On The Nation: Minor parties debate the economy
On The Nation: Minor parties debate the economy
United Future’s Peter Dunne calls ban on foreign home ownership "a racist policy" that says "a certain category of people are the cause of the problem. Now just think of the historical precedents for those sorts of claims".
Mana’s John Minto says busloads of Australian women are coming to New Zealand, buying 2-3 houses before flying home - "that's a disaster for New Zealand"
Dunne to Minto: "You are supporting a racist policy".
ACT’s Jamie Whyte says property owners should be able to sell to whomever they like: "I don't consider myself to own the whole country, unlike you over there".
NZ First’s Winston Peters raises "smart policy" where immigrants must live five years outside Auckland when they first arrive in New Zealand
Maori Party’s Chris McKenzie on support for rising net immigration rates: "Well if you are asking me as a Maori, immigration has been very poor since 1840 so absolutely not"
Minto: "...we should be able to abolish the dole because we can provide decent jobs for everybody".
Russel Norman says 45 percent increase in median house price in Auckland - 34% nationally - under current Government
McKenzie: Maori economy now worth $47 billion but there's a long way to go to help the most vulnerable
NZ First wants new state agency to buy land to help first-home buyers enter the housing market
GST: Greens won't back reduction from 15% this election, NZ First promises "substantial changes", Mana would scrap it and introduce inheritance tax
United Future backs increased refugee take and increased population
ACT would make raising super age and linking it to inflation rather than income "a priority" in coalition negotiations
NZ First insists no crisis in Super funding; Greens say "smart, green economy and productivity gains can pay for super age to stay at 65”
Whyte wants to cut interest-free student loans and says paid parental leave is "middle class welfare" - "we think people should bear the costs of their own decisions".
Norman to Whyte: "Imagine you're part of a big human family"
Maori Party warns if financial literacy not improved, Maori will get "half the retirement savings everybody else gets"
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Lisa Owen: The headline for this year’s budget first, confirmed on The Nation last month, is that the government will be back in surplus. So we apparently have a rock star economy tracking with growth above 3%, unemployment rates lower than most OECD countries. So Russel Norman, isn’t this proof that we are on the right track?
Russel Norman: Well this government has increased debt to about 60 billion dollars, so they have added nearly 50 billion dollars to government debt. When you think that the terms of trade are at the highest they have been in a generation and still we are running very large current account deficits. I think you’d have to say when you look at the Christchurch rebuild, there’s a big stimulus through the economy. Actually when you put all that together the economy isn’t doing very well and we have a big debt government. Yes thought they might run a wafer thin surplus in this financial year. But if you look at what they have done since they have been in government, National’s legacy will be massive debt. It’s about $10,000 per person in New Zealand, is how much National has added to government debt.
Lisa Owen: Chris McKenzie, are we on the right track?
Chris McKenzie: We are on
the right track. I wouldn’t call it a rock star economy
but we need to put it in context, that we have come through
what we all know to be one of the largest global financial
crisis’ of modern times. And if you have a look at the
growing Maori economy, that has grown exponentially over the
last ten years. It’s worth $37 billion dollars now and
contrary to popular belief that isn’t fuelled by the large
amount of capital from treaty settlements that are going
into the regions, that it is self-employed Maori businesses
and it is Maori workers. But we have plenty a way to go if
we are going to reach the most vulnerable people in this
Lisa Owen: John Minto?
John Minto: Well I would say
that the rock star economy would be an absolute mystery to
low and middle income families. They have not seen any
benefits from this so-called economy. And the only growth we
are seeing and for a long time the only growth we have seen
has been in low quality, low paid jobs where people cannot
even get guaranteed hours of work. So we have got 300,000
people either unemployed or looking for extra hours in the
jobs they do. And nothing this government is doing is going
to make any difference to them.
Lisa Owen: Winston Peters, are they on the right track?
Look most historical economists will tell you that you can
get a surplus, but the question is, is it real or notional.
Is it substantial or have you got there for example, by
cutting bio security, cutting conservation, cutting foreign
affairs and aid? Or cutting back on projects that you
announce but you delay the spending on those, so you get an
artificial result? Yes it will be a surplus, it will be
cigarette paper thin, but it won’t disguise how fragile,
brittle and vulnerable our economy is and we seriously are.
We have got most of our bets on the one product, milk; one
company, Fonterra; one market, China. And now we are getting
warnings. One little blip here and we could be in serious
Lisa Owen: Peter Dunne-
Winston Peters: That will expose whether or not we…
Lisa Owen: We’ll come back to you Mr Peters. Peter Dunne-
Peter Dunne: We are on the right track. We are certainly not a rock star economy at this stage. But we are in a position having come through the worst of the global economic crisis far better than most of our trading partners and the countries we benchmark against, to now start to make progress. This is not the time for lurches in policy; it’s the time for calm hands on the tiller to take us through the next few years, which are going to be very critical. And I think that the budget surplus, while it will be thin, it’s an important step in the right direction. It’s an important step towards showing the people of New Zealand that there is a dividend to come for the tough times of the last three years.
