Phil Goff Interviewed By Tvnz Political Editor, Guyon Espiner

GUYON Phil Goff, thank you very much for joining us on Q+A this morning we really appreciate you being here. Let's start with something you don’t agree with the government on, and that is the economy. If we look back a year ago there was a real fear that the recession might brutally hit New Zealand, we look now, Crown accounts are improving, unemployment is not nearly as bad as was forecast, your accusation that the government had inadequately managed the economy in a recession, it just turned out to be plain wrong didn’t it?

PHIL GOFF – Labour Leader No it didn’t, what we're doing now, we're certainly doing better, the IMF has predicted that the world economy will grow by 3.9% this year. Westpac says that you know after recession generally you get 6% growth, but this has happened often despite the government rather than because of it, and the accusation I made last year, the job summit, John Key promised it wasn’t a jobfest, but what did it deliver.

GUYON Unemployment is lower than it was forecast Mr Goff

PHIL Of course it is, but that was despite not because of the government. Look when you look at unemployment we can throw statistics around but you're talking about human beings, what New Zealander didn’t watch three and a half thousand ordinary New Zealanders in South Auckland queue up for 150 low paid jobs.

GUYON Pretty power stuff. What would you have done Mr Goff for those people to ensure that they had jobs now and didn’t have to queue for those lines, what would you have done had you been in the government's shoes over the last year.

PHIL It wasn’t about throwing a whole lot more money at it, but it's how you do things, for example if you want a stimulus to get the economy going to keep businesses going, to get people into work, you would have given a helping hand to the strugglers the battlers that really were finding it hard.

GUYON How would you have done that?

PHIL Oh the tax cuts last year, 30% of the money went to the top couple of percent of income earners, they banked it, they didn’t spend it, if you'd given that to the families, the people that were excluded under $40,000 with kids, they would have spent it, that would have given the economy a boost.

GUYON Okay I want to talk about tax a little further down the track, but a big theme in your speech that you made on Thursday, your state of the nation speech was equity and fairness, you spoke very forcefully in favour of a rise to the minimum wage, but what about those people you just spoke about queuing for jobs, the people who can't get work at all, do you think there is a case for raising the level of the unemployment benefit?

PHIL Oh look raising the minimum wage, absolutely. What we want to do is not lock people into unemployment benefits, we want to get them off it, we want to get them into jobs, we want to get them into … training.

GUYON Everyone wants that, can we get a clear answer on whether you think there is a case for raising the amount of money that is paid on the unemployment benefit?

PHIL Oh there's a case for it, whether you can afford it at a particular point you’ve gotta make that judgement. I support raising the minimum wage, we have taken a stand on that, we've not talked about raising benefits at this point, we've talked about getting people off benefits.

GUYON You spoke in your speech a lot about tax as well, and again you returned to that equity and fairness argument, and I want to quote from that, you said too many people on good incomes avoid and evade paying taxes. Now I've looked through the MP's Register of Pecuniary Interests, and I see you don’t have a family trust or a trust listed there, so I presume that you personally do and always have paid the top tax rate.

PHIL I've the top tax rate, I've always paid every dollar in tax that I've been required to pay and I'm proud to pay that tax because that’s how we fun our education our health system.

GUYON Is that the case for your caucus, because when you look through that Register of Interests, there are a lot of your own MPs who have trusts, and can structure their finance and their assets so they do not pay the top tax rate, do you include those people in the people who are being unfair by not paying the top tax rate?

PHIL If you have a system that allows people to avoid paying tax, they would avoid paying taxes, what you have to do is get the system right. What I guess offends me is that most people, average working New Zealanders, wage and salary earners they don’t evade, they don’t avoid their tax, they can't, but when you see the list of the top hundred income earners in this country and half of them are paying less tax as a proportion of their income than the people right at the top, you say there's something wrong with the system.

GUYON Something wrong, a lot of people would agree with that, but can I return to that, have you asked those MPs, I mean is it fair that they're not paying the top tax rate, all of them are paid over $140,000 at least yet they're able to structure their finances in that way. When you gave a speech and said that was unfair had you checked with your own caucus to see whether those people are paying the top tax rate and paying for the roads and hospitals and schools of New Zealand?

