Fenton Darien: Spending Cap (People’s Veto) Bill — First Reading 
Fenton Darien: Spending Cap (People’s Veto) Bill — First Reading 
[Volume:675;Page:21319] 
DARIEN FENTON (Labour) 
: 
 I am delighted to take a call on the Spending Cap (People’s Veto) Bill. I never thought that I would say this but I feel a bit sorry for the Hon Rodney Hide. It is not that I agree with his bill; far from it. The bill is a bit of an ideological burp of the proportions that we have come to expect from the ACT Party. I know that the Hon Rodney Hide does not want my sympathy but I offer it in a genuine— 
Hon Rodney Hide 
: No. 
DARIEN FENTON 
: Well I offer to the member— 
Hon Rodney Hide 
: Please please. 
DARIEN FENTON 
: He does not want it. OK I will stop feeling sorry for him. But I do want to say that not only is Rodney Hide leaving this Parliament after being chucked out by his own party but also the confidence and supply agreement that he negotiated and signed up to with National has been treated with contempt as well. 
This bill was one of the showpieces of that confidence and supply agreement even though National has no intention of supporting this bill beyond its referral to a select committee or beyond this Parliament. Like some of the other great initiatives we saw in the wonderful confidence and supply agreement between ACT and National negotiated by the Hon Rodney Hide—who does not want my sympathy so I will not give it any more—there was the agreement on the concrete goal of closing the income gap with Australia by 2025 and the establishment of a so-called high-quality advisory group led by none other than Dr Don Brash. That part of the confidence and supply agreement is a bit like this bill. The advisory group that was set up has been dumped after costing the country half a million dollars for advice that we could have dug out of the  
Hansard  
of the Governments of the 1980s and 1990s. The gap now between ourselves— 
Hon Maurice Williamson 
: Now you’re talking! 
DARIEN FENTON 
: —that is right—and Australia has grown under this Government. It is now 38 percent so not only has the Government failed to get anywhere near achieving that goal but also it has gone backwards. 
This bill in the confidence and supply agreement was called the New Zealand Taxpayer Rights Bill. I believe it copied some of the bills that other members have talked about and I will eventually talk about other legislation from other parts of the world. The bill was supposed to have its first reading within the first 6 months of the new Government. I think my colleague the Hon Ruth Dyson did a very very good job of reciting the calendar of this Government which was elected on 8 November 2008. Six months from then—being very very generous—was 8 May 2009. This bill was not on the Order Paper then—nowhere near it. In fact even if we are generous and give a bit of space for the National Government to find its feet and figure out what kind of Government it thinks it might be we realise it has still taken all this time. We are heading for 2012 so I think that delay is a real failure on the part of not only the ACT Party and its confidence and supply agreement but also the National Government. The Government has failed to live up to the agreement it made with its confidence and supply party. We are at the eleventh hour of this Government’s first term and certainly nearing the end of Rodney Hide’s political career but we are debating the first reading of this bill. 
As I said this bill has no show of surviving the general election. This bill is a cynical move by the National Government. If National wins the election which is very unlikely this bill is a good lesson for other parties about the folly of signing up to confidence and supply agreements with National. I think the Maori Party might be learning that lesson as we speak. I hope the other parties will take notice of how shabbily Rodney Hide and the ACT Party have been treated by the National Government. 
Hon Rodney Hide 
: We’ve loved every minute. 
DARIEN FENTON 
: He has loved every minute of it. Well shame on him. 
Having said all of that I want to register Labour’s strong opposition to this foolish and ridiculous bill. It has no purpose; it is meaningless. Spending cap legislation is not needed and it has not worked overseas. I was very interested in the National Government’s weak attempts to try to show some sort of feeble support for this bill by describing it as “interesting”. “Interesting” usually means “We think it’s a crock but here’s one way we can say that without insulting the Hon Rodney Hide.” We do not need a law like this. We need a responsible Government that will lead by example and be fiscally responsible like the last Labour Government was—and thank goodness for Michael Cullen. 
Sandra Goudie 
: Ha ha! 
DARIEN FENTON 
: That member can laugh but New Zealand is in the best situation of any country in the world because of Michael Cullen and the previous Labour Government. 
We cannot have this debate without considering the present context in which the Government is slashing spending and there are job losses in the core State sector. National and ACT have made a really good job of demonising our public sector workers. They have done an appalling job on that. These workers provide essential services and so far National and ACT have got away with cutting 2500 jobs. They are quite happy to take the credit for our front-line workers who have been there during the tough times like the Christchurch earthquake but they are ruthlessly slicing through public services. As an example of what can happen with a cap on spending I am told that the Government is now struggling to get decent independent policy advice from some Government departments. We realise that from some of the junk that we hear back from Government Ministers when they try to justify the terrible decisions that they make. 
This bill is just another attempt to try to slash more vital Government services and to create more tax cuts so the rich can benefit and be handed over more money while fundamental services are cut for those who need them the most. Let us talk about that because I know that members opposite like to have a bit of a laugh when we talk about Government spending. Let us talk about the facts under Labour and under National. When Labour was in power for 9 years our Public Service spending was 30.1 percent of GDP. What is it today? It has gone up to 36 percent. That is despite the slash-and-burn approach of this Government. That spending has skyrocketed to 36.4 percent of GDP so I would like to hear the next speaker from National explain—that is if National is going to speak for more than a minute on this bill and show some enthusiasm in its support of it which would be quite a nice change—why after attacking the last Labour Government for its Public Service spending that spending has skyrocketed under National. Of course attacking public services is the intention of this bill. This is happening at the same time that the Government is slashing public services. 
I am interested in why the Minister and the Government have not had a good look at how this proposal has worked overseas because it seems as though they have not done so. Certainly Treasury has looked at that and some other members have talked about what has happened in Colorado and in Japan. Japan has had a spending cap since World War II but that has not stopped it from amassing debt equal to 200 percent of its GDP. Every year the Japanese Government gets an exemption from the Act in Parliament. This proposal is an old hardy annual of the Republican Party in the United States and we all know what has been happening there. A member of the Maori Party talked earlier about the Tea Party in the US and the irresponsible actions that we have seen there that took the whole world to the brink of an economic collapse when politicians could not agree on the Budget because they were playing politics around spending caps. This proposal has never achieved widespread support. We can look at other places and California is a really good example of one of them. It has not quite had a spending cap but it has emulated the proposal in this bill which is about holding Government-initiated referenda on spending. But proposition after proposition has brought the state of California to its knees. 
Spending caps are a populist approach: if we go out and ask people whether the Government should spend any more of course they will say no. I think the proposal by the member that there be a Government-initiated referendum is quite frankly stupid. It is a stupid proposal and it would leave Governments absolutely vulnerable. I was interested to hear Sam Lotu-Iiga who spoke before the dinner break. He spoke about increases in spending on early childhood education health and other things but he did not seem to realise that this bill would put caps on that spending. Thank you.