Lisa Owen: Jamie Whyte -
Jamie Whyte: Well 3% growth and a
small surplus, that’s better news than we have had over
the preceding years so that’s encouraging. However 3%
growth isn’t that impressive when you are coming out of a
recession and when you have got this massive stimulus, as
Russel said, from Christchurch. And the disappointing thing
about the economy and about the government is that they have
done nothing really to fundamentally reform the structure of
the New Zealand economy. They have accepted what they
inherited by and large from a very bad Labour government
beforehand. So I think we are not quite in the right tracks,
and a much more profound reform of the economy is required.
Lisa Owen: Alright well let’s do a quick stock take of some policies here, I’d like brief answers please gentlemen. GST: Jamie Whyte, scrap it or keep it, at what level?
Lisa Owen: At what level?
Jamie Whyte: Well I think that
one day it could go up to 17.5% might be a good idea. But
for the mean time just keep it
Lisa Owen: Peter Dunne -
Peter Dunne: Keep it at 15%
Lisa Owen: Mr Peters -
Winston Peters: Keep it but make substantial changes
which would be announced in this election campaign.
Lisa Owen: Russel Norman-
Russel Norman: We didn’t support the increase in GST and that it went with big tax cuts for upper income earners but it’s now structured into the fiscal position of the government so we won’t be proposing a change at this election.
Lisa Owen: Chris McKenzie-
Chris McKenzie: Keep it but
take it away from the essentials in life like fruit and
Lisa Owen: John Minto-
John Minto: We would absolutely
scrap it completely because it’s a tax on people on low
incomes. People on the poorest 10% of New Zealanders pay 14%
of their income on GST, if you are in the top 10% you pay
less than 5%. We’d get rid of it.
Lisa Owen: Ok well what would be your top personal tax rate?
John Minto: Personal
tax rate, I don’t know. We’d have certainly a much
greater, a much more progressive tax system, than we have at
the moment. But what we would do to replace that GST is we
would have a financial transaction tax.
Lisa Owen: We’ll come back to that later, so I want to come to your Chris McKenzie, your top personal tax rate would be what?
McKenzie: Well I think that the accumulation of wealth, that
grinds with people who are working in the small country
towns and I think that they could afford to pay a bit more
personal income tax.
Lisa Owen: How much more?
Chris McKenzie: Well
that is yet to be decided amongst our caucus.
Lisa Owen: Russel Norman, top income personal tax-
Russel Norman: We’ll be
announcing our tax policy and our fiscal policy closer to
the election. But in general terms we have an approach which
says you want to use the tax system shift it off good things
and put it on bad things, whether that’s pollution, so
that’s kind of what a green tax system looks like.
Lisa Owen: So 39 percent at $80,000?
Russel Norman: Well what I
have said is that we will announce our tax policy closer to
Lisa Owen: Mr Peters-
Winston Peters: Well likewise,
no-one would announce their rates right now but we will do
it in the election campaign. But let me tell you this, one
of the problems we have got is that a significant number of
people with serious wealth are not paying any tax at all or
paying at a far lower rate than the poor and low income. But
we want to correct that and we believe that we need in our
system political commitment to ensure fairness
Lisa Owen: Peter Dunne?
Peter Dunne: Well we would have
a three-tier tax system, 10 – 20 - 30 cents in the dollar
depending on the income threshold, yet to be determined. So
in answer to your question, target a top rate of 30
Lisa Owen: Jamie Whyte-
Jamie Whyte: I don’t know why
Winston says that no one would announce their numbers today,
I’m announcing mine today in fact we are
Winston Peters: Well that explains it.
Lisa Owen: Tell us those numbers
Jamie Whyte: Those
numbers are we can have a top rate of tax of 24 percent, now
with cuts we can make now in spending, corporate rate of 24
percent, so kicking in where the 30 percent rate now kicks
Lisa Owen: John Minto I want to come back to you. Scrapping GST that brings in $14 billion a year and you are also suggesting a tax-free income, some income that can’t be taxed, $27,000. How are you going to pay for that?
John Minto: We are going to pay for that with a dramatic restructuring of the tax system because what’s happened in the last 30 years is that wealth has accumulated with a very tiny number of people and so the tax burden has shifted from the corporate and from the wealthy onto low and middle income New Zealanders. We have to reverse that. So there is a whole mix of things that would bring in a lot more income. For example inheritance tax, which in our policy would kick in at half a million dollars. And these are the kinds of things which we used to have and which we used to use to invest in building a decent society. And now we have got, as I said, 300,000 families without work and we have got enormous social problems as a result. So to get rid of those social problems we have got to invest money and we have got to bring in more tax from high income people and from corporate and less on low income.
Lisa Owen: Peter Dunne, losing $14 billion a year by ditching GST and tax re income, former revenue minister, can it work?
