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Budget 2006: Rt Hon Helen Clark Budget Speech

Thursday 18 May 2006

Rt Hon Helen Clark
Prime Minister

Budget Speech


3.00 pm

Thursday 18 May 2006

This is an investment Budget, and it’s a Budget that only a Labour-led government can deliver.

This is a Budget which invests in New Zealand and New Zealanders;

- in transforming our economy,
- in building opportunity and security for our families,
- and in building our unique national identity.

This is a Budget which delivers on the promises Labour made to New Zealanders at the 2005 election.

We believe in keeping our word.

We deliver what we promise.

And this Budget delivers on the confidence and supply and working agreements we have with other parties in this House.

Successful government under MMP requires parties to work together – and I thank New Zealand First, United Future, and the Green Party for making it possible for our Labour-Progressive Government to govern and deliver this Budget.

Labour offers steady, predictable, stable, and progressive government which gets results for New Zealand.

This is our seventh Budget.

Each Budget Labour brings to this House is another step forward in building a stronger economy, making life better for our people, and investing in the things which make New Zealand a special place to live in and be part of.

Everyone knows that New Zealand has gone ahead under Labour – the facts speak for themselves.

Our country has grown ahead of the OECD average under Labour – and, even at the bottom of the economic cycle, annual growth will still be positive.

Our government is ranked sixth in the world in terms of government contribution to a country’s competitiveness.

And we continue up at the top of the employment rankings – with the second lowest rate of unemployment in the OECD at 3.9 per cent.

Average annual unemployment in the year to March is down exactly half on where it was under National seven years ago, and more than half for Maori and Pacific peoples.

These results are spectacular. 313,000 more New Zealanders are in work today than when Labour came to government in 1999.

But good as these results are, we know that more must be done.

As New Zealand lifts its economic performance, so other countries are seeking to lift theirs.

In my Prime Minister’s Statement to Parliament this year, I set out Labour’s aspirations and work programme for economic transformation.

This Budget and recently announced policies follow through on that statement.

I said in that statement that faster, cheaper broadband was a top priority for the government, and that lack of it was holding New Zealand back.

Now the government has announced major policy to produce faster cheaper broadband – to acclamation throughout New Zealand except from the National Party and friends.

They need to explain to New Zealand why they continue to back a set of rules which showed it could not deliver what New Zealanders want and need in telecommunications.

This government is serious about transforming New Zealand, and we will act to see that our people enjoy modern infrastructure and services.

That applies to transport too.

Labour inherited a huge infrastructure deficit in transport and elsewhere.

Before this Budget we had already almost doubled spending on land transport since 1999. This Budget takes that increase over 1999 funding to 134 per cent.

This year we are allocating an extra $1.3 billion to guarantee the state highway programme for the next five years. That will speed up work on major projects to ease traffic congestion in Auckland, Wellington, and Christchurch, and keep up the momentum of much-needed improvements around New Zealand.

In addition, an announcement will be made tomorrow on a multi-million dollar funding package to address the fast growing Waikato region’s transport needs.

These investments mean that over the next five years the government will spend $300 million more on land transport than it takes in by way of petrol excise, road user charges, and motor vehicle registration fees.

These are huge investments, and they are investments in New Zealand’s future which only a Labour-led government can make.

Major progress has also been announced today on other key features of the government’s economic transformation agenda, for example:

In education and skills

• more investment in apprenticeships, for industry training overall, and school to work transitions for young people,
• more investment in literacy programmes in the workforce,
• more investment in tertiary institutions and in students.

Under this Budget more students will get student allowances and scholarships for university study.

And this Budget provides the funding for a huge government policy – no interest on student loans.

That policy has given our young people and graduates hope for their future.

If they stay in New Zealand, they know their student loan debt is manageable and they can plan ahead.

This is about helping our young people get ahead, and it’s about helping them to make their big contribution to our country.

This is a win:win for New Zealand.

In science and research, so critical to economic transformation, investment is up again. Labour has now increased investment in science and research by 65 per cent since 1999.

We believe there is a critical role for government in investing in the research which will produce the innovation of the future, across our primary industries, our high tech, our environmental technologies, and our biosecurity.

This Budget also increases investment in commercialisation of research and in venture capital to help young Kiwi firms with high growth potential.

We are building up to Export Year 2007, with more funding allocated to market development assistance for Kiwi companies.

And, as promised in my February statement, a major review of regulatory frameworks is under way to make sure that our economic transformation is not unnecessarily constrained by the way in which government regulates.

