Sunday 20th November, 2011

Q+A interview with Labour Leader, Phil Goff.

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

Q+A, 9-10am Sundays on TV ONE. Repeats at 9.10pm Sundays, 9:05am and 1:05pm Mondays on TVNZ 7

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PHIL GOFF interviewed by GUYON ESPINER

PAUL Next Saturday we vote for a new government and a new prime minister. And after a week of the teapot tape saga, Labour’s Phil Goff’s saying, ‘Enough is enough. For God’s sake, let’s get back to talking policy.’ Political editor Guyon Espiner is live now with the Labour leader.
GUYON Thanks, Paul, and thank you, Mr Goff, for joining us.
PHIL GOFF – Opposition Leader
Thanks, Guyon.

GUYON Let’s start with one of the biggest policies, and that is jobs. Treasury’s independent forecast is for 170,000 new jobs over four years. How many will Labour create under your economic management?

PHIL We’re a bit sceptical about that 170,000 jobs. That was promised last year. I think we can do better than that?

GUYON More than 170,000?

PHIL Yeah, yeah.

GUYON How many?

PHIL By doing the right things. I mean, we’re not describing the problem; we’re saying what the solution is going to be. What do we need to get jobs? First of all, we need to upskill people. We’ve got people from Christchurch at the moment, they’re campaigning in Manchester to try to bring people in with skills while there’s 10,000 people unemployed in Christchurch.

GUYON Can you put a figure on it?

PHIL Well, I’d like to see those 30,000 jobs that they need in Christchurch, that they need skills for to rebuild the city, I’d like to see New Zealanders first in line for that.

GUYON So you’re promising well over 200,000 jobs, are you?

PHIL Oh, look, you can’t put a figure on it. All I can say is the things that you need to do to get those jobs – upskilling, you need savings for investment – that’s why Labour’s talking about that – you need research and development if you want high paid, high-tech, high-skilled jobs.

GUYON We’ll talk about savings in a minute, but capital gains tax is one of your big platforms in restructuring the economy. Like all taxes, New Zealanders will want to know if they are going to pay it. Now, you have an exemption for people who are 55 years and older who have owned and worked in their own businesses for 15 years. Have you worked out yet what counts as a small business for that purpose?

PHIL Yeah, look, those details go to an expert panel, because you don’t write those details in opposition with the resources that you have. But what we know about the capital gains tax is that we can pay off the debt, and most of it will go to pay off the debt, we can keep our assets, and we can give most New Zealanders a tax cut—

GUYON I’ll let you make those points, but people will want to know whether they can pay it. And I would put to you that you must know how many people will be exempt, because if you don’t know how many people will be exempt, then how could you possibly know how much revenue you’re going to get from it? How many people will be exempt from it?

PHIL Yeah, look, I can’t give you the figure on that, because that’s the sort of figure that will come out of the detailed policy work that needs to happen—

GUYON So how can you—?

PHIL And, Guyon, you know this.

GUYON Yes, but—

PHIL You know this—

GUYON How can you put a figure on this?

PHIL Let me finish this point.

GUYON How can you put a figure on how much revenue you’re getting when you can’t say who’s going to pay?

PHIL Because the figures are like Treasury figures – they’re forecast and they’re subject to change, but we know approximately how much we’re going to get. You know, we’ll get 78 million in the first year. That rises nearly to half a billion dollars within three years, a billion dollars within six and ultimately over three billion a year—

GUYON Okay, just more broadly—

PHIL Now, those— Sorry, just let me finish this. Those aren’t Labour Party figures. Those are figures from an independent consultant, BERL. They’re much more conservative than the Treasury figures. Treasury thinks we’ll get a lot more.

GUYON So just broadly on that exemption, is it most tradespeople who would be exempt?

PHIL It would be people that have been working on their account for about 15 years. It’s actually a relatively small amount in the wide picture.

GUYON Do you know roughly how many?

PHIL That’s why we don’t need to know the specific figure on that. We know the broad figures that we’ll get. They’ve been worked out by economists in BERL who are well respected and are reliable. They’ve done the work on it, and obviously when you’re in government, you cross the Ts and dot the Is.

GUYON Okay, the capital gains tax is part of a major tax switch, isn’t it, which includes the increase in the top tax rate, the GST off fruit and vegetables, etc. Under your plan, what is the first year you gain any additional revenue from your tax switch and how much do you get?

PHIL Well, from 2015, 16, we’re back into surplus, and by 2021, we’ve paid off the debt a year faster than National.

GUYON What is the first year that you gain any additional revenue from your tax switch and how much is it?

PHIL I think it’s about 2016, 17. Again, I don’t carry all those figures in my head.

GUYON Well, it’s 2018, 19. It’s a long way off.

PHIL It is, but, look, this is—

GUYON You’re going to go six years, two terms—

PHIL Guyon, this what you’ve got to consider. The alternative of the sale of assets will give you cash up front, but once you’ve sold the assets, they’re gone forever. Once you’ve sold the assets, you’ve lost the dividends forever. With the capital gains tax, we pick up the $26 billion over 16 years, but it’s still bringing in revenue to pay for our health services, to pay for our education, to pay for our ageing population. There is not an economist around that doesn’t think that a capital gains tax is a good idea. I think even you think it’s a good idea, and it is because it broadens our tax base and it means that we can tackle the long-standing problems that we’ve got without selling our assets and giving most New Zealanders a fair go, a tax break, by having the first $5000 tax-free.

GUYON Let’s talk about that first $5000 tax-free, because when it’s in its full implementation, it costs you $3 billion over two years. It’s 1.5 billion a year.