Peter Dunne: No, in a word. And
the cost of a tax-free threshold would mitigate against
doing anything else. I think that it’s a nice idea in
principle, utterly unworkable in practice and should be just
chucked out before we even start frankly.
John Minto: Ah hang on Peter we have had…when 150 New Zealanders get an increase in wealth over one year of $4.5 billion dollars and that’s not taxed by you, how are people supposed to feel about that? People on the lowest income are paying much more tax than those wealthy New Zealanders.
Peter Dunne: But the tax system isn’t there to pay out social prejudices, the tax system is there to get efficiently the revenue the government needs to fund the activities that we think it should undertake. The idea that you use the tax system to play off one group against the other I think creates a lot of the distortions that have riddled our system with a huge number of problems over the years and which thankfully, I take some part in this, we have removed in recent times under both the last two governments.
Russel Norman: So you’re saying we’ll leave it to the market
Lisa Owen: Mr Peters
Winston Peters: Let’s look at the history here; when
Mr Dunne and his colleagues back in Labour bought in the GST
it was 10 percent, that was written in stone. Do you
remember Mr Prebble’s famous statement? Then they put it
up to 12.5 percent, that’s what Labour did. And then the
National party promised to not increase it and they did
that, it’s 15 percent now. Now let me tell you when you
are poor you have no discretionary spending and that’s
what people are screaming out there for today, to have fair
policies where people get a fair go. But the low and middle
income now are seriously up against it and to say that
trying to correct this is an attempt to interfere in or
distort the economy is just darn hogwash.
Lisa Owen: Let’s talk about corporate tax, gentlemen, let’s talk about corporates for a moment. A Facebook question that we had is that we are losing out on about $6 billion in corporate tax avoidance. So what are you going to do about that?
I did a lot about that. Remember the Winebox and what is was
about. The trouble is you have got in the political system
people who will not confront these sorts of influences in
our politics. And if we had a fair tax system everyone would
pay their fair share and you could actually decrease
taxation. But when I hear the idea from the ACT party, which
we just heard, which would mean a massive cut back on
everything, he never said what they were going to do, but
you could forget health, you could forget public education,
you could forget the police…
Jamie Whyte: No, no, no. None of these. It requires no cuts in health or education.
Lisa Owen: Let’s talk about creating some jobs, Russel Norman, creating jobs. Winston Peters has pointed out that we are a one trick economy – Fonterra, milk powder – and we are at risk. How do you create more jobs, how do you change that?
Russel Norman: Well the strategy
of this government has been to simplify the economy, so that
is moving towards milk powder in the dairy sector, raw logs
in forestry, they have also been investing heavily in mining
without much result and the effect of that is a very low
value-add economy, and low value-add economies can’t
support jobs [interrupted]
Lisa Owen: But Steven Joyce referred to your party as the ‘can’t party’, can’t mine here, can’t build here, can’t do this, so if you are not going to do that, how do you get jobs?
Russel Norman: So Steven
Joyce’s record in government is that he’s borrowed $50
billion, so genius. But if you are talking about value-add
in New Zealand you need to pick the industries that you
think are worth supporting. So clean energy, it’s the
fastest growing sector internationally. You know this is now
going to overtake gas as the second biggest source of
electricity in the world, New Zealand has a lot of
advantages in that sector. That should have been the sector
that the government supported but instead it picked mining.
Look at dairy or forestry, actually investing in value-add
in those sectors creates a lot more wealth and a lot more
jobs. If we want high paying value-added jobs we are going
to have to spend more money on research and development. New
Zealand spends 1.27 percent of GDP, which is less than half
of what Finland at about 4 percent. If we don’t invest in
R&D you won’t get high value jobs
Lisa Owen: I’m going to go to Jamie Whyte. Your response-
Jamie Whyte: This idea that the government picks the industries that we pursue is absurd. I mean it wouldn’t be absurd if Russel Norman got in because that’s what would be happening. But it’s a disastrous way to run an economy. The government doesn’t pick which industries most resources go to, it’s a result of natural market forces [interrupted]
Russel Norman: But you have to decide whether you want to support more R&D. So other countries have tax credits for R&D and we don’t, so we have very low spending on R&D compared to other countries [interrupted]
Jamie Whyte: No you do not need to decide that. [interrupted]
Lisa Owen: Gentlemen there is still a lot of ground to cover, we’ll be back…
Lisa Owen: In this part of the program we are focusing on housing. If I can come to you Mr Dunne, home ownership in New Zealand is trending downwards, 75 percent to 65 percent in the last 20 years. Does that matter?
Peter Dunne: It matters because it’s part of the Kiwi dream but then I think we have got to then think about what’s the best long term way of encouraging people to be able to buy their first home and the answer has to come through savings policy. We’d certainly support the use of KiwiSaver in that respect, the development of home ownership accounts so that people can actually save to get that deposit to get into that first home.
Lisa Owen: But you are in a government where the house prices are rising and supply is not meeting that, interest rates are now on the up and up… You are part of the problem aren’t you?
