Debate on Budget Policy Statement

Thank you, Mr Speaker. I move, That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2021-22 and Half Year Economic and Fiscal Update, December 2021.

💬 SPEAKER: The question—

💬 Hon Grant Robertson: You have to speak now, I think.

💬 SPEAKER: The member might want to keep going, or—

No, I think I’ll keep going if I may, Mr Speaker.

💬 Chris Bishop: It’s a good thing you didn’t sit down!

I didn’t sit down. Silence is golden, Mr Bishop, and I thought I’d start with a pause. You might want to try it.

First of all, I’m very pleased to be standing to talk about this Budget Policy Statement (BPS), and I’m very much looking forward to the delivery of the Budget by the Minister of Finance. But I do want to recognise, at select committee, the submitters, of whom there were about 98, and a number of those—about half—submitted in person. I want to say that we did listen very carefully to them. A lot of them were very focused. They focused on things like climate change, on transport policy. I particularly enjoyed the free bus fares lobby group, which actually has a very good message to send about access to transport, and also, of course, a number of submitters who endorsed and encouraged the Government in addressing poverty—[Interruption]

💬 SPEAKER: Order!

Thank you, Mr Speaker. Each of those things is obviously important, and the Budget Policy Statement in particular sets out the direction that the Minister of Finance intends to travel to reach those destinations. What the BPS says is that the issues that matter most to New Zealanders are the ones that this Government is intending to address, particularly those long-term challenges. The priorities set out by the Minister are familiar. Obviously, the Budget Policy Statement is very much under the shadow of COVID and continuing to keep New Zealanders safe from COVID-19. Accelerating and reinforcing the recovery and the rebuild from the impacts of COVID-19 is an important part of the Budget Policy Statement—and also, in addition and at the same time, laying the foundations for the future, including addressing those key issues of climate change and our climate change response, housing affordability, and child poverty.

The overarching feature—and I’ll get to the select committee proceedings shortly—was the need to get on and help New Zealanders, even in the face of the COVID pandemic, and a reflection of the fact that we’re in a financial position to do that because of the strong recovery to date, careful management of the books, and a strong fiscal position, and the fact that those protections were put in place not only to protect the health of New Zealanders but also to protect jobs, protect businesses and livelihoods. And, as we’ve seen today in question time, that is ongoing. And, of course, a headline feature of discussions was the one-off $6 billion in Budget 2022 to invest in major programmes and an acknowledgment that the health reforms feature heavily in that—but also acknowledging that those operating allowances will reduce, over time, to $4 billion in 2023, and $3 billion in 2024-25. And important recognition, also, of multi-year funding so that agencies, including the new health agency, can have a considerable certainty over what their Budget allocations will be from year to year.

Also in the Budget Policy Statement, of course, Government debt was an important topic of discussion, and in the statement it was forecast to peak at 40.1 percent of GDP, which, whilst high for New Zealand’s historical standards, is still significantly lower than was forecast in Budget 2021. That puts us in one of the lowest net debt positions in the world, certainly in terms of our OECD neighbours, and gives us a resilient economy to start with. The Minister did talk about debt and, in particular, was asked in committee about what a prudent level of debt was. Importantly, he noted that GDP is not the only question to be addressed there but also what the social and economic needs of the community are. And, of course, avoiding long-term infrastructure deficits was one of the things he identified where having a low debt certainly wouldn’t be prudent if what that meant was ongoing decay of infrastructure. So a specific number was something that was avoided.

The committee also heard from the Minister that the Government was focused on a just transition to a climate resilient, sustainable, and low-emissions economy, and also focused on the physical and mental wellbeing of New Zealanders. In particular, the Budget policy was focused on improving health outcomes for all New Zealanders, including COVID-19 response, and, of course, a focus on improving the wellbeing and opportunities for Māori and Pacific peoples, including through access to affordable and stable, sustainable housing. And a final priority, an obvious one, was around child wellbeing and a reduction in child poverty, including access to housing and stable housing. Obviously, the DHB reforms were focused on the replacement of DHBs by Health New Zealand, and making that transition to make a much more efficient, effective, and equitable health system. That’s part of, in the long term, managing rising health costs. And, again, as I think I noted, that’s one area where that multi-year approach will be of critical importance.

In terms of climate change, the Minister referred to the emissions trading scheme and the fact that the proceeds of that will be recycled into emissions reduction programmes through the Climate Emergency Response Fund, noting that the initial allocation was $4.5 billion. I think it’s fair to say he noted that that was very much an initial allocation and, in the future, more will be needed.

And, of course, at the Finance and Expenditure Committee, there’s always robust discussion. The ACT Party unsurprisingly talked about the tax burden, but the Minister really responded, when challenged particularly on the 39 percent tax rate, that it’s appropriate for people who are earning over $180,000 to pay at that rate, also noting that the Minister noted that the economy has been very, very strong. Most people are in work, and therefore the amount of tax paid as a proportion of the economic activity remains very stable. And he thought the balance was about right. And so, in terms of the tax take as a proportion of GDP, and also the total amount of Government spending, which is about 35 percent of GDP, the Minister noted that was at the higher end, but also, as set out in the Budget Policy Statement, that is projected to return to a stable level of about 30 percent—and, if I recall rightly, slightly below that.

Mr Watts focused on the costs of establishing the new health entities and the deficits of the DHBs, but the Minister did respond to that, emphasising the importance of the two new entities and the importance of making sure that they get off on the right footing—that they begin life in a stable position and aren’t given any legacy problems that they may have over from the DHBs, and that they will therefore be a much more effective way of delivering health services and deliver real fiscal benefits, and will be a real break from the current system.

And, of course, Treasury also presented on the Half Year Economic and Fiscal Update and, as was to be expected, inflation was touched on. The question was asked whether Government expenditure would increase inflation, but the secretary was very careful in the response, noting that this isn’t necessarily the case at all; it depends on the quality and nature of that spending, and, of course, what the tax revenue is, noting that taxation dampens inflation. And, from that, we could draw that tax cuts would do the opposite.

So, in summary, we still have the continuing shadow of COVID-19, but the Government’s strategy has proven effective. This is still a wellbeing Budget focused on the wellbeing of New Zealanders, giving New Zealanders the capability to live lives of purpose, balance, and meaning to them, and I’m very much looking forward to seeing the Budget in due course.

Thank you, Mr Speaker. The Budget Policy Statement, along with the Half Year Economic and Fiscal Update (HYEFU), commences Budget cycle for Budget 2022 and, make no mistake, as we heard, this is an incredibly important Budget, taking us from the height of the pandemic to a world of tumult and uncertainty in every regard, but certainly economically. New Zealanders are caught bobbing on the economic ocean, and the seas are rough, and the Budget is going to set the direction for New Zealand, for that cork.

Looking at the international papers this morning, what jumps out is a Federal Reserve that is saying it will increase the cash rate in the United States by 50 basis points. The ANZ and others here are saying that’s what our Reserve Bank are going to do. And the reason for that, and for that discussion, is because inflation is a big, entrenched problem—that is, it’s around much longer than people had thought, and it’s going to be higher. And the papers are talking about a real risk, and we broached this in the Budget Policy Statement (BPS) discussion of stagflation or even recession, and I’m not necessarily predicting that but that’s certainly the flavour that is coming through internationally. So is it actually too late in terms of these interest rate hikes, or will they spur on these phenomena of stagflation and recession?

Yes, inflation’s international, but it’s also domestic, and we talked about that, and it is higher in New Zealand than much of the Western World. During the height of the pandemic, Grant Robertson and the Government, as is shown in the figures, spent more than almost any other country in the OECD—in fact, every other country in the OECD other than the United States. And we grew our debt—yes, it was low—but we’ve grown that public debt, according to some and on some measures, by more than any other country in the Western World. It was, of course, right to be increasing spending to keep people in work and to keep businesses going, but we did it to excess. And that means, in our remote, isolated economy, we’re fuelling inflation higher, and it has a cost of living implication. In fact, it means—we believe, in National, and many others do as well—we are in a cost of living crisis. Higher inflation is leading to higher interest rates and other economic consequences which I’ve talked about, and that means more pain for New Zealanders, for longer.

Jacinda Ardern and Grant Robertson—and, again, this came through in the Budget Policy Statement discussion with him—don’t believe there is a cost of living crisis. If there is, they think that it’ll all be over before we blink. But everyone else, as I say, and certainly on this side of the Parliament, we know that we have one, and that it’s here for the foreseeable future. Possibly, even, it’s a new normal, as food prices have risen by 13, 14 percent, as gas is over $3 and could possibly even get to something like $3.50—something I never thought we’d see. Housing and rent costs have grown exponentially. In fact, everything has been affected by the inflation that we’re seeing.

And we’re hearing, in polls like the Ipsos international poll of our country, that the cost of living is New Zealanders’ number one issue, and this came through, actually, in the submissions from a bunch of NGOs, that women feel the brunt of it disproportionately—from a gender pay gap that we have still in New Zealand, and also from oftentimes women making household decisions when it comes to those things I’ve been talking about, like food and the like. Every other survey we saw backed these sort of themes up, from Consumer New Zealand, to the banks and their confidence work, to other NGOs. The other group quite clearly affected by all of this—and it’s come through in the submissions and also from the likes of that Ipsos poll—are those earning $50,000 to $100,000 a year; $80,000, in New Zealand, is not high on the hog any more; actually, it can be very tough, with a family, to be living on that kind of income. And so this theme of cost of living in crisis came through very clearly in our Budget Policy Statement discussions: high inflation relative to anything I’ve seen in my adult lifetime, and much lower wage growth, meaning real wages are going backwards. It’s a crisis, whatever Jacinda Ardern and Grant Robertson want to believe and want to call it.

The fact of this, of our cost of living crisis, should inform every aspect of Budget 2022. It should be at its heart; not the only thing, but at its heart. And it would be a real Wellbeing Budget—because Mr Robertson told us that’s what this is again, when he came and presented in regard to the Budget Policy Statement—if that was at its heart and not just merely, as I suspect it is, a rhetorical device. Government has the capacity to provide meaningful relief for New Zealanders who are feeling pain; to provide that relief on the way through, as we also deal with the other big, often long-term issues that New Zealand has, and that we’ve heard about in the Finance Committee over the course of our hearings on the BPS, whether it be climate change, whether it be issues of dependency, and the like.

