One week left on the election campaign trail – National Party leader Bill English

TVNZ’s Corin Dann asked National Party leader Bill English on Q+A this morning if he was running a “concerted scare campaign” regarding Labour’s tax policy.

Mr English responded saying “that’s what’s in the public’s mind. The public want to know the answers to those questions about how many taxes and when.

Labour keep changing their mind. It’s absolutely legitimate. I mean, this is real.”

“This is about cash in people’s pockets, investment decisions, the decisions to employ another person, what people can take home at the end of the week. These are real things. It’s not just some hypothetical argument,” says Mr English.

The party leader defended National’s work on the condition of New Zealand waterways, despite the suggestion farmers haven’t had to change their behaviour under National’s watch.

“Well, that is absolutely wrong. And the media who have been out on this campaign have actually seen the distress among – not just the farming community, but the horticulture people, all the people who work in those industries – because there’s been five or six years of intensive work.”, he said.


Q + A
Episode 28
BILL ENGLISH
Interviewed by Corin Dann

CORIN Good morning to you, National Party leader Bill English.

BILL Good morning, Corin.

CORIN I wonder if we could start with the economy. Can you guarantee homeowners watching this morning that their interest rates will not go up under a National government in the next three years?

BILL You can’t guarantee it, but it’s less likely, because we will be running the government’s books with less debt. We will be dropping debt.

CORIN So it would not be unreasonable, for example, if I was to write a story, to say National can’t rule out higher interest rates in the next term of government? That would not be unreasonable, would it?

BILL Well, we can’t guarantee it. And I think everyone knows governments can’t guarantee interest rates. But we can do our bit to keep them lower for longer.

CORIN So why is it that you’ve got a flyer going round in mailboxes at the moment saying lower debt, lower interest rates, or much higher debt and higher interest rates. It’s very hypocritical, isn’t it, to suggest that under Labour, they’ll have higher interest rates when you’re saying yourself that you might have higher interest rates?

BILL Well, according to their own plan, they will have considerably higher debt. We believe it’ll be higher than they say.

CORIN High enough to seriously influence interest rates? I mean, they’re going to be two years slower than you to get to 20%. No market analyst thinks that 20% of GDP debt is anything to worry about.

BILL Well, it’s the change at the margin, right? So interest rates are relatively low now. There’s absolute clarity that a Labour government will be borrowing more. That’s even before they have to negotiate with the Greens, who would have them borrowing more and New Zealand First.

CORIN So are you saying that because they’re borrowing more, that will mean interest rates go up?

BILL It could well do, yes.

CORIN But you borrowed tens of billions of dollars, tens of billions of dollars in government extra. You pushed debt up from about 9% of GDP right up to about 25%, and interest rates fell.

BILL Well, that was in extraordinary circumstances, where Reserve Banks around the world were pumping money into the system in an unprecedented way.

CORIN And credit to you for doing that, but it’s incredibly scaremongering, isn’t it, to go out and suggest to people that their interest rates are going to be higher, when you yourself can’t rule out that it’ll be higher under you?

BILL Look, it makes clear the point we are going to be having declining debt under National. Under Labour, their will be higher.

CORIN So will they.

BILL No, they’re going to have by their own numbers, $11 billion more debt. Then there’s the negotiation with New Zealand First or the Greens or maybe both if they happen to be the government, which will push debt higher.

CORIN And they have a fiscal pact, and they’re not going to spend any more than you are. The surpluses are the same. So as far as the Reserve Bank’s concerned, it’s not forecasting interest rates to go up for a couple of years. Why are you out there telling people they’re going to be higher under Labour?

BILL Because what government can do to keep your interest rates low – and this matters a lot to our households, because a lot of them have borrowed to get into houses – to keep interest rates low is to contain our spending and our debt. And we’re on a track to do that. All the other parties are signalling significantly greater debt.

CORIN It is just part of a concerted scare campaign, isn’t it? You haven’t been able to run on your record. You have run on a negative campaign. Add this to the $11.7 billion hole, which does not exist, and you’re just out there to scare voters. Are you not proud of your record?

BILL I absolutely disagree. We are very proud of our record. We are running on our record. But more importantly, we are running on a plan for the next three years, the next five years to take advantage of the strength of the New Zealand economy. The Labour Party and the other parties have the obligation to answer the questions that New Zealanders are asking.

