Q+A interview with Labour Finance Spokesman, David Cunliffe.
The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can be watched on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news
DAVID CUNLIFFE interviewed by GUYON ESPINER
GUYON ESPINER David Cunliffe joins us now. Thanks for joining us.
DAVID CUNLIFFE - Thank you, Guyon.
GUYON Will Labour introduce a compulsory super scheme?
DAVID You know, it’s been really fascinating in the last week to see the Prime Minister say that he believes auto-enrolment into KiwiSaver is a good idea, and the Minister of Finance, within a couple of days, say he didn’t have the money for it, that it was going to cost a couple of hundred million. What the rating agencies have said, as per your intro, is that New Zealand has some long-term problems that if we don’t get on top of, we’ll get more downgrades and our cost of borrowing will go up, and one of those has been our lack of savings. We’ve got too much private debt, not enough savings. It has to be fixed.
GUYON Yep, and what are you doing about it?
DAVID Well, we have a strong savings policy that we’ll be announcing fairly soon now. Um, we have said previously that we are interested to see the government’s intentions. They said they were putting out a green paper. That’s sunk without trace. And we’d like to see the PREFU, which is the update on the economic baselines, before we make our announcements because, as you know, we are committed to a fully costed manifesto.
GUYON Ok. I don’t want to waste valuable time trying to get you to announce a policy that you’re not going to announce, but compulsion, in principle, is that acceptable to you?
DAVID Well, people think of compulsion as a black and white thing. And I do want to say this - it’s not quite that simple. You can either have a scheme where some are in and everyone can get out, or all are in and you can still get out, or hard compulsion is where all are in and no one can get out. And I think good judgement is required to see where on that continuum you get the best bang for the buck in terms of the most savings, good social equity and reasonable fiscal cost, and we’ll be announcing our decision in just a few weeks from now.
GUYON So you are prepared to spend government money on this? It wouldn’t just be the employer you’re putting the burden on?
DAVID Let me be very clear. Labour does see savings as a critical priority. We will have a strong savings policy that will get New Zealand’s savings rate up. We will lead this debate.
GUYON On superannuation, will you restore the contributions to the Super Fund?
DAVID We will be looking very favourably towards restoring pre-funding. The Prime Minister-
GUYON The full $2 billion? I don’t want to talk about the Prime Minister today. We’re talking about you.
DAVID Yep, sure.
GUYON The full $2 billion?
DAVID Uh, well, we think pre-funding super is important.
GUYON The full $2 billion?
DAVID I’ll give you the number when we make the announcement. But we think pre-funding is important. You cannot have 65% of the average wage at 65 years without pre-funding superannuation. The Prime Minister has lied to the public of New Zealand by saying he would resign before changing the pre-funding or changing the age. You can’t do it. He’s $200 billion short on that promise.
GUYON Let’s talk about your figures. On your tax package that was released a couple of months back, you will borrow $2 billion more in the first six years than National would. What’s the good bit?
DAVID Hey, the good bit is we pay of the Crown’s debt completely earlier than National does - by 2021 - and we reach fiscal surplus the same year as National does. We’re front-end loading some investments in things like savings, like growth and jobs to ensure we meet those targets.
GUYON Yes, but that is an extremely long timeframe.
DAVID Well, it’s faster than the government’s.
GUYON You are borrowing $2 billion more than National over the next six years. I mean, the ratings agencies didn’t like what they’re doing. They’re not going to like that at all, are they?
DAVID Let’s be clear about what the ratings agencies have said. They’ve said we’ve got three problems in New Zealand - we don’t save enough, we don’t export enough, and we have too much private debt. Labour will address all three of those. Now, you can’t do that and take savings as an example without investing a little bit upfront. And if you’re talking about having a strong savings policy, that is going to cost a bit of money. That is part of our fully costed manifesto.
GUYON Yes, but as you intimate there, your numbers show that you will have a higher debt than National for every year until 2021. Correct?
DAVID No, no, I did not say that. Total debt.
GUYON Well, your graphs show that.
DAVID But not spending in any one year.
GUYON You will have more borrowing than National for every year until 2021. I’ve seen your graphs. I’ve seen your numbers.
DAVID Um, what the ratings agencies have said-
GUYON Well, that’s true, isn’t it?
DAVID What the ratings agencies have said is that there is a bipartisan commitment in New Zealand across both major parties towards tight fiscal discipline. Because we’ve met with them. They’ve seen our numbers. It’s the first time an opposition has given a fully costed manifesto in some time, I think. Certainly better than the last election.
GUYON But you’re comfortable having more borrowing than National for every year until 2021?
