $68 billion, and so what this actually means is that this Government is playing with mirrors. What it’s doing is it’s slowly running down the economy through lower growth rates—and I’ll talk about that in a moment—but at the same time, because it’s getting short of money, it’s letting its debt increase. If you go back to even a couple of months before, the debt was actually quite a bit lower in terms of its percentage.

What this Government’s not doing—even though they’re trying to portray that they are—is actually saying they’re reducing debt. They’re not. Actually, what they are doing, in the sheer numbers, in the amount of money that they’ve borrowed, is actually increasing debt, and they’re trying to offset that by saying, “At a gross level, it’s OK. On the percentage level compared to GDP growth rate, it’s okay.” Well, actually, what they are doing is using that debt figure as the area to let them expand, to enable them to start to spend and fund some of the programmes we have heard talked about today. We have heard about the Provincial Growth Fund, the 3 billion bucks that Shane Jones has got, the billion bucks that got given to Winston Peters, and all the other stuff—the student fees.

What they are doing is, basically, playing with our future—playing with New Zealand’s future—by actually increasing debt. Then, at the same time, what they’ve done in the last 16 months is raise tax by $2.6 billion, and that is against the policy they talked about. Prior to being made the Government, they campaigned on the fact that they wouldn’t introduce any new taxes, and now—now—they have already increased taxes by $2.6 million. Then, of course, we have got the whole issue around the capital gains tax. The whole thing about this is: “Shovel on another $2.6 billion of taxes on New Zealanders.”—on ordinary New Zealanders—“That’s not enough—that’s not enough. Let’s grow the debt as well. That’s not enough. Let’s talk about another tax.”, which is the capital gains tax.

So that’s all about just building up money so that you can spend your way out, but the issue that I think we should be talking about is not the flabby spend that we hear every day from the Hon Shane Jones when he steps up to the mark and tries to defend yet another piece of flabby spend that’s creating no jobs. We have gone silent on all that foreign affairs stuff that Winston Peters is doing around the Pacific, and the new ambassadorship and consulate in Sweden—all that’s been wasted. So what is happening is that we have got this economy that is just not going as well as it should.

The other thing I heard today in question time is that we’re out there doing trading arrangements. Grant Robertson talked about diversifying the economy—diversifying the economy. He talked about trying to get a relationship with the EU. Well, I’ve got to say to Mr Grant Robertson that that has been in train for quite some time. It wasn’t an initiative that was started by the Labour - New Zealand First Government; it’s actually been in a long time. Trying to take credit for something that you haven’t done is not a good thing.

But the issue is: where are all the other trading relationships? The reason is we’re not out there—we’re not out there. We’re going to talk about the relationship with China. We’re not out there. We don’t have a close enough relationship with them. What about the other fast-growing economies in the South Pacific? We do not seem to be out there, because we don’t have a Minister of trade out there away from New Zealand, not in New Zealand. We don’t have a Foreign Minister out travelling enough around the world creating new opportunities for businesses to be able to go and actually create and build and develop new markets around the world, and all that stuff is helping to contribute towards our slowing economy.

The other thing that’s chilled the economic growth in New Zealand was the industrial relations. So all these things are building up—the industrial relations framework, which employers are now starting to grapple with. Why does the Government set about demolishing the confidence of a New Zealand economy and, particularly, the people that own businesses and make the decisions about investing in new plant and stock and, more importantly, about employing new people? What we’ve seen with this Government is it set about, almost destructively, reducing that confidence.

Ultimately, it is those business owners that will make the decision to hire new people. Once you’ve got that—once you’ve got a growing economy; once you’ve got people employed—issues around social policy and all those other aspects start to fall away because people get paid well, they get jobs that they can feel good about, they have much better relationships, and all their social outcomes are much more stronger. That’s why it’s absolutely essential that we have a Government that actually knows what it’s doing, but at the moment we don’t. We have a Minister that is much more keen on pursuing Budgets that have nice intent, but, actually, are they delivering the outcome for New Zealand? I’ve got to say to you that in my view, they’re not. It’s not, and we will increasingly see the outcomes of that over the next few months, I think, because the GDP rate in New Zealand is slowing, and it’s slowing dramatically.

