O'Connor Simon: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeO'Connor Simon: Questions for Oral Answer — Questions to Ministers[Sitting date: 22 May 2014. Volume:699;Page:18245. Text is incorporated into the Bound Volume.]1.SIMON O’CONNOR (National—Tāmaki) to theMinister of Finance: How does Budget 2014 contribute to building a more productive and competitive economy through the Government’s Business Growth Agenda?Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of theMinister of Finance: Budget 2014 contains a range of initiatives across the Business Growth Agenda. As everyone now knows we have entered a period of significant growth for the New Zealand economy that is lifting job numbers and incomes. The challenge for the Business Growth Agenda is to keep reducing some of the longer-term capacity constraints in areas like skills and innovation so that the New Zealand economy can continue to grow at a faster rate than it has in the past for an extended period. One important area is building our international markets. Budget 2014 provides funding of $69 million over the next 4 years for New Zealand Trade and Enterprise to boost its presence in China South America and the Middle East and to lift the number of companies it works with intensively from 500 to 700.Simon O’Connor: How does Budget 2014 contribute to lifting research and innovation in New Zealand?Hon STEVEN JOYCE: The Budget continues this Government’s long and extensive initiatives in the research and development area. This Budget contains an additional $58.6 million over 3 years for additional contestable science and innovation funding which will take the total annual Government investment to $1.5 billion by 2015-16. High-quality scientific research is of course critical to increasing innovation and economic growth. The Budget also contains two tax measures to benefit businesses investing in research and development. Loss-making start-up companies will be able to cash out all or part of their tax losses from research and development expenditure whileall businesses will be allowed tax deductibility for research and development black hole expenditure which is currently neither deductible nor able to be depreciated. These tax changes will help us meet our goal of increasing business research and development to 1 percent of GDP.Simon O’Connor: How does Budget 2014 contribute to lifting the skill levels of the New Zealand workforce?Hon STEVEN JOYCE: The Budget contains additionally nearly $200 million of initiatives over the next 4 years. Tuition subsidies for science agriculture and selected health sciences will be lifted which comes on top of funding increases for engineering and science in previous Budgets. Additional funding also means the Government will be funding 10 centres of research excellence from 2016-17 up from the six that were recently selected through the competitive process. The Government will also spend an additional $20 million expanding the very successful apprenticeship reboot programme by an additional 6000 places bringing the number of places to 20000.Simon O’Connor: How is the Government’s successful share offer programme helping to pay for new infrastructure investment as part of the Business Growth Agenda?Hon STEVEN JOYCE: The Government’s successful share offer programme raised around $4.7 billion which is being invested in new priority public assets and infrastructure without taxpayers having to borrow this money from overseas lenders. Budget 2014 allocated another $1 billion for these investments which will be made through the Future Investment Fund. That brings allocations from the fund so far to almost $3 billion leaving nearly $1.7 billion in the fund for spending on more new assets in the next two Budgets. Future Investment Fund allocations in this Budget included $67 million for the new Grey Base Hospital on the West Coast $172 million for the upgrading and building of new schools including the Pegasus Bay school in North Canterbury $75 million for Christchurch housing $40 million for Crown Irrigation Investments and $30 million for the Hobsonville housing development. All of these things would not have been possible unless we had had the programme of the mixed-ownership model.Hon David Parker: If as he claims the economy will become more competitive and productive why is it that imports are forecast to grow far faster than exports for the next 4 years increasing our external deficit to $16 billion by 2017?Hon STEVEN JOYCE: I think the member needs to look at the progress that this Government has already made despite various prognostications by certain commentators including Treasury. This year the balance of payments deficit is down to about 3.5 percent of GDP and forecast to go lower. If the member thinks that it is as good as it gets well it is a heck of a lot better than the 8 percent when he was in charge.