Peter Dunne: No and I think if you start to say let’s control house prices or let’s control interest rates you are actually looking at the wrong end of the stick. This is about creating the conditions for people to be able to save and buy their own homes and I think you have got to take a much longer term view than the sort of quick fixes that are being thrown around at the moment.
Lisa Owen: Chris McKenzie, should we give up on this dream of owning a home? You know it’s a dream of the past isn’t it?
Chris McKenzie: Well Maori have
been spectators in this housing game for a long time and we
have got tired of it so we have decided to be proactive.
I’ve just come from the National Maori Housing conference
last week and we are in every aspect now. We used to be just
in the papakainga development area but we are developing in
Auckland, in Weymouth, in Papamoa, we are getting in to the
social and affordable housing space. So what we’ll do is
we will make intergenerational loans available so that more
of our people can own their own house. We are going to make
the dream available.
Lisa Owen: Just very quickly by a show of hands, who wants to ban foreign buyers from buying residential properties? Who supports that as a policy?
Winston Peters: We do.
Lisa Owen: Is that a racist policy Jamie Whyte?
Well it’s not racist necessarily but it’s
Peter Dunne: Oh absolutely
Winston Peters: Oh I never so much bunkum in all my life, the fact of the matter is we were one of the highest per person ownership countries in the world, that was our great pride that a property democracy was being built here. And what we have seen here is the domestic market of housing now becoming international and the offshore interest, there is so many other people. It’s driven the Auckland house prices through the roof. Everybody knows that, but these globalists, these internationalists on my left here don’t want to do anything. In fact when anybody says this is causing an enormous crisis in Auckland, they shout racism and xenophobia. It’s conceptual bunkum [interrupted]
Peter Dunne: Because that’s what it is. It is racist [interrupted]
Peters: Excuse me, why is it that somebody, why should
Lisa Owen: Why is it Mr Dunne, why is it?
Peter Dunne: Because what it’s doing is saying that a ‘certain category of people’ are the cause of the problem. Now just think about the historical precedence for those sorts of claims. [interrupted]
John Minto: Ah this is nonsense, look Dunne cut that out. When you have a bus load [interrupted]
Peter Dunne: That’s exactly what
it’s doing and John Minto I’m surprised that with your
integrity, that you’re part of it.
John Minto: When we have a bus load of women from Australia who come over to New Zealand and drive around and before they get back on the plane they have all bought two or three houses a piece, that’s a disaster for New Zealand. That’s bidding up the prices [interrupted]
Winston Peters: Exactly what’s going on.
John Minto: Ah, ah I don’t care where they come from [interrupted]
Peter Dunne: You did a great thing for New Zealand with your opposition to racism 30 years ago, I’m surprised of how you turned on it [interrupted].
John Minto: Are you saying I’m racist against the Australian women?
Peter Dunne: Well you are supporting a racist policy.
John Minto: Oh come on, grow up, don’t try that sort of rubbish on me Peter. The truth is that you’re bidding up prices [interrupted]
Peter Dunne: Well it’s the truth John.
John Minto: No that’s the truth; that you are bidding up prices…[interrupted]
Peter Dunne: You are picking… [interrupted]
Winston Peters: They don’t want to know.
John Minto: …Bidding up prices and keeping them out of the hands of decent New Zealanders.
Peter Dunne: This
whole agreement is about certain groups of people, that’s
what we describe them as, buying homes and driving other
people out. Let’s front up to the problem and let’s not
be racist about it. [interrupted]
Lisa Owen: Mr Peters, Mr Peters, is there solid evidence to suggest this is an issue?
Winston Peters: Of course there is solid evidence. I have evidence that offshore buyers from Luxembourg, all over the world and including Asia, are buying our land and buying our houses. Now we have got people standing over here defying gravity. Why? Because they are deeply embarrassed by their failure to do a darn thing.
Jamie Whyte: Our houses? They are not buying your houses are they? They are buying the houses of the people who choose to sell them. What’s this ‘our houses’ stuff? You don’t own other people’s houses in New Zealand.
Winston Peters: This is amazing. Haha, listen to that! With respect, who financed that housing? [interrupted]
John Minto: Jamie Whyte. You would sell the whole country out to anyone, wouldn’t you, and leave New Zealand families without homes.
Jamie Whyte: Unfortunately I don’t consider myself to own the whole country, unlike you over there [gestures to Minto, McKenzie and Norman] who you think it’s your country to dispose of. It’s not your country [interrupted]
John Minto: It is our country. It is our country to operate together to get a fair deal to everyone.
Jamie Whyte: It is not your country
Peters. Actually it is. It is our country.
Lisa Owen: Alright, John Minto from the Mana party, you want no deposit loans for Maori first time buyers and cheap government loans for Maori. What about the poor Pakeha?
