Goff Phil: Questions for Oral Answer — Questions to Ministers 
Goff Phil: Questions for Oral Answer — Questions to Ministers 
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5. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by his statement that “the vast majority” of people will be “better off” as a result of his tax switch on 1 October 2010? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. If the member disagrees and thinks people have been made worse off he will campaign on reversing the tax switch. I notice he does not want to do that. 
Hon Phil Goff 
: If the vast majority of people are better off why are the Federation of Family Budgeting Services and every other social agency reporting that more and more people in debt are coming to see them and why is the Baycorp Advantage debt company expecting a massive spike in debt increases by Kiwis by the end of the year? 
Rt Hon JOHN KEY 
: One reason is that they were allowed to run up a lot of debt because of the policies of the previous Labour Government—that is actually the reason. Secondly one would have thought that that member would know after 30 years in politics that when there is a recession low-income New Zealanders struggle. But the good news is that those low-income New Zealanders are being looked after by a National Government. 
Jo Goodhew 
: How easy would it be to reverse the tax switch? 
Rt Hon JOHN KEY 
: As Mr Carter pointed out on television the other day it would be extremely straightforward to reverse the tax switch. 
Hon Member 
: Your new friend! 
Rt Hon JOHN KEY 
: He was the member’s friend once. But for the most part it would be simply a matter of crossing out the existing tax rates and putting in the tax rates that applied before 1 October. The reason that Mr Goff does not want to reverse the tax switch is that alongside dropping GST he would have to do the following: firstly he would have to raise income taxes across the board; secondly he would immediately have to reduce benefits— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I would have thought that after 2 years in Government the Prime Minister’s response would be about the policies of his Government not speculation on the effects of the policies of another party which is what he is doing now by going through the initiatives being put forward by the Leader of the Opposition. [ 
Interruption 
] 
Mr SPEAKER 
: Members of the House know the rule: points of order are heard in silence. There is just too much noise. I knew that there would be robust debate today but members have to be reasonable. The Prime Minister was saying what in his view would have to be done were GST to be brought down and he was saying what Mr Goff would have to do. That is not saying that that is Labour’s policy; that is saying what he believes. I do not think I should necessarily rule that out. He must not allege that a policy is Labour’s unless he is quoting from reports but I do not think it is unreasonable to describe what might have to happen in his view. 
Rt Hon JOHN KEY 
: Let me make it quite clear that despite the mobile charade known as “Axe the Tax” going up and down the country that is not what is happening—that is exactly the point. He would have to tell beneficiaries that he is reducing their income. He would have to tell superannuitants that their income was going down. He would have to reduce Working for Families payments. He would have to increase companies’ taxes— 
Mr SPEAKER 
: I say to the Prime Minister that we have heard quite enough. 
Hon Phil Goff 
: After 2 years in Government when will the Prime Minister accept responsibility for what his own Government has done particularly when the recovery has stalled prices are going up faster than wages and he looks after his rich mates? 
Rt Hon JOHN KEY 
: I accept responsibility every single day and I speak for the Government. My president does not speak for the Government; I speak for the Government. Let us just go to this very helpful chart that was produced— 
Hon Darren Hughes 
: Smile and wave. 
Rt Hon JOHN KEY 
: —hello how are you “Dazza”—by the Minister of Finance yesterday. It shows that in the last 2 years of Labour— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I think that you are familiar with the Standing Order about the conciseness of both questions and answers. We are getting the usual litany of rubbish from the Prime Minister. [ 
Interruption 
] 
Mr SPEAKER 
: Order! [ 
Interruption 
] I am on my feet. The Leader of the Opposition may wish to leave the House and if he is not careful he will. His deputy may go with him if she is not careful. I invite the honourable Leader of the Opposition to reflect on the provocative question he asked. It was a very provocative question. He cannot expect me as Speaker to stop the Prime Minister from giving a pretty political answer. If members want me to clamp down on Ministers’ answers I am very happy to do that. Members will note that I stopped the Prime Minister earlier on today when he answered in response to the honourable Leader of the Opposition’s question. It was a perfectly fair primary question and I did not allow the Prime Minister to dump on the questioner. But that question was highly provocative and I cannot as Speaker stop a Minister from responding to a highly provocative question. When the honourable member stopped the Prime Minister he was not actually saying anything provocative; he was referring to some information in respect of taking responsibility for his own Government. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It is not so much on the substantive point of order as on the comments you made to the two colleagues on my left while you were ruling. I just remind you Mr Speaker that earlier today you warned the Prime Minister twice about speaking while you were on your feet without threatening to throw him out. 
