Oh Bummer – the Standard is Poor

Budget 2009 – Russel Norman’s Speech

Introduction
I am profoundly disappointed with the lack of courage this Budget shows. The Prime Minister likes to compare himself to US President Barack Obama. This is not an Obama Budget. This is an Oh Bummer! Budget. As so many other countries take seriously the need to grapple with our economic and environmental crises at the same time, this Budget will go down in history as not even Standard, and mostly just Poor.

This is in fact the ‘Standard is Poor’ Budget. This is the Budget that the Government got signed off by Standard and Poors before they presented it to the Parliament and people of New Zealand. What have we come to when the Government of the day goes groveling for approval to a failed international rating agency like Standard and Poors?

This agency helped cause the current global financial meltdown by giving triple A rating to the dodgy subprime mortgages. They gave Enron a triple A rating a few weeks before that corrupt corporation collapsed.

It is shameful to watch the Finance Minister grovel before the failed standard is poor rating agency.
But the standard of this Budget is also poor because there is no strategy to get us out of debt, debt that means a frightened Finance Minister kowtows to a rating agency.

This Budget locks in our dependence on imported oil – imported oil that added nearly $8billion to our overseas debt last year.

This Budget does not enough to invest in the innovation and research that would see us climbing out of debt.
This Budget does nothing to protect NZ companies from foreign ownership that results in billions of dollars in dividends flowing to overseas owners every year.

This Budget does nothing to change the tax incentives around investment properties, tax incentives that encourage New Zealanders to borrow money from overseas to buy property for capital gains.

The Finance Minister talked more about creating new prisons than he did about protecting our precious natural assets or lifting our children out of poverty. His focus is on reforming environmental law to make it easier for developers to further exploit our already over-allocated natural resources.

A Government’s first Budget is time to show the nation what their vision looks like in action. This first Budget, as New Zealand faces a recession, is an opportunity for the National Government to show the people of Aotearoa what values they stand for when times are tough. Do they stand up for those hit hardest, insisting that we all tighten our belts a little to help our neighbours? Or will some continue to see the good times roll while others go hungry. Does the Government uphold every Kiwi kid’s right to a fair go? Does it uphold every Kiwi’s right to decent healthcare, a warm home, a good school and a safe climate? Or, does it leave our most vulnerable citizens to slip through the ever widening holes in what was once a cradle to grave safety net?

The standard for a Budget delivered in hard times is the first Budget of Michael Joseph Savage who came into office when times were tougher for New Zealanders than they are now. Savage was elected in the middle of the great depression with very high unemployment and great pressure on the government’s accounts. At their first meeting his Cabinet agreed to pay a Christmas bonus to the unemployed and a week later they approved seven days annual holiday for relief workers.

In the first Budget of the Savage Government they raised allowances for the unemployed and increased the wages of young workers. They began the construction of state housing, regulated mortgages for farmers. And more.

Savage’s government put the people first. It was a government that said all New Zealanders are worthy of dignity and respect and it put its money where its heart was.

In our current times an equivalent Budget means rolling back the 1991 benefit cuts introduced by National and never overturned under nine long years of Labour government. That is what a truly responsible government would do. A caring Government certainly wouldn't axe the Pay and Employment gender equity commitments to women working in the public service.

In current times a Michael Joseph Savage Budget would extend the Working for Families tax credit to beneficiaries. Labour introduced Working for Families with the express purpose of discriminating against those who were out of the workforce, something many kiwi families are just discovering as they lose their jobs and their Working for Families tax credits at the same time. Labour’s scheme left the poorest families in our society the worst off, and a truly caring government would overturn that discriminatory policy and give a break to those who are out of work in this recession.

But will this government show its heart and live up to the Savage standard.
Green New Deal
Times are different in at least one very important respect, and that is our awareness of the ecological crisis we face. We have to deal with both the economic and ecological crisis at the same time.

