KEY POINTS:
The most interesting thing in yesterday's Budget lay in the annexes and the books that the Minister of Finance released at 2pm. It was a telephone book of information.
My copies will not reach me at Lake Rotoma until tomorrow, so I rang a parliamentary colleague to look up some tables to give you an idea. One that interests me is Treasury's prediction of how many of us are going to be ill enough to be on the sickness benefit. Treasury says in Core Crown Expense Tables, Table 6.3, on page 180, that over the next four years another 6000 adults will have to go on the sickness benefit. Every year the number of people on the sickness benefit keeps rising. It is disguised unemployment.
Another figure, the total tax take. It's a big number, $52 billion. So big it is meaningless, but we can compare it to the total tax in National's last Budget, $32 billion, and do the mental arithmetic. Total tax has gone up $20 billion!
As the first Minister of State Owned Enterprises, I like to see how my babies are doing. The total cash contribution of the SOEs is a massive $1.032 billion, nearly half the cash surplus, much of it comes from the electricity companies.
Then you need to interpret the figures. Is $1 billion from the SOEs a good performance? The answer is no. The private electricity companies are outperforming the state generators. TV3 is outperforming TVNZ. I have just published a book, Out of the Red, which examines why the SOEs once outperformed the private sector. (It was leadership). The SOEs are some of the nation's biggest companies but there is no analysis of their performance. The Budget tables do not tell the cost of appointing cronies and politically correct boards. Last year, we had the lowest increase in productivity since we began keeping records. To reach such a low figure the productivity of some state enterprises must be going backwards.
There is something else that is not in the Budget or the tables that is causing inflation - the number of civil servants. Labour has added 24,500 civil servants to the payroll. What do they do? Not much. Treasury says there has been no improvement in any government services. Last year civil service pay increased around 40 per cent faster than inflation and 30 per cent faster than the private sector. Forget house prices. Wages increasing faster than prices combined with low productivity is inflationary.
The Opposition says we need to restrain spending increases. We need some courageous politicians to tell us we need to cut spending and to say where. Few citizens would notice if we abolished every single commission. However, we would all notice lower interest rates.
