Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 28 April 2015. Volume:704;Page:2910. Text is incorporated into the Bound Volume.]5.GRANT ROBERTSON (Labour—Wellington Central)to the Minister of Finance: Has he ever described achieving a surplus in this year as an “artificial target”; if not why not?Hon BILL ENGLISH (Minister of Finance):Yes it is a somewhat artificial target in that there is not a single dividing point between the Government’s books being in good shape or not being in good shape if only because of the potentially significant variations in forecasts. For instance in the last 4 or 5 months inflation has turned out to be significantly lower than was anticipated just back in December. So the Government is making good progress on getting its books in order. There will continue to be fluctuations in forecast particularly of tax revenue.Grant Robertson: If getting into surplus in 2014-15 is an artificial target why was it the No. 1 promise made by National in its publicity material to voters at the 2014 election?Hon BILL ENGLISH: It was not the No. 1 promise in fact because New Zealanders know that fiscal surplus is not an end in itself. The point of the target has been to get control of Government expenditure and ensure that we get good value for the PAYE that New Zealanders hand over at the end of every week and we have been able to achieve that through Better Public Services and consistent movement towards surplus and the ability to repay debt.Grant Robertson: I seek leave of the House to table this document—Mr SPEAKER: Order! The member will resume his seat. I will not be putting the leave.Jami-Lee Ross: What was the state of the Government’s finances when National first came into office in 2008?Hon BILL ENGLISH: When we first came into office we were faced with the legacy of a Government that increased spending by 50 percent in its last 5 years in office. So in fact we inherited—[Interruption] Well the Labour Party has forgotten this. We inherited a $3.9 billion deficit for 2008-09 and Treasury was forecasting never-ending deficits and that is before the Christchurch earthquake and the recession. The deficit peaked at $18.4 billion and we are making considerable progress in reducing that and moving to surpluses.Jami-Lee Ross: What progress has the Government made in turning the Government’s finances around?Hon BILL ENGLISH: What is just as important is the progress we have made on Better Public Services because this Government has taken the view that what delivers results for communities delivers results for the Government’s books. So while we have run relatively tight Budgets we have focused strongly on getting results for the taxpayers’ money that we already have and addressing longstanding and persistent social dysfunction which drives much of Government spending. This approach is working. We are getting better results in our communities in terms of lower crime fewer young people going through our courts a 40 percent reduction in the number of sole parents under the age of 20 and reducing long-term costs of welfare dependency. And as a result of that Crown expenditure in the current year is about $4 billion lower than we thought it would be 3 years ago when we set our surplus target.Grant Robertson: Does he recall his own statement: “Getting back to surplus is one of the most important contributions the Government can make to increasing genuine national savings and building a more competitive economy.”; and how does he reconcile that with his new-found belief that it is just an artificial target?Hon BILL ENGLISH: Yes I do recall that statement and I will continue to make that statement. But unlike the member the Government is not obsessed with a particular point target. We are headed in the right direction. We are achieving what the Government wants to achieve which is improved public services and protection of the most vulnerable at the same time as supporting a growing economy. We are moving in the right direction towards surpluses and reduction in debt.Grant Robertson: In what way is the New Zealand Herald wrong when it said that when it comes to the surplus “promises are promises” and that his and the Prime Minister’s reputation will be damaged if the Government does not achieve a surplus it has promised for two election campaigns?Hon BILL ENGLISH: I just disagree with it. In the first place it does not know what the numbers might actually be and we will not find that out until October this year. Secondly it is pretty clear that the Government has Government finances under control and we are headed in the right direction. A lot of New Zealanders have confidence in that. We are not going to let the pursuit of any particular number in the operating balance stop us from making good decisions for the progress of the New Zealand community and the New Zealand economy.Grant Robertson: If he is not interested in a particular number for the surplus why did he go to New Zealanders and promise a $372 million surplus?Hon BILL ENGLISH: We have always indicated that we wanted to get to surplus. That is clear. That is proven to be a very effective anchor for public services and community expectations. The actual number of course is a product of the independent forecasting capacity of the New Zealand Treasury. We do not pick a number and as I have said to the member before we are not going to make random cuts to entitlements and public services just to satisfy him about a particular surplus number.Grant Robertson: Does he agree with the New Zealand Herald that John Key has “indulged in smoke and mirrors to make a surplus or deficit in the tens or hundreds of millions of dollars seem inconsequential.” and why has he promised to New Zealanders for two election campaigns that the Government’s books would be in surplus only to now decide that it is an artificial target?Hon BILL ENGLISH: I do disagree with the New Zealand Herald. The member needs a bit of context to this. The deficit reached $18 billion. The most recent forecasts for the 2014-15 year close that from minus $18 billion to minus $500 million. That is dramatic progress by any standard and the Government has done that at the same time as improving public services. I know that the member really resents the fact that we have been able to improve public services and get the Government’s books in order but that is what we will continue to do.