Debate on Budget Policy Statement

I move that the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2024. Budget 2024 is going to take—[Interruption]

SPEAKER: Mr Smith, we’re going to stop and we’re going to start your time again, because some people seem to think that the conclusion of question time is a good time to start conversations all over the House. It’s not. We’ll start again—I’m calling Stuart Smith, the chair of the Finance and Expenditure Committee.

STUART SMITH: Do you want me to move it again?

SPEAKER: Yes.

STUART SMITH: I move, That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2024.

Budget 2024 is going to cover three key themes: prioritise investment in the public services that matter most to New Zealanders, deliver personal income tax reduction for working Kiwis, and deliver durable savings to support investments today and to get the Government books back into balance. It is a fact that we are in a significant downturn in New Zealand. Our books are taking much longer to get back into good shape. Our deficits are much stronger than in other countries of comparable means to us, and it’s going to be very tough for us to get it back in shape.

We run a structural deficit that is the second-worst in the developed world, and we heard today that that’s expected to be 1.5 percent. The country that has the highest structural deficit is the United States, which has the reserve currency. We can’t afford to run structural deficits at that level. We are in a significantly difficult position, and that’s thanks to the mismanagement of the previous Government, quite frankly.

Government expenditure has got completely out of control. We have the official cash rate (OCR)—which was confirmed again today—at 5.5 percent, which drives interest rates, which is a significant impost on household incomes, or disposable incomes. What I think we all have to remember is that once we did come out of that COVID era and we had inflation getting a little bit out of control, the Reserve Bank kept the funding for lending programme going at the same time that it was tightening the OCR. That is, effectively, making it cheaper, on the one hand, for banks to lend money, and, on the other hand, trying to make it more expensive for banks to lend and drive interest rates up. One foot on the accelerator, one foot on the brake, and when we asked the Reserve Bank Governor about that, his response was that he had a moral contract with the banks to continue that funding for lending programme going. My question is: what about the moral contract that the Reserve Bank has with the taxpayers of New Zealand? Because they are the people who are feeling the effects of that.

So inflation has driven rents up, as we’ve heard today, to an increase of $170 a week from 2017. That is a significant impost on household incomes. The Minister of Finance told us this in the select committee. When she was asked about whether we had a tax problem and that perhaps we weren’t raising enough tax, she pointed out that in 2011, the median-income earner was paying 15.5 percent of their salary in tax, and today, that figure is 20.6 percent. So we don’t have a tax problem. What we have is an expenditure problem, and we have to bear in mind that only 40 percent of taxpayers pay net tax. So that is a very difficult position for us to be in, and I think, as the famous former chancellor of the exchequer for Louis XIV said, the art of taxation is plucking the goose with the minimum amount of hissing. I would postulate that we are getting quite a bit of hissing, and so we need to focus much more on our expenditure.

The Minister of Finance also committed to keeping the operating allowance to less than $3.5 billion, and she confirmed that yesterday, in question time, and here, today. However, the previous Government had locked in $2.3 billion of that spending, so it’s very little to come and go on. We wait with bated breath to see what the Minister is going to do next week, but I’m sure it’s going to be well worth the wait.

She also said she was going to set a clear direction on debt, and she made it very clear that debt needs to come down as a proportion of GDP. She has committed to reduce it to less than 40 percent; in fact, she wants to operate it in the range of between 20 and 40 percent. Now, some pundits call for a much higher level of debt, but that is not actually suitable for New Zealand, because we suffer from quite regular shocks, be they natural disasters or other things, so we need to have that buffer to move on. The Minister indicated that she didn’t have an issue with debt, provided that debt was for infrastructure that would drive productivity—that is, getting a good return from that investment.

So, in short, the Minister emphasised that it’s results that the Government is looking for, not money out the door, and I think the best example of that is one of the pre-Budget announcements, on school lunches. That is a saving of $104 million, and it’s still going to feed, actually, more than the same number of children. It’s going to feed 10,000 additional children between the ages of two and five. It just shows how you can find wasteful spending right across the Public Service, I’m sure, just by looking at doing things in a different way, and I think that’s a great start for our Budget. Mr Speaker, I don’t know about you, but it certainly didn’t do me any harm at school—having sandwiches and a piece of fruit, rather than butter chicken—and there are many more savings to be made in other places.

But I want to move on to other Budget announcements, such as Gumboot Friday, which was mentioned here today. That’s $24 million over four years going to I Am Hope to deliver mental health services. I think that that’s a fantastic initiative. We have to trust and give an opportunity to those in the private sector to deliver services, and I’m sure that they are able to do that in a cost-effective way.

Surf Life Saving and the Coastguard—I was at the event last night, and it was great to see one of my constituents get an award for the Coastguard. I think that they’re a very worthy cause, and it’s not a large sum of money, but it will go a long way and make a big difference to those services: $63 million.

Of course, our defence forces also got a mention in pre-Budget announcements, with $571 million going to back our Defence Force. In the uncertain times that we are in today, we have to be mindful of those services and of how much they deliver for us in New Zealand. So that was a very good announcement.

We also had the corrections announcement of a $1.9 billion investment to enhance public safety and rehabilitate offenders—another great announcement. So we’re actually delivering more for less, I believe.

But I think that one of the key things for me was the education announcement on structured literacy: $67 million. That has gone down incredibly well out there, I think. All those people who are out and about, talking to the schools—there’s been great feedback on that, and so that’s a really good announcement. Then we had $153 million for charter schools. I’m really looking forward to seeing those take off, because I know what difference they make, and, actually, often they take on the children with the most difficult learning situations and get fantastic results. So I think that’s another good announcement.

Then, there is $429 million in savings from the Ministry of Education to redirect funds to the front line. Again, this is getting money out of the back office and into the front office. Then, of course, there is the Pharmac announcement, with the largest ever Budget of $6.294 billion, and we do know—we canvassed this well—of the fiscal cliff that was left by the previous Government.

So, in short, we have a Budget that is about sensible spending. It’s about delivering results for New Zealanders, and it’s about delivering tax relief for hard-working New Zealanders. That is long overdue. Fiscal drag is a terrible way to try and raise more taxes. It’s doing it by stealth. We’re going to get rid of that, and I think that that’s long overdue. So, with pleasure, I commend the select committee report on the Budget Policy Statement.

Thank you.

Thank you very much, Mr Speaker. I want to acknowledge the chair of the Finance and Expenditure Committee. We are a quite a constructive select committee and it was important that we spent the considerable time having a look at the Government’s Budget Policy Statement.

We heard from a number of submitters, both orally and who’d written in submissions, as to the impact and the effect and what they wanted to see in relation to this Budget Policy Statement. And I’ve got to say, the submissions were varied—varied. I’m going to go take some time a little bit later in this contribution to be able to go through some of those submissions and what some of those submitters said in relation to the trade-offs that were going to be made through this particular Budget. We have, as the chairperson said, one of the Government’s overarching goals for this term, as set out in the statement, “To build a stronger, more productive economy that lifts real incomes and increases opportunities for New Zealanders.”

But what we have heard in the last 24 hours is something called “killing the Kiwi Dream”—killing the Kiwi Dream of being able to own your own home. That is what we’ve heard in the last 24 hours from this Government. And they’ve had to clearly stand up and address that because it had been leaked from their Budget Policy Statement. And this is what the concern is on this side of the House—that we’re going to see a lot of smoke and mirrors between now and the Budget, and then in the days after that. Because they probably weren’t going to say that out loud—that they were removing the first-home grant. They were probably going to be requiring for that information to come out a little bit later or for others to find it. They weren’t going to be transparent with Kiwis and put that in their PR, saying, “We’re going to get rid of the first-home grant.”

It’s very similar to a situation that we saw in previous years under a National Government, when the training incentive allowance was removed by stealth as well. Nothing in the PR around the training incentive allowance basically being cut, by the National Government, back then, by stealth—basically, it wasn’t until the Opposition highlighted it that that smoke and mirrors was revealed and it was revealed that the training incentive allowance, just like the first-home grant, was going to be removed. So I want to ask the members on the other side of the House, when you do that PR, be really clear about what you’re going to cut. Because if you don’t want to be clear about what you’re going to cut, New Zealanders won’t be fooled. And in the time after the Budget, when this side of the House starts to go through every single detail, we will bring it to Kiwis’ attention what you are doing to cut the choices they want to make in order to get ahead.

The other thing that they’ve decided to do is to cut a lot of the things which would have helped right now for Kiwis. They have removed the free public transport fares. They were free for those who were 12 and under, we made them half price for those under 25, and they’ve removed them. They’ve also introduced a new car tax, an additional $50 with road-user charges to Kiwis. They’ve said, time and time again, and right through the Budget Policy Statement, that they have a laser-like focus on the cost of living; that that is one of their targets. But they’ve actually removed some of the measures that help everyday Kiwis in the hand today. And yet if you actually go on to the National Party tax calculator—because they keep saying, basically, the tax cuts are going to help—well, some of our lowest-paid Kiwis are probably only going to get $2 in the hand, according to their calculator—$2 in the hand each week. How does that help when the rent is going up?

The chairman referenced the Monetary Policy Statement today, and there are two very sticky things that are basically refusing to bring down inflation. One of them is increases in rents—apparently there’s going to be downward pressure on rents. I haven’t seen that since this Government has come in. The second thing that’s basically making inflation difficult to bring down is around rates. It’s great for Auckland that they’ve got a deal, but what about the rest of the country? I’ve heard 33 percent up in Northland, we’ve got 17 percent in Porirua, and then it’s 8 percent the next year. That is something that needs to be dealt with in order to bring inflation down. But we don’t have a solution so far from this Government.

