Cullen Michael: Budget Debate 
Cullen Michael: Budget Debate 
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Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 It is a time-limited debate and 10 minutes before the end of the Budget debate the Minister of Finance is called in reply regardless of whoever is actually speaking at that point. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: That is correct. 
Hon Dr MICHAEL CULLEN 
: Tonight I address my remarks particularly to the full quivering ranks of the National Party opposite—a group of people whose heads are so empty that even if they rattled one would not hear a sound coming forth from them. Of course National has put up those wonderful billboards that extend the entire vocabulary of Sandra Goudie. In other words they are limited to two words per billboard. One of those billboards has it right on the money. It is absolutely correct. It is exactly the Labour message in response to National. It is tax or it is a cut. It is tax or it is a cut in health. It is tax or it is a cut in education. It is tax or it is a cut in superannuation. It is tax or it is a cut in law and order. It is tax or it is a cut in defence. We want to know what cuts the National Party is planning. National has said that if it is elected it would have a mini-Budget before Christmas. Of course Sandra Goudie was still doing strippergrams the last time the National Party had a mini-Budget before Christmas. I want to tell her what happened in that mini-Budget. 
Sandra Goudie 
: I raise a point of order Mr Speaker. I take exception to a comment made by the Minister and I would like him to withdraw and apologise. 
Hon Dr MICHAEL CULLEN 
: I withdraw and apologise and I shall now sleep a great deal easier at night not having to think about that. 
The first thing that happened in that mini-Budget introduced before Christmas in 1990 was that a widow in order to qualify for the widows benefit had to apply for it on the day her husband died. That was the start of 9 long years of a National Government of cuts and of ideological insanity as my colleague has just been through. What has National told us? It has told us that it can do this because the Government has grown so much. I tell Mrs Goudie that when National left office core Government spending was 33 percent of GDP. Where is it now? It is now 30 percent of GDP. Where is it forecast to go to? To 32 percent of GDP with Working for Families and with the tax measures in this year’s Budget. 
When National was in Government Government spending was higher than the OECD average. Now it is lower than the OECD average. So much for the record on those matters! Or of course as National says in one of these things it is going to get rid of the pen-pushers whoever they are. Only the National Party has not realised that in the public service they use computers these days. But never never mind. 
What is public service employment in terms of the core State sector public service the administrators? It has gone from 2.18 percent of total employment to 2.34 percent. What it is actually talking about is the teachers the social workers the staff of what used to be the Special Education Service; all of those people. Those are the people whom Mr Key is going to cut and as he told us on a Sunday night programme he has sacked people before and did not shed a tear because he is a man who never cries and does not know how to. 
We spend only $1.9 billion on that core public service administration. That is an interesting figure. I said that the National Party has to cough up at least $2 billion a year for tax cuts and Mr Key said that it would not be anything like that much. What does $1.9 billion buy? If we just cut the 21 cent rate and nothing else it can be cut by getting on for 6 cents. We can actually give a massive $30 a week at $35000 a year and a maximum of $33 a week. That is $1.9 billion. All those people on $100000 that the National Party keeps talking about will not be happy with only a $33 a week tax cut and all those on $30000 getting $23 a week will want to know what will pay for the $1.9 billion. What will go? Will it be my local police officer my school my teachers or my nurses? Who will go to pay for those tax cuts? The National Party will not tell us. It will not tell us what its tax cuts will be. National wants to keep that secret for as long as possible because it knows that the numbers will not add up. 
National has people expecting large tax cuts which it cannot deliver except at the expense of core social services—superannuation health education and law and order—and we should not be surprised. Dr Brash is on record as to what he believes about all these matters. He has given many many speeches over the years. He has said what his views are. He said that the Employment Contracts Act did not go far enough on labour deregulation and it should be taken further. He said that he wanted schools privatised; that he saw no reason for the State to own schools or hospitals. He said that he wanted to raise the age of eligibility for superannuation and indeed even now at his age he is still comfortable about raising the age of eligibility. All he says now is: “Well it won’t be for those over 50.” which is a pretty strong signal that it will be for those under 50 under a National Government. One would have to be pretty hardy at 49 to change all one’s patterns of retirement behaviour to take account of the fact that the goalposts will move again if a National Government were elected. He wants a capital gains tax on housing. He wants to cut the rates of able-bodied benefits. He wants to use prices to limit health-care demands. Therefore people get in on the basis of whether they can pay not on whether they need an operation or need assistance from the health-care system. Don Brash wants to scrap the minimum wage. A man who used to earn nearly half a million dollars a year as Governor of the Reserve Bank would deny people a miserable $9.50 a week; $9.50 a week is too much for Dr Brash. Dr Brash tells us that those kinds of wages are too much for some New Zealanders. 
So is it tax or is it cuts? We are taxed significantly less than the OECD average. An average worker on a full-time wage is taxed less than in Australia as a proportion of wages. Employers do not pay payroll taxes as they do in Australia. So what is going to give? If it is not cuts in expenditure then it is looser fiscal policy and it is higher interest rates. I invite the National Party to go to the people promising higher interest rates so that they can pay for their own tax cuts. How does that work out for most people? It is tax that pays for health education superannuation and law and order. Of course on Budget night half a dozen of National’s spokespeople immediately said that we were not spending enough. They said we needed more for the police more for defence more for justice more for health more for this more for that more for the other less revenue no blow out in spending no increase in the fiscal deficit and no interest rate rises. 
Dr Brash used to give speeches about that kind of nonsense when he was Governor of the Reserve Bank but now it is becoming official National Party policy. So it is clear who the winners would be under a National Government. It would be those on the highest incomes. It is clear who the losers would be. It would be the great majority of the rest of the population. I invite the National Party over the next few weeks to tell us which part of the health spending it objected to. Was it the increase in pay for nurses? Was it the faster roll-out of primary health organisations? Was it the cancer control strategy? Was it the cataract operations? Was it the increase in mental health funding? Which part of that spending goes under a National Government. 
Then I want to know from National which part of the spending goes from education in terms of increased numbers of teachers changes to student allowances and so on. What goes from the pensioners? Is it the new rates rebate scheme? Would that go under a National Government? I want to know National’s position on savings. Would it abolish the KiwiSaver scheme? National has said it would do that for the superannuation fund. Dr Brash can save for himself. He does not understand why somebody who is on that extraordinary generous minimum wage of $9.50 an hour cannot save for his or her retirement as well. What would give under a National Government when the National Government gives itself a tax cut if National ever gets into power? It does not add up and National knows it. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: The question is that the amendment to the amendment to the amendment be agreed to. This is the Rodney Hide amendment.