4. SHANE JONES (Labour) Link to this
to the Minister of Finance
What reports has he received on the likely impact of an ageing population on New Zealand’s finances?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
That is not a personal question. I recently received a Standard and Poor’s report that concludes that this Government’s programme of debt reduction and provision for future superannuation costs has made New Zealand one of the best-placed nations in the world to cope with the costs of an ageing population. The report also noted that tax cuts on the scale of Australia’s would be “very short-sighted” and questioned whether they would be sustainable.
Hone HarawiraTēnā koutou te Whare. In light of the significant difference in life expectancy, with Māori dying an average of 8 years earlier than non-Māori, what reports has the Minister received outlining the impact of that disparity on the economy, and is that a concern for the Government or is the Minister pleased to be saving money?
Hon Dr MICHAEL CULLEN Link to this
It is very doubtful that that disparity saves much money, given the higher health-care costs that are incurred as a consequence of low health standards amongst many Māori. I can report that publications due to come out in the near future will show that those disparities are being reduced under this Government.
John KeyCan the Minister confirm that one of the most important ways to prepare our economy for the demographic changes is to have a skilled and motivated workforce here in New Zealand, and can he also confirm that one of the most debilitating factors for our economy has been that so many skilled and motivated workers have in the past 6 years got up and moved to Australia because the wage gap has widened from 20 percent to 33 percent under his watch; if he cares so much about those issues, what does he intend to do about them before he retires?
Hon Dr MICHAEL CULLEN Link to this
Yes, and no. I can confirm that we have maintained net in-migration of 10,000 a year, that we show a net in-migration of skilled people, and that throughout every year in the 1990s, under a National Government, out-migration to Australia increased in net terms, including in the 2 years after tax cuts.
Has the Minister seen any other reports on why alternative strategies may be short-sighted and unsustainable?
Hon Dr MICHAEL CULLEN Link to this
Yes. The Monetary Policy Statement from the Reserve Bank highlights the current inflationary risk facing the economy. In such an environment, it is clear that large-scale tax cuts without corresponding expenditure reductions would fuel inflation and increase interest rates, as a former Governor of the Reserve Bank would himself have said when he was the Governor of the Reserve Bank.