PHIL It’s about 1.4 billion.

GUYON 1.5 billion a year. Now, two years’ worth of that policy is three billion. That’s the amount of money you would save right out to 2033 by raising the retirement age. Now, my point is – wouldn’t it have been better if we needed to save money to cut that policy which gives $10 a week to anyone regardless of income rather than saying to people, ‘Hey, you’ve got to work two years longer in your life’?

PHIL No, let’s look at it. Mercers Investment say that raising the retirement age gradually to 67, and it doesn’t come into effect until 2033, but it saves about, I think they’ve said, about 100 billion.

GUYON By 2050.

PHIL Yeah, but—

GUYON I mean, these aren’t big numbers—

PHIL What you’re talking about— What you’re talking about, Guyon, is not policies for the next seven days, not policies for the next three or four years. You’re talking about, you know, we don’t want an empty slogan – ‘building a brighter future’. We want to know how we’re going to do that. We’re going to do that by long-term policies. You know and I know and every New Zealander knows that with us living maybe 11 years longer than what would’ve been the case when we were born, we’ve got to make some changes. We’ve had the guts to do that. You know that the capital gains tax is a fair tax, because at the moment, you and I pay tax on every dollar we earn as a wage and salary earner, but people can make tens of millions of dollars and pay no tax at all.

GUYON Okay.

PHIL No, the third point, and I want to make this as well, you know, we’ve been hearing the Prime Minister talking about jobs and where they’re going to come from. We need to make sure that those investment signals are the right ones – that we’re investing in areas that are going to produce jobs, not speculation, that we’re going to have savings so we can invest in jobs.

GUYON Okay.

PHIL That’s what the future is about. That’s how you get a brighter future, not by an empty slogan.

GUYON I want to finish this interview in the last few minutes that we do have with coalition politics, essentially. Do you accept that you would need New Zealand First to be able to form a government after next Saturday?

PHIL Well, people indicate whether or not we need a party other than the Greens next Saturday, what I’m campaigning for this week is every vote we can get for Labour so that we’ve got a strong Labour-led government as an alternative to National. It’ll only be that way that we get an alternative to having a National government.

GUYON And is that an acceptable, viable alternative to you – a Labour, Green, New Zealand First government? Could you, would you want to manage that?

PHIL I think I’d rather manage that than a National, ACT, Maori Party government. That’s been kind of bizarre.

GUYON So, Winston Peters says he’s going to stay in opposition. Do you believe him?

PHIL Oh, you know, you’ve got to take people at face value. He said that that’s what he’s going to do. He’s got to get there first.

GUYON But you’re going to try and convince him otherwise, because you say—

PHIL No, we’ll wait and see what the people decide, and then we’ll work out how we can form a stable government on that basis. We’ve done it before. We did it in 1999, 2002, 2005. And as you’ll recall, we had some pretty difficult partners at that stage, but we made it work. We gave New Zealand stable government.

GUYON So you would try to entice him over to be part of a Labour government?

PHIL Oh, I’m not sure whether it’s going to be him. You know, there are other options that may be available.

GUYON What are they?

PHIL I’ve said who I’m not going to work with.

GUYON Yeah, well, what are they, Mr Goff?

PHIL Well, the Maori Party is there, and they may get some seats.

GUYON What’s the relationship there? Have you got a line of communication?

PHIL We talk to them, and there are areas where they would feel far more comfortable with a Labour policy because we’d be looking after ordinary working people, not tax cuts for the wealthy at the expense of middle- and low-income people. So, I mean, that’s the thing that’s damaged the Maori Party – that they’ve supported GST going up, that they’ve supported tax cuts for the wealthy when their people have missed. Their people are unemployed at twice the rate as they were three years ago.

GUYON Back to Winston Peters, because some polls are showing that he may hold what he calls the balance of responsibility. Would you be prepared to offer him a ministerial position?

PHIL Oh, look, that’s all hypothetical. I’ll wait and see—

GUYON Well, not really, because in 2005—

PHIL Well, no, it is hypothetical because we don’t know. The people haven’t spoken yet.

GUYON Let me ask the question in full.

PHIL Yeah, sure.

GUYON Because in 2005, Winston Peters said, ‘I am going into opposition. I’m not going to join any government.’ After 2005, Labour offered him a ministerial position and, lo and behold, he voted confidence and supply. So it is material, and I’m wondering whether you would offer him a ministerial position.

PHIL What’s hypothetical is whether he’s going to be there.

GUYON Do you trust him?

PHIL Oh, we’ve worked with him reasonably well in the past.

GUYON Do you trust him?

PHIL I’ve said what I’ve said. We’ve worked with him reasonably well in the past. He met the terms of the agreement between Labour and New Zealand First at that time.

GUYON Do you trust him?

PHIL I’ve said he kept to his word in his last term in government.

GUYON I put it to you—

PHIL But this is—

GUYON If you trust someone, you should be able to say that.

PHIL Well, no, no, look, we’ll go in there, we’ll get an agreement after the election, we’ll put together an alternative coalition, but it’s based on two things, and I’ve said this very clearly. It’s based on being able to put together a stable government. I believe we can do it And it’s based on people who will sign up to the core values we think are important to take New Zealand forward. It’s about jobs, it’s about decent incomes, it’s about giving all of our kids a decent start in life.

GUYON Got to leave it there. Thanks, Phil Goff, for joining us.

PHIL Thanks, Guyon.

GUYON Appreciate your time.

PHIL Yeah, a pleasure.

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