Key John: Financial Review Debate — In Committee 
Key John: Financial Review Debate — In Committee 
[Volume:624;Page:19385] 
JOHN KEY (National—Helensville) 
: 
 On behalf of the Opposition I look forward to engaging in what I think will be a robust debate about a Government that just simply likes to spend money and that is driving up interest rates for New Zealanders with its wasteful spending. It is a wasted opportunity that this Government has failed to deliver on for the people of New Zealand and I think the Government will be harshly treated for that in the months ahead. 
This Government inherited some economic conditions that it had very little to do with. Indeed it inherited some wonderful reforms that took place in the 1980s and 1990s which really unlocked a country that had a closed economy—an economy that did not trade with the outside world in any great form in a country that had all the wrong economic settings in place. Those were the policies that this Prime Minister likes to refer to as the “failed policies of the 1990s”. But those “failed policies of the 1990s” have delivered record surpluses to this Government—record surpluses that this Government has wasted. This Government inherited an exchange rate that was at an all-time low in the early part of its first term and it had fortunate conditions in inheriting very high commodity prices from a very strong Chinese economy. All those conditions led to the Government having a very large and burgeoning tax take—in the order of $35 billion to $40 billion of additional taxes in the last 5 years. The way that it has chosen to spend that money is one of the key elements of this debate. 
Before we go too much further we should look at the record of spending undertaken by this Government because when the Minister of Finance took office in 1999 he set a self-imposed spending cap of $6 billion. For any Labour Government we know that sticking within a spending cap can be difficult and Dr Cullen has proved to be no different from any other Labour finance Minister who has gone before him. He broke his self-imposed spending cap in his first term even if it was just by a fraction—at $6.1 billion. Having got the taste of that increased spending having got the taste of blood in his mouth he went on to undertake $12.7 billion worth of new spending in his second term and if this Government—and we hope it does not—gets a third term I project that spending will rise to somewhere in the order of $14 billion to $15 billion if not more. 
The finance Minister knows that that is a major problem for the country because he told the  
Dominion Post  
as reported on 
24 March that there was a bit of a hiccup with the numbers. There is I might add for the benefit of anyone who may be listening to this debate a lot more than meets the eye with regard to that comment. We will come back to it in due course. Dr Cullen said and I quote from the  
Dominion Post  
of 24 March: “I can’t confirm any numbers but I can confirm the initial run of the Budget numbers didn’t play out to a sufficiently credible long-term debt track. Steps are being taken to address that.” That is Treasury-speak for a major bust-up with Treasury and with the numbers it was crunching in an out-of-control spending ministry that was just spending money left right and centre. But members should not take my word for that. It may be worth referring to another article that appeared in the  
Dominion Post  
in the weekend by Gareth Morgan who stated in the last paragraph of his column: “Meanwhile the Government is spending like mad just adding to the inflationary pressures and in so doing increasing pressure on the Reserve Bank to tighten further and substantially.” The message from economic commentators around the country is that you have a Government that is spending so much money— 
The CHAIRPERSON (H V Ross Robertson) 
: No no—not me. 
JOHN KEY 
: Oh OK. The Government is spending so much money that it is putting pressure on interest rates and New Zealanders are paying for that with higher mortgage rates. 
This Government was faced with a couple of opportunities. One was to set in place a platform of future economic growth for New Zealand. This Government could have chosen to build capacity in our economy and to invest in infrastructure and quality education. It could have chosen to invest in things that would make New Zealand sustain higher levels of long-term growth. But it failed in that and it failed rather miserably.