This year, we in the Green Party put our heads together and devised our own stimulus package – we figured out just how many jobs we could create by growing parts of the economy that actually need to grow, jobs doing desperately needed work. The Finance Minister has failed to say how many jobs his Budget will create.

Our package of initiatives is a first step towards what we and others call a Green New Deal. It’s a deal that aims to save the economy and the environment at the same time. Lots of countries around the world are busy adopting Green New Deal plans.

Our billion dollar stimulus package includes ‘shovel-ready’ projects that create jobs and stimulates the economy in a way that responds to pressing environmental problems including climate change. The proposed package covers: energy efficiency, transport efficiency, protecting waterways, building more homes and community sector initiatives. The stimulus spending over the next 3 years amounts to just over $1B per year –approximately the same amount the National-led Government has spent to combat the recession so far, and less than most other countries.

Our Green MPs have been on a listening tour – taking our ideas around the country and adding to them the ideas of hundreds of New Zealanders. Because we think building a sustainable, fair economy a topic on which every Kiwi deserves a say. New Zealanders have plenty of ideas. They know that the country has finite space and resources and we can’t have infinite growth in resource use.

So how does this Government’s first Budget measure up? Is it a Budget to protect those hardest hit – or a Budget to protect the balance sheets of the wealthy? Is it a Budget for those who’ve got the reins of power now, or is it a Budget for the future – for those born today and tomorrow who will one day sit in this House and wonder how we could have left them with such an almighty mess? It’s time to build an economy as if we were still going to be here in 2011, 2015, 2018 maybe even 2050. Can this Government Budget for the future?

Home insulation
There is at least one point of light for which the Government deserves credit and congratulations. In last year’s Budget the Green Party negotiated enough money to insulate all state homes. A little later, we negotiated a billion dollar fund to help get private homes insulated via the Emissions Trading Scheme. While putting that scheme on hold the Government has worked with my colleague Jeanette Fitzsimons on a fund to make private homes warm, healthy and safer for the climate.

In what may be some kind of Parliamentary record, the Green Party has successfully negotiated a massive funding increase to improve Kiwi homes with two separate governments in less than one year. We’ve campaigned for this over many years and it is good to see that we have multi-party support and money committed to make it happen. Warm, dry and healthy homes make sense economically. They make sense socially. And they make sense environmentally. I thank the National-led Government for embracing this sensible solution.

The Greens estimate that the $323 million of new money for insulation in this Budget can create 2,700 new jobs, and preserve the jobs that already exist within the Energy Wise Home Insulation Scheme. This is great for our economy during a time of economic crisis, and, it will continue paying us back for generations. It will also help us tackle the environmental crisis. This is what a Green New Deal looks like in action.

The Greens expect to continue working closely with the government to ensure the insulation programme runs smoothly and effectively. It is important to remember that there are almost 900,000 kiwi families living in damp, cold, unhealthy homes, and it is going to take time to make it right. Critics may argue that there is only enough money in the Budget for the first four years, but that is how the Budget process works. You will see that “out years” beyond year four are specifically referred to in the appropriation. The Greens have an expectation that this programme will continue, regardless of who sits on the Treasury benches, and we will push to ensure that the further years are funded. We will not rest until every one of those 900,000 kiwi homes is warm and healthy – it is not good enough to have kids in this country getting sick from their own homes. I am proud that we’ve been able to do something about that.

Social spending
Beyond this bright spot, things get pretty grim. The Green Party believes a strong public service is essential for providing a fair deal for all New Zealanders. All Kiwis are entitled to a good education, high quality health care, and employment opportunities.

This Budget does not provide this. It does not provide opportunity or fairness for everyday New Zealanders, in these dark times it does not offer hope. The National Party has not kept its promise of just capping the public service it is cutting into the public service and this will inevitably lead to a cut in the services that Kiwis receive.