The chairman also referenced the Monetary Policy Statement and one of the other things that was basically set out in the Monetary Policy Statement today was around insurance. That is another reason—increasing insurance premiums is another reason why inflation is not coming down. But what is the Government doing to support them through the Budget Policy Statement? It says they’re going to try and make things more productive, and yet what we have again seen—again through smoke and mirrors and basically through digging through some of our media—is that they’ve removed the national resilience plan. The national resilience plan—the funding for that was to support local regional councils to basically mitigate the climate change impacts, and that was supposed to help with bringing down insurance premiums. But we’re not seeing that action from this Government. Instead, what we are seeing are smoke and mirrors where they are cutting one thing, choosing another, and then not saying anything about it.

But that’s the problem here—Kiwis are not dumb. They are not dumb. They will see right through it. They may not see it on Budget day, but, by golly, this side of the House will go through the detail and show Kiwis the cuts and the choices that the Government is making that will basically impinge on their ability to get ahead. We have seen it already with first-home buyers. Interest deductibility—so, straight away, landlords—$2.9 billion—will be able to outbid them at auction because they will be able to have that tax break behind them. But what does this Government do? They remove the first-home grant.

So I now want to, basically, echo the voice of some of the people who submitted to the select committee, because even though the other side of the House won’t agree or basically listen to what I say, what about the people who actually read the document and want to be able to contribute and say to the Government and plead with the Government to change what they’re doing? If we look at the Aotearoa New Zealand Association of Social Workers, they say “we acknowledge the fiscally challenging environment in which the Coalition Government is currently navigating, yet we raise our concerns about disinvestment in public services whilst maintaining intentions or personal tax reductions. Such an approach, we believe, is likely to further compound social inequities and lead to disadvantage for many New Zealanders.”

But you don’t believe the Aotearoa New Zealand Association of Social Workers? Maybe you’ll agree with CCS Disability Action, a group that represents our disabled community, who again have seen a cut from this Government, who have seen criteria tighten so that their carers cannot get respite, so that some disabled people cannot access the support to help them, enable them, to live a good life. We’ve had meetings and rallies across New Zealand and a lot of people are absolutely upset with this Government for what they are doing to the disabled community. So if you don’t believe this side of the House, maybe CCS: “We have significant concerns about the priority areas as well as the short-term goals laid out in the Budget Policy Statement. We are also disappointed to see that disability is absent.”

And you know what? The disabilities community isn’t the only group that’s absent from the Budget Policy Statement. Where is the child poverty reduction? Where are the climate change actions? This Government has, basically, removed the ability to focus their accounts and, basically, the funding that hard-working taxpayers in New Zealand require them to do. Again, if you don’t believe the CCS Disability Action, how about you might believe Disabled Persons Assembly (DPA) NZ? “DPA is concerned that the proposed tax cuts and funding of tax rebates for landlords will have a negative impact on the government’s ability to provide essential services that disabled people rely on across health, education, welfare and support services.”

But maybe you don’t want to agree with the Disabled Persons Assembly or CCS or the Association of Social Workers; maybe you just want to agree with a person, an individual, who took the time out of their day to submit to the select committee because they thought it was so important that they did. From Emma: “A budget policy statement that neglects to address social policy is woefully incomplete.”

Or maybe, if you’re a bit of an environmentalist, the Environment and Conservation Organisations of New Zealand: 43 groups with a concern for environment. They are, “disappointed that the Budget Policy Statement has lost the acknowledgement of the natural environment, responses to climate change, and wellbeing aspects of the environment.” Time and time again during those submissions, we heard people that said, “Do not give us tax cuts, but fund the public services that we depend on for us to have a good life.”

We have seen over the last 24 hours this Government using smoke and mirrors to basically disguise their cuts and we will hold them to account in eight days’ time.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. We are, of course, debating the Budget Policy Statement, and much has been made—particularly by the finance Minister—of the fact that there’s still “eight more sleeps” or so until we get to the Budget itself. But, none the less, we have here, in the Budget Policy Statement, some clues as to what will be in the Budget, although not the operating allowance—breaking from convention there.

Government Budgets are values statements, and we have actually on the record a former National Party Minister of Finance and then Prime Minister who once said in a quip in an election debate that people “can’t go shopping with your values.” So let’s talk about this Government’s values and how they’re making it harder for regular people to go shopping. On those values, as the Hon Barbara Edmonds just noted, within this Budget Policy Statement, there is no reference whatsoever to climate change—climate change, which by the way was mentioned in the briefing to incoming Minister, the Minister of Finance, as one of the greatest threats to financial stability in this country.

We also saw that one of the first things out the door from this Government, under its first 100 days, was a repeal of smoke-free legislation, which no one had asked for and no one had campaigned on except for the tobacco lobby. But guess what! It’s given the Government an extra half a billion dollars in revenue to pay for their much-foreshadowed trickle-down tax cuts and, of course, their $2.9 billion in tax cuts to landlords.

Within this Budget Policy Statement, it says that the Government wants to—and I quote—“build a stronger, more productive economy.” So the question has to be asked: stronger for who? More productive for who? What do those words actually mean? Well, we know that it will be stronger for the landlords in this country who have $2.9 billion handed to them. It will be stronger for the oil and gas companies, who will see more profit going offshore and lining their pockets. It will be stronger for those who are opening coal mines in the conservation estate, and it’s stronger for the tobacco lobby.

But on that point of productivity—and we’ve had a lot of debate about this, back and forth, in the likes of question time and other debates over the last few months—we have had not only Treasury officials in many hearings in front of the Finance and Expenditure Committee but also the likes of the International Monetary Fund and the OECD saying to the Government that one of the most important things that it could do, if it really cared about the productivity of this economy, is to fix the tax system.

I know that the Greens go on about this somewhat, because it is a fundamental piece to fixing the way that our economy operates. We’ve got a pretty good clue into how it operates, out of the IRD and their high-wealth individuals report at the beginning of last year and some great subsidiary papers from Treasury which broke down wealth distribution in this country. There we found that the top 311 families in Aotearoa hold more wealth combined than the bottom 2.5 million New Zealanders. That is not an accident; it is a consequence of a tax system that has consistently entrenched inequality and sees the average New Zealander pay an effective tax rate of less than half of those at the top. Those are political decisions.

So we also heard from the chair of our select committee about the mental health announcement today, and I think that there has been quite ample discussion about procurement processes, which, of course, we’ll leave for another day. But, to that effect, I just wanted to reflect, actually—because this Government seems to be intent on and tells us a lot that they care about return on investment and value for money. Well, in 2018, we had He Ara Oranga, the report of the mental health and addiction inquiry, tabled in this place, and it told us what, effectively, all of the international research does, which is that all of us have genetics which predispose us potentially towards the greater or lesser manifestation of mental ill health but that it is fundamentally our environment, the opportunities that we have access to, the stability that we experience in our lives as a result of having affordable housing or not, the ability to belong—all of those things are the greatest determinants of mental ill health manifesting or not.

To put that another way: stable housing is suicide prevention, decent incomes are suicide prevention, and belonging and acceptance in our communities are suicide prevention. And if we are solely, as a Government or as a Parliament, talking about funding mental health treatment while not talking about addressing the causes of mental ill health, then we are missing a massive trick and putting far too many New Zealanders in pain and suffering that they do not need to go through.

I also just wanted to pull through some of these pre-Budget announcements that the Government has put out there, because, frankly, this Government is gaslighting New Zealanders with all the more oil, coal, and gas. They’re telling us that they’re making decisions for renters. But how are they doing that? By handing $2.9 billion to landlords, which, by the way, the financial policy statements from the Reserve Bank said, is going to increase house prices in this country by increasing the valuation of properties from those who already own.

They tell us, on the one hand, that they are making decisions for the wellbeing of kids in State care by shredding laws that those who grew up in State care, the Children’s Commissioner, and the Waitangi Tribunal are pleading with them not to shred. They tell us that they are making decisions for reaching our climate goals. And how are they doing that? By passing laws to fast track coal mines and seabed mining. And, in fact, as I’ve just alluded to, climate change is not mentioned once in this Budget Policy Statement. And that is despite it being one of the greatest risks to financial stability in this country and, indeed, in the world—

Sam Uffindell: I didn’t hear it from your new MPs in their maiden statements.

CHLÖE SWARBRICK: This is one of the really important things that I think it’s important to unpack, especially for members of the National Party heckling just now, as to why the Green Party cares so fundamentally about the inextricable connection between social and environmental wellbeing. Climate change exacerbates inequality. So if we can take a second here to unpack that, it is the case that we know, based on domestic and international evidence, that those with the most means contribute the most in terms of climate-changing emissions. Yet they are also those who have the means to continue moving further and further up the proverbial hill from rising seas—that is, further and further away from the impacts of a warming climate. So who is hit the first and the worst by climate change? It’s those who have the least and have contributed the least to those climate-changing emissions.

So what’s the Government’s response? Not only to knowingly plough ahead with policies that will increase inequality based on the data, the evidence, and their own official advice but to say that they are no longer going to use the emissions trading scheme revenue directly for reducing carbon emissions in this country but for generalised tax cuts. Tax cuts do not trickle down.

