Douglas Roger: Budget Debate 
Douglas Roger: Budget Debate 
[Volume:673;Page:19189] 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 National and Labour are the biggest obstacles to the reform modernisation and eventual success of New Zealand. The Appropriation (2011/12 Estimates) Bill shows why. National like Labour has elevated means over ends pragmatism over principle posture over policy cynicism over sincerity and symbols over substance. National may have inherited the financial mess from Labour but that is no excuse for not tackling its causes head on. When it comes to means over ends we can all agree that we want to see New Zealanders enjoying the best living standards possible. Only ACT however identifies and promotes means based on private enterprise choice and competition which will deliver that end on a viable and lasting basis. 
Unfortunately National has long since succumbed to bribery via increases in Government expenditure as a means to that end a means that is not viable and leads only to lasting debt. The end result of decades of bribery by both National and Labour Governments is a level of Government spending—that is local and central—that now represents over 40 percent of GDP. Best international estimates of the optimal level of Government spending are in the region of 19 to 22 percent of GDP. Running at nearly double that level can mean only an economy hobbled by excessive taxation and bureaucracy and warped incentives. That is exactly what we have in this country at the moment. A Government that makes no serious effort to change that when it has the opportunity is clearly a Government that puts pragmatism before principle. It fails to do the right thing because it is simply too hard and runs the risk of upsetting vested interest groups and lobbyists. Although ACT welcomes the opening up of certain State-owned enterprises to private ownership up to 49 percent we are left wondering why National lacks the courage of its alleged private enterprise convictions— 
Mr DEPUTY SPEAKER 
: The member cannot use those words. They are an aspersion on members. I ask you to withdraw that comment. 
Hon Sir ROGER DOUGLAS 
: I withdraw that comment. National lacks the conviction of its alleged private enterprise standing and wants to retain a majority interest in for example an airline and a television network when such things are properly the purview of the private sector. 
Cuba nationalised everything in sight in the 1960s but eventually learnt its lesson and is now busy privatising again. If Cuba can then surely we can. It is not just a question of the money that so-called asset sales would bring into empty Government coffers; it is that Governments have no business owning such things as television stations etc. in the first place. 
In its obsession with not frightening the horses this Government tries to create the appearance of tackling the present crisis when in fact it does as little as possible. This is where posture over policy comes in. National at one time pretended to be enthusiastic about New Zealand catching up to Australia by 2025. It even created a task force charged with telling us how we could do that. The task force was even chaired by one of the best economic brains in the country: ACT leader Dr Don Brash. The task force made many excellent recommendations. What has National done? It has filed them in the rubbish bin. National’s purported commitment to catching up to Australia by 2025 if ever is now shown to be as hollow as Helen Clark’s infamous commitment to returning New Zealand to the top half of the OECD by 2010. It is all posturing with no policy to back it up. Even when the posturing was eventually abandoned has Mr Key abandoned any pretext of wanting to catch up to Australia by 2025? Let him tell us but if the answer is yes as this Budget would indicate where does that leave his claim to be ambitious for New Zealand? 
In its failure to tackle the looming crisis facing our nation this Budget is a symbol of National’s cynicism. National knows for example that in reinstating a youth minimum wage at least 12000 new jobs for young people would be created in short order. The Budget could have signalled National’s intention to do that. It did no such thing. Instead it relied on the tired old Muldoonist tool of subsidisation. Its youth employment package which created fewer than half as many jobs at an enormous cost to the taxpayer is a further instance of this Government not only spending too much money but also spending it unwisely. 
I mentioned at the outset the Government’s propensity for symbolism over substance. Is there a more eloquent example than that of National’s continuation of Labour’s big government approach to early childhood education? Ever greater wads of taxpayers’ money have been thrown at the sector with both parties touting it as illustrating their caring natures. In practice what is to show for all this generosity with other people’s money? A 300 percent increase in expenditure over 5 years has resulted in a 1 percent increase in participation. It is symbolism over substance and at what cost? 
In 2009 the Russian Prime Minister Putin observed in a speech in Switzerland: “Any fourth grade history student knows socialism has failed in every country at every time in history.” As a surviving luminary from the collapsed Soviet Union Mr Putin should know what he is talking about. It would seem that our politicians have failed to heed the lesson that Mr Putin correctly says is obvious to any fourth grade history student. Sadly the Budget confirms this is the case. Government assets over the last 10 years have more than doubled to 120 percent of GDP or $223 billion. Billions of dollars that would otherwise have gone to the private sector have been invested in assets that show very low return. 
As former President Ronald Reagan once observed: “In this present crisis government is not the solution to our problem; government is the problem.” The New Zealand Government is too big too intrusive and spends too much. National’s Budget did nothing meaningful to change that. As my colleague Heather Roy so accurately described the Budget yesterday it was a dire disappointment and an abject failure of nerve.