Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:649;Page:17671] 
2.  
JOHN KEY (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by her statement yesterday in relation to Government borrowing: “Oh I just think it’s mind-bogglingly stupid to go out and be borrowing in the time when the international markets are in crisis”; if so why? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes in respect of increasing debt to GDP ratios to pay for tax cuts as appears to be the National Party’s policy. 
John Key 
: Can the Prime Minister confirm that the Government is currently borrowing $32.5 billion and that over the next 3 years it intends to increase the level of this debt despite the worldwide credit crunch; and does she consider this to be mind-bogglingly stupid? 
Rt Hon HELEN CLARK 
: The key issue of course is the debt to GDP ratios. I notice that contrary to the National Party’s intention to increase these ratios over the forecast period of the Budget that the Labour Government has delivered these debt to GDP ratios are consistently falling. 
R Doug Woolerton 
: Can the Prime Minister remember other instances in the past of Governments raising debt levels and can she tell us who did it and what the result of that policy was? 
Rt Hon HELEN CLARK 
: Probably the worst example was the National Government of Sir Robert Muldoon which went into huge borrowing—Think Big—which caused this country a lot of grief with a blowout in fiscal deficits. I expect that is why some of my colleagues have labelled the Leader of the Opposition “Muldoon’s mokopuna”. 
Jeanette Fitzsimons 
: Does the Prime Minister agree that what is particularly mind-bogglingly stupid is borrowing for white elephant new motorways when we have totally run out of cheap oil vehicles on State Highway 1 in Auckland are down by 8000 a day on last year and overall public transport use is up 9.4 percent in Auckland or does she not agree because Labour is throwing billions at new motorways too? 
Rt Hon HELEN CLARK 
: The situation that the leader of the Green Party outlines certainly justifies the fact that the Labour Government has increased spending on public transport more than 15 times over what it was when it was elected in 1999 but one might take a little more interest in the National Party’s infrastructure plans if its leader were able to give the slightest idea what he was borrowing the money for and he has not been able to come up with a single example. 
John Key 
: If that is how the Prime Minister describes an Opposition party that would want to in Government raise its debt to GDP target by 2 percent how would the Prime Minister describe a Government that raises its debt to GDP target by 5 percent? 
Rt Hon HELEN CLARK 
: I am looking at tables from the Budget documentation here that show net core Crown debt including the New Zealand Superannuation Fund financial assets to be absolutely stable at around 6.1 percent over the forecast period—positive. 
John Key 
: I raise a point of order Madam Speaker. I asked the Prime Minister how she would describe a situation where a Government raised the debt to GDP target by 5 percent. I wonder whether the Prime Minister could address that. 
Madam SPEAKER 
: I thought the Prime Minister did address it. 
Peter Brown 
: Does the Prime Minister agree that any party that seriously contemplates borrowing for road funding as has been reported would at the very least have supported legislation that ensured that all the revenue collected from the petrol motorist went into the transport account as the recent amendment to the Land Transport Management Act does—$570 million per year? 
Rt Hon HELEN CLARK 
: The member raises a good point because I understand that the National Party voted against that very sensible legislation and of course past National Governments have been perfectly happy to take money off the motorist and use it for everything else but the transport system. 
John Key 
: Would it be helpful for the Prime Minister if I reminded her that when she came into office in 1999 the first thing her Government did was raise the debt target from 25 percent of GDP to 30 percent of GDP and when she was asked why that was she said that it gave Michael Cullen the option of using additional debt to finance the Crown’s activities? 
Rt Hon HELEN CLARK 
: I know that the facts are going to hurt the Leader of the Opposition but I am looking at debt to GDP ratios from 1999 35.6 percent; year 2000 the first year of the Labour Government 32.9 percent; 2001 31.4 percent; 2002 29.1 percent; 2003 27.7 percent; 2004 25.3 percent; 2005 23.5 percent; 2006 21.6 percent; and 2007 18.2 percent. What about that does he not understand? 
Gordon Copeland 
: Does the Prime Minister agree that it would be prudent and desirable to borrow for roads hospitals rail upgrades port upgrades schools etc. provided that a source of funds were available to repay those loans—for example the sell-down of about 20 percent of our State-owned enterprises to Kiwi-only investors—and would that not be the right thing to do if for once we put the interests of this country first rather than socialist ideology on the part of the Labour Party mixed with timidity on the part of the National Party? 
Rt Hon HELEN CLARK 
: I suggest to the member that the relevant issues here are around the debt to GDP ratios but I know that the member has given his vote to the National Party to cast except for confidence and supply which I thank him for and therefore I assume he has some insight into the National Party’s real plans to sell our State-owned assets like Kiwibank. 
Rt Hon Winston Peters 
: Does the Prime Minister have any reports that would give her a sense of déjà vu that this is a case where the Opposition is prepared to borrow and hope and hopefully work it out sometime after the election if it can fool enough people before it? 