So, for all of the hot air that we hear in here, for all of the rhetoric that we hear from the Government—that they care about people, that they care about the planet—there’s the evidence that bears out completely the contrary of that—that their decisions will increase inequality, they will increase house prices, and they will increase homelessness. When it comes to climate change, well, my many parliamentary written questions to the Minister for climate show that he’s not even asking, so we can only conclude that he doesn’t care.

Then there’s the experiences of everyday people, who, out there, removed from this place, will tell you that they are exhausted. This Government campaigned on the cost of living, yet, so far, all we can see is that that cost of living continues to go up. More people are losing their jobs and will under the economic track that this Government has decided to pursue.

We are also seeing climate progress being shredded. And when I pressed the Prime Minister a few months ago on whether he could name one thing that they had done which would lower the cost of living in this country, what did he point to? Removing the regional fuel tax, which will remove hundreds of millions of dollars for critical infrastructure in our largest city. And there is next to no guarantee that the fossil-fuel companies won’t just fill the gap.

So, in conclusion, this economy that we’re always talking about and debating in this place, it isn’t set in stone; it isn’t this deity that was handed down to us on stone tablets. The economy is all of us—the stuff that we create, the planet that we live on, and the rules that we put in place which show our priorities and the things that we value, the kinds of outcomes that we want to work together in society to create. And the message from the Greens, here—that we want New Zealanders to hear—is that we can make decisions that prioritise, fundamentally, the wellbeing of people and planet, not the austerity trickle-down nonsense that we are hearing from this Government.

I also just wanted to point out, finally, the deep inconsistency that we hear from this Government that they are going line by line through expenditure and cutting wasteful spending, yet none of their Ministers take responsibility for any of the job cuts.

Thank you, Mr Speaker. I rise to add to what others have said about this Budget Policy Statement report from the Finance and Expenditure Committee. I would give some responses to what Barbara Edmonds said, but, to be honest, I can’t remember any of it already!

I was interested in some of the things that Chlöe Swarbrick said, and I know it’s unparliamentary to refer to a member’s absence, but you’ve got someone who is actually doing her best impression of the woman who wasn’t there. It’s almost as though she wasn’t part of the last six years, where the Greens backed up the Government. She says, “We need more affordable housing. We need more affordable rent.” She was part of a Government where the average house price went up $250,000, or 30 percent. She backed a Government where the average rent went up $200 a week. Then she comes along and says, “Oh, isn’t it terrible. Give me one more chance and I won’t screw it up as bad next time.” I mean, the Greens have got to take some accountability. This Government and the New Zealand people are inheriting a huge mess, and they created it. And no amounts of catnip clips on Instagram are going to make your rent cheaper. They’re not going to make the economy better; they’re not going to make your job more secure. All they’re going to do is maybe boost someone’s following on Instagram. I think this country has fallen for that formula before, and look where it got us.

Where it got us is that we’ve got a Government inheriting an extra $100 billion worth of debt. The interest on that debt will soon be $10 billion per year. We’ve got a Government that is inheriting inflation that is 5.8 percent domestically, even as tradable inflation from the rest of the world falls. We have a Government that is inheriting an official cash rate of 5.5 percent, a level of interest that flows through into people’s mortgages—and yes, their rents. We’ve got a Government that is inheriting a structural fiscal deficit. What does that mean? It means that, when you wash out the cycles and the ups and downs in the economy, at the end of the day the Government policy settings that we inherited meant there was not enough money coming in to meet the commitments to spending that the previous Government made. That is the basic inheritance of the Government. But enough about us. What about the people up and down New Zealand?

Let me tell you some of the stories that I’ve heard from people just in the last few weeks, and what we’re trying to do about it. I’ve spoken to real estate agents who tell me the number one reason people are selling is because of relationship breakdown because of years of financial stress through the COVID period and the inflation period and everything else that the previous Government did for us. I’ve talked to people who say, “You know what, the toughest thing about running our retail store is that people are on edge. They’re stressed and they abuse us because the price rises are getting to them, because they’re constantly checking their account to see if they can afford the next thing they need to do.” I’ve talked to people in construction who say, “I don’t know what I’m going to do, because there’s no more work after a certain point in the future.”

Things out there are grim, and they’re grim for New Zealanders because, fundamentally, while New Zealanders were tightening their belts, Grant Robertson, the former finance Minister, was loosening his endlessly. And, as a result, we now face the fiscal circumstances that I describe, where the Government insulated itself from the challenges of debt by just borrowing some more. We now need to tighten our belts as a Government, just like firms and farms and families have been having to do for years of Labour’s fiscal abuse. And that means that, in this fiscal policy statement, we make three commitments. One is that we are cutting back the wasteful spending. The fact is that there has been too much waste under the previous Government. These guys never saw a problem that they didn’t think could be solved with borrowed money! Some of the expenditure that now lives on in folklore was just extraordinary. A classic is the $50 million on designing a bike bridge they didn’t actually build. In what sort of fantasy can you afford to do that? The New Zealand Government did it.

We’ve just had a report from Kāinga Ora. This is a doozy. These guys over there—Kieran McAnulty and Arena Williams and all of them—supported and were part of a Government that actually decided to set up Kāinga Ora in such a way that it loses half a billion dollars a year. Every day, Kāinga Ora loses a million and a half dollars. This is what we’ve inherited, and people need to see this reality—the Kāinga Ora model. They were supposed to bring about affordable housing, but they were so inefficient. For all that money they’re losing, they managed to pay over the odds for the land, over the odds for the builders and the materials and the project managers. I mean, get this: the Labour Party tried to make housing more affordable and they were so inefficient they actually managed to make it more expensive. It’s actually difficult to exaggerate how clownish that Government was in its execution.

The result of all of that is that the amount of money spent per person after inflation—let’s not even talk about that for now—was 30 percent more in 2023 than in 2017. They managed to spend 30 percent more money on you, after inflation, and actually get worse results in just about everything from education to housing to health. They say, “Oh, but there was a pandemic.” Yes, there was a pandemic, but the rest of the world had moved on by 2022-23. Only New Zealand was still labouring under a Labour Government that used it as an excuse for just about everything. They’re still using it as an excuse now. It’s kind of interesting that, by 2023, they were still blaming the former National Government that went out in 2017. I predict that, in 2026, Labour will still be blaming things on COVID!

The facts are that if we don’t get this spending under control, we are doomed. So that’s why we make no apology, and I’m proud to be part of a Government that is cutting wasteful spending, reducing bloated bureaucracy, reducing expenditure funds that took people’s money, gave it to someone else, and didn’t actually get a good result. Yep, we’re cutting waste, and, yep, we’re cutting taxes. That’s the second thing in this Budget Policy Statement. And I’ve heard people say, “Oh, $10 or $30 a week or a fortnight—that’s nothing to me.” Well, actually, to the people on that side of the House, over with Labour and the Greens and Te Pāti Māori, when you’re earning $160,000, it might not mean much to you. But I can tell you that to those people that I talk to, people on the main streets of places like Waiuku, actually, when things are really tight and you’re checking your account all the time and you’re taking things out of the trolley, this tax relief will be welcome. I can assure you because that’s what people are saying to me.

Then, finally, we are actually going to do more and better in the areas that matter most. I’ll just give you a few examples. The Healthy School Lunches Programme wasn’t funded past the end of this school year. Next school year, if Labour’s Budget figures were taken seriously, it would have ended. We had to either borrow another $340 million, tax another $340 million, or find $340 million of savings elsewhere to make it happen next year. Do you know what we’ve actually done? A little bit of option 3, but we’ve also made the scheme $104 million cheaper while feeding more children at the same time. And that is, I think, the emblem of what this Government is doing. After years and years of Labour doing less and less with more and more, this Government is doing more and more with less and less—just as households and firms and employers and farmers have had to do for the last three years of the cost of living crisis. The Government is now living by the same values and applying the same discipline as they have had to.

So roll on the Budget next Thursday, which will finally show that some adults are back in the room, some responsibility and some accountability is being taken for the Government’s finances, because, as a great woman once said, when the Government takes a bigger slice, there is so much less cake for everybody else. This Government is shrinking its slice so there will be more cake for the rest of hard-working New Zealanders.

Thank you, Mr Speaker. I rise on behalf of New Zealand First to speak on the Budget Policy Statement, and I just thank the last speaker, the Hon David Seymour, for his experience in laying out the content around the previous Government’s spending and situations that we are now facing as a country going forward. Much of the Budget Policy Statement 2024 is focused on setting out the new fiscal strategy—and I would highlight that: the “new” fiscal strategy. There is a new Government; there is a new way of thinking, and we went through an election with this new strategy and we are now here to deliver it through the Budget Policy Statement.

The Budget Policy Statement also sets out the new short-term intentions of the Government and the new long-term objectives. What I would say, as a first time in this House over the last six to seven months, is learning the processes as we go through—and looking forward to next Thursday to the Budget. That’s going to be a real highlight of actually seeing how that all comes together. But this Budget Policy Statement, the Minister of Finance came to the Finance and Expenditure Committee that I sit on and she was able to explain the vision going forward, and she put forward what the Budget Policy Statement was all about, and then we were able to question. It was actually quite an interesting time hearing the Opposition criticise a lot of what was actually said in this Budget Policy Statement. But to me, it was quite clear we are looking at this new direction.

What we did hear then—and we have heard from the other side of the House today—was a number of submissions, and those submissions were varied. But what I must say is probably a lot of the submissions that were put forward to the Budget Policy Statement were basically really not looking at content. They were actually looking at it from an individual’s point of view, from their organisation’s point of view, and going, “Hey, look at me. Make sure that we aren’t forgotten in the Budget.”

