MORENA, GOOD MORNING, AND WELCOME TO Q+A. I'M GREG BOYED. AFTER YEARS OF TIGHT BUDGETS, NATIONAL HAS MADE A BIG PITCH FOR VOTES THIS ELECTION, BUT IS IT ENOUGH? AND AFTER NINE YEARS IN POWER, IS THIS THE BRIGHTER FUTURE NATIONAL PROMISED WHEN IT FIRST TOOK OFFICE? AND JESSICA IS STANDING BY WITH FINANCE MINISTER STEVEN JOYCE. WE HAVE OPPOSITION MPS ON A LITTLE LATER TOO. COULD THEY DO BETTER? CAPTIONS BY JAKE EBDALE AND FAITH HAMBLYN. CAPTIONS WERE MADE WITH THE SUPPORT OF NZ ON AIR. COPYRIGHT ABLE 2017. AND WE'LL HAVE ANALYSIS FROM OUR PANEL ` POLITICAL SCIENTIST, DR JENNIFER CURTIN FROM AUCKLAND UNIVERSITY; KERRY MCDONALD, A COMPANY DIRECTOR, CHAIRMAN AND ADVISER; SHAMUBEEL EAQUB, ECONOMIST AND AUTHOR. BUT FIRST HERE'S JESSICA. THANKS, GREG. AND GOOD MORNING TO FINANCE MINISTER STEVEN JOYCE. I want to start off asking you into thousand and eight you talked about a brighter future. As is the kind of budget you had in mind when you talked about that, and that you have working for families wage subsidies and that plan? The first oneas a lot has changed in the meantime ` we have had the global financial crisis and Christchurch earthquakes. We are performing as a country a lot better then OECD countries. We have been growing for the last few years so it is a work in progress, but Kiwis would look around the world and say New Zealand is doing pretty well in comparison. We have always had in this country a form of family tax credit before working for families. You're back to when I was a kid, you had family benefit. There are other aspects of working for families that we haven't had. We have always been looking for an extra tax situation for parents with young families. National talked about working for families in a negative light. Was this a dead rat for you to swallow having to include this in your budget? No because there has always been some form of family tax credit. There are different rates for different aged children. By standardising those, the first child if they are under 16 the parents get an extra nine dollars. There is the first rate for the first child and in rates for the subsequent children. The con set has been around for years, though this is the current mechanism. This can't sit comfortably with you. It does because we have always had` I see the logic completely in terms of giving parents a bit of help, extra tax breaks. New Zealanders endorse that approach. You have been given the title of this budget Labour lite. Was that the point? The commentators will say a lot. They will say it is not enough. A completely doesn't come to mind, labour light. We have had the room to do some things that we haven't done and a long time. We have been talking about tax changes going back to 2014 but this is the first opportunity New Zealand has had to do that because we have a strong and growing economy that is delivering surpluses. It does make it easier doesn't it, that if you go until their labour territory, four months before the election your Mps can stand up and say we are doing this and thus. I just don't think of the budget in terms of the election cycle. You don't think about the election? I am strongly of that view` you must. I am strongly of the view that you don't change your approach just because it is election-year. Through nine different budgets we haven't taken account as to where we are in the cycle. The public are smarter than that. They think what is the trend, where is it heading. Let's have a look at the tax brackets because you have adjusted those. Why not change them straight away?Why not wait until April? It is impractical to change them. The first thing I thought was can we do the stuff in October? They said minister we are in the middle of the IRD business transaction. He is 100 reasons why it could be a bad idea. It would have been literally seven or eight days after an election and people would have said that was more cynical. It is literally because the IRD is in the middle of its biggest ever system changes, and it said don't try and break is on the way through. Will that be passed on to landlords, the accommodation benefit. It is the theory of the opposition and that the accommodation supplement just goes to landlords. An inferior does because it subsidises people's rents. MSD has done some work ` we asked them after 2005 and asked them to push rents up. And it did not. People are already paying for the rent. What it will do is go into their pockets and they will have more after housing costs, and that is really important to somebody with a couple of young kids in West Auckland or South Auckland they could be getting over $100 a week more depending on them circumstances. It is one of the things I am most proud of ` is that we are getting the opportunity to do that. A wage subsidy and a rent subsidy ` people are getting paid enough and aren't able to pay their rent. Is there something fundamentally wrong with the system if the government has to subsidise these things? The largest amount is around tax changes. So there is an extra $11 a week of people earning up to 22K. We are keen to see young families do a bit better and particularly those on lower incomes. Should the government have to help with that? A stronger economy helps with that most of all. We are seeing increasing employment and wages. Not enough though. In terms of developed countries we have the second highest