3. Hon MARK GOSCHE (Labour—Maungakiekie) Link to this
to the Minister of Finance
Has he received any reports on prudent levels of Government debt?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Yes, I have seen a report from Standard and Poor’s that says that this Government’s fiscal management has made New Zealand one of the best prepared nations for facing the challenge of an ageing population. I have also seen reports from bank economists highlighting the importance of our strong fiscal position in counterbalancing the large current account deficit, a symptom of our poor savings record that KiwiSaver is designed to address—and the number of people signed up has now passed 150,000.
Hon Dr MICHAEL CULLEN Link to this
Yes, contrary to this kind of strategy I have seen a report suggesting that we should be borrowing to spend more on roads, although no doubt the borrowing will be used for a wide range of other purposes. Not only does this ignore the massive increases in spending on road-building under this Government but also it is inflationary and it will reduce our capacity to deal with upcoming fiscal challenges. And, of course, although it is espoused by Mr John Key, it contradicts the constant calls for fiscal tightening by Bill English.
Hon Dr MICHAEL CULLEN Link to this
As I think Mr Key might be wont to say: “That depends on how you define borrowing.” I have seen a report suggesting that we do not have to call it borrowing if we get the money from overseas. Given that this report comes from the same National MP who has recently lobbied for the prohibition of water, I hope that Mr Key has not been paying her too much attention.
Hon Bill EnglishCan the Minister confirm that his Budget documents, as released today, show that he had planned a billion dollars in personal tax cuts but had to abandon them because he could not contain ministerial bids for spending and, as a result, we had the biggest spending Budget ever?
Hon Dr MICHAEL CULLEN Link to this
I can confirm that the issue was raised in the early discussion of the Budget. Of course, rather than cut back on social services and rather than stimulate inflation, the Government did not proceed, which shows that the reason for not proceeding had nothing to do with ideology and everything to do with good economic management. Mr English is now saying that the Government should have run a looser fiscal policy.