English Bill: Debate on Budget Policy Statement 
English Bill: Debate on Budget Policy Statement 
[Volume:645;Page:14842] 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 It is a bit rich for that member to be quoting a cartoon when the Prime Minister of New Zealand blames the problems of the Labour Party on Minhinnick the cartoonist who I think left the  
New Zealand Herald  
30 years ago. That shows just how out of touch she is with the public mood. That is the contrast we are seeing here. Labour plays all these fancy little political games. Dr Cullen sets trapdoors makes traps and dreams up clever little moves like how he is against the Auckland airport deal when he is for it. But the public are facing the reality of 8 years of mismanagement of economic growth. [ 
Interruption 
]  
I invite the member Jill Pettis to turn up in Wanganui and take responsibility for the fact that she is part of the problem that has caused 10 percent interest rates. She should explain why that is to people in Wanganui with mortgages. I think that is why she is retiring. She has figured out that there is no way she could get voted in in that seat. The member sitting beside her Steve Chadwick knows she will not be representing Rotorua for the very good reason that people in Rotorua are facing 10 percent mortgage rates their morning tea discussion is about the price of butter and cheese in our supermarkets their tax rates have not changed for 9 years and they see Dr Cullen on the TV saying “Don’t worry folks. My borrowing is low. My bank account is in surplus. But your borrowing is way up. It has never been higher. Your interest rates have never been worse. One of the reasons is because I took much more tax than I needed.” 
Every time Dr Cullen is on TV Labour loses support. People know that when he is boasting about what good shape the Government’s books are in it is at the expense of their overdraft and now their house price. If Labour thinks that will work when people’s house prices are starting to drop and when even if the Reserve Bank drops interest rates it may not drop mortgage rates then it is mistaken. It is not all Dr Cullen’s fault but that is the reality that people are facing. What is happening is that the events of the last 8 years are starting to look a bit different from how they looked even 12 months ago. Dr Cullen used to portray himself as the magical manager of the economy over that 8-year period. Now that it is starting to look a bit gloomy I think we will find him arguing that he was not really there; it was someone else’s fault. 
I want to raise just one example with the Labour members. They have claimed relentlessly that they are totally responsible for the drop in unemployment. They have claimed that relentlessly. Well the Reserve Bank forecasts that over the next 3 years unemployment will go up by 60 percent—from 3.4 percent to well over 5 percent. Who takes credit for that? 
Pansy Wong 
: Cullen? 
Hon BILL ENGLISH 
: I do not see Michael Cullen getting up and saying: “I’m responsible for the rise as much as I was for the fall.”—no not at all. That rise in unemployment is a direct result of his management of the economy. It is likely to be the case that if National has the privilege of becoming the Government we will have to deal with that mess—with sharply rising unemployment that is partly a result of 9 years of mismanagement of the economy. 
The problem now is that the public do not believe anything Dr Cullen says. We have had a few questions in the House over the last couple of days about debt. Dr Cullen has been obsessing about debt for the last 6 or 7 years. As we know he has been looking for any excuse to make sure he keeps up his punishing rates of taxation of middle New Zealand whereby people on $39000 pay what used to be the wealthy tax rate of 33c in the dollar. We know that is a problem because after Kevin Rudd’s tax cuts in Australia someone on the average wage in Australia will pay half the tax rates that someone in New Zealand pays. 
Dr Cullen has kept pretending that there is a big problem with debt. Just a couple of days ago he gave a speech in which he said: “Anyone who talks about borrowing money talks about it only because they want it to finance tax cuts we cannot afford.” A little light bulb went off in my head. I thought “I wonder whether Dr Cullen is borrowing money.” And he is. This year Dr Cullen is borrowing $2.7 billion. I will ask Labour members to answer the question that he has asked us: “What is he borrowing $2.7 billion for?”. Is he borrowing it to finance the increase in the number of teachers in our schools? Is he borrowing it to finance the army of useless policy analysts who served up the analysis behind the Fast Forward fund? It was 10 pages of Cabinet paper waffle that we will absolutely not put up with. Is he borrowing it to finance his tax cuts? I will tell members how tricky Dr Cullen has been. One of his tests for tax cuts is that he says: “I’m not going to borrow for tax cuts.” So what he has done is borrow this year before 1 July so that after 1 July in the run-up to the election he can then say: “I’m not borrowing for tax cuts.” He is borrowing $3 billion this year but none in the next financial year. He is hoarding the cash now; borrowing now for the cash he needs next year. He will go on TV and say: “I’m not borrowing for tax cuts.” 
Fortunately our public accounting system is transparent enough that Dr Cullen has been uncovered. One of his tests is that he said: “I’m not borrowing for tax cuts.” We can confirm that Treasury has put in the accounts that he is borrowing for tax cuts. Not only that but also Treasury has said—and I will quote because journalists do not believe me— 
Chris Auchinvole 
: What do they say? 
Hon BILL ENGLISH 
: Treasury says: “The Government is increasing borrowings to meet the cash shortfall.” How could it be any more blunt? Cash surpluses become deficits because of the tax cuts and those deficits are going to be “met by borrowings”. Dr Cullen is working on the principle that if he shouts loud enough that someone else is burning down the house someone else might burn down the house but no one will notice that he is burning down the house across the road. 
The man has no credibility. He has gone on for months about how he is not borrowing and he is. Then today he claimed that he has reduced gross debt. Actually he has not. I will quote from the financial statements of the New Zealand Government which show that in the time he has been in office—2000-06—gross debt has not dropped a dollar. He has not repaid a cent of debt but he has spent 7 years saying that he has done nothing else. Sure as a proportion of the economy it has dropped because the economy has grown; it is not because he has paid it off. He has told taxpayers he needed all that extra revenue to pay off debt and he has not paid off a cent. This year after 8 years debt will go up by $2.7 billion. The man is a fraud. He has given up any pretence to competent economic management because only one thing matters to him: the re-election of the Labour Government. At any cost to anyone at any time the Labour Government must be re-elected. The very heartening thing is that out on the street they know that. It will not matter if he throws the kitchen sink at them. 
In fact after the announcement yesterday which tried to make the numbers look big my constituents have been ringing up and saying: “Why is he spending $750 million to get my vote?”. In fact one of them said: “He could have got it for $1 million; why is he spending $750 million?”. The bigger that Labour members try to make the numbers the more cynical the public will be. The New Zealand public know what is going on. They do not actually need us to lay it all out.