Norman Russel: Estimates Debate — In Committee 
Text is subject to correction 
Norman Russel: Estimates Debate — In Committee 
[Sitting date: 01 August 2012. Volume:682;Page:4186. Text is subject to correction.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak in this debate on Vote Finance. I want to speak briefly about the central if you like economic strategy of the John Key - John Banks Government. The central economic strategy of the John Key - John Banks Government is around asset sales. What the John Key - John Banks Government has as its central pillar is the privatisation of assets. This has been justified on financial grounds and I think it is worth referring to the Government’s own books as to what the fiscal impact will be of going ahead with this privatisation programme.  
I think the Government has misled New Zealanders about what the real fiscal impact of this privatisation is if it goes ahead. If you look at the Budget Economic and Fiscal Update from 24 March 2012 on page 42 you will see Treasury’s estimate of the actual impacts of this privatisation programme if it goes ahead. What you will see is that the estimate is that in 2016 the loss to the Crown as a result of privatisation would be $360 million in a single year because of the forgone profits and the savings because of the reduced finance costs would be about $250 million.  
What this means is that if the privatisation of the assets goes ahead the Crown position will be worse off by $100 million per year. That I think puts to a lie the fundamental argument that the Government has put forward that this is a fiscally rational strategy. So when the John Key - John Banks Government tells us that it makes sense to go ahead with this privatisation programme fiscally the lie is to be found in the Government’s own books. When you look at the Government’s own books the estimates— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! The member just needs to be very careful about saying the word “lie”— 
Speakers’ Rulings 
 page 42. I just bring the member back. Just be very careful about that. 
Dr RUSSEL NORMAN 
: Thank you Mr Chair. If you look at page 42 of the Government’s Budget Economic and Fiscal Update you will see there the actual fiscal impacts of the privatisation programme. I think it is worth repeating the numbers in this table because in this debate around asset sales and privatisation there have been a lot of arguments put forward that this makes fiscal sense but when you look at the actual numbers you realise that this is not the case. I would like to repeat those numbers for the benefit of the Government members who obviously have not looked at it very closely. If the John Key - John Banks Government goes ahead with privatisation it means that in 2016 in just that single year the forgone profits as a result of it will be $360 million—$360 million. It means the estimated finance cost savings—the benefit to the Government—will be about $250 million. So we are $360 million worse off and there is $250 million in savings for finance costs. What that means is that the net impact on the Government’s operating balance will be that it is worse off by about $100 million in a single year.  
This is the Government that says it is going to veto the extension of paid parental leave because it is going to cost $108 million a year. This is the Government that says it cannot afford to help working families and new mums and dads with paid parental leave because it costs too much—it would cost about $108 million a year. Yet here it is: as a direct result of the asset sale programme that the John Key - John Banks Government is promoting the Government books will be worse off by about $100 million per year. That is the fundamental fiscal reality of this asset sale programme.  
So when people are considering whether this makes any fiscal sense whether it makes sense in terms of the Government’s position and in terms of the Government books you need to not listen to the rhetoric from the Government; you need to look at the actual figures that are printed in the Budget Economic and Fiscal Update 24 March 2012 put out by the New Zealand Government. I refer you again to page 42. You will see in black and white the reality of the impact of the privatisation programme. This privatisation programme remember went through on one vote—the vote of John Banks—with 61 votes to 60. It went through with one vote.  
The impact of that programme will be that the fiscal position of the New Zealand Government is worse off by about $100 million every year going forward into the future as a result of privatisation. That is the truth that underpins the John Key - John Banks privatisation programme. That is the truth that we need to keep at the heart of our minds as we have this debate around asset sales going forward. We actually look at the Budget documents rather than the rhetoric.