Court Simon; Parker DavidSIMON COURT (ACT): Thank you Madam Chair. To the Minister: for context there's an analysis published by Thomas Coughlan from New Zealand Media and Entertainment who has reported that Treasury thinks that the Government would have to deliver one of the biggest ever Budget spends next year just to stand still with inflation pressures which are likely to add to the cost of the Government's programmes by $3.5 billion next year. Now that's Treasury advice which I'm sure the Minister has seen. So that raises a real dilemma for this Government and for a future Government in having committed to such extraordinary growth in spending $6 billion this year on top of spending in previous years.Question for the Minister: is it likely that a payment such as this one-off payment would need to be paid next year to account for the cost of living increase that New Zealanders will face? At the moment inflation's running around 6.9 percent. That would add by my brief calculations for somebody on $70000 a year which this payment is targeted at if their cost of living was increasing by the rate of inflation that would be an over $4000 a year increase in their cost of living.So look is it possible that this payment would have to be replicated next year? Will the Government be able to afford it? Is this payment inflationary on top of all the other Government spending with clearly no ability to manage any reduction in spending in any single department? The assumption is from the Minister that there would have to be cuts in order to deliver ACT's tax cuts and he's pointed to various aspects of baseline services which ACT rejects—in fact if you read our alternative budget it's quite clear we propose to maintain baseline spending and deliver front-line services in education and health. The cuts that ACT propose to save money to fund our $2000 tax cut for somebody on $70000 a year actually come from deleting ministries which deliver no value to the taxpayer which are completely unnecessary. But you can read all of that in ACT's alternative budget.So the question for the Minister: does he agree with Treasury that warns that tax increases or spending cuts will be needed next year and is this measure inflationary or is it simply signalling that the Government will have to give New Zealanders a much-larger tax rebate next year and is this being funded from debt or is this being funded from earnings? Because Minister if it's being funded by borrowing from future taxpayers from future generations is this even ethical if the Government's not prepared to look at its operational spending which it's also funding from debt and make necessary cuts to wasteful Government spending?Hon DAVID PARKER (Minister of Revenue): Of course this year's spending includes a one-off substantial payment to clear the historic deficits of district health boards that have accrued over a long period of time. That won't repeat.In respect of the total spending as a percentage of the economy as I have said in earlier contributions—I think I've been over this a number of times—this year it's projected to be 31.6 percent of GDP; next year even taking into account inflation on both the revenue and the expense side it's projected to be 31.1 percent of GDP; the following year 30.4 percent of GDP. I think as the member would've heard earlier the date when we return to surplus is one year earlier than was achieved by the National-ACT administration following the global financial crisis. I would also note that those spending figures as a percentage of GDP for this year are 31.6 percent compared with 34.1 percent of GDP spent by the ACT-National coalition in the 2010-11 year.