9. Hon Sir ROGER DOUGLAS (ACT) Link to this
to the Minister of Finance
Is he comfortable that Government expenditure as a percentage of GDP is set to rise from 31.8 percent in the 2007-08 financial year to 37.3 percent in the 2009-10 financial year; if so, why?
Hon BILL ENGLISH (Minister of Finance) Link to this
The figures do show a considerable rise in Government expenditure as a percentage of GDP, a fact that might be noted by the Labour Opposition, and by the Dominion Post, which labelled our Budget as “Slash and Burn”. The increase in the percentage of GDP is somewhat exaggerated, both by the decline in GDP and by the fact that the Working for Families package and the KiwiSaver initiatives are classified as expenditures rather than tax reductions. Even so, core Crown expenditure will have increased by 45 percent in the 5 years to June 2010, and the Budget signalled clearly that, on behalf of the taxpayer, this Government is setting out to get control of what was reckless growth in Government expenditure.
Hon Sir Roger Douglas Link to this
In what way will the budgeted increase of $450 million for heritage, culture, and recreation do more to kick-start the economy than promised tax cuts worth the same amount, especially when over the last 2 years we have seen a transfer from the private sector to the public sector worth around $10 billion?
Every Minister and every chief executive should be asking himself or herself exactly that question—that is, what they are effectively going to deliver from their increased funding. The Government has signalled clearly that, in the time it has had available as a new Government, it has made considerable savings by tying up the loose ends left by the previous Government. And we have signalled that, over the next few years, Budget increases will be zero or minimal, and that means people will need to find answers to those questions.
Hon Sir Roger Douglas Link to this
Can the Minister explain how the extra $450 million for the heritage, culture, and recreation budget will create more jobs than tax cuts worth the equivalent amount, and is it not true that the Government’s extra borrowing to finance that expenditure is backed by nothing more substantial than thin air?
I agree with the member that because the Government is borrowing billions of dollars over the next 3 or 4 years—in fact, almost doubling public debt—it needs to ask hard questions about every dollar of public expenditure.
Hon Darren HughesWell, that is a bit rich, coming from the Opposition, which criticises every answer that is given. The public of New Zealand understands that those questions should be asked. I think the Public Service is starting to understand that those questions should be asked. The only people who believe that the questions should not be asked are those in the Labour Opposition, and that is why the public does not support them.