Key John: Supplementary Estimates — Imprest Supply Debate 
Key John: Supplementary Estimates — Imprest Supply Debate 
[Volume:618;Page:13787] 
JOHN KEY (National—Helensville) 
: 
 Was that not a revealing speech from the Hon Paul Swain who was filling in for one of the finance Ministers who was obviously unable to take his call? Was it not a revealing speech when he told the House that growth was past its peak? It did not take Paul Swain to tell the House that growth was past its peak; when the Budget was released Treasury told everyone that that was exactly the situation. Over the last decade growth in New Zealand has been about 3.5 percent but lo and behold what do we see in the Budget documents and tied up in the imprest supply debate today? We see a projection that the growth rate will fall and fall rapidly over the next 10 years—fall and fall rapidly. 
What a disgrace for a Government whose members have gone up and down the country to tell the people of New Zealand that its No. 1 priority is growth! That is what the Prime Minister said in her speech early at the start of this year. That is what the Minister of Finance has been telling people every time he has an opportunity to give a speech—that growth is the No. 1 objective of this Government. Well that is not the case because we know that we are not allowed to talk any more about this country going back into the top half of the OECD. When the Minister of Finance came before the Finance and Expenditure Committee just last week I put to him that very question—when would New Zealand go back into the top half of the OECD. He sat there looked at me with that typical “deer caught in the headlights” look that a Minister gets when he has completely lost control of his ministry and said: “Not any time quickly.” That is when we will go back into the top half of the OECD under this Government—“Not any time quickly.”! 
Hon David Carter 
: Why doesn’t he make it 2011? 
JOHN KEY 
: The date of 2011 is a date well and truly forgotten. This is my prediction: talking about our getting back into the top half of the OECD is about as popular in the Labour Cabinet as closing the gaps is. That is right—it has gone. One is not allowed to talk about it any more. It is another one on the banished list of failed objectives from a failed Government. 
After the Minister of Finance had come down and woefully delivered the Budget of 2004—and that is another point I would like to pick the Minister up on—he said it was well received. If communism by stealth is well received then I suppose it was well received. But it was not well received by the four out of five New Zealanders who got absolutely zilch. Four out of five New Zealanders are out there today as I speak in the House working their guts out to produce a better New Zealand and a better country and those four out of five New Zealanders got the doughnut from Michael Cullen. For four out of five New Zealanders the message was: “We’ll take your tax dollars; you keep working hard for us but there’s absolutely nothing zilch zero doughnuts for you in this Budget. Carry on working; we’ll carry on overtaxing you but there’s nothing for you in this Budget.” 
Why are they feeling the pinch? Well for very very good reason. This Government loves taxing the hard-working productive sector of New Zealand. It loves taking extra dollars off those people at every opportunity it can. It has had plenty of opportunities. This year alone hard-working New Zealanders will pay $500 million more; the impact of their moving up into different— 
Hon David Carter 
: That’s $2600 per household! 
JOHN KEY 
: Yes $2600 per household extra but $500 million more from the impact of fiscal drag or bracket creep—$500 million! Yet there is not a dollar for four out of five hard-working New Zealanders in this country. A billion dollars more will be paid due to changes in the tax rates and a lot of that is due to the change in the top tax rate. 
Hon David Carter 
: It is “envy tax”! 
JOHN KEY 
: Does the country need it? Does the Minister of Finance need it? Oh let me just remind myself that this Minister of Finance has had the largest Budget surplus in New Zealand’s history yet he somehow still seems to think he needs to have the “envy tax”. Any Minister of Finance can produce the largest Budget surplus in New Zealand’s history if he or she wants to overtax. It is very hard to go to the Inland Revenue Department and say: “Look I’m a bit offended by Michael Cullen taking an extra $2600 off me so what I’m going to do—and I hope you don’t mind—is this year I’m not going to pay it.” Unfortunately that does not work very well because a whole load of laws passed by Parliament mean that any Minister of Finance can get the largest Budget surplus in history if that is what the Minister wants. 
