The National Party leader labelled yesterday’s Budget a Backwards Budget:
Budget 2022 confirms that New Zealand is going backwards under Labour faster than ever, Opposition Leader Christopher Luxon says.
“This is the Backwards Budget. Kiwis, the economy and outcomes are all going backwards under Labour and today’s forecasts confirm the situation is only going to get worse before it gets better.
“Labour’s spending addiction means the books are going backward. Not content with a $6 billion spending spree, they’ve also raided future budgets – spending $2 billion from Budget 2023 and $0.4 billion from Budget 2024. And that’s before you count climate spending and the cost of living bandaid – which are on top.
They’re pushing out surpluses and shifting the goal posts to clear the way for more spending by lifting debt limits.
“With inflation at a 30-year-high and prices running laps around wages, Kiwis are experiencing the worst cost of living crisis in a generation. The forecasts today show inflation is rampant for years to come.
“More and more Kiwis are falling behind each week, squeezed by growing costs and a Government that refuses to offer them meaningful income tax relief while ramming through the biggest spend-up in New Zealand history.
“Labour’s cost of living package is a temporary band aid. The squeezed middle are paying the price for Labour’s economic mismanagement.
“And despite smashing the record for government spending, outcomes are going backwards. They’ve added more than 10,000 bureaucrats to the public service, yet outcomes are getting worse.
“Under Labour, wait times for surgery and specialist assessments have blown out, literacy and numeracy achievement rates have hit alarming lows and violent crime and gang numbers have exploded.
“New Zealand is going backwards, fast. We simply cannot afford this Labour Government.”
A transcript of his Budget speech is here.
We’ve got inflation now at just under 7 percent, we’ve got wage growth only at 3, and that means all Kiwis are going back faster than they’ve been going in the last three decades. Mortgage costs are up because interest rates are up, rents are up $150, food prices are up the highest they’ve been in over a decade, and petrol is up over $3 a litre. And I can tell you, Kiwis up and down this country are feeling that pain. And this Budget will be putting Kiwis backwards into the future. . .
So let me be really clear: the cost-of-living package that this Government announced in the Budget today is just a band-aid on a major wound. It’s a band-aid. They deny that there was, in fact, even a cost-of-living crisis for a long period of time, and now they’ve added a temporary band-aid, which just runs out after three months. And I can tell you, what we just saw was inflation’s going to be running at 3 percent right out to 2025, so Grant Robertson’s big solution to the current cost-of-living crisis is a temporary payment to a small group of people. And I have to tell you: if you’re earning $71,000 a year, you get nothing.
And that means nobody on the average wage gets a cost-of-living payment, because these are the people that would have benefitted from income relief through a very good, sensible, logical plan—our plan, which was just say, “Take the current progressive tax system, and in fairness, why don’t you just live the tax thresholds up by the amount of inflation? And an average Kiwi household would have had $1,600 a year to fight this cost-of-living crisis that they’re facing.” But Grant Robertson said, “No.” And why did he say, “No.”? Because the dirty little secret is that inflation, while it destroys savings, it destroys people’s purchasing power, and it gets into an economy. The dirty little secret is that inflation helps Grant Robertson. Why? Because he’s collected $17 billion more in tax revenue because, as prices go up, taxes go up. And Grant Robertson, as we know, is utterly, totally addicted to spending, and that means that he won’t let Kiwis keep a single cent of their own money, because he thinks he can spend it better than them. And on this side of the House, we know Kiwis with cash in their pocket will spend it and save it a lot better than Grant Robertson. . .
Let me lay out the facts on why the books are going backwards, because it is very, very important that Kiwis register what has gone on here today because of the economic mismanagement and the lack of economic leadership from this Government. Kiwis up and down this country are tightening their belts at their kitchen tables. They are doing it. Grant Robertson should be doing exactly the same, but he’s not. And what we have seen from this Government is a loss of a culture of financial discipline. We’ve seen a loss of targets. They don’t care about every single dollar being spent as if it’s their own, and they should because it’s not their money—it’s taxpayers’ money. But I’m telling you, Grant Robertson has a problem, and his problem is that he is so deeply and utterly addicted to spending, and I want to say that the impact of his addiction on our fiscal books is incredibly clear, and when you think about it, he’s damaging New Zealand’s economy very strongly. This is—be under no doubt—a massive Budget blowout.
