Government Borrowing—Priorities

We have not invested in skateboards!

At a time when the Government is borrowing heavily, is it fiscally responsible to borrow further to pay for pet motorway projects such as Steven Joyce’s “holiday highway” north of Auckland, which the Government’s own figures show will lose the country money?

We have not actually got to the motorway north of Auckland, but the Government does stand by its extensive investment in roads. We need to complete the Auckland motorway network. We need to deal with the bottlenecks and traffic risks in the Auckland-Hamilton-Tauranga triangle, and with other bottlenecks around the country, so that we can have efficient delivery of our export products to our ports, and this country can earn more than it spends, for a change.

At a time when the Government is borrowing heavily, is it fiscally responsible to borrow further to pay for free allocation credits, otherwise known as subsidies, to greenhouse gas polluters?

The Government has a pretty balanced fiscal strategy, where we are borrowing money to absorb the shock effects of the global recession and the mismanagement of the previous Government. That will help us through tougher times. At the same time we are investing in the future, and investing in infrastructure and skills, in order to lift the growth performance of this economy.

I raise a point of order, Mr Speaker. The question was about greenhouse gas subsidies. I wonder whether the Minister could address why that is a priority for his spending.

I do not believe that that was the only aspect of the member’s question. There was more to it than that, and the Minister, as I recollect, correctly answered the first part of the question.

I raise a point of order, Mr Speaker. It was a one-legged question, so to speak, which asked why the Government was borrowing to pay for free allocation credits. It was a one-part question.

I will allow Dr Russel Norman to repeat his question, without penalty.

Thank you, Mr Speaker. At a time when the Government is borrowing heavily is it fiscally responsible—

That was what I thought. The member made a statement at the start of the question. If a member makes a statement at the start of a question, the Minister is just as likely to pick up on that statement and respond to it. If the member wanted to ask a question, he could have asked why the Government was borrowing for certain things, and I would have backed him. He may ask his next supplementary question.

Is it fiscally responsible to borrow further to pay for free allocation credits, otherwise known as subsidies, to greenhouse gas polluters?

As is often the case with this Government, we have about the right pragmatic balance in the case of greenhouse gas emissions, where we have obligations under the Kyoto Protocol. The Government is picking up some of those obligations, and some of them will be spread through the economy through the emissions trading scheme. So the Government is doing its bit and the rest of the community will do its bit. It is about the right balance. It is a better balance, in our view, than the previous Government’s emissions trading scheme, which would have imposed very significant costs on all New Zealand households and businesses.

Is it fiscally responsible to borrow further to pay for tax cuts for those at the top?

The member will have to wait and see what is announced in the Budget tomorrow in respect of that matter. We have said for some time that any tax package the Government puts together will be broadly fiscally neutral. It cannot be a lolly scramble, because for every dollar the Government gives out, it has to take in a dollar from somewhere else.

Will he assist Opposition MPs to understand how borrowing for tax cuts is fiscally responsible by pushing Treasury to allow economic analysts from the Parliamentary Service to attend the full media Budget lock-up tomorrow?

Judging by the statements made by various Opposition parties, I do not think we will ever be able to persuade them that irresponsible borrowing is bad for New Zealand.

I seek leave to table photographs from the 2008 Budget lock-up, which show that even National Party blogger David Farrar was let into the full media lock-up.