One of the issues for the Government is how it’s going to fund its operations and continue to do that in the short term, because they will not have the money. They’re already about $700 million down on where they were budgeting probably about a year ago. That is a substantial cost, and that will impact on the ability for all New Zealanders to be able to share the benefits of increasing spend, because this Government is running slowly into a point where they can’t do the type of expenditure they want.

I just feel disappointed for New Zealand, because this is a Government with, in my view, little ambition around how they want to drive a dynamic economy. They might be good on rhetoric, but the ability to actually manage a dynamic economy, to put the right frameworks in, and to make sure that people feel that they can invest and do the hard work and take the risk that many have to do at a personal level—that bit is just missing. We’re strong on rhetoric; we just don’t seem to see any delivery on the actual outcomes.

This is a split call. I call Dr Deborah Russell—five minutes.

Thank you, Mr Assistant Speaker. I am delighted to take a call in this debate on the Budget Policy Statement. The Budget Policy Statement draws on work that has been done in Treasury for some years now on the Living Standards Framework. It’s integrated into the Budget Policy Statement—in particular, through thinking about well-being.

As part of the work that the Finance and Expenditure Committee has done in preparation for this well-being Budget, we spent some time talking to absolute experts in the field. This afternoon, I want to report to you in the context of this debate some of what Professor Marilyn Waring talked to us about when she came to the Finance and Expenditure Committee. She is, of course, a former National Party MP and an eminent economist and political philosopher.

One of the interesting things that Professor Waring told us about was that GDP is a comparatively new measure. It was first really used in about 1934, and when it was first introduced, it was controversial. There was a longstanding debate as to what got put into GDP and, importantly, what got left out of GDP—what counted and what didn’t count. There’s some interesting stuff that goes into that—for example, carpentry was something that Professor Waring told us didn’t make its way into being counted in GDP until the 1970s. That was when it crossed the production boundary—the boundary of what counted in GDP and what didn’t. So it’s rather interesting to think about what doesn’t count in GDP.

Primarily, the sorts of things that don’t count in GDP are women’s work and work that goes on in the home. Here are some of the items that are not included in GDP—and this comes from an article by Paul Dalziel and Caroline Saunders. What doesn’t count in GDP? The cleaning, decoration, and maintenance of the dwelling. What doesn’t count in GDP? The cleaning, servicing, and repair of household durables, the preparation and serving of meals, the care, training, and instruction of children, the care of sick, infirm, or old people—

💬 Hon Chris Hipkins: Unless you pay someone to do those things.

—and the transportation of members of a household or their goods. As my colleague the Hon Chris Hipkins has pointed out, those matters only count if they are paid—if someone pays for them—because that’s the definition of GDP. It’s the monetary measure of the market value of all the goods and services an economy produces, but only—only—if there is a monetary value paid for by the market.

GDP is an interesting and worthwhile measure. It is an important measure of what goes on in the economy, but it does not measure all that is important in the economy. It does not matter what counts for well-being—what counts for enabling us to lead a flourishing and a happy life.

The ancient philosophers concentrated on what it was to lead a flourishing and happy life, and what counts for a flourishing and happy life? People say, “What is it? How do we know that?” Well, we know that because it’s been talked about for centuries. We know that what matters to people is good health. We know that what matters to people is social connectedness. We know that what matters to people is meaningful work. We know that what matters to people is standing in their communities. We know that what matters is people. That is what this Budget sets out to count. We are starting to answer Professor Waring’s challenge. We are starting to answer that challenge of what really counts. That’s why this well-being Budget is so important.

Of course it will be hard to develop the measures. Of course this first essay into doing a well-being Budget will be difficult. But, as it took nearly a century for the measure of GDP to settle down a bit, it might take us time to get the measures of well-being right. But we are on our way and we are making an attempt at it, and we have some concrete goals—concrete goals—because we know that what gets counted is what people work towards. So we will work towards productive businesses, regions, and an economy, we will work towards a thriving nation through innovation and social and economic opportunities, we will work to lift Māori and Pacific incomes, skills, and opportunities, we will work to reduce child poverty and improve child well-being, and we will support the mental well-being of all New Zealanders because we will work for well-being.

