Category: New Zealand Parliament – Hansard

Source: New Zealand Parliament – Hansard

Hon Dr DAVID CLARK (Labour—Dunedin): Thank you, Madam Speaker. What a wonderful bill this is. What an excellent bill. I mean, successive Governments down through the ages have made changes to the tax system in the name of fairness, without facts. The idea of fairness can be subjected and manipulated to suit political arguments, but here we have a bill in this House which encourages transparency so the public can debate the merit of tax changes with real facts behind them.

I want to congratulate the Hon Deborah Russell for bringing this to the House and the Hon David Parker for his work on this bill over a long period of time to achieve a bill which actually shines a light on our tax system so that we as New Zealanders can understand how it works. I hear opposite the frustration from the party that would want to defend the interests of the very wealthiest New Zealanders. You heard how often they referenced the wealth report that was done that showed that those earning typically over $20 million—sorry, net assets worth well over $20 million—pay around 8.9 percent as a tax rate as opposed to middle-income New Zealanders, who pay around 20 percent as a tax rate. People know our system intrinsically is a bit unfair. People have always kind of known that, but we haven’t had the facts and they don’t like seeing them out in the public. This bill would seek to make sure that we actually have regular reporting on how our tax system is functioning. So I want to, just quickly in my contribution, look at the schedule at the back of the bill which goes through the different principles. In the select committee we had quite a bit of time going through this with tax experts—I think around about a dozen submissions from tax experts—that helped us zone in together with the help of Sir Rob McLeod on the principles in this bill.

The first focuses on economic income, and it is the principle of horizontal equity—looking at what is the real wealth that people have, not just the wealth they’re currently taxed on but their real wealth and how equal and fair that is looked at across the system.

The second looks at efficiency and, in my view, really gives us the opportunity to say: is the system itself efficiently functioning in a way that removes distortion? For example, is our economy focused on investing in productive assets which we’d all want to increase our exports and make us a wealthier country, a more prosperous country overall.

The third is vertical equity, which looks at progressivity of the system overall. We all know that lower-income people pay a higher portion of their income on taxation. And we all know that actually in real terms, wealthier people pay a bit more of their income typically, although not always, through the tax system. We want to know that the system overall is progressive.

Revenue integrity looks at whether there is coherency in the system, whether loopholes are emerging as changes happen, and then we want to look at the compliance and administration costs—is it hard for taxpayers and Government to comply, does it carry a cost for them in doing it, and how do we minimise that? Then certainty and predictability so that taxpayers can know what they’re likely to have to pay in tax; they can understand their obligations before they’re due. Flexibility and adaptability looks at the way in which the tax system continues to change to reflect current circumstances. Those are the principles in this bill.

I just wanted to spell them out really quickly, to go once over quickly so that people can see there’s nothing to be afraid of in there. What we’re looking at is transparency in our tax system and it’s just astonishing to me that the National Party are arguing against transparency. It is not clear to me, or maybe it is, what they’re trying to hide by opposing this bill. It is astonishing—astonishing. New Zealanders should have a good hard look at this debate, both sides of it—I think transparency is really valuable here—and see those who don’t want you to understand regularly what our tax system looks like and those that would really like everyday New Zealanders, middle-income New Zealanders, to understand how the tax system functions and how those who are in the very wealthiest class, for example, as one outcome of this, avoid paying the kinds of tax rates that middle-income New Zealanders do.

We need transparency in New Zealand. It’s for the long-term good of the system. I want to congratulate again, particularly, the Hon David Parker for his excellent work on this bill, and I commend it to the House.

Source: New Zealand Parliament – Hansard

SIMON WATTS (National—North Shore): Thank you very much, Madam Speaker. I do rise to speak on the Water Services Entities Amendment Bill. Isn’t it ironic that we hear the opening words from the Minister in regards to this legislation, talking about the critique and criticism that is being levelled against this bill? You see, the reality is that our role in this House is to represent our communities, to represent the views of hard-working Kiwis across this country. It is not to simply pay lip service to that feedback and not take into account the views of our community.

