THE NATION TRANSCRIPTS Saturday 7/07/10

(Copyright to Front Page Ltd but may be used provided attribution is made to "TV3's 'The Nation'")

CUNLIFFE CANNOT SAY WHETHER CARTER WILL BE EXPELLED FROM LABOUR PARTY

Labour party Finance spoeksman David Cunliffe says he cannot say whether Te Atatu MP Chris Carter will be expelled from the party.

Speaking today on TV3’s “The Nation”, Mr Cunliffe said Chris Carter was “dead wrong” when he suggested in his infamous anonymous letter that Mr Cunliffe was “smiling” at the prospect of Phil Goff losing the Labour Party leadership.

Mr Cunliffe said that was why he voted for Mr Carter to be expelled from the Labour caucus.

But asked if he thought the party would also now expel him, Mr Cunliffe said: “I do not know the answer to that question.”

CUNNLIFFE WANTS RESTRICTIONS ON OVERSEAS INVESTMENT

Labour’s Finance spokesperson, David Cunliffe, believes foreign investment rules need tightening up.

Speaking today on TV3’s “The Nation”, Mr Cunliffe said it was his personal view that foreign investment which brought skills, technology, or distribution to market obviously had a big bonus around it as well as just the cash.

“Other investment that just buys up an existing asset and essentially takes offshore the income stream that goes with that, obviously doesn’t add as much value,” he said.

“We need our law to be able to tell the difference.”

Mr Cunliffe confirmed that Labour was looking at increasing income tax to 38% above a six figure income threshold.

And he said the party would “quite possibly” expand Kiwisaver as well as looking at continuing with the Cullen Fund.

DUNCAN Labour's Finance Spokesman, David Cunliffe's profile has taken probably from his point of view anyway, an unwelcome lift being singled out by Chris Carter in his now infamous letter as a possible replacement for Phil Goff. But Mr Cunliffe doesn’t want to talk about that, he wants to talk about Labour's economic policy and that’s why he joins me now, welcome along Mr Cunliffe.

I just want to start this interview by looking at foreign investment, there's been a lot of talk about the Crafer Farms in recent weeks. Do you think if you're an incoming Labour government that you'd have to do more about protecting assets in New Zealand, and wider that just strategic assets?

DAVID CUNLIFFE – Labour Finance Spokesman
I think that there is a great deal of public concern about the fact that we seem to be slipping backwards, that we're not catching Australia and part of the reason for that is that we not owning our own future, and we are certainly discussing within our team, the ways in which we could help New Zealand to own more of its future.

DUNCAN When you say you're discussing it with your team are you looking at widening the definition to – because I think the definition at the moment is strategic assets on sensitive land. So are you looking at other land like farms?

DAVID Well I mean there are a range of things that we could do and there are a range of views. Shane Jones wouldn’t mind me saying that he quite likes the Waitangi Fisheries model where no foreign investor can own quota, whether there's something in that that could be ...

DUNCAN See the Japanese actually own 50% of Sealord so they actually do have 99 year lease on the quota don’t they?

DAVID Well they can participate in a joint venture and have a lease, but that’s different from having outright ownership, and so one question we're looking at is, is there some analogy there for land holding. Another question that we're looking at as you've referred to is, does the current definition of strategic assets or sensitive land need broadening?

DUNCAN And does it? If you were taking office do you think it does?

DAVID I'll give you a personal view, against the background that as a team we haven't yet set upon our final position. My personal view is that we do need to look at broadening the definition because not all foreign investment is the same. Some investment that brings with it skills, technology, distribution to market, obviously has got a big bonus around it as well as just the cash. Other investment that just buys up an existing asset and essentially takes offshore the income stream that goes with that, obviously doesn’t add as much value. We need our law to be able to tell the difference.

DUNCAN So should the government be underwriting say Landcorp for instance, Landcorp had a bid, didn’t have enough money, didn’t stump up with a deal, would you underwrite Landcorp?

DAVID Oh I can't be in the position of giving a case by case view on cases that I don’t know the details of, so I'm gonna have to pass that one.

DUNCAN I want to look at if and when Labour would take office. Do you accept that you cannot buy popularity any more, because in the past you had your interest free student loans and Kiwi Saver, a number of very expensive policies that were popular? Do you accept you can't go there any more?

DAVID Broadly yes. As Labour's Finance Spokesperson, and I know Michael Cullen used to say the same thing, part of core business is ensuring that the public knows that they can trust Labour with the family chequebook if you like. Labour has to be fiscally prudent, we certainly were last time round, we cut gross debt in half and net debt to zero. We had the lowest unemployment in the world and the longest post war expansion. That’s a pretty good start, and we've gotta maintain that.

