3. CHARLES CHAUVEL (Labour) Link to this
to the Minister of Finance
Has he received any recent reports on the Government’s fiscal policy stance?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Yes. I have received Fitch Ratings’ New Zealand sovereign rating report, which notes that this Government has run “a broadly neutral fiscal policy stance”. The report also notes that since the early 1990s general Government debt has declined from close to 60 percent of GDP to 25 percent of GDP. Despite this positive review of the Government’s fiscal policy stance, we will remain conscious of inflationary pressures when we announce next year our personal tax reductions.
Hon Dr MICHAEL CULLEN Link to this
Yes indeed. Just today, according to the PricewaterhouseCoopers and World Bank joint study Paying Taxes 2008: The global picture, which offers data on total tax rates, payment frequency, and the time needed to comply with tax regulations, New Zealand is ranked second best in the OECD, after Ireland, and ninth best in the world out of 178 economies. The report goes on to note that—
Hon Dr MICHAEL CULLEN Link to this
—unfortunately, that member has not—outside of all rich countries and the Maldives, the top performers whose business tax systems may be successfully emulated by other countries are Singapore, Hong Kong, Ireland, and New Zealand.
Hon Bill EnglishDoes the Minister believe that people on $39,000 who are paying 33c in the dollar in tax are grateful to him for the way he has accumulated all the money that he needed and that he thought they did not need?
Hon Dr MICHAEL CULLEN Link to this
What endless public opinion surveys show is that people do not believe that we should borrow for tax cuts, unlike that member; people do not believe that we should cut social services to pay for tax cuts, which that member did in 1999; people do not believe that the entire benefit of tax cuts—
Hon Dr MICHAEL CULLEN Link to this
That member in 1999 cut New Zealand superannuation and cut taxes. He is far too young to be suffering from that kind of premature amnesia, and I will continue to remind him and bring him up to date.