2. CHRIS TREMAIN (National—Napier) Link to this
to the Minister of Finance
What will be the main focus of the Budget next month and how will this build on Budget 2009?
Hon BILL ENGLISH (Minister of Finance) Link to this
The fact is that Budget 2009 was a success [ Interruption] It successfully steered New Zealand through the worst effects of the global financial crisis and the worst effects of the recession, and it started to get on top of the legacy of 9 years of mismanagement by the previous Government, which was setting this country on a track to ever-rising public debt.
How will Budget 2010 help hard-working New Zealand families to get ahead and to build on the success of Budget 2009?
Hard-working New Zealand families will be waiting until the Budget to see how the tax package works out for them in the short term. But in the long term, we need to tilt this economy in favour of investment, work, and exporting, and away from consuming too much and borrowing too much. We certainly need to put the country on a track that is different from the track promoted by Labour, which has indicated that it is not concerned about debt levels any more, and wishes to borrow as much as it thinks it can get away with. That would, of course, leave a large legacy of debt for New Zealand families to pay off.
Hon David Cunliffe Link to this
Does the Minister believe that a Budget that does nothing, achieves nothing, and helps no one can be a success; if so, can he explain how increasing GST will create jobs and help reduce the pressure on ordinary Kiwis’ family budgets?
The Budget will certainly get control of debt. In a country that owes $170 billion to foreign lenders, it is reckless on the part of Labour to say that debt is not an issue. As we speak, Greece is in the process—
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. There are two parts to the point of order: first, the Minister has responded to a question about his Budget and his view on the Budget; second, by talking about Labour Party policy in the second part of the question, he misrepresents it.
Mr SPEAKERThe problem is—[ Interruption] I am dealing with this point of order. The problem is that the question asked for an opinion: “Does the Minister believe …” something, I reflect. The Minister was explaining why he believed that, and I think we have to allow the Minister to do that.
Hon David Cunliffe Link to this
Why is the Minister making the main focus of his Budget a tax package that will increase GST to redistribute to those people on the highest incomes, when, surely, his first goal should be creating jobs and taking pressure off Kiwis to make ends meet?
The Government is focusing on a tax package because tax is one of the strongest levers to pull to influence the shape of the economy. Over the last 10 years too much of the growth in this economy came from property speculation, Government spending, and unsustainable jobs, and we will change that because Kiwis deserve sustainable jobs and more investment in exporting, as this country earns more than it spends. That is a concept foreign to the Labour Party.
What were the most significant economic problems inherited by the Government, which are still hampering the economy?
We inherited a legacy of an economy with anaemic growth but fast-rising debt. In the 3 years to 2008 the economy grew by less than 1 percent per year, and the export sector had been in recession for almost 5 years. The Pre-election Economic and Fiscal Update showed a sharp rise in deficits and rising debt, which turned into soaring debt, and were all the results of Labour policy before National took office.
What alternative approaches has the Minister seen for dealing with New Zealand’s economic challenges?
New Zealand is going down a similar path that other countries are beginning to follow, some with bigger challenges than us. Having borne the brunt of the recession, we need to get our public finances in order. Our policy in that sense is consistent with the best economic advice from around the world. However, the Labour Party seems to be heading in a different direction with its policy, which is to put taxes up, spend more, and borrow a whole lot of money.
Stuart NashWill his Budget be judged a success if it focuses on a GST increase that will erode the value of the life-savings of thousands of, mainly, retired New Zealanders who rely on savings for their livelihood, and, at the same time, makes all of the basics more expensive?