Key John: Estimates Debate — In Committee 
Key John: Estimates Debate — In Committee 
[Volume:627;Page:21981] 
JOHN KEY (National—Helensville) 
: 
 Vote Finance is an appropriation in the order of $49 million—$48877000 to be precise. I know that this is a Government that likes to spend a lot of money. I know that it is a Government that likes to waste a lot of money. I know that this is a Government that likes to hire a lot of consultants despite the fact that the Minister of State Services has been telling us for years that the reason we have had such a large build-up in the State sector was that all of that knowledge was coming in-house and there would be no need for consultants. Lo and behold the Minister of Finance kindly released that information to the Finance and Expenditure Committee a few weeks ago and what did we see? Labour used to criticise the National Government for spending around $90 million a year on consultants. Lo and behold there it was in black and white that Labour is spending $137 million a year on consultants and that is in addition to the extra 8000-10000 core bureaucrats it has added here in Wellington. 
But that is not what I want to talk about in terms of Vote Finance. I want to talk in relation to what must now be the biggest waste of $2.742 million in New Zealand’s history. It will go down with the Nordmeyer “Black” Budget and Michael Cullen’s “Black” Budget which are rather synonymous now with one another. Six percent of the departmental vote—$2.742 million—was spent on purchasing advice on tax. We see what a waste of money that was when we look at what has come out of this Government recently. 
Let us start with the Budget’s alignment of GST and provisional tax costing $760 million. That was a very interesting scenario because when I went into the Budget lock-up and asked Treasury officials why that issue was costing $760 million why there was a $760 million loss of income in that financial year the Treasury officials were at a loss. But they did eventually provide someone who gave me the answer. The answer was of course that under GST payments there is no accrual accounting so because it moves into an income period that is some 20 days forward they cannot be counted. 
Well that is quite interesting except that Dr Michael Cullen the Minister of Finance made an interesting revelation I thought at a KPMG seminar that I heard him speak at recently. He said that he was not told of this fact until weeks before the Budget was produced. Weeks before the Budget was produced he did not know that $760 million was not coming into the Government’s coffers in that year and that is despite the fact that he spent $2.742 million for advice for taxation. 
 What is even better of course is that his lapdog sidekick David Cunliffe has been out there running around the country— 
Dr the Hon Lockwood Smith 
: Who? 
JOHN KEY 
: His sidekick—the Dewey of Huey and Dewey—has been telling the country: “We’re doing great things for business because we’re giving you $760 million as part of a $1.4 billion package.” That is quite interesting except that I am sure Mr Cunliffe when he has a bit of time on the back bench in the years ahead will be able to reflect on the fact that of course it is not worth $760 million to business. I see that Mr Cunliffe has his calculator out and he has already worked it out. He is a reasonably smart Associate Minister of Finance I am sure. The use of money for 20 days cannot possibly add up to $760 million worth of costs unless we are talking about billions and billions of dollars and we are not. So it is just a hoax that the business community is getting $760 million worth of benefit. It is for the record getting about 20 days’ use of money. That was not worth spending $2.742 million on advice. 
I will move on to the next point which is Labour’s intention to put a capital gains tax on foreign-held shares owned by New Zealanders. This comes from a Minister of Finance who last night had the audacity to go to the property investors’ seminar and tell them that diversification is a good thing. He said that last night but when it came to the Budget part of his $2.742 million worth of tax advice was telling New Zealanders that it is not a good thing to diversify. He said: “We don’t want you to own foreign-held shares.” even though the Cullen fund sends three-quarters of its money offshore even though foreign-held shares are a relatively small proportion of shares owned by New Zealand investors and even though those investors already have money here in New Zealand and on the stock market and the money is likely to go further into the property market—which is the thing Michael Cullen was having a go at 6 months ago when he was thinking more logically.