Introduction
Mr Speaker,
I move that the Appropriation (2013/14 Estimates) Bill be now read a second time.
It's my privilege to deliver the National-led Government's fifth Budget.
When I stood up to deliver the Government's first Budget, in 2009, New Zealand faced challenges I think we're only able to fully appreciate with the passing of time.
The world had entered the worst financial crisis since the Great Depression, from which it has yet to fully emerge.
The New Zealand economy had been in recession for more than a year and some economists were predicting the unemployment rate would go higher than 10 per cent.
The previous government had increased its spending by 50 per cent over the previous five years and that was simply unaffordable.
The Treasury told us that if we kept the policy settings we inherited, we'd never see another budget surplus again and government debt would increase to levels we're currently seeing in Europe.
That wasn't the end of it. Few at that time anticipated how difficult the global recovery would be. And no-one anticipated the Canterbury earthquakes which, apart from the terrible loss of life, have been one of the most expensive natural disasters in history.
So, starting in Budget 2009, we set out our plan to get New Zealand out of a deep hole.
We were prepared to run deficits for a few years, to support the fragile economy, preserve jobs and protect the most vulnerable New Zealanders, including families with children, from the worst of the recession. That meant increasing government debt.
But at the same time, we set out a credible path back to surplus and a plan to start paying back this debt.
That plan involved reining in expenses and getting on top of the longer-term drivers of government spending.
We also set out a comprehensive programme to build a more productive and competitive economy that supports higher incomes and more jobs.
This has included our tax package in 2010, our on-going resource management reforms, the introduction of 90-day trials, investment in infrastructure, building on our international trade deals, and a significant investment in skills, training and apprenticeships.
We have been driving for better results from public services. And, since the earthquakes, we have been working hard to support Cantabrians through the aftermath of their disaster and through the rebuilding of their city.
Mr Speaker,
The Government's plan has not involved radical change. We've done what we said we would do, and we've taken people with us.
And that plan - using sound and proven economic policies - is working, as international bodies like the IMF have recognised.
New Zealanders can look to the future with well-earned confidence and optimism.
The New Zealand economy grew 3 per cent last year, which is almost the same as Australia, and higher than almost every other developed country.
Wages are growing, cost of living increases have been modest and interest rates are at 50-year lows.
There are 50,000 more jobs in the economy than two years ago, although unemployment does remain too high and attracting new investment that creates jobs is a particular focus for the Government.
The fiscal outlook has improved markedly as a result of the Government's sound management and we are on track to post a surplus in 2014/15.
These are real achievements that are benefitting New Zealanders and their families.
Budget 2013 is about building momentum in this programme.
But there is a risk that all the gains we are now making could be lost in the future, by going back to policies that have failed in the past.
We know what these are - high and wasteful government spending, more costs and more taxes on households and businesses, and more state control of the economy that chills private sector investment and destroys jobs and growth.
New Zealanders were conditioned in the 2000s to believe that Budgets should be about the novelty of new, expensive spending programmes that held out promises of economic and social transformation, arranged by the Government.
Those promises were illusory. There was no sustainable revenue stream to pay for the increased spending, and there was nothing genuinely transformational to show for it.
In contrast, this Government believes that Budgets are about careful stewardship of public money, and investing wisely in programmes to improve people's lives and help grow the economy.
In the end, it is the effective use of public money, not the amount of it, that makes a positive difference to the lives of New Zealanders and their families.
