Parker David: Questions for Oral Answer — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeParker David: Questions for Oral Answer — Questions to Ministers Questions to Members[Sitting date: 25 June 2013. Volume:691;Page:11184. Text is incorporated into the Bound Volume.]6.Hon DAVID PARKER (Labour)to theMinister of Finance: Does he agree with ANZ regarding the New Zealand economy that “Our concern is that the domestic-centric mix of growth is not sustainable from the standpoint of New Zealand’s external imbalances”; if not why not?Hon STEVEN JOYCE (Acting Minister of Finance):I agree with a number of statements in the ANZ’s review of GDP in the first quarter for example when it says that lead indicators suggest solid growth in the second half of the year. I agree with it when it says that base momentum is lifting. And I agree with it when it notes a build-up in manufacturing inventories added to GDP. However I do not agree with the particular passage the member quotes. Household savings are in fact up. The Government remains on track to surplus and to begin paying off debt and forecasts have to be considered in view of the large one-off effect of the Canterbury rebuild on domestic activity. And on that basis I disagree with its assertion.Hon David Parker: Why does he expect the public to believe that the recovery is broad-based and the benefits are being shared by all when 40 percent of working New Zealanders did not get a pay rise at all in the last year yet the cost of living—be it electricity prices petrol taxes health or education costs—keeps going up and up?Hon STEVEN JOYCE: Well the member makes an interesting point but I am not sure that it squares with the facts because the reality is that the cost of living is actually the lowest it has been in 9 years. It has gone up about 1 percent in the last year. Interest rates which are of course one of the biggest household costs are as low as they have been for 40-odd years—in fact 50 years I think. That means on balance that most households although they would all like to be further ahead—and of course we all would—are in fact slightly better off in the last 12 months than they would have been the year before.Hon David Parker: Does he understand that New Zealanders are feeling disappointed with his management of the economy given that most of the modest economic gains have gone to the few percentage at the top while everyone else has stayed still or—Hon Dr Nick Smith: Not true.Hon David Parker: —it is—gone backwards?Hon STEVEN JOYCE: I suppose the lie of that statement is probably the polling numbers that suggest that New Zealanders in fact are supporting the economic direction of this Government. The reality is that it has been tough the world over in terms of people getting ahead but in the New Zealand context with low interest rates low mortgage rates a low cost of living increase and a Government that is running the economy carefully and successfully we are actually doing better than most parts of the world.Paul Goldsmith: How does New Zealand’s external balances compare with what the Government inherited in 2008?Hon STEVEN JOYCE: Statistics New Zealand last week announced that the current account deficit in the first quarter was 4.8 percent of GDP and was actually down a bit and compares with the current account deficit in the final quarter of 2008 where it peaked at 8.8 percent of GDP. That was the worst quarter in the last 25 years and came at the end of a 4-year period in which the current account deficit averaged over 8 percent. So what we are seeing is a steady rebalancing of the New Zealand economy and that is reflected in our external balances.