Thank you, Mr Assistant Speaker. It’s a great privilege to follow Deborah Russell. I followed her around for two months during an election once. There are many ways of hiding bad news and camouflaging reality, and this term “the well-being Budget” is the best I’ve heard of yet. I couldn’t understand how they got to that point until I heard Deborah Russell talking about the ancient philosophers, and now I understand the Labour Party policy perfectly.

The real issue with this, though, is earlier on we heard Michael Wood talking about comparing the Government’s annual report to that of a big company. In some ways, they’re absolutely right. They do that. The problem is the difference generally is the standard of bookkeeping, and the thing that really concerns me about where we’ll get to in the well-being Budget is how accurate the bookkeeping is. I think the thing about Budgets is Budgets need money, and, to acquire money, you need a strong and vibrant economy. The thing that primarily concerns me about the state we’ve got to right now is that we’ve spent a fair bit of time in the last 18 months driving foreign investment out of the country and putting foreigners off coming to New Zealand to be educated, to assist in our workforce, and to build our economy. So, once you do that—

💬 Hon Member: Rubbish.

—well, it’s proved by the facts—you start to weaken the growth of our economy. When you’ve got a massive predicted spend such as we have with the Provincial Growth Fund and with the free tertiary education for first-year students—and, of course, I have said in the House before that I can hardly criticise that, because I got a free education myself and look where it got me. But the thing that worries me most is the way this money is being distributed, and to match that to some of the aspirations of the well-being Budget is very difficult.

I’ve yet to see any evidence of the Provincial Growth Fund and its spend being matched to well-being and people’s better interests. One of the things that bugs me in this House are the bombastic comments of he who refers to himself as the first citizen of the provinces. Well, I hate to disappoint him, but, actually, the Governor-General is the first citizen of the provinces, and if he’d ever read our constitution, he’d find that out—well, not the constitution, but the pieces that make it up.

So I think that the real challenge we’ve got in New Zealand is around the things that, basically, make people’s lives better. If we’re going to invest money in free education for those who were managing without the free education—in other words, there’s been no increase in those people getting into that business—and splash money around the provinces in a manner that has yet to create more than about 45-odd jobs and has yet to create anything concrete for the people of our provinces who need a better lifestyle, then I think that’s probably irresponsible.

I think that when you look at our provincial areas, the places that really need money spending on them are health and education. That is particularly applicable to remote rural New Zealand, where services have been withdrawn over a number of years and where it’s very difficult for young people to get a decent education because there’s just not the scale or the bulk of people that can create an environment that’s challenging and that also enables those schools to be able to provide the broad enough education for those kids going to those schools. Those are the challenges we face in rural and provincial New Zealand. It’s not around growth. Tourism is doing well. Tourism is doing very well on the back of decisions of the last Government.

So those sorts of things are growing well in New Zealand. In fact, they’ve grown too well in lots of parts in New Zealand, and now we’re stretched for infrastructure to support them. That’s where the Government needs to be spending its money—on infrastructure that then provides jobs for those young people that live in rural and provincial New Zealand. I think that if we spent a lot more energy on that and a lot less energy on splashing money around things that don’t matter so much, it would be a whole lot better for New Zealand.

Now, I want to talk very briefly about the well-being Budget and the fact that we’ve spent a lot of time defining well-being and quantifying well-being. We’ve, basically, picked up an OECD definition of all this and adapted it to New Zealand’s conditions, but we haven’t adapted it to New Zealand’s conditions—we’ve just picked it up. New Zealand’s a very different country than the rest of the world, and we need to be specific in what we do. It’s a great opportunity for us. If we want to go down the well-being path, it’s a great opportunity for us to develop our own system, our own measurements, and our own accountability, and I’ve got some serious doubts, having read all the information on this, that we’ve actually got an accountability and reporting factor that will do us any good in the future.

So I don’t have a problem with embedding well-being in the Government’s Budget Policy Statement, provided that we do it in an accountable manner, and I’ve got serious doubts that we will do that. I think that there are some flaws in this system. I think that it will take a whole lot of rectifying and you’ve got to have money to do it.

This is a split call—five minutes.