employment rate in the OECD. That is good progress and that will bring to bear on wages. The more you get, the more it comes off working for families or a combination supplement. The aim of the exercise is to get us to that point which is why we put so much money into the tech area. If you stay as the finance minister, when would you see the working for families and the supplements come down? Is there a time that those would come down. The peak was in 2011. The labour see that as a failure that it's come down. As their incomes rise and more people get into jobs, that's what will occur. We will see that in years to come particularly if we are investing in the areas of the economy that look to higher paying jobs. The tech sector and innovation areas. When would you like to get rid of working for families? I don't think you will ever get rid of it. We have always had a method of supporting young families and families on lower incomes. There is a sign that the economy isn't working at the government has to supplement lower income families. It has been going on for 50 years. People actually accept and support the idea that an effect they pay less tax over that. That would be the definition of success as a finance minister ` do not have the economy and such a situation. Somebody with a younger family should pay less tax. It is a political view that most New Zealanders support. This was a catch up budget. Bill English has been saving and this money had to be spent. It is not catching up. We have not had the opportunity before. We now have the capacity. We have the surpluses. We are doing a very big infrastructure spend, and between the families package and the investment and infrastructure and services, the amount of cash we have is virtually nil. There is not a lot of wiggle room. It is $32 billion that this government will spend on new capital infrastructure and the next few years. Phil Goff came out and said doesn't seem like it is visionary. I think he is being a little political. As the mayor of our biggest city, he thinks it doesn't help his city. Was it visionary when it comes to things like infrastructure? There are a lot of Aucklander sitting in the car thinking what are you doing? There is construction work on every single motorway bar one in Auckland right now. That is one of the reasons it is slower. Phil is complaining about the time it took to come from the south. All we are spending millions of dollars to widen the southern motorway and each direction. Then there is the East West Link to get people to the airport and back. Then there is the CRL, significant money going into that. As outsiders look into Auckland they will think they are getting a lot. We will build a new road here and a bit of this there ` can you see why he said that? What is visionary? Something innovative and different. What we need to do is keep checking away on the things that make the difference, and we could all talk about monorails to wherever, building capacity and a roading system. There is Auckland Transport alignment network. We haven't allocated all the money there. There still significant sums of money to go. We are talking with the council for the next project. Just raoding projects or infrastructure? There is discussion going on about what the next project. There is more visionary stuff to come. We need to keep bringing in the private sector funding as well. Water infrastructure too. So we would see private ownership of that? Not long-term private ownership but private funding, perhaps. The biggest amount of money that has ever been spent on infrastructure and the next four years. We will need to bring in more private sector funding. Thanks for your time. SEND US YOUR THOUGHTS. WE'RE ON TWITTER @NZQANDA. YOU CAN EMAIL US AT Q+A@TVNZ.CO.NZ OR TEXT YOUR THOUGHTS AND FIRST NAME TO 2211. KEEP THEM BRIEF ` EACH TEXT COSTS 50C. WE'LL BRING IN THE PANEL AFTER THE BREAK. We are performing as a country a lot better than other OECD countries. We are growing more than them. It is a work in progress, Time to bring in our panel. You don't change a budget because of an election year. We have to be clear about that this is an election budget. This is what John Key did before. They are returning to their tried and true method of making sure that their core voters and centre voters are packed up. The big spend on health and education which we didn't get to talk about earlier does shore up some of those voters as well. There is beginning spend to make it look different to non-election-year budgets. It has got no economic merit as a budget So presumably it is for political objectives. He is saying that the cupboards are bare and they have spent all they canso it has got to have merit. I regarded his comments as your political flannel. A budget is simply part of a policy framework, so as you are developing your policy there are aspects that will go into a budget and things that won't. There are 20 major policy areas where they are weak and need to take action and they are showing no signs of doing it. What would you have liked to seen in their budget? There is no added value. It is expenditure and low incomes ` something has to be done about it, and the interviewer pushed on the issue of working for families. It is a critical issue and Helen Clarke's crowning achievement. It is paving over the cracks of welfare. There is nothing in