CORIN Correct me if I’m wrong, but the TV ads that you guys have been putting out over the last few days and changing have been, what, running on your record? It doesn’t look like it to me. It is negative tax ads.

BILL Well, and that’s because that’s what’s in the public’s mind. The public want to know the answers to those questions about how many taxes and when. Labour keep changing their mind. It’s absolutely legitimate. I mean, this is real. This is about cash in people’s pockets, investment decisions, the decisions to employ another person, what people can take home at the end of the week. These are real things. It’s not just some hypothetical argument.

CORIN Well, like a $11.7 billion hole? That’s not hypothetical?

BILL Well, that’s the best estimate.

CORIN Just a second here. I’ll move on after this. But are you comfortable personally as a leader of integrity to be running lines like $11.7 billion holes, which no economist in this country will back? I have asked your office to tell me a name. They haven’t come back to me on that one. Do you feel personally comfortable with that sort of attack politics?

BILL Yes, I do, because that’s the estimate of this weird budget that Labour have put up. I mean, we have got surpluses, and they’re saying they want to run up more debt and raise more tax. When you look at the spending, they are trying to tell us – and I’ll repeat it again, and everyone agrees this is the case – they’re trying to tell us there is big chunks of government over which there’ll be no new policy for the next three years. No one believes that.

CORIN Yeah, but no one thinks there’s that hole. All right. Let’s move on to the water tax. Research from Radio New Zealand over the last couple of days suggesting in fact dairy farmers, most of them, 10,000 won’t pay virtually anything in that tax. Are you again scaring up the farming community on something that is not going to affect them nearly as badly as you say?

BILL No, we’re not. The tax was always on irrigators. Now, they’ve looked at the dairy farms as also the arable farmers. There is also the horticulturalists – the numbers that have been used are the ones that the farmers produce. And what it shows is how pointless that tax is. Because it’s a tax that randomly selects one group with a punitive attitude, which Labour have expressed themselves. They have said if we disagree with this, we’ll double it. The real issue is the pollution going into the water and the extensive work and investment that is going on in New Zealand now to manage that. We don’t need the tax. It’s a poor tool. And we want to work with the community that they are provoking.

CORIN All right. Well, Simon Upton, who’s a former colleague of yours, at the OECD, in his report made it pretty clear that there’s been a lack of ambition and that you are taking far too long. And I wonder whether we’ve got to the point on the tax, because your government has done nothing for nine years. You’ve had water forums. You’ve had discussions. Nothing’s happened. Farmers haven’t had to move, haven’t had to change their behaviour because you haven’t forced them to.

BILL Well, that is absolutely wrong. And the media who have been out on this campaign have actually seen the distress among – not just the farming community, but the horticulture people, all the people who work in those industries – because there’s been five or six years of intensive work. It’s Labour and The Greens who’ve just discovered the issue of water quality, are using it quite cynically. There’s intensive work gone on. And there’s a lot more to do, because the next stage is to deal with the water quality in our cities, which is also a challenge.

CORIN Can you say hand-on-heart that you have not sacrificed the environment in order to grow our economy?

BILL Yes, I can, and I can say--

CORIN That’s not what the OECD and Simon Upton say.

BILL Well, it looks different from Paris, doesn’t it, than when you’re living here making a living as a high-value food producer. We are smart enough in New Zealand to be able to maintain our position as a high-value food producer with all the clean green brand and lift our environmental standards.

CORIN The point he’s making is that a lot of the nitrogen leakage and this sort of thing into the environment – we haven’t even felt the full impact of this yet and your government for nine years has not done enough. It has been too slow.

BILL I disagree. The science, for instance, of the nitrate flows into water has only been recently developed. The measurement system to show progress was finalised just two months ago because it took--

CORIN And are all our rivers fenced? Have we fenced all our rivers?

BILL Well, 90%, yes.

CORIN Are you going to do them all?

BILL The farmers have spent hundreds of millions. Yes. The regulations will be passed and they will be—and that’s the result of a whole lot of arguments, including over, you know, the definition of a slope in the high country, which all takes time. New Zealand’s in a great position now, though, and I can tell you this – our rural sector needs to be profitable to afford the investment to lift the environmental standards. They’ve been investing in a large scale and now we can measure progress and there’s full accountability, annual and statutory environmental reporting.

