1. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
How will Budget 2009 address commitments that were made but not funded in Budget 2008?
Hon BILL ENGLISH (Minister of Finance) Link to this
The previous Government made several unfunded commitments as part of Budget 2008. These were promises that could not be paid for within the generous operating allowance in Budget 2008, so they were charged up against future Budgets. They included a $200-million-a-year economic transformation package, $70 million a year for an expansion of the Ministry of Foreign Affairs and Trade, and $190 million to fulfil contractual pay increases for teachers. As part of Budget 2009, the Government will decide whether they will be kept or dropped.
Some of the obligations are contractual and will be met. Such obligations are teacher pay rises. Others will be assessed against other spending priorities. For instance, we have to decide whether pre-commitments to adjustments in tertiary institutional funding 3 or 4 years away are more important than the growing demand on the probation service and corrections service.
Hon David Cunliffe Link to this
Can he confirm that the biggest unfunded commitment he has cut so far is John Key’s cycleway, and that that is why he said: “we won’t be spending $50 million on it this year, or next year, or the year after.”?
Most of the unfunded commitments are related to Budget years 2 or 3 years away, so ending them will have no immediate effect. It will mean that some people will not get some of the things they might have been expecting, but, equally, no one will lose anything they already have. Unfortunately, we discovered that because no funding had been allocated to these commitments, when we removed the commitments we were unable to make any savings.
Hon David Cunliffe Link to this
What measures does the Minister intend to introduce in the Budget to help the thousands of ordinary New Zealanders who are struggling to pay their mortgages and small business loans, and who are suffering from the banks’ reluctance to lower lending rates in line with the reduced official cash rate? Does he take note of the fact that taxpayers are footing more of the risk via banking guarantees and Reserve Bank asset-building?
Those ordinary New Zealanders decided to do something for themselves by voting the member’s Government out and this one in, just a few months ago. In respect of the banks, the Government and the Reserve Bank are keeping a close eye on them. No doubt there will be a bit of pushing and shoving while we sort out how the banks will share the burden of getting through the recession.
Sue KedgleyHow much will the restructuring of Auckland governance cost? Will these costs be part of Budget 2009, or will all the transition costs be passed on as a debt to Auckland ratepayers when the transition agency winds up?
My understanding is that the costs of setting up the transition board will be appropriated in the Budget.
It is possible to commit only to those things you are actually going to spend money on, and that is what is going to happen in this year’s Budget.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. Yesterday in points of order around question time, we traversed the issue that the phrase “unfunded commitments” in the question was ruled out of order, yet we see it come back in this supplementary question. It is clear that no evidence has been presented for any unfunded—as opposed to unappropriated—future spending commitments.
Hon Gerry Brownlee Link to this
No such ruling was made. The member over there took offence at the use of the term “unfunded”, and quite understandably. The mistake the member David Cunliffe makes is that National voluntarily removed the term “unfunded” from a question. It appeared, therefore, on the sheets that the member probably saw. It was certainly not ruled on, nor was it ruled out of order. Quite frankly, it would be absurd to have it ruled out of order, because unfunded promises are a fact.
Mr SPEAKERI do not need any more assistance on this matter. The phrase is not out of order. Members often do not like supplementary questions, but they do have supplementary questions of their own in which to pursue the issue. I thought the point of order the member was going to raise was that, in fact, the Speaker is not spending any money. The Minister perhaps should not have referred to the Speaker by saying “you”—as in what “you are actually going to spend money on”. Does the member wish to ask further supplementary questions?
Hon David Cunliffe Link to this
Perhaps as a point of order, just to clarify for the record that the supposed—