Foss Craig: Estimates Debate — In Committee 
Foss Craig: Estimates Debate — In Committee 
[Volume:640;Page:10397] 
CRAIG FOSS (National—Tukituki) 
: 
 Following the previous speaker who is earning his new nickname—I believe it is “Parekura Lite”—as he seeks to fulfil his ambitions I will speak to Vote Finance but maybe this speech is more about a vote of no confidence in the Minister of Finance. 
Towards the end of his speech earlier the Minister of Finance had a go at someone for wanting to borrow money overseas to fund tax cuts. Actually Dr Cullen also borrows overseas because many of the holders of his bonds treasury bills etc. are owned overseas. So in fact Michael Cullen borrows from overseas in order to fund the various votes. Does he borrow to fund tax cuts and various distributions? Yes he does. In recently answering a written question in which I asked him whether the funding from the various borrowing and bond programmes was allocated to specific budgets or specific votes he said that no it was not and that it essentially just went into the queue at Treasury. So we do not know what happens to the money that Dr Cullen borrows from overseas but quite frankly it could be used to fund tax cuts. 
Dr Cullen’s obituary is being written as we speak. We have heard it earlier. He endlessly puts out spin. We have just recently seen some taxpayer-funded advertisements about the various policy packages of 1 July that Labour brought out in the recent Budget. Let us look at what will be on Dr Cullen’s tombstone. 
In 1999 when Dr Cullen became Minister of Finance the official cash rate was around 4.5 or 4.75 percent. In 2007 Export Year that rate is 8 percent and is going higher according to the analysis of only today—almost double the 1999 rate. When Dr Cullen became Minister of Finance the current account deficit was about 3 percent and he predicted it would go down to 2 percent. In fact today it is about 8.5 percent. As Dr Cullen alluded to in question time today when he became Minister of Finance the Kiwi dollar was valued at around US40c. I think he said it went down to US38c. In this year Export Year the Kiwi dollar is at nearly US80c and again it is predicted to go higher than that. What a disgraceful legacy that is after 7 years of a commodity boom. 
When Dr Cullen became Minister of Finance in 1999 the highest tax rate was 33 percent. It is now 39 percent. At that time he also said that only 5 percent of taxpayers would be in that bracket. Currently around 12 to 14 percent of taxpayers are in that bracket. 
Home affordability when Dr Cullen became Minister of Finance in 1999 was at around 4½ times average earnings. Today it is 7½ times average earnings. New Zealanders are unable to even aspire to own their first homes now let alone to fund any type of mortgage. 
When Dr Cullen became Minister of Finance the proportion of the average wage paid in tax was about 19 percent. In the year 2007 that figure is now 23 percent—23 percent of the average wage is now paid in tax. I say to Dr Cullen that that is a disgrace after 7 years of the incredible commodity boom that the New Zealand Government has enjoyed but that the New Zealand public most certainly has not. 
Every one of those statistics has a terrible impact on our families and on their aspirations and all that those statistics seem to do is to make more New Zealanders go overseas. The previous speaker started to make fun of Australia. Well in fact 500000 New Zealanders have chosen to move to Australia. Basically those people have chosen to go to a wealthier country than this one and they are in a better position than we are to handle a high currency exchange rate and high interest rates. They have shared in and enjoyed the commodity boom over the last 5 or 6 years because there has been a programme of personal tax cuts year after year in Australia. One cannot hide from that fact. Many Kiwis are envious of the New Zealanders who are now in Australia and enjoying the current tax rates and the economic boom there. 
Dr Cullen also suggested a mortgage levy in 2006. Well the mortgage levy is here. New Zealanders will be paying about $3 billion more in interest in 2008 than they were in 2006—$3 billion more for New Zealand mortgage payers; that is what they will be paying. That is the mortgage levy. It has arrived loud and clear and Dr Cullen’s name is all over it. 
The exchange rate of the New Zealand dollar is probably as high as it has been in 22 years. Our interest rates are the highest in the Western World and more important in the trading world. Some people seem to forget even in this Export Year that we are a trading nation. Again I say New Zealanders have not been able to share in the commodity boom. Yes we have dairying yes we have forestry and yes we have coal. Dr Cullen’s legacy is a disgrace.