John Minto: Exactly, our
policy is for everyone and if you look at our full policy
we’ve got that provision for everybody. I got into my
first home through a home ownership account with the Post
Office Savings Bank, that should be open to everybody. But I
have to say with the housing crisis the greatest part of the
crisis for families on low incomes and the only way anywhere
in the world that decent affordable housing has been
provided for people on low incomes is through state rental
homes. So we are saying that New Zealand should do what we
did after the Second World War, we built 10,000 affordable
state rental homes every year and we need to do it again
until this crisis is over. And every New Zealander will
benefit because the rents in the private sector will go down
as a result.
Lisa Owen: Russel Norman, getting first home buyers onto the ladder, that is a difficult problem. LVRs, what would you do with them? Lift them now?
Russel Norman: So the housing
market, what’s happened in the housing market, which is
about a 45% increase in median prices in Auckland under
this government, 34 percent increase in median prices
nationally, is a result of both demand and supply. So, on
the demand side the foreign buyers are a significant part of
it, not the whole picture but a big part of it. The tax
rules, the lack of a capital gains tax is also one of the
drivers of it. We have seen that and then on the supply side
we need to increase the supply of affordable housing and the
government has a role in that as do planning rules. You need
to put all of those things into the picture, it’s a
complex equation but you can’t rule out as this
government’s done, capital gains tax, you can’t rule out
foreign buyers. It’s all part of the picture. And making
sure there is more social housing, I think as Chris has
indicated, is a very important part of it. But also making
sure that the state provides some support for families to
get into their own home is also a key part of it.
Lisa Owen: Jamie Whyte, for you it’s simple right? Let us build where we like and expand the city-
Jamie Whyte: Yeah the main problem is the artificial restrictions on the supply of land imposed largely by councils. These solutions over here all involve taking money from some people and using… they say so it’s going to benefit everybody. Because the government is going to take control of the housing market. But of course that money comes from somewhere, it doesn’t come from nowhere [interrupted]
John Minto: It comes out of the pockets of low income families.
Jamie Whyte: You are going to tax the low income to build these houses?
John Minto: No, no, no.
So the money to build these houses comes out of somewhere
and that has costs and they don’t understand these costs.
They just start trying to take control of the economy, start
trying to decide who gets what where and it’s stultifying.
This is exactly what is killing the dynamism of the New
Lisa Owen: I want to bring Mr Peters in, you are keen on a state agency that would buy land and sell it back to people at cost, low interest rates and long term loans. I mean how much would you spend on land as a government?
Winston Peters: The
amount that’s required to ensure that speculation is not
driving up artificially the house prices of this country.
Lisa Owen: So what are you saying, $2 billion, $3 billion?
Winston Peters: And let me finish. Now don’t forget I was a Treasurer, I know how to get a budget surplus and a serious one, which we did, not like now: cigarette paper thin and artificial to boot. Now let me tell you this here, you are actually having an argument here about something where this country used to be the world leader. We used to build houses, twice as many as now when had half the population of now. So it’s not that we can’t do it. But what we have got here is people over there saying ‘it should be run by private industry and by private speculation’. This is a disaster. So we’d have the bottom level, or the early income or early entry level substantially influenced by the state buying land and ensuring that the commodities that go into it are at a far more reasonable cost.
Lisa Owen: That sounds like a Mana party policy. What do you think of that Peter Dunne?
Winston Peters: No
it’s not a Mana party policy, it’s our policy.
Lisa Owen: The Government buying land to sell back?
Peter Dunne: I think that the important thing is that government has an important role in terms of the provision of social housing and I think it needs to work in partnership with the number of agencies that are out there at the moment developing social housing schemes. I think they should be expanded and I think there is plenty of scope for doing that. One thing I do want to say is there is absolutely no justification in my view for the imposition of a capital gains tax. Because all that will do is lock people into existing homes, it certainly won’t provide the revenue stream that’s claimed for it and it will just be another disincentive for people to actually begin the housing ladder accent.
John Minto: The reason we are debating housing now is because of massive market failure, that’s what it is. It’s complete failure of the market. The market will provide homes for families on low incomes but they’ll be cardboard boxes by the side of the road. And your government Peter Dunne, the government that you are with now is tearing down, for every 10 state homes it’s destroying in Glen Innes it’s putting up 5. They are decreasing our housing stock. They are making housing more expensive for families on low incomes. It’s an absolute disgrace and it’s gonna stop.
Jamie Whyte: Why do you think housing is expensive? Related to market failure?
Lisa Owen: I want to bring Chris McKenzie in here
Chris McKenzie: The quality of
housing New Zealand stock is atrocious and I mean except for
in Auckland where [interrupted]
Lisa Owen: Let’s talk about house prices Chris McKenzie because part of what is apparently driving up prices is immigration. And we have had big increases in the last while. A net gain of 2,500 in the first quarter of last year up to 10,500 people in the first quarter of this year. Is that a good thing? Do we want that many people?
Chris McKenzie: Well if
you are asking me as a Maori, immigration has been very poor
since 1840 so absolutely not. But I mean each region is
unique and so when you go out to the rural areas where you
see housing New Zealand homes empty and run down and nobody
wants to do anything about them, it’s time for a third
party to step in, for Housing New Zealand to transfer those
assets over and for us to get people back in homes because
that’s where we are going to develop jobs.