Until we actually hear the Budget next Thursday, we won’t actually know that content around some of that spending. But what I would say is we did have the Taxpayers’ Union and we did have a number of submitters that did come forward and go, “Actually, this strategy is the right way and this is a good way; a good step forward.” They could actually see going into the Budget that this will actually comply. There were a lot of different questions around the Public Finance Act, whether this complied with that Act—and, yes, it does.

So, as we just heard from the last speaker, the Budget Policy Statement sets out the key overarching goals of the coalition Government. We’ve heard it’s about building a stronger, more productive economy that lifts real incomes and increases opportunities. We’ve seen that on the side of the House already in our intentions around primary industries, to increase production. We’re looking at increasing and doubling some of that primary industry in the next 10 years. We’re seeing our foreign affairs Minister and our Prime Minister offshore promoting our country and opening avenues for us.

Another key overarching goal was to deliver more efficient and effective and responsive public services. We’ve heard through the election campaign, time and time again, around restoring law and order. This is something this side of the House will do. We’ve heard about improving health outcomes, and we’ve all got the stories to tell when we go to the hospital—about trying to get someone to see you, and the wait times. We are going to make sure that that service is more effective and more efficient. Educational achievement: we’ve heard again how we’re going to lift the achievement around education.

Another overarching goal in this Budget Policy Statement is getting the books back in order and restoring discipline to public spending. The five priorities in the Budget, what has been forecast, is delivering tax reduction. We’ve heard a lot about tax reduction in this House, and the constituents that are in my area are thrilled with the idea that they’re going to be getting a tax cut. They can actually see some money in their pocket to actually pay for the cost of living.

Identifying enduring savings: this Government is doing that, and through the lunch programme, like we have seen, we can do that programme but actually save $100 million. That is incredible savings. We’re improving the public services—I’ve just touched on that—and keeping tight control of Government spending. But, importantly, what I would like to highlight is that there is also a focus on developing a sustainable and long-term pipeline of infrastructure investment. What I would like to highlight in this document was the multi-year allowance that has been increased to $7 billion, and infrastructure in this country is something that we need to make sure we’re putting more investment in. And this document signals that.

It’s also important to consider—and Stuart Smith, in opening, outlined the context that this Government actually finds itself in. Critically, the New Zealand economy is in a much weaker situation than we previously thought. The level of GDP in this document, the economic scenario is showing a $42.8 billion lower forecast in the forecast period—that’s $42.8 billion less in the nominal GDP. We’re also looking at Crown tax revenue reducing by nearly $14 billion. So this Government, on this side, we have to make allowances and actually adjust our budgets for those scenarios. So the continued revisions to the country’s economic outlook are having a negative impact on the Government’s fiscal positions, and we realise that and we are actually signalling that in this document.

The difference, also, is, I think, the attitude of this Government compared to the last. The difference between the Government’s revenue and the Government’s spending has been in deficit since 2019-20 and it has been driven by an increase in the core Crown expenses. What I would like to say is it’s a bit like running a household. Once you realise your expenditure is exceeding your income, you’ve got to adjust—and the last Government was far too slow in doing that. This Government will get our spending back under control.

The Government also sees debt as only necessary in three situations. It can be used as a smoothing device to allow automatic fiscal stabilisation such as a tax revenue and unemployment benefit spending to operate across the economic cycle or as a buffer in events of an economic shock. We understand around climate change, that is actually what that’s saying: that in situations of a shock, we actually will use debt. It’s also to fund the high-quality investments that provide benefits to New Zealand over time.

It is great, I think, the announcements that have already been made. We’ve had those announcements around the Coastguard and the Surf Life Saving, around that $63 million; the Defence Force spending, around $571 million; Gumboot Friday, $24 million. We heard about those savings that this Government’s already making in the school lunch programme—over $100 million. But what I would like to highlight so far was the Corrections announcement of $1.9 billion.

So there is this document—it’s the first one for this Government; the first one for our new Minister of Finance. She has set out a strategy, a programme, going forward. I think it is a good way of looking forward. I’m personally looking forward to the 2024 Budget package. We have a good foundation, and that’s what this is about—setting the foundation for the Budget next Thursday. It has the information that we require. Most importantly, it’s setting us up to take back our country, and that’s what New Zealand First has set out to do. Thank you very much.

Tēnā koe e te Pīka. Otirā, tēnā tātou e te Whare. I’d also like to just acknowledge the opening statements made by the chair of the Finance and Expenditure Committee, Stuart Smith—a fine committee, I must say, as a representative on that particular committee—and also the sentiments he shared in regards to the three bullet point goals and objectives.

I sympathise with my Green colleague Chlöe Swarbrick, in that there is no mention of climate change, but there’s no mention of Māori in here at all, either, or low-income earners, and so this is not a Budget that is going to help those who are struggling here in Aotearoa. I’ve heard, you know, the “cost of living”. It’s like the “cost of death”, to be quite honest, in any Budget for those who are really struggling out there to put kai on the table, to pay the bills. We’ve seen an increase in unemployment, we’ve seen a decrease in people employed by the Public Service, and so we’re seeing just cuts, cuts, cuts everywhere, and we’re haemorrhaging everywhere, and this is what this Budget is showing.

So my three - bullet point contribution to this Budget is: the first bullet point is that this Budget Policy Statement 2024 is in breach of Te Tiriti o Waitangi, once again, article 1, as Māori have been excluded from developing and managing our own Māori budgets. Not surprising; this has been consistent for the past 184 years of oppression and assimilation. Kāwanatanga was supposed to be over your own people, not over mine, and that was reinforced in article 2, which is the second bullet point. The Budget Policy Statement 2024 is in breach of Te Tiriti o Waitangi in article 2, as Māori have not been given our right to self-determination, to be undisturbed—to be undisturbed—and the budgets pertaining to the protection of the land, forest, fisheries, and other taonga that article 2 protected in terms of our pre-existing rights. Again, another breach: protecting the pre-existing rights of Māori for as long as we wish to retain them—as long as we wish to retain them.

Now, if the Minister would read Te Tiriti o Waitangi, he would know that those two bullet points have been breached. And the third: the Budget Policy Statement 2024 has also breached article 3. We were supposed to be given the same access and opportunities for education, employment, health, housing, social services, and trade for the last 184 years as per the agreement with Kuīni Wikitōria.

The Budget Policy Statement 2024 is in further breach of Te Tiriti o Waitangi as there is no Budget funding that will address the significant inequalities directly and indirectly related to historic breaches of Te Tiriti o Waitangi. This was to be guaranteed the same rights and duties as British subjects. Again, this Budget Policy Statement does not reflect any of that and gives us no choice but to talk about this and ensure that our people understand that this is not a Budget for our people. That’s the first thing.

The second thing is that this Budget—I don’t see anything in there where it would have made life a lot easier for our people right now. Supporting my member’s bill taking GST off kai would have done that. Income tax for whānau on low incomes would have done that. Those who are on $30,000 or less—that’s 2.2 million people in this country who are paying tax on $30,000 earnings. That’s cruel that any Government continues to do that. We’re talking about beneficiaries, we’re talking about superannuants, we’re talking about those who have contributed to this country at 65 years old. There’s no increase in take-home pay for 98 percent of the whānau. And we heard some of the tax discrepancies here in Aotearoa. Many are paying between 24 and 30 percent tax; 2 percent of this country are paying 9.4 percent but they control 50 percent of this country’s wealth, and that is not reflected in the Budget Policy Statement.

Next week, we will see the entrenchment of poverty in this country—we will see the entrenchment of poverty in this country—and we will see those who are well off. We will see homeowners well off. Many of our people don’t own homes. We’ve got 50 percent of the social housing waiting list are Māori. We only own 31 percent of homes here in Aotearoa—31 percent of our people own their own home, and they’re intergenerational houses. We cannot get into a new home. You’ve taken that ability away from us. And this is what this Budget policy is telling us: huge Treaty breaches and that there is no hand-up for those who are struggling. Low-income earners and Māori are absent from this, the whenua’s absent from this, those who are unfortunate are absent from this, and we will not be supporting this. Kia ora tātou.

I’m really pleased to be able to speak to this Budget Policy Statement today. I want to focus on political choices. That’s what every single Budget Policy Statement always is and always will be. Political choice is about what we value—whether we are going to value those who have been doing it tough the most, for generation after generation; whether we are going to continue to allow for those who have been given more support than they will ever need, and whether they are going to continue to see more support, like landlords receiving $2.9 billion worth of tax cuts when they do not need them. Those are political choices.

We have, in Aotearoa, everything—let me say that again: everything—that we need to ensure that everyone lives good lives; to ensure that we are protecting our environment for generations to come; to ensure that we are taking the strongest action for a stable climate, for mokopuna, that we possibly can. We have everything in Aotearoa, and the Budget Policy Statement, along with the analysis of the Finance and Expenditure Committee, outlines where this Government is making clear what their choices are.

If the Greens were in Government and were actually controlling and running the Budget, we know that we would prioritise and make the choice to end homelessness. Now, we can actually clear the public housing register in five years—clear the public housing register—if we choose to scale up and invest in public housing—in public housing—and actually clear the public housing register. Because investing in ending homelessness has generational positive impacts.

