2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Minister of Finance
Does he intend to renege on any of the promises he has made to New Zealanders about actions his Government will follow; if so, which promises?
Hon JOHN KEY (Prime Minister) Link to this
I am not going to comment on what is in the Budget, because members can wait another day for that. But what I would say is that one of the promises that New Zealanders were made by a National Party in Opposition, now a National Government, is that we will show good leadership when it comes to the economy. When New Zealanders see the Budget tomorrow they will know that, just like Standard and Poor’s comments on Tuesday, National tends to be a much better manager of the economy, or words to that effect. [ Interruption]
A great clap for somebody breaking his word! [ Interruption] If members opposite are going to interject before I even ask my question, I am going to reply—
Mr SPEAKERWould members just settle down a little. I note the deputy leader of the Labour Party was interjecting while her own leader was trying to ask a question, and interjected in a very inappropriate way, I might add, but I will not take that matter further. Please, if members would settle down a little. The honourable Leader of the Opposition has the floor.
Does the Prime Minister recall saying in this House: “Most of all, New Zealanders will be able to believe our tax cuts, they will be able to trust our tax cuts … You see, we believe in tax cuts, we believe in the power of tax cuts, and we will deliver them. What is more, we can afford to do it.”, and what do his plans to renege on those promises say about his credibility and his trustworthiness now?
As if it were only yesterday, I remember making those comments, and that is why so many New Zealanders have thanked me for the tax cuts that we delivered on 1 April, only months after being sworn into office.
Nathan GuyYes, I have seen two such reports. The first was in the 2007 Budget where Michael Cullen cancelled the income tax cuts he had promised. I note that at the time he cancelled them the Government surplus was $8 billion. The second was a recent report in the Weekend Herald regarding Labour’s promised tax cuts in 2010 and 2011. Because of the severity of the global recession, someone who likes to tweet on Twitter from time to time, David Cunliffe, said: “It therefore follows that we would likely have had to scale them back to maintain a fiscally prudent stance.”
Did the Prime Minister say: “… I personally guarantee that we will: … [reduce] personal taxes on 1 April 2009, 1 April 2010 and 1 April 2011.” and did he personally guarantee that reduction after the International Monetary Fund had publicly warned that the world economy was entering a major downturn in the face of the most dangerous shock to financial markets that the world had seen since the 1930s, and after the collapse of Lehman Brothers; if so, were his promises naive, irresponsible, or dishonest—or all three?
For a start, the piece of paper that David Cunliffe is holding up looks a lot like the Labour seating plan after the election. The second answer is no.
Hon Jim AndertonWhen the Prime Minister said, at the launch of his party’s tax policy last year before the election, that his policy was “appropriate for the current conditions” and would require “no additional borrowing”, why did he not tell New Zealanders that the reason no extra borrowing would be required was that those tax cuts were not going to proceed?
I thank the member for reading out the full quote about the appropriate conditions. They would have been the same conditions under which Labour promised a tax cut that actually cost more than National’s. All I can say to the member is what I would say to any New Zealander: that the Government has to deal with the dynamic conditions it faces. These are the worst economic conditions for 70-odd years. This Government will face up to those conditions and ensure that the good ship New Zealand sails through them out of the very rough waters that it is currently in.
The first surprise was the speed and extent of the global economic downturn, which took all Governments in the world by surprise. [ Interruption] Opposition members are bleating on like a bunch of sheep, but I remember them in January, when they said these were the worst conditions for 70 years—maybe ever—and the Government should be doing something about it. Well, tomorrow, we are doing something about it.
Does the Prime Minister not get it: that what makes people really angry is not that he is not now delivering on the tax cuts, but rather the self-serving dishonesty and irresponsibility of promising them in the first place, when he knew he could not deliver on them?
If I had the support of the House to give a 15-minute speech on dishonesty, I would do that in relation to the previous Labour Government—its pledge card, its Electoral Finance Act, and its endless bits of legislation that robbed New Zealanders of hope. No wonder its seating plan looks like that piece of paper now!
In interviews the Prime Minister has given about himself he claims to have, evidently, a reputation as a smart market dealer, so did he know before the last election that the economic situation in New Zealand and around the world was deteriorating, or did he find out only when Treasury told him, and would the cancellation of his party’s tax cuts mean that National now accepts that tax cuts are not always the best way to stimulate the economy?
The answer is no. I do not think anyone would have predicted the level of economic downturn that has taken place in the last 6 months.
Does the Prime Minister agree with the commentary in the New Zealand Herald this morning on National’s plans to renege on its tax cut undertakings, which said that “in the commercial world, such an obvious breach of promise would be actionable in the courts”, and that we seem to be going back to the bad old days of the 1990s, when campaigning politicians lied to the public, who never got what they voted for; if not, why not?
I can only guess that that came from a Brian Rudman column, and as a general rule I do not read those. But in the same fine newspaper earlier in the week, in a much better written column, Audrey Young made the very good point that even if the Government were to break a promise in relation to tax cuts, by delaying them, it would be keeping a promise that it will manage this economy well—or words to that effect.
On what basis can the Prime Minister guarantee superannuation entitlements when he intends to cut the funding that makes it possible to ensure those entitlements; or is this just another example of his being ready to promise something now, while knowing that he cannot deliver on it in the future?
The first thing is that I can make an absolute guarantee in relation to the funding of New Zealand superannuation entitlements, irrespective of any pre-funding of the New Zealand Superannuation Fund. I do that on these grounds—and I would be on exactly the same territory as the Hon Dr Michael Cullen, when he was asked exactly that question back in October 2000. When he was asked how pre-funding would affect New Zealand superannuation entitlements, he said that pre-funding relates to how New Zealand superannuation is funded overall, and “it will not have any direct impact on New Zealand superannuation entitlements”. He was right.
What is the Prime Minister’s explanation to the more than 1,000 decent, hard-working New Zealanders who worked in the Public Service and who now have been deprived of their livelihood since he promised not to cut but only to cap public sector employment?
Firstly, the Government has moved a lot of people from the back office to the front office. The Budget will spell that out clearly tomorrow. But one of the reasons why Labour was turfed out was that all it knew how to do was spend money. These are economic conditions that require good, rounded economic management, and all I can say is thank goodness we have Bill English.
Did the Prime Minister promise New Zealanders that within 6 months of his becoming Prime Minister, 1,250 people extra, net, would be enrolled on the dole in the course of 1 week, which is apparently what happened last week?
I do not know the exact number who enrolled last week on the dole. But I do know that all countries around the world are struggling with rising unemployment. I do know that New Zealand’s unemployment rate is 5 percent, and we can contrast that with the rate in Australia, which is 5.7 percent, or the United Kingdom’s rate, which is 6.8 percent, or the United States’ rate, which is 8.5 percent. I do know that when I stood up in this House and supported a 9-day fortnight, which saved jobs at companies like Fisher and Paykel Appliances Ltd—and good on them for sorting out their problems today—the Labour Opposition criticised it. I do know that when we held the Job Summit to try to save jobs, the Labour Opposition criticised it. I do know that on this side of the House we care about jobs. If anybody should be worried about unemployment, it should be Phil Goff.
I seek leave to table a document in which the Prime Minister personally guarantees to do things that he has now reneged and broken his word on. It was published, and authorised, by M Oldershaw, Fergusson Drive, Heretaunga, and proudly paid for by supporters of the National Party.
The House did settle for a while, and then it got very unruly again. I am struggling to hear. Seeking leave to table documents is an important right that members have, and it should be treated seriously. It appears that leave is sought to table what appears to be a policy document of the National Party. Is there any objection to that document being tabled? There appears to be no objection.