Lisa Owen: But I was asking you about whether you thought levels of immigration, at that level, was a good thing. So, is it? You said it’s been a bad thing for Maori since 1840. What do you mean by that?
Chris McKenzie: Immigration is
always a good thing because our people go backwards and
forwards and people come here. When immigration starts
boosting the house prices in Auckland actually it’s time
to have a conversation about what we do about that.
Lisa Owen: Mr Peters, is that level of immigration appropriate?
Peters: Why on earth would you possibly ask me when I have
told you for years what the problem is? Because what the
problem is, when you bring in unfocused immigration,
that’s not focused immigration, but unfocused immigration
then you have a huge housing problem. And on top of that you
compound it with offshore buying. And when you hear these
sorts of so-called free market arguments the real issue
becomes this, what has happened to Auckland? Well it’s now
gridlocked every morning, every night and getting worse. We
are going to spend money on railways, we are going to spend
money on roads but it’s never going to be solved. Now down
at Whanganui. [interrupted]
Lisa Owen: Now how do you get people out of Auckland? How do you get people out of Auckland if it’s gridlocked?
Winston Peters: When you have a smart policy on immigration that says to live here you must live 5 years somewhere else in the country, like Canada does, nothing wrong with that. Because of course these free-marketers here don’t want to do a darn thing about it. Huge infrastructure spare in Dunedin [interrupted]
Lisa Owen: Jamie Whyte is nearly choking on that over there-
Jamie Whyte: There is no problem that can’t be solved by pushing people around, that’s the idea that round here always some kind of people. [interrupted]
Peters: You told me that you’re a philosopher, I’ve
never heard so much rubbish in all my life.
Lisa Owen: Cap on immigration, John Minto-
John Minto: I think that New Zealand we do have to get real about immigration. And the fact that we have got employers, for example, who are able to at the drop of a hat go overseas, bring people over here, for example for the Christchurch rebuild, instead of New Zealand employers being required to train up New Zealanders to do those jobs and to provide jobs for that 300,000 people that don’t have enough work. We are instead giving them licence to go overseas to bring in what they want as more compliant workers to do those jobs. We should have a development strategy that means that every New Zealander has a high quality job. We should not have the dole, we should be able to abolish the dole because we can provide decent jobs for everybody.
Lisa Owen: Now we will talk more after the break.
Peter Dunne: I didn’t get a chance to talk about immigration
Lisa Owen: We’ll come back to you after the break.
Lisa Owen: We are going to take a look at superannuation but first Peter Dunne has something to say on immigration.
Peter Dunne: Well all I wanted to say was that, and thank you for allowing me to say it, is that United Future supports current immigration levels, thinks that immigration is necessary for the growth and development of this country, our population is too small. We also think we should take a more humanitarian approach to the numbers of refugees we accept each year.
Lisa Owen: Well superannuation now, let’s turn to you Mr Whyte – superannuation is costing us a lot of money. Should we stick to the retirement age of 65, is it affordable?
Jamie Whyte: No, we’ve already announced we think it should be put up to 67 in the short-term, phased in, and the income that you earn should be linked not to wages but to inflation.
Lisa Owen: If you were in a coalition would that be one of your top three priorities?
Jamie Whyte: That would be a priority, because that’s
you know the finances of the government are unsustainable
over the long run under this system as the population ages
and this one’s a bit of a no-brainer and so it’s
something we could get through very easily.
Lisa Owen: Chris McKenzie, how fair would that be for Maori?
Chris McKenzie: Well as we know Maori die much sooner than non-Maori and we’ve got a large young Maori population who are having to support an increasingly elderly non-Maori population so whatever the answer is we’re going to have to up-skill this generation of Maoridom to ensure they are successful if we’re going to get anywhere.
Lisa Owen: Mr Peters, you’d like to hold the line. It’s going to rise in cost to 20 billion by 2030 – where’s the extra 11 billion going to come from?
Winston Peters: With the greatest respect, you’ve bought into the view that we’re in crisis because the financial services market wants to take this business off the Government and run it themselves for massive profits, let’s be honest about it –
Lisa Owen: It’s just the reality that it’s going up, it’s tracking up?
Winston Peters: I’ll give you the reality, no listen to the facts here, listen to the facts here. Net, it’s costing us 4.1 percent against GDP. That is half of what it’s costing in countries like Germany where they’ve got a crisis. We do not have a crisis here and make it very, very clear. What’s designed here, no, no –
Lisa Owen: Australia thinks it’s a crisis, they’re bumping it up to 70 over time.
Winston Peters: That might be what Australia thinks but I’ve just given you the figures to tell you that it’s not a crisis. At 4.1 percent net, that’s what it’s costing us. Now what I’ve got here is the same group who are running KiwiSaver at 22 billion dollars profit for them over the next 30 years, they want to run superannuation. And if you trust them, if you trust them –
Lisa Owen: Let’s bring Russel Norman in here, the Greens are relatively quiet on super, they say 65 but are open to discussion. You’re all about sustainability aren’t you, so how is it sustainable?