On Sunday, we, of course, in National—and Chris Luxon—put forward what we think should happen; in a sense, gave an alternative to the views that we’ve heard from Grant Robertson. That is, New Zealanders are slipping into higher and higher tax brackets, and paying more tax simply because of inflation, and we should do tax indexation. And I’ve asked Grant Robertson about this, and about the issue of adjusting the first three income tax brackets, and, again, if you take that person earning $80,000, say, they’re not high on the hog, but a policy like that in the Budget, coming from the BPS and HYEFU, wouldn’t mean anyone gets rich but it would help in a crisis, as well as helping other income earners and superannuitants—a policy of around $1.7 billion.

These sort of issues that have been canvassed aren’t inflationary or, at least, it’s not right to say, “Well, that’s inflationary—giving people back their own money—but if the Government spends it, it’s all fine”. That’s a ridiculous proposition. And, when it comes to spending cuts, actually, another issue that seems to be raised, again, given as we’ve heard in the BPS that Grant Robertson—and he didn’t deny this when I asked him this in the committee—is giving to himself and the Government the biggest single operating allowance or new spend-up in $6 billion, ever. That means there could be meaningful relief for New Zealanders if it were $1.7 billion alongside that, and leave significant funds to do more.

Mr Robertson told us, and has already said, that much of what he’ll be spending will be on Labour’s health restructure for a new centralised bureaucracy, and a new climate change fund. The thing about the restructure is that it, of itself, won’t deliver a single new operation or ICU bed. In fact, the only people it will deliver for are the Wellington consultants who’ll dine out on it. Even the DHBs speak of the serious disruption that will come from a restructure in the middle of a pandemic. As for climate change, it depends whether it’s just spending or real investment and, excuse my cynicism, but, just as Labour’s Provincial Growth Fund or the COVID fund have seen money wasted—spent neither in the regions, nor on COVID, respectively—so it well may prove for climate change. Grant Robertson isn’t smarter and doesn’t always spend it better than the rest of us.

My view has always been that there are several reasons for our high inflation but big Government spending in an overheated economy is certainly one of them, and the one the Government could do most about. We should provide tax relief to New Zealanders on the way through, whilst also reining in Government spending through a focus on discipline and quality investment. Thank you, Mr Speaker.

Mr Speaker, thank you very much. And I thank the Finance and Expenditure Committee for their consideration of the Budget Policy Statement and for their report that we have in front of us in the House here today.

This will be the fourth Wellbeing Budget that this Government has put forward, and we continue to have a focus on making sure we have more joined-up services, that we think intergenerationally, and that we make sure that we focus on the evidence-based issues that were identified in that first Wellbeing Budget in 2019. In addition, for this year, in Budget 2022, we have three main priorities: that is, firstly, to continue to keep New Zealanders safe from COVID-19; secondly, to accelerate the recovery and the rebuild from the impacts of COVID-19; and to lay strong foundations for the future—including addressing issues such as our climate change response, housing affordability, and child poverty.

The Budget Policy Statement draws on the Treasury’s half-yearly economic and fiscal update, and that did—in December—indicate a very strong fiscal picture, which continues, albeit with the new challenges that have come upon us in 2022. What that Half Year Economic and Fiscal Update shows is that the Government’s books will go back into surplus in 2023/24—significantly earlier than forecast and significantly better than we have seen in other times when the crises have hit the country and New Zealand has been impacted that way. That is down to the disciplined, careful, and balanced approach that we are taking to the economy, and the hard work of New Zealanders in making sure that we have rebounded from COVID-19 very well.

Also, as has already been mentioned, net core Crown debt is now forecast to peak at 40.1 percent of GDP—again, much higher than New Zealanders have been used to seeing, but comparatively still amongst some of the lowest levels of public debt in the OECD. As a country, New Zealand is well positioned fiscally to be able to manage a shock like COVID-19. As we have also discussed, the Crown’s core tax revenue has increased as more people have been in work as the economy has grown. At the same time, we have been careful about the expenses that the Government is putting out there. We are up around the 35 percent of GDP level—that is a similar level to what the National Government had when they were coming out of the Canterbury earthquakes and the global financial crisis. But we bring that back down again to around 30 percent of GDP by the end of the forecast period. Again, a careful and a balanced approach to making sure that we look after New Zealanders, we invest in addressing the big challenges that are facing us, but we also have a mind to the future generations and what debts we leave them.

The two big focus areas that I highlighted in the Budget Policy Statement are indeed in health and in climate change. There is a one-off operating allowance of $6 billion in this Budget. That is because, as I’ve stated, on the day that we released the Budget Policy Statement, the major restructuring of New Zealand’s health system requires a significant reset within the health Budget and to make sure that we set that health system off on a stable path. This is a significant and important reform to ensure that New Zealanders get the healthcare services that they need and deserve. We want to end the postcode lottery of healthcare. The Opposition finance spokesperson said that DHBs thought this would be disruptive; well, it certainly is disruptive to the DHB model, because we are getting rid of it, because we’re actually moving to the Health New Zealand and Māori Health Authority model, which will mean that we can provide consistent quality of services to New Zealanders wherever they live. And it is also those iniquities that every New Zealander knows exists in the health system that we are trying to address through this. I am extremely proud that this Budget will fund the Māori Health Authority so that we finally, once and for all, ensure that health services deliver for Māori in New Zealand. Equally, other populations in New Zealand who have suffered from those inequities, including in rural areas, also can look forward to a system that actually makes sure that they get the support that they need as well.

We also will have a dedicated public health agency within the Ministry of Health that would learn the lessons of COVID-19. This will be a multi-year funding pathway for the health system and it will deliver better health services to New Zealanders. This is an investment many decades in the making and the one-off allowance takes that into account.

The other quite unique element of this Budget is the creation of the Climate Emergency Response Fund, another multi-year fund. This is where we are recycling the revenue of the emissions trading scheme directly towards emissions reductions initiatives. This House has a serious responsibility to support New Zealand in meeting the climate change targets that we have set. Not only is that important for the health of our planet and the health of our people, it is also where economic opportunity lies for New Zealand. And so the Climate Emergency Response Fund will be used to make sure that not only do we meet those targets but that we seize those opportunities. This is a fund that is outside of the Budget allowances, it is hypothecated—to use the technical term—it’s designed to target and make sure that we are making progress on meeting those emissions reductions plans.

Alongside the formation of the justice and natural resource clusters, this is all part of our public finance modernisation approach to move away from the single-year siloed budgeting approach which makes it difficult for Governments to address complex problems. We are now addressing that directly by having multi-year funding and joining agencies together with clear priorities that they agree. This is an important step forward in this Budget, and the Budget Policy Statement, I believe, does show that we are continuing along the path of wellbeing. What the Budget Policy Statement doesn’t do is that it doesn’t set out on a path that would mean New Zealand was unable to afford investments in health and education and in housing in future years. We have chosen very deliberately over the course of the last couple of years to make sure that we support those on low and middle incomes to be able to deal not only with COVID but now the period of time we have with high inflation caused as it is by significant global supply constraints and the increasing cost of oil—which has been exacerbated by the Russian invasion of Ukraine.

What we have heard from the Opposition is that they somehow or other think that they can take some funding out of the operating allowance, the one-off $6 billion operating allowance, and then magically not have to deal with the consequences of those decisions in future Budgets. That is simply not true. It’s not how Government budgeting works. Those costs carry on, and the Leader of the Opposition said he wants to carry on with those tax changes. He also—I think—wants to get rid of the Government’s 39c tax rate. We’ve had a bit of coming and going about that in the last few days, but it does appear to still be the Opposition’s policy to do that. They also want to reverse the changes that the Government has made to make it easier for first-home buyers to afford to buy a first home in terms of interest deductibility and the brightline test. They also want to get rid—

💬 Simeon Brown: That doesn’t help one bit.

Hon GRANT ROBERTSON:—Mr Brown, I’m coming to you—of the Auckland regional fuel tax, which would mean Mr Brown would have to return that photograph of him at the Eastern Busway, which is funded out of that; so that’s gone. And when we add all of those things up, we come to a $3 billion bill, according, I see, to Thomas Coughlan, who was in the New Zealand Herald today, a $3 billion bill in Budget 2024—and that’s the total of the new spending allowance that is available. So, once again, the National Party think they can promise everything, but they can’t. They cannot promise to cut taxes, to reduce debt, and to increase spending. That is the fiscal Bermuda Triangle—that’s where Paul Goldsmith fell down, and unfortunately for Christopher Luxon and Simon Bridges, that’s where they are falling into that once again, because it’s not possible.

Every single Government has to make tough decisions, trade-offs, when it comes to putting a Budget together, and we believe we have the balance right. Because in this Budget, we are lifting the incomes of low and middle income earners. We have the family tax credit that very nearly 350,000 families will benefit from increases in, we have increased the minimum wage, we have lifted the incomes of those on benefits. We’ve done that because we know those are the communities most affected by increases in inflation and increases in the cost of living. What we don’t need and what this Budget won’t do is deliver an enormous tax cut to people on the highest incomes, because what that would do would be a sign of the priorities of a Government that felt that rewarding those on the highest incomes was more important than making sure that we support and protect those on low and middle incomes, and we actually have decent health services, a decent education system, that we actually build houses for New Zealanders.

Those are the things we have to be getting on with. We’ve got to be getting ahead of issues around climate change to make sure that we meet those challenges and we seize those opportunities. The Budget has to be a balance of all of those things while keeping our fiscal position strong. That is what the Government has achieved over the last four years while supporting people through COVID-19, and that is what this Budget will deliver. The recipe that the National Party are putting forward will make things worse for New Zealand. This Budget will make things better for New Zealanders.

