Anderton Jim: Questions for Oral Answer — Questions to Ministers Questions to Members 
Anderton Jim: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:669;Page:16386] 
5. 
Hon JIM ANDERTON (Leader—Progressive) 
 to the  
Minister of Finance 
: Was it his objective for the National-led Government to deliver a step change in New Zealand’s economic performance and if so has such a step change been achieved? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes it is our objective although incoming National Governments always find they have to achieve this. In 1975 and 1990 the incoming National Governments inherited from the previous Labour Governments economies that were headed for recession with bad Budget positions. In hindsight I wonder why we did not expect that in 2008 but— 
Mr SPEAKER 
: As I read this question it simply asks: “Was it his objective for the National-led Government to deliver a step change in New Zealand’s economic performance and if so has such a step change been achieved?”. There is nothing wrong with referring to past record but the substance of the answer should not be an attack on other parties. This is a question on notice and the answer should relate to whether the Minister considers—and there is no fixed answer to it—that a step change has been achieved. The other matter may be relevant but it should not be the prime part of an answer to dump on the questioner’s party. 
Hon BILL ENGLISH 
: Yes it is our objective. In response to the member’s question of whether a step change has been achieved I say that incoming National Governments achieved a step change in growth both in 1975 and in 1990 and we probably should have expected that it would be required in 2008. 
Mr SPEAKER 
: The Minister has totally ignored the Speaker. We are getting close to Christmas and I do not want to deal in too severe a way with any member but I ask the member to treat the questioner with some respect. As I understand it the Minister has acknowledged that a step change in New Zealand’s economic performance was an objective. It ought not to be too difficult for the Minister to say whether the Government has achieved that without going back and giving the House a history lesson as he was doing. Given the question asked that is not reasonable or fair. I ask the Minister to listen to what the Speaker is saying on this matter because members have a right to ask reasonable questions. This is not an unreasonable question. 
Hon BILL ENGLISH 
: Yes and this Government inherited an economy that was contracting and shrinking; in fact the export sector started shrinking in 2005. Since then we have turned it round considerably but there is a long way to go. 
Hon Jim Anderton 
: Does the Minister of Finance believe that the step change has been brought about by giving $14 billion in tax cuts to New Zealanders earning over $100000 meaning that the previous Government’s fiscal surpluses would change to the massive deficits revealed today? 
Hon BILL ENGLISH 
: The member is showing that he does not understand the legacy left by the previous Government which was in the 2008 Budget a forecast of 10 years of deficits. The tax packages that this Government has produced since 2009 have been fiscally neutral—that is income tax cuts have been paid for by increases in taxes or reductions in expenditure elsewhere. The member is simply wrong. 
Hon Jim Anderton 
: Has the Minister of Finance seen figures released today showing that retail sales slumped by 2.5 percent after the GST increase to 15 percent in October which went with rising prices falling real wages and higher unemployment; if so how are those outcomes a sign of the economic step change that the Prime Minister promised? 
Hon BILL ENGLISH 
: I agree that the flat consumption is in sharp contrast to the record of the previous Government when from about 2004 onwards the export sector was driven into the ground and New Zealanders went on a debt-funded spending binge. We make no apology for the fact that our policies are designed to turn that round by encouraging savings and exports. An increase in GST and an increase in the effective tax rate on housing will help us to avoid the same kind of binge occurring again. 
Hon Jim Anderton 
: Did the Minister note that GDP in constant dollars rose by 1.2 percent from December 2008 to June 2010 compared with the 3.4 percent rise in the corresponding first 18 months in office of the previous Government; if so is that again an example of the step change that the Prime Minister promised? 
Hon BILL ENGLISH 
: Given the global financial crisis that intervened and the damage done including the damage done by that member to our export sector I accept that the first few years of growth under this Government have not been as high as we would like them to be. However we are putting in place the platform to turn round the damage done by the previous Government to overcome the effects of the global financial crisis and to strengthen our economy. 
Hon Phil Goff 
: Given that he is refusing to take responsibility for the economic position he has had 2 years to influence and that he is blaming the previous Government why did he describe on 18 December 2008 the economic position of this country he inherited from Labour as “reasonable” and why did his Treasury officials state in their briefing to him that Labour had “done a good job of getting the New Zealand economy in a position where it can respond well to economic shocks.”? Why does he not take responsibility for his own actions? 
Hon BILL ENGLISH 
: In December 2008 that advice was wrong. The net debt position of the Government’s books was relatively sound but Government spending was completely out of control. The export sector had been driven into the ground there was a loss of confidence in investment and debt was going through the roof. It has taken us all of the last 2 years to turn round the damage done by Labour to New Zealand’s economy.