3. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Does he stand by his response last week, when asked whether the next two rounds of tax cuts legislated for last year will go ahead: “We live in dynamic times but I wouldn’t jump to conclusions on that. It is my expectation they will go ahead.”?
Hon BILL ENGLISHDoes the Prime Minister agree with Air New Zealand’s chief executive, Rob Fyfe, that “We need to stimulate this economy and there are more effective ways than broad-brushed tax cuts.”; if not, why not?
Mr Fyfe, along with anyone else, is entitled to his own views about the right balance of Government efforts to stimulate the economy. I note that the travel and tourism industry relies on households having discretionary spending, and Mr Fyfe’s company will benefit from New Zealanders who decide they can afford to travel because they are receiving tax cuts.
Does the Prime Minister agree with economists Brian Gaynor and Gareth Morgan, and the Deputy Governor of the Reserve Bank, Grant Spencer, that tax cuts for those on higher incomes tend to get saved rather than spent—or perhaps used on overseas trips, as the Minister said—and therefore do not meet the most important criterion in the current circumstances of being cost-effective in preserving and creating jobs?
The Government has been attempting to strike a balance between the short-term need to cushion people from the sharper edges of recession, and the long-term need to lift our growth prospects. As the Government has always said, it will not try to tell people how to use the money. Those who have high debt or high credit card debt will use tax cut proceeds to reduce that debt, and they probably should do that. Others who do not have high levels of debt will spend it. We believe that it is up to them to make that decision.
Why did the Prime Minister even bother holding the Job Summit if he intended to ignore the views of key participants such as Rob Fyfe and Stephen Tindall that the tax cuts needed to be properly targeted, as Labour’s were, to achieve the best outcome in preserving and creating jobs, or did he believe that $50 million for a cycle track was more important than the $4.5 billion available for tax cuts that, properly targeted, would have created tens of thousands of jobs?
One of the benefits of the summit was that it gave a number of people the opportunity to express views, and some of those views were different from the Government’s views; we were listening. One thing I never heard them say, even when they disagreed with the Government, was that they wished Labour were back.
Can the Prime Minister tell the House one thing that came out of last Friday’s Job Summit that will help the 160 Sealord workers who lost their jobs yesterday, whom I will visit this afternoon, or the 120 Irwin Industrial Tools workers at Wellsford who are likewise likely to lose their jobs this week?
I think what did come out of the Job Summit was a strong resolve by everyone who participated, regardless of whether he or she supports the Government, to do everything he or she can to give those people the confidence that they will be able to get another job. We all realise what a big and difficult challenge that is, but the Government and the participants at the summit are strongly committed to it.
I raise a point of order, Mr Speaker. My question was very straightforward; it asked the Prime Minister to tell the House one thing that the summit would do, and the Minister has not mentioned one thing.
Mr SPEAKER