2. PESETA SAM LOTU-IIGA (National—Maungakiekie) Link to this
to the Minister of Finance
What reports has he received on economic imbalances inherited by this Government?
Hon BILL ENGLISH (Minister of Finance) Link to this
I have seen a statement from the Fitch Ratings agency saying that New Zealand’s economy is burdened with severe imbalances, as indicated by a persistently large current account deficit and now growing public debt. The deficit ballooned under the previous Government’s decade of economic mismanagement. Labour campaigned on the idea that the current account deficit was too big when it was 5 percent of GDP. By the time Labour had left office, it had almost doubled. The Government is addressing these imbalances by implementing policies that promote exports and investment over borrowing and consumption, which have been the pillars of economic management for the last 10 years.
Peseta Sam Lotu-Iiga Link to this
Has he seen any reports in the last week arguing for large increases in Government spending?
Despite the warning from a number of ratings agencies that out-of-control Government spending could lead to a downgrade in New Zealand’s credit rating, I have seen reports from the Leader of the Opposition who yesterday proposed that everyone should get the dole, regardless of the family income, and today he is reported as backtracking on his call for the dole. When asked whether it meant everyone should be entitled to the unemployment benefit, no matter how wealthy his or her partner, he said: “No, no, that’s not true.”, which directly contradicted what he said yesterday.
Peseta Sam Lotu-Iiga Link to this
What are the implications of Mr Goff’s proposal to expand the welfare system?
Mr SPEAKERI think the member might want to rephrase that question, because the honourable Minister has no responsibility for the background of the proposal. He can comment only on reports he has seen in that regard.
Peseta Sam Lotu-Iiga Link to this
What are the implications of the report that the Minister heard of detailing Mr Goff’s proposal to expand the welfare system?
It is pretty hard to work out the implications, because yesterday Mr Goff promised that anyone who lost his or her job under Labour would get the dole regardless of his or her spouse’s income. Today he has backtracked on it, so we are not sure whether he is for it or against it. We suspect that he is not sure either, because he is trying to satisfy two contradictory factions in his caucus.
Hon David Cunliffe Link to this
Despite the historically low debt, low unemployment, and higher growth inherited from the previous Labour Government, when will the Minister stop whining about the economy he inherited and start formulating some new ideas and a real plan to lift New Zealanders’ incomes, or is he happy to hide behind the skirts of the Secretary to the Treasury and the Governor of the Reserve Bank?
The only whining is coming from Labour members, who have yet to understand just how bad the effects of their decade of economic mismanagement have been. For instance, in this once-proud exporting nation, in the last 5 years we have seen exports in recession. In fact, the tradable part of this economy shrank in the last 5 years, while the non-tradable part of it grew by 20 percent.
Hon David Cunliffe Link to this
In light of Fitch Ratings’ downgrading of New Zealand’s credit rating watch and Alan Bollard’s criticism last week of the lack of saving in New Zealand, does the Minister now realise that cancelling the research and development tax credit, cutting KiwiSaver contributions, and suspending contributions to the Superannuation Fund undermine New Zealand’s performance, or does he think that the timing of Fitch Ratings’ downgrade was purely a coincidence after John Key’s speech?