This National Government has made it quite clear that they will continue to support houses being used as capital investments to build more wealth for people who are already wealthy. That is what this National Government is choosing to prioritise instead of massively, massively ramping up and scaling up public housing—public housing. We could choose to end poverty in this country—we could choose to end poverty. Instead, this Government is choosing to introduce more sanctions that will push more hardship upon the people who have the least. So instead of choosing to end poverty, this Government is going to make it worse for people who are struggling the most.

So I really wanted to point out that there are political choices. The Greens know that we have what we need for free dental, for ending and clearing the public housing register, for a guaranteed minimum income to make sure that everyone has what they need, to make sure that people can go to the doctor and the dentist and get healthcare when they need without having to worry at all about their financial situation. We could choose to continue the funding for Jobs for Nature, where, as I’ve been hearing from around the country, we finally were able to see hapū, iwi, marae, and communities working with their young people, reconnecting the hearts of young people and their local communities to what they love, being able to sustain an income by protecting their wetlands, their waters, their bush health, their soil health, by protecting ecosystems for biodiversity, and the look on the rangatahi faces and how much they are enjoying and growing from that mahi. We could choose to continue funding those things.

So I want to be really clear, this Budget Policy Statement is about what this Government values—they value landlords. They value landlords who already have more than enough—$2.9 billion—and they are trying to make out like the few dollars that they are going to afford those on the lowest incomes is of benefit, when, really, the benefits are going to those who already have enough. That is the choice of this Government. The Greens know that people deserve far more than that. Thank you, Mr Speaker.

I rise with great pleasure to speak about the Budget Policy Statement, as we prepare for the 2024 Budget in just eight sleeps. As we’ve heard from our Minister of Finance, this Budget is going to be all about strengthening our economy and investing in our front-line public services. We will cut wasteful spending, get money out of the back office and into the front office, invest in infrastructure, and deliver tax relief for hard-working New Zealanders, who haven’t had any tax relief for the past 14 years.

Our tax relief package will increase the taxed take-home income of 83 percent of New Zealanders 15 and over, and 94 percent of households across this country. This is what the New Zealand public voted for, and this is what, on this side of the House, we will deliver. It is what we need to rebuild the economy and beat inflation. It is what low and middle income - earning families need to get on to top of the cost of living crisis. It’s what the Government needs to get the books back in order to rebuild the economy, restore law and order, and deliver public services. On this side of the House, we respect hard-working New Zealanders. They are not a bottomless ATM machine, where there are more and more tax withdrawals. It is time for them to keep more of what they earn, and spend it how they want to spend it, not see it wastefully frittered away by bureaucrats who think they know best. It is time to get Wellington out of farming, and out of growing, because our farmers and our growers deserve the respect.

They work hard from dawn till dusk to make a living, and we’re going to stop treating them like villains, and be aspirational for our primary producers, who are the backbone of our economy, and we will make sure we get this economy driving forward. Our Government is all about the action, delivery, and outcomes, and we have been busy already with a raft of actions in just the few months that we’ve been in Government. We started by cancelling the ute tax last year, and now we are slashing through the fields of red tape, modifying, delaying, and cancelling a raft of rules and regulations, including freshwater, winter grazing, or slope rules for all those farmers. We’re also putting together an extensive infrastructure pipeline—yes, infrastructure—eliminating the bottlenecks to growth which have had the brakes on our businesses across the country. These actions are significant for my home region of Hawke’s Bay, which is a huge export region, and will play a big part in helping us double the value of our exports in the next ten years. This Government’s plans for infrastructure will be life changing for people across our Hawke’s Bay region. Building the four-lane expressway will create efficiency and drive more productivity.

Our actions so far are already restoring business confidence, and confidence on the farm, where inflation has been at record highs. I’ve been out talking to businesses across my electorate, and talking to farmers, and there is aspiration, once again. It’s early days, but inflation has come back to 4 percent from its peak of more than 7 percent. Food inflation has dropped to just 0.8 percent, with fruit and vegetable prices falling from this time last year. Average mortgage rates are slowly showing signs of softening. But, let’s be real: it is tough out there. We have a lot of work to do to get the books back in order.

We’ve achieved billions of dollars of savings across Government agencies, which is going to make a real difference. We’re committed to guiding Kiwis through the current economic challenges, and already we’ve made practical amendments and actions. We’ve announced $1.9 billion in investment to enhance safety and rehabilitate offenders. And also, as we’ve already heard, we’ve invested in education—$67 million into structured literacy, because we know if we’re going to drive this country forward, we need to invest in education, in our children, and lift performance in the classroom. It’s been going backwards, and we need to ensure we are driving forward.

We need a more productive economy, with higher living standards and more opportunity. We will achieve this through many of the things that we’ve already announced: a country where Kiwis can return home in search of a better life, instead of leaving in pursuit of higher incomes overseas; public services delivered and evaluated through the lens of social investment—getting in early, funding distributed to communities, so Kiwis achieve their potential, leading to better lives.

Our Government has just announced today a boosting fund for Surf Lifesaving New Zealand, and Coastguard, as we’ve heard earlier—$63.64 million over the next four years. This is the type of thing on our front-line services which will make a real difference. I would be a strong advocate for that, because in my region of Hawke’s Bay, the Hawke’s Bay Surf Lifesaving played a critical role in Cyclone Gabrielle, saving hundreds of lives through the Pakowhai communities and the Eskdale communities. It’s these types of investments which will make a real difference—putting funding into the front line across the country, putting funding into our communities, moving it out of the back office and into front-line services.

And there’s a comprehensive response to climate change, on track to achieve our ambitious emissions targets and resilience to the challenges of more weather events like we saw in Hawke’s Bay. In my electorate of Tukituki, Hawke’s Bay, we have so much potential to grow. Just last week, I visited one of our largest indoor strawberry growers, with 14 kilometres of strawberry plants which they supply to the local markets. They had plans to export this as well, to Asia, where they can fetch a premium. I was out with ExportNZ Hawke’s Bay recently, meeting a delegation from South-east Asia, and they were so pleased to see our Prime Minister, our Minister for Trade, and all our Ministers out there, around the world, facilitating relationships, building relationships, and creating market access opportunities for our New Zealand products, because we need to drive more innovation, technology, and more capital investment.

That is what this Budget Policy Statement is all about—productivity. We want our country to be a better place to do business, to invest, to innovate, to take risks, to build things, to make things, to hire people, to grow, and to raise our children. We will responsibly deliver these lower taxes for low and middle income - earning families by fully funding a tax relief package where there are careful savings and targeted revenue measures, because this is what is going to make a huge difference in a cost of living crisis. We’ve already heard about our housing crisis in the House today; we have seen rents go up by $170 a week in the past six years. We need to drive those down again. That’s where we are investing in practical solutions, like restoring interest deductibility, and bringing the brightline test back to two years. We are stopping the wasteful spending, we are going to fiscally manage this economy a lot better, and not drive this country into more and more debt—over $100 billion. Interest on that is more than we spend on education. We need to drive more focus into our front-line classrooms, with our children and our hospitals, with our nurses and doctors and patients; on the front line with our police where we’re making a real difference in this country. I’m pleased to say that this Budget Policy Statement will ensure we’re getting this country back on track.

The Budget Policy Statement is an opportunity for the Government to set out their goals and their objectives to guide the decisions that they’re going to make in their forthcoming Budget. That is the purpose of a Budget Policy Statement. By convention, Ministers of Finance not only set out the strategic framework that will guide the decision making for the forthcoming Budget but they also set out what the operating allowance is going to be, how much is going to be spent in the forthcoming Budget. This is a long-held convention. It is not required by law, but it is a convention that has been held, including at times of changes of Government.

Now, we traditionally hold elections and form Governments towards the end of the year. This is inconvenient around the budgeting process, but it is something that incoming Governments of all stripes, up until this year, have dealt with. We had Bill English in 2008, in the midst of the global financial crisis, issue a Budget Policy Statement and an operating allowance. We saw the incoming Government in 2017, formed very late in the year, not only deliver a Budget Policy Statement with a stated operating allowance but also a mini-Budget in that period.

So this Government has to explain to the New Zealand public why it has broken that longstanding convention. It is not unreasonable for New Zealanders to know the strategic framework in which the Government is making Budget decisions and the amount of money that will be spent. It is where the short-term fiscal intentions are spelt out. It is where the long-term fiscal objectives are signalled if they’ve been changed from previous strategic statements around expenditure. We did, indeed, see that in the Budget Policy Statement that was put out by the Government. This was something that the Finance and Expenditure Committee spent a large portion of time discussing. Part of that is around what the Budget is going to achieve.

I think one of the things that stood out not only for Labour members on the committee but for a number of submitters is the difference between those objectives between last year and this year. Because in terms of what the priorities for this new Government with its first Budget are, we can see that Māori and Pacific people have been removed as a priority in terms of what is in the Budget Policy Statement. We see that child poverty is no longer listed as a priority—that has been removed. We see a transition to a low-emissions economy gone—not a mention of decarbonisation or climate change. Not one single mention in the entire Budget Policy Statement put out by the Government.

I think one of the things that we can say is that this Budget Policy Statement indeed stands as a very true and accurate testament to the priorities of this Government. It spells out very clearly that they will prioritise landlords over first-home buyers. It spells out the strategic intent to make sure that they do rip out and cut the funding for any climate measures that were in place.