This Government—and I want to just step it through—has increased Government spending since coming to power by 67 percent. You haven’t seen a 67 percent improvement in outcomes or services. And, consequently, we’re spending $127 billion this year in Government spending. That is unprecedented, and that is $51 billion more this year than it was in 2017—$51 billion dollars more. And now, let’s just look at this year, because Grant Robertson said he would spend $6 billion in the biggest Budget spend-up in the history of New Zealand, and he’s actually spending far, far more than that. And I want to take the House and the country through this because it’s actually really important everybody understands what’s going on, because he’s trying to make out that he’s fiscally prudent. And the reality is he’s more addicted to spending than he’s ever been before. There’s the $6 billion he’s already announced, and then you have to remember, earlier in the week, he spent $3 billion from the Climate Emergency Response Fund, earlier in the week—a lot on Labour projects and buzz words and strategies and plans and plans for plans. . .
For you to spend money and to deliver outcomes, there’s something in the middle called “implementation, execution, delivery”. Those are the things you need to do. But if you haven’t run anything, you don’t know how to get things done, and that’s exactly the story of all of this front bench: they don’t know how to convert the spending into outcomes. And you can pick any topic you want—any portfolio you want—and you’re going to see a consistent pattern: more spending, more bureaucrats, worse outcomes.
Let me give you an example; let’s take Chris Hipkins and education because, without doubt, that’s the most damning set of stats I’ve seen since I’ve come into politics, and to this place, 18 months ago. He spent $5 billion more, hired 1,400 more staff—staff earning $120,000 or more has tripled—and yet we have less kids attending school, and we have worse academic outcomes. What we’ve got from Chris Hipkins is more spending, more bureaucrats, and worse outcomes.
Let’s look at Megan Woods and housing, because, if you remember something called KiwiBuild—remember KiwiBuild?—we don’t talk about it anymore, but the flagship KiwiBuild; only delivering 1.3 percent of the promised 100,000 houses. But, even if we put that aside, just think about the four outcomes you actually have to deliver in housing: house prices are up $400,000; rents are up $150; there’s a quadrupling—a fourfold increase—of people wanting a State house; and, sadly, this morning, 4,500 kids woke up in a motel in emergency accommodation. So what I’ve got to say is that from Megan Woods, we’ve seen more spending, more bureaucrats, and worse outcomes.
Let’s talk about Kris Faafoi, because he’s probably going to wake up now. He spent an extra $150 million. He’s hired another 500 people and, on every single visa processing, the wait time has got even longer. What is that? More spending, more bureaucrats, worse outcomes.
I want to talk about Kelvin Davis just quickly, because we should talk about Kelvin and Corrections. He spent $139 million. He increased the back office staff of Corrections by 50 percent, and then those prisoners that desperately need alcohol and drug rehabilitation services dropped from just over 6,000 down to 1,000. More spending, more bureaucrats, worse outcomes.
I really want to talk about Michael Wood and transport—that’s the one I really want to get to, because who would have thought that an $800 million bike bridge across the Waitematā was a killer idea? Brilliant idea. And then you go and spend $55 million on consultants looking at it, and then we’re still hiring an empty office building on Auckland’s waterfront to run a cancelled project for $600,000. He’s tripled the communications staff, we’ve had a tenfold increase in those that are paid over $100,000, and even then they still can’t communicate why you need two props of zeroes for $10,000. I mean, you honestly can’t make this stuff up, and I could go through every single portfolio and the story’s the same: more spending, more bureaucrats, worse outcomes. They don’t know how to get things done.
I just want you to take yourselves back two weeks ago because, two weeks ago, Andrew Little came to this House, and he stood up, and he realised he had a problem with wait-lists on health. And he had a cunning idea, I thought, you know, because the reality is this: there’s been a fifteenfold increase in people waiting more than four months for their first specialist appointment, and that was from when they came to power before COVID in February 2020, and it’s only got worse since then. Anyway, so Andrew Little came to the House and he said, “Look, I can’t just go and create another working group, because that’s what we used to do. We spent nine years in Opposition, we had no ideas, we arrived in Government on day one and we formed 230 plus working groups.” Now, we lost count of them but that’s what they did. So he didn’t just create a working group; he thought about it a bit more and he created what we call a “task force”. That was task force. And the great thing about a task force—this wasn’t just a normal task force, or a bog-standard task force; no, this was a “high-powered task force”, OK. [Cheers from Opposition members] . . .