Here we are with the Minister of Finance presenting his Budget Policy Statement, and the most animated he got and the most excited he got about spending billions of dollars of New Zealanders’ money was when he talked about National’s plan. Is it any wonder, because that finance Minister is now in a position where he is defending his right to take billions of dollars out of New Zealanders’ back pockets at a time when they are doing it tougher than ever, and he says he has to make tough decisions. He has to make difficult calls. Well, I’ll tell you which side he has come down on when he’s gone to make those difficult calls. What this Budget Policy Statement sets out very clearly is that he has decided to take New Zealanders’ money and spend more of it than ever. That’s the tough decision that he has made.

So what is the context in which this Budget Policy Statement is published? We are facing a cost of living crisis in this country.

💬 Dr Duncan Webb: Tax cuts are inflationary.

Kiwis are doing it extraordinarily tough, and Duncan Webb may agree with the Prime Minister that there’s no crisis, but let me tell you that the everyday New Zealanders I meet with and the everyday New Zealanders I speak to when I say, “What are the financial concerns you have?”, they don’t say, “I’m really concerned about how I really want Grant Robertson to put billions of dollars into a health restructuring fund and a climate change pet project fund.” That’s not what they say to me, Duncan Webb. What they say to me is, “I’m really concerned that every time I go to fill up at the pump, I feel like I’m being fleeced. I feel like it’s more expensive every time.” What they’re saying to me is, “Every time I go to buy my groceries, they seem like they’re more expensive, and every week I seem to have less money in my bank account than I did the week before.”

💬 Dr Duncan Webb: $2.15 a week.

Do you know why they feel that way, Duncan Webb—and you should have asked the Treasury about it when they came to brief you about this Budget. The reason New Zealanders feel they are doing it tough is because they are.

We have rampant, record inflation at the moment—a record in 30 years—running at 5.9 percent. So prices are getting more and more expensive, but are wages keeping up? No, they are not. Wages have increased at only 2.6 percent, so the truth is that New Zealanders are spending more and getting less. They are facing a cost of living crisis, and it’s not just these costs. It’s things like rents, which under Labour have increased, on average, by an additional $140 a week, so that your typical renter in the past year has seen their rent go up by $50 a week. That is the gift that this Government has given working New Zealanders renting their own homes.

The prospects look even bleaker, because what New Zealanders are faced with over the months that this Budget Policy Statement relates to is not only continuing inflation, continuing increases in the petrol price, and continuing increases in the price of groceries but also ratcheting interest rates. So those people who have saved hard and who have struggled to get into a home will see that their mortgage payments will get ever-bigger and will eat more and more into their disposable income and into the savings they are making for their family. So we have ahead of us, Labour members, difficult times for everyday New Zealanders.

What does the Minister of Finance think is the right response to that reality? Well, he thinks that this is the time to have a record spend-up. He thinks that this is the time to have the biggest operating allowance ever in a New Zealand Budget in history. So I want to ask Dr Webb whether he’s understood where that money comes from, because we on this side of the House understand where Grant Robertson gets his money from. He gets it from hard-working New Zealanders, who, under this Labour Government, have been paying $12.5 billion more in tax than when Grant Robertson came into office. Every dollar that they give Grant, the Minister of Finance, is a dollar that they don’t have to spend themselves, and yet at this time, when they so badly need to keep more of their own money, Grant Robertson’s priority is to put half a billion dollars into restructuring the health system—that’s right; in the middle of a pandemic, he wants to spend half a billion dollars on a back-office restructure—and then he wants to put together some funds for some pet projects for climate change. That is his priority.

Now, he spent four minutes of his speech being very animated about National’s plan, so I’m sure that the Speaker will engage me to suggest an alternative approach to this Budget Policy Statement. That is to actually focus on putting more money in the pockets of New Zealanders who are doing it tough, and National would focus on doing that—it is their money.

Inflation has meant that people are in higher tax brackets. They are paying more and more tax, and Grant Robertson is collecting more and more of their money. So National has said, “Well, let’s be sensible. Let’s make some adjustments to the tax thresholds through modest adjustments so that people who have been caught in higher tax brackets than we ever imagined they would be get some relief.”, and we have put forward a package that would achieve that.

Now, it’s a modest package. Actually, Grant Robertson has given himself a $6 billion operating allowance. We’ve said, “Look, you could achieve this with just $1.7 billion of that allowance—so less than a third of your allowance.” Grant Robertson would still have $4.3 billion left over, which, by the way, would still be the record highest spend-up by a finance Minister in a Budget operating allowance ever.

Our package would achieve meaningful relief for New Zealanders. It would mean that a family with two adults on the average wage would benefit from about $1,700 a year. Now, I’m the first to admit that that’s not going to make anyone rich, but what I also know is that when you’re a struggling family, every dollar counts, and $1,700 is more meaningful than a restructure at the Ministry of Health. For someone on $55,000 a year, on a more modest wage, they would be paying $800 less tax. That is the benefit they would get.

For a couple on New Zealand superannuation—and I don’t know whether members opposite have actually spoken to a superannuitant lately, but I’ll tell you what they have been saying to me. They have been saying, “It’s really hard, Nicola, because super is actually paired to after-tax average wages, and my super is not keeping up with inflation. It is not keeping up with the growing cost of living. I’m on a fixed income. I’m finding it harder to afford the bills each week.” So our tax plan would give them relief. They would see their superannuation payments increase, if they were a couple, by $546, and we think that that shows where our priorities are and where our values are.

So you have to ask yourself what’s the alternative approach that Grant Robertson is suggesting, and we had this hackneyed response today—actually quite intellectually moribund—in which he tried to hoodwink New Zealanders into believing that the choice they face is between having some relief in their material circumstances and having some tax reduction, but the only way that that can be achieved, according to Grant Robertson, is through a slash-and-burn of the health and education systems. I find this despicable, because Grant Robertson knows that these tax reductions that we propose can be achieved and still maintain every dollar that’s being spent in New Zealand right now.

What we have to ask ourselves in this House is: do we really believe that this Government is already extracting maximum value from every dollar of taxpayer money that it spends? I put it to you that the answer is absolutely not, and I want to just run you through the small example of what’s been going on with housing in this country. Here we are with a Government that’s given Kāinga Ora, the State housing entity, an $8.3 billion borrowing facility, and, at the same time, that State housing agency has overseen a quadrupling in the State house waiting list. We have more people in need than ever before.

This Government is spending the money—that’s absolutely true—but is it getting the results for that money? I’ll tell you where that money has actually gone: 1,300 new staff have been hired at Kāinga Ora, more than doubling the number of people getting a Government wage to work in that agency. I’ll tell you where else that money has gone. Instead of actually into building houses, the Government is now spending $1.2 million a day on emergency motel rooms for people that it can’t house because it hasn’t built the houses for them, and what we see is that there are still 52,000 State houses that haven’t been brought up to the healthy homes standards that the Government says every private landlord in the country must meet.

So what we see from those small examples is that Grant Robertson, in asking New Zealanders to believe that he spends their money better than he does, simply isn’t supported by the facts. National can see that this is the time of a cost of living crisis, and we continue to urge the Government to give New Zealanders the tax relief that they deserve.

Thank you, Mr Speaker. The member who just sat, Nicola Willis, asked the question, “Have any of the Labour MPs spoken to a superannuitant?” And let me tell you that I have spoken to a superannuitant, and what that superannuitant said to me is, “Thank you. Thank you for leading us through the biggest financial crisis in a century. Thank you for guiding our country through that crisis. Thank you for keeping us safe. Thank you for keeping us alive. Thank you for the spending—the money that you have put into making sure New Zealanders are protected from COVID.”

She also asked about the results that we’ve been getting from the spending. Well, I can tell you that a 3.2 percent unemployment rate is fantastic value for that money. But I’d just like to join in the congratulations of that superannuitant to our Finance Minister, Grant Robertson. Grant Robertson has done an incredible job at leading New Zealand through this most challenging, this most difficult of both financial and health times. Grant Robertson had our economy at the point where we were able to ride out the COVID crisis better than most countries around the world. Grant Robertson needs to be thanked over and over again for his incredible leadership when it comes to running the Budgets.

Now, I keep saying that my father once said to me, “Doing what is right is not always easy, but it is always right.” And what Grant Robertson has done in guiding us with his Budgets over the last couple of years has been right, because it has kept New Zealanders alive. We did hear from the ACT Party yesterday that they don’t place much value on human life; instead, they have other measures of success, but human life is not one of them. And things aren’t easy right now; we understand that. We understand that New Zealanders have been doing it tough for the last couple of years. But it would have been a lot more difficult if we didn’t have the leadership of both Grant Robertson, in the finance portfolio, and the Prime Minister.

We have protected New Zealanders from the ravages of the virus that takes no prisoners and, if it had been left to run its course, would have devastated our country. And I’ve spoken about my whānau being one in the last 100 years that has felt the impact of the influenza pandemic, when my great-grandmother passed away in 1919—leaving my grandfather and his three equally young brothers without a mother. And as a Government we had a couple of options: one was to do nothing, one was to do a little bit, and the other was to go for broke. And we decided that we had to go for broke because it was the right thing to do. Leaving more boys and girls motherless or fatherless wouldn’t have been right; it would have been a dereliction of duty. So we had to act and we had to act fast, without the benefit of a manual to guide us.

And did we as a Government ever believe that we would receive unanimous support for the path that we took? No, never. Did we as a Government believe that making the hard decisions was going to win us universal adulation? No, never. Did we as a Government ever think that political opponents would see this as an opportunity to belittle and deride everything we did to promote their own personal political aspirations? Of course we did. But we’re up for the challenges, and Grant Robertson has shown that he is up for the challenges, because being belittled and derided by political opponents and those challenged by reality is simply the price a Government pays for doing what is right.

So closing the borders was the right thing to do and lockdowns were the right thing to do and vaccinations and boosters are the right thing to do and vaccine mandates were the right thing to do and wage subsidies were the right thing to do and the COVID-19 Leave Support Scheme was the right thing to do. All of those things cost money, and yet we hear Simon Bridges sitting there, saying that it was excessive. Now, tell that to all the people who would have lost their jobs, tell it to all those workers who were supported, tell it to those businesses who were able to keep their doors open that Simon Bridges and the National Party believed with all their hearts that all that support—that financial support—was excessive.

