2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Does he stand by his statement that “All savings that the Government makes helps in the current financial position we are in.”?
Rt Hon JOHN KEY (Prime Minister) Link to this
Yes. The savings we will make in the Budget will be sensible, responsible, and balanced. We are making those savings so that we can redirect funding into front-line health and education services, invest in much-needed infrastructure, fund our share of the reconstruction of Christchurch, and reduce what otherwise would be very large deficits.
If he wants to reduce the deficit, why is he cutting tax credits to low and middle income earners in KiwiSaver but not cutting back any of the windfall tax gains he gave to the highest income earners at a cost of $2.5 billion each year?
Because this Government introduced a balanced package of tax cuts that were fiscally neutral. Actually, they are fiscally in surplus; they give the Crown about a billion dollars by 2013-14. The Opposition is welcome to go and campaign on a higher top personal rate and make New Zealand less competitive with other countries. It is more than welcome to go ahead with that. In fact, it should go ahead and do it. But when it comes to tax, as we always know with Labour, it campaigns on one thing and does another, just like it did with the bus last—[ Interruption]
Mr SPEAKERI do not blame the Opposition for the reaction, but I was on my feet. The answer was fine until that last bit. The last bit was not acceptable.
Why is he cutting home care for the frail elderly in order to reduce the deficit but asking for nothing back from New Zealand’s highest income earners, some of whom got more than $1,000 a week in tax cuts, like him?
I am advised by the Minister of Health that we are putting more money into home care. That is consistent with this Government, which, despite finding itself in a position where we have to run a balanced Budget, is putting hundreds of millions of dollars more into health care, as the member will see on 19 May.
If he wants to cut the deficit, why is he cutting tax credits for low and middle income earners in Working for Families but not taking back any of the windfall gains received by the highest income earners in New Zealand, costing this country $2.5 billion a year?
Because we ran a balanced programme. In fact, as a result of our tax changes we delivered a position where more money was coming to the Crown. But, as I said earlier, if the member wants to go and campaign on raising the top personal rate, he should go and do it, and we will see him on 26 November.
Does he agree with this quote from Bill English that “Taking higher-income families out of WFF saves very little money,” and is he therefore just tinkering with the scheme, or does he intend to cut deeper into lower and middle income families and the tax credits they get under Working for Families?
I agree with Bill English, and that is why we are not taking higher-income families out of the scheme.
Why is his Government focusing on cuts that hurt people but do not solve the real problem, which is the stagnation of the New Zealand economy all through last year, even before the earthquakes?
I will tell the member what hurts people. It is when a party is in Government for 9 years and real wages do not go ahead, when it runs inflation rates that are so high that New Zealanders pay an enormous amount for their interest rates, when it goes out and fails to address the issue that one in five young New Zealanders leaves school without being able to read or write properly, and when it is more interested in hiring bureaucrats for the health system than in hiring nurses and teachers. That is what hurts people, I say to Mr Goff, not sensible economic management like this side of the House is delivering.
What responsibility does he take as Prime Minister for turning the forecast deficit for 2011, which was, at the point when his party became the Government, $2.4 billion, into a $16 billion deficit?
I take full responsibility, and I take full responsibility because I am proud to stand up as Prime Minister and say to the people of Christchurch that in their moment of need, we are helping them and we will fund them. If the member wants to campaign on getting rid of the money for Christchurch, he should go ahead, and I will see him later, but I bet that Brendon Burns, Lianne Dalziel, and the other members from Christchurch such as Clayton Cosgrove will not be saying that in Christchurch. I am proud to take responsibility for keeping programmes that have helped New Zealand in difficult times, and I am proud to be the Prime Minister who takes responsibility for the fact that unemployment capped at 7 percent in this country, not 11 percent. I am proud to take responsibility for that, and if the member does not like it, that is probably why he will never be Prime Minister.
Hon Trevor Mallard Link to this
In light of his comment about the global financial crisis, when did he first become aware of it?
I think we all started seeing the global financial crisis in the early part of 2008. We were very surprised that the Labour Government did not respond, but we all know that all Labour knows how to do is spend. Frankly, I am not surprised that the member is asking a question—
Hon Trevor Mallard Link to this
Did the collapse of Lehman Brothers and the collapse and takeover of Merrill Lynch by the Bank of America, with which he was quite familiar, pre-date his commitment to the KiwiSaver tax credits?
Firstly, I was not aware of the takeover by the Bank of America of Merrill Lynch. That happened long after I left the company. I think we could all see that the global financial crisis was looming. It was deeper than we all thought, and in fact I remember in 2009 being a member of this House when hearing those from the Opposition saying that the Government should be doing more, spending more, and indebting New Zealand more. In fact, we took a very responsible view, indeed, and I am proud to take responsibility for that.
Hon Trevor Mallard Link to this
In light of the Prime Minister’s comment that he was not aware of the timing of the collapse of Merrill Lynch, I seek leave of the House to table—
Before I go any further—[ Interruption] The member did not need to sit down; I do apologise for that. I just want to know what the document is that he is seeking leave to table.
Leave is sought to table an article from the New York Times of September 2008. Is there any objection? There is objection.
Hon Trevor Mallard Link to this
Does he accept that someone whose wealth increased by $100,000 a week on average through last year and who received $1,000 a week in tax cuts is more able to save than someone on the median wage with two children?
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. In light of the Prime Minister’s interjections across the House, I want to apologise for understating—