Cullen Michael: Estimates Debate —  
Cullen Michael: Estimates Debate —  
[Volume:610;Page:7159] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The Government is very happy to debate the advice it receives from Treasury. As Minister of Finance I get hundreds of recommendations each week from Treasury. It is not like being Governor of the Reserve Bank where every 6 weeks he or she gets to make one decision—I get to make hundreds of decisions every week and in the vast majority of cases I agree with Treasury. But the member is quite correct every now and then I disagree with Treasury. 
Let us sum up Dr Brash’s prescription for growth and let us measure it against the past and what has happened and whether it will work and why I do not get the advice he seems to think I get all the time. His first prescription is to flog off the State-owned enterprises. That has been a great success for Tranz Rail has it not? That piece of movement has really been dynamite in terms of generating growth! [ 
Interruption 
] It must be coming up to lunchtime the member opposite has woken up. Second he would flog off New Zealand Post. How would that drive stronger growth when New Zealand Post is doing very well already? Of course we saw it work with Air New Zealand as well did we not? We saw our national airline going down the tubes following privatisation. 
Rt Hon Winston Peters 
: Who did that? 
Hon Dr MICHAEL CULLEN 
: The fourth Labour Government did that. Mr Prebble did that. It was a stupid mistake to do it. 
We pass on to the second prescription for growth: do everything Treasury tells us. The Minister should just become an overpaid rubber stamp paid about $180000 a year to plonk “ Yes” on the page. Why not just buy somebody out of Work and Income New Zealand to do that particular job and save $150 to $160 a week? That person could be on a work scheme and all he or she would have to do would be to sign off every Treasury recommendation while being called the Minister of Finance. 
Sometimes Treasury makes recommendations that I do not agree with. Sometimes Treasury makes recommendations contrary to Government policy. Lo and behold we do not always agree with them. But in the vast majority of cases we do because Treasury officials offer good solid independent advice. But they would not claim to be absolutely always right in every instance. 
Rt Hon Winston Peters 
: They must have changed! 
Hon Dr MICHAEL CULLEN 
: They have changed since that member was the Treasurer. Treasury does not now believe that it holds all the knowledge in the universe. The people who thought that have long since departed this life. 
 The third prescription for growth is not to listen to the public. The public do not know what is going on especially those people paid under $60000 per year. Their opinions do not count for anything in the world in which Dr Brash lives. The fact that they happen to be 90 percent of taxpayers is neither here nor there; they are just the public and the public are mean and self-grasping. As far as Dr Brash is concerned they put their interests first—unlike the situation in the pure market economy which is supposed to work because people put their interests first. But never mind we are not worrying about the logic as we work through all of this. Public choice theory states that the public have a right to be wrong and politicians might occasionally listen to them if they want to. If the member wants to run on a platform of flogging off the State-owned enterprises doing everything Treasury tells him and not listening to the public 21 percent will seem a very very high target for the National Party at the next election. The 5 to 6 percent that ACT gets is about what that policy rates in terms of public support. 
Then there is the bit Dr Brash did not mention which is to slash public spending. This Government holds to a policy of Government spending growing at about the same rate as nominal gross domestic product (GDP) over the medium term. The figures show that Government spending has remained constant as a proportion of GDP and is projected to continue to do so declining slightly as time goes on. Dr Brash says that we should increase it by the rate of inflation only which is 2 percent on average versus 5 percent. It does not sound much but it is $1.25 billion cumulative on top each year. By the end of 3 years we are looking at $3.75 billion per year in spending cuts. 
As Dr Brash said to the National Party conference one cannot do that by fiddling around the edges especially when his colleague Mr Ardern called for big increases to Department of Conservation spending today. Dr Lynda Scott is always calling for increases to health spending the law and order spokesperson is always calling for more spending on courts prisons and police. I have yet to find anybody in the National Party who calls for a reduction in spending in his or her area; it is always in somebody else’s area. Even Georgina te Heuheu does not call for a cut in Maori spending. A sum of $3.75 billion has to be carved out and that has to come out of the big votes which are health and education.