But we can see light at the end of the COVID tunnel, and winding back those protections safely is also going to be the right thing to do. But none of them have been easy, and none of them have been unanimously popular. There are always those out in the communities who wanted more, and there were businesses that wanted more—they wanted more for themselves, for their niche needs—there will always be those that throw out criticisms and personal insults and threats because they don’t get what they personally want. And those criticisms, those threats, and those personal insults aren’t easy to do deal with, but that is the price a Government pays for doing what is right.

As the finance Minister said, the Government is continuing our work on our wellbeing approach and we’re continuing to make progress against our core goals, and those are: continuing to keep New Zealand safe from COVID-19 and accelerating the recovery and the rebuild from the impacts of COVID-19 and laying the foundations for the future, including addressing the key issues such as climate change, such as housing affordability, and such as the child poverty response. And I as a Māori Minister know how important it is that we supported Māori through COVID-19 and to helping with the future. We created the $120 Māori Communities COVID-19 Fund to support Māori as we moved to the protection framework. And we built on this and recently announced the $140 million to support Māori and Pacific health providers to support their response to Omicron.

And overall, in health, we allocated over $250 million to support Māori communities’ response to COVID-19, and you can also see our commitment to Whānau Ora. Since the onset of COVID-19, this Government has contributed—or has invested, I should say—over $150 million to support the Whānau Ora COVID response. But again, Simon Bridges has said that all that investment in keeping people alive, keeping Māori alive, is excessive. And it goes to show how little value that not only the ACT Party but also the National Party put on human life.

So the strength of this Government is in the way that we work with iwi and other community organisations. And that has been highlighted in the response to COVID-19, where we have met consistently with the National Iwi Chairs Forum, with other iwi leaders not associated with that forum, with other iwi leader groups in geographical-specific areas such as Tāmaki-makau-rau. Even this afternoon, I have another three separate meetings with leaders from those significant Māori groups to continue to see how we can make sure that our response for Māori is successful.

We’ve got to remember: we have had 65 deaths too many over the course of COVID-19—65 too many, but we’ve got to remember that’s not 65,000 deaths that we’re talking about. That’s not 65 deaths a day. The investment that this Government has put into addressing COVID, and will continue to put into addressing COVID, is going to continue.

These results continue our record of delivering for Māori and our record of delivering for our people. This Government has been well led, and this country has been well led, by Jacinda Ardern and Grant Robertson. And I go back to the very first question that I addressed: have we spoken to superannuitants? Of course we have, and they are saying, “Thank you.” We know that there are people out there who are so grateful for the investment that this Government has put into keeping New Zealanders safe, and we will continue to keep putting money into keeping New Zealanders safe, because that is the right thing for us to do as a Government.

E te Māngai, tēnā koutou; tēnā koutou e te Whare. In a flood, you could have 10 people working together to build a boat that would house all of them through that crisis, or you could have one person hoarding nine-tenths of the materials necessary to make that boat, scolding the others for not working hard enough. The boat would not be built. Those rising waters wouldn’t care about who held the most status or the most money. In moments of crises, we tend to realise we’ve got to cast aside the dead-weight ideas that hold us back. Psychologists call the exhaustion and the brain fade that many of us are experiencing two years into this global pandemic “moral fatigue”. It is when things keep shifting and changing, when you’re not quite sure what others are doing, when it feels as though you’re having to think really in-depth about every single step or decision that you make and the potential impacts or consequences of those decisions, when you feel as though you are fighting just to survive.

This brain fuzz is related to the ever-increasing onus that politicians are putting on what we call “personal responsibility”, making excuses for what we have traditionally called “collective or social responsibility” in our politics. This exhaustion has a lot of people rightfully asking, what are we doing all of this for? What are we aiming for? Where are we going and why? For some reason or another, this has some—particularly some in this House—yearning for what they call “business as usual”, because when everything feels as though it is in crisis, when everything feels as though it is on fire, perhaps it’s better the devil we know, right?

But the devil we know, business as usual, isn’t our future; it simply cannot be, and we heard that in the many submissions to the Finance and Expenditure Committee. “Business as usual” is not our future, because it is those very settings that drove the greatest wealth inequality in this country, on record. It gave us the housing crisis. In “business as usual”, Aotearoa New Zealand produces four times the amount of climate change emissions than the limit required to keep our planet under 1.5 degrees of warming. Everybody deserves security and hope to be free from this exhaustion, but we will not get there by focusing on individualistic, short-term ideas, such as those that have been floated by the Opposition. It is that kind of thinking that has created this exhaustion in the first place. It is only by working as a collective—the infamous team of 5 million—that we will create security and hope and a better future for all of us, it is in realising our strength and working together and pooling our resources to do bigger and greater things than any one of us could do by ourselves.

We hear a lot about the economy, but we don’t tend to hear a lot about what the economy actually is. We’re told that we’ve got to sacrifice for this economy to get our economy back on track. That basic, boring story neglects that the economy is all of us—our relationships with each other, the things that we create, our planet and its resources—

💬 Simeon Brown: Oh!

CHLÖE SWARBRICK: —the time we spend at work, unpaid labour—such as parenting, Mr Simeon Brown—the skills that we learn, the problems that we have, and the ways that we decide to fix them. It’s about how we work together to achieve our communities’ and our country’s goals and aspirations. It is supposed to serve us, not the other way around.

The late, great Jeanette Fitzsimons said in her 2006 state of the planet speech, “If the task of government is to promote the well-being of all people, how could it do that? I suggest to you that it has everything to do with offering a vision for a better way of life rather than more growth; it has to do with inclusiveness, with justice, and with protecting our commons—our common environment and resources, our common culture, our public health and our education systems.” Jeanette’s challenge was to question what we call the economy. What are our goals and who do they serve? What is economic growth really working towards? Is it protecting our planet? Is it protecting all of our people? She suggested that those most in need were not the benefactors of economic growth, and, unfortunately, the data proves her correct.

Since roughly the time of that speech in the early 2000s, we have seen the price of basic necessities skyrocket faster than overall inflation. We’ve seen soaring house prices, yawning wealth inequality, and, as the Child Poverty Action Group submitted to the Finance and Expenditure Committee, persistent levels of child poverty. It is clear who the economy and its rules are currently working for.

So when we hear the words “the cost of living crisis”, we need to question, like I hope we question all political rhetoric, what that statement actually means. At what point are we willing to call inflation a cost of living crisis? Is it 4 percent, 5 percent, 6 percent? Statistics New Zealand’s household living-costs index shows that those with the least wealth in Aotearoa have experienced, roughly, double the rate of inflation as those with the most for many years. It is an inequality crisis. The lowest-income New Zealanders, the half of New Zealand who own just 2 percent of the wealth in this country—this is a “business as usual” crisis.

So what causes this inflation and what does it suggest about our policy response? Well, the Treasury told our committee that it’s a complicated story, including COVID-related disruptions to supply chains, rising oil prices, elevated wages, and cost pressures. As with all stories, however, there is a long and important part that is left out, cultural norms that are assumed, because hidden within that story of inflation is one of economic power and growing inequality. Just yesterday, the Commerce Commission report into supermarkets plainly describes the sector’s excess profits. KPMG’s annual review of the financial sector showed pouring fuel on the fire of the housing crisis helped commercial banks in this country rake in the highest profits that they have ever seen. Economists have suggested that, as a result of the choice to heavily rely on unconventional monetary policy over the last two years and high trust supports only for the big end of town, we’ve seen an acceleration of a nearly trillion-dollar wealth transfer to the wealthiest in this country.

In response to this cost of living crisis, the Opposition have revived their old faithful trickle-down economics, floating tax cuts, cuts to spending, cuts to workers’ and renters’ and beneficiaries’ rights—straight out of the 1980s tax book—playbook, rather. These aren’t solutions; they are once again declaring a war on the poor, which is why I implore the other side of the House, Labour, to stop playing by this tired neo-liberal playbook. The Nats will always be able to argue that they will tighten up the books. It’s because they don’t care about the people and the planet that they have to sacrifice to get there.

So about that—planets—which has been on the back-burner, literally back-burning while too many politicians and commentators pretended as though, after we got through this recent pandemic, we’d just go back to business as usual. The House finally declared a climate emergency just after the 2020 election. As the member who initially almost got kicked out of the House in 2019 for trying to press that motion, I am fundamentally dedicated to ensuring that the Government is accountable to that symbolic declaration. But, unfortunately, at the end of last year, in the name of the COVID-19 crisis, this House passed a law which delayed the introduction of the inaugural emissions reduction plan. As I said in the Finance and Expenditure Committee reports back then, and I’ll repeat today, the Government has given itself time to get its plan right and must use that time to work with submitters and others to make sure that the emissions reduction plan is the best it can be. Anything less than a Budget that delivers on the necessary investment to implement the emissions reduction plan will not be enough.

So here we are, eight years away from a point at which scientists said global emissions had to be half of what they were in 2005, and a little over two months away from the emissions reduction plan and the climate budget we were assured would help get us to that point of action. The Greens have used every ounce of leverage and power to enable necessary transformation to happen. The emissions reduction plan is itself a product of the change that we brought to Government in the last term, born of the grassroots-inspired zero carbon Act, every dollar of the Climate Emergency Response Fund, as a result of the changes that we have made to ensure that the biggest polluters start to pay for the harm that they have caused to our planet. Is it enough? No. It will never ever be enough until we have curbed emissions below 1.5 degrees necessary for our survival. Responsibility now rests, however, for better or for worse, with Labour Ministers sitting around the Cabinet table, finalising what happens within their sectors.

Past leaders have, as Paul Hawken said, “stolen the future, sold in the present, and called it GDP”. Nearly 100 years ago, in the wake of traumatic world wars, this Parliament decided to do something radical: it built the social safety net. In the subsequent decades, we have seen successive Governments at their worst tear holes out of that, and, at their best, only make minor repairs.

This Budget must be a Budget for an economy that serves both people and the planet. We cannot afford anything less, because people and the planet are, frankly, exhausted and we’re organising.

