Smith Lockwood: Estimates Debate — In Committee 
Smith Lockwood: Estimates Debate — In Committee 
[Volume:627;Page:21983] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In examining Vote Finance I would like to focus on the fiscal policy advice that this Government has been receiving. We know that this Government sprays taxpayers’ money around as if there were no tomorrow. Government spending has risen—it was $34 billion in the last year—and if this Government were to get another term it would take that spending up to $60 billion. This Government would double its spending in 9 years on things like tertiary singalong radio programmes Cowboys and Indians parties for the Weathertight Homes Resolution Service and that kind of wastage and nonsense. 
But I want to focus on something more serious because we all know of this Government’s wasteful spending. I have a Treasury document called  
State Sector Wages 
. I want to know what this Minister plans to do about that advice. That document is dated 28 January 2005 and it tells us that over 5 years the core public service—and let us put teachers and health professionals aside—has increased by 25 percent under this Labour Government. The number of people involved has risen from 30000 to 38000. The document also tells us that the average rate of increase in the cost of that public service is 8 percent a year. In fact in the year to June 2004—in 1 year—it scored a 12 percent increase in cost. That Treasury document tells us that what has been driving those cost increases averaging 8 percent a year in the public sector is the increased number of positions I have mentioned—a 25 percent increase in 5 years—and increased wage levels. But let us wait for this one. There are also increased costs associated with regulatory change particularly the Holidays Act equal employment policies and those kinds of things. 
The report goes on to tell us: “Commensurate increases in outputs do not appear to have been achieved as a result of this increase in costs.” That is Treasury stating that the taxpayer is spending a huge amount—8 percent a year more—on the core public service and that we are getting nothing for it. I want to know what the Minister will do about that. I guess Labour will lose the election and that will solve the problem. Treasury goes on to state that the cost of the public sector is expected to increase more rapidly than the rate of economic growth. Do members know what Treasury points out will be the consequence of that? The increase in cost of the public sector has the potential to quote Treasury to “choke off” economic growth. That is what the report from Treasury which is under Vote Finance states in the fiscal policy advice to this Minister. We want to know what the Minister will do about it. Treasury is telling him that if the rate of increase in the public sector continues it has the potential to choke off economic growth. The report states that it will mean that the Minister will be unable to implement the policies he wants to implement. 
One of the most recent policies of this Government that I have heard about is interest-free loans for students forever. Have members heard anything more irresponsible than that? That will mean that anyone with half a brain will enrol in something so that he or she can borrow to the hilt on the student loan scheme and have free money forever. That has to be the dopiest policy—and the Government claims to be fiscally responsible! What advice has Treasury given the Minister on that? What advice has Treasury under this vote given the Minister on that policy? Interest-free student loans forever! I bet I know the advice Treasury has given him. It would be not to go down that route because anyone with enough brains to get into a tertiary institution will have enough brains to know that he or she should borrow every cent possible under such a stupid policy given that the money is free. All that he or she would have to do over the years would be under a very gentle regime to pay back the principal gradually. I do not know what advice Treasury has given the Minister on that policy.