1. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
In light of his comment that “borrowing $300 million a week is unaffordable and is holding the economy back,” how much on average has his Government borrowed each week during the current financial year?
Rt Hon JOHN KEY (Prime Minister) Link to this
The Government’s bond programme for this year was recently extended to $20 billion. That is more than is required for the year, but the Debt Management Office is front-loading some of the borrowing to take advantage of favourable market conditions. On a weekly basis, that averages out to new debt of $380 million a week. That sort of increase in debt is absolutely unaffordable, and I am glad the member now sees that.
If borrowing $380 million a week is, as he just said, absolutely unaffordable, how can he afford to spend $44 million a week—or $2.5 billion a year—on giving tax cuts to the wealthiest 10 percent of our country?
If we were, that would be unaffordable, but we are not. The Government has made a number of tax changes since coming into Government, but, taken as a whole, National’s tax changes are in fact reducing the Government’s deficit compared with the situation we inherited in 2008. Without these changes the deficit next year would be almost $1 billion worse.
Will his cuts to home care, which hurt frail elderly people trying to live independently in their own homes, significantly reduce that $380 million of borrowing a week?
I can say that the Government has been working very hard to take the rough edges off the recession. It is one of the reasons why we had run such a large deficit. I also say that when members opposite see the Budget next week, they will realise what great progress the Government is making in getting the country back into surplus, so that we have to borrow less. I look forward to Labour producing its alternative budget, which will show us having a debt profile that is similar to Greece, I would have thought.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. It was a specific question. It was relatively short, it was to the point, and it had to do with home-care spending and the effect of that on the amount of borrowing. There was a lovely general statement about the Budget and about the Opposition, but certainly—
Mr SPEAKERI accept the basic thrust of what the member is saying. The dilemma I have as Speaker is that when members incorporate into a question a supposed statement of fact instead of asking for the information, when members insert a statement into the question, as was inserted into that question about some alleged cuts to some programme or other, it gives the Minister answering a lot more leeway. If the question asks a straight question, then it gives a Minister less leeway. I can be of far more assistance to members if they do not insert statements into questions. If it is a primary question, then it has been validated. A supplementary question has not been validated, so a Minister has a fair bit of licence in those circumstances. But I will be listening very carefully because the Prime Minister, I accept, was on the edges of that one. I do want to hear questions that ask questions rather than insert statements. The facts should be in the primary question and then the supplementary questions should respond to the answers given by the Ministers.
Have cuts of up to 80 percent to adult and community education and pushing up the fees on parents for early childhood education significantly reduced his $380 million borrowing each week?
If all savings help the Government’s position, has the Prime Minister considered not installing the $1,000 seat warmers in his BMWs, and has he considered requiring that his Minister of Foreign Affairs take a $4,000 commercial flight and not a $75,000 air force flight?
In terms of the use of the air force by the Minister of Foreign Affairs, from time to time that will make sense because of the diary that he runs. But I have said to the Minister of Foreign Affairs that when it comes to jumping out of planes, there will be none of that. We do not want that. Phil Goff tried that stunt and there was nothing in it for the taxpayer.
I apologise to the honourable Leader of the Opposition. I say to colleagues that we must be able to hear what is going on. I accept there is a fair bit of passion in some of these questions and answers, but we want to be able to hear them.
Does the Prime Minister agree that the flight to Vanuatu cost the taxpayer $71,000 more than it needed to, but the flight to do the parachute jump cost nothing because it was on a routine Special Air Service parachute jump?
That is a bit rich coming from Labour. That was a routine flight with Phil Goff as Minister of Defence. Well, all I can say to the member is that he should not do that sort of stunt now, because I tell you what: if the parachute was packed by the Labour Party caucus, it would be a very interesting jump.
It’s only jealousy, Mr Speaker. [ Interruption] When the seals stop performing, I will ask my question.
I am on my feet, and the House will come to order. The House has had a bit of fun but it is time to settle down. When I am on my feet there will be silence, or members will be leaving. The honourable Leader of the Opposition knows that he should not make statements like that, but then I accept the provocation as well.
How can New Zealand afford to borrow to pay for his $2.5 billion tax cuts for the wealthiest 10 percent each year but not afford to invest in the Cullen superannuation fund, which this year produced a rate of return of over 23 percent, on average over 8 percent, and has reduced his deficit by some billions of dollars?
All I can say is thank goodness Phil Goff is not the Minister of Finance, because this table quite clearly shows—
I raise a point of order, Mr Speaker. I think it is clear to you that that did not even begin to address my question. [ Interruption]
I meant what I said about the House coming to order. I realise there is a lot of disorder in the House, and if I happen to pick on the wrong person to leave, it will be a bit unfortunate. But I will not tolerate more of this. I think it would be more helpful for an answer not to start in the way it did, and I invite the right honourable Prime Minister to answer the question.
When the Government introduced its tax cuts, which were across the board, it made a number of changes. It increased taxes in certain parts and reduced them in others. That showed that by 2014 the deficit will have reduced by over a billion dollars.
Hon David Cunliffe Link to this
I seek leave for the Prime Minister to table the official document from which he was quoting in the previous supplementary answer.