3. SHANE JONES (Labour) Link to this
to the Minister of Finance
Has he received any reports on alternative fiscal strategies?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
I have seen lots of them, nearly all emanating from the National Party. In particular, I have seen a report suggesting that the Government should have run lower surpluses over the last few years—that is, adopt a more expansionary fiscal approach. This report came from Bill English, who for months has been saying we should be running a tighter fiscal stance.
Hon Dr MICHAEL CULLEN Link to this
Yes. Adopting a more expansionary fiscal approach would have increased inflationary pressures and led to high interest rates and a high exchange rate. I have also seen a report stating that the Reserve Bank should have moved sooner and more dramatically on interest rates. These reports all come from Bill English. I do not support his high interest rate, high exchange rate, spendthrift approach.
Hon Bill EnglishCan the Minister name the current Minister of Finance who is running a high exchange rate, high interest rate, high spending policy?
Hon Dr MICHAEL CULLEN Link to this
I can name the current Minister of Finance who has been running a policy of substantial surpluses, leading against inflationary demand. I also note that the same Minister of Finance, Dr Cullen, presented a Budget last Thursday that the financial markets concluded did not place further pressure upon the Reserve Bank. I can name an Opposition finance spokesperson who had two positions on fiscal policy last week, and, when asked what his position was on tax cuts, said: “Well, look, that’s a hypothetical question.”
R Doug WoolertonWould the Minister be prepared to at least review other nations’ monetary fiscal policies, with a view to amending the Reserve Bank of New Zealand Act to potentially better the economic outlook for exporters and businesses in New Zealand?
Hon Dr MICHAEL CULLEN Link to this
My understanding is that the select committee is finalising terms of reference for an inquiry. No doubt that will be looked at. I note that if we look across at Australia, we see that it does have multiple objectives within its relevant legislation, but in practice the Reserve Bank of Australia does actually target inflation as its primary target.
Dr Pita SharplesKia ora, Madam Speaker. What work is the Minister aware of in progressing the genuine progress index as a comprehensive measure of the economic accomplishment of our nation?
Hon Dr MICHAEL CULLEN Link to this
I am aware of significant work in that regard; in particular, my colleague Maryan Street has shown a very strong interest in this area and has brought proposals forward for discussion. I am aware that under such measures, for example, those countries that are often praised by members opposite as being highly successful have shown very, very modest—in fact, negative—increases in genuine progress over the last 30 years.
Judy TurnerAre the expected benefits from United Future’s business tax cuts (a) better wages for workers, (b) improved international competitiveness with Australia, (c) a more innovative and dynamic economy, or (d) all of the above; and can the Minister confirm that United Future pushed for this package?
Hon Dr MICHAEL CULLEN Link to this
I think that all of those benefits can be expected. The package is an outcome of the confidence and supply agreement with United Future, which was also mirrored in the confidence and supply agreement with New Zealand First. It was supported in the House by Labour, Progressive, United Future, and New Zealand First. It was opposed by the National and ACT parties.