6. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
What was net core Crown debt as a percentage of GDP and in dollar terms in November 1999 and November 2008, and what is it currently?
Hon BILL ENGLISH (Minister of Finance) Link to this
The percentages were 24 percent, 6 percent, and 21 percent as at May this year.
Hon David Cunliffe Link to this
How many Budget fiscal surpluses has he achieved, and how does that compare with the record of the previous Labour-led Government?
Well, the answer to that is no fiscal surpluses, and the reason is that when we became the Government we were presented with forecasts that showed that on the basis of the damaging policies of the previous Labour Government, there would be deficits for 10 years and ever-rising debt that would have reached the same levels as some of the distressed countries that are being buffeted by financial markets now. We have done a good job of getting that under control.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. Regretfully, the Minister has not addressed the question, which was to seek a comparison between whether his Government has achieved fiscal surpluses and the record of the previous Labour Government—not whatever projections he might think he has about the future. There was no comparison with the unending run of surpluses achieved under the previous Government.
Mr SPEAKERHon David Cunliffe Link to this
I seek leave to table the time series of fiscal and economic indicators from the year 1999—
Hon David Cunliffe Link to this
Given that the Minister’s Government has increased debt by a record amount since entering office, and by its own admission has borrowed $17 billion in the last year alone, was it fiscally responsible to pass $23 billion worth of tax cuts—the lion’s share of which went to the already well-off?
Yes. The Government, at the same time as dealing with the recession, has focused on long-term structural reform in the economy. In 2010 we implemented a unique tax switch where we cut taxes on incomes and savings across the board and increased tax on consumption and the effective tax rate on property. That was a fiscally neutral package, and it will be very good for this economy in the long run because it promotes higher incomes and higher growth.
Hon David Cunliffe Link to this
In light of that answer, would it not now be more fiscally responsible to partially unwind those large and partially unfunded tax cuts to the wealthy by reintroducing the former 39 percent tax rate at a higher threshold of, say, $150,000 a year?
Well, the member is about 3 years late. Actually, in Budget 2009 we did unwind significant tax cuts for the upper end of the income range. In fact, we cancelled them. But if the member thinks that more spending, funded by higher taxes and more borrowing, is what the world is going to pay for in New Zealand, then he is wrong.
Hon David Cunliffe Link to this
Will he now support a capital gains tax to remove tax distortions that favour property speculation and make the debt problem worse, and offer all Kiwis a fair tax cut in these tough times?