Well, National have listened to our communities. We have listened to local government and we have proposed a solution, called Local Water Done Well, that we believe will deal with the reform requirements of water infrastructure in this country. As the Minister failed to note in his address as he opened today, all major parties in this House believe that water infrastructure reform is necessary. It is a question of how do we achieve that outcome. This bill is not the mechanism which we believe, nor the majority of local councils across this country—nor, in fact, the majority of Kiwis—is the pathway to achieve sustainable change in an area which is so critical.

I think when the Labour Party members reflect, in 51 days’, on some of the contributing factors of what happened in the 53rd Parliament, the water services entities legislation and the amendment bill that we are referring to and talking on at its third reading today will be a significant element and a significant contributing factor to the fact of where Kiwis no longer trust this Government. The three waters legislation and the Water Services Entities Amendment Bill is a litany of errors, it is a litany of broken promises, and it is a litany of making it up as you go. And that is the reality that personifies this Government and its processes.

Labour Ministers, and the Minister we have just heard from, are accountable for this reform. They are accountable for its failures and they are accountable for not listening to New Zealanders in regards to how this could have been improved. Because this bill could have been improved, had we given it more than six weeks of consultation with the public. On 22 June, this bill was read, and on 27 July it was reported back to this House. Well, is that acceptable? Is that the way in which we do business in this democracy? I say no. I say that is a complete derogation of our democracy and the fact that we should be taking this legislation that we passed through this House very seriously. We got that feedback loud and clear from submitters on this bill throughout the process that they did not have adequate time to be able to consider the inputs and requirements of this bill.

This bill is a back-down bill. This bill came as a result of the release of the National Party’s alternative, Local Water Done Well. Following that, with a new leader of the party and a need for a policy bonfire and a policy reset, and following the release of our alternative model, then this bill came into play. What is so frustrating is that, actually, none of the substantive aspects that needed to be changed in the bill, the elements around the mega-bureaucracies that are co-governed—an opportunity was there begging to be able to make the amendments and changes in this bill that went without any due consideration. And that is a great shame, because all this bill does is change the number of the mega-bureaucratic co-governed entities from four to 10. That’s pretty much it. It doesn’t deal with the significant pushback across this country that co-governance within the water services and the Public Service delivery—pipes under the ground is not the appropriate mechanism. Co-governance remains unchanged in regards to this legislation. The mandating of the fact that the assets and liabilities across councils will have to go into these new entities is unchanged, with the exception of the Chatham Islands, because don’t forget the Chatham Islands is actually the one territorial authority in this country which was exempted from this legislation. Well, there’s always one, but I do wish the 668 residents in the Chatham Islands all the very best, but they will not be alone in regards to the only entity that is outside this legislation; post 14 October, all other councils will join with them, and rightly so.

The other element of this bill that has not been modified that received significant feedback: 1,997 submissions. That’s quite a lot. The challenge is only 28 individuals were heard through the select committee process, and I think one doesn’t have to be too good at maths to work out that’s not a large number, but you can see why people are fired up and annoyed that their voice has not been heard. But the undemocratic element of this bill in regards to the Te Mana o te Wai statements—and the Minister continually says, and I acknowledge, that in the prior National-led Government, there was the introduction of the principle—the principle—of Te Mana o te Wai. The principle is very different to the introduction by this Government, and reinforced in this bill, of Te Mana o te Wai statements. The statements are not the principle; there is a very clear point of demarcation between those two aspects, because the statements, in effect, bring into place powers and obligations on a number of individuals in regards to this legislation. It is not a principle; it goes further. And so for the Minister to say that the Te Mana o te Wai statements in this bill are simply just a continuation of prior principles under prior Government is not consistent with what we heard in regards to the feedback during the select committee process.

New Zealanders are simple—sensible, sorry; they are sensible and they understand that this is going to be legislation that does not deal with the underlying aspects that we need in this country. This is a back-down bill, and what is interesting to hear from the Minister in regards to the fact that this legislation will remove debt from all of those councils that are burdened with debt, and this will mean that their rates are not going to go up—well, where does that debt all go? Where does it all disappear off to, because the costs and the debt required to fund the water pipes under the ground will still continue irrespective of where that ends up. So maybe the debt’s coming way from the council, but it’s going into another entity. And I’ll tell you what: there is no magic money tree. There is no magic money tree that means this debt just sort of disappears and that no one has an obligation in regards to paying. Ratepayers and taxpayers will continue to be on the hook for the funding of infrastructure in this area. So to simply say that removing the debt from councils, and, as a result of that, a reduction of rates, is going to solve all the problems, is, again, inconsistent and, again, not noting the reality that we are simply moving this problem from one side of the boat to the other. And it will still exist, and that obligation will still exist. And, yes, we do have a deficit of infrastructure, but simply ignoring the fact that this needs to be repaid is, I think, something that Kiwis will see through and have already seen through in regards to this bill.

