2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
How many times, if any, has he told New Zealanders that he would not increase GST?
Hon JOHN KEY (Prime Minister) Link to this
Before the last election I was asked whether National would raise GST in order to increase overall tax revenue to fund Government deficits. I said we would not be doing that, and if a reporter asked me the same question today I would give the same answer. I can also say that prior to the advice of the Tax Working Group, increases in GST, as well as changes to the taxation of property, were not on the Government’s radar. On that basis, if I were asked directly about raising GST, in good faith I would have said no.
In addition to saying, as was clearly shown on the DVD, that he would not raise GST, does he recall telling Radio Dunedin that there was no prospect of National raising GST?
Mr SPEAKERIf the honourable member was sitting very close to her leader, she would have heard him call a point of order and know it must be heard in silence.
I seek leave of the House to table the transcript from Radio Dunedin yesterday where the interviewer said clearly that Mr Key did make the promise not to raise GST.
Is the member saying that he is tabling a transcript, or a transcript of a reporter saying he thinks he remembers that?
I do not need this debate to go on any further. I will not seek leave, because I do not seek leave for the tabling of recent media reports.
I raise a point of order, Mr Speaker. Can I seek clarification? My understanding of your ruling to date was that something that is easily accessible to members, like a newspaper article, could not be tabled. This is a transcript of a radio station that most members of this House would not have seen. I do not believe that that is within your ruling earlier.
I hesitated a moment because the honourable Leader of the Opposition has raised a perfectly fair and serious point of order. My ruling did refer to recent media articles from major daily newspapers and national weeklies or their websites, and from major television and radio broadcasters or their websites. I am sure people from Dunedin would consider Dunedin to be a fairly major place. It is one of New Zealand’s major cities. I feel I have to stick with my ruling, or I start to unwind a very important ruling that I have made.
Which of the various statements that the Prime Minister has made about GST is the accurate one: his promise not to raise it, his comment last week on Newstalk ZB that he would raise it, or his comment on Radio New Zealand last Friday that he might not raise it?
Well, firstly, none of those are actually accurate transcripts of what I have said. They are an interpretation from the Leader of the Opposition and, therefore, should be taken with a grain of salt. I tell the member that the one he should take accurately is the one in my statement last week, which was written in black and white. It said that the Government is seriously considering a move to increase GST to 15 percent.
Hon Sir Roger Douglas Link to this
How much revenue would a hike in GST to 15 percent raise, taking into account the automatic adjustments that would be made to benefits levels, as well as the compensation for other low-income earners, which he has guaranteed; or does he not know?
We know that the increase in GST raises about $2 billion. There is clearly an offset. I can say to the member that it is an extremely complex calculation, but if one looks at the net effect of raising GST, lowering personal taxes right across the board—the top, lower, and middle end—and taking into consideration the other moves the Government is making, it will make the bulk of New Zealanders either better off or a lot better off, and on a straight GST income tax no one will be worse off.
Does he stand by his statement reported on Radio New Zealand last week that he would not put the rate of GST up if that put the Government’s relationship with the Māori Party at risk, which apparently gives the Māori Party a veto power?
I raise a point of order, Mr Speaker. I seek your guidance on this. One of the reasons for tabling documents in the House is to substantiate a question such as I asked. I asked a question based on a transcript of a Radio New Zealand programme. The Prime Minister has denied that he said that. It is easy to resolve that by tabling the document.
Points of order cannot be used to litigate the answer the Prime Minister has given. The Prime Minister denied making a certain statement. That is the end of the matter as far as the Speaker is concerned.
I raise a point of order, Mr Speaker. It is very simple. If the Leader of the Opposition wants to read out the exact quote and ask me a question about it, I am happy to answer any of those questions. That is not what the Leader of the Opposition is doing. He is—
I apologise to the honourable Prime Minister. The Prime Minister will resume his seat. The Speaker will deal with these issues. He does not need assistance from the backbenchers. These matters cannot be litigated by way of point of order. I have ruled that the Prime Minister’s answer was a perfectly fair answer. The Leader of the Opposition can ask further questions if he wishes to challenge that answer, but not by way of point of order.
Hon Sir Roger Douglas Link to this
Given that the Tax Working Group estimated that a hike in GST to 15 percent would raise $1.9 billion after automatic benefit increases, which, after a compensation package for low-income earners he has promised, would likely leave only $1 billion, could he not afford to pay for personal tax cuts by lowering the various expenditures that he opposed while in Opposition, such as the Working for Families programme, which he labelled “communism by stealth”?