Thank you very much, Mr Assistant Speaker. The buzzword for this debate seems to be “well-being Budget”, and I congratulate the Government. That’s good packaging, good marketing, and they’re doing a good job of selling their approach to Budgets. But I also have to agree with my old friends on the National Party side that are, effectively, saying that well-being is what Governments always focus on, and that’s true.

When I look at the Budget Policy Statement, I see that there’s words in there about taking a long-term, intergenerational view, thinking broadly about impacts, positive and negative—well, that’s, effectively, social investment, and that’s what Bill English and the National Government championed. So the Government’s doing a good job in packaging and marketing their Budget as a well-being Budget. They’ve, effectively, taken social investment and they’ve rebranded it and are selling it as their own, and, you know, in Parliament, we spend all this time arguing who’s right and who’s wrong, but that’s politics for us.

I am wanting to focus on the fifth of the five big goals of the Budget priorities for this Budget Policy Statement around supporting mental well-being for all New Zealanders. This is an important aspect that I think all New Zealanders are interested in. Mental health is a priority for any Government. It should have been the priority for the past Government, and I’m glad it’s a priority for this current Government.

Of course, when we look at all of the wording that’s out there in the approach to mental well-being and the approach taken in the report by the inquiry, there’s a lot of focus on Māori well-being and Māori mental health. There’s a lot of focus on young people as well, and that’s true. Māori mental health challenges are greater than those that are non-Māori, and it’s true that we have a very high proportion of young people that are ending their lives by way of suicide. It’s the highest reason for deaths among young people. But I think we also need to remember that the highest rates of suicides in New Zealand occurred in males aged 25 to 44. That’s an area that isn’t often discussed. It doesn’t often get headlines. Of course, a focus on youth and, of course, a focus on Māori and Pacific health and those issues do get a lot of attention, but let’s not forget that males aged between 25 and 45 need a huge amount of support and focus, as well.

So I hope that when the Minister does put together his recommendations off the back of that inquiry, and I hope that when we discuss this in the future, we can also talk a lot more about males in that category, because they are hurting themselves at a higher rate, and that’s not good enough. We need to ensure in New Zealand that males know it’s OK to speak up and it’s OK to ask for help and that we have community resources there to assist them.

The Mental Health Foundation was correct, I believe, when they put in their submission on the Budget Policy Statement that we need to move some of that balance to not just focusing almost solely on acute mental well-being and support there but also on community-based resources. Of course, if we take the well-being approach or the social investment approach—whichever label we want to put on it—if we don’t address mental well-being early on and if we don’t get in at the community level, and people do get to an acute point, then that ultimately costs the Government and the taxpayer more in the longer term. So my plea to the Government is to of course focus on mental well-being, as you are suggesting, but don’t forget the men aged 25 to 45, as well.

When it comes to other priorities in this Budget Policy Statement, when we look at the wider question of well-being, of course, we don’t lift well-being in New Zealand unless we can address the standard of living. To address the standard of living, we have to address the cost of housing, and if we don’t address the cost of housing properly, then all the well-being initiatives and all the approaches in the Budget won’t amount to much, because the cost of housing is one of the highest costs that any New Zealander is going to face. If the barriers to homeownership and the cost of housing continue to be high and if Governments—whether they’re blue or red—don’t adequately address land supply, then we’re not going to see much improvement in the standard of living and we’re not going to see much improvement in the well-being of New Zealanders.

So I say to the Government that in all of their priorities in the Budget and everything that they do, we must also remember that we have to properly address housing affordability, and that’s going to include land supply. If we don’t get proper Resource Management Act reform and if we don’t open up land more, then we’re not going to see the runs on the board that we want for New Zealanders.

So in terms of the approach of this Budget Policy Statement, I think that if we were to take the politics out of it, whether we’re blue or red or whatever colour, we could probably support that long-term approach. But approaches to mental health and approaches to the standard of living need to continue to be addressed.

I call Kiritapu Allan—five minutes.

