6. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does the Government’s online Budget calculator use the Treasury’s forecast inflation rate of 5.9 percent for 2011; if not, why not?
Hon BILL ENGLISH (Minister of Finance) Link to this
First of all, I thank the member for drawing the attention of the House to the website www.taxguide.govt.nz, where anyone can check the impact of the tax and income support changes that were announced in the Budget, and can confirm that virtually all New Zealanders will be better off. It does not include factors not directly attributable to the Budget, such as falling unemployment rates or indexation of entitlements. These are, however, reflected in the Budget forecasts, which include the creation of 170,000 jobs over the next 4 years.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. The question was on notice, and was, I think you would agree, a very straightforward question. The answer really is either “Yes” or “No”. It appears that the Minister was trying to say that, no, it does not, but I seek your assistance in clarifying that matter.
Mr SPEAKERThe member makes a fair point. The question was a very straightforward question; we heard a lot of answer that did not actually relate to the question. In the end, after we had heard what was not included in the calculator, we had not actually heard whether that inflation forecast was included. I think the Minister should answer that; it was on notice.
Hon Gerry Brownlee Link to this
I raise a point of order, Mr Speaker. It has become a habit of that member simply to raise spurious points of order if he does not get the answer he wants—
No, no, I have heard enough; the member will resume his seat. The question asked was a very straightforward question. The question asked, and I will repeat it for the assistance of members: “Does the Government’s online Budget calculator use the Treasury’s forecast inflation rate of 5.9 percent for 2011; if not, why not?”. That is a very straightforward question—no politics—and the House does deserve an answer. There is public interest in that, and the House deserves an answer. Instead of that, the member was thanked for drawing attention to the website, etc. That is not the way questions should be answered. At the end of the day, the member has drawn a conclusion from the Minister’s answer that maybe the calculator does not take account of that forecast inflation rate, but the public should know for certain and should not have to draw a conclusion about it. Where a straightforward question is asked, this House and the public deserve an answer.
Hon Gerry Brownlee Link to this
I raise a point of order, Mr Speaker. The Minister of Finance did give a straight answer, and I point you to Speaker’s ruling 157/8, which makes it very clear that a member cannot insist on a “Yes” or “No” answer. If you have ruled that that no longer applies, then we should be told that formally.
Again, I would ask for a little sense to be applied to Speakers’ rulings and the Standing Orders where a matter is clearly in the public interest, and it is not that difficult. The Minister of Finance is responsible. This matter is directly the responsibility of the Minister of Finance; it is not some peripheral thing. And I think the House deserves to know the information—whether the forecast inflation rate is included in the calculator’s calculation results. It is not a difficult matter, and it is just trifling with the House to avoid answering it. I ask the Hon Bill English to answer.
Hon Peter DunneI raise a point of order, Mr Speaker. Can I take the point you have just ruled on one step further by drawing your attention to Speaker’s ruling 158/1. It seems to me that with the ruling you have just made, which will be of benefit to the House, you are in effect overturning Speaker’s ruling 158/1. I raise that because for many years Speakers have used the phrase “The Minister is just required to address the question.” in response to complaints about whether an answer has been properly given. Mr Speaker, I think it is very important for you to indicate whether, in fact, that provision still prevails, or whether you are, in fact, ruling in a way that sets a new precedent in respect of that. It would be of benefit for all members of the House to know whether that change is being made.
I appreciate the honourable member’s point, and I have made it very clear that my interpretation of Standing Order 377 is very simple. The Standing Order states that “(1) An answer that seeks to address the question asked must be given if it can be given consistently with the public interest.” To me, the most crucial part of that Standing Order is that an answer must be given as long as it can be given consistent with the public interest, and the nature of that answer—if there is any doubt about the question asked; and there are many questions where it is hard to work out what exactly is being asked—should address the question as best the Minister can. But, in my view, there is no doubt about what that Standing Order means, and that is why, in my view, it is the responsibility of the Minister to answer a fair question. I think with some questions that are asked a member may be trying to get a “Yes” or “No” answer on something that is not absolutely the Minster’s direct responsibility, or was not on notice. But this question was on notice, and is about something right at the heart of things. The calculator is part of the Budget documentation; it was put in place by the department for which the Minister is directly responsible. There can be no doubt that it is a matter that that Standing Order intends should be answered. That is why I am asking the Minister to answer it.