this budget that adds economic value. His comments about infrastructure were ill founded. This government has had infrastructure team and Treasury for years and it has achieved nothing. Shamubeel? When you look at it in cash terms there is no money left, so there is no room for the opposition to make promises on top of what is delivered. It is a catch up budget. There is stress in many areas. He talked about a social investment approach, 320 million. We have a lot of money going into prisons and also the films. They are sprinkling money into different areas to keep everybody happy. They have crossed the divide across many things into labour territory. He didn't want to call it the labour light budget, but does it leave labour any room to do much? That is the crowning achievement,is that they have wedged labour. The median voter is not keen on universal welfare expenditure any more. They still like universal access to good health care and education. If labour will find a new policy to counter what we have seen in this budget, they will need to take some care as to how they do that. They can't just change working for families and make it more generous. They need to do something that helps raise wages. If National holds the centre like this, where does labour go? I would say they have to come back. All national has to do is keep the voters they already have and hope that everybody who votes for them normally turns out. It is labours job to win some of the national voters back to them that they lost in 2008. There is something to add to that in terms of housing is a massive issue and National has failed on that successively for nine years. The plan as weak. It is modest on infrastructure. On climate change it is $4 million. $1 million a year. There is a more fundamental issue and that if we are going to have this conversation, it is about immigration. That is on the mind of voters. There is where Winston Peters will play a big part. I agree strongly with that. Policy is improving the living standards of New Zealanders. What has the government done to boost productivity? They have a productivity commission which has achieved nothing. What was in this budget that reflected a growth in productivity or a focus on improving productivity? Nothing. Why is working for families there? Because incomes are too low and families can't survive or pay the rent. This government just shuffles and doesn't address the issues. Shamubeel's point about immigration is spot on. It is the critical issue. We are bringing in far too many low skilled people and we are having to bring in more low skilled people to build houses for the low skilled people that are already here. To compound the problem, most immigrants coming into Auckland, Auckland doesn't export; it is not the centre of innovation. It is the centre of consumption, real estate and services. There is a little bit of expenditure in innovation, which has been the Minister's focus for a while. I am supportive of that. The low income supplements or improvement, it is all policy based. Most of the income increases for low income families since the 1980s have come through government policy measures, not through the market. Wearing a business hat, where is the incentive to invest in capital to raise collectivity, to raise wages? It is not there. Was this in any way aspirational? No. I think because you are coming into � term, they are really thinking about winning this election and hopefully being in a good place to have another shot three years on. You don't get a sense that they are imagining them selves there for 10, otherwise you would see more interesting things happening with transport and broader housing. I can't ignore Auckland. We need to just keep chugging along with roading etc? There is so much room to borrow money for projects that are worthy. The best way to fund it as debt. It'll be the most inter generationally fair way to fund. We should be investing in New Zealand and New Zealanders. This is that element of we can't trust New Zealanders to do this. We need to argue that New Zealand has the room to invest in New Zealand. If you look at trains and public transport and busways, if you think about the more creative measures like condition charging, we have to do these things. We will leave it there. AFTER THE BREAK ` LABOUR'S GRANT ROBERTSON AND GREEN PARTY CO-LEADER JAMES SHAW ` I'M JOINED NOW BY LABOUR FINANCE SPOKESPERSON GRANT ROBERTSON AND GREEN PARTY CO-LEADER JAMES SHAW. Once again, the budget didn't keep up for standing still just forinflation and population increase. In education there was no vision in this budget for a world where technology is changingEverything that we do. We need our education system to be firing. Schools got a 1% increase in funding. Our focus is on solutions. James, you want to be part of the next budget that is delivered. What would you be pushing to see happen? Conservation funding was cut once again. We have only $4 million for climate change. We are off track. We would have designed a family support package. Yet you voted for the budget. We did not vote for the budget. We voted for a package thatsupports improvement to the accommodation supplement and family tax credit. That will have an effect on some people at the bottom. You supported it in the house. We have been beating National with a big step stick for many years. They are