Grant Robertson's Budget wish list

Grant Robertson says the Budget is likely to be 'bereft of vision and focus'. Photo / Jason Oxenham

Labour would like to see targeted investment in regional New Zealand in next week's Budget, Grant Robertson said yesterday in his first major speech since becoming finance spokesman six months ago.

While Auckland was important as the country's largest city and generated a great deal of income, the focus given to one region would not generate the wealth and lifestyle wanted for future generations, he said.

However he was not optimistic that the Budget would deliver.

"We have a government fiddling, flummoxing and failing on the economy, and all the while leaving future generations with the bill for it," he told a Dunedin business audience.

"It is, in short, irresponsible. Out of touch and out of ideas, this is set to be a Budget bereft of the vision and focus we need."

What was required was an active policy of targeted financial investment stronger innovation partnerships, encouragement of migration to the regions and research and development through tax credits to all qualifying companies rather than the grants system that operates now.

"Our approach to the regions is not about picking winners from a list of companies we know from the Koru Club," he said.

"It is about backing the talent and ideas that are in the region. It's about forming a partnership with local government, business, and educational providers."

Mr Robertson also said the Budget should focus on making housing affordable for all New Zealanders.

While the Reserve Banks was dealing with the issue of housing demand, "the Government cannot outsource housing policy to them."

"It is high time for the Government to clamp down on foreign speculators and ensure affordable housing is being built."

Auckland was bursting at the seams. Auckland Council estimated that there was an historic shortfall of 20,000 houses in Auckland.

Auckland needed a further 10,000 a year to keep up with demand but in the last year only 7,700 building consents were granted.

In turn average house prices in Auckland had exploded to $800,000, rising by 18 per cent in the last year and 60 per cent rise since 2008.

"This matters to all of us," Mr Robertson said. "If the bubble bursts it will cause ripple effects across New Zealand."

Domestic demand in the economy was high at the moment, and some of that was built off the apparent wealth of Auckland property owners.

"Moreover it is no exaggeration to say that you are paying higher interest rates today in Dunedin than you should be if it were not for the Auckland housing crisis.

"The Reserve Bank Governor would have lowered interest rates, now among the highest in the OECD, if it were not for his fear of pouring petrol on the overheated market."

Mr Robertson asked whether John Key was the Prime Minister for Parnell (where he lives) "or is he also the Prime Minister for Pine Hill?"

The median income for a family in Parnell in Auckland was double that of a family in Pine Hill, in Dunedin.

The number of people unemployed in Pine Hill was double that of people in Parnell.

"Goodness, even the houses in Parnell are making a killing, with the median house price in Parnell $500,000 more than in Pine Hill.

"The people of Pine Hill or Putararu or Palmerston North need a Prime Minister and a government who backs them just as much as those in his own neighbourhood."

Mr Robertson said he also wanted to see moves in the Budget to diversity the economy away from the reliance on dairy, and it should invest more in education and training to prepare for "a new economy".