Russel Norman: Well you’ve got to look at the overall dependency ratio, that’s the most thing to look at, which is both young people who aren’t in work as well as the elderly. And as those young people go through the education system, the trick really I think for us a nation is to make sure they get the education they need so they can afford to pay the taxes that we’re going to need to pay in the future. That’s why we announced a policy quite recently about making, through a school hubs policy, to make sure that particularly poor kids who are currently underperforming through no fault of their own, so that they get a chance to get a decent education. Then we’ll get better paid jobs, higher skills and when we get a higher skills economy, then we can afford to pay the taxes that we need to pay in order to support older New Zealanders.
Lisa Owen: You talk about education though, but Labour is predicting that by next year that Super bill is going to cost us as much as educating all our children from pre-school to university. How is that sustainable?
Russel Norman: And there is a significant concern around the cost of Super and that’s why we said we should engage in the discussion. But if you look at Treasury’s long-term fiscal projections, the kind of assumptions that sit behind it are critically important in terms of the performance of the economy. How sustainable these things are depends on the performance of the economy. Under this Government we have low productivity growth, low value-add, it’s very difficult for an economy like that to support older New Zealanders. That’s why a smart, green economic strategy says let’s invest in R&D, let’s invest in value-add, that way we can afford the kind of lifestyles we like.
Lisa Owen: Let’s bring in Mr Dunne as part of that Government. You would like flexi-Super. Sixty years old you can take it at a lower rate, 70 you get more money. But that’s just shuffling the deck chairs isn’t it?
Peter Dunne: No it’s not. What it’s actually doing is giving people the choice over when they retire. We haven’t actually had a statutory retirement age since 1993. We have an age of entitlement for superannuation. We would say keep it at 65, give people the option of the lower rate from 60 or the higher rate if they defer to 70. Let them make the choice, let’s not let politicians tell people how long they’ve got to keep working and what –
Lisa Owen: Mr Peters –
Peter Dunne: And what that would do…I have –
Lisa Owen: Mr Peters, wouldn’t that mean some people, 60 year-olds who take the lower rate, that they’re condemned to a retirement in poverty?
Winston Peters: That’s a fact, that’s exactly what’s going to happen here. But I want to come back to my original point. You began with the contention that it’s unaffordable and I’ve just said to you that you’re wrong.
Lisa Owen: I said it was rising and the figures said it would rise to 20 billion.
Winston Peters: OK but Mr Norman’s right in this context. When he says it depends on the strength and soundness of your economy, he’s 100 percent right. We used to grow at five and a half percent a year not nothing for six years and all of a sudden a rock star economy at 3.5. Next year it’s going to be going down again in growth and the year after that. Their way of running the economy means that what you say will be true because what they’re doing economically is simply unsustainable.
Lisa Owen: Peter Dunne, you think that compulsory savings for retirement is a good thing, don’t you?
Peter Dunne: I do and that’s the second leg of the flexi-Super proposal –
Winston Peters: He does now, he opposed me back in 1997 –
Peter Dunne: Because that was a rubbish scheme in 1997 –
Winston Peters: Oh rubbish –
Lisa Owen: So what has changed Mr Dunne?
Peter Dunne: So what has changed is we’ve now got a much more comprehensive package –
Winston Peters: He’s woken up … he’s come around –
Peter Dunne: I didn’t have a late night
Winston Peters: (indistinct)
Peter Dunne: Oh don’t get personal – if you look at the flexi-Super proposal, with people moving into compulsory KiwiSaver and most New Zealanders are in KiwiSaver anyway, you’ve now got a situation where at age 65 someone has a really good package – a combination of New Zealand Super and KiwiSaver –
Winston Peters: Did you support KiwiSaver?
Peter Dunne: Yes I did
Winston Peters: Did you?
Peter Dunne: Yes. And that gives – and I was the minister in charge of it for a while too – and that gives the opportunity to have some flexibility at either the 60 or the 70 end.
Lisa Owen: Let’s go to this side of the room, Chris McKenzie how do you feel about that position when potentially it’s money coming out of the pockets of people who can least afford it?
Chris McKenzie: Well and not only that but we’re in an inequitable situation because the people who can least afford it, least know how to engage. So the FSC says you know if you’re under 40 you should, your investment portfolio should be balanced or growth. Well you go to the streets of Tokoroa and talk to them about that, they’ll have no idea so actually they’re at a disadvantage already and you know, if they don’t get it, if we don’t get financial literacy up around this point then we’re destined to get half the retirement savings that everybody else gets.
Lisa Owen: So I just want to be clear, hands up who among us supports a compulsory Super savings plan?
Russel Norman: Compulsory enrollment which I think is you know, to drive people into it. But if people want to get out of it I think they should have that option because it might not be the best thing for them right at that moment.