and delivering. The package they delivered last week will left children above the OECD body line. We would introduce it faster. Why did you do that? Iit was a line call. We came down on one side of the line and labour came down on the other. This is the nature of MMP. Sometimes labour votes with the labour. On this one, given the opportunity to support acre package that included improvements to working for families , accommodation allowance, and given we have been working on child poverty, we thought we had to. How frustrating was it for you? Our position on the legislation was clear. It was about tax cuts. We are not going to support that. We were clear about that. Even though there might have been some good in the working for family stages, there were only about 1/7. Hhas it distracted from you getting the message across? No, not at all. Not many New Zealanders are interested in parliament. They are interested in whether or not this budget will benefit them. 20 bucks a week sounds good, but the New Zealanders I talked to worry about the cost of going to the doctor. They worry about their early childhood education centres the more fees. I get the feeling the sugar hat won't last. It doesn't get into anyone's pocket or 40 weeks. New Zealanders want better health, education and housing. People care about how you are going to work out of the election. This was meant to demonstrate that. I have that in this sort of situation if we don't see it work? We are committed to changing the government to a government that has solutions and has a vision for a future where higher wage jobs, New Zealanders can live the lives they do about. A vote in parliament is what it is. We are committed to changing the government. Why have it if it is not for how people would see how you work? James and I produce a set of rules which give the framework we will work in the. We will not live let people live in cars and garages. We will deal with things like paying into the superfund. Individual decisions within that, we are separate parties. There is an alternative government. Tthe vast majority of voters want to know if they are voting for the status quo or the change. We want to be clear with the voters that we other parties of change and not the status quo. That is what the campaign is about. By the time the election rolls around, voters will be clear what they are going to get under the status quo under the labour/green government. Did you talk about your response of the budget? Each party is individual and takes its own positions. We have an agreement to change the government and a framework. There are individual decisions that get made labour has been clear. This budget is not about giving me a tax cut. This is about the future and an economy that is exciting. We have the fourth lowest labour productivity in the world. We need to invest in getting capital to small businesses. We need to invest in improving skills for the future of work. We need research and developments ending up. Steven Joyce is not only the finance minister; he is the campaign manager. In terms of the budget, there have been commentators that talked about it as labour light will stop how do you respond to that? It certainly lite. Does it go into your territory? Our regard as were housing. New Zealanders know that sugar hurt of a tax cut isn't necessarily going to be the thing that is going to approve the accounts educated. It is hard for people when they think I am going to be $100 better off under this. Jess, if you own Auckland, your rent has gone up more than $100 a week. I give New Zealanders a lot of credit here. As I go around New Zealand, and a survey last week, most New Zealanders realise the priorities we have. While it might be great initially, fallacy it is at the way forward. I agree. There is no appetite amongst people on higher incomes for a tax cut. Everyone who is there is thinking they are feeling good about their circumstances, but they are worried about the direction of the country. We are leaving people behind. That is going to continue under national. They are worried about the state of the waterways. They are worried about housing and how it isn't being addressed. That is things we are committed to change. Steven Joyce keeps kicking it down for feuded governments. Is this budget going to make it is year for you to campaign for four months? Absolutely. Where is the solution to the housing crisis? They announced 34,000 in the budget. There is tens of thousands shortage. It was inadequate. It doesn't get close to fixing it. On budget day, the biggest issue facing New Zealand they barely spoke about. They are embarrassed about the housing crisis because they have perpetuated it. Were you surprised at that as well? I was surprised they didn't say a great deal about it. They won't do what it takes to fix the really big structural problems in the economy. We are having to provide subsidies for people on low incomes rather than deal with the fact they are on low incomes. Does that stick and Steven Joyce's craw? John Key called working for family communism by stealth. I think New Zealanders have seen too much of the homelessness crisis. They don't like send their fellow New Zealanders living in cars and garages. They want that soul. The absence of that plan leaves us room in this campaign. This budget will fizz. It is a sugar hat, and it is not a solution to the problems we have. It is not a vision for the future. Parents will not look at the future for their kids as having an education. THANK YOU. STAY WITH US ` NEW ZEALAND FIRST LEADER WINSTON PETERS JOINS ME AFTER THE BREAK. THERE WAS NO VISION AND THIS BUDGET FOR A WORLD WHERE TECHNOLOGY IS CHANGING. WE NEED OUR EDUCATION SYSTEM TO BE FIRING. 