Spending less, delivering more

Labour’s aspiring leaders’ expensive promises have provided the government with a golden opportunity to highlight the responsible position it has taken to economic management.

2. JAMI-LEE ROSS (National—Botany) to the Minister of Finance: What steps is the Government taking to responsibly manage its finances and deliver better public services, following fast-rising government spending of the mid-2000s?

Hon BILL ENGLISH (Minister of Finance): We have followed some fairly basic rules that any prudent household or organisation would follow. We make sure that spending commitments are costed and that there are funds available to pay for those spending commitments, at the same time as balancing the need to support New Zealand families through uncertain times. The Government is on track for surplus next year. We have been able to deliver better results in health, education, welfare, and justice at the same time as reducing a very large surplus due in part to the Christchurch earthquake but also due in part to the policies of the previous Government. We intend to continue to deliver better results, in many cases for less funding.

Jami-Lee Ross: What are the benefits for New Zealand families of the Government’s responsible economic and fiscal management?

Hon BILL ENGLISH: The main benefit for New Zealand families has been that they have had a degree of security about their income support and their jobs through some of the more difficult times that this economy has endured in the last 30 years. The cost of living is rising at less than 1 percent a year—a 14-year low. The export sector has been growing in the last 2 or 3 years, despite a high dollar. New Zealand’s 2.5 percent growth in the last year puts us among the faster-growing economies in the Western World. Business and consumer confidence is at, or near, a multi-year high. The Government’s disciplined spending is taking pressure off exchange rates and interest rates.

Jami-Lee Ross: How does New Zealand’s current economic performance compare with the position that the Government inherited in 2008?

Hon BILL ENGLISH: The Government inherited the triple problems of domestic recession, which began early in 2008; the global financial crisis; and the unfunded spending commitments of the previous Government, which saw public spending increase by 50 percent between 2003 and 2008. The New Zealand public is being treated to a display of all the attitudes that led to that, in listening to the Labour leadership contest—

Mr SPEAKER: Order! [Interruption] Order! . . .

Jami-Lee Ross: I will try this one, Mr Speaker. What alternative policies has he seen, and what are the differences between those alternatives and the approach being taken by this Government?

Hon BILL ENGLISH: The Government has set out on a plan to protect the most vulnerable through difficult times, to return to surplus, and to build a more competitive economy. Our policies have been directed at enabling businesses, in particular, to make the decision to invest another dollar, employ another person, and pay a better wage. There are alternative approaches that involve reckless spending promises with no credible plan to fund them, and policy proposals where the Government uses its regulatory powers as well as its cheque book to buy votes. That is the approach we saw through the mid-2000s. But to give credit where it is due, the Labour leadership candidates are promising to spend—

Mr SPEAKER: Order! [Interruption] Order! The Minister has no responsibility for that.

Hon David Parker: After Labour ran nine Budget surpluses and reduced net Government debt from 18 percent of GDP to zero, did he say in 2008, when the global financial crisis and recession hit: “This is the rainy day that Government has been saving up for.”?

Hon BILL ENGLISH: I did say that because we were presented with a pre-election update showing 10 years of deficits ahead of us and ever-rising public debt—that is, public debt that never stopped increasing—in those forecasts. I am pleased to say that we have turned it round, but I am worried to think that the Labour leadership candidates think that they could do it all again.

Mr SPEAKER: Order!

Hon David Parker: Why does he repeatedly blame the global financial crisis and the Canterbury earthquakes for his record borrowing of more than $50 billion in the last 5 years, and if the Government’s spending track was left in such bad shape, how was it that he could responsibly cut taxes?

Hon BILL ENGLISH: Well, it is just hard to know where to start there. The fact is that the tax packages were revenue-neutral—

Hon David Parker: 40 percent to the top 10 percent.

Hon BILL ENGLISH: No, they were revenue-neutral, and I am proud to say that we are the only developed country that has been table to increase GST and cut income taxes. No one else has actually been able to pull that off. In respect of the Government finances, well, as I said to the member, we were presented with 10 years of ever-growing deficits and ever-growing debt and with public services that were a complete shambles. We are proud to have been able to fix up that mess and do better.

Hon David Parker: Why is it that he finds corporate welfare so easy to justify, yet the idea of supporting the working New Zealanders, who keep this country going, through decent labour laws and fair wages seems to get him into a cold sweat and in need of a lie-down?

Hon BILL ENGLISH: The member is simply wrong. This Government has ensured, with regard to the people whom he is referring to—the people who go to work every day, work hard, and pay their taxes—first, that they get taxed at a fair rate, not a ridiculously high rate; secondly, that when they pay their tax, they actually get public services that work; and, thirdly, that they get an economy managed in a way that they can have some security that when they go back to work the next day, they will still have a job. We are very proud of our record in supporting working people in New Zealand through tough times.

The leadership circus has shown that Labour hasn’t learned from its mistakes and highlights the contrast with National which has focussed on spending less and delivering more.

One Response to Spending less, delivering more

  1. Dave Kennedy says:

    Sadly what Bill is claiming is actually untrue, the tax cuts were not fiscally neutral and in reality cut government revenue by at least $1 billion a year.

    His statement that we are getting government services that work is also wishful thinking he should try saying that to:

    -all those who had ACC entitlements denied because of the promoted perception that ACC was in financial difficulties (it wasn’t).
    -the 50,000 education workers dealing with the shockingly implemented Novopay
    -All those who struggled to get the Housing New Zealand call centre to respond when it was initially under staffed
    -All those in genuine need who have to use advocates to get the support that they are entitled to.
    -The thousand who have had their personal details exposed due to mistakes from a number state institutions
    -The 270,000 kids living in poverty
    -The Food banks across the country experiencing increasing demand.
    -The growing mess made through the introduction of the flawed National Standards and the refusal of two Ministers to work with the teaching profession to solve it.
    -DoC workers who have lost their jobs and seeing worthwhile projects cut.
    -rapidly reducing govt services for rural communities that are our economic backbone.

    I could go on…

    Like

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