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Features

Budget 2008: Real solutions

Global trends in food and fuel prices are hurting New Zealanders. With Budget 2008, the Labour Government is providing New Zealanders with tangible, detailed and fully costed solutions.

Today I will release hundreds of pages of documents and reports relating to this year's Budget. 

Delivered at a time of global challenge, the Budget provided relief for households and investments in New Zealand's future.

It was grounded in the values that Helen Clark and I have articulated since our days in opposition: that the government should work in the interest of every New Zealander, in good times and bad; that New Zealand should actively participate in the global marketplace, but should set its own priorities and chart its own course; that politicians must always be honest about the challenges we face.

But as the documents I am releasing will show, the government had to make difficult choices when putting this year's Budget together.  We considered tax cut packages that were both bigger and smaller than the one we announced.  Ministers proposed a number of initiatives that in the end could not be funded. 

The truth is that balancing the books requires trade-offs.  Every dollar spent in one place is a dollar that cannot be spent somewhere else.  That is the reality of government.  You cannot just promise to good on behalf of the public - you have to get down to work and decide what your priorities are and how you are going to pay for them.

For Labour, this approach is approach is nothing new.  Even in opposition during the 1990s, we set a clear policy direction and were careful to promise only what we could deliver.  All New Zealanders knew we supported a significant change in direction and that we would have different priorities than the National-led government of the day. 

In opposition we ran all our promises through detailed costing models.  In the end, we proposed fully costed programmes like the New Zealand Superannuation Fund, and we openly campaigned on introducing a new top tax rate.

But it would seem that the days when an opposition - especially one that presents itself as a government in waiting - has to front up with real policy and a transparent programme are behind us. 

John Key and Bill English have refused time and time again to tell us what National would do in government, what services they would cut to pay for bigger tax cuts, and how much they would borrow to pay for their promises.

New Zealand is right now facing the most challenging global economic environment we have seen in at least a decade.  The subprime mortgage crisis in the United States has led to a global credit crunch, making mortgages and borrowing more expensive all over the world.  A relentless commodity boom has led to breathtaking increases in global food and oil prices. 

These challenges are happening right now and the government is acting on them right now.  Our Budget was a real response to the global environment.  It was a genuinely counter-cyclical Budget that will responsibly stimulate the economy when that stimulus is needed.  But we have also been honest with New Zealanders, telling them we cannot unilaterally bring down the cost of petrol or food. 

But the National Party says it can't tell New Zealanders how it would respond to the global situation.  Bill English says things are too ‘uncertain' to develop a plan for the economy. 

Mr English may be uncertain, but New Zealanders are certain that they are feeling pressure right now.  John Key may not know what he would be doing if he was Prime Minister, but New Zealanders know they would be expecting him to come up with an honest approach.

National wants to wait until just before Election Day to front up with an economic plan.  That way, if New Zealanders balk at what they see from National, it will hopefully be too late to make a difference at the polls.

We cannot let that happen. 

The Labour-led government has presented a Budget that includes relief for today and a plan for the future.  But we are not about to stop there.  We are going to keep talking about our ambitions for our economy and for all New Zealanders.  We are going to keep talking about how the economy should be managed, both in good times and during the inevitable rainy days.

And while National keeps quiet, we will be more than happy to speak on their behalf.  I am happy to remind New Zealanders that Bill English responded to the tough times of the late 1990s by cutting superannuation and public services.  I am happy to remind New Zealanders that John Key's economic grounding is in the world of trading and betting in the currency markets at Merrill Lynch - an environment in which he admits he paid no attention to the moral or social consequences of his actions.

I am confident that National's real plan would be nothing more than borrow and hope economics, with a slash and burn approach to public services and support.  If I am wrong, National needs to set the record straight - not with empty rhetoric and vague assurances, but with real policy.

Until then the Labour-led government will keep reminding New Zealanders of all that this country has achieved since 2000.  And we will keep talking about how to address the challenges and opportunities still in front of us.