DUNCAN Well let's have a look at that reputation, let's have a look at what you do stand for. You’ve had a pretty strong campaign about reversing GST from 15% to 12.5%, even though it's on fruit and veggies, would you do it or not.

DAVID We've been really clear that we would not have put GST up.

DUNCAN Would you reverse it Mr Cunliffe?

DAVID Well our leader's being clear that that’s a matter the jury's still out on, and one of the options would be to take GST off fruit and vegetables. I think it's fair to say that that’s a pretty interesting idea.

DUNCAN It's a political marketing ploy though isn't it? I mean are you committed to it?

DAVID We aren't committed to anything yet because we haven't made the decision, but what I'm saying is that there are some reasons why it would be very helpful to hard press New Zealanders who are worried about the GST going up on the basics, have been hit by power price rises, who've been hit with rental and mortgage costs going up, because interest rates are on their way up, who've only had 1.6% wage growth in the last year, and now we know unemployment's going up. For hard pressed Kiwi families they need a bit of relief. So if it's not this maybe it'll something else.

DUNCAN If they need relief would you then rule out any new taxes?

DAVID There will be some change to the tax system under a Labour government, we would aim to make the tax system fairer, where as well as not liking the fact that GST went up because of course it hurts people on more modest means than most because they have to spend everything they earn, they therefore pay tax on everything. If you're a millionaire you don’t have to spend everything you earn to stay alive, so you're not paying tax on everything. We are very critical of at tax package that gave a third of essentially borrowed money to 5% of the income earners.

DUNCAN So you'd bring back in that top rate of tax? We spoke to Phil Goff here a couple of months ago about bringing that 39 cent rate back in at around $100,000. Is that what the party's looking at?

DAVID What our leader has said is that we would look at putting the top rate back up to, I think he said 38 cents, and that we would put the top rate threshold up to a six figure number. So middle income New Zealanders, people in the sort of 50, 60, 70, 80, $90,000 range would be exempt under that proposal, and you'd have to be making six figures before you paid anything in the top rate.

DUNCAN Do you feel comfortable with putting taxes up personally?

DAVID Well I think you’ve gotta look at it as a package.

DUNCAN Do you feel comfortable with putting a new tax on?

DAVID Well if you are able to put other taxes down, then I don’t have a problem with it. I don’t think we see adjustment of the top rate and threshold as a great revenue earner. What we are looking to do is to rebalance the tax system so it feeds into getting more jobs, and better incomes for working New Zealanders, who need a bit of a hand. I mean people have gotta feel that they can get ahead. This government that we've currently got campaigned on a socalled brighter future, and now we know we're slipping further behind.

DUNCAN And you’ve also indicated there's another couple of promises in your toolbox if you like, around Kiwi Saver and the Cullen Fund. Are you going to do something with Kiwi Saver and reboost it?

DAVID I'm happy to say that they while we're still working through the details, it is Labour's intention to lead the debate on savings policy going into the ....

DUNCAN Will you expand Kiwi Saver?

DAVID Quite possibly.

DUNCAN And what about the Cullen Fund, will you go back to having another two billion dollars worth of contributions there?

DAVID We've said that we will immediately look to restart contributions.

DUNCAN So you'll borrow more, because what we've just agreed on there I think is a two to three billion dollars worth of spending?

DAVID I haven't names a number on superannuation.

DUNCAN No but those figures are currently on the books around super, so you're saying you shouldn’t go to full contributions?

DAVID I haven't said that either, I'm just saying that’s an open question. We would have to be very careful about the fiscal balance. We have committed already that we will go into the election with a fully costed manifesto, and that we'll be up front with New Zealanders about the impact that we expect it to have on all things being equal – the debt balance, the operating balance, and the government's network.

DUNCAN So would you borrow more than the current track at the moment with the government's borrowing?

DAVID I think again we've still got to finalise our internal discussions. I've been working just this last week on some work around the fiscal framework, so I can only give you an interim and personal view. It follows from the fact that we need to maintain public confidence in Labour government's fiscal prudence, that we can't blow the budget. And that means managing net debt down over time, over the business cycle.

DUNCAN I just want to end this interview on a couple of issues, first flexibility of labour laws. You’ve seen what the government's done around the tradability of that fourth week. Are you in any way flexible like your Leader?

DAVID I think our Leader's made it very clear that the fourth week should not be tradable and I support that position. It's been Labour policy for a long time. What I would observe is that the government seems to be lurching from one quick fix suggestion to another. A couple of weeks ago it was mining National Parks, that was going to be nirvana. This week it's screwing down wage rates and workers' conditions. Well how you get to be a wealthy country by screwing workers, I don’t know.