Then we have members opposite—members who sit on the committee and sat there and listened to submissions, such as the member who has just sat down, Catherine Wedd—trot out something that simply is not correct, that New Zealand is on track to deliver on its emissions reduction targets. That member, if she was paying attention at the committee would have heard a number of submitters, including a discussion with the Minister about how we are indeed not on track to deliver on emissions budgets. In fact, there are big gaping holes—in emissions budget two, a 4 million tonne hole left by scrapping the Government Investment in Decarbonising Industry Fund, and a further hole in emissions budget three, and a Government that has absolutely no plan, no vision, and no idea of how it will achieve closing the gaps on it.

This is a Government that is intent on taking our country backwards, and nowhere is it more plainly spelt out than in the Budget Policy Statement. So when they say the country is back on track, it’s back on track and slapped into reverse, because that is where we are going—backwards fast, with no vision and no plan for the future. If we have a look at the kinds of other things that are starting to seep out that indeed are enshrined in the objectives of this Budget Policy Statement, we can see what we’re seeing coming out around housing in the last 24 and 48 hours, that we have a Government that is prioritising tax cuts for landlords over helping first-home buyers into their first home. They are making bad choices and choices that will have ramifications for decades.

What we are seeing is that the National Party is laying very clear that they object to expenditure on building public houses. We’ve seen this smokescreen sham report that has come out and object to the kinds of investment that needs to be made if we are going to solve our housing crisis. But, no, what we have is a Minister and her minions that trot out that what we will see is by bringing back interest deductibility, we will see a lowering of rents for renters. By how much? Nobody can tell us. It’s not something that is ever answered. “It depends” is the answer. The sophisticated economic modelling that sits behind the National Party’s backwards thinking—it depends. Well, front up and tell us how much better off they are going to be.

New Zealanders were promised in the election that this Government would deliver a Budget that would help them with the cost of living. Most New Zealanders are expecting $250 a fortnight in tax cuts, so I guess, in eight sleeps, New Zealanders will know whether or not the National Government is going to deliver on that election promise of up to $250 a week—not the few cents that many of them will get while they are paying more for rents, while they are paying more for insurance, while they are paying more for so many other things. In the midst of this housing crisis of slashing the number of State houses that would have otherwise been built and making sure that they are prioritising investors over renters, what are they doing? They’re bringing back the ability of landlords to kick tenants out for no reason, with bringing back no-cause evictions.

This is a Government that is indeed making its priorities clear. It is also a Government that is borrowing for its tax cuts. Throughout the submissions and the analysis that we heard on this Budget Policy Statement, we heard from a number of submitters—and this was something that was canvassed very fully. We discussed the analysis that had been carried out by Westpac and the economists at Westpac, which outlines that the Government will need to borrow up to $15 billion over the next four years, and that is close to the publicised cost of the tax cut programme outlined by this Government.

It is not radical economics to say that if you weren’t spending 15 billion bucks on tax cuts, you wouldn’t need to borrow $15 billion. This is a Government that says, out of one side of its mouth, it wants to pay down debt, but yet its actions are showing that it is going to borrow $15 billion over four years to pay for tax cuts, and this is in addition to the $2.9 billion it will be delivering to landlords while making sure that first-home buyers are locked out of the market.

We have an opportunity in the Budget Policy Statement to have good and constructive debates about operating allowances and we will, across different parties, have different views on what they should be, but in order for that to happen, we need a Government that is transparent enough, with a finance Minister that is transparent enough to actually tell the public how much that operating allowance is.

I’m grateful for the opportunity to stand and add my contributions about the Budget Policy Statement (BPS), which reflects our commitment to restore fiscal discipline, revitalise our economy, and redefine Public Service efficiency in New Zealand. The National-led Government is very clear about what it wants to achieve, as the Budget Policy Statement sets out our overarching goals are to build a stronger, more productive economy, to deliver more efficient, effective, and responsive public services, and to get the Government’s books back in order.

Under the stewardship of finance Minister Nicola Willis, this year’s Budget Policy Statement outlines our approach to navigate through economic challenges with prudent fiscal management and strategic investment. It marks a pivotal shift from the last Labour Government’s policies because it requires us to be prudent and responsible with New Zealanders’ hard-earned money and taxes that they pay. It steers us towards sustainable economic health and ensures long-term benefits to all New Zealanders.

In 2023, our Government was elected on the promise to rebuild New Zealand’s economy. Kiwis voted for the National-led Government to fix the economy because they are suffering and they know it will have to be a National-led Government to be prudent with the taxes that they pay and a National-led Government to reconnect New Zealand with our existing trading partners around the world, and also connect with new regions and new countries to create new revenue opportunities for Kiwis.

The 2024 Budget, in eight sleeps, will be a blueprint for delivering on this promise. And the core of our strategy is to cut the Government’s wasteful spending, stimulate growth while improving public expenditure and improving public health to reduce the burden on our future generations.

The New Zealand economy is at one of its worst and its weakest, with the double-dip recession, with this structural deficit, with a continued high official cash rate. It doesn’t need economists or experts or data analysts to tell us that our economy is suffering. Just simply talk to people around us in our community up and down the country and ask about how they feel about the economy, about their living, and about their cost of living in New Zealand right now. Ask them for some examples with what they face when they have to pay at the supermarket checkout, when they have to juggle between the children’s expenses and how much more they have to pay for their rent or their mortgage interest, how much more they have to pay for transport costs simply to get between places.

So our economy is not good—period. Our state of the nation is not good—period. Our Kiwis are suffering—period. I have received so many questions and messages from constituents who have asked me about the status of our country, and they asked, “Really, how bad are we? How come New Zealand has so much debt now? How is it possible that the Government now pays more on finance costs?” And on this, I must share the shocking, shocking financial data again, which I repeatedly shared during the Finance and Expenditure Committee and also to many of the constituents that I met in the community—that the New Zealand Government now pays $1 billion more this year than the spending that we give to Defence, Police, Corrections, and Customs combined. We pay more on finance costs, simply to service our nation’s debt, more than these four combined.

I’ve also been asked by so many people about structural deficit. It’s a word that we constantly used in our select committee, and I’ll take this opportunity to explain it for you. It means our country’s expected revenue is consistently below its expenditure. That means, even in the periods of economic growth, our Government does not generate enough revenue to cover its spending. [Interruption] It also means, for the members opposite, for you to understand, that our Government’s ability to respond to future crises is limited because we have committed spending to our country but we have less fiscal headroom to address the unforeseen events such as economic downturns, such as natural disasters, such as public health emergencies without further increasing debt.

So the National-led Government is laser-focused on rebuilding our economy by cutting down wasteful Government spending, enhancing revenue, investing in growth, and implementing structural reforms. And by focusing on these areas, this is how New Zealand can actually shift from a structural deficit to a fiscal surplus, improving the country’s long-term fiscal sustainability and economic resilience.

Since becoming an MP, I have had many opportunities to hear from Kiwis from the top of the North Island to the bottom of the South Island, literally. I’ve been in communities, held public meetings, knocked on business doors to ask them one question: “How are you going?” There is one consistent theme and repeated words: “hard”, “tough”, “doomed”, “challenging”, “expensive”, “pressure”.

I remember speaking to a motel owner in Invercargill, and he said, “Business is hard and people are not travelling. Hiring staff is hard because the last Labour Government have raised the minimum wage too high.” I asked a business executive in Napier, and he said, “I’ve just returned from overseas on business trips and things are buzzing out there. Businesses are active, people want to trade, productivity is high, new technology, new energy. But coming home back to New Zealand was hard because things are expensive, we can’t afford to export, and our products are more expensive and losing our competitiveness.”

I asked a tourism operator in Rotorua, and he said he’s never been under so much stress because international tourists are simply not coming back enough, even compared to before the pandemic; whereas many other countries in the world are simply crying out for having way too many tourists. I also asked international students in Auckland, and they said they’re very disappointed with their experiences in Auckland. So many shops are permanently closed, it’s more expensive to travel within New Zealand than to travel to Australia. They have no confidence in finding a job in New Zealand that will give them a clear pathway to residency and finally calling this country home.

I have so many more stories that I can share from day to day Kiwis who are struggling in the state of the economy we are in right now. And everyone that I spoke to has asked me one question: “Can you please fix the economy and fix it fast? I don’t know how much longer we can hold on to this.”

So I see the BPS as hope. The three main takeaways from the BPS for me—and I’ve always been sharing this with the communities outside of this Parliament building first—the Government will deliver meaningful tax reduction, responsibly and affordably. Tax thresholds have not been adjusted for 14 years. New Zealanders are suffering with cost of living pressures, so tax relief is coming. Tax relief will be funded from within a new operating allowance for Budget 2024, and we won’t be borrowing extra for tax relief and will not be adding to inflationary pressures.

Second, we are putting a strong focus on supporting and expanding front-line services that day-to-day Kiwis desperately need, like health, education, and law and order.

Thirdly, the mess that the last six years of Labour Government created for New Zealand will take more than one Budget to fix. It will take several Budgets. This is because there need to be structural changes to cut red and green tape to turn around the ship that has been sailing in the wrong direction, and soon make it right again.

We also need to rebuild New Zealand’s economy because special economic and tax forecasts prepared by the Treasury for the BPS showed that Treasury has downgraded the expectations of economic growth for New Zealand. This has a flow-on effect into forecasts of tax revenue and the ability for New Zealand’s economy to rebuild.

So our response is that the Budget Policy Statement is more than a fiscal document. It is a declaration of our Government to uphold fiscal responsibility, stimulate economic recovery, and restore the prosperity of our nation. So thank you for the opportunity for me to speak in support the BPS, and to all New Zealanders, hope is coming.

