Key John: Supplementary Estimates — Imprest Supply Debate 
Key John: Supplementary Estimates — Imprest Supply Debate 
[Volume:632;Page:3692] 
JOHN KEY (National—Helensville) 
: 
 That was the current Minister of Finance. In the National Party we are never quite sure who the current Minister of Finance will be because frankly those members are all lining up on television and claiming their credentials. A few weeks ago Phil Goff in his caravan did so and Trevor Mallard told us in the weekend that he should be the Minister of Finance but he does not know the difference between an asset and a liability. What a remarkable interview there was with Trevor Mallard on Saturday. When he was asked a question by Lisa Owen he said that it was OK if bonds owned by Meridian Energy went down because the Government still owned the assets. I hate to tell Trevor the bad news but the Government actually owns the liabilities and they are the ones that will have to be repaid with that kind of thinking. 
I am glad Michael Cullen raised in his speech the little issue about bribes. Let us go to the major bribe that this Labour Government had in its campaign: the student loan policy. It was a very interesting policy and it was the first thing in the Budget that Michael Cullen got a clap for and that took 14 minutes—it was about 12 pages into the Budget. Why did he get a clap? Because the blowout in cost was going to be slightly less than he originally thought. That came from a man who when I asked him before Parliament adjourned at the end of the last session what the impact was on the New Zealand balance sheet and what it cost the taxpayer of New Zealand looked at me and said: “I don’t know. I’ll have to go and ask somebody.” When he came back with the answer the figure was $1.5 billion. That has been the write-off to the New Zealand balance sheet. That is what mum and dad have had to pay for and 40c of every new dollar of every loan that goes forward. 
That answer came from the man who claims he is an economic genius. It is no wonder that he is about to retire. Actually the interesting question is whether he will retire. We have it on pretty good authority on this side of the House that the only person who supports Michael Cullen is his wife because Helen Clark certainly does not. She does not talk about Budget 2006. Members opposite refer to it as “Michael’s Budget” because nobody wants to be associated with it. It was a shocker and the message that she was sending— 
Hon Clayton Cosgrove 
: I raise a point of order Madam Speaker. There is a longstanding convention in Parliament—the member may not be aware of it but I know senior members who will adhere to it—that members should not bring family members or spouses into debate. That protocol is generally adhered to by both sides and I would ask you to line the member up on that point. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I just say to the member that it is a convention that family members are not brought into debate. 
JOHN KEY 
: Then the Budget is supported only by Molly the dog. She is the only one that would be prepared to stand next to Michael Cullen and that Budget. 
What do we know about that Budget? Interestingly the first thing we know is that when members look at land transport—the only thing theoretically that came out of the Budget—they will see that of the $1.2 billion $800 million alone went to fix up the hole that was there previously for inflation. There was nothing new about roads and nothing that will fix Auckland’s motorway network in a hurry. That was the centrepiece of this Budget and there was nothing there. 
Something else was very interesting about the Budget. We went into the process telling the Government that it was wasting a lot of money. We did not ask the Government to believe our point of view; we asked it to look at the briefing to the incoming Minister which stated the following about the rationale of spending in New Zealand: “There is little information to indicate that New Zealanders are getting more services and better results from the public sector for the large increase in resources provided. What little information exists is not encouraging.” Why did Treasury write that? Because it had taken a look at the annual bill for the State sector—the core State sector. It found that there had been a 27 percent increase in the State sector and that the wages bill in the last 5 years has doubled—it has gone from $2 billion to $4 billion. Last week Michael Cullen had the audacity to tell working New Zealanders not to ask for a pay rise because he had put so much pressure on the system with his own spending and hiring that they could not have a pay rise. The message to the workers of New Zealand is that the Government does not care about them any more; it just cares about bloating the bureaucracy hiring more people and having them there. 
Chris Tremain 
: And rents in Wellington. 
JOHN KEY 
: Let us have a look at that. This is a Government that now has itself in the position where over 50 percent of all commercial real estate in Wellington is leased by the Crown—one in two buildings in Wellington. I see that Jill Pettis is nodding. Is that meant to be a good thing? 
What was very interesting about the election campaign was the myths that came from the Labour Government. One of the things that came out concerned its borrowing programme. Michael Cullen went on about some nonsense about $8 billion. We have done some calculations about the borrowing programme. This Labour Government as a result of its student loan policy as a result of its Working for Families package and as a result of the things it has done is now in the position where it is borrowing more money than National would have borrowed had it come into office. That is the situation. [ 
Interruption 
] That is absolutely right; it is borrowing $8.7 billion. Parekura does not believe that but he should believe that he has been done over. I will tell him why. The Minister of Finance sat with me on TV during the election campaign and when we talked about saving money in the State sector he said: “Cuts cuts cuts—there’ll be no room.” I say to Parekura that interestingly enough when I picked up the Budget last time what did I find were the two areas that had had money hammered out of them—completely cut—with no explanation or rationale? There was $25 million cut from Te Puni Kokiri and $65 million cut from the Ministry of Economic Development with not one moment of explanation. Those were the cuts that came out. What is not in this supplementary estimates debate is the simple question around tax cuts. Where were the tax cuts? That was the question that was asked and that was the reason why this Budget sank faster than the  
Titanic 
. 
 What is very interesting is the most recent report from Macquarie Economics which came out just a couple of days ago. It shows that of all the OECD countries the only country now running a larger surplus than New Zealand is Norway. There is a reason for that. Norway has a hell of a lot of oil and it is running a surplus of 18 percent of GDP. We are the country with the next largest surplus according to the OECD. [ 
Interruption 
] That is right I say to Jill Pettis. So when Michael Cullen is next asked by Guyon Espiner on Television One about this issue and he says: “Oh $8.5 billion tax cuts—so?” I will tell him that the “so?” question arises because he is running a larger surplus than any OECD country other than Norway and by the way he has been taxing people so much over the last 10 years that they have not had a tax cut for 10 years. 
There is also another interesting little graph produced in this document. This Labour Government goes on and on about how much it has done but quite interestingly this graph shows—and members opposite might be interested to look at this—that during National’s period in Government from 1995 to 1999 revenues did not increase at all. That is right; that was the situation. Taxes did not go up at all because the National Government was cutting taxes. But in the last 5 years there has been a 45 percent increase in revenue. In Australia the number of people on the top personal tax rate has gone from 30 percent to 2 percent. 
Does anyone have any idea of what has happened in New Zealand in that time? Oh that is right the Government said that the top rate would affect only the elite rich those earning $60000 who used to make up 5 percent of taxpayers. That figure has now gone to 11 percent. That is the answer—11 percent of people in New Zealand now pay the top personal tax rate. So that is an interesting question. 
I say to Dr Cullen that the “so?” question arises because New Zealanders are working hard and they deserve to keep what they earn. We have a Government that is overtaxing people and according to the briefing made to the incoming Minister it is wasting every dollar of it. It is no wonder that members opposite do not want to be anywhere near that Budget. It is no wonder that Trevor Mallard is putting up his hand. It is no wonder that David Cunliffe wants to be the Minister of Finance and no wonder that Phil Goff does—and actually Clayton Cosgrove has a sort of sly little smile on his face. They are all eyeing up the chance to become Minister of Finance. They know that when Helen Clark tells a member of the press gallery who works for the  
Listener 
 that although Michael Cullen has been Minister of Finance for years she does not know whether he will read the next Budget those members know it is code for: “Michael you have read two. The last two have been shockers. We are behind National in the polls. We will not take another Budget without a tax cut.” It is no wonder that Michael Cullen is the only one who backs that Budget; I would not go within a hundred feet of it.