DAVID Well, if you’re talking about a relatively trivial amount against the background of the tightest fiscal discipline the Labour Party has ever imposed itself, I am totally comfortable with where we are, because we are going to solve the problems of this country rather than pretend they don’t exist and hire fancy-pants PR people to sedate the public. We are going to do the job, and we’re going to have to invest to do the job. And if we don’t do the job, we’ll get another credit-rating downgrade like the Minister for Downgrades has had in the last two weeks.
GUYON Are you saying that you would, um, sack half the spin doctors in the Beehive if you took power? I’d like to hold you to that.
DAVID Yeah, well, you know, there’s a record number of spin doctors in the Beehive getting paid a record amount of money, and we’ll be sacking some of them, for sure.
GUYON Ok. Working For Families - will you restore the cuts that National made?
DAVID Working For Families we think is a really, really important programme.
GUYON Will you restore the cuts that were made?
DAVID Uh, I’m not in a position to give you a commitment on that right now.
DAVID Because we’re going to be refining the final shape of our spending plans in light of the PREFU, which, for the public, is the Pre-Election Economic and Fiscal Update. We need to see those numbers.
GUYON Ok. The public sector cuts. There have been a lot of them, and Labour has moaned long and hard about them. Will you restore any of the public sector cuts that National has made?
DAVID Will we restore any? We certainly will be. We’ll be restoring adult and community education. We’ve already voted $13 million for that and announced it. We’re going to be restoring the Training Incentive Allowance. We’ve already said we’re going to be restoring early childhood education cuts. We’re going to be restoring mental health funding. We’re going to be restoring a lot of stupid, short-sighted cost-cutting measures that this government has substituted for a real plan. Now, the rating agencies knew all about their cuts, but they still downgraded New Zealand. They still gave National a D on its end-of-term report card. Now, it’s now just about cost cutting. That is not going to take New Zealand to a brighter future, especially when, as Pita Sharples has indicated, it’s certain sections of the public that bear the cuts a whole lot worse than others. Now, the gap between the rich and poor in New Zealand is getting wider and wider and wider again. Half the country’s missing out, and we still haven’t solved the problem. So why don’t we take the other approach? Let’s care about everybody. Let’s make sure half the country doesn’t fall off the boat, but let’s get the job done by showing some political guts and courage.
GUYON Ok. You talked a lot about the rich and the poor.
GUYON The poorest New Zealanders are on benefits. Will you raise the level of the benefit?
DAVID We will be, I believe, indexing benefits so that people will not fall further behind with inflation.
GUYON That’s what National has done.
DAVID Are you asking for a one-off inflation-?
GUYON I’m asking you, having talked the big talk about poor people, whether you will raise the level of the benefit.
DAVID Here’s three commitments that will make sure people on the benefit are better off. Firstly, the GST will be zero on all fruit and vegetables that they buy. Secondly, the first $5000 of all income, including beneficiary income, will be tax free. That will be about $20 a week extra in the pocket of every beneficiary family with two parents. Thirdly, we’re going to be announcing a children’s package which will have a significant impact on the children of beneficiary families. And I believe that if we don’t start caring for all our children in New Zealand, then we are going to have a country that is going nowhere.
GUYON Early childhood education. There has been some talk about Phil Goff saying that he would restore that. National cut some $400 million. Can you afford to do that?
DAVID Look, I think we’re going to have to phase some things in. I don’t think we can go - and this is the reverse of your earlier question about fiscal discipline. Of course we can’t restore everything on day one. What we can do is, in a fiscally responsible way, say, ‘Here is the clear direction we’re going in. Here is a down payment. This is what the country can afford right now, and we’re going to be working our way up as we can afford, as the growth comes in, as the exports come right,’ and we’ll be working in that way.
GUYON And this is a legitimate position, obviously, but you seem less worried about government debt than National and more worried about private debt.
DAVID Let’s look at the facts. Let’s see what the ratings agencies have said. They’ve said it’s New Zealand’s total debt. Now, that total debt is 84% private debt, 16% public government debt.
GUYON You’re more relaxed about growing the government debt, because that’s what your figures show you’re going to do.
DAVID Having spent most of the last couple or three weeks telling my caucus colleagues no, they can’t have X, Y, Z because we can’t afford it, I wouldn’t say I’m relaxed. I’m trying, with my caucus colleagues, my front-bench team, my leadership team, to deliver the best possible bang for the buck for New Zealanders, to get the job done, to make sure nobody gets left off the boat and keep fiscal discipline. We will do that.
GUYON Got to leave it there. Thanks, David Cunliffe, for joining us. We appreciate that.
DAVID Thank you.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- National's 10% poll jump isn't believable - but the party's support does seem to be holding up
- Nevil Gibson's Editor's Insight names those most affected by the phase-out of ETS subsidies
- Restaurant Brands' Ted van Arkel explains why the market is tougher in Australia
- Forsyth Barr's Rob Mercer on the New Zealand sharemarket's departure from fundamentals
- Sunday Business with Andrew Patterson