Hayes John: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeHayes John: Questions for Oral Answer — Questions to Ministers[Sitting date: 12 March 2014. Volume:697;Page:16548. Text is incorporated into the Bound Volume.]2.JOHN HAYES (National—Wairarapa)to the Minister of Finance: How will the Government’s economic and fiscal policies ensure its accounts return to surplus in 2014/15 and help keep interest rates lower than during the previous economic cycle?Hon BILL ENGLISH (Minister of Finance):The Government will continue to focus its Government spending on programmes that make a real difference to the lives of New Zealanders such as investing to help people get off welfare and into work and investing to reduce crime. What we have learnt in recent years is that often the solution to the problems that the taxpayers pay us to fix lies with finding better more effective answers not with spending more money. By remaining on top of its spending the Government will help avoid a repeat of the sharp interest rate rises during the last cycle up to 2008 when floating mortgage rates actually reached almost 11 percent.John Hayes: What recent reports has he received on the Government’s finances and what trends are emerging in both spending and revenue?Hon BILL ENGLISH: The Government’s financial statements for the 7 months to 31 January were released yesterday. They showed that Government expenses are around $140 million below forecast at $40.1 billion for the 7 months indicating that the Public Service is doing a good job of containing expenditure but achieving better results for our communities. However despite stronger economic growth tax revenue continues to track below forecast. Although we have spending under control Government revenue is inherently more difficult to forecast. We are yet to see just how much of that shortfall of around $800 million flows through to the end of the year. In any case the Government is on track to deliver a surplus for the 2014-15 year and that of course will raise questions for New Zealanders about big-spending promises in election year and what damage they might do not just to the Government’s books but also to pushing up interest rates further.John Hayes: How does the Government’s current financial position and outlook compare with the position inherited by the incoming National-led Government in 2008?Hon BILL ENGLISH: We have learnt some lessons from the period particularly of about 2005-08 because by 2008 despite a decade of good economic conditions the New Zealand economy was in recession and floating mortgage rates were nearly 11 percent. This Government is determined not to make the same mistakes—that is to go on a spending spree just when times are better and secondly to allow the housing market to grow at very high rates putting pressure on our exporters.Hon David Parker: How can he claim to be a good economic manager when despite record dairy prices and the Christchurch rebuild boosting construction the Government accounts have still come in well under forecast for the third month in a row?Hon BILL ENGLISH: The commentary around the accounts points out some of the reasons for that. I am very pleased to see that this Labour Party spokesman unlike the rest of its spokesmen is so devoted to achieving a surplus. We look forward to pre-election policies that indicate that he is going to be as prudent in his fiscal management as he says the current Government should be.John Hayes: With the Government on track to surplus next year what policy prescriptions would put that return to surplus at risk and fuel sharp interest rate increases?Hon BILL ENGLISH: I think it is increasingly obvious that policies for instance that promise large amounts of cash to New Zealand households mean that not only is the Government unlikely to make a surplus but also it would be a pretty clear signal to the Reserve Bank that it should put interest rates up. Other policies such as an expensive emissions—Rt Hon Winston Peters: I raise a point of order Mr Speaker. It will be very apparent to you that seeing as the Minister is not talking about anything within his portfolio or Government administration or Government policies he should not be talking about it at all.Mr SPEAKER: No I cannot accept the point the member raises. Members have the right to ask a question. The question effectively was what policy prescriptions would put at risk a return to economic surplus etc. That is a legitimate question; it is allowed a legitimate answer.Hon BILL ENGLISH: I was just going to finish by referring to the emissions trading system policy that certainly is Green policy and may be Labour policy. An expensive emissions trading system would push up electricity prices and inflation.Rt Hon Winston Peters: I raise a point of order Mr Speaker. Again the Minister of Finance is not responsible for any other political party’s policy—the Greens’ the Labour Party’s or anyone else’s—so why is he being allowed to persist with his answer?Mr SPEAKER: He is certainly able in response to that question to talk about the potential that he considers would be aligned with an emissions trading scheme. It is unhelpful for the Minister in giving the answer to refer to the policy being adopted by any other party in this House.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. With reference to your last ruling my simple question would be—and I agree with you—why he was not pulled up and why some action was not taken against him. He has done it before time and time again.Mr SPEAKER: It was. If the member had listened he would have heard me make a comment.