Goldsmith Paul: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeGoldsmith Paul: Questions for Oral Answer — Questions to Ministers[Sitting date: 30 July 2014. Volume:700;Page:19657. Text is incorporated into the Bound Volume.]3.PAUL GOLDSMITH (National)to the Minister of Finance: How is the Government’s plan to lock in the gains from a growing economy helping to deliver more jobs and higher wages for New Zealanders?Hon BILL ENGLISH (Minister of Finance):The programme is focused on locking in gains over the next 3 to 5 years from a growing economy that could under sensible management deliver sustained growth. So our plan includes responsibly managing the Government’s finances continuing to build a more productive and competitive economy that supports higher wages and more jobs investing in better public services so we can have a better community as well as sound Government books and supporting the rebuild of Christchurch including $15 billion of Government support.Paul Goldsmith: What is the outlook for the New Zealand economy over the next 4 years and how will this be supported by the Government’s economic programme?Hon BILL ENGLISH: The economy has built good momentum and there is considerable confidence among businesses and households about the outlook. We have the opportunity if the economy is well managed to get through the next cycle of growth with relatively low interest rates and possibly a lower exchange rate. That could lead to a significant rebalancing of our economy in favour of exports. Average wages are forecast for instance to increase to $62000 up $7000 in the next 4 years. The economy is expected to grow just under 12 percent in the next 4 years and we are on track to reduce Government debt back to 20 percent of GDP by 2020.Paul Goldsmith: What lessons has he taken from the previous economic cycle when house prices doubled and floating mortgage interest rates reached nearly 11 percent?Hon BILL ENGLISH: The Government learnt some sharp lessons from the economic management of the previous Labour Government. By 2008 mortgage interest rates had reached almost 11 percent house prices had doubled in 7 or 8 years and inflation—that is the cost of living—was rising at 5 percent. We are focusing on avoiding a Government spend-up even though it is election year and on influencing the housing market so that we can have a more balanced economy. Those are sharp lessons from the mismanagement under the previous Labour Government.Hon David Parker: How can he say his plan is working when after 6 years wage rates are stagnant 147000 people are still out of work youth unemployment is over 13 percent Auckland house prices under his watch have increased in real terms at a 50 percent higher rate than under the previous Government and we are having billions of dollars sucked out of the economy through a collapse in our export commodity prices?Hon BILL ENGLISH: My opinion of it is I suppose interesting although I have had the opportunity to share it with the House several hundred times in this last session. But it is the opinion of the New Zealanders who have stopped leaving to go to Australia that really matters. Three years ago there was a net flow of 40000 New Zealanders to Australia. Last month there was zero. So the battlers in the regions have decided it is working and they are staying because they can get work here with appropriate pay and they know they cannot get it in Australia.Paul Goldsmith: How are the lessons taken from the previous economic cycle being built into the Government’s programme for responsible economic and fiscal management?Hon BILL ENGLISH: Those lessons that I referred to earlier are really quite important. It is important for instance that we maintain the discipline of economic spending but also that we maintain a strong focus on the economic policy that has given businesses and households the confidence they now enjoy to invest to save to work more hours to save more money and to go and ask for a wage increase because they can see the productivity. So we will be sticking to careful fiscal management a broad programme of microeconomic reform and in particular we will avoid the mistakes made by the previous Labour Government the damage from which we are still cleaning up 6 years later.Brendan Horan: Will the Government consider the New Zealand Independent Coalition’s policy of a financial transactions tax of 0.1 percent on banks and foreign exchange just as Germany and 10 other European countries are mooting as good fiscal management?Hon BILL ENGLISH: No.