Winston Peters: Let’s just, one thing, you’re wrong to say Maori don’t believe in savings. At the time of –
Lisa Owen: I didn’t say that, I said low income earners might be disadvantaged by compulsory saving –
Winston Peters: That was
your inference. At the time of the superannuation,
compulsory savings referendum, Maori almost voted two to one
in favour so they are for savings if they see a sound
Lisa Owen: I want to move on to extending paid parental leave, 14 to 26 weeks. Jamie Whyte would you support that?
Jamie Whyte: No I wouldn’t support that. There’s a tendency here for politicians to pick things they like and say ‘we’re going to back that, we’re going to fund it because we think it’s a good thing’, we in ACT think people should bear the costs of their own decisions.
Lisa Owen: Is this what you would refer to as middle-class welfare?
Jamie Whyte: It is middle-class welfare.
Lisa Owen: Ok, so what would you cut from middle-class welfare?
Jamie Whyte: Well the most obvious thing we’d cut from middle-class welfare is interest-free student loans, that’s the most egregious example.
Russel Norman: It would be an interesting effect if everyone decided not to have any children though wouldn’t it? I mean you say it’s personal responsibility so what if everyone personally decided to have no children, what would be the impact of that? Don’t you think there are social implications for people having children?
Jamie Whyte: Do you really think people only have children because you flick them a few bucks?
Russel Norman: Well I think people have children and we have a responsibility as a society to support them because we all rely on those children to support us in our old age.
Jamie Whyte: You think you own the children, this is extraordinary (indistinct)
Russel Norman: It’s a society Jamie – imagine you’re part of a big human family
John Minto: Jamie you’ve had your go –
Jamie Whyte: So this is what you think. It’s not a family, this model, this model -
Russel Norman: I know you think – the politics of the junk-yard dog doesn’t work very well.
Jamie Whyte: This model, the relationship between the Government and the people is the same as the relationship between parents and children. It is, the very idea you have is outrageous –
Russel Norman: So the politics of the junk-yard dog is what happened in the ‘80s and ‘90s and that’s why we have massive poverty and inequality in our country – do we want to revisit all of that?
John Minto: Here you are Jamie, coming here with policies to make the rich richer and put even more burdens on families on low incomes. I think if we talk about paid parental leave –
Winston Peters: The sad thing here is that there are members on the right-wing of the National party who think just like him and they’re going to prop them up in Epsom – this is a law of the jungle man over here –
Peter Dunne: The question about paid parental leave. It would be quite nice to have a –
Russel Norman: Except the jungle gets wiped out, the jungle gets bull-dozed that’s the only problem. There’s no jungle to have the law of the jungle in because it gets wiped out under the ACT policy –
Peter Dunne: Could we actually come back to question about paid parental leave and you asked ‘Do people support it or not?’. We support 26 weeks in fact our policy over time is to move to 52 weeks.
Lisa Owen: And your response to that?
Jamie Whyte: I’ve already given it. We disagree with such policies. We believe –
Lisa Owen: But what about the idea of community that Russel Norman was talking about?
Jamie Whyte: You’ve got to understand, what they are doing is not communal. Communal is cooperative not cohesive –
Winston Peters: Hey look can I say something? We could go on all day listening to this dribble. Can I possibly say this? That we believe in the 26 weeks but you’ve got to have commensurate compensation for the employer because at the end of the day if he or she cannot employ this worker then all jobs will be lost. So you’ve got to have your balance here.
Lisa Owen: I want to go to Russel Norman. Labour announced a Reserve Bank tool, the KiwiSaver. What would your answer to the problem be in terms of the Reserve Bank Act?
Russel Norman: So part of it, so is about the objectives of the Act. And so most reserve banks around the world have dual objectives, it’s not inflation but it’s also output or external balances or a version of that or employment. So that’s I think a very sensible approach. Then there’s also the inflationary pressures, so where do the inflationary pressures come from in the New Zealand economy? We know it’s coming out of housing, we know it’s coming out of electricity – that puts pressure on the Reserve Bank to increase interest rates which increases the exchange rate, makes our tradable sector get into trouble. So let’s deal with the inflationary pressures coming out of housing and electricity directly, which is what NZ Power’s all about and our policies around housing, that takes some of the heat off the Reserve Bank. In terms of the -
Lisa Owen: OK I just want to check, who’s with you on this on this side, on this side, who would change the Reserve Bank Act? Hands up
John Minto: Oh we would, I mean New Zealand –
Lisa Owen: Just a short answer John. Who on this side who would change the Reserve Bank Act?
Winston Peters: No, no,
excuse me for the last two decades New Zealand First has
been saying this Act would never work for our type of
Lisa Owen: Ok, thank you so much
Russel Norman: So to be fair to Winston he has been saying this for a while –
Winston Peters: Yeah –
Lisa Owen: Many thanks to each of the guests for their time this morning and if you’re wondering about National and Labour, Bill English and David Cunliffe will be with us next week.