I rise on behalf of ACT in opposition to the motion that the House take note of the Finance and Expenditure Committee’s report on this Budget Policy Statement. I would much rather that the House took ACT’s minority view, which I have to say is an excellent view of the Budget Policy Statement, and if we were to take that then this whole country would be on a much better trajectory. Why is that? Well, the first thing it points out is that taxation under this Labour Government has increased. How much exactly? Well, for every person in this country, adjusted for inflation—which is considerable, and we’ll get to that—taxation has increased by $2,138. That’s from the middle of 2017, when this Government was elected, to the middle of last year, the last financial year that we had. It will have gone up more since last June. Every person, from every six-month-old baby to every retiree—if you take the amount of tax the Government’s taken and divide it by the number of people, it’s taking $2,138 more than it was four years ago, adjusted for inflation.

A lot of people say, “Well, I don’t mind paying tax so long as we get some quality of service out of it.” A lot of this Budget Policy Statement—well, the Minister says and the chair of the select committee says it’s about a Wellbeing Budget. “We’re improving people’s wellbeing.” Where oh where is the evidence for that? We’ve got Kelvin Davis here in the House. He’s the Associate Minister of Education, allegedly. We have to ask ourselves what has been the performance of the education system? What have we got from the 1,300 extra bureaucrats that have been hired by—

💬 Hon Kelvin Davis: You obviously don’t understand kura kaupapa or kōhanga reo.

And I want to say to Kelvin Davis—he’s taking off his mask to heckle me. Now, he should talk to the Minister of Health and ask what are the rules for taking one’s mask off. Naughty boy, Kelvin Davis. He should follow the health rules, and at least if he was doing that it would make up for his performance as the alleged Associate Minister of Education. What’s been happening on his watch, especially in Te Tai Tokerau, in the electorate he represents, is fewer kids are showing up to school, fewer of them are passing, fewer kids are prepared, and that’s before the COVID response required them to take all that time off school. So there we go.

💬 Hon Kelvin Davis: What do you know about kura kaupapa? What do you know about Māori-medium schools?

And here he goes again.

So what have we got in education for 1,300 extra Ministry of Education bureaucrats, all paid more than a teacher at the top of the scale? Nothing; $2,138 extra, and education is going backwards. We’re going backwards in the Programme for International Student Assessment. We’re going backwards in the Trends in International Mathematics and Science Study. We’re going backwards in the Progress in International Reading Literacy Study. Every one of the measures of how well our kids are prepared to navigate the 21st century is going backwards, including whether they even show up to school in Te Tai Tokerau, where the alleged Associate Minister of Education lives and purports to represent.

Then we come to healthcare. What’s going on in healthcare? Morale is at an all-time low; $2,138, and can we deliver even a couple of dozen more ICU beds in the middle of a pandemic? No, we can’t.

Then we ask: what’s going to happen next? Well, the facts are that New Zealanders face a crisis in the cost of living—a cost of living crisis, as we’ve been saying since December. It’s become so popular to say it that I’ve heard other people start to say it lately. There is a crisis in the cost of living, and the solution is simple. If the Government can’t control the price of oil, and if inflation is all coming from offshore as they say—well, that’s not quite true, but at least the Government could stop profiting off it, because what happens right now is the price of a litre of petrol goes up, and people pay at the pump, but you know what else they pay? The Government doesn’t mind, because they’re getting their 15c in extra GST.

So when people say that the cost of living has gone up $5,000 in their household for their groceries and their petrol, and the Prime Minister—she’s a bit like that Supertramp album, Crisis? What Crisis? Well, actually, there is a crisis for those people, because they can’t make ends meet. Of that $5,000 extra that people are paying at the pump and at the checkout, how much of it is being taken by the Government? Well, the Government’s happy when prices go up, because they’re getting 15 percent in GST. The Government’s happy when the price goes up, because if people do get a pay rise, they go into a higher tax bracket.

The ACT Party says the solution to that is simple—not to give a few dollars more, to quote that old Western movie. The question is whether we’re going to cut taxes by $2,000 on the average earner—take that 30 percent tax rate right down to 17.5, and give the average worker back a bit over $2,000. You know what’s interesting about that number is that that’s what the increase in taxation has been on the average New Zealander. It doesn’t seem too bad.

Then the Prime Minister gets up—and there’s Kelvin Davis. He’s taken his mask off again. I hope he’s not going to say anything, because it hasn’t worked well for him before when he’s opened his mouth. Then they ask, “Oh, but if we don’t spend all this money, we won’t have any health or education.” That’s simply rubbish. Every single household in this family is having to reduce their spending as the prices rise. They have to tighten their belts. They have to make economies. They have to save money. They have to sometimes choose if they put one thing in the supermarket trolley or the other. Some people are taking things out when they get to the supermarket. They have to decide if they can fill their car right up or maybe just put 50 bucks in this week and drive really carefully. Everyone else is facing those realities. Do you buy extra clothes for the kids this week or put it off to next payday? Everyone is facing those realities, but not this Government. They say if we spent one dollar less, oh, there’d be no more hospitals. Yeah, right! It is simply not plausible.

So let me tell you what needs to happen in this Budget and future Budgets. This Government is going to have to start coming down to earth and facing reality like everyday Kiwis already are. If they’re having to tighten their belts, if they’re having to make savings, guess what! The Government’s going to have to too. It’s going to have to stop standing up in the House and saying, “Oh, we’re so, so tight. Tax revenue only went up $14 billion last year. We’re only taking an extra $2,138 for every New Zealander since we got into power. We couldn’t possibly find any kind of savings. You guys will have to do that. There’s no crisis. You guys save. You guys deal with the rising prices at the petrol pump and at the checkout, and this Government will just keep taking the tax because we couldn’t save anything.”

Well, I say to this Government that they’re going to have to find that, actually, they are wasting money. They’re wasting it by the billion. They need to stop wasting New Zealanders’ money on things like Kāinga Ora, which has a $2 billion fund of money that they’re borrowing at the taxpayers’ expense to go out and bid for land and bid for builders and project managers and materials—anyone seen any GIB board lately? Kāinga Ora are going out, buying it all up with taxpayer money, and they’re actually bidding up the price of housing. That’s how insane this Government is.

What about the bike bridge? No one wanted it except for old Michael Wood over there. He wanted it, but then he got some polling and he discovered he was all alone, so he cancelled it. You know what? The sad thing is for the New Zealanders that have to pay 50 million bucks so he could design the fantasy. It’s a very extensive fantasy, but nothing compared with this train set down Dominion Road that no one even knows why it’s there. He knows politically he’s got to build something but he doesn’t know if it’s to get to the airport or to intensify Mt Roskill. He doesn’t know if it’s actually being put there in order to go through Mt Albert or Dominion Road or above the ground or under the ground. He doesn’t really care, as long as he builds something. It’s the most purposeless, directionless infrastructure project in the history of New Zealand. It’s going to cost $15 billion, and that’s before the price escalations occur.

There’s no shortage of activity that is pointless and wasteful and that could be reduced just as New Zealanders are having to save their money with the cost of living crisis it’s facing every day. The Government’s going to have to make some economies too. We’re very happy to show them in this Budget how they could save money—how they could cut that middle income tax rate of 30 percent that you pay from $48,000, drop it all the way down to 17.5 percent, and give $2,000-plus back to the average earner to make up for the $2,000 extra that this Government is taking off every single New Zealander. Thank you, Madam Speaker.

Before I give the next call, I do want to remind the member who has just resumed his seat, and all members, that you are allowed to take your mask off momentarily to take a drink of water, and I do not actually need a running commentary on who is having their mask on or off as you’re making your speeches.

Point of order, Madam Speaker. Actually, members on both sides of the House have pointed out at various times that members have not been wearing their masks, and Speakers have actually admonished them for taking their masks off and heckling. I don’t see how it helps the order of the House for you to point that out to me when I’ve done what everyone else has been doing, unless you are actually trying to admonish me for something everyone else has done, which seems highly selective and unfair.

Yesterday, I actually did point out a member of the member’s own party but I didn’t call out their name. Someone actually pointed out to me that that member had, after giving a speech, sat there without a mask for several minutes—

💬 David Seymour: Were they heckling?

ASSISTANT SPEAKER (Hon Jenny Salesa): —and I chose not to name them. That is actually what I’m trying to do here. I do not need for you to actually talk at me while I’m addressing you.

Mālō e lelei, Madam Speaker. It is really good to have you back in the House. Unfortunately, there is no mute button when you’re in the House. So unlike the contribution from the member before, it would have been good to be able to press the mute button.

So it’s great to be able to take a call on the Budget Policy Statement and to recommend that the House note the report. As a member of the Finance and Expenditure Committee that reviewed the Budget Policy Statement, again, can I add my thanks to the 46 submitters who came and provided submissions on the various points within the statement. As members will be aware, the Budget Policy Statement commences the Budget cycle and sets out the Government’s strategy and policy goals for Budget 2022, which is on 19 May this year.

I think, though, what is most important about this year’s Budget Policy Statement is the very first sentence in the forward by our Minister of Finance, the Hon Grant Robertson. This forward was written in December 2021, and I quote, “Budget 2022 is being written in the continuing shadow of the COVID-19 pandemic. Around the world as countries seek to open up, a fourth wave of the virus is taking hold and the Omicron variant has emerged. In New Zealand we are managing our transition to a new framework to minimise the effects of COVID-19 and protect our population as vaccination rates increase and we seek to reduce restrictions.”

The Minister is certainly showing his Nostradamus qualities very strongly on many platforms, having successfully picked the Opposition leadership and finance spokesperson change in his speech on this debate back in April 2021. Yes, in April 2021 he picked Christopher Luxon as the Leader of the Opposition and Simon Bridges as the finance spokesperson. But perhaps it is less about being psychic but, actually, more that the Minister is a careful and prudent Minister of Finance, having carefully drafted the Budget Policy Statement that reflects the Government’s strategy and has proven to be a successful approach to managing the health impacts of this virus whilst still keeping the economy going.

