2. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
Is he aware of any reports of Government spending commitments by the previous Government that have no funding set aside to pay for them?
Hon BILL ENGLISH (Minister of Finance) Link to this
There are quite a large number of such reports, and I will discuss just a few of them. The previous Government made multi-year commitments to a $1 billion home insulation programme, for which no funding was allocated, and it made a range of commitments exceeding a billion dollars of investment in the rail system, for which no funding was allocated. In addition, it neglected to commit to the $1 billion over 3 years needed to maintain the viability of the Accident Compensation Corporation non-earners fund.
Has the Minister seen any further reports of Government spending commitments that have no funding set aside to pay for them?
Yes, I have. No funding was set aside for $300 million of economic transformation announced in the 2008 Budget, and there was only a fraction of the extra $600 million trumpeted for the Ministry of Foreign Affairs and Trade. In the light of those very large commitments, the previous Government pretended that it would put together a Budget on just $1.75 billion for new spending for this year, when its average new spending on the 3 previous years was almost twice that figure.
Hon David Cunliffe Link to this
Does the Minister accept Treasury advice that it is proper practice for future but as yet unfinalised cost estimates to be specified as either specific or contingent fiscal risks; or is he assuring the House that his 2009 Budget will contain none of those?
Treasury appears to have had a great deal of difficulty keeping up with the large number of unfunded promises made by the previous Government, such as the promise of the universal student allowance, which even Labour worked out during the election campaign was a vote-loser, not a vote-winner.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. I see that you are already anticipating the nature of the point of order—that the response does not in any way address the question about the practice of unspecified fiscal risks.
Mr SPEAKERThe question, indeed, asked about the practice with regard to fiscal risks and the treatment in the Budget. I would ask the Minister to respond more directly to that part of the question.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. I am willing to repeat the question or to provide a short tutorial—
The member will resume his seat. Points of order do not have such comments attached to them at all. The honourable member should know that. I will invite him to repeat his question so that all members can ascertain the question and have it answered properly.
Hon David Cunliffe Link to this
Does he accept Treasury advice that it is proper practice for future but as yet unfinalised cost estimates to be specified as either specific or contingent fiscal risks, or is he assuring the House that his 2009 Budget will contain none of these?
Well, the member might like to answer the question as to why the specific and highly contingent fiscal risk of the non-earners account was left out of the pre-election update. Why did the Government try to hide that billion-dollar risk?
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. As you are well aware—and you have already ruled on it—my question was very specific. It was about the 2009 Budget. The member quoted a historical example, which does not counter the point that has been made. I look forward to the Minister addressing the question. Can we have another answer?
The question put to the Minister was pretty specific—it was about the treatment of fiscal risks. The Minister’s response was to ask why something was left out. I ask the Minister to indicate how fiscal risks will be treated in the future, which is what the questioner has asked. It seems to be a reasonable question. In the public interest the Minister does not have to answer, of course.
I raise a point of order, Mr Speaker. If the member wanted the answer to that question he should have asked that question. You have put it much more clearly than the member did, and I invite him to ask a clear, straightforward question.
Hon David Cunliffe Link to this
Mr Speaker, at your direction I have repeated the question twice. You obviously found it clear. I am happy to repeat it a third time if that would assist the Minister.
I invite the member to repeat the question. I expect, though, that if the question is as I heard it before, that technical question is to be answered.
Hon David Cunliffe Link to this
Does the Minister accept Treasury advice that it is proper practice for future but as yet unfinalised cost estimates to be specified as specific or contingent fiscal risks, or is he assuring the House that the 2009 Budget will contain none of those?
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. Given that you have three times directed the member to answer the question, particularly with reference to the forward-looking aspects of Budget 2009, can the Minister confirm that his answer—“Yes.”—was in relation to Budget 2009?
The Minister does not need to enlarge on his answer. He chose to answer one part of the member’s supplementary question, I presume with regard to Treasury advice, and that is all, under the Standing Orders, that the Minister is required to do. If the member adds more than one part to a supplementary question, he cannot expect them all to be answered.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. I seek clarification from you. In the event that the 2009 Budget, for the first time since the Public Finance Act came into force, does not contain any specific fiscal risks, I take it the Minister will not be exposed to—
It seems from estimates from the commitments made by the previous Government that it made an allowance of $1.75 billion, but appeared to make commitments of more than $3 billion.
Hon Trevor Mallard Link to this
Did his answer to my friend David Cunliffe’s last supplementary question apply to the first or the second leg of that supplementary question?
The Minister did not hear that question and I invite the Hon Trevor Mallard to repeat it. I ask members of the House please to keep the noise down so that Ministers can hear questions.
Hon Trevor Mallard Link to this
Can I ask the Minister whether his reply to David Cunliffe’s last question applied to the first or the second part of that question?
Hon David Cunliffe Link to this
Has the Minister seen reports that the Government’s so-called $9 billion economic stimulus package is in fact not new stimulus at all in that it is, rather, spending and tax cut decisions made very largely by the previous Government and before the latest data on the gravity of the international recession became available?
Hon Trevor Mallard Link to this
Will there be unspecified or contingent fiscal risks outlined in the 2009 Budget?
Jeanette Fitzsimons Link to this
Will the Minister admit that the billion-dollar Green Homes programme, which has already been legislated for in section 223 of the Climate Change Response (Emissions Trading) Amendment Act, was to have been funded out of State-owned electricity companies’ dividends, under the emissions trading scheme, and that it is only the actions of his Government in creating uncertainty around the future operation of the emissions trading scheme in the electricity sector that have put its funding in doubt?
I know that that is the agreement the Greens had with the previous Labour Government, but they had also committed the same dividend stream to State-owned enterprises making renewable energy investments. I might also note that the billion-dollar package, which was announced as a billion dollars to make it look big, was apparently going to be spent over 15 years, so there is a good deal of confusion around how many times the State-owned enterprise dividends had been committed to being spent on a number of different things.
Jeanette Fitzsimons Link to this
Is the Minister aware of the vast literature showing that investment in energy efficiency reduces the need for investment in new power stations, and why is he just taking the word of the electricity companies about the need for their dividends, rather than investigating properly?
Yes, I am aware of the literature, as are my colleagues the Hon Nick Smith and the Hon Gerry Brownlee, and they are putting themselves to the task of seeing whether the current Government can creatively take that opportunity.
Jeanette Fitzsimons Link to this
Will the Minister commit to funding the scheme out of his economic stimulus package if the Government moves to destroy the original source of funding under the emissions trading scheme—because this programme provides the best economic, social, and environmental return on any investment programme to secure jobs and the well-being of families?
If such a scheme shows clear economic and productivity benefits, as well as the well-understood benefits particularly for the health of children, then the Government can put it alongside the many other schemes that people claim to me represent infrastructure that will increase the economic, social, and environmental well-being of the country.