McClay Todd: Questions for Oral Answer — Questions to Ministers Questions to Members 
Text is incorporated into the Bound Volume 
McClay Todd: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Sitting date: 04 April 2012. Volume:679;Page:1637. Text is incorporated into the Bound Volume.] 
1. 
TODD McCLAY (National—Rotorua) 
 to the  
Minister of Finance 
: What recent reports has he received on the Government’s financial position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Excellent question! The Crown accounts issued today show a deficit of $5.5 billion for the 8 months to 29 February. The deficit is $395 million higher than the forecast of the pre-election update. This is due to a combination of factors. The Crown expenditure is $1.4 billion lower than expected offset by lower than expected tax revenue tracking $1.2 billion below forecast; and there is also a $500 million increase in Earthquake Commission costs mostly due to the 23 December earthquake. 
Todd McClay 
: Why have the latest estimates of Earthquake Commission costs increased? 
Hon Trevor Mallard 
: Because there was an earthquake on 23 December. 
Hon BILL ENGLISH 
: Most of it is related to the 23 December earthquake but alongside that we would expect to see fluctuations in the estimates for the costs of the earthquake to the Earthquake Commission and therefore to the Government because there is a massive information-gathering exercise going on down there in Christchurch. There is something like 120000 damaged houses and over 600000 claims. And as the Earthquake Commission moves through the process of understanding that damage in detail—working out for instance where there are duplicate claims—we can expect to see these numbers fluctuate fairly considerably. 
Todd McClay 
: What progress is the Government making in keeping expenses under control? 
Hon BILL ENGLISH 
: The Crown expenses are about $1.4 billion below forecast at $45 billion for the 8 months to February. Some of those lower expenses will be due to timing issues—that is expenditure has not occurred yet but it will occur in the future. However it does indicate I think that the tight focus on expenditure across the Public Service means that we are instilling some disciplines and maybe we will end up spending a bit less than we expected. 
Todd McClay 
: How will Budget 2012 contribute to the Government’s goal of returning to Budget surplus by 2014-15? 
Hon BILL ENGLISH 
: Exactly how is yet to be finalised but as the Prime Minister has indicated Budget 2012 will include little or no new net spending over the next 4 years. There will of course be new funding for health and education but we would be looking to offset that funding with savings in lower priority areas and by tightening up tax loopholes. 
Hon David Parker 
: Why did Government members of the Finance and Expenditure Committee block Treasury being called in to answer criticisms by the Auditor-General of Treasury’s mismanagement of the Crown Retail Deposit Guarantee Scheme which added tens of millions of dollars if not hundreds of millions of dollars to the Crown’s losses under the guarantee scheme? 
Mr SPEAKER 
: In so far as the Minister is responsible for that. 
Hon BILL ENGLISH 
: That is really a matter for the select committee but the issues have been thoroughly canvassed. Treasury has acknowledged some weakness in the early stages of the Crown guarantee set up by the previous Labour Government now 3½ years ago. Actually even the Auditor-General has not been able to show that there were other actions Treasury could have taken to reduce the liability.