Cullen Michael: Debate on Budget Policy Statement 
Cullen Michael: Debate on Budget Policy Statement 
[Volume:623;Page:18904] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Thank you for the call Mr Speaker and I say that soon you will be able to call me the father of the House. [ 
Interruption 
] It is based on continuity I am afraid. I want to come to the interesting aspect of this debate. We have listened to—[ 
Interruption 
] Well Mr Prebble can call me “Dad” if he likes—one continuous song from the Opposition throughout this debate. Opposition members have said that the economy is doing too well under this Labour-led Government that the Government finances are too good under this Labour-led Government that there are too many people in employment under this Labour-led Government—and that we are going to hell in a handcart as a consequence of all that. That has been the line taken by Opposition speaker after Opposition speaker. 
I want to point out firstly that the Budget Policy Statement re-emphasises the long-term agenda this Government has. Unlike previous Governments in recent times we are not governing just for the next 3 months or the next 3 years; we are governing for the long-term benefit of the vast majority of New Zealanders. We do not believe in having a big booze-up one night and a big hangover the next morning in terms of governing this country. Yet almost every Opposition party believes in some variety of a booze-up but does not want to face the reality of some variety of hangover as a consequence the next day—or in the case of some members who start the booze-up rather late the hangover probably comes in the evening. We are providing therefore within the context of the Budget Policy Statement fiscal stability and certainty. The markets international observers and businesses in New Zealand know how this Government is governing in fiscal terms. They know that there is a strong fiscal path forward and that there will not be major lurches in policy from one extreme to another. 
Secondly we are providing for the future superannuation needs of New Zealanders. The New Zealand Superannuation Fund is building up assets rapidly—so well indeed that the National Party has done the flip-flop of all time and has decided it will support the New Zealand Superannuation Fund. To be fair ACT has remained staunch. ACT has stood by its belief that many people should be poor in their old age and therefore it opposes the New Zealand Superannuation Fund. We have to give the ACT party marks for consistency. It has low marks for intelligence and low marks for humanity but has high marks for consistency. 
Thirdly we are investing further and further in health and education. In this year’s Budget health spending will see the largest increase that it has ever seen in terms of the increased dollars going into Vote Health. That vote will deliver to us a massive improvement in primary health care throughout New Zealand. Indeed one of the fiscal problems I face is that the primary health organisation policy has been more successful than the Government had forecast. More people have come into the primary health organisations than was forecast and we are having therefore to front up with money earlier than we had originally anticipated in terms of the primary health organisations. The result of that is that many more people are getting cheap visits to the doctor and many more people are getting low-cost prescription charges. Therefore low to middle income New Zealanders are able to afford to access proper primary health care which is crucial to their long-term health status. 
Then we are providing money for infrastructure and business development. What every party in the Opposition wants to do is to provide the infrastructure but those parties do not want to pay for that infrastructure. To be fair the Green Party would not have the infrastructure at all in the first place and therefore sees no reason to pay for it. But at least it is clear what the other parties want to do. They want to build roads out of nothing they want to build bridges out of nothing and presumably they would have roads and bridges that went nowhere as a consequence. 
In this year’s Budget we will have some new priorities. We will have policies around savings and how we can assist people to lift the level of savings in New Zealand particularly work-based savings. We will have policies around how we assist middle-income families into first home ownership because that is a great difficulty and we are seeing declining homeownership levels amongst too many people. We could have argued 5 or 10 years ago that that was due to social choice but the rate of decline in homeownership is clearly not socially or economically desirable and is not being driven purely by choice. 
What we have in the Opposition some 6 or 7 months out from an election is a party that aims to become the Government—the National Party—and one can see its members here. Mr Tisch has shrunk down behind his seat and the only other member who is supporting him in the House is Mrs te Heuheu. National is a party in a state of ongoing crisis—a party whose own caucus members now refer to themselves as being like the cast from the television series  
Six Feet Under. 
 I will not go through the cast of  
Six Feet Under 
 and say which particular member of the National Party front bench resembles which particular member of the cast because I would very quickly get myself into serious trouble in terms of withdrawals and apologies I tend to suspect. 
Jill Pettis 
: Yes yes—resist resist! 
Hon Dr MICHAEL CULLEN 
: So I will resist—for once I will resist that temptation. 
Certainly the National members are also becoming more widely known these days not as the National Party but the “Pyjama Party”. All I can say is that it is a bit like having a parachute on. I think the best thing that Dr Brash can do is to pull the cord and see whether he gets to a position of safety as a consequence of doing that. National’s view of life for average Kiwis is that we should have a diet of heated-up peas and frozen corned beef and that is the future for the average Kiwi. Dr Brash is a lonely out-of-touch autocratic leader who gives strange speeches without consulting with his caucus and his spokespeople and then it all unravels as a consequence thereafter. He is a leader who barely participates in Parliament and who has sat here for day after day not asking a single question as Leader of the Opposition. 
Darren Hughes 
: What did he say today? 
Hon Dr MICHAEL CULLEN 
: I think that he said “Uh” today. I think that was his major contribution in terms of understanding. During the year so far Dr Brash has managed to ask two main questions and seven supplementary questions—the Leader of the Opposition! When Helen Clark was Leader of the Opposition she asked questions day after day after day. When Bill English was Leader of the Opposition he asked questions every day in the House but Dr Brash apparently does not need to ask any questions. Perhaps he thinks he has all the answers already. That may be the reason why he does not ask any questions. 
And Dr Brash’s self-proclaimed chief strategist Mr Murray McCully has disappeared. 
Jill Pettis 
: Missing in action. 
Hon Dr MICHAEL CULLEN 
: He is missing completely in action. Nobody knows where he has gone to. If Mr McCully were Tarzan Jane would be going through the forest and trying to find him but he is not Tarzan at the present time so we do not know what has happened to him. Maybe he is working on a grand strategy that will be pulled out some time a month before the election to a reaction of shock awe and horror from the rest of the political scene within New Zealand. 
We have heard only one song from the Opposition: that the Government has a huge surplus which means we can have tax cuts—bigger and bigger and bigger depending on which party one is in—that will have no effect at all on the economy or on our ability to spend money in health education etc. Firstly I say that is macroeconomic nonsense. In an economy where the manufacturing sector is running at 93 percent capacity where the exchange rate of the New Zealand dollar is already high and where unemployment is low and employment very high to feed extra billions of dollars into consumption would be pure macroeconomic madness at the present time. Any Government that would think about doing that in this position should be taken out and quietly shot. Secondly I say that is fiscal nonsense. It confuses an operating surplus with a cash surplus. 
Let us take what ACT said. ACT said that we could afford $5.8 billion of tax cuts without affecting current spending because the operating surplus is about $6 billion. The cuts would pay for themselves those members said because we would have increased growth. Well even if we accept the somewhat weird argument from certain Treasury officials that we could get 0.5 percent a year of extra growth in GDP—0.5 percent a year was what they were thinking was more possible—that is $800 million of extra GDP and $230 million of extra revenue which does not go far towards meeting $5.8 billion dollars of reduced revenue. Tax cuts do not pay for themselves and that has been proved over and over again. Who does pay for tax cuts? Those who want to see a decent health system those who need a decent pension system those who actually want decent roads those people who need assistance for educating their kids and those people who cannot afford to pay the full cost of going to a doctor or the full cost of getting their prescriptions. That sounds remarkably like the kind of person who is a stalwart in the ACT party. It sounds remarkably unlike the vast majority of New Zealanders. Tax cuts do not heal and they never will.