Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 11 March 2015. Volume:703;Page:2116. Text is incorporated into the Bound Volume.]3.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement in relation to the Reserve Bank that “it’s not an option for the bank to raise interest rates”?Rt Hon JOHN KEY (Prime Minister): First of all as I said at the time that is a matter for the governor but I do stand by my statement which simply reflects what just about every market commentator is saying.Andrew Little: To the Prime Minister not the market commentator—Mr SPEAKER: Order! Just ask the question to the Prime Minister.Andrew Little: Why did he put public pressure on the Reserve Bank Governor to use his power to not raise interest rates when the whole point of the Reserve Bank independence is to protect the governor from partisan interference?Rt Hon JOHN KEY: I did not put any pressure on the Reserve Bank Governor. As I said it is a matter for the governor. But is the Leader of the Opposition telling us that in an environment where inflation is at 0.8 percent and probably going lower where our base rates are 3.5 percent where seven countries in the developed world this year alone have cut interest rates and where three-quarters of the world have base rates between zero and 1 percent he seriously wants the governor to raise rates in which case no wonder he has thrown Willow-Jean Prime under the—Mr SPEAKER: Order! [Interruption] Order! I remind the Prime Minister that when I rise to my feet it is important that he then resumes his seat.Andrew Little: In light of that answer if he thinks that megaphone diplomacy with the Reserve Bank is OK why did he not intervene to exempt first-home buyers from the Reserve Bank’s loan-to-value ratio restrictions?Rt Hon JOHN KEY: Well actually I am glad the member raised that because that was going to be one of my points so I may as well cut straight to it. That is exactly what the Labour Party did when the loan-to-value ratio came out. It ripped straight into it with David Cunliffe and said: “Oh by the way it shouldn’t be doing it.” And in 2014 Labour—Mr Parker will know this because it was his policy—actually went into the election with a variable KiwiSaver contribution which would have meant that actually politicians would have to decide part of what was happening in terms of interest rate - setting not the governor.Andrew Little: Is he aware that house prices in Auckland went up by almost $90000 on average last year alone and is that not a sign that his half-measures on housing affordability are a failure and the only real solution is to get out there and build affordable homes?Rt Hon JOHN KEY: It seems pretty well wide of the mark in terms of the question but you know the Government is building a lot more—insisting on building a lot more homes. I think 84 of the 100 special housing areas that have been consented are actually in Auckland. What the member Andrew Little I assume seems to be saying if we tie the two together is that interest rates should rise. That is a remarkable thing to think. If that is your level of economic understanding I am shocked that you want interest rates to go up. Fair enough.Tim Macindoe: What reports has the Prime Minister seen that explicitly question the Reserve Bank Governor’s independent judgment in setting monetary policy?Grant Robertson: Has he used this answer?Rt Hon JOHN KEY: Well actually no he has not. Actually I have seen a number of reports regarding monetary policy decisions over the years. They include: “The Reserve Bank Governor is out of order.” “We’re disappointed by the Reserve Bank’s decision to raise the cash rate.”—OK—and best of all “Politicians must stop cynical point-scoring in these matters.” Those comments were made in a press release by Andrew Little.Andrew Little: Point of order. [Interruption]Mr SPEAKER: Order! This will be a point of order that will be heard in silence.Andrew Little: I seek leave to table a print-out from the QV.co.nz website confirming that average Auckland house prices rose $90000 last year.Mr SPEAKER: As I have ruled on many occasions if it is freely available for members to go and search on the web themselves I do not intend to put the leave.Rt Hon JOHN KEY: I seek leave to table the press release “Reserve Bank Governor out of order” by Andrew Little.Mr SPEAKER: Order! Such press releases are also freely available.Hon Member: Has anybody read it?Andrew Little: Widely read. Widely read. Just so we are clear: does he dispute the figures from Harcourts chief executive officer Hayden Duncan and from ASB economist Jane Turner showing that current rates of building consents are not high enough to cope with Auckland’s population growth?Rt Hon JOHN KEY: There has been an explosion of building activity in Auckland and around New Zealand.Hon Members: Ha ha!Rt Hon JOHN KEY: Well members might laugh but actually it is true.Phil Twyford: Where are they?Rt Hon JOHN KEY: There are quite a few actually and they will continue to happen. Actually they will happen under a National-led Government that has allowed special housing areas to take place which the Opposition was opposed to. They will happen because interest rate settings are affordable for New Zealand which by the way the Opposition was opposed to. But if the member really cares about Aucklanders here is an idea: join with us and vote with us on the Resource Management Act reforms. Oh that is right you will not.Andrew Little: Why not just be straight with the people of Auckland and admit there are more people per house than before it is projected to get worse in the years to come and his tinkering will only send house prices higher and higher again and again?Rt Hon JOHN KEY: I think actually if we go back to the primary answer I was very straight. As I said it is a matter for the governor but in my opinion raising interest rates at this time is not the right thing to do. But when it comes to being straight here is the answer: Mark Osborne. Because—guess what—Andrew Little does not know the answer to the question: Winston Peters or Willow-Jean Prime? He does not know the answer. [Interruption]Mr SPEAKER: Order!Andrew Little: Making question time too much fun! When is he going to stop doing the Reserve Bank’s job start doing his own job and realise that under his watch homeownership has plummeted prices have skyrocketed and for hundreds and thousands of Kiwis the dream of owning their own home just now lies in ruins?Rt Hon JOHN KEY: I am doing my job and one of my jobs is leader of the National Party and as leader of the National Party I am voting for Mark Osborne. As leader of the Labour Party that member does not have a clue whom to vote for. Interesting. Here is the answer: Willow-Jean Prime. She has got “Labour” on the bottom of her billboards—Tracey Martin: Point of order.Mr SPEAKER: Order! [Interruption] Order! There is a point of order called by Tracey Martin.Tracey Martin: I raise a point of order Mr Speaker. Just some clarification Mr Speaker. Previously the Prime Minister has denied—[Interruption]Mr SPEAKER: Order! This is a point of order and it will be heard—so I can hear it—in silence.Tracey Martin: Previously the Prime Minister has declined to answer questions because he was working in his capacity as the leader of the National Party. We now have the Prime Minister standing and as the leader of the National Party making statements in the House in answer to questions. Can I ask you to clarify when it is suitable and when it is not.Mr SPEAKER: It is a very difficult line for me to clarify but on many occasions when I go back through Hansard I note that various Ministers or Prime Ministers have declared that they have made statements as party leader and therefore should not be questioned because that is the basis on which they have made the answer. The Prime Minister in this particular answer brought in the fact that he was a leader of a political party which is not out of order. When I considered the question “Why won’t you do your job?” or words to that effect I gave the Prime Minister a fair amount of latitude in the way he did then answer that question.