Tremain Chris: Questions for Oral Answer — Questions to Ministers 
Tremain Chris: Questions for Oral Answer — Questions to Ministers 
[Volume:654;Page:3845] 
1. CHRIS TREMAIN (National—Napier) 
 to the  
Minister of Finance 
: What level of public debt does he consider prudent? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The ideal— 
Hon Trevor Mallard 
: You expect silence tomorrow do you English? Talk to your mate. 
Hon BILL ENGLISH 
: Is that some sort of threat? I raise a point of order Mr Speaker. 
Mr SPEAKER 
: The Minister will resume his seat right now; I am going to deal with this matter. The member is being unnecessarily unruly. He may not have liked my previous ruling but I have ruled and the member must accept that. It is totally unacceptable for him to bellow across the House like that. I have called the Hon Bill English to answer the question and he will do that. I have ruled on this matter. I warn the honourable member that he will be out of the House for the rest of this day if he challenges my ruling. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am in no way challenging your ruling; you ruled absolutely correctly. It was the Government that turned down the leave and it is losing the cooperation— 
Mr SPEAKER 
: That matter has been dealt with and that is not a valid point of order. The member had better watch his behaviour. 
Hon BILL ENGLISH 
: The ideal level of debt is one where debt levels are low enough to allow a Government to borrow during a recession in order to support the economy and where interest costs are not a significant burden. What constitutes prudent debt has changed numerous times over the years and in the present circumstances it is appropriate that the Government tolerates an increase in debt. We will ensure though that as the recession passes debt returns to lower levels so that New Zealand is well positioned for future recessions. This will not be the last recession. 
Hon David Cunliffe 
: Would the Minister agree that gross debt levels of 17.5 percent of GDP and net debt levels of 0 percent which were achieved under the Labour Government are prudent; and can he confirm that New Zealand’s gross and net sovereign debt is far less than that of either the UK or the US and than the OECD average prompting Moody’s Investors Service to rank New Zealand as having amongst the least indebted Governments of the world? 
Hon BILL ENGLISH 
: The figures are correct. But the member needs to remember that the reckless spending of his Government particularly in the last 3 years is what will be giving rise to the rapid rise in public debt over the next 5 years. 
Chris Tremain 
: Will unfunded commitments in Budget 2009 be a source of future debt increases? 
Hon BILL ENGLISH 
: No. The Government is breaking with the previous Government’s habit of making unfunded commitments. All initiatives— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. You have previously ruled on the Government’s use of the phrase “unfunded commitments” in this House. You have ruled in line with the Clerk who has prevented—quite rightly—such language from being set down in prepared questions because firstly it is without justification on the facts and secondly it bears no resemblance to the Budget practice used in the past by the Labour Government— 
Mr SPEAKER 
: The member has made his point; he will resume his seat. There is nothing inherently unparliamentary about the term “unfunded”. No one has ever ruled it out. 
Hon BILL ENGLISH 
: No. This Government will break with the practice of the previous Government of making unfunded commitments. All initiatives announced tomorrow will be charged against Budget 2009. This will apply for example to the scheme to insulate New Zealand homes which will be outlined in the Budget tomorrow. The previous Government promised a billion-dollar scheme but not one single dollar was committed to that scheme. 
Hon David Cunliffe 
: Does the Minister agree that the cost of the unemployment benefit is $793 million per annum at 7 percent unemployment rising to $1.019 billion at 9 percent unemployment based on Pre-election Economic and Fiscal Update forecasts; does he then agree that rising unemployment poses a significant fiscal risk; and can he clarify for the House the levels of unemployment that he considers to be prudent? 
Hon BILL ENGLISH 
: What I can clarify is that unemployment is rising and that this Government will do every single thing it can to offer to those people who have lost their jobs the hope that they can get a new job. 
Jeanette Fitzsimons 
: Does the Minister see any prudential difference between increasing debt to fund more consumption and debt to fund investment in a more resilient economy with lower carbon emissions less dependence on oil and more ability to withstand future price shocks; and if he does see a difference will the Government be putting forward a plan to transform the economy in that way? 
Hon BILL ENGLISH 
: As has been stated in the media in the last 24 hours the Greens have made a significant contribution to the Government moving in that direction. 
Hon David Cunliffe 
: I seek leave to table an article by Moody’s Investors Service entitled “How far can Aaa Governments stretch their balance sheets?” which rates New Zealand as being amongst the least indebted countries of the world. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House.