The opportunity that was placed upon this Government in regards to this legislation, as I have highlighted, is absolutely there for the taking. The elements within this bill—there was a real opportunity in order to reset the position around water services and three waters infrastructure. That opportunity has not been taken up by this Minister, and this Minister, when reflecting on the performance of the 53rd Parliament, in 51 days, will need to take accountability for the actions that have been taken in regards to this piece of legislation and the other elements of the bill that are connected, because there is no one else that the blame can be laid upon other than the Minister, the Hon Nanaia Mahuta, and the Prime Minister, for pushing through reform that was so strongly opposed by all New Zealanders. And that’s the reality: you’ll hear a lot of comments and excuses around that, but that is the reality of this bill. National opposes this bill.

Source: New Zealand Parliament – Hansard

TUESDAY, 15 AUGUST 2023

(continued on Wednesday, 16 August 2023)

WATER SERVICES ENTITIES AMENDMENT BILL

In Committee

Debate resumed.

Clauses 1 and 2 (continued)

CHAIRPERSON (Hon Jenny Salesa): Members, when we were debating this bill last night, we were in clauses 1 and 2, which are the “Title” and “Commencement” for this bill. Are there any members who would like to take a call?

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair, and good morning. It’s good to be back again on the Water Services Entities Amendment Bill.

I’m keen to get into a little bit of commentary in regards to the commencement date of this bill in clause 2. Obviously, in regards to the commencement of this bill, there is a variety of timing mechanisms that are embedded within it. My concern, and the question to the Minister, particularly relates to the commencement aspects of this bill, that will start before 1 July 2024. If we walk our way back and just remind ourselves—and I appreciate that for some of us that causes a little bit of stress and pressure, but it is something to reflect on. The 1 July 2024 date is when all of this three waters reform was meant to kick off originally, and, obviously, post the policy bonfire and the great reset under the new leadership in the Government, the time line for this bill, as per this bill, kicks that out to mid-2026. But there is a phased approach around that.

Clause 2, in regards to the commencement, which links to the detail around that, says that some aspects, particularly around the initiation around shared services, will be kicking in straight after the Royal assent. So my concern here is that, acknowledging that we’re 51 days away from a general election, there is significant differential in the positions around how water reform should be undertaken within this country, and taking into account that there is significant amounts of money continuing to be spent—significant amounts of public money, taxpayer money, continuing to be spent—on reform that, post-election, will either continue or will cease rapidly, then it would only seem sensible that, actually, all of this bill comes into force on 1 July 2024. I think that’s reasonable, because if the mandate is given to whatever Government comes through, then that mandate will be clear, and that is democracy. But in the context of the fact that we have still got 51 days of costs being spent on reform, which, under a National-led Government will cease pretty much straight away, it seems a little bit ironic that we’re continuing just to head in and not take into account the pragmatic nature of the time line and the issues of where we’re at.

So I ask the Minister to put some consideration to the commencement of this legislation. The chances of him making any modification—well, I won’t take a bet; I’m not a betting man. But, anyway, I’ll give the Minister an opportunity to consider that. But, other than that, we’ll finish it there. Thank you.

Source: New Zealand Parliament – Hansard

SIMON WATTS (National—North Shore): Thank you very much, Madam Speaker. I do rise to speak on the Water Services Entities Amendment Bill. Isn’t it ironic that we hear the opening words from the Minister in regards to this legislation, talking about the critique and criticism that is being levelled against this bill? You see, the reality is that our role in this House is to represent our communities, to represent the views of hard-working Kiwis across this country. It is not to simply pay lip service to that feedback and not take into account the views of our community.

