Groser Tim: Debate on Budget Policy Statement 
Groser Tim: Debate on Budget Policy Statement 
[Volume:637;Page:7771] 
TIM GROSER (National) 
: 
 Mr English our deputy leader at the start of today’s debate on the Budget Policy Statement made the point—and I think he will be proven correct—that this is probably Dr Michael Cullen’s last Budget Policy Statement. I think that from that perspective it is fair enough to sit back and look at this in the context of the overall policy he has been responsible for coming into the third term of the Labour Government. If we overlaid the business cycle of this country on top of the political cycle I would argue that we would be hard-pressed to find in the last 40 years a Government that has had at its introduction a softer ride than this Government. One can run one’s luck for some time but eventually one’s luck runs out. And luck like inherited wealth can be easily misspent and wasted. 
When I was a young person growing up in this country along with all young New Zealanders I learnt the song that is almost an informal anthem—“We Don’t Know How Lucky We Are”. I always understood that there was a sense of irony behind that anthem but I suspect that the Labour Ministers in particular if not the Labour caucus as a whole will appreciate the irony in that phrase only after they have been knocked off their electoral perch and reflect on the moment when they had stewardship and after coming into office with the best economic conditions any Government has had for about four decades on what they did and did not do with their time in office. 
The roots of this problem started with a deliberate attempt to misrepresent the situation they came into office with. One can have one’s own view on whether this is the result of ignorance or simply blind ideological resistance to market reforms but the fact remains—and we have heard it today in various speeches made by Government members—that there has been a deliberate attempt to misrepresent the starting point of their time in office. 
I have just picked up one of the many statements I could have picked up. It is a statement that Mr Maharey made on 24 May 2006 to this Parliament when he said: “The 1990s … were 9 long years of absolute and utter decline for this country. … every single region in this country was shrinking … the 1990s will be remembered as an utter disaster”. At least one thing we can ask about that statement is whether it is empirically verifiable. Let us just quickly go through the actual reality. 
The rate of inflation was between 15 and 20 percent until 1990. It plummeted down throughout the 1990s to low figures where it remained until tragically prior to the 2005 election a very clear message was sent to the Governor of the Reserve Bank: “Ease back a little guys. Let this genie out of the bottle just a bit. We’re in trouble and we can now feel the effects of this in terms of a grossly dysfunctional monetary policy compared with its original position.” 
The rate of employment fell from over 11 percent in 1990 when Labour came into office to 6 percent. We have heard today from various spokespersons who reiterated versions of Mr Anderton’s “jobs machine” as if somehow the fact that we enjoy low unemployment is a consequence of decisions they have taken. Policies like this take years to bear fruit. They have been the beneficiaries of a process that they reject for perhaps ideological reasons. 
One could say the same thing about the growth rate. Thanks to some tough market-oriented decisions taken earlier we have had a growth rate now of about 3.5 percent for 15 years. That was the actual legacy that Labour members inherited on taking office and on assuming their responsibilities to the rest of New Zealand. 
What have they done with the fruits of that inheritance? First of all they have falsely claimed political credit like a conductor who jumps on an engine just as it is leaving the station and claims that he was the chief engineer. They have spilt the milk on useless growth of bureaucracy with deeply dubious consequences from the point of view of the New Zealand community. Let us just look at some of the bigger picture figures. First there has been huge growth in core Government expenditure—well over 40 percent and way in excess of the level of GDP spending in Australia even when we take account both of Federal and state Government spending. 
I do not have a deep ideological problem with a dollar of Government money being spent. I know that some people do but I personally do not. But I do want value for that money and I take a different view on a dollar being spent on upgrading say the national grid to a dollar spent on advertising a State monopoly called the Accident Compensation Corporation for no discernible purpose other than a political purpose. I do want to see from the billions of extra dollars spent in health demonstrable health outcomes that improve the status quo as a consequence. 
We have heard in the House today National members ask for the evidence of improved outcomes from this vast increase in spending. When we look at health it is the same underlying picture—an enormous increase in Government expenditure. We still have an education system that I think gives us excellent results at the top end but it has become clearer and clearer that at the bottom end of the food chain in terms of our education system we are not getting results and we have had some shocking statistics that bear this out. So all of this money is being poured in and producing a huge growth in bureaucracy with very little to show for it. Well we have one thing to show for it and that is a vast increase in the number of bureaucrats. For example in the education sector the number of bureaucrats has increased by approximately one-third over the life of this Government. 
I thought it was fascinating to listen to Mr Cosgrove today—he has been in this Parliament for some time now—attack my colleague Dr Lockwood Smith as if he were the Minister and Mr Cosgrove was the Opposition member. That is the problem. Labour members still have an oppositionist mentality. When will they stand up and take responsibility for being the Government? When will they discharge their responsibilities to the people of New Zealand who put them there in the first place? When will they assume the real mantle of office? I am afraid that time is running out on them. 
If we drill a little deeper we find more examples of the same theme. In the area of health in spite of the enormous increase in spending on health over recent years—I think some $4 billion—what have we seen? We have seen the number of doctors per 1000 New Zealanders drop from 87 to 73. I personally do not think that the benefit of that is outweighed by the 24 percent increase in the number of health bureaucrats who have been added to the public sector bill. 
 So in the health sector managerialism has gone mad the number of doctors has declined and there are growing waiting lists all on the back of a huge increase in Government expenditure. If we drill down into some smaller departments we get the same underlying picture revealed. Inside the more modest Housing New Zealand Corporation the actual number of State houses has increased by less than 10 percent since 2002 but staff numbers unbelievably have ballooned by 42 percent. The number of those staff on more than $100000 a year has more than doubled in this short period of time. Another example is the Department of Labour. There has been a staff increase of 600 in the Department of Labour over the last 4 years and again the same pattern of increasing numbers of those on what would be regarded as very high salaries by the standards of most New Zealanders. 
So what we are seeing again is this growth in bureaucracy and expenditure and very little to show for it whatsoever. Then of course what is worse is what has been left unattended. The Government inherited with its good luck an economy that was in better shape than the economy any other Government has had to deal with in the past 40 years. Instead of using this as a platform to try to advance New Zealand to the next level of wealth creation the track the Government has gone down is to redistribute money to its stakeholders increase the size of the bureaucracy and increase the number of bureaucrats in control. What it has not done is put forward the agenda that would take this country forward increase our competitivity and give the young New Zealanders who are leaving this country some belief that they could make their fortunes here in our own country.