Mr SPEAKER 
: I take the honourable member’s reminder in the form in which it was offered. The right honourable Prime Minister was referring to some information in answer to the last question. I will allow him to continue that. 
Rt Hon JOHN KEY 
: I was referring to this very useful important document produced by the Minister of Finance. It simply shows that over the last 2 years the real increase in after-tax wages under a National Government has been 9 percent. I must say that I was shocked that over the last 2 years of the Labour Government it was minus 1 percent. 
Hon Phil Goff 
: In respect of the responsibility that the Prime Minister said he would accept is he taking responsibility for the fact that power companies have charged consumers 15 percent GST on electricity prices for the month of September before the increase even came into effect; and who benefits from that: the power companies or his Government? 
Rt Hon JOHN KEY 
: I take responsibility for the administration of the law. As the member would know if he looked at the rules around the pricing of GST components the power companies have probably acted within the law. But my point would be that I think all of us are a little bit disappointed that they have chosen to act that way. The Minister of Revenue has worked with a lot of businesses around New Zealand to accommodate them if there was an unusual situation. Had they approached the Government I think we would have given them an exemption for that. 
Hon Phil Goff 
: Why should families who in September faced a nearly 20 percent increase in vegetable prices; faced big increases and premature increases in their power prices; faced if they live in the Auckland region a rental bill $23 a week higher than this time last year; and faced time and again Government-imposed increased charges such as accident compensation feel better off? 
Rt Hon JOHN KEY 
: One needs to look at a number of component factors. Firstly what is the overall inflation rate when taking into consideration a whole basket of goods across the economy? We know that under a National Government it has been running at 1.5 percent and when Labour left office it was 5.1 percent. The second thing one needs to look at is the tax cuts that have been in place under the two Governments. The answer is that under a National Government they have been significant. The third thing one needs to look at is whether there have been wage increases. The answer is that under a National Government there have been but they reflect the cost of living. The reason that families should take some comfort is that by and large for the most part their wages are rising faster than the rate of inflation. 
Hon Phil Goff 
: Can he confirm that families are likely to face an inflation rate of over 4 percent by the end of this year and of about 5 percent by mid next year; and why should those families feel better off when most have had little or no wage increases? 
Rt Hon JOHN KEY 
: The answer to that question is that yes inflation will rise over the next 12 months and the Reserve Bank will look through that rise because it is a one-off effect from GST. That same one-off effect took place when the member was in the Government that brought in GST and raised GST. The issue is not the underlying inflation rate per se; it is the impact on prices and that impact is catered for by a tax cut. 
Hon Phil Goff 
: Is the Prime Minister telling families who are saying that they are worse off because the price of everything is going up that they are wrong and are they rather than him out of touch? 
Rt Hon JOHN KEY 
: Let us run through some facts and then in the end I will allow those families to make that decision when they go to the ballot box next year. Let us run through some quick comparisons for the last 2 years of the Labour Government and the first 2 years of this National Government. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. You will recall the question; it was straightforward and asked whether the Prime Minister was telling those families that they were better off. 
Mr SPEAKER 
: No the member actually asked whether the Prime Minister was telling those families that they were out of touch or whether he was out of touch. The Prime Minister could have given a highly political answer. Instead he said he wanted to resort to the facts in answering the member’s question. That is not unreasonable. I do not think I can stop the Prime Minister from answering that question that way. He wants to give some information that he believes shows that the people are—well I will leave it up to him to show what—but he was not being abusive and he was not criticising the Labour Party at all. He was just referring to some information. 
Rt Hon JOHN KEY 
: Here are some facts. Let us take the price of bread and the price of cereals. They went up by 18 percent in 2 years under Labour; they are up 4 percent under National. Milk went up 23 percent under Labour; it is up 7 percent under National. Cheese prices increased 50 percent under Labour; there has been a 3 percent reduction under National. Let us take the price of petrol. It went up 22 percent under Labour; there has been a 14 percent reduction under National. Let us take the price of gas. It was up 22 percent under Labour; it is up 5 percent under National. Let us take housing rents. They went up 6 percent under Labour; they are up 3 percent under National. This is what mums and dads will look at and I think I know the way they will vote.