Smith Nick: Public Finance (Fiscal Responsibility) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Smith Nick: Public Finance (Fiscal Responsibility) Amendment Bill — First Reading 
[Sitting date: 04 December 2012. Volume:686;Page:7056. Text is incorporated into the Bound Volume.] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I need make only a brief contribution on this bill the Public Finance (Fiscal Responsibility) Amendment Bill because it is such common sense and the fact that it is being supported so widely across Parliament indicates what a sound bill it is. Just to briefly comment on the contributions that have been made it is not surprising that the media are openly speculating on Russel Norman as a Minister of Finance in an alternative Government when you contrast the speeches we have just heard from Clayton Cosgrove and from Russel Norman. It is not surprising when we contrast the sort of nasty negativity which does not speak anything of the values or vision that Labour has with yes a very different vision that the Greens have. It is a vision that I think would be a disaster for New Zealand but at least we have some idea of what the Greens might stand for. 
We need look no further than the social disaster that is unravelling in the southern parts of Europe and the fiscal crisis in the United States of America to recognise the importance of good fiscal policy to New Zealand’s future. In my 23 years in this Parliament I would say that the single most important Act that changed the prospects for New Zealand was that 1994 Fiscal Responsibility Act. In the 20 years prior to that New Zealand’s books were very poorly managed by both National Governments and Labour Governments. In the 20 years since New Zealand has moved from being one of the worst performers in the OECD to one of the better performers. 
In typical Bill English style though this bill is about making those incremental improvements in that Act and I want to comment on the three major ones. The first is that fiscal policy has got to be better aligned with monetary policy. New Zealanders have so often been punished with high interest rates not because the Reserve Bank is not doing its job in controlling inflation but because Governments have spent up big and there has been a high price for New Zealanders to pay for that. I say when I read Labour’s big-spending policies that among the biggest losers will be those New Zealand families who are aspiring to own their own home because of the interest impact that those policies will have. 
Secondly this bill makes good sense to be focused on the level of fiscal responsibility not just today but looking out into the future. When we came into Government in 2008 we were looking at a decade of deficits and I will not be lectured by members opposite about fiscal discipline given the level of projected debt and spending that the Labour Government had built into the bottom lines of New Zealand that saw ever-ballooning debt and deficits going out for 10 years. That left the Minister of Finance Bill English with a nightmare. He is going to have to spend the best part of his career actually pulling back on the extravagant spending that occurred in the term of the last Labour Government. 
The third big change in this bill is in terms of focusing on the efficient and effective spending of public money. There are so many areas in which Government money was poorly expended. I really look forward to the discipline that these reforms will apply. Let me give you just one simple area in closing. I spent the best part of the last 3 years trying to improve the solvency of ACC. It was down to 45 percent. Members opposite laugh but it was at 45 percent solvency. If it was an insurance company it would literally be broke. We have improved that up to 75 percent. Judith Collins is doing a great job of continuing that work. We are determined as a Government to get to 100 percent solvency. What worries me is that Labour’s spokesperson on ACC said Labour wants to go back to pay as you go. It wants to go back to pushing the cost out into the future. That sort of policy will be held in check by these sorts of provisions which will expose the fiscal nonsense of those sorts of changes which we would not support. 
This bill is just part of the package of the sensible financial policies that this Government is adopting which protect New Zealanders from the sort of loose fiscal policy that can cause so much social harm as we see in so many parts of the world. I urge the House to support the bill.