Well, National have listened to our communities. We have listened to local government and we have proposed a solution, called Local Water Done Well, that we believe will deal with the reform requirements of water infrastructure in this country. As the Minister failed to note in his address as he opened today, all major parties in this House believe that water infrastructure reform is necessary. It is a question of how do we achieve that outcome. This bill is not the mechanism which we believe, nor the majority of local councils across this country—nor, in fact, the majority of Kiwis—is the pathway to achieve sustainable change in an area which is so critical.

I think when the Labour Party members reflect, in 51 days’, on some of the contributing factors of what happened in the 53rd Parliament, the water services entities legislation and the amendment bill that we are referring to and talking on at its third reading today will be a significant element and a significant contributing factor to the fact of where Kiwis no longer trust this Government. The three waters legislation and the Water Services Entities Amendment Bill is a litany of errors, it is a litany of broken promises, and it is a litany of making it up as you go. And that is the reality that personifies this Government and its processes.

Labour Ministers, and the Minister we have just heard from, are accountable for this reform. They are accountable for its failures and they are accountable for not listening to New Zealanders in regards to how this could have been improved. Because this bill could have been improved, had we given it more than six weeks of consultation with the public. On 22 June, this bill was read, and on 27 July it was reported back to this House. Well, is that acceptable? Is that the way in which we do business in this democracy? I say no. I say that is a complete derogation of our democracy and the fact that we should be taking this legislation that we passed through this House very seriously. We got that feedback loud and clear from submitters on this bill throughout the process that they did not have adequate time to be able to consider the inputs and requirements of this bill.

This bill is a back-down bill. This bill came as a result of the release of the National Party’s alternative, Local Water Done Well. Following that, with a new leader of the party and a need for a policy bonfire and a policy reset, and following the release of our alternative model, then this bill came into play. What is so frustrating is that, actually, none of the substantive aspects that needed to be changed in the bill, the elements around the mega-bureaucracies that are co-governed—an opportunity was there begging to be able to make the amendments and changes in this bill that went without any due consideration. And that is a great shame, because all this bill does is change the number of the mega-bureaucratic co-governed entities from four to 10. That’s pretty much it. It doesn’t deal with the significant pushback across this country that co-governance within the water services and the Public Service delivery—pipes under the ground is not the appropriate mechanism. Co-governance remains unchanged in regards to this legislation. The mandating of the fact that the assets and liabilities across councils will have to go into these new entities is unchanged, with the exception of the Chatham Islands, because don’t forget the Chatham Islands is actually the one territorial authority in this country which was exempted from this legislation. Well, there’s always one, but I do wish the 668 residents in the Chatham Islands all the very best, but they will not be alone in regards to the only entity that is outside this legislation; post 14 October, all other councils will join with them, and rightly so.

The other element of this bill that has not been modified that received significant feedback: 1,997 submissions. That’s quite a lot. The challenge is only 28 individuals were heard through the select committee process, and I think one doesn’t have to be too good at maths to work out that’s not a large number, but you can see why people are fired up and annoyed that their voice has not been heard. But the undemocratic element of this bill in regards to the Te Mana o te Wai statements—and the Minister continually says, and I acknowledge, that in the prior National-led Government, there was the introduction of the principle—the principle—of Te Mana o te Wai. The principle is very different to the introduction by this Government, and reinforced in this bill, of Te Mana o te Wai statements. The statements are not the principle; there is a very clear point of demarcation between those two aspects, because the statements, in effect, bring into place powers and obligations on a number of individuals in regards to this legislation. It is not a principle; it goes further. And so for the Minister to say that the Te Mana o te Wai statements in this bill are simply just a continuation of prior principles under prior Government is not consistent with what we heard in regards to the feedback during the select committee process.