Already we have seen an estimated 1400 jobs lost and an effective wage freeze in the public sector – this is not a cap, this is a sinking lid, this is an attack. And the wide ranging cuts we are seeing across the public sector – in Justice, Social Development, Labour, ACC, Environment, Tertiary Education Commission – will keep coming.

We see no evidence of the Government’s rhetoric of moving office staff to the frontline - perhaps they discovered that the person booking the surgical appointment wasn’t always qualified to operate the scalpel. They are just straight cutting jobs not moving them.

Cutting backroom staff sounds good in theory, but in practice it means no staff in hospitals to make sure records are kept current, and so who will do this work? Do we want it to be pushed onto doctors and nurses. Do we want doctors filling in forms or treating patients?

I am worried about how this Budget will affect the most vulnerable. The statistics for Mäori in terms of wealth and health give a clear message that the articles of Te Tiriti o Waitangi are yet to be honoured by Government and this Budget’s failure to seriously address this failure is truly a shame.

The measure of a society is how it provides support and opportunity for those in danger of being left behind, this is even more true in a recession and I fail to see how this Budget will help those who need it most. We have already seen staffing cuts at MSD and the undermining of NGO funding for those who work with the needy and we look destined to return to the failed competitive tendering models of the past.

Environment
The economy is not the only thing in recession. Our environment is also groaning under the weight of human pressure. We’re taking resources at a rate beyond what can be replenished; we’re pumping out pollution and waste at a rate that the planet cannot absorb; and we’re losing the wild and natural places and species that we as Kiwis love so dear. National recognized our deteriorating environment in their Blue-Green policy, but have they backed it up with action in this Budget?

Sadly, just as this Budget fails to address the economic recession, it also fails to assist the environment. In fact, it worsens a dire situation by cutting funding to our two key environmental agencies, the Ministry for the Environment and the Department of Conservation.

Conservation funding has been slashed by 6%, with DOC’s budget cut by 9%. $54 million dollars desperately needed to keep our iconic kiwi from extinction has been stolen from our natural heritage. The Blue-Greens of the National Party will be hanging their heads in shame.

Vote Environment has also been shaved to the scalp. Despite an additional $4.4 million to implement the Greens’ Waste Minimisation Act and develop policy to protect our lakes and streams, the Ministry for the Environment’s operational budget is cut. And, despite the fact that our global climate crisis is only getting worse the climate change operational budget is down.

9 million dollars has been set aside for the reform of the Resource Management Act, the purpose of this reform, as the Finance Minister told us, is to enable business to make more money. This Government cares so little about our natural heritage that even the Environment budget has been pilfered to benefit developers.

Fisheries compliance (including observer programmes) has been cut by 6 percent, and Biosecurity surveillance has been cut by 11%. This is outrageous. These are essential to protect our ecosystems and export economy from exploitation and contamination.

By contrast, a Green New Deal Budget would invest in protecting our waterways, where a $600 million investment over 3 years would create 4500 jobs, restoring our lakes and streams to allow swimming, and protect our all-important clean green brand. The premium value of that brand to our dairy and tourism industries has been calculated at over $1 billion a year.

So there are good economic and environmental reasons for the Government to invest in protecting our land, our water and our wildlife, yet this Budget completely fails to do so. It is environmental and economic illiteracy to ignore the environmental recession and make investment decisions and funding cuts that deepen it.

Health and Nutrition
In health, an ounce of prevention is ignored by the current Government in favour of a pound of sugar. Money to fight child obesity has been canned while earlier this year junk food has been let back into schools – is it politically expedient to sacrifice kids’ health?

When kids develop type 2 diabetes and their teeth are rotting will this be a great win for the politically incorrect out there? And who will foot the Bill for the extra dialysis machines, the extra medication, the extra doctors and nurses we will need to keep an unhealthy population alive. The tax payer. This is the ultimate short-sighted thinking. Today’s budget initiatives to retain doctors and train new ones will be essential given this has Government’s attack on illness prevention.