Budget 2022 will make progress towards the goals the Government set at the start of the current parliamentary term, and the submissions received on the statement support these goals. Briefly, they are: continuing to keep New Zealand safe from COVID-19; accelerating the recovery and rebuild from the impacts of COVID-19; laying the foundations for the future, including addressing key issues such as our climate change response, housing affordability, and child poverty. As noted in the statement, we are lifting the operating allowance to a one-off $6 billion per year for Budget 2022 to invest in major programmes. The allowances will then reduce to $4 billion at Budget 2023, and then $3 billion in Budgets 2024 and 2025. This increase is designed to ensure we forge ahead with the major reform programmes that will have long-term benefits for New Zealand. The remainder of the allowances will cover significant cost pressures and fulfil our manifesto commitments.

I’d like to spend a moment on one of these key reforms, and that is the health reform. There is need for substantial investment to ensure that Health New Zealand and the Māori Health Authority are established on a secure and stable footing, and are able to address the pressing health sector needs. For Pacific people, the greater focus on primary and community care will serve us well. There is longstanding evidence that the DHB-based system has not delivered equitable outcomes across the country for Māori and Pacific peoples, and particularly for those in rural areas. Māori and Pacific people are twice as likely to die young from conditions that could have been treated, and being Māori or Pacific determines what sort of treatment you receive. The establishment of a new Māori Health Authority to drive hauora Māori and commission health services directly in the creation of a dedicated public health agency are the steps that we’re taking to reduce fragmentation, address the challenges caused by historic underfunding, and support the structures that will enable the health system to improve outcomes for New Zealanders.

The healthcare service that a person receives should never be dependent on where you live. In our future health system, instead of that postcode lottery which determines the care that people can access, we will have a better balance of national consistency for hospitals and specialist services, and local tailoring of primary and community care. This will improve care quality and equity, while ensuring the services you receive close to your home reflect the needs of your community.

But what concerns me the most is the alternative as argued by the opposite side of the House. The Opposition has proposed tax cuts to the top rate, but the maths to pay for this doesn’t add up. Now that they want to spend the operating allowance, the problem is they have not accounted for future years. The $3 billion cost expected in 2024 and 2025 for their tax cuts would eat up all of the $3 billion of new operational expenditure for future years, which I set out earlier in the speech. This would leave no room to increase expenditure on the likes of health, as our population ages; education; or salaries for nurses and police.

And yet, unlike the other side of the House that sees the mentioning of the cost of living as a KPI for their MPs, as noted by Chris Penk yesterday in one of his speeches, we on this side of the House, though, have worked consistently to increase and focus support for low and middle income earners since we came into this Government in 2017. That’s why we’ve seen a $5 increase in the minimum wage, benefiting around 300,000 workers. That’s why we’ve increased Working for Families changes that would lead to 346,000 people better off by an average of $20 each week. That’s much more than the $2.15 proposed for those on lower-income rates. We’ve created the winter energy payment, starting again on 1 May, benefiting over a million New Zealanders during the winter months. We made the largest across-the-board increases in benefit income since the 1940s. And probably something for the ACT Party, who noted that we haven’t done anything for primary school teachers, well, since 2017, there’s been a 16 percent increase for primary school teachers. We’ve increased the pay of new police officers by 19 percent since 2017, and 21 percent for new nurses. The Government’s plan is providing targeted support to New Zealand families to deal with the cost of living, while also investing in critical services and, importantly, keeping a lid on debt.

So I summarise my contribution: Budget 2022 is being written in the continuing shadow of the COVID-19 pandemic. The Government’s strategy has proven to be a successful approach to managing the health impacts of the virus while keeping the economy going. This will be our fourth wellbeing Budget, and the Labour Government is committed to achieving its policy goals using an approach that’s designed to drive investments to improve New Zealand’s living standards by tackling longstanding system challenges as well as addressing the pressures immediately in front of us. Wellbeing means giving people the capabilities to live lives of purpose, balance, and meaning to them. As the Minister of Finance has said earlier today, there are no easy choices when you’re in Government, and we believe we’ve got the balance right. Thank you, Madam Speaker.

The next call is a split call. I call the Hon Louise Upston.

Thank you, Madam Speaker. The Budget Policy Statement is of course about priorities and that’s what this debate is and why this side of the House does not support and will not support Budget 2022. I want to give a couple of reasons why, because the third area of priorities says this: “Laying the foundations for the future, including addressing key issues such as … climate change response, housing affordability and child poverty.” This is a Government that’s been in 4½ years; you’re only just starting to lay the foundations of the two biggest challenges—actually, the three biggest challenges—that Ardern has gone on about for five years. I want to pick on two of them.

The number I want the House to remember today is 100,000, because Ardern promised 100,000 KiwiBuild homes—admittedly within 10 years, but they’re nowhere near that. But what has happened with housing affordability? We’ve seen the average house price now go up by $400,000, and for the thousands of renters across New Zealand, their average rent has gone up $140 a week, which is a direct contribution to why we have a cost of living crisis. The other 100,000 that I want people to remember today is the 100,000 children that Ardern promised to lift out of poverty. How’s that going? She promised to lift 100,000 children above 50 percent of the median income by 2020. It’s now 2022 and it’s got worse. There are now over 100,000 children—100,400 by the way—so she has failed to deliver her promise to lift children out of poverty. So the other side crow all the time about their wellbeing Budgets, but what has it actually done for children in poverty on the measure that the Prime Minister herself put out there?

In contrast, Christopher Luxon outlined a speech on Sunday in his state of the nation address, which clearly stated the realities of many New Zealand families today with a cost of living crisis. Petrol in Wellington—$3.50 a litre. So for those of us sitting in the House, it probably doesn’t make too much difference for us, but there are hundreds of thousands of New Zealanders that dread pulling up to the petrol station now, and they dread going to the supermarket for the very reasons that the cost of living is going up and is going up far faster than wages.

So that’s why a very sensible, practical policy is actually giving New Zealanders a bit of tax relief, actually keeping more of what they earn. The other side tends to forget that when we have this big Budget Policy Statement and there’s $12 billion - plus extra coming in tax, Grant Robertson rubs his hands with glee because then he gets to decide how to spend the money that hard-working New Zealanders have earned. So this side of the House says quite simply that in the middle of a cost of living crisis, we should enable more New Zealanders to keep more of their own money and make decisions for themselves. This side of the House trusts New Zealanders. We trust New Zealanders to make decisions about themselves, about their families, about their businesses, and about their communities.

The other side, as I remind the House—100,000 KiwiBuild homes was going to be a critical part of improving housing affordability. Well, that’s a fail. That’s four years of failure from Labour. On child poverty, 100,000 children would be lifted out of poverty by 2020. It’s now 2022, and that’s an absolute abject failure. But who pays for that? It’s the children in the very households that we’re talking about. The cost is on them, and this side of the House knows we should support families to support themselves.

I call on Debbie Ngarewa-Packer, who is connecting with us remotely. Debbie has five minutes.

Tēnā koe e te Pika. Tēnā tātou e te Whare. I stand to speak on behalf of Te Paati Māori in this debate on the Budget Policy Statement. There’s been much kōrero in this House about the cost of living crisis, and the reality is poverty, of course, from out-of-reach costs of living has been affecting tangata whenua for a very long time. We acknowledge the latest child poverty stats which showed a downward trend in the last three years, but material hardship for Māori, Pacific, and disabled tamariki and their whānau remains the same. So, yes, as our Minister Kelvin Davis states, New Zealanders are doing OK, but Māori tangata whenua, tangata moana, and disabled whānau aren’t.

Now, one simple solution would have been to adopt the 2019 Government’s Welfare Expert Advisory Group recommendations. It didn’t, and now two years of COVID has exasperated these cruel hardships, and whānau who may have been keeping their heads above water are now caught in the tide of disparity. And please stop the peacocking, Minister Davis; stop acting as if the Government saved this nation from COVID. So you should be funding Māori response efforts—they saved your nono and are our Government Tiriti partners. Stop looking for praise for doing what should have been done. It’s Māori faces that were on the front line, still is, and has always been. It’s Māori faces that make up essential workers. It’s Māori faces that make up Hauora, Whānau Ora. When we look at this, it’s Māori faces that should also be receiving the recovery from COVID investment. Five dollars for butter from a cow on our whenua; kai, housing, fuel from our whenua, no increased income, rising inflation—undeniably, our people are hurting.

The last two years, we’ve seen a huge wealth transfer from the poor to the rich. As economist Bernard Hickey has reported, the Government’s COVID policies made the rich $952 billion richer, while the poor were forced $400 million further into debt to the Government. Low-income whānau now need more than twice as many food parcels as they did before COVID, and I see on the ground the whānau choosing to travel to town to get groceries and not another trip to attend doctors, specialist appointments, or vaccination. The Leader of the Opposition claims to care about the cost of living, while at the same time proposes to make this wealth transfer even worse through his new tax cuts for the rich policy. Prime Minister, e te Pirimia, it is absolutely a cost of living crisis that will create a pandemic of poverty.

This couldn’t be more obvious in the housing market where we’re seeing the biggest wealth transfer in generations from hard-working whānau to the greedy property class. Since 1986, the number of Māori forced to rent has increased by 88.3 percent; 70 percent of Māori cannot afford homes and they’re living in rentals. One-third of Māori live in a house considered damp or overcrowded. Māori make up 50 percent of the waiting lists for social housing; 30 percent of Māori pay rent that is over 30 percent of their weekly income; and 33 percent of Māori will shift residence every three years. At the same time, there’s 191,646 unoccupied ghost houses; this is in 2019, by the way. At least 12,000 tangata whenua are homeless in their own whenua. This is an absolute disgrace, and fixing it should be our Government’s top fiscal and economic priorities.

We have generations of whānau who will never be able to afford to buy a house in this market, and we’re holding them to hostage with the very real prospect of homelessness. There are solutions to housing crisis and inequality, including taxing unearned wealth through capital gains and ghost house taxes—“Horror, horror!”, I hear some of you say. We must tighten up bans on foreign ownership and guarantee houses for citizens and permanent residents. We will fight and support to increase the construction of State houses and rent-to-buy placements while enabling papakāinga housing at scale through regulatory reforms and increased investment, and stop all sales of freehold land to offshore foreign interests. We will also support low-income whānau by actually lifting their income. It is clear that we need to double baseline benefit levels and student allowance and increase the minimum wage to $25 while tagging increases in the cost of living.