It’s an honour to be able to stand today in this House and speak to the first ever well-being Budget. I want to commend my senior colleague the Minister of Finance, the Hon Grant Robertson, and also the executive, who have wrapped around him in terms of showing leadership on the world stage, because we know that for over at least eight years, at an international level, the OECD has been promoting the fact that GDP in and of its own right is an insufficient measure to measure the well-being of a nation’s growth. We all know that it misses a range of different considerations in terms of measuring, indeed, how productive a country can be.

Now, before I turn to my substantive points, I just want to make a brief comment on Jami-Lee Ross, the previous speaker, who drew an alignment between the previous Government’s approach to investing in communities and what we’re trying to do here with this well-being Budget. I must say that I have to fundamentally disagree with that previous speaker. This is a marked change from what the previous Government did over the past nine years.

What the previous Government did over the last nine years when they were in Government was systematically withdraw funds. They focused on fiscal objectives over all other indicia of well-being, which saw us—a country that was one of the most accredited in the world for being one of the leaders in terms of the way that we looked after our community—become, in just under a decade, one of the leaders in the highest youth suicide rates in the world. We had some of the highest-rising wage inequalities in such a brief period. We had a housing crisis that was monumental—

💬 Hon Judith Collins: Ha!

Whilst they may snigger across the aisle, I would, if I was in that position, feel ashamed of myself. A Government that sat there at the helm, with the public popularity that they had as well, and they failed to make any form of movement in terms of housing those that need to be homed, in terms of investing in the regions and creating jobs and actually giving young folks a bit of hope, and making sure that young people who were coming up through the ranks in our country—why did we have that dearth? Why is it that New Zealand, one of the most productive countries—well, we’re not, actually. But, one of the most pristine countries in the world—how come we had one of the highest suicide rates in the world? Because young people couldn’t see themselves in our future. So that’s really abhorrent.

Anyway, I just really wanted to mark away from the points that the previous speaker—

💬 Chris Bishop: That is trivialising an important issue.

No, I disagree with that speaker as well. We’re not trivialising it. We’re making a statement that, actually, our Government’s intending to do the exact opposite from what the previous Government were doing. They failed to recognise that there was a mental health crisis, they failed to recognise that there was a housing crisis, and they failed to invest in those people that deserved it the most.

So if we turn to what the well-being Budget does, and in terms of what the priorities are this year, let’s look at that. Well, one of the things that we’re doing is we’re lifting Māori and Pacific incomes, skills, and opportunities. I must say that in terms of the submissions that we received on the Budget Policy Statement, we were inundated by Māori organisations, who, for the first time, I think, in a very long time, saw themselves recognised within the Budget Policy Statement objectives and the way that this Government was going about approaching how we assess well-being—because you know what? This isn’t something new. This is something that Māori have been doing for a very long time. If we want to talk about models and so on and so forth, Te Whare Tapa Whā is a Māori model that does, effectively, summarise for us the way that we holistically approach well-being. So I want to commend our Minister of Finance for putting it into a policy form and requiring that every single member of his executive is required to show how they will, in this Budget bid coming up, align their objectives for the year with these core Budget policy objectives.

The next one: reducing child poverty and improving child well-being—again, something that the previous Government failed to do. We had one of the highest rates in the OECD of children living in poverty, and it was a shame. This is this country, here—we had one of the highest rates. We turn to supporting mental well-being for all New Zealanders—again, something that the previous Government failed to do. Now, every single one of these Ministers here is required to show that in some way, shape, or form, they are lifting and improving the lives of all New Zealanders. I am absolutely pleased to commend this Budget Policy Statement to the House.

Thank you, Mr Assistant Speaker. We’ve heard some very impassioned, excited speeches today, and it’s been a pleasure to listen to so many of our colleagues on the Finance and Expenditure Committee speak with such passion. I thought that Dr Deborah Russell spoke really well. She’s one of the, I think, outstanding members of the Labour caucus, and I look forward to her elevation in due course.

