Hide Rodney: Budget Debate 
Hide Rodney: Budget Debate 
[Volume:639;Page:9374] 
RODNEY HIDE (Leader—ACT) 
: 
 The ACT party will not be voting for this Budget. We will not be abstaining on this Budget; we will be voting against this Budget. This Budget can be summarised as one of spend spend spend and tax tax tax. It is another Michael Cullen Budget that has the same old policies the same tired old policies that he has trotted out Budget after Budget. 
When Michael Cullen took office he famously said that he would be judged and his policies would be judged on whether he achieved 4 percent real economic growth. Well the judgment is in on that I say to Dr Cullen and those famous words should be his famous last words. The outlook in this Budget for the next 5 years—and I am amazed that no one from the Government has talked about economic growth— 
Hon Member 
: You will. 
RODNEY HIDE 
: Well I will not actually. The outlook for the next 5 years is a paltry 2.3 percent increase in economic growth. That is only because in years 4 and 5 the Government is hoping the growth rate will pick up. In the next 3 years the outlook for New Zealand is an average growth rate of less than 2 percent per year. That compares with Australia which is topping nearly 4 percent a year. So the outlook is for the gap between New Zealand and Australia to widen. 
 We see again in this Budget from Michael Cullen no plan no direction and no strategic vision for New Zealand. The only thing this Budget guarantees is more spending higher interest rates and lower economic growth. In 2000 when Dr Michael Cullen took over as Minister of Finance Government spending per year was $9000 for every man woman and child in the country. So for a household of four people that amounted to $36000 a year. That is what the Government spent on average. Of course we have to ask ourselves what that average family of four gets from the Government. Is it getting $36000 worth of benefit? I do not think so. Well now that spending is $13000 a year per person and in 2011 it will be $15000 a year per person. Under Michael Cullen core Government expenditure has increased by $20 billion which is a 32 percent real increase and it is set to go up over the next 3 years by another $9 billion. 
Do members know what is truly shocking about that increase? It is that Treasury itself says it can see no benefit from that extra spending. There has been no improvement in Government service and every Kiwi knows that. In fact the more money that has been thrown at Government departments the poorer the service from them has been. 
We hear that this Budget is about savings and investment. Well the way to achieve savings and investment is to have more money in people’s pockets and to have a higher economic growth rate. The way to achieve both of those is to cut taxes comprehensively across the board. There is the money to do that. That is what this Budget should be about. But of course the Labour Government is about spending money to win votes; it is not about managing the economy for the good of the country. That is why the ACT party says that we need now a tax payout rights bill that would put politicians on a constrained budget and hold the level of Government spending at where it is. And if politicians like Dr Cullen want to spend more money in real terms then they should go to the people in a binding referendum. That is what the ACT party says we should be doing so we can have some confidence that the size of the Government in the years ahead will not ever become bigger than it is now. 
You know Michael Cullen says that we cannot let people spend their own money because that would be inflationary. Well Milton Friedman got a Nobel Prize for explaining that the cause of inflation is monetary policy not people actually working earning and spending their own money. Monetary policy is what causes inflation. So the idea that somehow allowing people to spend their own money is inflationary is totally wrong. 
Of course we are all in favour of the cut in the company tax rate that has occurred from 33 percent to 30 percent but now we have widened the gap between the top personal tax rate and the company tax rate. Tax accountants will have a field day and the other complications that have been introduced will complicate our tax code further. We should be aiming for a low flat tax across the board without the exemptions that arise when just because the Government has a policy that it wants people to follow and invest their money in it thinks it therefore has to give them a tax break. 
Here is what a real Budget would do for New Zealand. It would drop the top rate of income tax across the board to 20c in the dollar. That would be a boost for investment and savings and indeed for economic growth. We would hold Government spending in the medium to long term in real terms. We would deal to red tape with a regulatory responsibility bill. We would demand transparency and accountability from all Government departments through service-level agreements that would see departmental heads fired for any failure to deliver that. We would actually take the shares of the State-owned enterprises and distribute them to everyone. If the State-owned enterprises truly do belong to the people of New Zealand let us see that. And we would take the Cullen fund—a Government fund—and distribute that money to everyone by putting it into their KiwiSaver account or into an education endowment so that it is their money. 
We have seen even more money go on health. And where are the benefits of that? There have been absolutely none. In fact the one thing that the Labour Government has done in health is to actually deny us the opportunity to see the size of the waiting lists and to see the performance that is occurring. More money has gone in but now we are not even getting the information that we used to get on the performance of the State health system. Why is that? Because it is woeful. We cannot achieve a better result from our health system by pouring in more money. If we could it would actually be working now because we have never seen an increase of money go into the health system like the increase we have seen under Labour. The way to fix the health system is the same as the way to fix everything else in the economy. It is not to run it like the Soviet Union used to run its economy; rather it is to empower consumers—empower New Zealanders through the provision of competition and choice by introducing the private sector into the delivery of health. 
The key thing New Zealanders are looking for in a Budget is the direction that a Government is going to take. We see nothing in this Budget except a process of spend spend spend and tax tax tax. The way to approach a Budget is to introduce a taxpayer rights bill and to hold Government expenditure in real terms. If politicians want to spend more of people’s money why do they not go and ask them to agree to that by having a referendum on it? That is the ACT way. Thank you Mr Assistant Speaker.