4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he agree with the Prime Minister’s views on economic policy?

Hon BILL ENGLISH (Minister of Finance) : Yes.

Hon David Cunliffe: Does he agree with the Prime Minister’s views of his Treasury’s estimates that the fiscal costs of the Government’s emissions trading scheme is $110 billion, or 14 to 17 percent of GDP, dismissing it as nonsense; if so, why?

Hon BILL ENGLISH: Yes, because it is.

Hon David Cunliffe: Can he confirm that the assumptions underlying his Treasury’s $110 billion estimate are, in fact, quite reasonable given that the $50 per tonne carbon price is in line with that used in Australia, is half the cost that Nick Smith used when criticising his opponents, and is Treasury’s mid-range scenario?

Hon BILL ENGLISH: I think, as the Prime Minister said yesterday, that Treasury has trouble predicting what will happen by Christmas let alone what will happen by 2050. It made a guess on the basis of a range of highly contestable assumptions.

Hon David Cunliffe: If that is the case, how does he then reconcile his statement that Treasury’s projections and the long-term fiscal outlook “highlights the stark choices New Zealand faces if it is to avoid an explosion of public debt”, and how does that wear with the Prime Minister’s dismissal of Treasury’s long-term forecasting?

Hon BILL ENGLISH: Treasury did some long-term fiscal forecasts based largely on the policy settings left behind by the reckless previous Labour Government, which managed this economy incompetently and missed the opportunity of a generation to step up economic performance.

Hon David Cunliffe: If the Minister does not consider his department’s advice on the fiscal impacts of the emissions trading scheme to be reliable, what, then, is the advice—which the Government is relying on—that underlies the figure of $3,000 by 2030, which Mr Key gave Federated Farmers yesterday; and does it do better than the advice that Treasury’s regulatory impact assessment unit criticised as being too flimsy to support the bill before Parliament?

Hon BILL ENGLISH: This Government has the capacity to make its own distinctions between good advice and bad advice. Advice we disagree with is bad advice; advice we agree with is good advice.