I also just heard, obviously, the full five whole minutes from Kiritapu Allan, and she also was very impassioned. She spoke about this being the Budget. No, it’s not actually the Budget; it is, in fact, simply the Finance and Expenditure Committee’s report on, not the Budget, but the Budget Policy Statement. So when she talked about all the spending that was going on, actually, none of it is what’s going on today. This is just a statement, a report back from the Finance and Expenditure Committee, of which Kiritapu Allan is a member, which is actually all about what the Budget’s focus is going to be. So it’s not quite what she said, but I thought that that impassioned, excited speech was possibly designed to set off Dr Deborah Russell, who is my personal favourite on the other side—apart from, obviously, Michael Wood, who is also one of my personal favourites, and, of course, as we all know, the Hon Kris Faafoi, who is absolutely our personal favourite. So that should, by the way, finish them off completely with any careers in the Labour Party.

Let’s come back to the issues.

💬 Hon Carmel Sepuloni: We can’t vote for you, Judith.

And the Hon Carmel Sepuloni—well, isn’t she a delight? Just a pleasure.

Let’s come back to the Budget Policy Statement. Well, let’s have a look at this well-being outlook—oh, for goodness’ sake. OK, creating opportunities for productive businesses, regions, iwi, and others, transition to a sustainable—I mean, everyone would agree with most of this stuff, I would have thought. I would have thought most people would say that lifting Māori and Pacific incomes, skills, and opportunities is a good thing. Frankly, I’d say that’s good for everyone in New Zealand. I don’t think it’s race-specific, although I do acknowledge that Māori and Pasifika are very much overrepresented at the lower end of the income scale. But many Māori and Pasifika are not at that level. Many have done extremely well in life and continue to do so. So I think that’s all about learning from those who have been able to do really well and seeing how we can do that better.

Reducing child poverty and improving child well-being, including addressing family violence—well, who could be against that? I’m very on to that, and I think one of the best ways of doing that is to treat children as though they actually are humans. I think that’s quite good—respecting them. Every Government thinks “We’re going to come in and do something on family violence.”—we certainly did—and sometimes that works, but the vast majority of what Governments do does not work in this area, and I’d be delighted to see something more innovative coming through that’s going to work.

I thought this week we’d hear from the Prime Minister in the press conference following the Cabinet meeting about what she was going to do about child poverty. I thought we’d hear something stunning. What we heard instead was that she’s going to ban ticket scalping. So “Ban ticket scalping” was the topic in the post-Cabinet press conference from our Prime Minister of New Zealand. A whole lot of people who are supposedly affected by all the things they want to do in this Budget are not actually going to be worried about ticket scalping. What they want to know is what this Government is prepared to do.

What we have seen today—yet another example on KiwiBuild—is a Government that’s happy to sign up all sorts of contracts and not get much done. Contracts without an end, contracts that just go on and on and on—currently $5.5 billion spent up in advance for 10,000 houses. The problem with that is that we’ve got 300 buyers interested—10,000 houses. That’s 10,000 houses over the next 10 years, and we have a Government that’s also committed to 100,000 houses over those same 10 years. So if you take $5.5 billion and extrapolate that out by the power of 10, that’s $55 billion set aside—or, actually, one of the liabilities that this Government is signing us up for as fast as it can. The trouble is that we’ve got 330 people interested in a KiwiBuild house. These are the sorts of decisions that actually make this Budget quite an important Budget, coming up, as to how this Government intends to address this issue.

So when I look at the Budget Policy Statement, how could anyone not be in favour of supporting mental well-being for all New Zealanders, with a special focus on under-24-year-olds? We know that the Government has set up yet another working group on mental health—230-something, they have now—yet another one. We had some really good stuff happening in mental health that we’d started, particularly around corrections and police. We had funding for police, and the reason why we had funding for police around mental health is that police are primarily the first responders in any mental health issue. Whether it is a suicide attempt, whether it’s a suicide that has been completed, or whether it’s a self-harming, it’s the police who are phoned straight away, and ambulance as well at that stage. I was so distressed that the incoming Government cancelled the police’s mental health funding that we had set aside from the justice sector fund for projects like this. That was an absolute disgrace. Now, that was 18 months ago. Let’s see if this Budget actually reinstates that money—let’s see if it does. I doubt it will, because so much money is having to be put aside for things like KiwiBuild and other things of that ilk—low-value spend, unfortunately—because it is going to take up a lot of the fiscal room that the Minister of Finance has.

