Foss Craig: Estimates Debate — In Committee 
Foss Craig: Estimates Debate — In Committee 
[Volume:632;Page:4144] 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak to Vote Finance which is allocated $52.8 million. Further to what Mr English has just pointed out about policy advice I say $2.7 million of that $52.8 million is for policy advice about the management and ownership of State-owned enterprises. I think that taxpayers deserve an explanation of that because Mr Mallard totally ignores that $2.7 million for policy advice and totally bulldozes any suggestion that is outside his own preferences. An amount of $2.3 million is allocated for policy advice on various taxes. Mr Cullen the Minister of Finance calls that an ideological burp. He totally ignores it totally bulldozes it and gives us one of his witticisms to explain why that should be ignored. We can point to about 10 percent of the $52 million that should be savings for taxpayers. I am a big fan of Treasury but if the current administration totally ignores its advice let us put it out to pasture. Let us save 10 percent. That is probably the next lot of waste we will see on wastewatch.co.nz—the National Party’s new site that will highlight much of this Government’s wastage. 
I think it is very important to look at the environment in which we are asked to consider this appropriation. Inflation is now at 4 percent. Inflationary expectations are nudging 4 percent for the next 2 years as a result of waste of being unproductive and of sending money to the squeakiest and loudest wheel as opposed to measuring productive outcomes for the New Zealand taxpayer. Further to that environment growth is struggling to beat even 1 percent over the same 18 months to 2 years. The emerging Asian tigers would be disappointed if they did not get 1 percent growth per quarter. In an environment where New Zealand’s gross average income is less than the Aussie average net income it is no wonder that 640 New Zealanders per week are leaving to go to Australia. This is an environment where for goodness’ sake there is a tax bill before the Finance and Expenditure Committee that will incentivise New Zealanders to invest into our biggest competitor Australia and into the Guinness Peat Group—and it will do that in an environment where New Zealand is struggling to save money. 
As was alluded to earlier the New Zealand living standards reports show that those who are suffering the most from the policies of the current Government and the forecast spending have grown to 17 percent. All we have heard is rhetoric and spin. If we get on the ground and talk amongst the people in the lower socio-economic levels we find they are struggling. The Labour members should absolutely hang their heads in shame at what is happening out there to real New Zealand. 
With regard to the inflation blowout I think it is a good idea to look at the effects of inflation bursting out to 4 percent. What are the dangers of that who will be most at risk and what are some of the effects? Those who will be hit the most are people on fixed incomes—mostly superannuitants who are struggling right now to pay $1.77 per litre for gas when about half of that goes in tax anyway. Those who are struggling on superannuation and on lower incomes will struggle as they try to meet the day-to-day demands to pay for their petrol electricity and simply just fruit and vegetables. 
The blowout in inflation creates a very interesting question as to whether the indexation of the tax brackets will still happen. There is a lot of uncertainty about that. Higher inflation means that more New Zealanders will lurch into the top tax brackets and they will recall the 1999 Labour pledge that only 5 percent of taxpayers would be in the top bracket. Well I think that currently about 16 percent of taxpayers are in that bracket and that will start to move towards 20 percent right now. We will be able to watch the flights to Australia start to fill up even further than at present. The price of oil has been blamed as part of the reason for the consumer price index increase and that is fair enough. That has contributed but the wanton waste the “spend-athon” and the gross overtaxation of New Zealanders by this current administration is absolutely to blame for the current situation. 
Further to the current environment what is another result of inflation bursting out through 4 percent? Today I heard 100 percent mortgages being advertised on the radio. One of the constant claims of the Reserve Bank and the Minister of Finance is that there is over-investment in property.