10. RODNEY HIDE (Leader—ACT) Link to this
to the Minister of Finance
In his last eight Budgets as Minister of Finance, which of Sir Roger Douglas’ initiatives, if any, has he reversed and which ones has he kept?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
I could give a long answer, but I will try to just cover the highlights. The Labour Government has continued the policies of enhancing support for families through the taxation system. It has continued to increase spending on health and education, and has continued to reject National Party fiscal profligacy. We have rejected policies of State asset sales, a flat-tax regime, and an uncritical belief in the power of the market. Finally, I have never presented proposals with major fiscal implications to Cabinet without a Treasury report, as Sir Roger did.
Why, if Sir Roger Douglas’ policies were so bad, has the Minister not reintroduced a wage and price freeze, fixed the New Zealand dollar, brought back supplementary minimum prices, abolished GST, raised income tax back to 66c in the dollar, re-established import licensing, repealed the State-Owned Enterprises Act, or abolished the Reserve Bank’s independence—or are those policies OK now, although they were not in the 1980s?
Hon Dr MICHAEL CULLEN Link to this
I think that perhaps the member was the one who fell on his head while dancing. The wage and price freeze was introduced by National, not Labour. Labour abolished the wage and price freeze, and I never supported it. Supplementary minimum prices were introduced by National and abolished by Labour, but I have noticed today that Mr English and Mr Key were arguing that we should have had increased sheep numbers in order to keep the number of meatworks open. The only way that could be done would be by subsidising farmers to have more sheep than they have at the present time. And it is not the policy of this Government to abolish GST. GST was introduced by the Labour Government, and I have supported GST since its introduction, though I had doubts about it before it was introduced.
Hon Mark GoscheDoes the Government plan to follow the advice of Sir Roger Douglas to sell off the remaining assets?
Hon Dr MICHAEL CULLEN Link to this
No. Unlike the National Party, we are very clear on that issue. We have halted the fire sale of the family silver, and indeed we have bought back some of the assets that were sold. We are certainly not planning, as Sir Roger is now proposing, to sell off the prisons, sell off the schools, and sell off the hospitals, and to follow Sir Roger’s famous motto, which I tried to coin for him: “So little time, so much to sell”.
Rt Hon Winston Peters Link to this
Does the Minister regard his major initiative—to not allow a return to the domination of politics in this country, and particularly of economic policy, by someone who ushered in a collapse in 1987 of the sharemarket that saw six of the 10 worst crashes in the world, including the four worst, occur in New Zealand—as some sort of record of his tutelage in running the finances of New Zealand?
Hon Dr MICHAEL CULLEN Link to this
Fairness overcomes me. I do not think it is fair to blame Sir Roger for the 1987 sharemarket crash, which was an international phenomenon. However, it is true that the level of speculation in the New Zealand economy before 1987 meant that the crash was more severe in New Zealand than in many other countries, and that the effects of it lasted longer than in most other developed countries.
Given that the Minister has stuck by the policies of the 1980s, why is he now against having a scholarship for every child, as every party bar the communists in Sweden now supports; against welfare reform like that introduced by President Clinton; against health vouchers, as introduced by the British Labour Government; against a flat-tax system like that in the ex-Soviet states; and against privatisation, which occurs everywhere except in Cuba, North Korea, Burma, and New Zealand under National or Labour?
Hon Dr MICHAEL CULLEN Link to this
Most of those policies have been very poorly described by the member, but let me just take one. He seems to believe that Sir Roger still supports a flat-tax policy. I have news for him: Sir Roger’s latest version—no doubt with yet another whiteboard covered in indecipherable numbers, as was his wont— now is to have a tax-free income of $20,000 a year and then a progressive taxation system after that. That is not a flat-tax system.
For the Minister’s benefit, I seek leave to table ACT’s policies that explain exactly how a flat tax operates.
Hon Dr MICHAEL CULLEN Link to this
I ask whether this is ACT’s policies or Sir Roger’s policies. I am well aware of the differences from the past.
Madam SPEAKER