2. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does he stand by all his recent statements?
Hon BILL ENGLISH (Minister of Finance) Link to this
Yes, particularly those statements that have been critical of the bizarre economics we are hearing about from the Labour Party.
Hon David Cunliffe Link to this
Does he still stand by his statement of 10 June that “… taxpayers are supporting the banks, and we want the banks to be able to demonstrate that they are going to support business and households through a tough time in the economy, even if it affects their profits a bit”?
The member asked me that question yesterday. I said I did stand by those statements. The fact that he has asked that question again today tells me he has nothing else that he can question the Government about.
Hon David Cunliffe Link to this
To the contrary, I have three more supplementary questions, the first of which asks: why was he clear last week that banks should be passing through official cash rate cuts to short-term interest rates, whereas this week he says the Government’s most important objective has been to ensure stability and orderly lending in the banking system, and can he tell the House whether he has received any representations or contacts from the banking sector in the last week that might explain his change of emphasis?
We have not changed our emphasis. There is some argument to be had about the gap between the floating rate and the official cash rate, but I would have to say it is not our top priority. The answer to the second question is yes.
Chris TremainI have. I have just received a report that tallies up the promises made by the Labour Party so far in the course of the Budget debate and its comment on Government policy. So far they add up to only $5 billion; I expect that number to get much greater over the next 12 months.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. It is a two-part point of order, and I am sure that you can anticipate what it is. In the first place, the dear old Minister has absolutely no responsibility for the Labour Party. Secondly, the Labour Party has not released its policy for the next election yet; therefore, we cannot have made any spending promises.
Hon Rodney HideOf course the Minister of Finance does not have responsibility for Labour Party policy, but he does have a responsibility to receive a large range of reports, which is what we would expect from a competent Minister of Finance. That is directly what he was asked about and what he was commenting on.
Mr SPEAKERI thank honourable members. I do not think we need to take more time on this issue. What the Minister must not do is to go on and comment on the quality of the policies he has received reports on when they are Labour Party policies.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. The Minister appeared to be quoting from a report. If he was, I require it to be tabled.
It is certainly a report, but before I table it I must correct a figure. I said it was $5 billion; actually, it is $6 billion.
I am quite happy to table it, because I am sure that the Labour Party is not keeping track of that figure, but I did not think it mattered whether the report was an official one. I am happy to seek leave to table the report—
No, the Standing Orders require that when a Minister who is answering a question quotes from an official document, another member of the House can ask the Minister to table that document. That is quite proper; it is not a matter of seeking leave. The House can ask for the document to be tabled when an official document is being quoted from. That is why I was checking whether it was an official document.
We are dealing with this now. The Speaker has been told that it is not an official document, so I have to take that at its face value. The Minister is now seeking leave to table a document in his possession that is apparently a compilation of figures. Leave is sought to table that document. Is there any objection to that document being tabled? There is none.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. My point of order now is that the Minister claimed that he was quoting from a report. His ministerial responsibility for answering the question was attached to the fact that there was a report. My request to you, Mr Speaker, is that after question time you look at the supplementary question and the Minister’s response to it, and you come back and rule on whether the Minister did have any ministerial responsibility, given the fact that he did not have an official report on this matter.
There is no need for the House to take more time on this matter. That is no responsibility of the Speaker whatsoever. The Minister was asked whether he had reports. He has a report and he has now tabled it. The report is available on the Table, and that is where the matter ends as far as the Speaker is concerned. Members can make their own judgments about the quality of the report that has been tabled.
Hon Clayton Cosgrove Link to this
I raise a point of order, Mr Speaker. You have been very vigorous, Mr Speaker—and I think you were quite vigorous this week with one of my colleagues—in requiring members who are tabling a document to provide a detailed description of that document. That is your right, and you have ruled on that. Further, you have been quite vigorous—and I will not comment on the veracity of this—in berating members when you take the view that a document does not exist. You have used that term quite often. When the member sought leave to table the document, you did not require a similar—
The member will sit down forthwith. The document exists. I have been concerned about the seeking of leave to table documents when they do not exist. The document was being held in the Minister’s hand. He had already described what it was, because he read out a whole lot of figures from it. The member is wasting the time of the House.
Hon Clayton Cosgrove Link to this
I would be grateful if you did not anticipate my point of order. You have required not only a detailed description, but also—quite rightly; I agree with you—that members, when tabling documents, provide authentication and details of the source of those documents. I put it to you that you did not require the Minister to give details of the source of that documentation. That Minister got the invitation to table the document, and he did, but I invite you to be as vigorous with members on that side of the House as you are with those on our side.
I do not need further assistance. I warn the Hon Clayton Cosgrove that any further such comment from him will have him leaving the Chamber for the rest of this sitting day. I will not tolerate any further comment from him of that kind.
Hon David Cunliffe Link to this
Can the Minister tell the House which banks he has received representations from and on which dates he received them, since he just answered “yes” to my previous question “… can the Minister tell the House whether he has received any representations or contacts from the banking sector in the last week that might explain his change of emphasis?”
I cannot see any point that the member has made about a change in emphasis. I am in regular contact with the banks, because of the importance of ensuring that banks continue to lend. If they stop lending, people will lose their jobs. That is more important than a bit of cheap politicking over one small aspect of the interest rates. In the last week I have spoken to probably three, if not four, of the major banks.
Metiria TureiIs the Minister not concerned that the official cash rate has fallen by 5.75 percent, but that credit card rates have fallen by only 1.5 percent, and does he not think that this is clear evidence of the banking sector failing to pass on savings to New Zealand families in deep need of relief and is yet another reason to hold an inquiry into the banking sector?
I support New Zealand families and businesses being able, in a competitive banking market, to pick the lowest rate that they can find, because that is what will keep the banks honest. If a parliamentary select committee thinks it can change the way that banks set their interest rates, I invite it to explain just how it will do that.
Dr Russel NormanWhy is the failure of the banks to pass on the cuts in the official cash rate to ordinary New Zealanders not a top priority, as the Minister answered to an earlier supplementary question, when it is costing New Zealand families millions of dollars; and in the meetings earlier this week with at least three major banks that the Minister talked about earlier, did he communicate to the banks that that was not his top priority?
I have been absolutely open about the Government’s top priorities. The first priority is banking stability, because we have seen the enormous damage it has done in the US, the UK, and European economies when weak, unprofitable banks have collapsed. It is our top priority to make sure the banks are stable. Our second priority is that they keep lending. Whatever decisions are made about interest rates for the people who are renewing their borrowing and whatever arguments can be made there on behalf of those who are interested in the floating rate, which is a very small proportion of the market, are less important than the fact that the banks keep lending to the whole economy, so that people can keep their jobs.
Hon David Cunliffe Link to this
Why would the Minister expect the banks to take seriously his earlier protestations about the interest rate pass-through, when he has had contact with nearly all of the major banks in the last week and, presumably, confirmed to them what he told the House: that the Government’s top priority is their financial stability?
It may be a revelation to that member, but from observing the practices of banks over the years I can say that politicians’ opinions about interest rates are only one factor that the banks take into account. I communicate with the banks about those issues that I think are the most important for the health of the economy and our ability to grow out of recession and replace jobs. I am quite happy that the job of raising the relatively small but legitimate issue of the gap between the cash rate and the floating rate is something that the Finance and Expenditure Committee has picked up. That issue has had a lot of airing in the media, and we will see whether the banks take any notice of that.