Foss Craig: Questions for Oral Answer — Questions to Ministers 
Foss Craig: Questions for Oral Answer — Questions to Ministers 
[Volume:672;Page:18467] 
2. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What reports has he received on the Government’s financial position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 This morning the Government’s financial statements for the 9 months to 31 March were issued. They show an operating deficit for the 9 months of the financial year of $10.2 billion compared with a forecast deficit of $8.9 billion. The Earthquake Commission’s $1.5 billion estimated share of the costs of the Christchurch earthquake accounts for most of this difference. However the figures do not include any of the further costs of the Canterbury earthquake including the Government’s support packages or the Government’s support package for AMI policy holders. 
Craig Foss 
: By how much has the Government’s financial position deteriorated since late 2008? 
Hon BILL ENGLISH 
: Not by as much as it might have. But it has deteriorated significantly requiring the Government to carefully review all its spending priorities—for instance the pre-election update in October 2008 forecast that the deficit for this year would be $2.4 billion. It is much more likely to be about $15 billion or $16 billion. This is all the more reason for New Zealanders to be very sceptical about political promises to spend more borrow more and run up even larger deficits. 
Craig Foss 
: How will the Budget next week respond to and improve the Government’s financial position? 
Hon BILL ENGLISH 
: The Budget is likely to confirm a very large deficit for the current financial year including recognition of a fair chunk of the costs of rebuilding Christchurch. But it will also set out a balanced and considered review of the Government’s spending priorities across a range of programmes and lay out a credible track back to surplus. 
Hon David Cunliffe 
: Can the Minister confirm that the New Zealand Superannuation Fund has made a return of 32 percent since he cancelled the Government’s contribution to it and that if those contributions had continued based on that rate of return Crown debt would have been reduced by approximately $375 million compared with what it is today? 
Hon BILL ENGLISH 
: The member needs to remember the context here. The New Zealand Superannuation Fund lost billions of dollars because of the change in global markets. It has clawed back a fair bit of that and one would expect that a fund of this size would over time return to its normal return. In the end the Government took the view that borrowing is not saving. Based on the member’s statement I would expect that a Labour Government would go out borrow $50 billion buy the New Zealand Exchange and call that investment. 
Craig Foss 
: Why is it important for the Government to get its finances in order and return to Budget surplus? 
Hon BILL ENGLISH 
: What a good question. It was appropriate that the Government run deficits through the recession as we continued with our long-term investment in infrastructure maintained public services maintained cash support to New Zealand families and protected New Zealanders from the worst effects of the downturn. But now that the economy is showing further signs of growth it is time we restrict our borrowing make more decisions about the priorities for our spending and get our way back to surplus. That is how the Government can contribute to national savings as households are already doing.