Brash Don: Financial Review Debate 
Brash Don: Financial Review Debate 
[Volume:607;Page:4165] 
Dr DON BRASH (NZ National) 
: 
 I want to make a couple of comments with regard to what Mr Tamihere said. In one respect he was absolutely correct. He mentioned that recent growth in New Zealand has been good and indeed it has been. Let us be quite frank and open about that. Why has it been good? It has been good because the exchange rate has never been lower in New Zealand’s history; because export prices have been extraordinarily good; because weather down on the farm has been good; and because this Government has reaped the benefit of the great policies of the late 1980s and early 1990s—low inflation low public sector debt and a liberalised economy—while at the same time deploring them. There has been a huge growth in this economy in the last decade because of those reforms. 
The Prime Minister in her speech to the House at the opening of this year’s Parliament made the point that growth in the New Zealand economy in the year to September had “peaked”—her word not mine—at 3.9 percent and from that point on slows down. Treasury estimates that in the financial year beginning 1 April the economy will grow at 2.5 percent. That was its estimate when the exchange rate was at 57 on the trade-weighted index. It is now at 61 on the trade-weighted index. I suspect that the best estimate Treasury can make now would be about 2 percent not 2.5 percent. According to the Minister of Finance’s own projection published in December the economy is projected to slow down gradually over the next 10 years so that in 10 years’ time the growth rate will be 2.1 percent. Let us be quite clear about that. Growth has been quite good for reasons that have nothing to do with the Government at all and is projected to slow down from this point. 
I want to speak particularly about the bill. Apparently it is not fashionable to talk about the bill when one is speaking in a second reading debate. However there are three issues that I want to talk about. The first one is the quite extraordinary fact that the bill explains that the Department of Conservation overspent its vote by $93.5 million. Its vote was only just over $100 million to start with so this is an overspend of something like 87 percent. To the best of my knowledge no Government speaker— 
Hon Maurice Williamson 
: How much? 
Dr DON BRASH 
: Eighty-seven percent. 
Hon Maurice Williamson 
: No it can’t be. 
Dr DON BRASH 
: My colleague Maurice Williamson questions this. However clause 7 states that we are validating unappropriated expenses incurred by the Department of Conservation of $93.5 million for the financial year ended 30 June 2002 whose total expenditure was $201 million. That is a huge overspending. To the best of my knowledge no Government speaker has bothered to explain why that expenditure took place. There has been no explanation at all. 
There are two other points that I found of great interest. The schedule details expenditures totalling $42 million in current expenses. They are all itemised in great detail. The biggest itemised expenditure is for secondary and tertiary education at about $17.5 million or 41 percent of the expenditure listed in the schedule. The National Party supports the Government playing a major role in financing education. What we worry about is that the present system is totally failing to deliver to a significant fraction of the young people coming out of our school system. Yes there are some good schools; yes there are some good tertiary education institutions; yes there are some well-educated people; but far too many kids are still coming out of our schools unable to read or write. 
I have been talking this afternoon to a person who works in the literacy area. He has a sign up at his literacy school that says “One Kiwi in five cannot read this sign”. That is a deplorable situation and one that condemns those young people to a life of low income and unemployment and frequently to drug abuse and crime. 
I have told the House on previous occasions about the manager of a company in Hawke's Bay who I met last year. He advertised for a forklift truck-driver and found that three-quarters of the applicants could not read well enough to be employed as one. They could not read the safety instructions or the pallet labels. They could not be forklift truck-drivers because they could not read well enough to do the job. 
I have also mentioned an incident that happened to me in January this year when my son and I sought to buy 10 tickets to ride the luge in Rotorua. The tickets cost $3.50 each. When I suggested to the 18-year-old woman behind the counter that 10 tickets for $3.50 should be $35 she said “just a moment” and keyed in $3.50 ten times— 
David Benson-Pope 
: And she went to school while your party was in Government for goodness sake! 
Dr DON BRASH 
: I am making the point that it is important we get the education system right. This Government has still failed to do that. Simply paying more money to fix the problem does not fix it. We are already spending more relative to our gross domestic product (GDP) on Government funding of education than every other developed country. [ 
Interruption 
] The Government chief whip has something wrong with his forehead. I ask the member if he is all right. He seems to be expressing some disquiet. 
The point I am making is that we are already spending more on Government-funded education in this country relative to GDP than in all but two other developed countries in the world. We are still producing a huge number of people who cannot read write or do basic arithmetic. The sad thing is that the present Government appears intent on locking us into a highly centralised and unionised system with total opposition to the kind of liberated freedom-of-choice option that I believe would deliver much more effectively for our children. 
The third item I will touch on briefly is the other major item in the schedule. Education comprises 41 percent but the other substantial item is the domestic purposes benefit which eats up 33 percent of the expenses listed in the schedule. I am happy to say that on this side of the House we have a number of people who speak on social welfare because we all care about it deeply. The reality is that in the last 27 years the number of those on the domestic purposes benefit has risen from 17231 in 1975 to 108980 in 2002. This is an increase of 532 percent at a time when the population has increased by just 22 percent. It is a huge increase. The Minister’s December Economic and Fiscal Update projects a further increase of 4000 by 2006-07. The increase in the appropriation last year suggests that the numbers are more likely to exceed that estimate than fall short of it. This is a huge tragedy which the Government is making worse by making it easier for people on the domestic purposes benefit to resist going back to part-time or full-time employment. It is a tragedy for the people concerned and it is a tragedy for the country.