John Key: unemployment will continue to rise over the next year

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement last week that "we're starting to come out of the recession"; if so, why?

Hon JOHN KEY (Prime Minister) : Yes; Treasury predicts that the economy is in the last quarter of negative growth. In a purely technical sense, that means we are at the end of the recession. However, we are by no means out of the woods. It will be some time before GDP recovers to previous levels, and for most people the measure of a recession is whether they have a job. As I have said many times, unemployment will continue to rise over the next year before peaking and beginning to fall again. That is the consequence of a very long recession, which began under the previous Labour Government.

Hon Phil Goff: Does the Prime Minister's plan to come out of the recession include the appointment as chair to the productivity task force of Don Brash, who says of his agenda that everything is on the table, including privatisation, notwithstanding the assurances to the contrary that the Prime Minister gave during the election campaign?

Hon JOHN KEY: The National Cabinet sets the agenda, the National Cabinet decides the policies, and for the term of this Government there will be no privatisation. Yes, I think that in leading the 2025 commission Dr Brash can play a part in helping narrow the wage gap. Goodness knows, this country needs help, because after 9 years of Labour it went in one direction and that was backwards, compared with Australia.

Hon Phil Goff: Why did the Prime Minister, as recently as on Q+A on Sunday, repeatedly refuse to rule out privatisation as part of his agenda despite his assurances that he would not be privatising before the election?

Hon JOHN KEY: I urge the member to read the transcript of Q+A. What I correctly said was that I have never said I am philosophically opposed to asset sales.

Hon Members: Oh!

Hon JOHN KEY: Well, I am not. I simply said it does not form part of the Government's agenda for this term. If we change our policy for future terms, we will campaign on it and be up front about it.

Hon Phil Goff: Does the Prime Minister accept that for tens of thousands of New Zealanders, far from coming out of the recession, they will be thrown out of work over the next 12 months, and does he intend to do anything to alleviate the genuine hardship, including the loss of homes, that many of those people are facing?

Hon JOHN KEY: I cannot tell the member how many people will lose their jobs over the next year or so.

Hon Member: Treasury did!

Hon JOHN KEY: Treasury have lots of predictions. Some of them are right and some of them are wrong, I am afraid to tell the member. The second thing I will say is that the Government is doing as much as it possibly can, I believe, to try to help people through a recession that is a global recession, which started in the United States of America. This Government has done everything from bringing forward infrastructure spending to things like a home insulation package, the reform of the Resource Management Act, the reform of the emissions trading scheme legislation, removing regulation, working on reform of local governance in Auckland, tax cuts of $1 billion in April"”and it goes on and on and on. Yes, there will be some people who lose their jobs, and this Government will do everything it can to try to help them into a new job.

Chris Tremain: What assistance does Work and Income offer, in addition to the main benefits, for people who find themselves in hardship during the recession?

Hon JOHN KEY: The answer to that question is that it provides assistance of well over $1 billion. I am advised that Work and Income provides a wide range of assistance to people in need, including to people who are not receiving any sort of main benefit. The assistance includes job search services, the accommodation supplement, child and out-of-school care and recreation subsidies, Transition to Work grants, temporary additional support, special-needs grants, and recoverable assistance payments. I am advised that the Government spends $1 billion alone on the accommodation supplement, and $300 million on hardship assistance. These services are available to people who do not qualify for a main benefit.

Hon Phil Goff: What does the Prime Minister say to his constituent Bruce Burgess, whose story is told in the New Zealand Herald this morning, who has saved and worked all of his life and has never asked the State for welfare assistance in his life, but now, at 63, has lost his job, risks losing his home, and is not eligible for transitional assistance, because his wife earns a very modest income?

Hon JOHN KEY: I say a number of things. Firstly, I urge Mr Burgess to go into Work and Income for an assessment. If he does that, Work and Income may be able to help him into one of the"”

Hon Annette King: Why doesn't the Prime Minister answer the question?

Hon JOHN KEY: "”I tell that member to just listen for a second, because she might learn something"”he might be eligible for one of the 144 engineering jobs available. Secondly, according to the facts as stated in the New Zealand Herald, Mr Burgess would be eligible for a partial benefit"”

Hon Phil Goff: How much?

Hon JOHN KEY: It would be $91.20 a week. The third thing"”

Hon Phil Goff: How much?

Hon JOHN KEY: It would be $91.20 a week. Thirdly, I say to Mr Goff that before he starts playing politics with a constituent of mine, I strongly, strongly suggest that he makes sure he is in receipt of all the information.

Mr SPEAKER: I have called Chris Tremain; please show the member some courtesy.

Chris Tremain: What correspondence has the Prime Minister, or other Ministers, had with Mr Burgess?

Hon JOHN KEY: A family member of Mr Burgess made contact with my office and I asked the Minister for Social Development and Employment to respond. Officials in the Minister's office asked the family member for Mr Burgess' details so they could see what assistance he might be entitled to. The family member did not supply any of the details needed, including Mr Burgess' name, so it was impossible to look into the situation. Following this morning's media coverage, Work and Income has been able to identify and make contact with Mr Burgess to receive all of the facts. I encourage him to sit down with Work and Income and have a full assessment of his individual circumstances, and I urge Mr Goff to make sure he understands all the facts when he starts dealing with a situation of an individual constituent.

Mr SPEAKER: I now ask members to show a little courtesy to the Leader of the Opposition, whom I have called.

Hon Phil Goff: Why did the Prime Minister answer in the House yesterday that a person who has been made redundant and who has a spouse earning $26,000 a year is eligible for financial support for job search or retraining when he or she is not?

Hon JOHN KEY: Because it is correct.

Hon Phil Goff: I raise a point of order, Mr Speaker. I did not hear the Prime Minister's answer; could he please repeat it?

Hon JOHN KEY: Because it is correct.

Mr SPEAKER: I thank the honourable Prime Minister.

Hon Phil Goff: Why was it possible, at a cost of hundreds of millions of dollars, to legislate for tax cuts last December that would have given people on high incomes, including the Prime Minister, hundreds of dollars a week in tax cuts, but it is not possible to provide short-term transitional support for job search or retraining for people who are suffering genuine hardship through no fault of their own, who have been taxpayers all their lives?

Hon JOHN KEY: Firstly, because it was a much better idea than giving welfare to millionaires, as Phil Goff was suggesting on Monday"”[Interruption]"”I am in no rush. Secondly, we need to understand what happened here. The National Party, when in Opposition, put up a proposal to provide transitional support to those most in need in this country. It is called the ReStart package, and we did it on top of the $300 million that is available for hardship assistance, the $150 million that is available for childcare assistance, and the billion dollars that is available for accommodation supplements. We are doing what we can to help those most vulnerable in the community.