4. Hon ANNETTE KING (Deputy Leader—Labour) Link to this
to the Prime Minister
Does he agree with the 53 percent of New Zealanders in last night’s Television One poll who believe they will not be better off as a result of the Budget?
Hon JOHN KEY (Prime Minister) Link to this
What people believe is entirely up to them, but I can assure people that the GST / income tax switch will make the vast bulk of New Zealanders better off. They can check that out by going to www.taxguide.govt.nz and putting in their details. I would also note that 61 percent of people in that survey said that the Budget would be good for the economy, and, even more important, 94 percent said they did not want Phil Goff to be Prime Minister.
Mr SPEAKERProvocative answers invariably lead to disorder. The answer was very good until the last unnecessary bit, but then the interjection across the House was totally unreasonable.
Who does he think has the best understanding of the impact of his Budget: himself, or our leading Christian organisations, who have spoken out against his Budget in the weekly newspaper Challenge Weekly, saying that it does little to reduce queues to food banks, that GST will fall most heavily on those least able to bear it, that it has not lessened the gap between the rich and the poor, and that the cost of new houses will rise, and who have dubbed his Budget the “price and pay Budget”?
When he said that New Zealanders would be pleasantly surprised in October, will the gap he highlighted when in Opposition, between the underclass and other New Zealanders, be closed by his tax cuts—an underclass he promised to do something about; if not, was the trip to McGehan Close with the TV cameras in tow just a publicity stunt?
It will not be worsened, and I believe that the creation of 170,000 new jobs will help close that gap.
When he said New Zealanders would be pleasantly surprised with their tax cut in October, had he factored in the $10 to $20 a week increase in rents, as quoted by landlords; the $5 a week power price increase; the increase in telephone bills; the increase in accident compensation levies; the increase in doctors’ fees; the increase in the cost of food items; an interest rate hike; an increase in rates; and an increase in early childhood education costs for parents; and in fact will the surprise not be an unpleasant one, as Kiwis already suspect because they are not silly?
No. If we take one of those points—we do not have all afternoon in the House—Treasury’s advice is that rents will go up by 1.4 percent. I might add that over the last 8 years of a Labour Government the average was 2.6 percent. I point out that if the member is looking at the inflation rate, which is really the fundamental point the member is making, I would refer her to Michael Cullen’s response when he was asked about why inflation was continuously running at over 3 percent under a Labour Government. He simply said that New Zealand could not be immune to these challenges and that the Government certainly could not control the price of petrol or food.
Does he think the low-income Aucklander who has contacted me today will get a pleasant surprise in October, given that he has just received an increase of $10 a week to his rent, before October, because of increasing costs from the Government’s Budget; he has been promised a $13.81 a week tax cut, and this rent increase leaves him with just $3.81 a week to cover the $9.68 increase in GST alone, without all the other costs he will face?
All I can say is that if rent has gone up now, when there has been absolutely no change at this point, that is because the landlord is choosing to do that. I would make one point: I fondly remember before the Budget when the Leader of the Opposition or the finance spokesman—one of the two—said he was interested in talking to this Government about a capital gains tax on property. Well, that might have done a thing or two to rents.
I seek leave to table the front page of the Challenge Weekly newspaper. It is not a well-known newspaper around New Zealand but it is a Christian newspaper, and I think it fits into your category of one that is not widely distributed.
I seek leave to table a transcript from an interview on Breakfast television on 26 May with the New Zealand Property Investors Federation.