New Zealanders are simple—sensible, sorry; they are sensible and they understand that this is going to be legislation that does not deal with the underlying aspects that we need in this country. This is a back-down bill, and what is interesting to hear from the Minister in regards to the fact that this legislation will remove debt from all of those councils that are burdened with debt, and this will mean that their rates are not going to go up—well, where does that debt all go? Where does it all disappear off to, because the costs and the debt required to fund the water pipes under the ground will still continue irrespective of where that ends up. So maybe the debt’s coming way from the council, but it’s going into another entity. And I’ll tell you what: there is no magic money tree. There is no magic money tree that means this debt just sort of disappears and that no one has an obligation in regards to paying. Ratepayers and taxpayers will continue to be on the hook for the funding of infrastructure in this area. So to simply say that removing the debt from councils, and, as a result of that, a reduction of rates, is going to solve all the problems, is, again, inconsistent and, again, not noting the reality that we are simply moving this problem from one side of the boat to the other. And it will still exist, and that obligation will still exist. And, yes, we do have a deficit of infrastructure, but simply ignoring the fact that this needs to be repaid is, I think, something that Kiwis will see through and have already seen through in regards to this bill.

The opportunity that was placed upon this Government in regards to this legislation, as I have highlighted, is absolutely there for the taking. The elements within this bill—there was a real opportunity in order to reset the position around water services and three waters infrastructure. That opportunity has not been taken up by this Minister, and this Minister, when reflecting on the performance of the 53rd Parliament, in 51 days, will need to take accountability for the actions that have been taken in regards to this piece of legislation and the other elements of the bill that are connected, because there is no one else that the blame can be laid upon other than the Minister, the Hon Nanaia Mahuta, and the Prime Minister, for pushing through reform that was so strongly opposed by all New Zealanders. And that’s the reality: you’ll hear a lot of comments and excuses around that, but that is the reality of this bill. National opposes this bill.

Source: New Zealand Parliament – Hansard

Question No. 3—Prime Minister

3. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does he stand by all of his Government’s statements and actions?

Rt Hon CHRIS HIPKINS (Prime Minister): Yes, particularly this Government’s work to ease the cost of living and support New Zealand families and businesses through difficult economic conditions. We are building an economy that keeps wages growing ahead of inflation, that maintains record low unemployment. We’re taking practical steps to support families like removing the $5 prescription charge, extending targeted childcare assistance, extending 20 hours’ early childhood education to two-year-olds, and making public transport free for kids and at half-price for younger New Zealanders. Our policies are carefully designed to deal with the pressures families are facing right now while maintaining prudent levels of Government spending and keeping a lid on debt.

Christopher Luxon: Was his trade Minister, Damien O’Connor, right or wrong when he said “We probably don’t have enough tax in this country.”?

Rt Hon CHRIS HIPKINS: The member’s taking the Minister’s quote out of the full context in which it was made.

Christopher Luxon: Was former tax lecturer Deborah Russell right or wrong when she said removing interest deductibility from rental properties was “a bad idea” and that “Plenty of residential property investors would simply increase rents.”?

Rt Hon CHRIS HIPKINS: The Government’s policy position on this is very clear and I think Deborah Russell is making a significant contribution in the tax area. I note that those comments were made over 10 years ago.

Christopher Luxon: Can he confirm that since the Government increased the cost of owning a rental property by removing interest deductibility, average weekly rents have increased by $75.00, just as Deborah Russell predicted?

Rt Hon CHRIS HIPKINS: I note that there has been a significant spike in inflation during that period.

Christopher Luxon: How much better or worse off would a typical low-income renter be if they save $2.00 a week on fruit and vegetables but were paying an extra $75 a week in rent?

Rt Hon CHRIS HIPKINS: The Government is doing a number of things to support low-income New Zealanders, including making sure that their incomes are keeping up with the rising costs that they are facing. Wage growth is growing ahead of inflation. That is one of the best things we can do to support families through this inflationary period. Bringing inflation down is also one of the good things that we can do to support them, and I note many of the policies the member is promoting would result in higher inflation for longer.

Christopher Luxon: Has he received advice about the number of IRD officials and lawyers that would be required to determine whether a mixed bag of salad or a vacuum-sealed beetroot count as processed or fresh?

Rt Hon CHRIS HIPKINS: No.

Christopher Luxon: Was finance Minister Grant Robertson right or wrong when he said that cutting GST on some items will “mostly benefit supermarkets”?

Rt Hon CHRIS HIPKINS: The member himself has confessed to having a road to Damascus conversion. The policy that the Labour Party has announced, of course, will be implemented after the election. I welcome the member’s confidence in the re-election of this Government.