I hope New Zealanders see this blue document from a blue Government that is so wrong, a back-track Budget Policy Statement. On page 1, it says, “Government’s overarching goals … Build a stronger, more productive economy that lifts real incomes”—what it doesn’t say is “for some”— “and increases opportunities for”—and it doesn’t say “for selected New Zealanders”, because that’s what it is going to do. It says it will “Deliver more efficient, effective and responsive public services to all who need [it]”. It won’t be for people with disabilities; it won’t be for people who need a roof over their head.

If ever there’s one day that summarises the lack of empathy for all New Zealanders, it’s today, because, on this day, $60 million that was a little bit of help to first-home buyers has been taken off the table, because it has to pay for a $2.9 billion subsidy, tax cut, tax break, for the landlords and the people who they will have to rent from. But that’s not it. That $2.9 billion is on top of the $2.8 billion that taxpayers pay to landlords in accommodation supplement. That is a direct subsidy to those people who own properties. And those people who are trying to buy a property—and the Government had $60 million—a mere $60 million—to help them with a little step up to get their foot in the door, and this Government has chopped off their feet. It is absolutely outrageous. We are seeing encouragement for landlords, support for landlords, subsidies for landlords. And what are we seeing for the rest of the country? The people who Norman Kirk said need a home, need something to eat, need a job, and need something to hope for. The only thing they’ll have hope for is a change of Government in two years’ time, because I’ll tell you what, it is going to be a pretty sad state.

The other thing about that subsidy for landlords is that it comes on the day that the Register of Pecuniary and Other Specified Interests of Members of Parliament came out. And I hope that New Zealanders read this document to see why there’s no empathy for people renting in this country. Do you know why? Because on that side of the House, it’s full of people who have rental properties. That’s who they empathise with; that’s who they are subsidising. [Interruption] Subsidising—oh, that member over there doesn’t like the word “subsidy”. If I said “subsidy” for agriculture, he’d be up in arms. Subsidising his landlord mates is what this Government, this National-led Government, is doing. It’s outrageous. And I suggest people go and look.

A lot of New Zealanders might have voted for National, because they were promised a $250-a-fortnight tax cut, $250-a-week tax cut. Now, that’s pretty significant—that’s pretty significant. And for low-paid New Zealanders, if they were to get the $250, that would make a huge difference. But I hope they’re not holding their breath. I hope they’re not holding your breath for a $250-a-fortnight tax cut. Let’s wait and see who gets the tax breaks. But if we look at the number of landlords in this country and we take $2.9 billion and spread it among them, it’s a hell of a lot more than $250 per fortnight.

This Budget Policy Statement clearly states that there will be benefits offered through the Budget, but they will go some New Zealanders, to a selected number of New Zealanders who are looked after by a Government that has no empathy for people on low wages. They say “hard-working New Zealanders”. I’ll tell you who’s hard-working: stay here till 12 o’clock and watch the people come in and clean this place. They’ve probably worked another job somewhere else, and how much will they get in tax cuts? Well, I’ll tell you what, I bet it won’t be $250 a fortnight. Now, this is an outrage. This is a classic Tory Budget Policy Statement from a back-track Government that will further divide this country.

The member’s time has expired.

There has been some outrageous crystal ball - gazing from the other side of the House. It is remarkable how many things they think they know when it is not possibly true. Unlike the member who’s just sat down, the Hon Damien O’Connor, I have in fact actually read this document, and it outlines some quite amazing things, like goals and priorities. Because I can tell you that we are an enabling Government, and this Budget Policy Statement sets out really nicely the way that we intend to do what we’re going to do. I can tell you that after six years of letting this country go down the tubes, it is not going to be fixed in one Budget. So what I’m going to do is talk to each of these points because I think it’s important to highlight how we are going to enable this economy to rebuild.

So you know what? Goal number one: build a stronger, more productive economy. We cannot lift incomes for people if we don’t do that. So all of this stuff is miraculous, symbolic gesturing, because none of it works without a strong economy, and we have to do these things to rebuild it. We have to do these things to lift people’s incomes, to increase the opportunities that we so want. I talk about Wairoa all the time as one of my favourite places in my electorate. I want people to not have to leave Wairoa for those opportunities. They need to have access, and that is what we are doing with the priorities in this Budget.

The next point is fundamental: efficient, effective, and responsive public services. None of this stuff is possible if we start sprinkling around money here and there without a focus and a strategy.

Tom Rutherford: Spray and walk away.

KATIE NIMON: Quite right: “Spray and walk away” is a really good point—I’m going to get to some clichés soon.

Now, most importantly—and we campaigned on this last year and we are absolutely bringing it all in—restore law and order, improve health outcomes, and educational achievement. None of that is possible if you don’t focus on the fundamentals. We have talked at length about this being a “basics, brilliantly” Budget—and that is what we are here to do. And to do that, you have to restore discipline. You cannot do that by throwing money at everything. All of this stuff is about the fundamentals. We need to restore discipline to achieve those, so let’s get into the priorities.

Meaningful tax reductions. This is all about cost of living relief. Members opposite went on and on about the cost of living.

Sam Uffindell: Tax relief.

KATIE NIMON: Absolutely. Do you know what? You do that through tax relief, and it has not been done for 14 years. Other countries around the world, their tax rate adjusts with inflation, unlike ours, and we’re going to do something about it. So you can talk all you like about what you think is going to happen. But, actually, like I said, there is no crystal ball. We will show you in eight sleeps’ time, and it will be brilliant.

Next we have identifying enduring savings. We’ve talked all the time about these savings that we’re going to do and we’ve been doing. We need to make them last, and this is exactly what it is that we are going to do. So what we need to do now is shift the spending to high-value areas.

Now, I’m going to get to these clichés I was telling you about, Tom Rutherford. I could go on all night. Bang for buck; rifle, not a shotgun approach; return on investment; spray and walk away—I love that one, Tom Rutherford. We need to make sure we are focusing on what gets return on investment; what is going to help Kiwis the most, and that is doing the basics right: healthcare, education, law and order, fix the cost of living. We need to get money fed back into people’s back pockets and we have been saying it until we’re blue in the face. Now is our time to show it.

Prudency, focus, and a high bar for Government funding. All of that stuff is discipline, it is focus, it is doing the right things first, and all of this has to be long term—long term and sustainable. To be long-term and sustainable, just like our infrastructure projects, we need a pipeline—you cannot plan for infrastructure work without having a pipeline. No one’s going to come and invest in New Zealand if we don’t show that we’ve got a plan for 30 years.

None of this is ever going to be done if we don’t do it, basically, and do it right. Now, that is the point—that if we do this well and we get the basics right, we then leave room for those urgent cost pressures and the policy commitments that we have talked about every single day since we’ve been here. The fundamentals done right allows us to do that, and that is what every member opposite has completely omitted in their speeches. The basics allow us to do those extra things that we have been talking about. You spend it all now and there is nothing left to do in the next three years, 12 years—

The member’s time is expired.

Kia orana, Mr Speaker. Well, that last speaker, Katie Nimon, just rabbited out the usual lines. But I’ll tell you what this document is: this document is recession by design. This is a Budget of austerity. They say that—[Interruption] You know, they can guffaw, but the first thing they did was to take the mandate away from the Reserve Bank to consider employment. And what do we have? Rising unemployment.

And they complain about the tax base while their own policy erodes it. Taxes are paid by working people, and this document reduces the number of working people in New Zealand. The projections are out: we’ll see another 26,000 people on the dole. That is by design. That is a choice. That Government is choosing to put people out of their jobs. Not just the people in the health sector, our Customs officials who protect our borders, people in the education sector—not just those people who are working for us but all of the knock-on effects, all of the other businesses. We’ve seen the construction industry is grinding to a halt because the confidence in the economy—under this document—has been gutted, so it’s no wonder we’re seeing falling consents.

Now, that Government over there—and you heard the language, the language of business. They’re talking about “return on investment” and “getting back to basics”—that is the language of corporate New Zealand. We know already that this document looks after corporate New Zealand. We saw the billions of dollars in tax breaks for landlords. Those billions of dollars have to come from somewhere. We heard Ms Lu talking about working New Zealanders and their wages. This is a Government that saw minimum wage New Zealanders go backwards by giving them a 1.5 percent pay rise in the face of 5 percent inflation. That is a pay cut. That’s what this Government is interested in: looking after their mates. That’s what we’re going to see. This Budget Policy Statement basically outlines a Budget for the few—a Budget for the few.

We know that these tax cuts are coming—Nicola Willis has staked her job on it. She said she will deliver the tax cuts that she promised in the election—$9.6 billion of tax cuts is what she promised in the election. And how is she going to do that? Again, we heard Nancy Lu talk about borrowing and how much we’re borrowing and what the interest costs are. Well, these tax cuts—these tax cuts for landlords—are going to be borrowed. There’s $8 billion of borrowing coming because of the tax cuts that we’re seeing. There is no economist—there is no economist—who says that this is a good idea. It’s the wrong time. The idea, the suggestion, that giving people tax cuts in this economy isn’t inflationary is madness. It cuts across everything we know about how the economy works. Where else is the money coming from?

