Mallard Trevor: Financial Review Debate — In Committee 
Mallard Trevor: Financial Review Debate — In Committee 
[Volume:653;Page:2428] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 One of the problems with this debate is that we appear to be living in two worlds. One is the real world and one is a world that appears to be inhabited by the Prime Minister and occasionally by Bill English. To get right to the nub of the issue one has to ask this question: does the Government have a debt problem at the moment or did it inherit a debt problem? It is clear from the international commentary whether it is from the IMF or the World Bank and from the comments made by John Key and Bill English early in the time of holding their current positions that the previous Government did a very very good job during the time under review—and in fact for the 8 years before that—of positioning the Government and the Government’s books in such a way that we could sustain a period of downturn. 
But there is nothing like someone who suddenly becomes as Bill English is a previous position denier. It is a bit like the climate change deniers or the Holocaust deniers. He is now consistently denying the very good position that he inherited. He is someone who now knows that if he had the choice again he would not make the tax cuts that came into force on 1 April. They were wrong. They were wrong in their totality but especially they were wrong in their distribution. Part of the job is to link economic policy with fiscal policy and that is what Bill English did not do in this particular area. Fiscally he probably got it just about right but as a result of the distribution of the tax cuts economically he got it very very wrong indeed. 
I will make a prediction. Sources that are normally very very well informed have told me that on Budget night in May the Minister of Finance will not only announce but will pass through all its stages a bill that will reverse the tax cuts for the out-years. Bill English will get up in this Chamber on Budget day and say that before members are allowed to go home the Government will under urgency undo the tax cuts for the out-years—the tax cuts that we have already legislated for. 
Dr Rajen Prasad 
: He’s not denying it. 
Hon TREVOR MALLARD 
: He is certainly not denying it. He cannot deny it. He is smiling in a knowing way but he cannot deny the fact that he will either before the Budget—because clearly he will come under some pressure to do so—or on Budget night make an announcement that he made a very big mistake in legislating for the out-year tax cuts. Because of the shape of the Government debt to GDP graph he will legislate in order to make his Budget documentation slightly more believable than would otherwise be the case. If he does not do that if he does not make that announcement then it will be very very clear that the next Labour Government in 2½ years’ time will inherit a debt position that will be much much worse than any that has been inherited by any Government since Rob Muldoon handed over power to David Lange in 1984. That is the parallel that Bill English is heading towards. 
I am sure Bill English has finished making his big Budget decisions already but he is facing a very very similar dilemma to the one Muldoon faced in 1984 as Minister of Finance and as Prime Minister. He is finding a Budget that is almost impossible to write.