Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Volume:623;Page:18319] 
4.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: What recent reports has he received on the Government’s fiscal programme? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 It was reported that the ratings director at Standards and Poor’s yesterday commented on the good job that the Government was doing on fiscal discipline the good shape that Government finances are in and as an offsetting factor against our strong current account deficit at the present time the maintenance of our credit rating. 
Clayton Cosgrove 
: Has the Minister seen any other reports bearing on the fiscal position? 
Hon Dr MICHAEL CULLEN 
: Yes I have seen a range of contradictory reports. Last month for example I was accused of putting pressure on interest rates by running a loose fiscal policy. In the meantime promises have been made in a National Party budget to deliver across-the-board tax cuts tax deductions for private health and education plus a substantial boost in defence spending. The first statement about a loose fiscal policy was made by Mr John Key National’s finance spokesperson. On the same day Mr English called for increased spending on education. 
John Key 
: Can the Minister confirm that in his first 3 years in office his cumulative Budget-spend was $6.1 billion and that in the last 3 years that has doubled to $12.7 billion with promises to increase that by even more going forward; so what impact does he think that that level of Government spending will actually have on mortgage rates if it happens at a time when the economy is constrained? 
Hon Dr MICHAEL CULLEN 
: For the last 2 years the Opposition has been accusing me of running what it calls— 
Hon Dr Nick Smith 
: Just answer the question. 
Hon Dr MICHAEL CULLEN 
: I am answering the question—obscene fiscal surpluses and now I am accused of spending our way into some form of gloom and doom. Even the National Party should allow a decent pause before it flip-flops on fiscal policy. 
John Key 
: I raise a point of order Mr Speaker. I asked the Minister quite clearly what impact he thought his level of increased Government spending would have on mortgage rates. Now he knows the answer is that they will go up. I wonder whether he could confirm that to the House. He completely missed it. 
Hon Dr MICHAEL CULLEN 
: What will put pressure on to make interest rates go up is a policy of massive tax cuts across the board. What I do know is that the Government is running a level of operating balance to ensure that the Government is not putting pressure on interest rates and the Government parties are now the only parties in this House that are standing by that policy. 
Gordon Copeland 
: Is it a goal of the Government’s fiscal programme to ensure that the tax system is fundamentally fair taking into account means and need; if so will he look again at income splitting to overcome the patent unfairness of the present system which sees a sole breadwinning family earning $60000 a year paying up to $2970 more tax than an equivalent family where each partner earns $30000 a year—the same income but almost $3000 more tax? 
Hon Dr MICHAEL CULLEN 
: If the first family has children of course they will be receiving the family support tax credit which is increasing substantially on 1 April this year. On 1 April next year they will receive further enhancements in that respect plus the new in-work credit. On 1 April the following year they will receive further increases in family support and I thank United Future for its support of those measures. What I can say about income splitting is that it enormously benefits those on higher incomes compared with those on lower incomes. Fairness is never a one-dimensional consideration. 
Rt Hon Winston Peters 
: Having regard to the Prime Minister’s answer which was supported by the Minister of Finance yesterday I seek to table a list of countries not in the OECD whose income per capita is greater than that of New Zealand. The countries include Bermuda Liechtenstein Monaco Brunei the Cayman Islands Singapore United Arab Emirates Greenland French Polynesia Qatar Kuwait US Virgin Islands Israel the Bahamas Gibraltar Taiwan— 
Document by leave laid on the Table of the House. 
Rt Hon Winston Peters 
: I seek leave to table a second document as the Prime Minister finds her statement yesterday a laughing matter. She said we were No. 20. We are not. We are No. 37 in the world. But here is the second document from the OECD. 
Mr SPEAKER 
: Leave is sought to table that document. 
Rt Hon Winston Peters 
: I want to say what it is. I want to define— 
Mr SPEAKER 
: The member is entitled to say briefly what his document contains. He went far beyond that with the first one. I would like him to be brief with his second one. 
Rt Hon Winston Peters 
: The second one is an OECD document that states New Zealand is in the low to middle income group alongside former communist countries Czechoslovakia and Hungary. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. I point out that there is no country called Czechoslovakia these days so that cannot be true for a start. 
Document by leave laid on the Table of the House.