DUNCAN And just my final question. If Phil Goff loses the next election, do you have a long term ambition to perhaps want to lead the party if there's a vacancy? If there's a vacancy there Mr Cunliffe?

DAVID I'm not going there at all. What I've said is I didn’t come into politics to do any particular job, I hope to be of service to my caucus and the team and to ....

DUNCAN But you’ve ruled out that you potentially will be leading the party one day?

DAVID I'm not ruling anything in, I'm not going there.

DUNCAN Not ruling anything out either?

DAVID I'm not going there.

DUNCAN Alright, thanks for joining us today Mr Cunliffe, appreciated you coming to the studio.

DUNCAN Labour's Finance Spokesman, David Cunliffe's profile has taken probably from his point of view anyway, an unwelcome lift being singled out by Chris Carter in his now infamous letter as a possible replacement for Phil Goff. But Mr Cunliffe doesn’t want to talk about that, he wants to talk about Labour's economic policy and that’s why he joins me now, welcome along Mr Cunliffe.

I just want to start this interview by looking at foreign investment, there's been a lot of talk about the Crafer Farms in recent weeks. Do you think if you're an incoming Labour government that you'd have to do more about protecting assets in New Zealand, and wider that just strategic assets?

DAVID CUNLIFFE – Labour Finance Spokesman
I think that there is a great deal of public concern about the fact that we seem to be slipping backwards, that we're not catching Australia and part of the reason for that is that we not owning our own future, and we are certainly discussing within our team, the ways in which we could help New Zealand to own more of its future.

DUNCAN When you say you're discussing it with your team are you looking at widening the definition to – because I think the definition at the moment is strategic assets on sensitive land. So are you looking at other land like farms?

DAVID Well I mean there are a range of things that we could do and there are a range of views. Shane Jones wouldn’t mind me saying that he quite likes the Waitangi Fisheries model where no foreign investor can own quota, whether there's something in that that could be ...

DUNCAN See the Japanese actually own 50% of Sealord so they actually do have 99 year lease on the quota don’t they?

DAVID Well they can participate in a joint venture and have a lease, but that’s different from having outright ownership, and so one question we're looking at is, is there some analogy there for land holding. Another question that we're looking at as you've referred to is, does the current definition of strategic assets or sensitive land need broadening?

DUNCAN And does it? If you were taking office do you think it does?

DAVID I'll give you a personal view, against the background that as a team we haven't yet set upon our final position. My personal view is that we do need to look at broadening the definition because not all foreign investment is the same. Some investment that brings with it skills, technology, distribution to market, obviously has got a big bonus around it as well as just the cash. Other investment that just buys up an existing asset and essentially takes offshore the income stream that goes with that, obviously doesn’t add as much value. We need our law to be able to tell the difference.

DUNCAN So should the government be underwriting say Landcorp for instance, Landcorp had a bid, didn’t have enough money, didn’t stump up with a deal, would you underwrite Landcorp?

DAVID Oh I can't be in the position of giving a case by case view on cases that I don’t know the details of, so I'm gonna have to pass that one.

DUNCAN I want to look at if and when Labour would take office. Do you accept that you cannot buy popularity any more, because in the past you had your interest free student loans and Kiwi Saver, a number of very expensive policies that were popular? Do you accept you can't go there any more?

DAVID Broadly yes. As Labour's Finance Spokesperson, and I know Michael Cullen used to say the same thing, part of core business is ensuring that the public knows that they can trust Labour with the family chequebook if you like. Labour has to be fiscally prudent, we certainly were last time round, we cut gross debt in half and net debt to zero. We had the lowest unemployment in the world and the longest post war expansion. That’s a pretty good start, and we've gotta maintain that.

DUNCAN Well let's have a look at that reputation, let's have a look at what you do stand for. You’ve had a pretty strong campaign about reversing GST from 15% to 12.5%, even though it's on fruit and veggies, would you do it or not.

DAVID We've been really clear that we would not have put GST up.

DUNCAN Would you reverse it Mr Cunliffe?

DAVID Well our leader's being clear that that’s a matter the jury's still out on, and one of the options would be to take GST off fruit and vegetables. I think it's fair to say that that’s a pretty interesting idea.

DUNCAN It's a political marketing ploy though isn't it? I mean are you committed to it?