We also see here that he would like to support a thriving nation in the digital age through innovation, social, and economic opportunities. Well, I think that’s a good thing. I think most of us would agree on this side that that’s a good thing. We’re not quite sure how a capital gains tax is going to help that. Most of us would think that that’s going to actually stop a lot of innovation and, let’s say, investment in the digital age. One of the reasons I say that is that many start-up companies—particularly in the IT software area—don’t have a lot of money to start with. So what they generally do is they tend to pay people quite a minimum wage, and at the same time they give them shares as part of their salary. We had to address this issue when I was the Minister of Revenue in the last Government. What we saw was that if we had gone after those shares in terms of capital gain, we would have forced those software development companies that have set up in places like Cambridge and all around regional New Zealand, as well as in the metropolitan areas, offshore. That is actually a very serious issue, because we would all agree, I think, in this House that the digital age is very much here to stay, and it is only going to grow more important for a country like New Zealand.

Let’s have a look at some of the issues that this Government is going to have to face in this Budget. We know that tourism has been a huge bonus for New Zealand over the last 10 years. We are very fortunate that we have had some very good tourism numbers coming through in increases. That’s not something we can guarantee, and I think that the Budget Policy Statement would have done well to address the fact that we are living in quite uncertain times. I say that, having heard Air New Zealand, the biggest provider, I would have thought, of tourism services in New Zealand, saying just the other day that international tourism numbers are down. We know that China cancelled—unilaterally, it appears—the Year of Tourism between China and New Zealand. That is something we should be very concerned about.

So I would like to have seen these issues addressed. It’s all very well saying “Let’s all be happy and have great well-being”, and we all agree with saying “Let’s all be happy and have great well-being.”, but also we have to have a way of encouraging business at the same time and encouraging good employment, encouraging good wages, encouraging people to stay in New Zealand, and encouraging tourism. But what we don’t seem to see in this Budget Policy Statement is any statement at all about where the money comes from—not a dicky-bird about where the money comes from. It’s all just “Let’s have world peace and happiness.” Everyone wants world peace and happiness—especially me, because everyone in this House will know what a peaceful person I am. We do want to have that, but you’ve got to have the money to produce all the things you want to give away as a Government, and that’s the issue here. There’s nothing solid, nothing concrete, about building the economy. They’re talking about it, but there’s nothing in here, in the detail.

Tēnā koe e Te Mana Whakawā. Well, that was the same old stuff we’ve come to expect from a tired old Opposition, but what I’m excited about is the fact that we are doing something different, something challenging, something innovative, and, in fact, something which leads the world. I have just heard that the last Government tried to address family violence, tried to address—so they say—housing, tried to address this, and tried to address that, and made what? No meaningful progress. So we’re not going to do it the same; we’re going to do it differently. We’re going to do it a way that no one else has done it before. The Minister’s going to present a Budget which looks across all of a New Zealander’s wellness—not just asking how do we make sure that incomes are good or that tax is brought in, but asking a whole lot of questions that, to be frank, no Government before this Government has asked.

I don’t apologise for asking questions about community connectedness, about civic engagement, about life satisfaction, and about cultural identity. I don’t apologise for that at all, because a meaningful life, a life which is flourishing, a life which we can value and respect, includes those things. In fact, it would be remiss of us not to have a system which takes into account those really important values. Well, this Budget is called the well-being Budget because it’s more than just an absence of malaise, an absence of sickness, and an absence of failure. It’s actually an aspirational Budget—a Budget that says, no matter how good things are, we can do even better. It’s wellness because it’s not just about one thing. It’s not just about a part of the body; it’s about the whole body—body, mind, and soul.

We can look at some physical and some tangible measures, as indeed we should. We mustn’t forget, and we will not forget, the importance of a thriving productive sector: the rural sector, the intellectual property sector. We’ve been examining research and development and the need to stimulate that, and the Minister is doing a great job in making sure that we have a vibrant innovation sector. That is a critical part of the economy, so that we generate the important wealth that can be used to support and enhance other aspects. But we also need, at the same time, to be looking at other measures—not only looking at what we earn as a nation, but how many hours do we spend earning that? Far too many. We’re one of the least productive. We might be generating a respectable GDP, but at the expense of time doing other things, things we love—being in the outdoors, spending time with family. We need to focus on our productivity as well.