We talk about, you know, being sensible spenders. Well, tell that to the people whose disability benefits got cut—that it’s prudent to stop the support we’re giving to carers. Tell that to the staff in Oranga Tamariki protecting our most vulnerable children, who are being laid off their jobs. Tell that to the police, who are being told to get out there and crack down, and, at the same time, the people who support them are losing their jobs. Tell that to the health workers who do the scheduling to make sure people can make their appointments and that resources are used as effectively as possible—tell that to those as well. So far, 4,500 jobs have been slashed—people who look after New Zealanders. That’s where the money’s—oh, there’s a few other places the money’s coming from, of course. The other thing we saw straight out of the gate was tax cuts for tobacco companies. We saw the excise tax frozen—a coalition promise so that the New Zealand First Party could look after big tobacco. That’s how they’re going to pay for these tax cuts for landlords—with people’s lungs. That is shameful. I’m absolutely ashamed that that’s part of our Government.

So this is a recession by design—saying you’re doing one thing with one hand; giving tax cuts and pretending it’s not the other hand that’s slashing the economy, throwing us backwards and throttling the lives of ordinary people those people who have been saving up, looking forward to buying a home. Today, they were peremptorily told that that helping hand, the very helping hand that Nicola Willis criticised the Labour Government for not giving enough money away—they had the rugs being pulled from under their feet. They’ve been sent backwards. This is a Government which is happy to see people stuck in rentals, trying to save but not being given the lift that they need.

The suggestion that in some way that’s going to Kāinga Ora is fatuous. We’ve seen what’s happened with Kāinga Ora. Already in Christchurch there are builds that we’re concerned are going to be put on hold. That is because of the so-called reset of Kāinga Ora. Of course Kāinga Ora has debt—because it costs money to build houses. It’s a great thing that we’ve spent billions of dollars on homes for vulnerable families. To suggest that it’s a failure to deliver warm, dry, social housing is madness. This is a Government that is going to abdicate its responsibility as part of its Budget policy—its Budget policy—of austerity. Fundamentally, that’s what it is.

As for a productive economy—a productive economy where more and more people are out of their jobs, where wages are frozen or falling, where there’s no confidence in the construction industry. Only last night, I was talking to a scion of the infrastructure industry who said, “There is no confidence.”, that their projects have been ditched and nothing new has been started. So people are looking elsewhere; they’re taking their talent and they’re taking their capital and there’s going to be a gap in New Zealand. This is exactly what happened last time National was in Government. They turned off the New Zealand economy, and all of that top talent left the country. It took the Labour Government a long time, along with its apprenticeship programme and a whole lot of capital works—

Cameron Brewer: Turn the microphone off.

Hon Dr DUNCAN WEBB: —to get it going again. I can hear Cameron Brewer yapping away there. He really should go on a holiday to the Gold Coast. I hear he likes them—google that one.

As for a structural deficit, of course, if you’re going to give enormous tax cuts, there’s going to be a deficit. So what we need to do is actually get back the New Zealand economy, to realise that full employment is the best thing we can do for the New Zealand economy, that helping people own their own homes is a good idea, and to stop gutting critical services in the Public Service under some kind of idea that people who aren’t face to face with the New Zealand public aren’t doing meaningful, productive, and important work. The suggestion that there is a back office and front office, and the back office is worthless—well, firstly, the division isn’t real. What we’ve got now—and I know this for a fact—is police officers spending hours of their day answering emails and doing admin. That’s something that a person with an entirely different skillset should do. A police officer is trained to do policing, not emails and scheduling. So this whole idea that the back office is not worthwhile—it’s a trope, and it’s vile because it undermines the good work that skilled people do to help New Zealanders.

So this Government has a Budget policy: recession by design. It’s absolutely shameful, and I know we’re going to see worse next week.

Thank you, Mr Speaker. I rise to give the final call on the debate on the Finance and Expenditure Committee—a wonderful committee—on the Budget Policy Statement. I’ve sat through all 13 speeches, listening to the different members, and I felt like I was in a bit of an Orwellian novel there as I saw history being revised by former Government members, as they went through all of the things that are wrong with New Zealand like the last six years didn’t happen; like they had no part to play in the pain and misery that they have inflicted on New Zealand businesses, on New Zealand households.

We come into Government in a situation where structural deficit is at 1.5 percent. We have the second-worst structural deficit in the developed world. We have interest payments that will be up at around $10 billion per annum. We have house prices that have risen significantly, rents that have increased $170 per week; the pain that this has inflicted on New Zealand households and New Zealand families is significant, and I see members over there shaking their heads like they had nothing to do with it at all. Well, you did have something to do with it, you had a huge amount to do with it, and you had six years to try and make a better New Zealand and you made a significantly worse New Zealand. I am very thankful that we have excellent Ministers, we have Nicola Willis in finance, and I am looking forward to the Budget coming out next week. There is a huge amount of work for our country to do and we’ve got many hard-working Ministers working very hard in this space to make it happen.

We heard a lot, as well, about how we are the party for wealthy people, and I find that absolutely baffling coming from a former Government that oversaw one of the biggest wealth transfers in New Zealand history. That is the reality. Through your inability to run a country, you oversaw a vast transfer in wealth from the lower and middle income segments of New Zealanders to capital-rich households in this country. That is the reality. You can’t run away from it, and the people of New Zealand need to always remember what you’ve inflicted upon them.

Construction sector is grim. I walk around and I talk to construction, I talk to businesses, and I get the same stories all the time that the revenue they are getting is down significantly, that the construction sector is coming to a halt and they are worried that all of their workers are going to disappear to Australia and when things come back online they are not going to have the workers there.

We look at the official cash rate; we inherited this at 5.5 percent. Now, that is high and that is really, really hitting hard. Kiwis don’t have the disposable income anymore and you go out and you talk to your local cafe, you talk to your local business: are people spending? And they say, “They’re not really coming in, and when they do, they’re just buying a coffee. They’re not getting a cake; they’re not getting anything else. My revenue’s dropped. I’m having to lay off staff; I want to keep them around.” And you hear this story over and over again, and I look at other hard-working electorate MPs—because most of them are on our side of the House, that’s the way they voted—and they will know from walking around that that’s the reality.

We’ve got a plan—we’ve got a plan, and the other side of the House didn’t have much of a plan, but we do have a plan. We are going to reduce debt. We want to reduce debt below 40 percent. We encounter regular shocks in New Zealand; we need that buffer, that is clear. We have a huge amount of interest that I’ve already alluded to that we are paying out; we need to reduce that. Yes, we can take on debt, if necessary, but if we do it has to be about making sure we fund infrastructure that is going to deliver long-term economic growth and productivity gains not the sort of debt that members on that side of the House covered themselves in and swamped our country in which was for operating expenses that consistently delivered worse outcomes for New Zealanders.

We’re going to be delivering tax relief as well, and I know the hard-working people of Tauranga and around New Zealand are very much looking forward to that. And we have a little walk down memory lane to 2011 when tax relief was last delivered, and we had people paying 15.5 percent of their income—around that—in tax. We look at that today; it’s up at 20.6 percent, as Stuart Smith, chair of the Finance and Expenditure Committee, pointed out in his opening speech. We don’t have a tax problem in New Zealand; we have a spending problem. And we have inherited an extreme spending problem from that side of the House—

Reuben Davidson: So why do people need to leave?

SAM UFFINDELL: And I hear them piping up. New Zealanders need to always remember what you did to our country, they really do. We have inherited some huge issues from you. But we are going to be delivering tax relief, because you know what, Madam Speaker? We actually believe that hard-working people deserve to keep their money. We think that they can do more with it than the Government can. We trust Kiwis to do better with their money to provide for them and their families, better than we expect the State to do it. We want them to keep more of their money and we have been clear through the election campaign and coming into Government that we are going to be delivering tax relief, and I know many New Zealand households who are out there doing it tough—you know, they’re paying a lot more in rent, they’re paying a lot on their mortgage, we’ve seen inflation, it’s continued—are looking forward to getting a little bit more back in their pocket.

And it was pointed out, I think, from a member of the ACT Party, who said, “Look the other side of the House, they rubbish these tax cuts, and maybe it doesn’t impact them. We’re sitting here on a $160k a year; they might not notice the tax cuts.” But for your average household out there in New Zealand that is doing it tough, that is going to make a difference. Maybe that means that they can take their kids to a dance class. Maybe it means that they can buy them some new footy boots. Maybe it means that they can decide that they don’t have to take something out of the trolley. There are many things that people will be enabled to do by getting a little bit of extra help, and we are there to help New Zealand households.

We also want to make sure that we’re cutting wasteful spending. And I think a really good example that this Government has delivered on this is with the school lunches programme where we looked at what was being done and we said, “Look, we can save $104 million on this, and we can actually roll it out to feed 10,000 more kids aged two to five years old.” That’s a really good example.

We’re looking at providers like Gumboot Friday and saying, “You’re doing a fantastic job, brilliant, we’re going to back you, here’s $24 million.” That’s a really good story. We saw the announcement today around community housing providers and social housing where we’re going to provide $140 million into that to provide 1,500 new social housing places. And I look in Tauranga, where we’ve got Accessible Properties, and they do a fantastic job, and they do a lot more cost-efficient job than Kāinga Ora. Their failures have been well noted and we’ve seen it in our local market—and I can see my colleague Tom Rutherford over there—where they have come in, outbid the market a lot, spent a lot building stuff, and delivered houses that actually aren’t affordable for the people that they’re intended for.

So this Budget is a no bells, no whistles—you know, it’s a no-frills Budget. It’s about getting back to basics. It’s about delivering tax relief to hard-working Kiwis and that’s what the side of the House is focused on. We are focused on rebuilding our economy, we are focused on restoring law and order, and we are focused on delivering better public services. Thank you.

The question is that the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2024.

Motion agreed to.