Hide Rodney: Questions for Oral Answer — Questions to Ministers 
Hide Rodney: Questions for Oral Answer — Questions to Ministers 
[Volume:624;Page:19223] 
3.  
RODNEY HIDE (Leader—ACT) 
 to the  
Minister of Finance 
: What advantages if any does accrual accounting have over cash accounting in the presentation of the Crown accounts? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 They both have advantages. Accrual accounting provides a full picture of the Crown’s financial position including non-cash components such as the unfunded liabilities in the Government Superannuation Fund and Accident Compensation Corporation funds and the retained surpluses from State-owned enterprises. It also has the by-product of making it more difficult to pretend that the benefits from State asset sales are as large as some people like to say they are. That is because the loss of the asset then has to be shown in the accounts. The main disadvantage is that ignorant and dishonest people can assert that the accrual surplus is the same thing as cash available for expenditure or revenue reduction purposes. 
Rodney Hide 
: [ 
Interruption 
] Paul Swain cannot stop himself can he? 
Hon Paul Swain 
: Two percent and falling! 
Rodney Hide 
: See? Does the Minister recall former Labour finance Minister David Caygill cooking the books by declaring a forest asset sale as income in order to hide a deficit; and what is the difference between what David Caygill did and what this Minister of Finance is attempting to do in order to hide a surplus? 
Hon Dr MICHAEL CULLEN 
: If the member cared to think about his own question he would find that the answer is that David Caygill could be accused of hiding a deficit in that case rather than a surplus. 
John Key 
: If we are to believe that the change in the presentation of the Crown accounts is as the Minister said recently an “effort to educate the media on one of the basic questions of third-form accounting: What is cash?” has he himself considered taking a form 1 accountancy course wherein he would quickly discover that the net value of assets on the balance sheet is the important issue not entirely whether they are funded out of cash; or is he telling New Zealand companies that are capital intensive and are thinking of investing in this country that they should not bother to do so? 
Hon Dr MICHAEL CULLEN 
: No but if the member cares to consult the latest Crown financial statements he will find that the only change that has been made is to the first line that is entered in terms of the summary fiscal indicators: the operating balance or the net cash flow. That means that Mr Key can no longer go around doing his dodgy international financial markets stuff pretending that one can use an operating surplus consisting of retained State-owned enterprise surpluses and revaluations to fund tax cuts. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. I ask you to reflect for a few moments on the answer given by Dr Cullen and to tell us whether the use of that sort of language is acceptable and if you consider that it is acceptable whether it would be appropriate for the Opposition particularly in supplementary questions to use such epithets as well. 
Hon Dr Michael Cullen 
: This is a robust House. I did not take exception to Mr Hide talking about “cooking the books” in relation to actions that I am taking and I am sure Mr Key is big enough to look after himself. 
Gerry Brownlee 
: I think there is quite a big difference between asking a question about whether someone had cooked the books in the past and suggesting that a member of the House today is “dodgy”. 
Madam SPEAKER 
: Ruling on the point of order I say there was a vigorous exchange of views about others. The point of order is not valid. I call Rodney Hide. [ 
Interruption 
] The member will address his question in silence. 
Rodney Hide 
: It will be hard to give my question in silence. Can I ask my question Madam Speaker? 
Madam SPEAKER 
: I have invited the member three times to ask his question. Would he please ask the question? 
Rodney Hide 
: Does the Minister agree with the Bank of New Zealand’s chief economist Tony Alexander who referred to the Minister of Finance’s focus on the cash balance as “pulling the wool over our eyes” and “the biggest smoke and mirrors exercise” since 1990 or is Tony Alexander also one of those people whom the Minister of Finance needs to educate? 
Hon Dr MICHAEL CULLEN 
: Mr Alexander is a well-known self-publicist in the economic area. In terms of the reference to smoke and mirrors I recall that that was Dr Brash’s description of the New Zealand Superannuation Fund which he now supports. 
Rodney Hide 
: I raise a point of order Madam Speaker. I would ask you to consider how that answer could possibly have addressed my question. My question asked whether the Minister agreed that Mr Alexander was one of the people who needed to be educated. Michael Cullen’s response was that Mr Alexander is a well-known publicist and then he went on to talk about Don Brash’s criticism of the “Cullen fund”. That in no way addressed the question. 
Hon Dr MICHAEL CULLEN 
: I am happy to elaborate further. The original question asked whether I agreed that I am pulling the wool over people’s eyes. The answer is no. The people pulling wool over people’s eyes are those who pretend an accrual surplus is cash that is available for spending or revenue reduction—people such as that member.