PHIL Yeah, I've got absolute confidence that every one of my MPs is paying all the tax that they should be paying, but if you look at the list of assets you'll see that the Labour caucus pretty much reflects a cross section of New Zealand, they're not big income earners by and large, they're people that have worked hard for their money, they’ve paid their tax, they believe in the system of providing for people who have need, that’s what Labour stands for. So what am I saying about tax, I'm saying about give people a fair go, make sure everybody carries their share and make sure that when you distribute the benefits of tax change it doesn’t just go to the privileged few.

GUYON The government is reviewing the tax system, you’ve offered some cooperation, would you support lowering the top tax rate back to 33 cents where it was before Labour raised it in 1999?

PHIL Not if that is going to give all of the benefit of the tax change to the people at the top levels of income. You know what I won't support, let me make this absolutely clear, is lifting the GST that will hit hard people with families and dependents to pay for tax cuts for those that are earning at the highest level.

GUYON The highest level, $70,000 that’s what we're talking about, that’s been the top tax rate, are they the privileged few that you were talking about, many trades people earn $70,000.

PHIL I think there's a good argument for lifting the thresholds so that people that weren't intended to be caught in that top tax bracket don’t pay that top tax rate yeah, I think that’s a fair point.

GUYON To what?

PHIL Oh I haven't gone into the detail of that, I'm not going to make policy on the hoof Guyon and you wouldn’t expect me to, but we are looking t all of those options and to go back to your point, yes we've said to the government we'll work with you if it's possible to get a consensus, so that we can have certainty about the tax changes, but we have bottom lines. Our key bottom line is that it's gotta be fair to all New Zealanders, that many benefit from those tax changes, not just the few.

GUYON It's an important question though that threshold because you're talking about the elite and the privileged and the rich, what's your definition of rich?

PHIL Oh look the people that are in the top 100 earners are obviously rich, and what we've heard from the Minister of Finance himself, is that half of them aren’t paying the same proportion of their tax as people who are the battlers and the strugglers in life.

GUYON The top 10% of income earners though, they pay 44% of all the tax, is that fair?

PHIL Well they earn probably over 40% of the income, so proportionately yes.

GUYON So you don’t have any problem with that?

PHIL No no I don’t have problems with that, look I earn good money, I have never resented a cent in taxation that I've paid if that’s going to help my fellow New Zealanders make sure that we have an education system that treats everybody, gives them the opportunity they need, and a health system that doesn’t measure your wallet rather than your pulse.

GUYON Can I get a couple of brief sort of yes or no answers really. GST, are you ruling out supporting a rise in GST?

PHIL Look, I think that'd be the last of the options that I would choose.

GUYON A land tax?

PHIL We'd look at it, there are some problems with that in terms of retired folk, in terms of your productive sector, but we'd look at all the arguments if the government wanted to take it up with us, but there are difficulties with it that would have to be overcome.

GUYON Monetary policy, the means by which we control inflation, loosening or lowering the interest rates to stimulate the economy or raising them to actually control inflation. You said last year that you were going to end a 20 year consensus on monetary policy, what are you going to replace it with?

PHIL Well what we said is that the role of a party in opposition is to challenge the assumptions that we've operated on in the past. By and large monetary policy has done one thing very well, it's put a curb on inflation, and I grew up in the years of Muldoon and we had double digit inflation, so I understand how important that is, but I also know as Minister of Trade, that one of the things that was most damaging to us was for our productive sector to have an overvalued and volatile exchange rate and their biggest problem was the volatility of it, and also to have amongst the highest interest rates in the developed world. Now we should not just assume that everything is working fine, it isn't, we've spent 39 of the last 40 years spending more as a country than we've earned, that is an indication that we have to do something to encourage our productive and our export sector.

GUYON Have you got an answer though?

PHIL Oh we're looking at a number of different things, there are a range of different models around the world from our colleagues across the Tasman to the Singaporese. What I've asked my economics team to do this year is to examine all of those options with an absolutely open mind. The test in the end is whether it works for our productive and our export sector.

GUYON Before I leave the economy let's talk about that economic team or the person who's at the front to it. Can you guarantee this morning that David Cunliffe will be Finance Minister should Labour win the election?

PHIL If he doesn’t fall under a bus.

GUYON So he's the only man….

PHIL Look I've got a good finance team there and David would be the first to say that people like David Parker and Trevor Mallard are working there closely with them, have those skills, have that expertise.

GUYON But he would be the minister?

PHIL David is really bright, he's got experience in the commercial sector, he's got experiences in Associate Minister of Finance. I think he will do a great job.