We are a low-wage economy with insecure employment. These policies will support whānau. They will stimulate the economy and help businesses as their whānau have to spend everything they earn while the rich hoard their wealth in trusts, housing, and investment schemes. It’s time for a radical solution to address this shameful crisis. It’s time for a new approach to economics. We must put people and the environment that sustains us first, second, and last. Nō reira, tēnā tātou katoa.

💬 Andrew Bayly: Madam Speaker?

The next call is a split call and they are both connecting with us remotely. You’ve got up before your time, Andrew. I call on Anna Lorck.

Thank you, Madam Speaker. As I Zoom into the House from the Hawke’s Bay, I do so having just read the headline “Reasons for optimism for Hastings”, following the release of its economic report card yesterday. The timing, as I take a call on the Budget Policy Statement, could not have been better, because it demonstrates that, even while the impacts of COVID-19 restrictions are being felt here locally, with Omicron sweeping through the region, Hastings’ economy is performing, and continues to perform, very well. It proves that the health response our Government has taken is the best response for protecting and growing our economy across New Zealand, for keeping people, wherever possible, in work, and business in business. This Budget is laying those foundations for the future—a future that, according to the National Party, is nothing but doom and gloom. But not in the Hawke’s Bay, and I am sure other regions are optimistic too. We are seeing businesses investing here at record levels, not retracting. And, if you visit, you will see, before your eyes, groundworks and new buildings occurring almost every week. There has been a phenomenal 59.6 percent increase in non-residential consents. That is a demonstration of optimism for the future.

Now, that does not take away from those business owners and their staff, especially our retail and hospitality sectors, who have found, and are still finding, it incredibly tough. But let me say, with as much optimism as I can muster from Hastings, we will get through it, because growing jobs, growing work opportunities, better wages, and keeping people in jobs and keeping the work coming in, matters for the people of New Zealand. That’s why we need to keep building strong, resilient regions, which the Budget Policy Statement does. I know, as we move forward in the recovery, it will be the provinces of this country that will come into their own. I have demonstrated that, in Hastings, this is an excellent example of the focus our Government has and the commitment we have to the regions. We have seen record Government investment, millions and millions of dollars coming in to help back the Bay, in partnership with council, iwi, and business, for infrastructure projects that will continue into the years ahead, as we keep building more affordable homes, investing in climate change projects for our regions, and in health reforms.

But, I’ve got to say, as a regional New Zealander who has always fought hard to get our fair share of Government investment, hearing the Opposition leader telling us he’s going to cut the Auckland regional fuel tax can only mean one thing, and that is that he and his National Party have not changed and they will be deserting the regions again. National forgot about the regions last time they were in Government, and they are clearly signalling it again, because if Aucklanders don’t have to pay for their region’s roading infrastructure problems, unfortunately it means the rest of us will have to pick up the tab, which will then mean there will be less money to go around for our regions’ roads, and our desperately needed infrastructure projects will be cut across town and country. We will end up right back where we were a decade ago, with a two-speed economy. That’s what happened under National because National neglected the regions. But, in Budget 2022, this Government will continue to keep giving them space to accelerate their recovery and rebuild from the impacts of COVID-19, and will lay the foundations for the future. It is the regions who help grow this country, and that’s what our Government is backing. Thank you, Madam Speaker.

It was an interesting submission process and it was an absolute pleasure to listen to the submissions, but, at the end of it, what I was left with was a very strong respect for our finance Minister and the leadership we have. The Budget priorities were ones that were utterly grounded, and they were grounded in the lessons learnt in the pandemic and in the values of the Labour Party. One of the things that will get money is heath, and it will get quite a lot of money. And it needs it. It needs it because it was ground down and ground down and ground down, and then we faced a pandemic. It was a very serious thing.

I used to work as an employment lawyer, and at one point I was negotiating out at the Canterbury DHB, and I was shocked to hear that that DHB received less funding per patient than anywhere in the country. It was our poorest people, and they were not getting the same service and funding that other people were, and that’s really quite despicable. I’d ask the Māori Party that complained that this hasn’t been a responsive Government to think about that, because that’s exactly the kind of thing that this Government’s done, which that party did not do when it was in coalition with the National Party. That National Party eroded the benefit. It eroded wages. It didn’t agree with the kinds of things that we’ve done in terms of the minimum wage. The minimum wage has gone up and that is a wonderful thing, because those are the workers that I used to work for and they need it desperately.

I find it very rich when I hear from the National Party the claim that they are actually looking after low and middle income New Zealand. Look at the suggestion they’ve made as a counter-proposal—it would deliver to our richest people thousands and thousands of dollars, and hundreds of dollars, perhaps, to our poorest. That is nothing in comparison to what this Government is actually delivering to low-income New Zealanders. They actually find it bad taste to have people who are talking about that as a way of dealing with a cost of living surge, because this, at the present time, needs things that are targeted. What the National Party is suggesting we do is highly inflationary. It would hurt a lot of people. It pours money in an untargeted way and it gives it to people who don’t need any more, and it doesn’t give it to the things that are needed.

What the finance Minister is prioritising are things like paying back the debt of our DHBs. That isn’t inflationary. That’s a very different thing. It’s actually putting money aside for the climate change response. It’s being long term in its thinking, and studious, and those are things that need to be done. I would ask the party that tends to chip away and suggest that there is something they might do better, I ask them to think about that. This is a Government that has actually backed our working families. It has made 346 families better off by an average of $20 a week. And that’s just one of the many things it’s done. It has implemented many of the Welfare Expert Advisory Group recommendations. It is not something where you can just say it hasn’t, because it’s just not true—it has done that. And it will continue to be committed to those people.

I’d like to talk for a minute about the interview I heard this morning with Christopher Luxon on Radio New Zealand National. He was blaming inflation on Government spending, and the interviewer asked, “Well, give us an example of this.”, and the example he gave was light rail, and the interviewer rather politely pointed out that that hadn’t happened yet, so it couldn’t really be responsible. Then the argument he gave was, “Oh, it’s all the bureaucrats that have been employed.” I thought it was very disrespectful thing to say because Mr Luxon works in an environment where he sees the impact of the people that are in the Public Service, and that Public Service delivered a whole range of things in a crisis, and they work very hard.

We had the Auditor-General in and he was talking about how well the Public Service had coped with the crisis, and how hard people had worked. I agree. They worked on things like the wage subsidy in the Ministry of Social Development, and—

Order! The member’s time is up.

Thank you, Madam Speaker. I’m glad you brought that to a close—I don’t know what the speaking notes are that the Labour members have been given, but I do know the first thing they’ve got to say: they’ve got to praise the finance Minister. That’s how you get ahead, that’s how you get back in in 2023, because we know we might lose one or two on the way, which would be most unfortunate.

But the other thing is that this argument that everything is inflationary if you do a tax cut, but no other expenditure is ever inflationary, that is something I’m going to turn to later in my contribution. But it is a pleasure to be talking on this Budget Policy Statement. I think it’s ironic that it is called a “wellbeing Budget”—the whole ethos of this document is about discussing about the human capital, natural capital, social capital, financial and physical capital. And it all sounds great. I know the Labour Government, and certainly Grant Robertson, loves talking in these wellbeing terms. However, it’s interesting, if you turn to social under the social capital, top of page 12, first thing we talk about here is social cohesion. Well, I’ve got to suggest to you that right now New Zealand is the most divided it ever has been, and that is as a result of four years of this Government. We are so divided in New Zealand and this wellbeing Budget—so-called—in this document I think will be the defining issue of this Government when it finally gets out of office. We will have to deal with the economic consequences of what’s gone on, and I will talk about that in a minute, but the lack of social cohesion, the amount of division that now permeates New Zealand, I think is palpable and is probably the most damaging thing that this Government will ever be remembered for.

But it also, on the very next page, talks about the impact of what’s been going on over the last 22 months. Of course, we’ve had these glowing reports and we heard the member from Hawke’s Bay talking just before about how it’s all good and great and fantastic. The reality is it has been devastating for many businesses and for many of their employees and for many of their suppliers. And guess who does that! That’s people. And, of course, we’ve had the tourism industry just decimated; $15 billion worth. We’ve had the international student market devastated; roughly $5 billion worth. I’ve been talking to the hospitality industry, the Restaurant Association, the Franchising Association, and, of course, the arts, which are all areas that have been absolutely decimated. Of course, if you listened in and heard what many members—from the Labour Party, in particular—were saying, “Everything is fine and dandy, and just wait, because we’ll just keep investing more money.”

But the reality is: for many New Zealanders, it really is hitting them in their back pocket. We’ve heard wages have risen by 2.6 percent, but at the same time—with inflation this year at 5.9 percent—there is an impact, a direct impact in the spending power of ordinary New Zealanders. That means they have less money to spend on their families, buying the groceries, all those types of things. It’s interesting, I was just looking at my phone before, there’s a report that’s just come out on Newshub, from a lady talking about—she has a family of five children; she’s saying that it’s costing her between $4,000 to $5,000 as a result of an increase in food, rent, and fuel. And it is crippling, because the people that the Labour members talk about, the ones who are on fixed incomes are the ones that have little discretionary income—certainly, the vulnerable and the lowly paid. That is why the poor Government policies that have been put in place that are driving up prices are hitting the very people that they claim to represent and, literally, people who have less money in their pocket.

Of course, that Consumers Price Index has been driven by these Government policies. You know, if you have this—and we had it in question time today, the Hon Paul Goldsmith asking the Minister of employment about the issue about raising cost of living, cost of wages, increasing holiday pay, and increasing number of holidays, all that has an impact. If you go and talk to my growers in Pukekohe, the cost of labour is a major factor and that is as a direct result of Government policies. Of course, what that’s led to is the Reserve Bank now being forced to deal with the issue of inflation, partly driven by Government policy. Of course, now we’re going to see the official cash rate go up, and as ANZ said the other day, they think it will be about 3.2 percent within the next year or so. And so that is why—it’s going to feed into mortgage rates and, of course, we now know that for someone who has a million-dollar house, and let’s say they’ve got a $600,000 mortgage on it, their interest costs this year will be up by another $7,000-odd. So you put that on top of the $4,000 to $5,000 on fuel and those other ones. It is a massive hit to the back pocket of hard-working New Zealanders.