CORIN It’s too late, though, isn’t it? Because we’re hearing from things like business leaders in the Mood of the Boardroom and they are suggesting that your government hasn’t got the vision, hasn’t got the energy, if you like, to make that change on climate change and on the environment, and that our reputation could be at risk now. We’ve got Al Jazeera coming, doing documentaries about our water quality. You’ve put us at risk.

BILL Well, we had the Labour Party going to go to Coes Ford near Christchurch, which is meant to be the poster child for all this. There was too much water. The picture didn’t look the way it was meant to look, which is just nonsense.

CORIN Are you seriously going to suggest that the water quality in Canterbury is somehow OK? Are you going to tell me that Lake Elsmere is good? That it hasn’t got seriously degraded over the last 10 years?

BILL No. Lake El—Well, it’s degraded over the last 30 years. What I can tell you is the serious effort gone in in the Selwyn River catchment and Lake Elsmere catchment over really complex, challenging issues. I mean, there is one answer – slaughter the dairy herd. I suppose that would help. Then next thing they’ll be talking about how to depopulate cities because they cause pollution. Well, that doesn’t make sense. New Zealand can be a high-value—

CORIN But there’s another way of putting that. It’s called diversifying your economy – moving into things that perhaps don’t have that pollution cost.

BILL And isn’t it interesting? Our exports are diversifying more quickly and more broadly than they have for a long time -- a burgeoning IT industry. In fact, you’re going to see a burgeoning agri-tech industry, because a lot of these solutions around the nitrate emissions and climate change – methane emissions -- are technology solutions which we’re investing internationally with research to carry out.

CORIN It’s funny because we haven’t heard much from you on that type of stuff in this campaign – that vision stuff.

BILL Well, we talk about it all the time. It happens that the campaign has got pretty focused on the messy policy from Labour on tax and their proposals about how—

CORIN And who’s exploited that?

BILL Well, the public want to know. It’s not a matter of politics. I mean, this isn’t just about us. This is about people’s real livelihoods.

CORIN Fair enough. Look, fair enough, absolutely. We’re certainly not playing tiddlywinks here and it’s politics, by all means. But surely you must have thought, what about a positive campaign? What about trying to highlight the things that you want to do?

BILL Well, we have. We’ve had an announcement every day for six weeks, well-organised, laying out the plans for infrastructure investment, for support for families, for cheaper GP visits, for both parents being able to share paid parental leave.

CORIN And why are all these suddenly coming in the campaign and haven’t been done a lot earlier?

BILL Because people need to see the plan – that’s one – and secondly, actually, we’ve always been a busy government. In any six week period we’re announcing a whole lot of things, but certainly it’s sped up for the campaign because we’ve got a positive plan and actually we know what needs to be done for New Zealand. We’ve got the team to do it and that’s why we want a mandate in the election.

CORIN How worried are you and why is it that we have a number of hospitals in this country that are turning people away because they’re overcrowded and they don’t have the resources to deal with it?

BILL This has been a long, tough winter and I want to acknowledge the people on the front line, because the winter peak – which is always pretty challenging – has lasted longer. Now we’re right into September and there’s still some very big days in our hospitals. But, look, we’ve got the capacity to make the investment that’s needed so we can handle all the demand.

CORIN You have now. That’s the point, isn’t it? You have now, but the population has grown rapidly over the last four or five years and you haven’t funded it enough, so now we’ve got people being turned away at hospitals.

BILL We just put the biggest increase on the 1st of July into health that it’s had for about 11 years – large-scale investment into capital facilities.

CORIN And that’s great, but the point is – and it’s something that’s come through from Mood of the Boardroom and these types of things – is that you’ve been too late. You’ve been too late to recognise these population pressures – the population pressures on our system – and it’s getting serious. I mean, people turned away from hospital.

BILL Well, look, that is a function of the winter peaks, but with respect to the population, I’ll tell you, there’s one thing we didn’t quite predict and that is 150,000-plus Kiwis in the last five years staying home, because we thought back five years ago the usual pattern would apply. They stayed home. That’s great. We’re up for it. We can invest for the kind of growth that’ll give us a population of 5 million in the next four or five years, the infrastructure that’s needed for it and the jobs that come with it. This is a positive, confident country going somewhere, and that’s why we want to stick to it.

CORIN Bill English, thank you very much for your time.

BILL Thank you.

Please find attached the full transcript and the link to the interview.

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