4. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does he stand by his statement: “this Government came into office with a plan to lift New Zealand’s economic performance”?
Hon BILL ENGLISH (Minister of Finance) Link to this
Yes, I do. In fact, I think it was an understatement. I now say we came into office with a very sound plan to lift New Zealand’s economic performance. Everything I have read about what other Governments are doing in recent times has indicated to me that we are right to focus on longer-term structural performance in the economy, not just on the quarter to quarter numbers around recovery.
Hon David Cunliffe Link to this
Which of the following elements would he rank as the most important to his self-confessed “very sound plan”: high unemployment, no wage growth, increasing prices, stalling the economy, or doubling the deficit by continuing upper-income tax cuts that a primary school child could tell him that he and the country can no longer afford?
Listening to that list sounded like a description of the last couple of years that the previous Labour Government was in power, actually, when there was zero wage growth, 5 percent inflation—
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. It would be a refreshing change if the Minister talked about this Government rather than the previous one, as you have previously ruled.
Mr SPEAKERThe member, when making a point of order, will not make that kind of comment. The member should reflect on the question that he asked. He asked which of the following facts that he inserted in his question was—I cannot remember the last part of the question. When a member asks a question like that, the Minister is at liberty to latch on to some of those facts, and to talk about them in a manner that the member may not have expected when asking the question. Discipline when asking questions is the secret in this place, if members want there to be accountability.
As I said, that sounds like a description of the last couple of years of the economy under the previous Labour Government, when it did stall, real wage growth was zero at the end, there was 5 percent inflation, unemployment was growing, and the 2008 Budget—Labour’s last Budget—projected a decade of deficits. I would like to say to the member that if those are his concerns he should look in the mirror, but he has never needed much encouragement to do that.
Chris TremainThe most recent step has been the tax changes, which came into place on 1 October. They reduced income taxes across the board, reduced company taxes and therefore reduced the tax on work, savings, investment, and exports, and increased GST and the effective tax rate on property. However, there have been other aspects of the Government’s programme. We have a very large programme of investment in infrastructure, we are reducing the number of Public Service bureaucrats, and we are making sure that we have efficient front-line services. We have an extensive programme of changes to the excessive regulation of this economy and have invested in lifting business innovation and research.
Hon David Cunliffe Link to this
How can he maintain that he has lifted New Zealand’s economic performance, when the June GDP figures were less than one-quarter of what was expected and had declined for the third quarter in a row, and when the New Zealand Institute of Economic Research estimates that growth actually went backwards in the latest quarter?
As I said to the member earlier, the Government is focusing on the longer-term structural strength of this economy. That is where it is focusing its policy. In the shorter term, the reason that the economy is not growing rapidly is that New Zealanders have made up their own minds to save more and spend less. They need to do that because the excesses of the economy under the previous Government simply could not last, so households have made the decisions that are slowing down the recovery of retail spending and of the housing market.
Hon Rodney Hide
Hon Pete HodgsonOh, no. I say to Government Ministers that I have let them get away with a bit much today. We will not have any more of that.
Does the Minister agree that one of the central planks of lifting New Zealand’s economic performance is reversing the incredible flood of red tape that tangled up this country under the 9 years of the previous Labour Government, and that this Government is making good progress in establishing the proper principles of good lawmaking, to reverse the trend that it inherited?
Yes, and I am pleased the member asked that question, because sorting out the regulatory mess that was left by the previous Government is not a glamorous job. It is a very difficult job and it requires persistence. The member, in his capacity as Minister for Regulatory Reform, has, in my view, done an excellent job. I am sure the economy will benefit from those efforts, through long-term higher growth rates.