1. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does he stand by all his recent statements?
Hon BILL ENGLISHHon David Cunliffe Link to this
Does his Government’s promise that the vast bulk of New Zealanders would be better off after a GST change include compensating renters for both the increase in GST and the increase in rent they face as a result of property owners passing on both GST and property increases to them?
Any impact on rents or on the property markets will depend, to some extent, on the details of the decisions the Government comes to.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. The Minister did not address the question other than with a truism. I asked whether renters would be compensated, under the Government’s definition, for any possible flow-through. The Minister did not address that question.
Mr SPEAKERWith respect to the honourable member, he is asking about something where the Minister indicated that no specific decisions have been made. It is very difficult for the Minister to give the precise answer the member is seeking, ahead of any decisions being made, as to exactly what the Government might do. That is my dilemma in asking the Minister to answer further. But the member has a further supplementary question.
Hon David Cunliffe Link to this
What does the Minister say to Grey Power, who have, in response to his claims that superannuitants will be automatically compensated for an increase in GST, pointed out that such compensation will arrive a year after the increase in GST; if so, will they be better off?
In his speech the Prime Minister indicated clearly that the Government understands the impact an increase in GST would have on superannuitants. He is quite open for the Government to make choices about what measures it uses to compensate them for those increases. I also add that in a tax package that reduces income tax rates, superannuitants will benefit from that because superannuation is tied to the after-tax average wage. So if the tax on the average wage goes down, superannuitants will be better off.
Hon David Cunliffe Link to this
Does the Minister intend to ensure that all homeowners are better off after a rise in GST, given the resulting increase in interest rates and a rise in local rates?
The member is getting well ahead of himself. Firstly, the Government has not made any particular decisions about it, and, secondly, it is not altogether clear how the housing market would react to any particular change in taxation. In respect of high interest rates, that member would know a lot about it, because under his Government they reached record levels.
Hon David Cunliffe Link to this
Does the Minister think that the 59 percent of New Zealanders who are already sceptical about his promise that they will be better off will be more or less confident that they will be better off, after it was revealed he broke his promise not to increase GST?
I think their confidence will increase as they understand the significant problem in the New Zealand economy, which is that we spend more than we earn. This tax package is one way we can change peoples’ choices so that in the future we invest, save, and grow our exports. That is how we will get more jobs, better jobs, and higher incomes. It will not be by following the failed policies of the past.
Craig FossWhat reports has he seen on the need for reform after many years of economic underperformance in New Zealand?
It has become clear that since 2005 the economy has been performing worse than was thought, as the Department of Statistics has just produced revised growth figures showing that from 2005 to 2008 the economy grew at less than 1 percent per year. The result of that is that we have record high levels of Government spending and household spending, but record low levels of export earning. That is a huge challenge for New Zealanders who want more jobs and higher incomes. This Government last week outlined a programme in this House to increase our earning capacity so we can have the things we want.