GUYON Let's turn to race relations which was a big strand of your nationhood speech on November 26 and I'll quote from that where you said that New Zealand was at a crossroads and we faced a very stark choice, you said "a future based on principle and with the interests of all New Zealanders at heart, or a country where one New Zealander is turned against another, Maori against Pakeha". Can you give us this morning some real life examples in the community where Maori have turned against Pakeha?

PHIL Oh I think that can happen quite easily if we take the wrong decisions.

GUYON We're at the crossroads according to you, where is it happening?

PHIL We are at the crossroads, and we are at the crossroads in the decision that was made around the Emissions Trading Scheme.

GUYON Did people come up to you on your motorbike tour and start talking to you about the Emissions Trading Scheme?

PHIL I think most New Zealanders have got a pretty vague idea about the Emissions Trading Scheme except for one point, they know that if you're gonna put a tax on emissions, it ought to fall on those that are causing the emissions, not on the average New Zealander as a taxpayer, that they understand really well, and they're absolutely right about that. Let's get back to what you were asking, look I represent the electorate in New Zealand, Mt Roskill, it's the most multicultural in the world. I'm really proud of the good race relations in my community between a whole lot of different groups, but can you be complacent about that, and can you guarantee that we'll get through, finalise the Treaty Settlement process and then move on if you had shabby deals like you’ve had over the Emissions Trading Scheme, where people were bought off in terms of their place in parliament.

GUYON But do you believe that this is turning Pakeha and Maori against each other?

PHIL I think there is a potential there that has to be avoided, I think the relations between Maori and Pakeha in New Zealand are as good as the relations between any two ethnic groups anywhere in the world, but there is a risk and there is a risk if you start muddying the waters with the sort of short term and shabby deal that was made to buy the Maori Party votes for the Emissions Trading Scheme, and a lot of New Zealanders agree with me on that.

GUYON Shane Jones said this week that it was his mission to drive the Maori Party out of parliament. Now how smart is it for the Labour Party under MMP to actually annihilate a potential coalition partner, leaving them only with the Greens and leaving you with almost no chance of forming the next government

PHIL Well if the electorate will make that decision but Shane was speaking from heart and he was saying this.

GUYON Is he speaking with your authority?

PHIL I'm comfortable with his comments.

GUYON You want the Maori Party out of parliament?

PHIL No no.

GUYON No no hang on hang on, that’s what he said, sorry Mr Goff, do you want the Maori Party out of parliament?

PHIL Look if there is a question of whether there are seven Maori seats that are Labour Party or Maori Party held I want them all to be Labour Party held.

GUYON So you don’t want to work with the Maori Party potentially?

PHIL No, no, that’s a different question.

GUYON But if you're trying to extinguish them, there's no chance at all is there?

PHIL In a democratic competition of course every one of our Labour candidates in the Maori electorates will be seeking to win those seats and I'll be right behind them, and I'd like 100%. The second question you ask is a slightly different one. Will we work with the Maori Party while they're in parliament, of course we will, if we think that’s in the interests of the country, as would any other party.

GUYON So let's get this straight. You want to drive the Maori Party out of parliament, but should they actually remain so you'll work with them?

PHIL I want to win every Maori seat in the parliament for Labour, but if we don’t do that will we work with other parties in parliament, of course we will, that’s the nature of MMP.

GUYON You have your own MPs a bit of a rev up this week. How much responsibility do you take as Leader for Labour being 20-25 points behind National in the polls?

PHIL I take the primary responsibility, I'm the leader and I have to take that responsibility. Was it a tough year last year, of course it was. What it always going to be a tough year when you’ve been in government for nine years and you go into Opposition, of course, but we are using our time in Opposition to come up with alternative ideas to rebuild, to reach out to the people that we want to represent in parliament, those were the people that I talked about in my speech last week.

GUYON Is the brutal truth though, you’ve had nearly 30 years in politics, you’ve been a great minister, but you simply do not inspire voters as a leader, that you are simply the temporary leader who will resign after Labour loses the next election.

PHIL No, I don’t accept that we're going to lose the next election and I don’t accept that I am a temporary leader. I'm there to lead the Labour Party, a very good team of experienced fresh and capable people, and our goal will be to win the elections in 2011, and we'll do that by setting forward policy that we believe will represent the needs and concerns of working New Zealanders and their families.

GUYON Will you resign on election night should Labour lose as Helen Clark did?

PHIL I don’t have a plan B for election night, and it's not about losing.

GUYON I think I heard a similar phrase before, but thanks very much for coming and joining us this morning.

ENDS

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