GST—Papers Released by Savings Working Group

How can New Zealanders trust his word when, before the Tax Working Group report, he had promised not to raise GST, only to change his mind as soon as he got the report?

Hughes Hon Darren Hughes Link to this

The member is misrepresenting that, as we have discussed in this House many times. If the member really believed that the increase in GST was a bad idea, he would be campaigning in Mana to cut GST and take back the income tax cuts. Neither the member nor his party have done that. Instead, they are—

I raise a point of order, Mr Speaker. The Minister has no responsibility for Labour Party policy. Firstly, a large chunk of his answer cannot be to accuse a member of misrepresenting something; secondly, he cannot go on to tell the member what his party’s policy should be. Ministers are responsible in question time for the policies of the executive of the day, not yesterday.

A point of order is being considered and there will not be interjection on it. I have to confess to the honourable member that I was distracted at the time and did not hear the detail of the question asked. If there is concern about it, I will let the member repeat his question and I will listen to it very carefully. If the question contains any political overtone, the member can expect the kind of answer he received.

How can New Zealanders trust his word when, before the Tax Working Group report, he was promising not to raise GST, only to change his mind as soon as he got the report?

I do not think the House needs further answer. I blame myself for allowing that situation to develop, but the Opposition should not have been surprised that a question that asked how the public could trust someone’s word got an answer that whacks the questioner around the ears a bit, because it was a highly political question. I gave the member the chance to repeat his question, and having listened to it very carefully I am not surprised by the answer.

Is the Minister committed to no further increases to GST, and is that commitment stronger than his promise in December 2008 not to raise GST, which was subsequently broken?

Again, the member continues to misrepresent the issue around GST; in respect of GST, the Government is committed to not increasing it, and the member—[ Interruption] Well, the member has not campaigned on it in Mana; instead, his leader has been following the Prime Minister around to try to get in his photos.

I raise a point of order, Mr Speaker. As you will have noted, this was the second reply to a supplementary question in which the Minister began his answer by accusing the questioner of misrepresentation. I would ask the Minister to clarify whether it was—

Gilmore Aaron Gilmore Link to this

No. The member will resume his seat. The member knows he cannot do that. If the member does not want the kind of answer he got, he must be mindful about taking supposed quotations out of context. Ministers are perfectly at liberty to challenge the way—if the member had stopped his question halfway through, it would have been a much more precise question, but he included in it an issue that I think he should have known, having heard plenty of answers on the issue, the Minister would challenge the context of that part of the question. And the Minister did. I cannot as Speaker stop that. The solution lies in the member’s own hands. Keep the question brief, without the political content, and the member, I can assure him, will get answers.

What other papers has he seen from the Savings Working Group?

The Savings Working Group is following the same practice as the Tax Working Group did—that is, it is publishing its working papers as it goes. In fact, there has not been a more transparent policy-making process carried out by a Government. To date the group has received and published a range of submissions, and has published about a dozen background papers. I have to say I am impressed with the depth and breadth of its coverage of the complex issue of how to increase New Zealand’s savings, and the considerable benefits that would arise from an increase in national savings.

Rephrasing the previous supplementary question, did the Minister or his Government promise in December 2008 not to raise GST? Mr Speaker, you will observe that I cannot make—

Order!

As has been discussed in the House before, when the Prime Minister was asked whether he would raise GST in order to close the deficit, he answered no, and that is exactly what has happened. We have increased GST in the context of a tax package that has seen significant across-the-board income tax cuts, $25 more per week for a family after the increase in GST, and $15 more per week for individuals. The member has had the opportunity to raise this issue in the Mana by-election, and has—

The question asked was a fair question, and the Minister answered it very well. It did not need that last bit.

Again—very straight and simple—is there currently a fiscal deficit; if so, of what magnitude in the last financial year, and has it increased or decreased as a result of Budget 2010?

The deficit in the last financial year would not have been impacted at all by Budget 2010.

I raise a point of order, Mr Speaker. Although admittedly there were several sub-questions, they were absolutely factual and straight. By your ruling, the Minister, at best, has the option to choose one of the two questions and answer it, but he actually answered none of them. For the sake of completeness, the first one was—

No, the member will resume his seat. I will invite the member to repeat his question because it did not contain any political statements. I will invite him to repeat his question, but he will not make that kind of comment.

Was there a fiscal deficit in the last financial year, and of what magnitude; and would that deficit be increased or decreased as a result of Budget 2010?

There was a fiscal deficit in the 2009-10 year. I cannot give the member the exact figure. It has increased in this Budget because of falling revenue while the Government is maintaining and increasing expenditure on public services. We have a plan to reduce that deficit from next year through to 2016.

Having established that there was a fiscal deficit in the last financial year—although the Minister does not know the magnitude of it—which he has just admitted to the House is growing, why should the public not therefore conclude that the Government broke its promise not to raise GST when there was a deficit?

It is a somewhat confusing question, but the answer is pretty straightforward. [ Interruption] The Government has put together a tax package designed to help rebalance this economy away from excessive consumption and housing speculation funded by debt. That tax package has included an increase in GST—

I raise a point of order, Mr Speaker. The question quite clearly did not ask the Minister—

The member will resume his seat. I have listened to the Minister very carefully; I believe he is actually trying to give the House an answer. The member asked a serious question; I think his colleagues should show the courtesy of listening to the Minister’s answer. The Minister, I believe, was giving a pretty good answer.

The GST increase is part of a package of tax reform that is pushing New Zealanders in the direction they are already going, and that is to reduce excessive consumption and housing speculation funded by excessive debt. We have put up taxes on property and on consumption, and reduced the tax on savings, investment, work, and companies so that we can encourage investment, savings, and new jobs and exports.

I raise a point of order, Mr Speaker. I listened carefully to the Minister’s reply, as I know you will have done. The question did not ask why the Government increased the deficit in the last Budget; the question asked why the public should conclude other than that the Government broke its promise, when, first, as the Minister has told the House, the Prime Minister said they would not—

I have heard sufficient.

—raise GST to fund the deficit, and he has then told us that there was one and the Government has increased it.

I do not know what to say to the honourable member. I am a bit long-sighted and I have trouble reading, but I can see the honourable member pretty well and I am sure he could see that I was on my feet. He should have stopped.

I would like him to reflect on his question. It was asking an opinion about something for which there is no precise answer. He should think about the question he put to the Minister, which asked why the public should believe something. There is no precise answer to that question. The Minister did his best to give a serious answer around the issue of the deficit. That is not a bad attempt to at least address a question to which there is no precise answer. Members need to think a little more about the questions they ask. For some questions there is no precise answer, and the best the Speaker can do, therefore, is make sure the Minister addresses it. I believe that the Minister did address it.

I raise a point of order, Mr Speaker. In fact, I am speaking to the previous point of order. Although I totally accept your guidance, Mr Speaker, that questions should be straightforward, and I think you would accept that I have done my best to do that, the question was, in fact, axiomatic—if we replay a couple of supplementary questions—and therefore a matter of logic, not a matter of opinion, as you have suggested, I say respectfully. The Minister said that the Government did not—

Order!

—break its promise not to raise GST, because it was not on account of a deficit.

Gilmore Aaron Gilmore Link to this

I am not going to listen to more argument on this matter. Where a member asks how the public is going to believe something, there is no precise answer to that question. The member should just think about that. I have dealt with the issue.

Why did the Government establish the Savings Working Group?