6. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
How can the vast majority of Kiwi households be better off after the Budget?
Hon BILL ENGLISH (Minister of Finance) Link to this
I encourage the member to go to the website www.taxguide.govt.nz to see how the tax changes on 1 October will do that. The GST income tax switch initially sees an average family with two children about $25 a week better off, a typical average wage worker about $15 a week better off, and a superannuitant couple about $11 a week better off. Even when other general forecast inflation is taken into account, the benefits of the tax package get bigger over time. This is because after-tax incomes are forecast to grow more quickly than price increases in the 4 years to 2014.
Hon David Cunliffe Link to this
Given that some of those price rises he is talking about include power price rises, what steps is he taking as shareholding Minister to signal to power companies that raising prices to generate higher dividends is unacceptable?
As the member will be aware, the Prime Minister has made some pretty direct comments about that matter over the last couple of days. I might say that the record on power prices under that former Minister’s supervision was pretty awful. They went up something like 60 or 70 percent during the time of the previous Labour Government.
Hon Clayton Cosgrove Link to this
What action will he take if power companies raise prices excessively, or will he simply continue to sit on the sidelines and watch?
Mr SPEAKERI will ask the member to repeat his question, but I ask the Minister to not interject while he is being asked questions. I ask the Hon Clayton Cosgrove to repeat his question.
Hon Clayton Cosgrove Link to this
What action will he take if power companies raise prices excessively, or will he simply continue to sit on the sidelines and watch?
As the Prime Minister pointed out, only some power companies would be affected by the emissions trading scheme. Consumers are now more than ever able to swap from one power company to another. The member may also be keeping track of the moves the Minister of Energy and Resources has made, through the Electricity Industry Bill, to restructure the industry so it becomes more competitive.
Aaron GilmoreThe benefit of Budget 2010 for an average two-child family increases to about $28 a week by 1 October 2011—1 year past the tax cuts. It then rises to about $41 a week by 1 October 2014. For a typical wage earner, it rises from $15 a week to about $23 a week by 2014. Once the 170,000 new jobs forecast in the Budget are taken into account, household disposable incomes from all sources and after tax increase by over 25 percent by 2014.
Hon David Cunliffe Link to this
If he is so concerned about energy companies keeping prices down, why did he pressure those companies last year to deliver bigger dividends to the Government?
The member may be aware that power company performance needed to improve pretty significantly. Under his Government power companies put prices up something like 60 or 70 percent—
—72 percent. They paid low dividends, and they just ran fat on costs. We are making them perform better by holding price increases to a minimum, and paying significant dividends to the Government. They are doing a better job now than they did under Labour.
How were New Zealanders materially worse off as a result of price increases before the 2008 election?
Electricity prices soared by 72 percent in the 9 years up to 2008. The previous Labour Government’s emissions trading scheme was poised to push up inflation by twice as much as this Government’s current scheme. It is a bit rich to hear from the Opposition about the impact on the Consumers Price Index of the emissions trading scheme, when it was going to push it up twice as far. In fact, in the year to September 2008—
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. The point of order is not a new one. I see that you were listening carefully to the way that the Minister answered the supplementary question scripted by one of his own team, which specifically asked about matters pertaining to a period before he was Minister of Finance. I submit to you that by focusing his whole answer on matters that were outside his current jurisdiction and then mischaracterising Labour’s position he is well outside Standing Orders.
Hon Gerry Brownlee Link to this
We should not get into debating points on these points of order, but I fear that the member across the Chamber has done exactly that. The reality is that Mr English as the Minister of Finance in the Government was instrumental in halving the emissions trading scheme costs—
The member is now getting into genuine debating material. I think the question was highly marginal. It asked the Minister about a period prior to the commencement of the Minister’s responsibilities, and that is why I was listening very carefully to the answer. The answer was fine to the point where it started to make assertions about the impact of the previous Government’s policy. That is where it started to depart from Standing Orders. We have heard enough of that answer. I ask members to be mindful of that.
Hon Dr Nick Smith Link to this
I raise a point of order, Mr Speaker. I seek leave to table a press release from the Hon David Parker that announced the doubling of increases in power and petrol prices from the emissions trading scheme that was advocated by the members opposite.