Foss Craig: Questions for Oral Answer — Questions to Ministers 
Foss Craig: Questions for Oral Answer — Questions to Ministers 
[Volume:652;Page:1909] 
1. CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What recent developments have occurred that may boost the New Zealand economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 This morning the Reserve Bank reduced the official cash rate by 50 basis points to now 3 percent. Two major banks have already reduced their lending rates by a similar amount. This is the lowest level since the official cash rate was introduced 10 years ago. Along with tax cuts on 1 April this move will provide significant stimulus to the economy and assist in protecting people from the sharpest edge of recession. 
Craig Foss 
: What previous reports on the outlook for the economy has he seen? 
Hon BILL ENGLISH 
: Prior to the Reserve Bank forecasts today which confirm that the economic outlook is consistent with the pessimistic views of Treasury before Christmas I saw one comment from Dr Cullen in September. He was quoted as saying that the worst was over now and he was very confident the economy would start to pick up in December. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. You may recall your ruling previously that Ministers are not responsible for any comments they made before the election. It is hard to see therefore how they can be responsible for comments that I made before the election—even less so. 
Hon Rodney Hide 
: I am certain it is obvious and I am certain the Minister of Finance would not want to be responsible for those comments. He was not claiming responsibility for the comment. What he was asked was whether there were any reports that he had seen. This is a report that he has seen. It is a particularly nonsensical one but he has seen it none the less. 
Hon Dr Michael Cullen 
: I have a feeling that we must make sure we have very even approaches to some of these matters after your recent ruling. If we were to ask whether the Minister of Finance has seen comments that “New Zealand does not have a debt problem.” made by him and Mr Key before the election; and if so whether he agrees with that comment you would not rule that question out of order? 
Mr SPEAKER 
: I am very happy to rule on this matter because I think the matter is quite clear and I do not want to take more time in the House. The Minister has responsibility in that area there is no question about that and therefore he is able to comment on reports relating to that area. That is the crucial issue: it relates to his area of responsibility. I invite the Minister to continue his reply. 
Hon BILL ENGLISH 
: I am aware that Dr Cullen does not want to take responsibility for comments he made but in September he was quoted as saying in respect of the outlook for the economy: “The worst is over now.” and that he was “very confident” that the economy would start to pick up in the December quarter. Sadly those predictions were premature at best. However Dr Cullen was correct in one important respect: we have had the election since then and in that respect the worst is over. 
Hon David Cunliffe 
: Does he agree with the  
New Zealand Herald  
and the  
Wall Street Journal 
 that his Prime Minister John Key is taking a unique approach to this recession that is “cavalier” and “at odds with the rescue policies being carried out in Washington Tokyo and Canberra.”? 
Hon BILL ENGLISH 
: I think the  
Wall Street Journal 
 has misunderstood the Government’s strategy. In fact I am told its journalists decided what the story was before they got here. The fact is that the Government is following a two-pronged strategy. The first is to provide stimulus to the economy in the short term—to protect people from the sharp edge of recession. The second is to deal with New Zealand’s chronic longer-term economic problems so that we can get this economy in top gear as it comes out of the recession. 
Hon David Cunliffe 
: To that end has the Minister read on page 10 of the Reserve Bank’s report today that the aggregate stimulus in the G20 is around 10 percent of GDP? How does that compare with the Government’s 5 percent of GDP of which 4.5 percent by the Minister’s earlier admission came from the previous Labour Government and 0.5 percent from this National Government just like the  
Wall Street Journal 
 said when 10 percent is the average around the world? 
Hon BILL ENGLISH 
: The use of an aggregate stimulus measure is misleading. New Zealand is not in the position— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I seek clarification through you of the Minister. Is he accusing me of misleading the House— 
Mr SPEAKER 
: The member will sit down. The member knows that is not a point of order. 
Hon BILL ENGLISH 
: Yes the use of an aggregate stimulus measure is not appropriate for New Zealand because that includes countries that are spending trillions on rescuing their banks. On a normal measure of stimulus New Zealand is similar to other countries and along with dropping interest rates the tax cuts will put cash in people’s pockets which will help protect this economy from the worst edges of recession.