1% ISN'T ENOUGH TO EVEN PAY THE POWER BILL. WELCOME BACK, AND GOOD MORNING TO NEW ZEALAND FIRST LEADER WINSTON PETERS. I want to start off by asking you, the budget that was delivered this week, what would you have done different? New Zealanders want to hear the truth our export strategy. There are probably 30 things, but to tell them the truth about what mass immigration has cost. Rather than saying it is all good for you and somehow believe that if you repeat it enough times, it will all be true. This was a breathtaking budget, and its lack of reality. The substance, he ended up staying today what Muldoon said in 1972. You can't get anything off the opposition parties because I spent at all. Did he have as campaigners sat on? Hasn't he delivered a budget that will be easy to campaign on for his Mps? The last time he was on his campaign in Northland, we made countless claims that have not been fulfilled. Not the superhighway, not the cell tower coverage, not the bridges and he is now doing it again. He is not going to be a successful campaign manager in 2017. Is this a sugar hit budget as labour and the greens called it? Why don't we look at what is wrong here? If we look at the size of our economy as we should have with our resources, with resources and development to add value, taking corporate tax down, we are staying static. It was a bad budget. I am not worried about inducements and lollies; their recognition of economic failure ` they aren't doing enough. Rogernomix in 84, dragging people into hide. If we didn't have a housing crisis, students pay three times as much as their parents, it is all these things they seek to disguise. With respect to one thing, New Zealanders are concerned about the ramifications for their children and grandchildren. And provincial New Zealand, they know one thing there is nothing for them at all. If you became finance minister, what would be your first priority? Which country and the world is going ahead with immigration at the level we have and mass immigration of low skilled people? I can understand what they want to come here, but most of them are economic refugees. With that sort of structure, you don't have productivity. The government has made changes around that. Switzerland, Norway, they have top-quality immigrants. That is what is critical. We are taking the wrong and far too many. All of whom need house, and they say we will bring in somewhat of build houses. The National party statement on housing is appalling. They have no idea. Unless they intend to claim parks. I am using my experience, and I think it is a disastrous budget for national. It has overtones of racism. The last two budgets for maori-housing, they built 11 houses. It was not in Remuera. The government has made changes to immigration, though. It doesn't go far enough as those you're concerned. Would that change things dramatically? I can't believe you are asking me that. After all these years, the warnings, you asked me that. They made changes last October. They made changes every year, and none of them cutback mass immigration. Helen Clark was bringing and 50,000 net when the Australians were taking 80,000. Now 72,000 net and no chance of bling that back. Their whole economic premise is predicated on mass immigration. For the umpteenth time, just tell the people the truth. What is your number one message for people looking at this budget? What would you like to remind them of? I would like to remind them of the rhetoric that is behind something that you don't get until 10 months time. He is saying you get this if you win the election, and hundreds of thousands of people will change their vote on this. The big issues on this campaign are not in this budget. This is where you start digging in and things don't look so flash with this budget. It's a high rate of immigration that is boosting GDP. If you compare our GDP per pack At the whole range of economies, we are not doing well. Immigration, as a timebomb and a very toxic one. Once the immigrants are here with permanent residence, if they are not contributing to the economy, it's affecting living standards, putting pressure on the whole structure. It is a disaster, and it has to be addressed. Why doesn't the government fix this? Immigration is hard. As you talk about immigration, you talk about racism or stop it feels like something you pull the plaster off and then start fixing it. We don't know why we we want immigration. We do it because we don't have enough investment and our people in terms of education and develop it. We rely on it for growth and the physical benefit that it gives. There is no view on why we have immigration. Nobody can tell me what size population we want. For this government, it is hard to get off the bandwagon. We have to be careful that tthe structure falls apart. The issue everyone overlooks except the James as environmental capacity. We are growing the population rapidly and in a whole lot of areas it is putting pressure on the environment. Water is a good place