1. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Why did he flag labour market reforms as a way to protect New Zealand against global volatility, instead of flagging up-skilling New Zealanders and introducing a tax regime that does not load investment incentives in favour of property rather than the productive and export sectors?
Rt Hon JOHN KEY (Prime Minister) Link to this
Because I was asked only about labour-market reforms. In relation to those other matters, the Government has changed the tax system to more heavily tax property relative to other investments. In Budget 2010 we increased the effective tax on property around investment borrowing by $1 billion a year. We are upskilling New Zealanders: the Government will be funding around 13,000 more core tertiary places across all sectors in 2012 than we were in 2008.
Why is it smart to cut KiwiSaver and to introduce labour-market changes that cut wages and conditions in New Zealand, when in the last 2 months a record number of New Zealanders, the highest ever, have fled New Zealand to Australia because superannuation benefits and wages are higher in that country?
I think the member makes an interesting point about superannuation. In Australia the payments are actually made by companies. They are at 9 percent and on their way to 13 percent. What the Government did in Budget 2011 reflected the fact that the Government could not afford to be the major contributor to KiwiSaver on an ongoing basis, and that at that point $1 of each $2 in KiwiSaver accounts had been contributed by the Government. Quite simply, we did not want to run as much debt as that. As we know from the financial markets in the last few weeks, running a lot of debt is not a very smart thing to do. We know Labour wants to run more debt, and that is what it will do if it ever becomes the Government.
When youth unemployment is at record proportions and there is a looming skills shortage crisis in New Zealand, why has his Government cut $145 million from skill training in the Budget?
As I said, I think, in my earlier answer, we are spending nearly $300 million more in terms of tertiary education in 2012 than in 2008. Again, there is a difference between this Government—and I actually accept that difference—and the previous Labour Government. This Government, when it gives taxpayers’ money for a particular project, expects to see results. When the completion rates are so low that taxpayers’ money is effectively being wasted, then in our view changes have to be made.
What does he say to Major Campbell Roberts of the Salvation Army, who, in commenting on the sharp cuts that his Government has just announced in its successful training programmes, said “There’s a harsh irony when the political conversation emphasises the need to prepare beneficiaries for work, yet the training that equips these people to enter the workforce is being slowly killed off.”?
I think we would reject that. The Government is putting in more money. We expect results from those training programmes. The other comment I would make to Major Campbell Roberts—as I have commented on numerous occasions, actually—is to say this Government takes its responsibilities towards vulnerable New Zealanders very seriously. That is why through the depths of the global financial crisis we continued to fund all sorts of payments, not the least of them being Working for Families.
Why has he cut the funding for the Salvation Army job training programmes, when its work outcome and training outcome from those programmes is at a very high level—over 65 percent?
I do not have the details of the specific Salvation Army programmes, but if the member wants to put that question down to the appropriate Minister or as a written question, he will be given an answer.
Hon John Boscawen Link to this
Given that he has just told the House that it is smart not to run too much debt at a time of financial crisis, why did his Government wait until this year’s Budget to make the changes to KiwiSaver, when they could have been made in two previous Budgets?
Because the Government addresses different themes in different Budgets. If we look at Budget 2010, we see that its particular theme was about rebalancing the tax system. Personally, I think we made some good changes there. We also came in with Budget 2009, and I may be wrong, but from memory that would have reflected the changes to KiwiSaver that we had campaigned on in 2008. So in that regard, in two of the three Budgets we have made changes. I personally think that we now have KiwiSaver on to a platform where it is enduring, where it is affordable, and where New Zealanders will participate.
Given the Prime Minister’s statement of commitment to skills training, why has his Government in the last couple of weeks, without consultation, imposed sharp cuts on the YMCA’s successful job training programme, which its chief executive officer, Ric Odom, says puts the future viability of its programmes at risk?
Again, I would say the same thing about that programme as about the Salvation Army programme: I do not have those details to hand. If the member wants to put that question down as a written question or as a primary question, then I am sure we can answer it, or he could give it to the appropriate Minister. But I go back to the earlier point I made, which is that the Government is spending more money in this area and it expects to see value for money.
When upskilling New Zealanders is core to creating a stronger and more resilient New Zealand economy, why has his Government in the last 2 years cut industry trainee numbers by nearly 31,000 and cut building and construction trainees by over 5,000, or by almost a third, when there is a shortage in the building trades?
Because some of those programmes just simply were not delivering results. There were a variety of reasons for that, and, again, if the member wants to direct that question to the Minister for Tertiary Education, I am he could give an answer to him, chapter and verse. But I think it is worth making one point, which is that, yes, of course skills training is critically important, just as education is. That is why the Government has been committed to everything from national standards to improving the quality of the teaching that we have in this country. But that is just one factor. I tell members that the other thing that makes a difference to delivering jobs and growth in the economy is having a competitive tax system, not one that would have a top personal rate with a yawning great big gap within it, and not one that would apply a capital gains tax—
Mr SPEAKERWhen 77,000 young New Zealanders are not in work, education, or training—which is not funny—and there is a desperate skills shortage in New Zealand, why has he not introduced new programmes to provide skills training for young people, particularly in the trades area, instead of simply relying on bringing people in from overseas while New Zealanders stay out of work?
Well, the member is just plain wrong. I mean, the Youth Guarantee is one good example of that. I myself was in Christchurch some months ago, announcing the increase in skills training there specific to the rebuild of Christchurch. What the Government has done is to say that New Zealand taxpayers deserve to see value for money, and we will deliver them value for money by focusing on courses that actually have good outcomes.
Well, you see, Labour wants to run more debt; Labour wants to waste taxpayers’ dollars. That is what Labour does. Labour has a PhD when it comes to education. Labour has a PhD when it comes to waste. On this side of the House, we deliver results. That is the difference.
I seek leave of the House to table a document prepared by the Parliamentary Library, showing that $145.885 million has been cut out of skills training.
I seek leave of the House to table from the Tertiary Education Commission website performance information dated August 2011 on the number of industry trainees, which shows there has been a reduction of 31,000 in the last 2 years.
Hon Jim AndertonCan the Prime Minister tell the House how it reduces New Zealand’s long-term national debt to sell assets that earn hundreds of millions of dollars a year in perpetuity, for a one-off asset sale that realises only a limited amount of cash for the short term?
I think the member raises a good point. Firstly, let us understand the facts. The Government intends, if it is re-elected as the Government, to purchase about $33 billion worth of assets over the next 5 years, and it will be releasing capital in the order of $5 billion to $7 billion. So, actually, the Crown balance sheet will rise. Secondly, if one looks at the dividend stream one gets from the current State-owned enterprises, one sees it is about equal, actually, to the funding cost of those State-owned enterprises. Thirdly, the Government intends to retain majority control. By retaining majority control but having outside investors, the Government will, in our view, deliver State-owned enterprises that actually expand their economic activities. If one was to look at the dividend stream from assets that is greater than the normalised dividend, one sees that is when special dividends are paid, and special dividends are paid only when those State-owned enterprises have embarked on, generally, overseas activities, as in the case of Meridian Energy with Southern Hydro, and when the sale of those assets has taken place. As we have seen with Air New Zealand, that is the very reason why that company has operated in the way that it has: because it has had a mixture of ownership. To be honest, the member was a member of a Government that sat around forever and, despite the fact that it had lots of surpluses, never ever got up one morning and said “Let’s buy back Air New Zealand.” If it was such a failed model, maybe the member should have done that, rather than become engaged in a failed and hopeless project down on the Hobsonville base, which has just been wound up.