English Bill: Questions for Oral Answer — Questions to Ministers 
English Bill: Questions for Oral Answer — Questions to Ministers 
[Volume:637;Page:7325] 
5.  
Hon BILL ENGLISH (Deputy Leader—National) 
 to the  
Minister of Finance 
: What is his position on the mortgage levy today and how does this compare to his position last Thursday? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 My position last Thursday was the same as that which I had understood the member’s position to be last Thursday and that was that ideas should be considered carefully particularly when they come from Treasury and the Reserve Bank. Unlike the member my position has remained unchanged. 
Hon Bill English 
: Can we take it from the Minister’s answer that Government officials are now still working on the concept of a tax on fixed-interest mortgages? 
Hon Dr MICHAEL CULLEN 
: Pursuant to the agreement at the end of the meeting that further work would be done on the variable interest mortgage rate I understand that a report is coming to me at the end of this week. As a matter of courtesy I shall make it available to the joint leaders of the National Party Mr Key and Mr English but of course if they wish to continue discussions I am happy to do so; if they do not then clearly the issue is off the table because it would require a bipartisan approach. 
Darien Fenton 
: What interest has been expressed in the levy? 
Hon Dr MICHAEL CULLEN 
: In the meeting I held with Mr Key and Mr English Mr Key indicated a high degree of interest in the proposal which Mr Key himself explained quite carefully at the meeting. He now claims he was merely being polite. So the National Party seems to have stumbled from a leader who claimed to be too polite to debate the Prime Minister in public to one who claims to be too polite to debate the Minister of Finance in private. 
Hon Bill English 
: Is the Minister aware that the Prime Minister said last week that it would be a waste of time for officials to keep working on it; and why has he defied her instruction to him to pull back on the tax on fixed-interest mortgages because it is political suicide? 
Hon Dr MICHAEL CULLEN 
: The report was almost completed. Given the fact the report was being prepared—in effect—at the joint request of that member his co-leader and myself I saw no need to stop it at that point. Indeed it was Mr Key who referred to the proposal as a stabilisation reserve where the levy could be negative on occasions—and he nods his head I see. 
Hon Trevor Mallard 
: Can the Minister confirm that this meeting was held following a written request from Mr Key to consider these matters and that at the meeting the strongest proponent of that mortgage levy was John Key; and given that is this question a set-up from Bill English as a very early start in his campaign to destabilise John Key? 
Hon Dr MICHAEL CULLEN 
: It is certainly true that in a letter to me Mr Key said he was very interested in debating proposals all of which were in the public arena at the time he wrote the letter. It was very clear at the meeting that Mr Key wanted more analysis on this matter. It was very clear also that Mr English’s body language was somewhat retentive—to put it mildly. It is very clear that the members of the “dream team” cannot agree on this matter just as they cannot agree on fiscal policy as Mr English showed at the Finance and Expenditure Committee this morning. 
Hon Bill English 
: Can I take from the Minister’s answer that whether the levy proceeds depends on the Opposition’s view and from his advocacy of the levy again at the select committee this morning that it is Labour’s policy to explore putting a tax on fixed-interest mortgages in order to buttress monetary policy? 
Hon Dr MICHAEL CULLEN 
: What I said was—and it follows a policy that I have adopted for close on 20 years now that monetary policy framework should be a bipartisan matter—that consensus would be required. If the National Party has now dogged on the agreement it entered into in December in my office then that is the finish of that proposal. But the fact remains the problem has not gone away and the problem for that member who is supposed to represent a rural electorate is that it is doing immense damage to the exporting sector. If he went down to Southland occasionally he might find that out. 
Rt Hon Winston Peters 
: Does the Minister of Finance share the view of New Zealand First that the preferred method of addressing inflationary pressures now—and at the same time promoting employment and export growth—is to introduce a dramatically extended savings plan providing real incentives to increase New Zealand’s appalling rate of saving and at the same time to increase our domestic investment capacity; and will he consider introducing such a policy soon? 
Hon Dr MICHAEL CULLEN 
: On 1 July the KiwiSaver scheme comes into operation. It is expected to have a significant impact in my view on the level of savings within New Zealand. We should always be open to further moves. I am personally still not supportive of compulsion on the contributor—the employee—because I now think the Government takes on a very high level of moral hazard around the failure of any particular savings scheme. 
Hon Bill English 
: Can the Minister answer the question that I asked right at the start: what is the Labour Government’s position today—[ 
Interruption 
] 
Madam SPEAKER 
: I ask members to show restraint. That was the second inappropriate comment made by that member and it will be the last one. 
Hon Bill English 
: Can the Minister outline for the benefit of the House and the public just what the Labour Government’s position is on the proposal to put a tax on fixed-interest mortgages? 
Hon Dr MICHAEL CULLEN 
: The position is that the fact that the National Party dogged on discussions means that no further progress can be made on that. But I invite the member actually to discuss seriously how monetary policy can be made more effective and what options are available. He has no ideas in the area other than to slash social spending and perhaps to have tax cuts for the rich. 
Hon Bill English 
: What are the public and the House to make of a situation where the Minister of Finance has just contradicted directly the Prime Minister’s position which is that the proposal is a “dead duck”—and that is a quote? 
Hon Dr MICHAEL CULLEN 
: I do not know whether the member noticed but I just put another bullet into the body. [ 
Interruption 
] 
Madam SPEAKER 
: The member is entitled to be heard. 
Hon Bill English 
: For the third if not the fourth time: can the Minister outline the Labour Government’s position on the proposal to put a tax on fixed-interest mortgages? 
Hon Dr MICHAEL CULLEN 
: For the fourth if not the fifth time: the fact that the National Party has dogged on the discussions means that it is now a dead issue. It will not proceed. [ 
Interruption 
] Well darling if you were kissing me I would be saying no even if you did not notice.