English Bill: Financial Review Debate — In Committee 
English Bill: Financial Review Debate — In Committee 
[Volume:661;Page:9463] 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I am not sure who it was but someone famous said that he or she changed his or her mind when the facts changed— 
Craig Foss 
: Maharey? 
Hon BILL ENGLISH 
: No Steve Maharey changed his mind regardless of the facts; it was not him—and I suppose that is my response to the Hon David Cunliffe. When the Government is in a much stronger fiscal position the Government will change how it describes New Zealand’s fiscal position but that has not happened. This idea that somehow most of the pressures on the Government’s books have evaporated because of small improvements in economic forecasts tells us more abut Labour’s attitude to the hard-won PAYE income that comes in every week from hundreds of thousands of New Zealanders who could use that money for different purposes themselves than it does about any kind of analysis of the Government’s books. 
The Government has followed a pretty straightforward plan in a year when the economy was contracting fairly strongly. It maintained what were previously high levels of spending under the previous administration. Now that the economy is recovering the Government has outlined a plan to lower the growth of Government spending starting from 1 July this year. The new discretionary spending will be about $1.1 billion on average when over the last 3 or 4 years it has been somewhere around $2.8 billion. The new spending has funded a lot more new activity than the current Government will be able to. 
Small improvements have not changed that picture. At the moment these books that Parliament is looking at today show that if we take the forecasts ahead it will take another 6 years before the Government is back in surplus. Even then it will have accumulated a very significant increase in public debt. That matters because as those who have been around the House for a while will understand public debt cycles are quite long. New Zealand’s public debt started lifting in the early 1970s and it was about 35 years before it had gone through the full cycle of rising strongly into the mid-1980s and then successive Governments brought that debt back down as a proportion of GDP through to about 2006—roughly 35 years. That was a somewhat difficult political time. In that period from the mid-1980s through to the mid-1990s at various times New Zealand faced threats of downgrades and a lot of difficult politics around containing Government expenditure and changing the mind-sets that go with the view that money grows on trees and it does not matter where it comes from. We do not want to do all that again. It would amount to a betrayal of many ordinary New Zealanders to allow our public debt to get out of control. That would be as the co-leader of the Greens Russel Norman used the term “stealing from the next generation”. He applies that analysis to any use of natural resources. I am applying it to monetary resources. 
If the current generation believes that we have a right to leave a burden on people who have not left school yet and to make them pay for things that we believe we want now even if we do not really need them then the Government disagrees with them. So that is why despite the member’s optimism about the improvements in the Government’s books I would describe them as marginal. I hope we keep making marginal improvements; that would be good. I would like to see us getting to surpluses sooner because then we have a few more choices. We would not have all the choices that he would like us to believe we would have but we would have a few more. Even when we get to surpluses we will then have this large stock of public debt and even when it stops rising we then have to start getting that stock of public debt down because we incurred it. We incurred it trying to maintain our standard of living through these times. We have an obligation to the next generation not to leave them with the burden of paying for what we wanted to have. 
So the Government is working through a fairly measured process. We have said that over the next 3 to 5 years the Public Service should get used to having no new money. It needs to rethink how it delivers services and learn to do more with less.