Peters Winston: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Peters Winston: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 20 June 2012. Volume:681;Page:3128. Text is incorporated into the Bound Volume.] 
5. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Prime Minister 
: Does he stand by his statement to Parliament of 8 February 2011; in particular that “The Government is building the foundations that will encourage growth in exports”? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes; and that is why for example the Government is running a tight fiscal policy to take the pressure off interest rates and the exchange rate. 
Rt Hon Winston Peters 
: Has the Prime Minister read a report from the International Monetary Fund that states: “the New Zealand dollar would need to be about 15 percent weaker than its current level.” to grow exports; if so does he agree with the New Zealand Manufacturers and Exporters Association chief executive that reducing the New Zealand dollar by this amount should be an aim for the Government Treasury and the Reserve Bank? 
Rt Hon JOHN KEY 
: The member will I am sure be aware of my public comments that as a general rule the Government would like to see a more competitive exchange rate against the US dollar. Against the Australian dollar it has been pretty competitive. Secondly the Government does not believe that it can influence that through intervention if that is what the member is suggesting. History would indicate that is very unsuccessful. Thirdly over time probably the most likely way to achieve a more realistic exchange rate is one where we see an example of good monetary policy where interest rates are lower and that is why taking pressure off that is important. But I would reject the view that it is not possible for New Zealand to succeed in export markets even with a high exchange rate because if one looks at the 13 quarters that National has been in Government one sees that 12 of those have shown an annual trade surplus. The only one where we have been negative was actually the quarter to March 2009. So we have been selling more to the world than we have been buying from it. 
Rt Hon Winston Peters 
: Has the Prime Minister read a submission to the Finance and Expenditure Committee from Treasury deputy secretary Girol Karacaoglu which states—[ 
Interruption 
] Well you would not know who he is but that is his name— 
Mr SPEAKER 
: Order! Please just ask the question. 
Rt Hon Winston Peters 
: Well they are all shouting out “Who?”. 
Mr SPEAKER 
: No. Order! 
Rt Hon Winston Peters 
: They are in Government these people. Anyway this is what this man said: “delivering a realistic”—[ 
Interruption 
] This cacophony of clowns should not be allowed to go on. 
Mr SPEAKER 
: No. Order! I invite the member to take a deep breath and start again and I ask the National Party backbenchers please not to provoke the right honourable gentleman. 
Rt Hon Winston Peters 
: A very wise warning. Thank you very much Mr Speaker. Has the Prime Minister read a submission to the Finance and Expenditure Committee of Treasury deputy secretary Girol Karacaoglu which states: “delivering a realistic and stable exchange rate will yield far superior overall economic outcomes than an interest-rate-centered monetary policy implementation of the sort used by NZ and most industrialised economies—provided it is complemented by appropriate monetary and non-monetary tools.”; if so what on earth is he doing about it? 
Rt Hon JOHN KEY 
: No. And I am reliably informed that it is “Kara-goo-loo” so it is more “loo” than “goo”. 
Rt Hon Winston Peters 
: A bit like you—I get it! 
Mr SPEAKER 
: Order! 
Rt Hon Winston Peters 
: So how many more freezing works processing plants and manufacturers will have to be laid off and to be foreclosed upon before his Government does something to address the high New Zealand dollar? 
Rt Hon JOHN KEY 
: As I said one of the reasons why the exchange rate has been appreciating is the very weak US dollar. It is not unique to New Zealand. If you go and have a look at Australia you will see the position where the exchange rate is very high. If you go and have a look at Brazil that situation is the same. If you have a look at Switzerland that position is the same. If you go and have a look at South Africa that position is the same. So what the Government can do is control the things that are within its reach and they are labour market reform making sure the planning reform takes place making sure that we are building infrastructure making sure that we are lifting education standards—all of those things that the member is generally opposed to. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I asked him a question about the rising dollar and he sent us on a trip around the world and then talked about everything else but the issue at hand. 
Mr SPEAKER 
: Order! The Prime Minister’s answer was in my humble view perfectly reasonable. He emphasised that in fact the situation is one of not so much a high New Zealand dollar as a low US dollar and explained why that is the case because he referred to other currencies that are also quite high against the US dollar and pointed out that New Zealand’s ability to make much difference to the US dollar is somewhat limited and the Government is focused on what it can have influence over. I think that was a perfectly reasonable answer to the question.