We also need to look at the spread of that income. The fact is that many of our people—people who are doing highly valued jobs caring for our elderly, working in our warehouses, driving those forklifts—are being paid a wage which cannot support a family, and we need to address that as well. I’m very proud that we’re raising the minimum wage, and aiming high. We’re aiming for an income upon which a family can be supported—a genuine living wage. So that’s an equity issue. It’s not just about how much; it’s about where it goes as well.

It’s the same with the housing market. We need more houses—we all know that. We know that we’ve got 1,100 more State houses already. We know that KiwiBuild has over 10,000 houses under contract already. We know we need more houses, but we also need good housing stock. It’s about quality. That’s why we’ve got the healthy homes guarantee—why we want to see renters in homes that are warm and dry. It’s simply not good enough to say, “That will drive up the rents. You should be living in a cold, draughty house with bronchitis and freezing cold so you can’t sleep at night because you want a house at a low rent.” That’s just not good enough. Firstly, there’s no evidence for it, and this is an evidence-based Government. Secondly, everyone is entitled to a home which is warm, and dry, and safe.

All this needs to be done with an eye on the future. We can talk about intergenerational equity, and we need to recognise that we have not done right, so far, to future generations—that there has been a slipping. We look at our rivers, our fresh water, and the quality that has been falling behind, and we should be ashamed. We can look at how we deal with waste and recognise that there is a burgeoning problem here in New Zealand as to the amount of waste we generate, and we look at our carbon profile and the fact is something’s got to change.

Again, some brave decisions have been made. The fact is that in the future there will be no further offshore exploration for oil and gas, and I don’t apologise for that either, because it’s time we started thinking of some new ideas. If we are going to be zero carbon in 2035, we’ve got to make some important decisions in a just way, in a way which recognises that change is necessary, and that change, in particular, is an incremental one. There are permits and exploration permits out there which extend into 2050. So let’s not pretend that that’s going to happen overnight. It’s being undertaken in a very careful, managed, fair way.

So I’m very proud that that decision’s been made and that there’s a whole lot of work being done to make sure that that transition is just and fair to everyone, that jobs are protected, and that, indeed, with the Provincial Growth Fund—which is a great example—further jobs are created. We’ve seen some fantastic grants right across the country, including Taranaki, which, to be fair, is where our oil and gas industry is primarily located. So that Provincial Growth Fund is really looking after the regions, and we know that when prosperity is driven in the regions, New Zealand as a whole does well. So we need to absolutely recognise that and recognise the intergenerational aspect of that.

But I want to also focus on those less tangible things—the things that, to be fair, are more difficult to measure. But we need to not shy away from that and to get out there and start measuring them—things like the connectedness of our communities, our cultural identity. How many of our children can speak Te Reo? It’s something I wish I’d been taught at school. How many of our children can communicate across all of our many and diverse cultures? How many of our immigrants have preserved their own language, their own cultural identity? We need to learn that they are taonga. They’re treasures that we need to hold dear so that people can feel connected within their own special community but also across communities. Let’s start looking at that, examining it.

Let’s also recognise the connectedness of all of these things. One thing we do know is that when a society is educated, it is prosperous. It is prosperous and its health improves. All of those things need to be addressed, so let’s recognise further that all education is worthy. Let’s not focus only on a narrow band. Let’s respect and promote and protect scholarship in the arts, scholarship in the humanities—those things which enhance and preserve all of our traditions—and recognise the important skills learnt in the trades. The fact that craft is a fantastic skill to have, the idea that we need to respect and value those people that do physical tasks: the carpenters, the plumbers—all of those people who support us with highly skilled trades with a technical background.

I’m really proud of what the Minister of Education is doing, looking at the trades and the polytech sector and saying “Not good enough.” That sector is really important to enhance our community as we go forward. We are going to look at that. We are going to not be afraid to make significant structural change if needed and to enhance and improve that sector, which is a critical part of our community.

These are all brave decisions. This is a new way of looking at things and that is exactly what’s needed. This wellness Budget is a world first. It’s a great Government to be part of and I’m very proud of it. Thank you, Mr Speaker.