Hide Rodney: Debate on Budget Policy Statement 
Hide Rodney: Debate on Budget Policy Statement 
[Volume:645;Page:14853] 
RODNEY HIDE (Leader—ACT) 
: 
 I for one thought it was great that John Key has announced policy today and says we should cap the number of bureaucrats in this country. I say that that is a great start because when I go around the country talking to New Zealanders I ask them what they want: “Do you want extra dollars spent on your health? Do you want an extra bed or an extra desk?”. 
Tim Groser 
: They want desks. 
RODNEY HIDE 
: Well the Labour Party appears to want desks and defends desks but New Zealanders want beds. They find it a bit ironic that sick people are piled up in hospital corridors unable to get a bed yet there are extra desks in the bureaucracy counting how many are waiting for a bed. That is the problem we have. 
Here is the other thing: I ask people what they would like—an extra doctor for their health dollar or a spin doctor? Do members know what they want? They actually want a doctor—a doctor who makes them well not one who makes them sick. When I ask whether for their health dollars they would like some dialysis or some policy analysis do members know what the answer is? 
Chris Auchinvole 
: What is the answer? 
RODNEY HIDE 
: It is dialysis; that is what New Zealanders want for their health dollar. So I think that John Key is knocking it on the head when he says that we have had a bit too much growth in bureaucracy and not enough growth in productivity. We have seen the dollars go in; we have not seen anything come out. 
 I feel that John Key has not gone quite far enough with his policy and I guess that will be ACT’s role happy role that it is. 
Tim Groser 
: Astonishing! 
RODNEY HIDE 
: I know that seems astonishing to the National Party but I think we can set our sights a bit higher. When we look at the bureaucracy our interest is not just in the number of bureaucrats. 
Christopher Finlayson 
: Or what they do. 
RODNEY HIDE 
: Or what they do not do. Our interest is also in the total spending of the Government. 
When Labour came to office 9 years ago it said it would fix the problems of the health waiting lists. Labour members said they would put up the tax on the rich fellas—knock them a bit harder. But we were not to worry because they were only 5 percent of taxpayers—it turns out they are now 15 percent—and Labour would then get on top of the health waiting lists. We saw a couple of billion dollars poured into the health system. We saw the billions poured in at the top but what we have not seen is anything out the other end. When we look at the spending we see that it has been rather poor quality. I think we have learnt from this experiment that pouring more money into the bureaucracy does not guarantee a better result. So I think we should be going further than just capping the number of bureaucrats. What we should be doing is putting a cap on taxes and total Government spending. 
I think I would also observe as we head into this election—and under the regulated period we are in an election period right now—that New Zealanders want to have a greater say over the direction of their country. They do not want to live in a world where a few people turn up to this place each week and tell them what they can say and cannot say how they should bring up their kids how much money they will have to pay to the Government and how it will be spent. They want to have a say over it. They also want us as politicians to exercise the same discipline in spending the dollars we take off them in tax as they have to apply in their businesses at their places of work and to their weekly budgets. The way to do that is to cap total Government spending in real terms. That means as John Key says that we would not cut one bureaucrat cut any budget or cut one dollar out of the current Budget. What we would do is hold it. 
What would happen if we held the current Government Budget in real terms is that we would actually have to have as politicians as a Parliament as a Government a discipline on our overall budget. What happens now is that as New Zealanders work harder and harder and produce more we take more. We do not just take more as a dollar amount; we take more proportionately because as they earn more they go upwards in the tax brackets. The harder New Zealanders work the fatter and richer the Government becomes. So there is an automatic escalator if you like that increases Government revenue to the advantage of politicians and to the disadvantage of taxpayers. 
Taxpayers have another problem in that every now and then we come along with a new tax or a new charge and very seldom do we eliminate them because Governments particularly this Government like getting hold of the money and spending it rather than returning it to taxpayers. In fact to hear politicians talk in this House one gets the sense that the money is the Government’s and does not belong to the people who earned it. It is Government money that the Government might think to return to taxpayers rather than money that is taken from taxpayers through the tax system and held in trust to spend to their benefit. 
So if we cap Government expenditure in real terms it would put a discipline on us because if we came up with a new bright idea for spending money we would actually have to find out where we would get the money from rather than just enjoy the surpluses of Kiwis working ever harder and paying ever more tax. I say that if a Government wants to spend above that cap that is OK. I think Governments should be allowed to do that with a simple proviso and that is that they get taxpayers’ permission and consent because it is taxpayers’ money after all that we are spending. So we fix the Budget as it is now adjust it for inflation and if we want to go above that we need a referendum to explain why and to get permission. 
If we had done that and had held Government spending in real terms since 1999 when Labour came to office Government spending would be $9 billion less than it is now. That is a whopping sum. The budgets would be exactly what they were in 1999 adjusted for inflation and population growth. We have to cast our minds back to 1999 and ask ourselves some questions. Was our health system really that bad? Was our education system really that bad? Have we got an extra $9 billion a year worth of extra benefit? I do not believe we have. I think the money has gone in but the service has not come out. 
I ask members to think of this: if we had that $9 billion and had not spent it it would be sufficient to drop for example the top rate of personal tax to 20c and to drop the company rate of tax from 33c to 20c. If we had done that over 9 years we would not be looking now at a 2 percent rate of growth; we would be looking at a 5 percent rate of growth. People would have more money in their pockets because taxes would be lower and they would have higher productivity higher wages and more prosperity. And picture this: a Government also has an interest in a stronger and more profitable economy because ultimately that is where our tax dollars come from. That is what we need—ACT’s Taxpayer Rights Bill. Thank you very much.