Make no mistake – these are ideological cuts from an ideological administration – canning the Obesity Action Coalition’s funding won’t lead to economic prosperity – it’s not the vision of hope New Zealand needs – it is petty politics.

Transport spending
Perhaps nowhere is the distinction between our current economic trajectory and a sustainable one more obvious than with transport.

The amount we will collectively spend on transport is, at least $10 billion out of the National Land Transport Fund for this term of Government. Most of that $10 billion is for roads. In fact, for every $1 spent on sustainable modes of transport—buses, trains, walking and cycling—National will spend $7 on roads.

Why place all our bets on roads when we are vulnerable to the price of oil? Why would this Government place all our bets on roads when the CO2 produced by traffic rapidly destroys our climate? Why would this Government place all our bets on roads as a measure to relieve traffic congestion when all the local and international experience shows that it does not work?

I can’t tell you why; we don’t yet understand the mind of a problem gambler. When the Minister of Transport announced earlier this year his intention to build seven roads of national significance, he did so without any kind of economic analysis of the benefits or costs of his proposal. Build first. Justify later.

Our recommendation for transport in our Green stimulus package is fiscally neutral. In the short term, we would shift $1 billion of state highway spending into more sustainable, more productive, higher quality alternatives taking the pressure off our existing roads. Our measures would create 40% more jobs while at the same time making our transportation network more resilient to inevitable oil price shocks. That’s a real jobs package! That’s what a Green New Deal looks like.

Education spending
As far as education goes this Budget is like a bad student party and the theme is retro – but Mr English if you were going to take us back in time - can we avoid the 90s?

The majority of those who put together this Budget got the very best the New Zealand education system had to offer – they are happy to leave the current crop of tertiary, secondary, primary and pre-schoolers with…little other than an empty chip packet.

Mr English and Mr Key went to university when the concept of a loan was likely to involve the University library rather than tens of thousands of dollars of debt.

This Budget wages an intergenerational war on those wanting an education now and in the future. It takes money away from early childhood education. How can this possibly make sense?

It’s good that in Education the Government is concentrating on infrastructure, but if this comes at the expense of teachers it is a false economy.

Housing spending
Dwelling consents are sinking rapidly – and builders are laying off staff all over New Zealand. What could be a better way to support the building sector than building more state housing stock?

One of the central ideas in our Green New Deal package is investing in thousands more state houses over the next few years – to keep people in jobs – to keep roofs over people’s heads and to keep the economy moving

Building 6000 state houses would only begin to meet the needs estimated for Auckland alone in the next 25 years – and it would make more sense than demolishing hundreds of homes so we can instead plough more than a billion dollars into a motorway

Will we have people living out on the streets this winter because of this ideologically driven thinking?
Last year Mr Heatley railed against Labour over the disgraceful situation of the poor, the sick and the un-well living in rat infested boarding houses. Mr Heatley pointed out that that this situation was the result of a housing supply shortage.

It seems that this Budget has an ideas shortage – we face an ideas deficit over how to solve the housing crisis and create work for our building sector. The Green Party doesn’t want people having to sleep rough; we don’t want kiwi families living in squalid boarding houses.

The Green Party is more than happy to assist the Government with ideas – we’ll give them to Mr Heatley and Mr English at no cost whatsoever. The Government can share our policies on building houses as well as insulating them.

Conclusion
While I am pleased that we are on the way to getting all New Zealand families into warm, dry, healthy homes, overall this Budget worries me. I am worried for the families who will suffer because of a stingy ideologically blinkered government. I am worried for the children who will grow up without a fair go– it is our birthright, no matter which side of the tracks our mum and dad are from. And, it’s with real sadness that I see another short sighted Government – perhaps even more so than the last – pouring money into motorways as if the very act were some sacrifice to the gods. Such is their devotion and their faith that they are deaf to rational arguments as to the wisdom of this spending.

ENDS

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