Cunliffe David: Estimates Debate — In Committee 
Cunliffe David: Estimates Debate — In Committee 
[Volume:627;Page:21988] 
Hon DAVID CUNLIFFE (Associate Minister of Finance) 
: 
 The desperation of the Opposition spokesman is simply proven by the technique he is using. He excludes numbers that are going down and includes numbers that are going up and thus concludes that the average has gone “up”. Well congratulations! But I have the privilege of sitting near the Secretary of the Treasury and he has just confirmed to me that the numbers I quoted last time—Government expenditure was 35 percent of GDP when Labour came in and is 33.7 percent now—are correct. If Mr Key does not believe those numbers he should take them up with Treasury because that is just what I have done. 
Dr Smith and other members have referred to the tax cut debate. That is a very important debate. For the benefit of the public who are listening I will say two very simple things. The public understands the difference between a surplus and a deficit: one gets paid one gets wages one gets money in the purse one pays one’s rent or mortgage one buys groceries one pays a power bill. Whether one is in surplus or deficit at the end of the week comes down to one thing: is there any money left in the purse? The reality is that this year’s Budget forecasts that we will be in a cash deficit for 3 out of the next 4 years. That deficit will actually go down to about $3 billion negative in 2008. In other words we will have to take on a small amount of debt in order to fund ongoing operations. If Mr Key—who is so banally hectoring—were running a business he would hardly take on additional debt to fund current consumption and operations. That would not be prudent. Nor will we take on debt. 
Dr Cullen has also used the analogy of a banquet. At the “Tax Cut Banquet” the top table goes first and they scoff themselves on the smorgasbord. They gorge themselves. The middle table gets a small helping and the bottom table gets the crumbs. At the end of the meal everybody gets the same bill. That bill has three components. It has the debt that those people want to load onto our children in the form of Government borrowing or flogging off what is left of the country’s assets. Those parties have tried it before and we were sick of it and voted them out then. Why would we have them back now? 
The second form of that bill is in the cuts to services like health education and other important things. Kiwi families know that what matters to them is not 10 bucks a week from John Key. They want to know that when their kids are sick they can go to a doctor they want to know that they have a good school down their street and they want to know that the cops are there to keep them safe. In short they want good Government not cheap Government. We have offered them good Government and we know that the voters will ensure that we can continue to offer good Government. 
But of course the crunch the kicker is the third part of the bill: higher interest rates. Let me give members the simple back-of-the-envelope example of a family with three kids that earns $50000 a year and lives in Auckland with a mortgage of $200000. If I leave aside the $120 or so a week extra they will get from Working for Families—the family tax cut that Labour has already promised—and simply take the effect of a 3c cut across the board in tax rates by my calculation that is around 28 bucks a week for a family with an income of $50000 give or take. If National were to borrow the $7 billion it would need to fund the tax cuts plus its spending promises I bet members opposite that the interest rate would go up at least 1 percent. If it did that is 38 bucks a week on a $200000 mortgage. That family would be 10 bucks worse off a week under National’s tax cut thanks to their mortgage going up leaving aside what they would not get from Working for Families. No sane family in New Zealand on $50000 will vote for that lot and see their mortgages go through the roof when they could stick with good fiscal prudence and a good Government.