Douglas Roger: Debate on Prime Minister’s Statement 
Douglas Roger: Debate on Prime Minister’s Statement 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 The new year is an opportunity for a fresh start. Traditionally people make resolutions that seek to cut back on the excesses they indulged in the year before. It seems that the National Government has yet to decide on its New Year’s resolutions. I decided that maybe I could save them the hassle so I put together a list of resolutions that National could adopt which would help New Zealand. 
The first resolution should be to slim down. The National Government after 2 years of bingeing has made government bigger than ever. Total Government expenditure reached just over $81 billion in 2010. That is almost 43c in every dollar earned. Such expenditure is financed by borrowing around $300 million every week simply because the amount of tax that goes into the Government coffers is less than it spends. With government so big is it any surprise that our economy is not getting off the ground? 
Growth in the New Zealand economy remains at around 1 percent. When the economy is leashed to a weight that spends over 40c in every dollar it is easy to see why we are going nowhere. In the meantime we see other countries such as Singapore float away with average annual growth rates of 4 percent or more. The Singapore Government spends a mere 17 percent—17c in every dollar. That might be all right if we were getting better services than Singapore. The reality however is that not only does our spending make us poorer than Singapore but across the board we also have worse poverty worse education worse health care and more crime—and the list goes on. 
Forecasts show that Australia will be 42 percent wealthier than New Zealand by 2025. Because of this 412000 New Zealanders the equivalent of all the residents in the Wellington region are likely to leave New Zealand for Australia over the next 15 years. The first New Zealand resolution that we should have is clear: slim down. 
I find it unbelievable that National which rightly complained so bitterly about the years of wasteful spending by the Labour Government suddenly when it gets into power cannot find any wasteful expenditure to cut. To the contrary National seems to have borrowed more money to spend. The simple truth is we will never spend or tax ourselves to prosperity. It is a shame that National still needs to learn that basic lesson. 
The second resolution should be to focus on what really matters. Core services such as education health and welfare—65 percent of core Government expenditure—are very important Government services. However the Government has been increasingly bad at providing them. Our education system is failing our young people. A third of school-leavers fail to achieve National Certificate of Educational Achievement (NCEA) level 2 or higher. For Maori 56 percent will not gain NCEA level 1 or above before they leave school. Some of our schools are so unsafe that the police are stationed within them. A classroom surrounded by police officers is not a proper learning environment. It is hardly surprising that 30000 schoolchildren cut class every day. Children are voting with their feet and are choosing to be away from dilapidated classrooms rigid curricula violence and the monotony of the classroom environment. In education the Government should resolve to empower parents. 
In welfare 13 percent of the adult population are receiving a benefit. That is compared with 2 percent in 1960. Approximately one in five Kiwi children will live in a benefit-dependent household. Recent figures show over 350000 people are on some type of benefit. For every six workers one person is on a benefit. Add in superannuation and the ageing population and it is likely that our children will live in a world where every one person receiving a Government handout will be supported by just two workers. This is simply not sustainable. 
In health the number of practising physicians is 2.3 per 1000 people. This is almost one fewer per 1000 people than the OECD average. The number of hospital beds per 1000 people is 6.2. This is over one hospital bed fewer than the world average. Every year hundreds of people continue to die while on waiting lists because our health system is overstretched. 
If Government tax-funded money could solve all these problems New Zealand would have solved them already. We spend vast amounts on all these areas but get substandard service in return. We have made ourselves poorer to afford all this. But do we get the kinds of services we want? We need to rethink the approach in all of these areas. 
In welfare the Government should resolve to get two-thirds of the people on benefits back to work. Despite unemployment reducing sharply between 1999 and 2008 expenditure on welfare soared. Part of this was done by transferring people on to sickness and invalids benefits. We will never solve the problem by just moving people around. The number of people on sickness and invalids benefits has increased by almost 70 percent in the last decade. In that period the population increased by 12 percent and spending on health almost doubled. It is very difficult to argue that these figures represent a declining level of health in the population. Rather it seems that for some it has become a lifestyle rather than a transition. 
In health the Government should resolve to restore the right incentives. If we look at other places around the world we can find practical templates to model our health care system on. Singapore has one of the best health-care systems in the world. Its infant mortality and life expectancy rates are amongst the best in the world. However what makes it amazing is its cost-effectiveness. Its Government spends very little money on making it a good system. It spends between 1 and 3 percent of GDP annually on health care. In contrast New Zealand spends between 8 and 9 percent of GDP. Singapore makes it compulsory to have health savings accounts in which individuals pre-save for medical conditions and they have a catastrophic insurance on top of that. 
New Zealand’s outlook is bleak. Today we sit in a position similar to the one we had in 1984. The difference though is that in 1984 we made tough decisions. We outlined the goal we wanted to achieve and moved swiftly to attain it. The public were supportive because they were able to see what we wanted to achieve and returned the Government with an increased majority in 1987. The point is that we did this by pursuing the right policies not by doing what might be popular in the short term. 
If members cast their minds back over the last 2 years of the National Government can they think of one piece of quality reform that has made New Zealand better off and will be remembered by anyone in 10 years’ time? I find it somewhat amusing that a party that has spent 9 years in Opposition arguing against most of the changes brought about by Labour such as Working for Families the lack of privatisation the abolition of youth rates the freezing of tariffs and the re-regulation of the labour market amongst others then does nothing about them when in power. National does not seem to get it and until it tries to set the agenda rather than follow blindly what Labour leaves in its wake National will continue to fail New Zealanders.