Rt Hon HELEN CLARK 
: It seems to me that the Opposition achieved the incredible triple whammy at its conference of stating it was quite happy to borrow much more at a time of international financial turmoil quite happy to cut spending in core areas and quite happy to privatise. Let us campaign on those things now! 
John Key 
: Does the Prime Minister recall seeing a statement from the Leader of the Opposition back in 1994—one Helen Clark—when the debt to GDP ratio was at 56 percent in which she made the comment that the Government was putting an undue emphasis on debt repaying it at the expense of our failing services and infrastructure demands in New Zealand? 
Rt Hon HELEN CLARK 
: Of course in the 1990s National managed to run high debt and cut public services and start charging ordinary Kiwis to go to a public hospital and State tenants market rents for their houses and cut superannuation and introduce an extortionist student loan scheme. That Government certainly sold the people of New Zealand down the river just as Mr Key’s private plans would sell the people down the river. 
Rt Hon Winston Peters 
: Has the Prime Minister received any reports from someone no less than the deputy leader of the National Party who suggested that his leader does not quite “understand” and how is it likely— 
Hon Dr Nick Smith 
: He never said that. 
Rt Hon Winston Peters 
: Well he did on the secret tape. 
Hon Member 
: No he didn’t. 
Rt Hon Winston Peters 
: Oh yes he did. And what are the chances— 
Gerry Brownlee 
: Do your homework 
Rt Hon Winston Peters 
: I don’t have to. We have the tapes. What reports does the Prime Minister have from no less a person than the deputy leader of the National Party Bill English that says his leader does not “understand”; and what is the likelihood of a leader ever defending a policy that he cannot understand? 
Rt Hon HELEN CLARK 
: I did indeed see those comments reported and I have to assume that because Mr Key did not understand Working for Families he went without Mr English’s consent on to  
Agenda 
 and just said: “No no I’m not going to change that.” So his having said he would not change that his having claimed he would resign if he touched New Zealand superannuation it seems to me that the obvious target for his savings is the roughly $1.5 billion a year he would save by wiping the tax credits for KiwiSaver and the $2 billion a year that goes into the New Zealand Superannuation Fund and I expect that Mr Key will be under a lot of pressure to explain why he would weaken the savings and superannuation position of ordinary Kiwis in order to pay for tax cuts for his rich mates. 
John Key 
: Could the Prime Minister explain why it was a good idea in 1994 when debt to GDP was 56 percent not to repay debt but to invest in infrastructure but it is not a good idea to invest in infrastructure now when according to Treasury we are in recession when 80000 people left New Zealand last year to live in another part of the world when our wages are in the bottom third of the OECD when the wage gap between New Zealand and Australia has blown out to 35 percent and is on its way to 60 percent and when—quite frankly—New Zealanders have given up confidence in her Government’s economic plan? 
Rt Hon HELEN CLARK 
: It is such a good idea to have good plans for infrastructure—not no plans like that member has—that this Government has doubled the amount it spends on roading every year has increased by 15 times per annum the amount spent on public transport and in nine Budgets has committed three times as much to the public health infrastructure as National did in the previous nine Budgets. No amount of shrieking from the rattled Leader of the Opposition and his deputy can take away the fact that he committed tremendous tactical and strategic errors at his conference by wanting to go out and substantially lift debt to GDP ratios and cut spending and privatise. 
John Key 
: Can the Prime Minister answer the question since we are all ears and we are happy to have the discussion: when is the election date? 
Rt Hon HELEN CLARK 
: I suspect that the Leader of the Opposition is starting to hope that the date is as far as away as possible. 
Gerry Brownlee 
: I seek leave for the House to adjourn to proceed immediately to a general election. 
Madam SPEAKER 
: Leave is sought; is there any objection? 
Rt Hon Winston Peters 
: That was last week’s plan! Is it a fact that the Working for Families and KiwiSaver schemes are so complex that an ordinary member of Parliament could not understand them as suggested in a secret tape recording we heard over the weekend; and again how is it likely that a leader would defend those policies if they are too complex for him to understand? 
Rt Hon HELEN CLARK 
: Mind boggling as it is apparently what the member says is true because we have it on the authority of Mr English who said: “If you push something up it’s gonna drop. If you give people cash they have high marginal tax rates. OK that’s it. You can’t get round that. Don thought he could but he couldn’t. So did John actually—but you can’t.” 
Rt Hon Winston Peters 
: I seek leave for the Standing Orders of the House to be put aside for a 1-hour debate so that Mr English can explain to Mr Key what these issues are about. 
Madam SPEAKER 
: Leave is sought. Is there any objection? Yes there is objection. 
Hon Dr Michael Cullen 
: I raise a point of order Madam Speaker. Last week Mr Brownlee was pretending the Government was trying to put off a confidence vote. Now he is trying that yet again by wanting to take an extra hour’s debate.