Christopher Luxon: Was the Government’s Tax Working Group, led by Sir Michael Cullen, right or wrong when they reported that evidence from 17 countries over 14 years found that only 30 percent of the benefits of GST exemptions were actually passed on to consumers?

Rt Hon CHRIS HIPKINS: I will allow everybody to make their own judgments on the Tax Working Group’s report. Of course, I note that there are some other recommendations in there that the member isn’t quite so enthusiastic about.

Christopher Luxon: Are there any members left in his Cabinet who actually support his tax policies or are they just waiting until the election so they can dump him and his desperate economic band-aid politics?

Rt Hon CHRIS HIPKINS: Well, at least I have a clear tax policy, which is more than the member has, and I think it’s because his co-leader hasn’t figured out how to pay for it yet.

Source: New Zealand Parliament – Hansard

Source: New Zealand Parliament – Hansard

Question No. 3—Prime Minister

3. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does he stand by all of his Government’s statements and actions?

Rt Hon CHRIS HIPKINS (Prime Minister): Yes, particularly this Government’s work to ease the cost of living and support New Zealand families and businesses through difficult economic conditions. We are building an economy that keeps wages growing ahead of inflation, that maintains record low unemployment. We’re taking practical steps to support families like removing the $5 prescription charge, extending targeted childcare assistance, extending 20 hours’ early childhood education to two-year-olds, and making public transport free for kids and at half-price for younger New Zealanders. Our policies are carefully designed to deal with the pressures families are facing right now while maintaining prudent levels of Government spending and keeping a lid on debt.

Christopher Luxon: Was his trade Minister, Damien O’Connor, right or wrong when he said “We probably don’t have enough tax in this country.”?

Rt Hon CHRIS HIPKINS: The member’s taking the Minister’s quote out of the full context in which it was made.

Christopher Luxon: Was former tax lecturer Deborah Russell right or wrong when she said removing interest deductibility from rental properties was “a bad idea” and that “Plenty of residential property investors would simply increase rents.”?

Rt Hon CHRIS HIPKINS: The Government’s policy position on this is very clear and I think Deborah Russell is making a significant contribution in the tax area. I note that those comments were made over 10 years ago.

Christopher Luxon: Can he confirm that since the Government increased the cost of owning a rental property by removing interest deductibility, average weekly rents have increased by $75.00, just as Deborah Russell predicted?

Rt Hon CHRIS HIPKINS: I note that there has been a significant spike in inflation during that period.

Christopher Luxon: How much better or worse off would a typical low-income renter be if they save $2.00 a week on fruit and vegetables but were paying an extra $75 a week in rent?

Rt Hon CHRIS HIPKINS: The Government is doing a number of things to support low-income New Zealanders, including making sure that their incomes are keeping up with the rising costs that they are facing. Wage growth is growing ahead of inflation. That is one of the best things we can do to support families through this inflationary period. Bringing inflation down is also one of the good things that we can do to support them, and I note many of the policies the member is promoting would result in higher inflation for longer.

Christopher Luxon: Has he received advice about the number of IRD officials and lawyers that would be required to determine whether a mixed bag of salad or a vacuum-sealed beetroot count as processed or fresh?

Rt Hon CHRIS HIPKINS: No.

Christopher Luxon: Was finance Minister Grant Robertson right or wrong when he said that cutting GST on some items will “mostly benefit supermarkets”?

Rt Hon CHRIS HIPKINS: The member himself has confessed to having a road to Damascus conversion. The policy that the Labour Party has announced, of course, will be implemented after the election. I welcome the member’s confidence in the re-election of this Government.

Christopher Luxon: Was the Government’s Tax Working Group, led by Sir Michael Cullen, right or wrong when they reported that evidence from 17 countries over 14 years found that only 30 percent of the benefits of GST exemptions were actually passed on to consumers?

Rt Hon CHRIS HIPKINS: I will allow everybody to make their own judgments on the Tax Working Group’s report. Of course, I note that there are some other recommendations in there that the member isn’t quite so enthusiastic about.

Christopher Luxon: Are there any members left in his Cabinet who actually support his tax policies or are they just waiting until the election so they can dump him and his desperate economic band-aid politics?