In closing, let me say that New Zealanders deserve far more than this Government has delivered. Labour has taken so much in taxes, they’ve added so much debt, and they’ve spent so much money, but yet they have delivered so little in public services and outcomes. And this is indeed, sadly, the “backwards Budget”. The books are going backwards, Kiwi households are going backwards, the outcomes are going backwards, and, sadly, the country’s going backwards and we’re heading in the wrong direction. New Zealanders deserve a Government focused on outcomes and getting things done, that listens and works with communities and businesses to do so, and we’re going to do that in the National Party Government that we lead. We do live in the best country on planet Earth. I’m optimistic about New Zealand. I believe we can do so much better than this. I want us to be confident. I want us to be aspirational. I want us to be ambitious. I want us realising our maximum potential—economically, socially, and environmentally. And that’s what New Zealanders can expect, and that’s what they’ll get with a National Government in 2023. Thank you. . .
Nicola Willis says government spending is out of control:
Budget 2022 confirms Finance Minister Grant Robertson’s spending is out of control, National’s Finance Spokesperson Nicola Willis says.
“Not content with a record $6 billion per year spending spree that he planned, Labour has raided future budgets – spending $2 billion from Budget 2023 and $0.4 billion from Budget 2024.
“That’s before you count climate spending and the cost of living payment – which are on top, taking the total spend-up to more than $9 billion per year of government spending.
“At a time when unemployment is very low, Grant Robertson is running a deficit of $19 billion.
“Having announced by far the biggest increase in spending in any Budget, ever, Grant Robertson expects New Zealanders to believe that he will keep his increases to $2.5 billion for the next two years. That is hard to believe.
“Inflation is at a 30-year high of 6.9 per cent, will remain above 5 per cent next year and is expected to stay high for years, not getting back down to below 3 per cent until 2025.
“While Labour might want to blame inflation all on offshore factors, Treasury has confirmed that inflation is being driven by domestic factors.
“Today’s forecast confirm that Labour’s economic mismanagement means Kiwis, the economy and outcomes are all going backwards.”
The Taxpayers’ Union echoes the backwards theme, recalling Rob Muldoon:
Grant Robertson is the first Minister of Finance since Muldoon to fail to deliver a budget suplus during a time of economic boom, says the Taxpayers’ Union, commenting from today’s Budget 2022 Beehive lockup.
“With Government revenues booming, it is stunning that Grant Robertson has failed to deliver either tax relief or a surplus,” says Jordan Williams, the Executive Director of the New Zealand Taxpayers’ Union.
“The spike to inflation has seen record revenue flooding into the Beehive due to workers paying higher income tax rates and more GST. But despite the inflation, the lowest unemployment since records began, the end of COVID lockdowns, and better than expected economic numbers, Grant Robertson has actually pushed back the return to surplus.”
“It is stunning that, during a cost of living crisis, Grant Robertson has failed to give back any of his windfall gain to the workers who earned it. His failure to deliver either income tax relief or a balanced budget beggars belief: while households tighten belts, Wellington balloons.”
“With Government revenues as strong as they are, the Finance Minister could have today announced both income tax relief and a surplus. Instead, he’s decided to feast on the revenue with a laundry list of spending commitments.”
“The temporary $27-per week ‘cost of living’ payment is a cruel joke. Unlike genuine tax relief, it fails to improve productivity incentives. It’s just a three month handout, and an ineffective one at that. At current prices, it wouldn’t even buy two blocks of cheese!”
“The only silver lining is pushing back by three months the hike to petrol taxes and Road User Charges. With inflation running at 6.9%, the hike to petrol taxes should have been squashed permanently”
And in a touch of irony:
The figures match but a change in tax brackets would continue for much more than the three months the $27 a week will; and the change in tax brackets would help people across the board, not just those earning less than $70,000, excluding superannuitants and beneficiaries.