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Economy—Statement

Wednesday 19 March 2008 Hansard source (external site)

Key2. JOHN KEY (Leader of the Opposition) Link to this
to the Prime Minister

Does she continue to stand by her statement, in relation to the economic downturn, that “Basically the New Zealand economy has held up pretty well.”; if so, why?

ClarkRt Hon HELEN CLARK (Prime Minister) Link to this

Yes; because I believe it to be true.

KeyJohn Key Link to this

Does she stand by the statement she made on radio 2 weeks ago that people’s mortgage rates are not, in fact, going through the roof?

ClarkRt Hon HELEN CLARK Link to this

People’s mortgage rates are affected by the general credit squeeze that is filtering through from offshore to New Zealand.

WoolertonR Doug Woolerton Link to this

Does the Prime Minister not think that the economy would hold up even better if the House were permitted to re-examine the Reserve Bank of New Zealand Act, as an eminent American economist has recommended in today’s New Zealand Herald, because “The Reserve Bank’s exclusive focus on curbing inflation is a mistake,” and counter-productive?

ClarkRt Hon HELEN CLARK Link to this

There have been reviews done in the past on whether there should be a broadening of the Reserve Bank objective, but the consensus to date has been that there should not be.

KeyJohn Key Link to this

If the Prime Minister stands by her statement, can she explain to hard-working Kiwis who are paying the second-highest floating mortgage rates in the developed world, and whose 2-year fixed-rate mortgages are tipped by Tony Alexander of the Bank of New Zealand to go through 10 percent in the next few weeks, just where the roof for mortgage rates is under a Labour Government?

ClarkRt Hon HELEN CLARK Link to this

The member is well aware, and has repeated on radio this morning, that mortgage rates are being affected by global market conditions. If he has an answer to those, would he please tell us.

KeyJohn Key Link to this

Is it helpful to the Government when the Minister of Finance goes around telling the New Zealand public that the economy is going into a recession?

ClarkRt Hon HELEN CLARK Link to this

Of course the Minister of Finance did not say that, but I would note that the Leader of the Opposition manages to say everything within the course of a week. This morning he refused to characterise the situation as going into a technical recession; last week he was telling radio “I think, look, the economy’s really slowing down, um.”

KeyJohn Key Link to this

Is the Prime Minister getting the same research staff as the people working at the Inland Revenue Department who cannot get anything right?

ClarkRt Hon HELEN CLARK Link to this

I am perfectly happy to table the member’s transcript from bFM where he says “I think, look, the economy’s really slowing down last week, um.”

KeyJohn Key Link to this

If the Prime Minister is right and the economy is holding up pretty well, does that mean the Minister of Finance, who thinks the country is heading into a recession, is wrong; and what on earth was going through the Minister of Finance’s mind yesterday when he declared publicly that New Zealand was heading for a technical recession?

ClarkRt Hon HELEN CLARK Link to this

The Minister of Finance did not say that.

Hon Members

He did so.

ClarkRt Hon HELEN CLARK Link to this

He did not say that. But I am happy to table the Radio New Zealand transcript of the Leader of the Opposition’s statement this morning. When asked: “Your views on the R word, recession itself—are we going to go into a technical recession? Is that your assessment?”, he said: “I’m not going to characterise it in that way.” What does he think? Is it a recession or is it not, or does it depend on whom he is talking to at the time?

KeyJohn Key Link to this

Is the Prime Minister then saying she agrees with Michael Cullen that the situation should be characterised as a recession, and if she does agree with him, why, a couple of days ago, did she say the economy is holding up pretty well?

ClarkRt Hon HELEN CLARK Link to this

Unlike the Leader of the Opposition I can read. I am not going to agree with something that Dr Cullen never said.

KeyJohn Key Link to this

Would the Prime Minister like Television One to replay the clip it showed last night, when Michael Cullen said: “Um, ah, we might be going into a technical recession.”; and will that not do quite a lot of damage to New Zealanders who are struggling at the moment under her Government’s policies?

ClarkRt Hon HELEN CLARK Link to this

We are seeing again what we saw last week. The Leader of the Opposition cannot admit that he is wrong, and he keeps quoting things that are not true.

CullenHon Dr Michael Cullen Link to this

To help the member’s medium-term memory, can the Prime Minister remember that the last time a senior New Zealand politician predicted a recession was in late 2005, that it was Mr John Key, and that he was wrong?

ClarkRt Hon HELEN CLARK Link to this

That would be absolutely right. But, then, knowing the member and his flip-flops, he probably said the opposite the next week and the week before.

HideRodney Hide Link to this

What responsibility does she take for 400,000 Kiwis leaving New Zealand permanently since she took over the job of Prime Minister, for labour productivity growth halving back to levels we have not seen since Muldoon days, for our not climbing up the OECD ladder but down it, and for the outlook for growth being at best 2 percent, and not the 4 percent that her Minister of Finance, Michael Cullen, promised; and will she just keep doing the same old thing to get the same old lacklustre result?

ClarkRt Hon HELEN CLARK Link to this

New Zealand has been through many years when 2 percent growth was as good as it got, and a lot of those years were under National Governments. Secondly, labour productivity rates do not rise as fast when unemployment is crashing. We have very, very low unemployment. The answer in the medium to longer term in terms of having higher wages is more skills and more innovation. Last week the National Party opposed the biggest investment in innovation that the country has seen in a long time.

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