Tremain Chris: Estimates Debate — In Committee 
Tremain Chris: Estimates Debate — In Committee 
[Volume:640;Page:10395] 
CHRIS TREMAIN (National—Napier) 
: 
 I think we will get off Dr Cullen’s personal cloud there and come down to some of the details of the appropriations spending. What I want to focus on today for members of the public is some $41 million that is sought in advice from Treasury in three key areas—$13.32 million on economic performance policy advice $17.59 million on State sector performance policy advice and $11.439 million on macroeconomic policy advice all of which are increased appropriations that the Minister of Finance has requested in this estimate. I want the public of New Zealand to understand the level of advice that has been appropriated in these estimates—whether that is good value for money whether the Minister of Finance is using $41 million worth of advice as good value or whether he is choosing to run his own path completely in other directions from where Treasury is recommending. 
 Just as an aside before I get into the detail of that members of the public should know that this estimate equates to a total of $5.643 billion in spending. Of that $2.1 billion is in borrowing expenses $2.4 billion is in capital expenditure and there is another odd billion there for other expenses. But there is $56.53 million in departmental output expenses. Of that amount $41 million is in three key areas of advice. 
One would hope that the $41 million investment in those three key areas of advice would be focused on taking the country forward. Those three key areas which should have the aim of really driving the country forward are firstly improving New Zealand’s economic performance $13.32 million; secondly improving the performance of our State sector $17.59 million; and thirdly improving macroeconomic policy at $11.439 million. 
Let us start with improving New Zealand’s economic performance. We will all remember the much-vaunted call by Dr Cullen in his 2001 Budget speech to lift New Zealand’s economic efforts comparative to other OECD countries to the top half of the OECD. What have we achieved despite a significant level of advice over the years? In fact we have dropped down the ladder in terms of economic performance. Unfortunately the positive moves in the Budget especially on company tax are overshadowed by the absence of a strategic direction and of effective policies to lift our economy’s sagging growth rate. 
If we go back to 2001 the sustainable projected growth rate was estimated by the Minister of Finance to be 4 percent. As we look forward in this set of estimates and the Budget for this year we have been averaging a GDP growth rate of 2.5 percent. This is below the growth rates of our key financial partners like Australia and certainly below the growth rates of the early 2000s and the late 1990s. Unfortunately on present policy settings the income gaps between ourselves and Australia will continue to increase. So I say to members of the public that we have to ask ourselves whether the $13.32 million that has been appropriated here is good expenditure and whether we have had good advice that has been well heeded. 
The improvement of State sector performance is a very relevant point. The Minister has requested $17.59 million in policy advice from Treasury. It is not just a small amount; it is $17.59 million. We ask ourselves whether we are getting good value for money in that. Achieving improvement in State sector performance is about getting more outputs from the inputs into the State sector. What we see there is excessive and wasteful Government spending up by a massive $3.8 billion over the next financial year. We also see that cost increases from regulation will continue to go up stifling productivity growth conflicting with monetary policy and certainly damaging the export sector. 
Hon Dr Michael Cullen 
: How much money have you made out of this Government Chris? 
CHRIS TREMAIN 
: I tell my friend Dr Cullen that I am not in the export sector so I do not have the issues of the exchange rate but many members of the Napier community who are in the export sector are struggling because of where the dollar is right now. There are serious worries about the value for money we are getting in terms of the advice in this particular section for $17.59 million.