Groser Tim: Financial Review Debate — In Committee 
Groser Tim: Financial Review Debate — In Committee 
[Volume:646;Page:14999] 
TIM GROSER (National) 
: 
 Central to the political challenge that we will have to front up to at the end of this year is the underlying Crown debt/revenue position. What is the real extent of the fiscal envelope available for different mixes of expenditure and taxation policies? That will be a major backdrop for political debate later this year if that is not already the case. Against the background of that observation I would like to compare and contrast—if we go back to school—the statement in the financial review of Treasury with the farce that unveiled itself today over the statement issued by the Secretary to Treasury and the Commissioner of Inland Revenue. 
If we go back to the statement in the financial review of Treasury we see an admission that Treasury has made a mistake. It states: “The financial statements of the Government show that the OBERAC”—which is one of the technical measures we can use—“was $0.5 billion larger than forecast at the time of the 2007 Budget.” Stripped of the official language what Treasury is saying or what we are recording as members of Parliament is that Treasury screwed up and the operating balance is actually larger than it estimated. The question would then arise as to what the consequences of that screw-up were for Treasury. What was the reaction of Dr Michael Cullen the great helmsman to that mistake? Well it was absolutely nothing. Members should just park that on the shelf for a minute. 
Last week Michael Cullen was the happiest man in New Zealand politics because finally he had discovered—or thought he had discovered—a deficit. This is not a minor point. This is actually a fundamental point because right throughout the golden years that Bill English our deputy leader has been talking about in the course of this debate—when so much wind was in the sails of the Labour Government and it had so many obvious soft choices to make and it usually made the wrong ones—Dr Cullen the great surplus denier was trying to deny the basis for a consolidation of taxation policy and for a systematic process of putting in place incentives that would build on the economic growth low unemployment and lower inflation that Labour had inherited from the previous Government. That is the underlying politics of this situation. But because Dr Michael Cullen the great surplus denier did not want to go there the mistakes that Treasury was making in underestimating the surplus were actually very welcome to the Minister. 
Today we saw an extraordinary statement from two of our top public servants. What had happened was that although last week Dr Cullen was the happiest man in politics because he thought he had discovered a deficit for the first time—he had been searching for a deficit for 8½ years and finally under this operating balance before gains and losses measure he thought he had found one—Treasury told him today it was sorry but it had screwed up. It was actually a very minor error of exactly the same magnitude as is contained in the document before us today but crucially it was a mistake that went against the political interests of this Government and this Minister. 
And boy did Treasury pay for that error! Talleyrand the great cynic but master of politics once said “It was worse than a crime; it was a blunder.” This small technical blunder elicited today at I think around 11 a.m. an extraordinary press statement from two of our most senior public servants. Members should listen to this; it is an abject apology made in public. “I regret any error in the Financial Statements and I am taking this matter very seriously” Mr Whitehead said. Not to be outdone by his colleague the Commissioner of Inland Revenue added that this “was a human error but a bad one. It should not have happened and I have apologised to the Minister of Revenue and the Minister of Finance.” To add to this a commission of inquiry has been set up would you believe. A commission of inquiry has been set up to investigate a technical accounting mistake as if this is the Spanish Inquisition. We can infer from this that Dr Michael Cullen must have been stamping his little feet in absolute and total fury at this accounting change. What is more it is totally unnecessary. 
Reports noted.