Transforming our economy gives us the means to support all our families meeting their full potential.

This Budget delivers massively for families.

Working for Families is transforming the lives of families across New Zealand.

Over the next four years, 350,000 Kiwi families will get $6.1 billion of family tax relief.

That’s around $1.6 billion in total every year.

That’s tax relief of $88 a week on average across those 350,000 families.

Three-quarters of all our families with dependent children are eligible for family tax relief.

I don’t hear the National Party praising tax relief for families – they want it for the rich, and they would sell billions of dollars of state assets to help fund it – along with cutting essential services like health and education.

This Labour Government doesn’t cut essential services like health and education.

We invest in New Zealanders;

- in families
- in health
- in education
- in housing
- in policing
- in all those areas which guarantee opportunity and security for our families.

We deliver on our policies.

We keep our word.

This Budget invests massively in health, with spending now up over 77 per cent under Labour.

This Budget invests another $3 billion in health over the next four years.

That could never have been afforded by National.

This Labour government is;

• building new hospitals,
• increasing the number of operations and treatments,
• making visits to the doctor and the chemist more affordable, and
• targeting especially the health needs of our children and our older citizens.

Investment is up this year in the school dental service, in well child care, and in home based and residential care of older people.

As well this Budget invests in the fight against obesity.

Over the next four years, we are committing $76 million to fight one of the greatest threats to all our families – obesity caused by poor nutrition and inactivity.

We look forward to working with communities, the health and education sectors, social agencies, sport and recreation groups, and food industry bodies to help New Zealanders become more healthy.

If we do not act, we face the very real possibility that today’s generation of New Zealand children will be the first to die younger than their parents. No country wants that on its conscience.

This Budget continues Labour’s significant increases in investing in the education of our children.

Total funding for New Zealand schools is now over $4 billion a year. Over the next four years, we will invest another $361 million in our schools, delivering more teachers, new classrooms and buildings, and boosting operational funding.

In the 1990s, governments were more interested in delivering tax cuts to the wealthy than in investing in schools. Then, school funding didn’t keep up with inflation. Since 1999, the Labour-led government has addressed National’s deficit, with a 31.7 per cent funding increase for schools in real terms.

This Budget also invests significantly in quality early childhood education. We want all small children to have quality early childhood education.

Over the next four years, we will invest $162 million as we begin to implement Labour’s policy of up to twenty hours free early childhood education for three and four year olds from July next year.

Investing in New Zealand families is also about making our families more safe and secure.

Fundamental to that is having a decent home.

More than 2,000 homes will be added to the state housing stock over the next four years, and we are increasing investment in housing partnerships with local government and community organisations.

And helping make our communities safer will be the extra 1,000 front police, and 250 non-sworn police staff we are funding, starting with this Budget.

Making families safer also means targeting violence, including family violence. This Budget funds initiatives across Social Development, Child, Youth and Family, Justice, Education, and Police.

These programmes target truancy, disruptive behaviour in schools, and violence in the family. It includes increased funding to community organisations working with victims, including Women’s Refuge.

This Budget also funds new initiatives in Labour’s old top goal – building our unique national identity.

We will promote and support what is unique, special, and valued about our country – from our heritage to our creative arts and culture, to our sporting and other achievements, our clean and green environment, our social cohesion and tolerance, and our precious international reputation as a constructive and principled nation fully engaged in world affairs.

Over the last six years, funding for New Zealand’s Historic Places Trust virtually doubled. This year it increases by another 47 per cent. The work it does in protecting our heritage sites is highly valued by Labour.

Last year’s one off increase to Creative New Zealand has now been baselined, and the Royal New Zealand Ballet gets an increase in its funding.

Broadcasting funding is up, as is funding on sport and recreation.

Conservation spending is up more than eighty per cent since 1999, and our natural heritage has been the winner.

This year’s Budget increases funding for the Treaty settlement process, so we can reconcile over the wrongs of the past.

Both the Foreign Affairs and Defence votes are up significantly, to ensure we can meet our international responsibilities, and see New Zealand well represented off shore.

As Labour’s Prime Minister, I am proud of this Budget. I know that only a Labour-led government could deliver it.

We have a clear vision and direction for this government;

• transforming our economy,
• making life better for our families, young and old,
• and building our national identity.

This Budget invests in all of them.

I congratulate the Minister of Finance on the Budget and on all he does to ensure that our government’s Budgets take New Zealand ahead and spread the gains to all our people.


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