So what’s the Government’s approach been? Well, it’s just been to spend money, and gee doesn’t Grant Robertson love doing that. It is unbelievable. What people don’t realise is that over the last 22 months, Mr Robertson has doubled the debt in New Zealand. It has gone from $60 billion to $120 billion. He’s doubled it. That is a record. I can’t find evidence of any other finance Minister who’s had the title of doubling the Government’s, the country’s debt in less than two years. And he thinks it’s great. He’s going to do the massive additional $6 billion of allowances this year, $4 billion the following year, and $3 billion the following. That is on top of the existing allowances. So this is even more money than had been previously planned for and allocated to deal with the increasing costs of health, education. What he’s done is taken an extra bite of money and put it on top of all of those other allowances that have previously been assumed and budgeted for.

So we’ve got Mr Robertson wanting to spend money—he’s good at it, there’s no doubt about it—but we’ve also got the ability of this Government to keep increasing the tax revenue. And what people don’t realise is that the Government’s tax revenue will increase by an extra $20 billion in four years’ time. So it slowly goes up—in four years’ time, the Government will be raking in $20 billion of extra spending in that one year. Of course, in the next year, under the current arrangements, that will rake in probably $20 billion to $24 billion, compared to today, of additional tax revenue. That’s why he thinks he can keep spending the money. What National is about is saying—not about tax cuts, and the Labour members love to characterise this as a tax cut: it’s not a tax cut. What we want to stop and reverse is all the additional taxes that the Government has imposed on ordinary New Zealanders over the last four years. And gee, there’s been a raft of them. There’s been—I just put in here the regional fuel tax in Auckland, yes, we do want to reverse it. A lot of it hasn’t been spent. We want to reverse the brightline test extension. We’re going to be talking about that tonight. Capital gains tax by stealth. We’re going to remove the interest deductibility on rental properties—yes, we are. Another thing imposed by this Government. We’re going to reverse the 39 percent on the top tax rate and, best of all, we will reverse the workers’ insurance, or the latest job tax proposal, because they are all additional taxes that ordinary New Zealanders will be paying.

We think that New Zealanders should not have to bear all these additional taxes that the Government has imposed on them over the last four years. We’re going to reverse them and give that money back. That’s not a tax cut; that’s just saying keep your hands off people’s money. Because at the end of the day, New Zealanders know how to spend their money. We would rather them that they’re spending it, investing in their children, being able to buy food, groceries, all those things, rather than the Government getting all this money going through a big mincing machine and putting it into wasteful spending projects—and a lot of them just will deliver no value at all.

It’s a real privilege to take the last call in support of the Budget Policy Statement, as a member of the Finance and Expenditure Committee, but, actually, I’d like to speak to this as the MP for Taieri and what this Budget Policy Statement means for the people in my electorate. That’s people like Balclutha man Bruce Keith, who last year suffered a seizure and he waited for an ambulance that never came. He’d basically frozen and he became stuck in the doorway of his shed. There was no ambulance available, a lot of desperate calls, and, finally, a local nurse was able to bring a wheelchair and wheel him down to the Balclutha Hospital. Now, Bruce was lucky; he lived to tell the story, but others haven’t. There was a woman in my electorate in Balclutha who, sadly, died in her garden, waiting for an ambulance. To their families, I am so sorry for that, but that is what postcode health looks like.

Last Budget, the Minister of Finance gave $83 million to St John Ambulance and that has helped fill the cracks. It has definitely helped save lives but the system is broken: first responses all mixed up with primary healthcare; rural people wait for ambulances or they catch InterCity buses to get to a hospital. Some people in Balclutha are waiting to catch a bus to Dunedin, and then their appointment is cancelled on the way. They have to travel all the way through, then get another InterCity bus to go back, and then wait for another appointment. Rural communities are finding it hard to get doctors, nurses, and midwives, and rural communities are struggling to attract talent, because, for some people, not having healthcare close by is a deal-breaker. In South Dunedin and Milton, different scenario but the same outcome: people waiting for weeks, sometimes months, for cancers to be even diagnosed—and those are cancers that could or should have been treated; lives that could have been saved or prolonged; and lives lost due to a system which has been fragmented and underfunded for decades.

Now, this Labour Government has put people’s health first in our response to COVID. It has led to one of the lowest mortality rates in the world, one of the most resilient economies, including the record low unemployment of 3.2 percent. We have consistently strong Treasury reports: Budget Economic and Fiscal Update, the Half Year Economic and Fiscal Update—stronger than forecast. They are testament to the careful and balanced approach of this Government, and I would actually say “adaptive approach” because COVID has not been easy and I salute the Ministers who have been able to adapt to the constantly changing, challenging situation. And Nicola Willis, if there was ever a more compelling case for continuing to put health first and transform the health system, it is now during a pandemic, because health matters and lives matter and healthy lives make for healthy economies. So I applaud this year’s lifting of the operating allowance to $6 billion. And may I remind this House it is a one-off increase to enable investment into major reform programmes like health, and that can’t come soon enough for me. It’s one-off: it drops to $4 billion and $3 billion per year over the next three years.

Now, National would rather cut that funding, $1.7 billion of it—or $3 billion, depending on who you listen to. So no health reforms and no new spend by 2023, and that is, basically, a death sentence for some people. They would rather dole out tax cuts, especially to their rich mates, and that is to their rich mates because, as we’ve heard in question time today, it is the difference between less than a cup of coffee for, say, a cleaner in the Parliament versus several thousand dollars upwards of $5,000 for, say, the Leader of the Opposition or a Cabinet Minister. So National are running a script. It’s a tired old National script. It’s a bit like the script born out of the 1980s. We’ve heard a similar one not so long ago from a previous leader Judith Collins who wanted to spend $31 billion to build roads in the North Island.

Now we jump forward several leaders to Christopher Luxon and it’s suddenly a script about tax cuts. And rather than being out in the community, the Opposition are working to a script, and it’s a bit like a public relations script. It’s what you’d expect to hear at an airline with key performance indicators (KPIs). In fact, Chris Penk let that slip yesterday. Now, I like Chris Penk. He’s usually a smart and sensible guy, but he showed us the type of ship or plane his boss is running. He said in this House that for him the cost of living is a KPI. I couldn’t believe my ears. So the cost of living—of getting food on the table, clothes for children, real life struggles for real life New Zealanders—to Chris Penk, that cost of living is, in his words, a KPI. And apparently every time he says it, he said, and I quote, he gets “a tick in the box”. No doubt, others on that side of the House do too and that is how National ticks.

The Budget Policy Statement reflects an ideology—and we’ve heard that word levelled at us as a criticism. I don’t apologise for that. Our ideology is around fairness, real-life experiences of the struggles of ordinary New Zealanders, and it’s based on evidence. We have heard the Minister this afternoon acknowledge that there are struggles currently. It is a difficult time; difficult because of a lack of investment over many decades and difficult because of a pandemic that we are all struggling with. And some people are feeling it worse, particularly in particular regions and in sectors like retail and hospitality. But the National Party script, I’ll call it a “luxicon”, actually. So a lexicon is a special language, but a “luxicon” is a language that comes primarily from the Leader of the Opposition. So in a “luxicon”, a feminist is somebody who says they’ll scrap the Ministry for Women, a ministry that has been fought for for decades, one that is trying to close the 8.6 percent gender pay gap for Pākehā women and the 27.4 percent pay gap for Pasifika women.

Another “luxicon” is “high-calibre Māori”. Now, I’m wondering if that is, (a) a Māori who is rich and therefore needs a tax cut, (b) a Māori who doesn’t have health issues, (c) somebody who isn’t a low-calibre Māori—well, that says a lot about the National Party—or (d) none of the above, because in his so-called state of the nation speech, Mr Luxon didn’t once mention Māori. So no clue there.

Another “luxicon”—commitment to equity of opportunity. Now, what does that actually mean when applied to the health system? Well, it’s a blame game. It’s blaming those who don’t get the same outcomes, like Māori and Pacific people who are twice as likely to die young from health conditions that could be treated. So, according to the National “luxicon”, that’s OK because somehow they’re both young, they’re both New Zealanders—never mind the outcome.

What I know is that the $6 billion that National wants to scrap, or some of it—$1.7 billion, or up to $3 billion—will go to establishing the new Māori Health Authority, and that is long overdue. It will put Māori health back into the hands of those who can influence it, and that’s Māori, and it will benefit all New Zealanders because, surely, it’s in everybody’s interests that all people in our society live the best lives in their best state of wellbeing.

So I applaud the Budget Policy Statement. I applaud the balanced approach: the record low unemployment that has put us in a position to be able to focus on priorities and do it in a way where we can make meaningful change with a multi-agency approach, with a multi-year approach; not a pet project for climate change, as Nicola Willis has said. If there is a crisis, it is a climate crisis, and I think Nicola Willis needs to wake up to that.

What this means is that we can go forward and change the postcode lottery system of what is healthcare. I can say to Bruce Keith of Balclutha, and others in my electorate, “Don’t worry, we know life’s tough, but we haven’t forgotten you. In the middle of a pandemic, we can still work to create equity so that you won’t have to be left standing at that garden fence waiting for an ambulance that won’t come. It means that you will get the same healthcare, whether you are in Auckland or South Dunedin or Balclutha or Middlemarch.” We will continue to put lives and livelihoods, first because that’s what we promised in our manifesto and that is what has got us through so far. It’s that and the efforts of ordinary New Zealanders.

I reject the statement that New Zealand is divided. We’ve heard a lot of noise from a very small group of people who have managed to get a lot of attention. But we know by talking to ordinary New Zealanders that they are united. They do want to see this through together in the way that we have been doing with a steady hand with COVID in the background but continuing to make the changes that we need to change to make New Zealand a fairer, more equitable, safer place for all New Zealanders. I am absolutely delighted to support this Budget Policy Statement and I commend the Minister for his work on it.