Foss Craig: Questions for Oral Answer — Questions to Ministers 
Foss Craig: Questions for Oral Answer — Questions to Ministers 
[Volume:654;Page:3761] 
2.  
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What factors will make up the change in core Crown expenditure in Budget 2009? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 As set out in the Budget Policy Statement last December there are three main elements to an increase in Government spending. These are first the automatic stabilisers consisting of increased payments for the increased number of people on benefits as well as automatic annual adjustments to benefits New Zealand superannuation and other income support. The second category is those discretionary decisions that the Government makes around the operating allowance. The third element is the capital expenditure that funds public services and infrastructure. As forecast the Budget Policy Statement of last December forecast a significant increase in Government spending based on increases in all these three categories. 
Craig Foss 
: What changes to entitlements is the Government contemplating? 
Hon BILL ENGLISH 
: The Government has stated a number of times that entitlements will not be changed. New Zealand superannuation all income support including welfare benefits all student support and Working for Families programmes will continue at their existing levels because we believe that it is important in this time of economic downturn that people have a sense of security. 
Hon David Cunliffe 
: Given that the cost of paying just one of those entitlements—the unemployment benefit—is nearly $800 million a year with unemployment at 7 percent rising to over a billion dollars a year when unemployment reaches 9 percent is it not time that he worried as much about the real human costs of unemployment as he does about pandering to credit rating agencies? 
Hon BILL ENGLISH 
: The Government actually has not talked about the credit rating agencies—hardly at all—since it came to office. [ 
Interruption 
] I invite the member to examine the public record. The Government is making decisions on the basis of what is good for New Zealand and those decisions have two objectives. The first is to protect New Zealanders through the worst of the recession and the second is to change the direction of the last Government and actually focus on a productive economy that will produce sustainable new jobs because that is the best thing we can do for those who have lost their jobs. 
Craig Foss 
: How has the Government’s operating expenditure been prioritised? 
Hon BILL ENGLISH 
: The easiest part of prioritising the Government’s expenditure has been getting rid of the ridiculous and open-ended commitments made by the previous Government including programmes that just did not work and programmes that were getting under way that were not going to work. As stated in the Budget Policy Statement the Government has directed new spending first and foremost to honouring those commitments on which we were elected. 
Craig Foss 
: What measures will the Budget include to improve New Zealand’s capital stock for future generations? 
Hon BILL ENGLISH 
: The member will have to wait for the Budget to actually have those confirmed but I can tell him that in the Budget Policy Statement the incoming Government outlined new capital spending of about $7.5 billion over the next 5 years which is a substantial lift on previous spending. More important than the amount of money is how well it is invested. This Government will be focusing it on long-term investments that open up the bottlenecks in this economy help our exporters become more competitive and help make the economy more productive. 
Hon Sir Roger Douglas 
: Does the Minister agree that reducing core Crown expenditure on sectors such as health education and welfare is sustainable only if it is accompanied by structural changes that increase competition; if so why does he refuse to do that in the way that he did with the health sector in the 1990s when he was responsible for large gains in productivity? 
Hon BILL ENGLISH 
: The member I think correctly identifies that there are substantial challenges in the sectors of health and education where the New Zealand taxpayer has invested very large amounts of new money over the last 10 years without much change in outputs. The health system does not treat many more people and the educational levels of our young people have not risen in relation to the amount of money spent. This just goes to show that more money does not fix every problem. This Government will have to be thoughtful about how we manage over the next few years with less new money for health and education.