English Bill: Questions for Oral Answer — Questions to Ministers Questions to Members 
English Bill: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:647;Page:16134] 
3.  
Hon BILL ENGLISH (Deputy Leader—National) 
 to the  
Minister of Finance 
: Does he recall advising Cabinet with regard to Budget 2007 that failing to stick to Budget spending limits risked “an interest rate response from the Reserve Bank the exchange rate staying higher for longer and a more pronounced economic slow-down” and has he given similar advice this year? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Yes and tomorrow I will deal with the matters contained in this year’s Budget. 
Hon Bill English 
: Can the Minister confirm that in Budget 2007 Labour did not stick to the spending limits that the result was an interest rate response from the Reserve Bank and the exchange rate staying higher for longer—as have interest rates—and that we are now experiencing a more pronounced slow-down partly because Labour would not stick to its own spending limits? 
Hon Dr MICHAEL CULLEN 
: No I cannot. The additional element in last year’s Budget was primarily the cut to business taxation which the National Party opposed. That was not of course spending; that was revenue reduction. Of course the major impact in terms of what happened subsequently was that the economy continued to grow faster than forecast. In conjunction with international pressures that led therefore to stronger inflationary pressures than had previously been forecast. 
Dr Ashraf Choudhary 
: What reports has the Minister received on fiscal policy decisions made before consideration of inflationary forecasts? 
Hon Dr MICHAEL CULLEN 
: I saw a report promising tax cuts to the average wage north of $50 before seeing any fiscal projections. That was then revised to $45 to $50 then revised to $45 to $50 after 3 years and then further revised to blame the journalist for misreporting all of that. This morning it became: “Oh well. Look you know that the answer is of course if you know—anything is affordable but you know you have to look at all the different priorities. But I believe very strongly in personal tax cuts.” from which one could take anything. 
Hon Bill English 
: Has the Minister seen the comment this morning by the Public Service Association that any tax cuts can “only be funded through borrowing or cutting public services.”; can he recall making that statement every Budget up until this one and does he still stand by it? 
Hon Dr MICHAEL CULLEN 
: As the member will see tomorrow the Government has reduced its forward-spending allowance. To have higher tax cuts than I will announce tomorrow would require a much bigger cut in the spending allowance and I will look forward to the member explaining when on the campaign trail Mr Key finally says what his tax policy is. 
Hon Bill English 
: Can the Minister recall stating many times that any reduction in the forward-expenditure allowances was a cut and how come when he does it it is a wise decision but if anyone else proposes it it is a cut in social spending that will see doctors and teachers sacked? 
Hon Dr MICHAEL CULLEN 
: What it will mean—and let us be quite clear about this—is a slower rate of improvement in social services than would otherwise occur. If anybody believes that I am going to start arguing that tax cuts have no cost then they do not understand me. But I should be generous. I congratulate the member on hauling Mr Key into line over the issue of tax cuts this week. 
Hon Bill English 
: Would the Minister agree that the public of New Zealand see his refusal to offer any personal income tax cuts for 8 years despite record surpluses not as sound economic management but as an arrogant assumption that Labour knows better how to spend their money and that they see it that way so much so that political scientist Dr Jon Johansson has described him today as “Labour’s biggest liability”? 
Hon Dr MICHAEL CULLEN 
: For the man who took National to less than 21 percent of the vote that is a pretty rich kind of accusation or quotation. What I do know is firstly we have cut taxes for families in New Zealand very substantially and although the member may be on an income where that does not matter if he was on an ordinary family income then with his number of kids he would be grateful for Working for Families. Secondly I know that New Zealanders want better health better education better superannuation and more investment in law and order and they want that from a Government. A National Government cut spending in all those areas when it was last in office and that member was the Treasurer when superannuation was cut under National. 
Hon Bill English 
: Can the Minister tell us whether that little outburst means what we think it means—that he still hates the idea that after 8 years he has finally been pushed into offering personal tax cuts to 1.8 million wage earners in New Zealand who do not have children which would allow them to qualify for Working for Families; and does he regret the fact that when conditions were pretty good for several years for tax cuts he missed the opportunity? 
Hon Dr MICHAEL CULLEN 
: No; I took the opportunity to lower taxes for business to lower taxes for families to lower taxes for savers to increase superannuation to introduce 20 hours’ free early childhood education to reintroduce income-related State housing rentals and on and on and that member voted against every one of them. Now his leader claims he was responsible for all those policies.