﻿Mr SPEAKER: Question No 7, Grant Robertson.
GRANT ROBERTSON (Labour—Wellington Central)
to the Minister of Finance: Does he stand by all his answers
to Oral Question No. 12 yesterday?
Hon BILL ENGLISH (Minister of Finance):
Yes, and I particularly stand by my statement where I said
that I stand by my statements.
Grant Robertson: Has he received forecasts from Treasury that show
a deficit for the 2015-16 year?
Hon BILL ENGLISH: As I have indicated a number of times,
the forecasts in the Budget are likely to show,
compared with the half-yearly update, a slightly increased
deficit for 2014-15 and lower surpluses for 2015-16.
Grant Robertson: I seek leave of the House to table an OIA document
released by Treasury, dated 7 November 2014, which forecasts
a deficit for the 2015-16 year.
Mr SPEAKER: Leave is sought to table that particular OIA document.
Is there any objection?
There is none. It can be tabled.
Grant Robertson: Is it correct that Treasury advised him
that even if he made the cuts to the Budget forward-spending allowance
that he did, the surplus in 2015-16 would happen
only if the fall in dairy prices significantly rebounded?
Hon BILL ENGLISH: Treasury may have given that advice at some stage;
I do not recall it. What I can tell the member is that the Budget
is a fairly dynamic process—that is, it is an interaction of Government
decision-making and new information— and he will just have to wait
for the Budget later in May to see exactly where Treasury
and the Government ended up.
Grant Robertson: In light of that answer, does the Minister recall
paragraph (e) of the paper dated 7 November 2014, which says
that a Budget surplus in 2015-16 could happen only assuming
dairy prices rebound as currently forecast?
Hon BILL ENGLISH: No, I do not recall that particular paragraph,
and in any case, I would not say the advice is wrong;
I would say it is partial. As we have discussed in the House before,
there are a lot of factors that lead to the operating balance
of the Government—the whole sweep of $73 billion of expenditure
and what is happening with that— and, as we have discussed a lot
over the last couple of weeks, other factors that were not known
in November, such as the inflation rate being a lot lower than expected,
and the impact of that on the total size of the economy.
Grant Robertson: Is he aware of the Goldman Sachs report
from July last year that indicated that there was a 5-year global milk glut,
and that with the further fall in milk prices last night,
there is now a $7 billion hole in the NZ economy, and did he take that
into account when assessing whether a surplus was possible
in 2015-16, even with a reduction in spending?
Hon BILL ENGLISH: There have been any number of reports
about where dairy prices might or might not go,
but I am a bit surprised at the Opposition attitude,
because those members are usually advocating that we have too much dairy,
and so presumably they are pleased when the prices are lower
and the industry is not doing so well.
Grant Robertson: Is it correct that not only has he failed
to deliver his promised surplus for 7 years but he is actually
on track to fail for an eighth year in 2015-16, unless there is
a major rebound in global dairy prices, which no one is predicting?
Hon BILL ENGLISH: No, but I can tell you that 8 years
of political failure by the Labour Party must be a lot more painful.
Mr SPEAKER: Question No 8.
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