Cullen Michael: Estimates Debate — In Committee 
Cullen Michael: Estimates Debate — In Committee 
[Volume:648;Page:17464] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The member is being just too clever by half. Earlier today he tried to claim that there was something significant about the fact that there had been borrowing in the past when in fact we said we were borrowing for measures for the Government. Let me just try to take the member through it. 
Firstly thanks to past borrowing practices Government repayments of debt are very lumpy. Debt comes up for repayment from year to year in highly variable amounts so the Government has to borrow in order to repay the previous debt when it does not have a sufficient cash surplus on top of everything else to repay that debt in that year. Secondly in response to the financial markets and as proper fiscal and economic management the Government has had a programme of a constant level of bond issuance over recent years at about $3.5 billion a year so that the markets have certainty and those in investment companies and the like have the assurance that high-quality money is out there in terms of Government bonds etc. 
Thirdly of course over the last 4 or 5 years we have forecast that we will be moving from substantial cash surpluses to substantial cash deficits. It may come as a surprise to the member having forgotten what it is like to be in Government but one actually bases one’s Budget on one’s forecast not on what one sees in the rear-vision mirror. One does not get to the end of the year and say: “Oh my goodness me! I should have borrowed $5 billion in the last year. Let us go and borrow it now.” One actually tries to forecast what one’s cash flows will be required to be and one borrows and obtains revenue on the basis of those cash flows. 
Of course the forecasts are sometimes wrong and adjustments have to be made to that borrowing. And yes indeed part of the way in which we are moving into cash deficits and the reason why we are moving into cash deficits over the next 4 years in order to fund the Government’s programme is that we are running down the cash on hand which has built up because we have borrowed— 
Hon Bill English 
: Yeah—State assets. 
Hon Dr MICHAEL CULLEN 
: Mr English is being too clever again and he should not try so hard to do that because it does not become him. Although Mr Key says National would not sell State assets the member is now telling me that a National Government would not run down the cash on hand. Well if National is not planning to run down the cash on hand in order to fund additional tax cuts over and above the current programme then how on earth is it planning to fund them except by selling some other State assets by massively slashing State expenditure or by having massive further borrowing? Mr English should not try to be too clever when he comes into this Chamber because he is not good enough to cope with that kind of clever argument once somebody responds to him. 
The fact is that nobody in the public thinks that running down the cash on hand is the same as selling Television New Zealand selling State assets in terms of the electricity generators selling KiwiRail or selling Kiwibank. But Mr English says it is the same thing. National says it will not sell State assets and even if it had built up cash surpluses it would never ever run down those cash surpluses nor would it not do so in order to fund $50 a week more in tax reductions than the Government has already promised. The National Party has promised another $50 a week over and above what the Government has already legislated for; that is the test the National members have set themselves and National is saying it can do that without extra borrowing when we have cash deficits of $3.5 billion a year because we are running down the cash on hand to practically zero over that 4-year period. 
Hon Bill English 
: Selling State assets. 
Hon Dr MICHAEL CULLEN 
: And the member says that is selling State assets. So when the member has money in the bank and he goes and buys a fridge he has sold his money. That is Mr English’s notion of budgeting. When he has money in his savings account and he cashes it up to purchase an overseas holiday he has sold his money in the bank. That is Mr English’s view of what cash on hand actually means. 
This is the man who wants to be the Minister of Finance in this country! We will have a kind of deep rural ignoramus plus a fast-money short-term financial market manipulator running the Government’s finances if National gets into power. It is no wonder in response to the Working for Families statements that Mr Key is being caned in every editorial up and down the country all of which ask who can believe this man and who can believe what National is saying. Mr English is smiling and laughing—members should look at him. He was on TV3 last night looking shamefaced and repeating the lines from Crosby/Textor: “We won’t borrow for tax cuts. I had better not say any more.” He said on TV3 last night: “I had better not say any more.” because anything more he said would have got him further into trouble on this matter.