DAVID We aren't committed to anything yet because we haven't made the decision, but what I'm saying is that there are some reasons why it would be very helpful to hard press New Zealanders who are worried about the GST going up on the basics, have been hit by power price rises, who've been hit with rental and mortgage costs going up, because interest rates are on their way up, who've only had 1.6% wage growth in the last year, and now we know unemployment's going up. For hard pressed Kiwi families they need a bit of relief. So if it's not this maybe it'll something else.

DUNCAN If they need relief would you then rule out any new taxes?

DAVID There will be some change to the tax system under a Labour government, we would aim to make the tax system fairer, where as well as not liking the fact that GST went up because of course it hurts people on more modest means than most because they have to spend everything they earn, they therefore pay tax on everything. If you're a millionaire you don’t have to spend everything you earn to stay alive, so you're not paying tax on everything. We are very critical of at tax package that gave a third of essentially borrowed money to 5% of the income earners.

DUNCAN So you'd bring back in that top rate of tax? We spoke to Phil Goff here a couple of months ago about bringing that 39 cent rate back in at around $100,000. Is that what the party's looking at?

DAVID What our leader has said is that we would look at putting the top rate back up to, I think he said 38 cents, and that we would put the top rate threshold up to a six figure number. So middle income New Zealanders, people in the sort of 50, 60, 70, 80, $90,000 range would be exempt under that proposal, and you'd have to be making six figures before you paid anything in the top rate.

DUNCAN Do you feel comfortable with putting taxes up personally?

DAVID Well I think you’ve gotta look at it as a package.

DUNCAN Do you feel comfortable with putting a new tax on?

DAVID Well if you are able to put other taxes down, then I don’t have a problem with it. I don’t think we see adjustment of the top rate and threshold as a great revenue earner. What we are looking to do is to rebalance the tax system so it feeds into getting more jobs, and better incomes for working New Zealanders, who need a bit of a hand. I mean people have gotta feel that they can get ahead. This government that we've currently got campaigned on a socalled brighter future, and now we know we're slipping further behind.

DUNCAN And you’ve also indicated there's another couple of promises in your toolbox if you like, around Kiwi Saver and the Cullen Fund. Are you going to do something with Kiwi Saver and reboost it?

DAVID I'm happy to say that they while we're still working through the details, it is Labour's intention to lead the debate on savings policy going into the ....

DUNCAN Will you expand Kiwi Saver?

DAVID Quite possibly.

DUNCAN And what about the Cullen Fund, will you go back to having another two billion dollars worth of contributions there?

DAVID We've said that we will immediately look to restart contributions.

DUNCAN So you'll borrow more, because what we've just agreed on there I think is a two to three billion dollars worth of spending?

DAVID I haven't names a number on superannuation.

DUNCAN No but those figures are currently on the books around super, so you're saying you shouldn’t go to full contributions?

DAVID I haven't said that either, I'm just saying that’s an open question. We would have to be very careful about the fiscal balance. We have committed already that we will go into the election with a fully costed manifesto, and that we'll be up front with New Zealanders about the impact that we expect it to have on all things being equal – the debt balance, the operating balance, and the government's network.

DUNCAN So would you borrow more than the current track at the moment with the government's borrowing?

DAVID I think again we've still got to finalise our internal discussions. I've been working just this last week on some work around the fiscal framework, so I can only give you an interim and personal view. It follows from the fact that we need to maintain public confidence in Labour government's fiscal prudence, that we can't blow the budget. And that means managing net debt down over time, over the business cycle.

DUNCAN I just want to end this interview on a couple of issues, first flexibility of labour laws. You’ve seen what the government's done around the tradability of that fourth week. Are you in any way flexible like your Leader?

DAVID I think our Leader's made it very clear that the fourth week should not be tradable and I support that position. It's been Labour policy for a long time. What I would observe is that the government seems to be lurching from one quick fix suggestion to another. A couple of weeks ago it was mining National Parks, that was going to be nirvana. This week it's screwing down wage rates and workers' conditions. Well how you get to be a wealthy country by screwing workers, I don’t know.

DUNCAN And just my final question. If Phil Goff loses the next election, do you have a long term ambition to perhaps want to lead the party if there's a vacancy? If there's a vacancy there Mr Cunliffe?

DAVID I'm not going there at all. What I've said is I didn’t come into politics to do any particular job, I hope to be of service to my caucus and the team and to ....

DUNCAN But you’ve ruled out that you potentially will be leading the party one day?

DAVID I'm not ruling anything in, I'm not going there.

DUNCAN Not ruling anything out either?

DAVID I'm not going there.

DUNCAN Alright, thanks for joining us today Mr Cunliffe, appreciated you coming to the studio.

ENDS

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