I regret that I took the time to explain to the House what the calculator does do. In fact, what I said was that the calculator shows the impact of the tax and income support changes announced in the Budget. That is what it shows. It does not include factors that are not directly attributable to the Budget, and that is the answer.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. I appreciate your efforts to enjoin the Minister to answer that question on notice. It was, as you say, a pretty straightforward question. The dilemma that I think the House has is that even after a second try the Minister’s answer is still quite indistinct, because it is, in fact, circular. He does not define what elements were “within the Budget” and what elements were not, and therefore he has not made clear to the House whether the 5.9 percent inflation forecast, which appears on page 63 of the Budget document containing the Economic and Fiscal Update, and which is an absolutely crucial variable—
I think the member has made his point clear, and I will try again. And I am being deadly serious here, because this matter is absolutely the Minister’s responsibility. The figure referred to in the question, it is claimed—and I presume that it has been validated—is in Treasury documentation associated with the Budget, so it is a matter that is absolutely at the heart of the Minister’s responsibilities. The Minister can refuse to answer the question if he believes that it is not in the public interest to answer it, but I would be highly surprised if answering the question was not in the public interest. I once more—and I am deadly serious—ask the Minister not to trifle with the House. I expect the question on notice to be answered. [ Interruption] I say to those members who have interjected that they will cease that immediately. This is clearly a fairly testing time in this House. I do not think anyone has ever seen this done before, and I expect members to show a little respect to this place.
The calculator shows the impact of tax and income support changes announced in Budget 2010. It does not include factors that are not directly attributable to the Budget, such as price movements.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. I sincerely appreciate your efforts, but the Minister has again given a circular answer. In—
On this occasion, the Minister said that it does not include price movements, which is another way of saying that it does not include inflation.
Hon David Cunliffe Link to this
Having established, then, that the 5.9 percent inflation rate forecast by Treasury on page 63 of the Budget document containing the Economic and Fiscal Update is not included in the public benefit calculator on the Minister’s website, how can he say to New Zealanders that they can go to that website and calculate whether they personally will be better off, if it, in fact, ignores the full effect of inflation?
Because the member is suggesting a stupid calculation, and we did not set up the calculator to make stupid calculations. If we wanted to work out the impact on wages over time, we might include an inflation rate, but we would also include projected wage increases. In the Budget the projected wage increases exceed projected inflation. The Budget also shows 170,000 new jobs.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. Although that question was not on notice, it followed directly from the previous question, which was on notice. The Minister appears to be responding that it is a stupid thing that New Zealanders would go to the website to try—
I have heard sufficient. On the question on notice, I insisted that the Minister give this House an answer. I believe that the Minister’s answer on this occasion did answer the question the member asked.
Aaron GilmoreWhat was the inflation rate over the 9 years to 2008, and what compensation for it did the Government provide?
Inflation over the 9 years to December 2008 averaged just under 3 percent, at 2.8 percent every year, and peaked at 5.1 percent in September 2008. The cumulative increase in the price level was 28 percent. Those who were on benefits obviously got indexation according to that, but, on the member’s logic, no compensation was offered to anyone else for 28 percent inflation in the cost of living.
Hon David Cunliffe Link to this
What provision does the online calculator make for rent rises being passed through to households following changes to property taxation?
The calculator does not include rent rises, but the Government has been quite open about the work that has been done on it. Treasury has calculated that it may rise by somewhere between 1 and 2 percent over 3 to 5 years. If we had followed that member’s advice and brought in a comprehensive capital gains tax, rents would be going through the roof.
Hon David Cunliffe Link to this
Does the online calculator make provision for the indication that up to 50 percent of retailers may seek to pass on price rises unrelated to GST, and what action will he take if that occurs?
If the member had any idea of what was going on in the real economy, he would know the extent of the discounting being done by retailers. Retailers simply will not be able to get away with putting prices up to whatever they like.
Hon David Cunliffe Link to this
How can he say that New Zealanders will be better off as a result of this Budget, when the Government’s online calculator omits Treasury’s forecast inflation track, the likely full impact of GST, the impact of property taxes on rents, and the impact of increased Government charges and lost benefits, and when will he admit to the House that he has misled the public of New Zealand as a result?
The member should take the advice he is getting from his own supporters, I suppose, on his side of the House, who pointed out to me before that if we are to show price increases over time, we need to match them with wage increases over time. Why does the member not include that in all his calculations?
Hon David Cunliffe Link to this
I seek leave to table the disclaimer attached to the 2010 online Budget calculator, which makes no disclosure—