2. JOHN KEY (National—Helensville) Link to this
to the Minister of Finance
What is the Crown’s actual operating balance for 2005-06, as reported in the last line of table 3 of the Financial Statements of the Government of New Zealand released yesterday?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
The figure is $11,473 million, of which approximately $2.8 billion is accounting and revaluation changes, and $2.9 billion is investments and returns on the New Zealand Superannuation Fund.
Has he seen page 21 of the Financial Statements of the Government of New Zealand, which indicates that in the year 2000 tax revenue as a percentage of GDP was 28.8 percent, and that it has now risen in 2006 to 33.1 percent, at a time when GDP has clearly been growing; and how can he justify taking an even larger slice of the cake?
Hon Dr MICHAEL CULLEN Link to this
In that time we have done a number of things. We have, for example, restored the level of New Zealand superannuation, which was cut by the previous National Government. We have removed the policy of very large increases in student fees every year. We have established interest-free student loans. We have massively increased the Working for Families payments, which count as expenditure as opposed to tax reductions in terms of the accounting principles. According to a report I have recently seen, New Zealanders are 88 percent satisfied with their quality of life in New Zealand. I suspect that that figure would be matched in very few countries in the world.
Hon Mark GoscheHas he received any reports on the consequences of large-scale tax cuts in an economic environment with inflationary and current account imbalances?
Hon Dr MICHAEL CULLEN Link to this
I have seen reports of Australia’s experience of introducing large-scale tax cuts earlier this year. The result was higher interest rates and higher mortgage repayments, leading to a slump in consumer sentiment.
Is the reason that the Minister of Finance raised more revenue than could arguably be required that the Labour Party—as we now find out, in the very recently received report from the Controller and Auditor-General—had spent $768,000 of taxpayers’ money, and will he be decent enough to pay the money back?
Hon Dr MICHAEL CULLEN Link to this
The member yesterday was terribly excited about an $11.5 billion surplus. The proportion of that figure that $750,000 represents is not even within the daily forecasting error by Treasury.
Is the Prime Minister not in the House because she is embarrassed, as the Labour Party is, that Labour owes $768,000?
Madam SPEAKERWould the member please be seated! When I stand, members sit. That question is outside the scope of the primary question. Does the member have another supplementary question?
Hon Phil GoffWould members on the Government side of the House also stop their interjections that are likely to provoke other interjections. Right from the outset, let us remember what the rules are.
When the Government increased its tax revenue last year to a whopping 33.1 percent of GDP, was it because the Government knew that it needed $768,000 of taxpayers’ money, and is that the reason the Prime Minister is not here today to defend that—because she is deeply embarrassed about the situation—or had she seen the report already?
Hon Dr MICHAEL CULLEN Link to this
The expenditure referred to represents approximately 0.001 percent of total Government revenue for the year. What I would like the member to do is to explain what the National Party spent its leader’s budget on, as no invoices are available and the Auditor-General could not examine what it spent the money on.
If the $768,000 of taxpayers’ money that the Labour Party inappropriately spent is so insignificant at 0.001 percent of GDP, why does the Labour Party not have the courage to pay the money back?
Hon Dr MICHAEL CULLEN Link to this
I have no parliamentary responsibility for that question, as Minister of Finance or as acting Prime Minister. The Prime Minister will respond, when she has had a chance to read the reports.
Has the Minister seen page 19 of the Financial Statements of the Government of New Zealand, and if he has seen it, could he explain why yesterday he told the House: “The fact is that the largest operating surplus, as a percentage of GDP, particularly excluding accounting changes, occurred when Sir William Birch was the Minister of Finance.”—if he has read page 19, he will know that, in fact, the graph shows that the highest level under Sir William Birch was 3 percent of GDP, yet yesterday the surplus was 7.3 percent of GDP—and yesterday when he tacked on his pithy little answer: “The member just makes it up as he goes along.”, was he the member he was talking about?
Before members go any further, I draw their attention to Standing Order 371, to which reference was made yesterday. If members would like to consider that. They should ask their questions straight, without other comment, and the answers should be given in like way.
Hon Dr MICHAEL CULLEN Link to this
I assume, Madam Speaker, that when the question has not been asked in that way, the answer can follow likewise. Of course, the member is so upset because he got the pith taken out of him yesterday.