4. Hon BILL ENGLISH (Deputy Leader—National) Link to this
to the Minister of Finance
What is Treasury’s best estimate of how much is available for new spending in Budget 2009 after pre-commitments and future charges against it are deducted from the allowances signalled in the 2008 Budget?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
That depends on whether one includes only spending commitments formally made, or whether one includes an assessment of likely major pressures.
Can the Minister give us an estimate, based on those expenditures that were committed to in the 2008 Budget, plus those that were not formally made but have to be paid—such as $200 million for teachers’ pay increases—and can he advise that it will leave him with something like $300 million of spare cash for the 2009 Budget?
Hon Dr MICHAEL CULLEN Link to this
In terms of the formal commitments in the Budget, I think the total was $1.14 billion out of $1.75 billion. Since then, however, there have been a number of further commitments: the police pay round is now under consideration by the police for ratification; there has been a pay offer to caretakers and cleaners, which I think is still out for ratification; and there are, obviously, the commitments in relation to the emissions trading scheme—the one-off payments in that case. There are also some issues, of course, around the acceleration of Treaty of Waitangi settlements. If all likely major pressures are included, then the operating allowance is pretty much fully committed for 2009-10.
If the allowance from 2008 for 2009 is already committed, before the Government has started making extravagant election promises, how does it intend to fund the undertakings it has made to the Greens, including a $1 billion insulation programme and $400 million for emissions trading scheme compensation?
Hon Dr MICHAEL CULLEN Link to this
I am sorry but I misunderstood the member’s question—I thought he was referring to the spending allowance for 2009-10. His latest supplementary question refers to, obviously, the contingency for 2008-09. There is still some room left in the 2008-09 contingency at this stage—probably around $20 million for 2008-09, and $32 million for the out-years.
Charles ChauvelHas the Minister seen any proposals on alternative ways to raise additional revenue to provide greater opportunities for new spending in Budget 2009?
Hon Dr MICHAEL CULLEN Link to this
Yes, I have seen a proposal from National to scrap the research and development tax credits, which would cost businesses a very large amount of money, and to transfer that money from the private sector to the public sector. I have also seen, amongst proposals to somehow or other retain a cap on the number of bureaucrats, proposals for new Government departments, such as a new Department of Immigration, a new Environmental Protection Agency, and—apparently—a new office of chief scientist.
Can the Minister confirm that he has advised the Public Service to find significant savings—or, to use the Labour Party term, “cuts”—in order for him to be able to cover the commitments he has made to the Greens, including a billion-dollar insulation programme and $400 million of emissions trading scheme compensation, and in order to cover the fact that the allowance he has left for the next Budget has virtually gone already?
Hon Dr MICHAEL CULLEN Link to this
No, I cannot. The member appears to be having a conversation with me, when the conversation really seems to be directed towards his benchmate. Mr English is arguing that there is no room in next year’s Budget for large, new fiscal initiatives; well, that is something I have been trying to tell him for quite some time.