Katene Rahui: Spending Cap (People’s Veto) Bill — First Reading 
Katene Rahui: Spending Cap (People’s Veto) Bill — First Reading 
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RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 The Spending Cap (People’s Veto) Bill seeks to impose a constitutional limit on spending as a sure way to create fiscal health. The Maori Party believes this legislation must be opposed at all costs. 
As other speakers have noted in the United States similar laws have been used to bring several states to financial ruin leading to massive cuts in social services. Thirty states already limit how much their legislatures can spend or raise revenues devastating funding for education and essential public services in their wake. Although we appreciate that the bill’s intention is to prevent the State from ever again accumulating a deficit like the one it faces now simply placing limits is a Draconian measure designed to appeal just to popular conservatism. Tea Party Republicans brought the United States to the brink of collapse a couple of weeks ago when they exercised a veto over raising the federal spending cap. 
The real reason for the bill coming up now is that National is seeking to tidy up the loose ends of the confidence agreement it has with ACT. In essence the bill is the desperate breaths of a party seeking to have some influence in the last 7 days of the Government’s work programme but we say in the strongest possible terms that this must not be ACT’s legacy to New Zealand. The motivation for Mr Hide bringing in the bill today is to protect the wealthy from having to pay their share of tax. As a Parliament we must be wary of any populist attempts to conjure up voting power that lacks sound rationale or academic justification. 
Spending discipline is an important ingredient in any recipe to fix the State’s Budget but putting in place a pre-imposed fiscal cap is a recipe for disaster. If our constituents need any proof of that we simply remind them of the spectacle of the fiscal envelope. I will remind National members of that bleak period in our history. The late Hepi te Heuheu attracted 100 percent support from iwi for his stand against this approach. The genesis of the fiscal envelope was that one fixed amount was offered to settle all claims for ever—approximately 3 percent of all appropriations for one year. The $1 billion fiscal envelope compared miserably with other transactions of the Crown leading Maori to believe that they were locked into an unhappy relationship with the Crown. At the time the fiscal envelope was seen as the final straw. A fiscal envelope of $1 billion for the settlement of all historical claims was in effect a definitive limit on what the Crown would pay out in settlements. Maori vehemently rejected such a limitation in advance of the extent of claims being fully known and as a consequence the fiscal envelope was subsequently dropped after the 1996 general election. One might have thought that Governments could learn from their mistakes. 
Internationally too the concept of a preordained limit has been met with as much comparable heat and fury as the fiscal envelope fiasco. What we have seen happen in Colorado is that the state’s roads declined to being in the worst shape since it stared monitoring them. The contribution to higher education funding fell from 60 percent to 40 percent and revenues returned to pre-recession levels. When the economy was restored to a more positive state of health it was almost impossible to make up what had been cut—a decision that was essentially devastating to public services. I found some devastating information about the spending cap concept from Rich Jones director of policy and research for the Bell Policy Center a progressive research group based in Denver. According to Rich Jones: “It’s been particularly negative on the state on state government and its ability to retain and raise the amount of revenues that it needs to function effectively.” 
Of course we are all in favour of any proposals to rein in spending and lower taxes. It is about value for money and we are as keen as the next party to look at that. But there are other things we could do that could tell us about effectiveness efficiency and the best value for our dollar. For example we could get the Office of the Controller and Auditor-General to report annually on the effectiveness of interventions targeted at Maori Pacific refugee and migrant communities as well as young people. How effectively spent is the taxpayer dollar in this regard? We could ask for an annual report on the capability of the State sector to achieve outcomes for Maori. We need as Nanaia Mahuta said earlier to discuss the real issues about value for money for government. We want to see more community services and less government bureaucracy for the outcome of whanau restoration. That is the best way of controlling debt and of creating prosperity and growth not a rigidly imposed fiscal envelope of ACT’s making. 
What we really need to see and what the Maori Party is determined we will see is that the Government is made more accountable and transparent through the unbundling of public money spent on tangata whenua. Kia ora.