1. AMY ADAMS (National—Selwyn) Link to this
to the Minister of Finance
What recent reports has he received on the economy?
Hon BILL ENGLISH (Minister of Finance) Link to this
I have received reports indicating that the economy is showing some early signs of recovery, which are welcome, but sustainable growth and higher incomes will be possible only if our businesses and exporters are supporting jobs. New Zealand’s terms of trade in the June quarter actually fell by 9 percent, the largest quarterly fall since 1975. In terms of trade, it is the lowest since September 2006, so we have some work to do to turn this economy round to an export-led recovery.
I have seen reports at the weekend that the Labour Opposition would borrow billions of dollars a year extra to support a range of policies, including widening the benefit system to the spouses of people who have lost their jobs, reversing KiwiSaver changes, and increasing the size of the Wellington-based bureaucracy. This wish list adds up to $6 billion a year.
Mr SPEAKER
Hon David Cunliffe Link to this
Why can his Government afford $1.6 billion of taxpayer subsidies to the heaviest polluters, or one-third of its tax cuts going to the top 3 percent of earners, or $35 million of subsidies to private schools while we are saving nickel and dime out of adult and community education; and who is he to talk in this House about priorities?
Who is that party to lecture the Government when the heart of its last coalition agreement was a large donation to its coalition partner? In respect of the emissions trading scheme, the Government has struck the right balance between its economic responsibilities and its environmental responsibilities.
The Government is already facing cash deficits of $10 billion to $12 billion over the next 4 years, as we endeavour to maintain entitlements and public services through a recession. Further borrowing of $6 billion, as advocated by the Labour Party, would represent a borrowing binge and raise the prospect of a credit downgrade and a sharp increase in interest rates for homeowners and businesses.
Hon David Cunliffe Link to this
Can the Minister confirm that at the time of the last general election New Zealand’s net Government debt was approximately zero, and can he further confirm that in the last few months of the outgoing Government gross sovereign debt was below 20 percent; if so, when is he going to stop blaming the recession for every piece of indecision and bad policy from his Government and grow up and govern?
The evidence for 10 years of economic mismanagement under Labour is pretty compelling. What I will say is that the further $6 billion of promises that the Opposition has made will be difficult for it to defend at the next election, because the public knows that endless debt is bad for the economy and bad for them.
What other views has the Minister seen about Governments saddling taxpayers with extra debt—[ Interruption]
Hon Trevor MallardI have allowed a fair bit of noise, because this is obviously an issue that excites some interest, but I think when a member at the back of the House is asking a supplementary question we should have a reasonable level of interjection, or, at least, we should desist from too much interjection. I invite Amy Adams to repeat her question.
What other views has the Minister seen about Governments saddling taxpayers with extra debt by reckless borrowing?
I have seen one such view, which described the idea of any extra Government borrowing as hilarious and crazy, and I will quote from it: “I just think it’s mind boggling stupid. You go out and borrow at a time when the international markets are in crisis?”. Those comments came from Helen Clark, the former leader of the party that has now promised $6 billion of extra borrowing.