King Annette: Questions for Oral Answer — Questions to Ministers 
King Annette: Questions for Oral Answer — Questions to Ministers 
[Volume:670;Page:17381] 
1. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister of Finance 
: When he said recently “where the Government does have some influence we are working hard to keep prices low” which prices was he referring to? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I was referring to specific examples such as interest rates. We have worked hard to control Government spending so that we do not put upward pressure on interest rates. Floating mortgage rates are about 5 percent below where they were at under the previous Government. With regard to the emissions trading scheme we have put in place a system that halved the costs of the emissions trading scheme. In electricity we have increased competition so that households do not face a 72 percent price rise as they did up to 2008. We have worked hard to bring the out-of-control ACC scheme under control so that levies do not have to keep increasing. 
Hon Annette King 
: If as he claimed on Sunday the Government is working hard to keep prices low why did he allow Government-controlled prices such as car and motorbike registration ACC levies early childhood education fees GST and the cost of doctors’ visits to name but a few to go up at a time when economic commentators are saying households could face a period of significant misery in New Zealand? 
Hon BILL ENGLISH 
: We have had to strike a balance between recognising that pressure on households on the one hand and cleaning up the mess left by the previous Labour Government—for instance the car licensing system was tens of millions of dollars in deficit. We are doing our best to close that massive deficit in the car licensing system without passing on all the costs to licence holders. 
Hon Annette King 
: What action will the Government take to control petrol prices now that they have reached $2.15 a litre which is something National demanded that the previous Government do when the price reached $2.03 a litre and which is something that while in Opposition National thought obviously the Government could do something about? 
Hon BILL ENGLISH 
: Unlike the previous Labour Government we do not claim to be able to control everything. Consumers and households are doing their best to deal with rising oil prices. As the member knows the Government does not have too much influence over Colonel Gaddafi but maybe the Labour Party does. 
Hon Annette King 
: What action will the Government take to reduce the cost to New Zealand families of milk which has gone up by 37c a 2 litre bottle given that John Key said in 2008 that families had to ration milk to their children because of the price and that the then Labour Government should do something about it? 
Hon BILL ENGLISH 
: As the member will know New Zealand is a beneficiary of high commodity prices. More people want to pay us more for more of our product than ever before and some of those prices are reflected in domestic prices. 
Chris Tremain 
: What is the outlook for inflation and how does this compare with past inflation? 
Hon BILL ENGLISH 
: Of course there has been a spike in inflation because of the increase in GST but if we look at Reserve Bank forecasts for this calendar year we see it projects there will be inflation of 2.3 percent; in 2012 of 2.2 percent; and in 2013 of 2.5 percent. Over those 3 years the rate in each year is about half the rate that inflation was at in 2008 when Labour left office which is why no one believes the Labour members when they complain about rising prices. 
Hon Annette King 
: If New Zealanders are better off following the tax cuts and the wage increases as he constantly claims can he explain why people are feeling the impact of food grocery accommodation insurance and petrol rises at the fastest rate in almost 20 years and does he believe that people are just making it up when they say they are facing a struggle at this time? 
Hon BILL ENGLISH 
: They feel those prices because they are out there every day doing their shopping and paying their bills. They have not all had significant wage increases but they have had after-tax increases in their wages. The member seems to be going down the track of I think it was the  
Herald on Sunday 
 which tried to claim that inflation was at the same kind of rate it was at back in the mid-1980s when it was actually 17 or 18 percent. Current inflation is actually around 2 to 3 percent.