When someone loses 100 percent of what he or she earns, that is communism by stealth. The answer to that question is that there are a lot of other benefits involved—[ Interruption]
I apologise to the Prime Minister—[ Interruption] I am on my feet. I apologise to the honourable Prime Minister, but I cannot hear his answer, and if I cannot hear it, then I am sure that many other people cannot hear it. It is fair enough to make interjections, but they must be reasonable. That was just out of all proportion.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. My suggestion to you is that you might be assisted in hearing if you followed the normal practice of asking Ministers to address the Chair.
Hon Annette KingI am considering a point of order. The member Trevor Mallard makes a perfectly good point. The Prime Minister should address the Chair, and then the Speaker can hear. Although it does not have to be at all times, it is a little bit helpful now and then.
Maybe I am the only one with amnesia, but I remember Helen Clark spending 9 years looking out here at some sort of picture in the distance, but anyway. It is quite clear—[ Interruption] Well, that is the answer. If we play the footage, she was looking out there into the distance for 9 years. I do not think she ever looked at me while she was answering a question.
I am on my feet, and someone will be taking an early shower if I see who is interjecting. We will just take a deep breath and settle down a little. What the Prime Minister must not do is to comment on my rulings. But a question was asked by the Hon Sir Roger Douglas, and I ask whether the Prime Minister recollects the question.
I do. If one were to look at the Tax Working Group’s recommendations, one would see that the recommendations and the belief behind why a change in the GST versus income split could be beneficial were manifold. They include the benefits of encouraging New Zealanders to save more—which we know is a real issue—giving New Zealanders much greater choice about their own money, making sure that there was equity in the system, and making sure that there was more sustainability in the future tax system. That is the range of reasons why we are considering such a move. It is not just about redistribution.
Hon Sir Roger Douglas Link to this
I raise a point of order, Mr Speaker. With respect, I do not think the Prime Minister tried or endeavoured to answer the question that I asked. The question was—
What I will do, because of the large gap between when the honourable member asked his question and when the Prime Minister got to finally answer it, is to invite the member to repeat his question, without penalty, so that the House can be satisfied that a reasonable answer has been given to it.
Hon Shane JonesHon Sir Roger Douglas Link to this
My supplementary question was, given that the Tax Working Group estimated that a hike in GST to 15 percent would raise $1.9 billion after automatic benefit increases, which, after a compensation package for low-income earners he has promised, would likely leave only $1 billion, could he not afford to pay for personal tax increases by lowering the various expenditures that he opposed while in Opposition, such as the Working for Families programme, which he labelled “communism by stealth”?
The Government is addressing that issue in relation to cutting expenditure. For a start, we have saved over $2 billion with our value for money exercise; secondly, we are increasing Government expenditure by about a third of what the previous Government did; and we are continuing to look for areas where there is waste. So the member is right; of course one could just slash expenditure to pay for tax cuts, but that would have significant implications for New Zealanders in terms of the delivery of their health, education, welfare, and retirement services, and that is not a place that I particularly want to go.
When he said in the House last week that he had not said he would raise GST, when on the DVD and in the transcript, he clearly does say that—it is in his own words? Why did he not follow the lead of his deputy leader and simply come clean and say “Yes, I have broken my word; I’ve reversed my policy.”?
There are a couple of things. In answer to the primary question today I made it clear that if someone had directly asked me that question prior to the election—[ Interruption] Members opposite should not cry. I know it is not all going well for them, but the basic point is that if someone had directly asked me I would have said no, because that was never considered at the time. But members should go to the DVD and have a look. The question was in relation to raising GST to cover deficits. I was also asked whether I would raise the top personal rate to 45 percent to cover the deficit. The answer then was no, and it remains no. [ Interruption] I know that the Leader of the Opposition does not like it when I directly answer a question, because he has spent a lifetime not doing it, but that is the way we operate on this side of the House.
Which assurance has greater credibility: the Prime Minister’s promise not to raise GST; the Prime Minister’s promise that he will raise GST but it will be fair to all; or, having been caught out in a conflict of interest on his Tranz Rail shares, his promise to sell his mining shares and his uranium shares?
Well, let us sort one thing out. No one thinks Phil Goff is sexy, anyway. [ Interruption] If we are going to go down to that sort of gutter material, we might as well sort it out. I stand by my statements.
I say to the Hon Parekura Horomia and many other members—he just happened to be the member I saw—that I am on my feet and members will cease interjecting. I must say to the Prime Minister that that is not an acceptable way in which to start to answer a question. He may have a view on the quality of the question, and that is why I hesitated to get to my feet immediately, but the Prime Minister should attempt to answer the question.