Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:632;Page:4489] 
7.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Does the Government have in mind a range of expenditure it is prepared to commit towards business and personal tax cuts in 2008-09 and in the following 3 years; if so what is this range? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 It is too early in the budgetary cycle to be clear about the possible available headroom. 
John Key 
: Is the reason the Minister will not tell us the size of the fiscal headroom because that number will be determined by the polls not by Treasury—a bit like his student loan policy was in the last election? 
Hon Dr MICHAEL CULLEN 
: It will in part be determined by one meeting our long-term fiscal objectives and two making sure we provide for essential social services—not three thinking up a number and pretending we can pay for it as that member did with his tax policy. 
R Doug Woolerton 
: Can the Minister give us an example of a successful economy that uses tax incentives as a method of encouragement for exporters? 
Hon Dr MICHAEL CULLEN 
: Certainly the Australian economy does for a beginning but so do many economies around the world including of course the United States in a number of different forms. 
John Key 
: Why are potentially billions of dollars worth of business and personal income tax cuts now seemingly affordable when the Minister has spent the last few years telling us they are not and when he has spent the last 9 months since he has been back in office saying that the $360 million of personal income tax thresholds probably are not affordable; is the reason they are now affordable when they seemingly were not before because his idea of affordability is a political concept not an economic one? 
Hon Dr MICHAEL CULLEN 
: No unlike that member whose policy implied raising the level of debt in order to fund current consumption this Government will ensure that its policies can be met while meeting its long-term debt objectives. 
Dr Don Brash 
: I raise a point of order Madam Speaker. That is a gross misrepresentation of the National Party’s position. There was no suggestion that we would borrow to fund current consumption either in the election campaign last year or subsequently. 
Madam SPEAKER 
: That is not a point of order; it is a matter of debate. 
Hon Dr MICHAEL CULLEN 
: Can I treat that as a supplementary question? 
Madam SPEAKER 
: No would Dr Cullen please complete the answer he started before. 
Hon Dr MICHAEL CULLEN 
: The Government remains committed to its debt target. As I said the Inland Revenue Department forecasts give some indication of available headroom. Other headroom will become available if we are able to constrain the growth in Government spending. That will be very difficult as I have explained to the member many times. 
Jeanette Fitzsimons 
: Can the Minister confirm that the funds available for personal and business tax cuts would have been $360 million more if he had not abandoned the carbon charge and that moves to ecological tax reforms such as charges on pollution waste and the use of scarce resources would further enable income and business tax cuts to proceed while at the same time turning the New Zealand economy in a more sustainable direction? 
Hon Dr MICHAEL CULLEN 
: It is unfortunate that the Government is unable to proceed with the carbon tax at this time. Clearly that is lost revenue. For the moment it is not booked fully to account in terms of where the money is going to come from. 
John Key 
: In relation to the Minister’s last answer how would he have a clue what is going to happen to his debt target when he rolls out his theoretical tax cuts because he cannot tell us how big the tax cuts will be he does not know whether they will be business or personal and he cannot tell us whether his indexation is in order—what he can tell us is that he is desperate to keep his job before Trevor snatches it off him so therefore he has been dragged kicking and screaming to the tax cut table? 
Hon Dr MICHAEL CULLEN 
: The only influence in that regard was of course the confidence and supply agreements with United Future and New Zealand First. I hate to tell the member who thinks he is the centre of the universe that he had no impact on this at all. 
Shane Jones 
: Has the Minister of Finance seen any reports of the impact on individuals of alternative taxation proposals? 
Hon Dr MICHAEL CULLEN 
: Yes. I have seen a policy document that tells readers to visit the website taxcuts.co.nz. It states that on visiting that website people will receive an alternative tax policy. The website states: “This domain is parked.” It is the National Party’s tax policy and that is it as of this moment. 
John Key 
: The difference between our tax policy and theirs is that we actually deliver one when we say we will—we do not promise it— 
Hon Dr MICHAEL CULLEN 
: I raise a point of order Madam Speaker. I suggest that when a member starts a question with such a long statement the member does not actually get to proceed to ask the question. 
Madam SPEAKER 
: Well that was not a question. 
Peter Brown 
: Will the Minister confirm that New Zealand First wanted the carbon tax dispensed with we wanted the taxation regime as it concerned the racing industry addressed and we wanted the corporate tax situation looked at—and the Government is doing that—and will the Minister confirm that we are over here helping the Government and Opposition members are over there just making a lot of noise? 
Hon Dr MICHAEL CULLEN 
: I can confirm that the member is over here helping the Government. But I would have to say in all fairness that I wish he had helped us to have the carbon tax. 
John Key 
: Does he agree that what he has been saying about tax cuts in the last couple of days can be summarised like this: tax cuts would have a positive effect on the economy they would help the well-being of New Zealanders and potentially billions of dollars of tax cuts are affordable now—albeit his colleagues would need to show some restraint about future spending proposals—in which case can he confirm that that was National’s policy in the last election? 
Hon Dr MICHAEL CULLEN 
: The answer is approximately no no no and no I think to nearly all of those because the National Party proposed a cut only in the corporate tax rate and nothing else for the business sector at all. That was its last priority. Under this Government changes to business taxation in order to grow a bigger cake are the top priority for taxation changes. 
John Key 
: Can he see why people are deeply sceptical about his born-again religious belief in the power of tax cuts to achieve higher productivity growth and incomes when he has spent the last 7 years in the wilderness raising personal tax rates and arguing against a cut in the company tax rate; and can he confirm once again that when it comes to Labour the idea of the affordability of tax cuts or their economic merits has nothing to do with anything other than him keeping his job and being dragged kicking and screaming to the tax cut table? 
Hon Dr MICHAEL CULLEN 
: If spending 7 years on this side of the House is being in the wilderness I leave paradise to the member for indefinite future.