Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:646;Page:15703] 
1. JOHN KEY (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by her statement made yesterday that “there are families who are squeezed”; if so when did that fact come to her Government’s attention? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes; it actually came to my attention in the 1990s when unemployment and poverty rose to the worst levels experienced in our country since the Great Depression. My Government has been working for 8½ years to address those issues. 
John Key 
: Does the Prime Minister recall seeing in the Budget papers last year a comment from her Minister of Finance that if there was overspending of Budget allowances they would “risk an interest rate response from the Reserve Bank the exchange rate staying higher for longer and a more pronounced economic slowdown”? 
Rt Hon HELEN CLARK 
: I do not recall every sentence of the Budget document but I am aware that the Reserve Bank has not raised the official cash rate since July last year. 
John Key 
: Given that the Prime Minister reads her papers why if she will have noticed that and had had those kinds of discussions with the Minister of Finance did she agree with him to an overspend of $4 billion in that Budget and on the back of that is she prepared to take responsibility on behalf of her Government for the fact that New Zealanders have now seen interest rates double under Labour’s watch? 
Rt Hon HELEN CLARK 
: There seems to be something of a misapprehension in the member’s question. This Government has gross Crown debt down to around 18 percent. That member has advocated that it should rise to 25 percent which I am advised would lead to extra Government spending on debt servicing of around $700 million a year. Everything I see suggests that Kiwis find his policy of borrowing for tax cuts to be simply crazy. 
John Key 
: Does the Prime Minister realise that the debt to GDP ratio has fallen for the most part because GDP has grown and nominal debt has largely been exactly the same; and secondly does the Prime Minister acknowledge that overspending in a Budget will put pressure on inflation and on interest rates and on the back of acknowledging that is she prepared to give an assurance to the House that she will rein in Government spending in this year’s Budget? 
Rt Hon HELEN CLARK 
: Firstly I am pleased the member has noticed that the economy has been growing a lot under a Labour Government. It has grown faster since 1999 on average than that of Australia the United States and the OECD average and it is forecast to keep growing in the next year faster than the United States or the euro zone. Secondly I would note that for roughly one-third of the time a National Government was last in office interest rates were higher than they are today. 
John Key 
: Will the Prime Minister acknowledge that if the Labour Government had rolled out National’s proposed tax plan in 2005 which not only was affordable but would have delivered about $40 per week to someone on the average income and if New Zealanders had an extra $40 or more in their pay packets do you think they would be able to pay for the food increases that were highlighted in the  
Dominion Post 
 and the  
New Zealand Herald 
 today and do you think they would be in a better position to service the mortgages— 
Hon Trevor Mallard 
: “Do you think”—get the question right. 
John Key 
: —that member might not care about New Zealand households but I do—which have doubled under a Labour Government? 
Rt Hon HELEN CLARK 
: Of course the Government offered far more support to families than the $40 the member is talking about. My recollection is that for a family with two children on $35000 the Working for Families package is worth $199 in tax relief a week. The National Party opposed the Working for Families package and continues to oppose it. 
John Key 
: Can the Prime Minister give the House an assurance that all four of Michael Cullen’s tests will be met when he rolls out his proposed tax cuts in the 2008 Budget taking into consideration that one of them is in relation to inflation and that yesterday the CPI data released shows that inflation was at 3.4 percent or will she not worry about that because she has given him the one test which was: “Dr Cullen cut taxes or look for a new job.”? 
Rt Hon HELEN CLARK 
: I have every confidence that the Minister of Finance will meet his tests and I know he will not be borrowing the member’s policy of borrowing for tax cuts because that is just crazy. 
Rodney Hide 
: Does the Prime Minister agree that the best way to assist working families being squeezed is to let them keep more of their money through tax cuts which would also provide for even stronger growth that would further help those families? 
Rt Hon HELEN CLARK 
: With respect to the member I think a range of policies is important. There will be a tax cut in this year’s Budget. A programme will be set out. That has to be set alongside the Working for Families package cheaper doctors’ fees the 20 hours’ free early childhood education and many other measures the Government has put in place to relieve pressure on families. 
Rt Hon Winston Peters 
: How does the Prime Minister explain her railing against Mr Key’s questioning when on all the fundamentals that have been announced by the National Party its policy in respect of the economy of this country is identical to Labour’s; and that being the case where is the problem here as being explained by the Prime Minister in her answers? 
Rt Hon HELEN CLARK 
: The problem may be that the Leader of the Opposition is in the process of swallowing so many dead rats that they are starting to come out of his ears.