Brewer claims Labour twisting his GST comments

Media release

Newmarket Business Association

Tuesday, 27 July 2010

Brewer claims Labour twisting his GST comments

“Deputy Labour Leader Annette King’s suggestion to Prime Minister John Key during Parliament’s Question Time today that the Newmarket Business Association is dead against the Government’s GST increase has been taken out of context,” says Cameron Brewer, chief executive of the Newmarket Business Association.

“She’s dug out a quote I made from the beach on 4 January when I was probably suffering from sunstroke. Five months later on Budget Day we learned about the enormous across-the-board personal tax cuts that will more than compensate for the GST rise.

“Annette King is right about me being ‘a good old National Party supporter’ and yes I was concerned back in January about GST being hiked up in isolation. However the 20 May announcement of a $4.3 billion personal tax cut well and truly makes up for the extra 2.5% increase in GST.

“It is a difficult environment for retailers, but we are convinced that October’s tax cuts will provide a good boost to the country’s cash registrars,” says Cameron Brewer.

Please note below: Question Time transcript for Q2 – 27 July 2010

2. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: What adverse impact on costs and prices, if any, have this Government’s policies had on New Zealanders?

Hon JOHN KEY (Prime Minister): On 28 April of this year the Government increased tobacco excise. This was strongly supported by Labour, which said: “This is a huge step forward in health promotion for all New Zealanders.” From 1 July a number of sectors, including liquid fossil fuels, came into the emissions trading scheme. This is expected to have an impact on households of around $3 a week, which, I might add, is about half the cost of scheme proposed by Labour. The most important thing to look at, however, is the overall change in consumer prices across the economy. The CPI rose only 0.3 percent in the last quarter. Most of that rise was due to tobacco price increases, leaving annual increases at only 1.8 percent. Members might like to know that over the last 4 years of the previous Labour Government inflation was never as low as that. In fact, it did not come to terms even anywhere near that.

Hon Annette King: When he said at the start of June that “People will be better off, they just don’t know it yet.”, had he factored in the following price increases that New Zealanders are experiencing right now: power, petrol, rent, mortgages, accident compensation levies, interest rates, car registration, dairy products, and even the price of a pint; if not, why not?

Hon JOHN KEY: I have only one question: where on earth was that member for the 9 years Labour was in office? Let us just run through a few—

Hon Annette King: I raise a point of order, Mr Speaker. You heard my question. It was absolutely straightforward. To start off an answer by talking about the last 9 years of the previous Government shows either that the Prime Minister does not have an answer—

Mr SPEAKER: No, no—the member was doing fine up until that point. The member will not use a point of order to make that kind of comment. I think it is helpful when Ministers, including the Prime Minister, answering questions do not ask a question in response. I am sure that the Prime Minister is perfectly capable of rephrasing the start of that answer.

Hon JOHN KEY: Let us just run through a few things for the education of the Labour members. Electricity prices rose 2.9 percent in the year to May 2010; in the 9 years Labour was in office they rose 72 percent. Petrol is $1.75 a litre; back then, when Labour was in office, it was $2.11 a litre. The emissions trading scheme added $3 to the average household per week—

Hon Annette King: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: The member is perfectly at liberty to call a point of order, and it will be heard in silence.

Hon Annette King: This might be a very good general debate speech from the Prime Minister—

Mr SPEAKER: I want to hear the point of order.

Hon Annette King: —but it does not address the question I asked the Prime Minister. He was answering in terms of what Labour did; I asked about what this Government did.

Hon Gerry Brownlee: The questioner stood up and read a list of various activities across the economy, claiming that the costs had risen for New Zealand households. It was only reasonable for the Prime Minister to then compare those costs to the costs under the previous Government. The result is a shocking indictment on—

Mr SPEAKER: Likewise, the honourable member had been fine up to that point. We will not use points of order to introduce political debate. I have to say to the Hon Annette King, in fairness, that if I recollect her question correctly she asked how the Prime Minister either explained or justified saying that New Zealanders would be better off given a list of price increases. The Prime Minister answered the question in a relative fashion: he identified certain price increases but compared them to what had happened previously. He therefore, I think, was arguing that relatively people are better off. That was his answer; it is not my business to judge it. I think the member is vulnerable to that kind of answer when she asks that kind of question.