to start. You need to grow exports if you are growing the population. Our exports are primary and environmental impact. It is ignored. Our exports are higher education, and we didn't see anything in this budget for the tertiary sector. As a consequence, the government funding of higher education in this country doesn't compare well to the rest of the OECD. We are supposed to stay high in the rankings in order to attract and retain really good students. That was missing as well. I want to talk about the politics were voting for the budget. There appeared to be a split in the memorandum of misunderstanding between labour and the Greens. It was a narrative that was overdone and the media. We would expect the greens to champion this issue. This is different to 2015 when both parties voted for the national initiative. They are the opposition, it is an Election year, they have to demonstrate they are different from the government. A phrase that has been used by everyone, sugar hits, if you are struggling in South Auckland, in a bad position, you are going to take a sugar hit. You are going to vote for the people that gave you it. That is a good thing and it is a vote winner. It's not that clear cut. If you are struggling in South Auckland, in one of those labour electorates, you may not turn out for this. You can't be sure that those on a very low income that will benefit will even vote this election. There is a million nonvoters in this country, and is a lot of those may receive this $20 a week, but that is not enough for them to vote for National. Wwhat did you make of Grant Robertson's plans? It is sensible. He is talking about the economy and fixing public services. We know we have been going backwards, and we are spending on education falling by 8%. My issue with that narrative is we're not talking enough about growing the economy. It feels far away. Investments and education will help. We don't know what the plan is. I want to see a much more constructive conversation on how we are going to grow our entrepreneurs. We are happy buying and selling houses, but not growing our businesses. We want our start-ups to grow and succeed. How hard is it to do what Grant Robertson outlined? It is a challenge, but when I wake up in the morning, I am fitting about productivity. The companies I am sharing or am a director of, and it is all about the digital age and pressures and markets. We need to evolve in a rapid and dramatic way. A high proportion of those men have exactly the same thought. When I look at the budget, there is no sense of evolution. Stephen Joyce is strong on innovation, but their thinking and to have your is not about a change well. It is not about a world in which the French election result has been a dramatic step. Trump is in the US, China has had a credit downgrade. If I listen to those, National and labour strike me as still thinking old mindset. Winston nailed it. I read his speech. Which aspects? All of it. Immigration, productivity. You are not going to get ahead as a nation just putting Band-Aids on. Working for families is just a Band-Aid. It won't last because it is not creating the economic wealth to address the issue. That's why the people that think about it won't go for the sugar fix. They will see it as short-term, not sustainable, reflecting a whole range of problems. I would put water at the top of the list. New Zealand has just sold a tannery outside Christchurch to a Chinese company for 30 years with a huge water right attached. I have seen nothing that explains why this is a good deal. This is a sort of area are used to work in, mining, gas. When you invest the megabucks in a project, where does the value arise? Aa good deal for the Chinese company. YOUR FEEDBACK IS COMING UP. THEN OUR PANEL HAS THEIR FINAL SAY ON THE HITS AND MISSES OF THE POLITICAL WEEK. THAT'S COMING UP AFTER THE BREAK. LET'S TAKE SOME OF YOUR FEEDBACK NOW ON GANGS AND DRUGS. The hits and misses of the week. We are expecting big laughs. My heads of the week is David Seymour calling this budget a comics budget. The Miss is Steven Joyce on housing. The hits are the greens getting their act together. Winston's prebudget speech was excellent. The Greens have got to grips. The my minister standing up against the background of this broad and the Ministry of transport is a must. CORRECTION: Miss. Bill says it wouldn't affect us. How does he know? It is arrogant. The solution is one good accountant, let them loose in the Navy's box. CORRECTION: books. It didn't get so much press coverage, but there is a hat for the maori-party. There is designated issues around culture, language, tourism and business. That secures them as the next coalition partner with National. They have something to champion. There is no better than on public transport. Roads are good for the regions, but we need more public transport for Auckland. The CityRail link didn't go far enough. That budget is it going to win an election? The budget won't, but it doesn't change what might already be high polling for national stop MARAE IS NEXT. REMEMBER ` Q+A REPEATS TONIGHT AT 11.35PM. THANKS FOR WATCHING, AND THANKS FOR YOUR CONTRIBUTIONS. THOSE WERE THE QUESTIONS, AND THOSE WERE THE ANSWERS ` THAT'S Q+A. SEE YOU NEXT SUNDAY MORNING AT 9. CAPTIONS BY JAKE EBDALE AND FAITH HAMBLYN. CAPTIONS WERE MADE WITH THE SUPPORT OF NZ ON AIR. COPYRIGHT ABLE 2017.