I now want to turn to the Working for Families package for just one moment. What a disgraceful display that was! Labour’s re-election plan was rolled out with a $21 million fanfare. I see that a number of the Ministers opposite me are now smiling and smirking. They know in their heart of hearts that it is nothing more than a blatant re-election plan. They are spending 10 times more than National ever spent on trying to promote a Budget. 
Hon David Carter 
: Coca-Cola spends less than that. 
JOHN KEY 
: Yes Coca-Cola spends way less than that. To trumpet its Budget the Government will spend $21 million on propaganda that will be shoved into mailboxes and at the bottom of that propaganda it will say “Vote Labour”. That is what it is really saying. That $21 million worth of propaganda will be paid for by the hard-working taxpayers of New Zealand. Four out of five taxpayers get zilch doughnuts from the Budget but they have to pay for that $21 million. 
Those people who do get something face a very interesting dilemma because if they have two children and they earn $38000 or $60000 the difference in their after-tax income is virtually next to nothing. It is one size fits all under the prescription of the Labour Government of Michael Cullen and Helen Clark. It does not matter whether people work harder work longer retrain for another job have more responsibility get up earlier in the morning or really try hard to produce more for their country; it does not matter what people do because they will get the same. Well the same thing was tried in Eastern Europe and it was an absolute disaster. It was tried in China and it was a disaster. It was tried in a number of communist and socialist countries around the world and it was a disaster. And now the Government is trying it in New Zealand. My confident prediction is that it will be a complete and utter failure like this Government has been. 
We have a growth rate that is on the way down which is absolutely despicable. It was a sad Budget that this Government delivered. It was a sad day for the productive sector of New Zealand and it is sad that the people of New Zealand have to pay $21 million to see this drivel rolled out through their letterboxes. It is not good. 
I want to speak for a moment about one of the elements of the Budget—that is the increase in capital expenditure for prisons. What is very interesting is that it shows that the capital expenditure to build four new prisons is about $600 million. This is a Government whose only action in the commercial sector in recent times has been to close the only private prison operating in New Zealand—Auckland Central Remand Prison. Why is that? What possible reason could there be for the Government to close that prison? Well I will tell the House the reason for it. It is because that private prison works in practice but just does not work in theory! That is the problem. It works in practice. It is 15 percent more efficient the rehabilitation rates are better the security is better the people of New Zealand want it the people of New Zealand like it but it does not fit the ideology of this Labour Government so it is gone. And the Government will build four more prisons at a cost of 15 percent more. That is why it is building a prison at Meremere at a cost of $350000 a bed. It is a disgraceful waste of Government spending. 
A few weeks ago there was a very interesting article on the front page of the  
Dominion Post  
that showed just how bloated the State sector has become. The Minister of State Services the Hon Trevor Mallard was very offended that it showed just how large the State sector is getting. What do we see in the Budget? We see a $1.2 billion increase in spending for personnel expenses over the next 4 years. This is a Government that has added about an extra 40000 employees if we look at the widest definition of State sector or an extra 19000 if we look at a pretty narrow definition. It has cost about $800 million so far and we are seeing a $1.2 billion build-up in spending. This is a Government that loves taxing the people of New Zealand. It loves spending other people’s money. It is a Government that loves asking hard-working families and other New Zealanders to tighten their belts but when it comes to tightening its own belt it does not know where the buckle is it does not know where the end of the strap is and it does not know how to tighten its belt—it just wants to spend more money. 
We see it in the health sector all the time. The health ministry is clearly getting out of control as well. We see billions of dollars more of Government money being spent on health but lo and behold the number of operations is going down. We saw the Minister of Finance write to the Minister of Health Annette King saying: “Can you explain to me why we are spending billions of dollars more and there are fewer operations?”. Annette King looks me in the eye and gives me that blank “deer caught in the headlights” look as if to say: “I don’t know. I’ve got to go back to my office and check it out. I just do not know why that is the case Mr Key.” 
This was not a well-received Budget. It was not a great day in New Zealand’s history. It was a very poorly received Budget indeed.