Rt Hon CHRIS HIPKINS: Well, at least I have a clear tax policy, which is more than the member has, and I think it’s because his co-leader hasn’t figured out how to pay for it yet.

Source: New Zealand Parliament – Hansard

ORAL QUESTIONS

QUESTIONS TO MINISTERS

Question No. 1—Prime Minister

1. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does he stand by all of his Government’s statements and actions?

Rt Hon CHRIS HIPKINS (Prime Minister): Yes, particularly the actions by this Government, which have led to record numbers of New Zealanders in work. Statistics New Zealand data out today confirmed that the economy has added 113,000 jobs in the June year. But that, of course, is not all; data released today also confirms that wages continue to outpace inflation, with average hourly wages rising by 6.9 percent to $39.53. We know that there are many Kiwis who are doing it tough out there, but the Government is continuing to work hard to lower costs, ensure that Kiwis stay in work, and that they get better paid.

Christopher Luxon: Was Grant Robertson right when he said in May that “we will return to surplus in 2025/26”, or will the pre-election fiscal update show bigger deficits and more debt?

Rt Hon CHRIS HIPKINS: In answer to the first of the question: at the time the statement was made, yes.

Christopher Luxon: Has he received any advice from the finance Minister or any officials suggesting the return to surplus will be delayed again?

Rt Hon CHRIS HIPKINS: Well, of course, the PREFU numbers—the Pre-election Economic and Fiscal Update—are put together by the Treasury, independently of the Government.

Christopher Luxon: So are you saying that you’ve received no advice from officials or from the Minister of Finance on whether the return to surplus will be delayed again?

Hon Grant Robertson: It will be with your spending plans.

Rt Hon CHRIS HIPKINS: It certainly would be if the member was the Prime Minister and was spending the huge amounts of money that the National Party have been promising to spend up and down the country, with no idea how they’re going to pay for it. But, of course, I have regular conversations with the Minister of Finance about the state of the Government’s finances.

Christopher Luxon: Why has the return to surplus been delayed twice in two years, and are more delays, debt, and deficits on the cards when he opens the books next month?

Hon Grant Robertson: Perhaps look around the world.

Rt Hon CHRIS HIPKINS: I’d encourage the member to look around the world at the deteriorating financial position around the globe. And I also might like to remind the member that our track record of producing surpluses is a significantly better one than the last National Government, where Bill English, year after year, promised that he was going to turn a surplus, and it took him a lot longer to do that than what he’d promised New Zealanders he would actually do.

Christopher Luxon: Why does he constantly blame global factors for his failure on the economy, when New Zealand is in a recession and set to borrow $20 billion this year but Australia is growing and running a big surplus?

Rt Hon CHRIS HIPKINS: The reason that New Zealand is in a technical recession—if the member wants to read the statistics—is because of a natural weather event called a “cyclone”.

Christopher Luxon: Is he aware that that natural weather event happened long after the country went into recession?

Rt Hon CHRIS HIPKINS: The member is simply economically illiterate if he’s going to make that claim. I’d be interested to know which quarters he is talking about, because the most recent quarterly statistics show that, actually, it was the cyclone that was the difference between New Zealand having negative GDP growth or positive GDP growth.

Christopher Luxon: Doesn’t Australia’s surplus show that countries in our part of the world can face a pandemic and global challenges but still come out the other side when they properly manage the economy instead of running it into recession like he has?

Rt Hon CHRIS HIPKINS: No; it shows that they’re different economies, that the nature of their economies is different, and that New Zealand does not have the minerals part of its export market that Australia does, where they’ve been doing very well recently. We’re different economies.

Christopher Luxon: Can he confirm his Government will spend more this year making interest payments on debt than on primary schools or on the Police?

Rt Hon CHRIS HIPKINS: Of course debt repayments have gone up as, globally, the cost of servicing debt has gone up. Interestingly, then, I’d be interested to know how the member’s going to pay for his nearly $10 billion worth of debt for roads, given that he doesn’t seem to have made any allocation for paying back the debt. He thinks that somehow the private equity markets are just going to give New Zealanders $10 billion in funding to build roads and not want any return from that investment.

Source: New Zealand Parliament – Hansard

Source: New Zealand Parliament – Hansard