Norman Russel: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Norman Russel: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 15 August 2012. Volume:682;Page:4377. Text is incorporated into the Bound Volume.] 
1. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Does he stand by his statement that “we are firmly focused on keeping the Government’s overall debt as low as possible”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. The Government believes it has made reasonable judgments about the appropriate use of debt. Through the recession we have borrowed extensively to support our public services and our income transfers to New Zealand families and households as well as borrowing extensively to fund the rebuild of Canterbury. We made clear at the time of those large commitments that over time we would expect to stop borrowing more money and eventually reduce our debt. So we have had quite high levels of debt in the last couple of years—high levels of Government borrowing—but that is rapidly tailing off. 
Dr Russel Norman 
: If the Government’s goal is to keep overall debt as low as possible why is it planning to sell high-returning energy assets for about $6 billion but to borrow a similar amount to build motorways with low or negative returns that have not passed Treasury’s business case guidelines? 
Hon BILL ENGLISH 
: There is no suggestion of the Government borrowing billions of dollars for motorways. The motorway investment is largely funded—or all funded actually—from the dedicated road-user charges and excise tax that go into the road-user fund. 
Dr Russel Norman 
: Is the Minister aware of the 2011 briefing to the incoming Minister of Transport which warns that there is a $5 billion - plus hole in the Government transport Budget over the next two decades caused by its uneconomic motorway projects which is similar to the amount it hopes to raise from asset sales? 
Hon BILL ENGLISH 
: I do not believe the briefing does say that. In fact I think it is a bit of a time-honoured ritual that every incoming Minister of Transport gets told there is not enough money. Every incoming Minister of Transport regardless of their party tells the transport agencies to go and do a better job and almost inevitably they do. Without significant increases in funding they are managing a large investment in roads and the main reason for that is that most people drive cars and need good roads to drive on. 
Dr Russel Norman 
: In light of the Minister’s answer I seek to table the briefing to the incoming Minister which says at— 
Mr SPEAKER 
: Order! These documents are readily available. We are not going to have quotes from it for that purpose. 
Hon David Parker 
: Did the Minister say: “Currently the Government debt is still rising rapidly. Because we are running deficits by 2014-15 we would hope that we were able to stop the increase in Government debt …”; if he did say that will he be stopping the plans by the New Zealand Transport Agency to borrow money? 
Hon BILL ENGLISH 
: Yes I am pretty sure that I did say that; it sounds sensible to me. On the second issue the Minister of Finance has to sign off any borrowing by the New Zealand Transport Agency so yes we could stop it. 
Dr Russel Norman 
: If debt is such an important issue for this Government why has it not reassessed the need for these motorway projects at a time of rising petrol prices and falling traffic volumes rather than going ahead and giving itself the power to put billions of dollars on the public credit card to fund projects that have never been put through Treasury’s guidelines? 
Hon BILL ENGLISH 
: Well the Government—both the previous Government and this Government—has done a number of assessments about the need for roads. I know that the member disagrees with some of the highway projects and favours pretty expensive rail projects that need massive public subsidies to make them work. We stand by our judgment. We believe that it will help the economy to grow and will provide better services for the public. 
Maggie Barry 
: Has the Government succeeded in controlling the build-up of debt? 
Hon BILL ENGLISH 
: The answer to that of course is yes. When we came into Government in 2008 the briefings to the incoming Government showed that under the previous Government’s settings net Government debt would reach 60 percent of GDP by 2026. As a result of the decisions that this Government has taken we would expect net Government debt by 2026 to be around 0 percent of GDP not 60 percent of GDP. 
Dr Russel Norman 
: Is the Minister aware that most of the Government motorway projects have very poor returns—according to the Government numbers for example the Warkworth to Wellsford project would cost $1 billion to produce just $600 million in benefits and that is a net loss—while the Budget shows that the energy assets have very good returns well above the cost of Government borrowing? 
Hon BILL ENGLISH 
: I do not agree with the member’s numbers but I would point out to him that it is a bit rich for the Opposition parties to campaign on dire poverty in Northland and a lack of economic opportunities and then campaign against the most vital piece of infrastructure Northlanders need to develop their economy. 
Maggie Barry 
: Has he seen any reports about policies that would increase the Government’s debt? 
Hon BILL ENGLISH 
: There are so many of these reports that it is hard to keep up with them but I can list just a few: 13 months of paid parental leave at 100 percent of the average male wage universal student allowances for full-time tertiary students and giving the in-work tax credit to beneficiaries as well as the dole to all unemployed students over the summer holidays. Just this list of promises made by Opposition parties particularly the Green Party would cost $11 billion a year. 
Dr Russel Norman 
: What is the logic in selling assets that produce healthy returns to the Government in the name of reducing debt and then turning round and increasing Government debt by about the same amount to build uneconomic motorways?  
Hon BILL ENGLISH 
: Most of those statements are wrong as the Government has said. In respect of debt the sale of assets will mean that we can avoid borrowing another $5 billion to $7 billion in difficult global financial markets. Alongside that the Government is overseeing pretty impressive fiscal restraint to make sure that we do not borrow any more than we need to provide the public services that we are required to. 
Dr Russel Norman 
: Is the real reason that the Government is planning to sell $6 billion worth of profitable strategic energy assets to avoid debt and then to borrow about the same amount to build motorways that do not have an economic business case that these policies are not driven by economics but by an outdated ideology from this Government and for purely political reasons? 
Hon BILL ENGLISH 
: No. If there is any outdated ideology it is the ideology that says that we should spend as much as we like and borrow it all and an ideology that is totally opposed to the private sector and economic development as articulated by the Green Party.