1. AMY ADAMS (National—Selwyn) Link to this
to the Minister of Finance
What reports has he received about the Government’s financial position?
Hon BILL ENGLISH
Mr SPEAKERToday the Government issued the Government accounts for the year 2008-09, which show that as a combination of the recession and the reckless spending policies of the last Government, the cash deficit for this year will exceed $10 billion.
The Government expects that, as a result of the recession and the reckless policies of the last Government, Crown debt will double by 2013. The New Zealand Government will need to borrow about $40 billion in total over the next 4 years. That means we will need to raise $250 million per week for the next 200 weeks.
Hon David Cunliffe Link to this
Does he agree with the International Monetary Fund, which said the outgoing Labour Government “put in place sound macroeconomic and regulatory frameworks.” and, as a result, left New Zealand able “to limit the damage from the global recession and to support recovery as needed.”; and can he, therefore, confirm that Labour left this Government with near zero net debt and one of the world’s lowest levels of unemployment? What has he done to ruin it?
I do not agree with the IMF or the World Bank, because every day this Government has to untangle the regulatory mess that that Labour Government left behind. Every day we have to deal with the reckless spending decisions that that Labour Government made. The pity of it all is that thousands of New Zealanders are losing their jobs, for two reasons. One reason is the recession and the other reason is the reckless policies of the last Government.
Hon Darren HughesLabour may think that debt costs nothing, but we actually have to pay interest on it. Over the next 4 years the cost for the New Zealand Government of servicing debt will rise from $2.5 billion to around $5 billion. The increase will be more than twice the size of the whole budget for Vote Police.
One alternative approach to managing the Government’s finances that I have seen was recommendations from the Labour Party that the Government spend $6 billion more than it is already spending. I advise Labour members that if the Government followed their advice and borrowed another $6 billion per year on top of current deficits—
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. You have previously ruled on this matter in two parts: firstly, the Minister of Finance has no responsibility for Labour Party policy; and, secondly and incidentally, Labour has released no such spending pledges. The Minister is—
The first part of the member’s point of order was fair; the second part was not. He cannot litigate—
The Speaker is on his feet. Clearly, the Minister can refer in his answer to facts or information from the past that have affected the situation he is dealing with as the Minister of Finance, and that is what I understood he was doing in answering that question.
Hon David Cunliffe Link to this
I appreciate your clarification, Mr Speaker, and I concur with it. I only submit further to you that the Minister’s comments were not in respect of past policies of a former Labour Government, but were speculation on the future policies of the next Labour Government, presumably of 2011, which are yet to be announced.
I hear the honourable member. I ask the honourable Minister to carry on with his answer but to be cautious not to speculate on future Labour Party policy.
Any number of people have recommended that the Government spend billions of dollars more on a range of policies, including widening the benefit system, reversing KiwiSaver changes, and increasing the size of the Wellington-based bureaucracy. It would be irresponsible for the Government to spend on those things on top of record cash deficits.