Bennett David: Questions for Oral Answer — Questions to Ministers 
Bennett David: Questions for Oral Answer — Questions to Ministers 
[Volume:678;Page:801] 
1. 
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Finance 
: What reports has he received on the Government’s financial position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Treasury today issued the Government’s financial statements for the 7 months ended 31 January. They show core Crown tax revenue was $946 million below the pre-election update. Total revenue was $1.4 billion lower offset by lower core Crown expenses of $1.2 billion. This has led to the operating balance before gains and losses being about $470 million below forecast. These numbers include recognising the expenses of the severe earthquake in Christchurch on 23 December. 
David Bennett 
: What implications do the monthly accounts have for the Government’s commitment to get its finances back in shape and return to Budget surplus in 2014-15? 
Hon BILL ENGLISH 
: Generally monthly accounts do not make much difference because the numbers fluctuate often over timing issues. However the lower tax revenue in the last monthly accounts is consistent with probably collecting less tax in this financial year than was expected in the pre-election update. This reinforces the need for the Government to stay disciplined with its spending and to stick to its plan to get back to surplus by 2014-15 so we can start dealing with debt which will rise from net debt at the end of 2008 of about $8 billion to a peak in 3 years’ time of around $70 billion. 
David Bennett 
: Why is it important to get back into surplus and start repaying debt? 
Hon BILL ENGLISH 
: The Government has just got to follow the same processes as many households businesses and other organisations. Through the tougher times we had been running up debt. As the economy picks up and our outlook improves we need to tighten up to save more—as New Zealand households are—and to start repaying that debt. As we have been saying for some time that is going to be quite a challenge over the next few years particularly to keep delivering good public services and improving them at the same time as spending the same or less money. 
David Bennett 
: What steps has the Government taken to responsibly manage its finances and reduce the build-up in debt? 
Hon BILL ENGLISH 
: We have set aside the Canterbury Earthquake Recovery Fund of $5.5 billion to make sure that there is a strong commitment to the rebuilding of Christchurch but that there is not a blank cheque from the taxpayer for that rebuild. We have also over the last 3 years reprioritised about $9 billion of low priority spending to more important more effective services and we have prepared the Public Service to change the way that it delivers services over the next few years. We have also committed to selling minority stakes in some State-owned enterprises which will raise between $5 billion and $7 billion over the next 3 to 5 years which will avoid the need to go to overseas lenders and borrow even more money than we already are. 
Hon David Parker 
: Is the Minister more proud of the worsening Government deficit which at $12 billion for the year is worse than was predicted in the Pre-election Economic and Fiscal Update or the widening current account deficit which leads to more overseas debt and more asset sales to foreigners? 
Hon BILL ENGLISH 
: I am proud of the way that the John Key - led Government has found its way through some very difficult circumstances. We have not overreacted to the sharp recession we have maintained public services and support for New Zealand’s most vulnerable but at the same time we have put in place the plans to get on top of our fast-rising debt. As I said before net debt in 2008 was about $8 billion it is currently around $50 billion and it will rise by a further $20 billion over the next 3 or 4 years. That is fast enough. 
Hon David Parker 
: Which is the worst testament of his Government’s management of the economy: the increase in the Government deficit to $12 billion or the widening current account deficit which leads to more overseas debt and more asset sales to foreigners every year? 
Hon BILL ENGLISH 
: The worst testament would be if we had adopted some of that member’s policies on the way through but we did not.