Hon Annette King: I raise a point of order, Mr Speaker. You may not have noticed that part of my question asked whether he had factored in price increases that New Zealanders are experiencing now. That was my question, and that was the basis of my question.

Mr SPEAKER: I think the way the member started her question was by saying something about people being better off—or the Prime Minister making a comment that people would be better off— and the Prime Minister, I think, was arguing that people are relatively better off. It is his right to argue that in response to a question like that. The honourable member, of course, has further supplementary questions.

Hon Annette King: In light of that answer, what will be left of most New Zealanders’ tax cuts when GST goes up by 20 percent on 1 October, which will further push up the cost of rates, power, rent, food, petrol, school uniforms, building a house, a block of cheese, and even the humble postage stamp? Has he asked New Zealanders the question he liked to ask in 2008: “Do you feel better off?”

Hon JOHN KEY: The answer to the question is that someone on the average wage will be about $15 a week better off, and the average family will be about $25 a week better off. But I can say that come 1 October 2010 New Zealanders will say: “Gosh, we must have a National Government, because we have had two rounds of tax cuts. We waited 9 years and never got one under Labour.”

Hon Annette King: Is he concerned about the continued cost his Government is putting on to small businesses, which has led Cameron Brewer of the Newmarket Business Association—a good old National supporter, I believe—to say: “The past 18 months have been really hard on retailers. The last thing they now want to do is increase their prices to help out the Inland Revenue’s tax gathering.”, and “while confidence remains flat, it paints a challenging environment for business,”?

Hon JOHN KEY: I have not spoken to Cameron Brewer about the matter, but I can say that this Government is delivering, on 1 October, a $4.3 billion personal tax cut, funded in part by a $2 billion increase in GST. If that party wants to go and take $4 billion worth of tax cuts off New Zealanders, it should let us know.

Hon Annette King: Does he agree with—

Mr SPEAKER: We cannot hear the honourable member. I apologise for interrupting, but I ask for a little respect, please, as we hear her supplementary question.

Hon Annette King: Does he agree with budget advisers who are telling families to grow their own vegetables and take in boarders in order to be able to make ends meet, with the rising cost of food, power, petrol, phone rentals, car registration, and so on; and what extra will families face after they have a GST increase on 1 October?

Hon JOHN KEY: I do agree with budget advisers when they say that people should do everything they can to make ends meet. That makes sense. I also agree with the point that food prices fell by 2 percent, on the recent record, which is the biggest fall since records began in 1960.

Hon Annette King: What is his understanding of the current price of 2 litres of standard milk, a 1 kilogram packet of Weet-Bix, and a loaf of white toast bread, and how much cold hard cash will

struggling families have to pay after these basic items are increased in price after a rise in GST on 1 October?

Hon JOHN KEY: My understanding is that they will be much more affordable when the tax cuts come on 1 October.

Dr Russel Norman: Does he agree that Cabinet’s decision not to lower the allowable blood alcohol content for driving for those aged 20 years and over will have costs on New Zealanders in more accidents and lives lost; if so, will he support giving his MPs a conscience vote on a Green amendment to his upcoming road safety legislation to lower the allowable blood alcohol content to 0.05 for all drivers aged 20 years and over?

Mr SPEAKER: Although I appreciate that the member tried to align the question to the impact on costs, I think that, in substance, the question was miles away from the primary question. But I will hear Dr Russel Norman.

Dr Russel Norman: I raise a point of order, Mr Speaker. The issue is about costs on New Zealanders, and the adverse impacts of costs on New Zealanders. If there are more car accidents as a result of Government policy, which is the arguable point, there will be more costs on New Zealanders.

Hon Gerry Brownlee: Mr Speaker—

Mr SPEAKER: Let me deal with this matter first, before I hear the honourable Leader of the House. If we take the question very strictly, it talks about the past and policies. It asks what effect, if any, this Government’s policies have had on New Zealanders. There has been no change—the impact of no change in terms of blood alcohol has certainly not impacted on New Zealanders as yet. So I think there is a range of reasons why the question is wide of the mark. I do not want to take a question off the member, though, and I am happy for the Greens to continue to have six questions so that I am not being too unfair on them. If the member wishes to ask another question on this primary question, or on a question further down the Order Paper, I am happy to accommodate that.

ends

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