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Key plans no-frills Budget for May

Published: 2:32PM Sunday April 01, 2012 Source: ONE News

Prime Minister John Key says he expects very little, if any, new Government spending to be announced in this year's Budget.

Speaking on TV ONE's Q A programme, Key said most government ministries will be expected to find further savings within their existing allowances.

"Last year's Budget was a zero budget and there is every probability this year's Budget will be zero or very close to zero," he said.

"That is because the Government is absolutely committed to getting back into surplus by 2014/15."

Key said health and education are likely to be the only departments given more money to spend, while all others will be expected to find savings.

Cut backs have been talked about for several weeks with the Prime Minister revealing last month plans to merge four departments and set specific goals for ministries to achieve in the next three to five years.

Key said he wanted to see a more efficient public service that costs less to run, employs fewer people, and does a better job than it does now.

The Ministry of Foreign Affairs and Trade has also recently announced it was looking to axe 300 jobs to save money.

ACC saga

Key was also asked about the ongoing ACC saga which has seen former minister Nick Smith resign from Cabinet, and colleague Judith Collins threatening defamation action against two Labour MPs and Radio New Zealand.

Collins has been repeatedly questioned about who leaked an email containing personal details about Bronwyn Pullar, an ACC claimant, at the centre of the affair.

Key said Collins is a person of "high integrity" and he supports her actions if she feels she has been mis-represented. It is unclear, though, whether tax payers will have to contribute to any legal costs.

"She would be in her rights to ask for support, the cabinet manual makes that clear," Key said, "It's a decision Cabinet needs to make."

He would not be drawn on whether he would personally support tax payers money being used to pay for the case, but said there is a principle at stake.

"It's all very well (the public) having a go at Judith Collins, but two senior members of the New Zealand parliament, in the view of Judith Collins, have defamed her."

Key himself was dragged into the affair this week when TV ONE's Close Up revealed a letter sent from Sovereign Insurance to former National Party president Michelle Boag in 2007.

It named National Party figures, including Key and former Prime Minister Jenny Shipley, in an attempt to get more than $14 million to settle an income insurance claim by Pullar, Boag's friend and former National Party activist, who suffered a head injury in 2002.

"Of course I'm not happy with that because some people watching Close Up or ONE News will have taken the view that I am some how associated when I'm not," he said.

Key said he has never been involved in a group supporting Pullar's claim and people use his name without his permission regularly.

He said his dealings with Pullar have been limited to the occasional conversation when he first joined the National Party, where he said she had told him about her grievance with ACC.

"The irony of this is that our political opponents would want to argue Bronwyn Pullar's had special treatment from ACC because of her association with the National Party but infact the very reason she's completely dissatisfied with ACC tells you that's not the case."

Key said he had no idea where the controversial leaked emails have come from and rejected the suggestion it had come from within his own party for the purposes of preparing for a leadership challenge.

He said he expects to be leader of the National Party at the next election.