Young Jonathan: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeYoung Jonathan: Oral Questions — Questions to Ministers[Sitting date: 18 August 2015. Volume:707;Page:5840. Text is incorporated into the Bound Volume.]3.JONATHAN YOUNG (National—New Plymouth) to the Minister of Finance: How is the Government supporting the economy’s resilience and long-term economic outlook?Hon BILL ENGLISH (Minister of Finance): Lower dairy prices and ongoing uncertainty in some global markets underlines the importance of New Zealand’s economic resilience which has increased in recent years. Household savings have lifted. More households have been more focused on paying down debt. New Zealand’s banks are well capitalised. New Zealand’s net international investment position which measures our international indebtedness has strengthened from 85 percent of GDP in 2009 to 64 percent of GDP today a significant reduction in our international indebtedness. The Government of course is supporting this resilience through responsible fiscal management.Jonathan Young: What recent reports has he received on the outlook for the New Zealand economy particularly in the banking sector?Hon BILL ENGLISH: Rating agency Standard and Poor’s released a ratings update for New Zealand financial institutions last week. It affirmed the issuer credit ratings of 11 financial institutions and lowered its credit ratings on 13 financial institutions. Standard and Poor’s said these changes reflected increased risks from rising house prices in Auckland and were not due—not due—to risks specific to any institution. It said that although rising housing prices in Auckland meant higher risks of a house price correction this increase is off a low base and a sharp correction remains unlikely. Standard and Poor’s pointed to New Zealand’s resilient economy and banking regulation as supporting a banking system that is low risk by global standards.Jonathan Young: What do other international ratings agencies say about New Zealand’s economic outlook?Hon BILL ENGLISH: There have been a number of reports from other rating agencies recently. Moody’s affirmed its AAA rating of New Zealand banks and said its outlook for the New Zealand banking system is stable based on banks’ healthy capitalisation strong asset quality and stable profits. Last week Fitch Ratings affirmed its AA sovereign credit rating with a positive outlook noting that the New Zealand economy and banking sector are relatively well positioned to weather a cyclical downturn in the dairy market. Later this month Standard and Poor’s is expected to update its sovereign ratings for New Zealand.Jonathan Young: What recent reports has he received showing continuing moderate growth over the next few years?Hon BILL ENGLISH: Most forecasters are going through a re-rating of the economic outlook because it is softer. Today the ASB bank issued its forecast of growth at 2 percent for this year 2015 rising to 2.9 percent in 2016. It points to the widely recognised challenges in some parts of the economy including positives such as a rapid improvement in export-sector competitiveness expanding tourism strong employment growth and lower interest rates. The ASB’s outlook is broadly consistent with Treasury and the Reserve Bank which forecast growth of 2 to 2.5 percent for 2015.