Douglas Roger: Debate on Budget Policy Statement 
Douglas Roger: Debate on Budget Policy Statement 
[Volume:670;Page:17060] 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 On 28 May 2009 I said in this House that this is a Budget of deficit—a deficit of spending a deficit of current accounts a deficit of courage and more important a deficit of imagination. I now realise I got it wrong; I was far too generous to the Government. This country is up the proverbial creek not only without a paddle but in a boat that is quickly sinking. We are running a cash deficit of $300 million a week which will rise dramatically over the next few months and the Government’s response has been to simply sit on its hands. Government members have refused to do the right thing. They are happy to fund reports to hold press conferences and to give speeches thereby doing everything humanly possible to avoid making any decisions that might in any way make them unpopular. I for one am sick of that. 
To be fair New Zealand faces problems that are of a longstanding nature and not necessarily of this Government’s making. But the point I make is that the Government is the Government and it is the Government’s responsibility to fix those problems. If we look around the world we can see a number of inspiring examples of Governments that have had the guts to do what is right to make the tough decisions and they are now enjoying tremendous success. Their economic prosperity has meant that the vulnerable and the old in their societies are looked after. The physically able have access to productive jobs. The sick have access to health care and their children are well-educated. These are the hallmarks of a well-functioning society. 
For many politicians in this House it seems that a vision of a prosperous society is just too difficult for them to fathom. Steve Chadwick made this clear when she said recently that her children had already resigned themselves to earning less in New Zealand than they would overseas. Is that the sort of vision and inspiration we will see coming out of Labour in the future? What a great future and vision she has instilled in her children for New Zealand! 
Instead of looking for reforms that could see us pass Australia many politicians in this House have simply given up. In this speech I do not want to focus on a comparison with Australia. The National Government by rejecting the 2025 Taskforce showed that it in turn does not want to catch Australia. It seems to be too ambitious for the Government. Rather I will look at a country that we should be outperforming in almost every respect: Singapore. Singapore has everything against it. It has roughly the same-sized population as New Zealand it has absolutely no mineral wealth and it could easily fit inside Lake Taupo. In almost every respect we should outperform it. However the reality is that we do not even come close. Let us draw comparisons between the two countries. First New Zealand’s GDP growth in 2010 was under 1 percent; Singapore’s GDP grew by a whopping 14 percent. In 1960 our GDP value was almost three times that of Singapore; in the last 20 years Singapore has raced ahead and will have a GDP value that is three times that of New Zealand by 2015. So in 1960 our GDP was three times that of Singapore; in 2015 Singapore’s GDP will be three times ours. If we look at labour productivity per capita in New Zealand dollars we see that Singapore productivity in 2010 was $182000; New Zealand’s productivity by comparison was $90000. We can see how the gap has grown quickly from 2000 on. 
Why has Singapore been able to achieve such prosperity with no minerals no land and a relatively small population? It certainly did not do it I suggest by giving loans of $43 million out of Government coffers to private television channels. It is because Singapore was willing to make the tough decisions. Government expenditure in Singapore is only 17 percent of GDP—17 percent; that compares with New Zealand’s 43 percent. Its tax rates are also low. The top tax rate in Singapore—and I have a chart here—is 20c in the dollar and that rate does not cut in until someone earns $320000. New Zealand’s top rate of 33c in the dollar kicks in at $70000. The first $20000 of income in Singapore is tax-free which is good for low-income earners and on the next $15000 people pay at a rate of only 2c in the dollar. 
Most important Singapore’s politicians had a vision for the future of their country. They put aside short-term political gains and focused on the future. In short they had the guts to do what was right. They outlined a blueprint of where they wanted to go and they moved swiftly to achieve it. In doing so they left New Zealand in the dust. But that is enough of that. 
What vision should we lay down for New Zealand’s future? The first point is that we should not accept apathy or poverty as many do today. We need new leaders that are inspired and want to do the best for New Zealand not necessarily for their own political parties. We need politicians who are prepared to implement quality reform. At the heart of any successful reform programme in New Zealand we need to achieve a switch from Government delivery to private sector delivery as Singapore did in a whole range of industries. In health for example the Singapore Government spends only 1 percent to 3 percent of GDP; in New Zealand we spend 9 percent of GDP on health. But in every area of the health sector Singapore has better outcomes. Its death rate at birth is only a quarter of New Zealand’s and so it goes on up the scale. People in Singapore save for some of their own health costs and they take out catastrophic cover. They also encourage the best doctors from around the world to come to their country. 
In education the outcomes for the poorest third of its population are extremely high with two-thirds of people in the lowest income bracket in Singapore scoring within the top two-thirds of their primary school leaving examination. 
Only when we in New Zealand are willing to look forward and to devolve control of much of what the Government currently spends on individuals will we deliver solutions for the problems that people on low incomes in particular face. New Zealand has become a nation rife with bureaucracy recklessly determined to reuse the ideas that have failed to solve poverty and other social ills over the last 80 years leading to poor education outcomes and poor health outcomes. But if we always do what we have always done then we will always get what we have always got. Eighty years of political control has achieved a larger welfare budget more people on welfare and barriers for those at the bottom that actually prevent them from getting ahead. It is time that we looked at countries like Singapore and had the guts to implement the types of policies they have implemented.