Robertson Grant: Oral Questions — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers Questions to Members[Sitting date: 09 December 2015. Volume:710;Page:8692. Text is incorporated into the Bound Volume.]8.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by his statement in Budget 2015 that unemployment is expected to fall below 5 percent in 2016 and that economic growth on average will be 2.8 percent over the next 4 years?Hon BILL ENGLISH (Minister of Finance): Yes those statements were based on Treasury’s independent forecasts at the time and those of the Reserve Bank and a wide range of private sector economists. Of course being forecasts these are updated over time as the member will know since he spent July and August forecasting crisis in the New Zealand economy and it seems to be bouncing back. I hope he revises his forecasts.Grant Robertson: Will unemployment drop below 5 percent in 2016?Hon BILL ENGLISH: Treasury’s independent view on that will be laid out next week. The Reserve Bank’s will be laid out tomorrow.Rt Hon John Key: The question is will the Labour Party drop under 5 percent in 2016.Hon BILL ENGLISH: Quite possibly—[Interruption]Mr SPEAKER: Order! I will allow the Minister to finish the question without the interjection.Hon BILL ENGLISH: But it seems unlikely.Grant Robertson: What kind of Christmas present is it for New Zealanders that we now have 15000 more people unemployed than at this time last year?Hon BILL ENGLISH: For those who do not have a job and who are looking for one of course it is not that good. But for the record high number of New Zealanders who are working they are going to have a good Christmas.Rt Hon John Key: Has the Minister of Finance seen the front page of the Bay of Plenty Times today: “8100 new jobs created. Latest figures show that thousands of jobs have been created in the Bay of Plenty”; if so does he have any comments he would like to make about it?Mr SPEAKER: The first part of the question is in order.Hon BILL ENGLISH: I have seen this and I was not surprised actually because things have been going so well in that part of the country despite it historically having a high level of unemployment. However the Labour Party has been studying the meaning of work while these people have been out creating jobs.Jacqui Dean: Does he stand by his statement made in Budget 2011 that 170000 extra jobs were expected to be created by 2015?Hon BILL ENGLISH: Again that statement was made consistent with Treasury’s forecasts at the time. Sometimes Treasury’s forecasts turn out to be inaccurate. That is the nature of economic forecasting. But in fact that target was exceeded and over that time from 2011 to 2015 176000 new jobs were created—one of the factors that has led to it having among the highest proportion ever of New Zealanders available for work and working.Grant Robertson: How can he claim success for his job creation policies when New Zealand has now slipped from ninth to 15th in the OECD for unemployment since last year?Hon BILL ENGLISH: For the reasons that I have just said. We of course accept that the unemployment rate is higher than we would like it to be and it has been a bit persistently high. Two reasons for that are that we now have the highest proportion almost ever of New Zealanders available for work—that is a very high participation rate—and record immigration flows so huge numbers of people are turning up to the labour market. It has been producing new jobs at a rapid rate until the last couple of quarters when it has slowed down. There seems to be some evidence it is picking up again.Sarah Dowie: What is the outlook for jobs and wages growth for New Zealand families?Hon BILL ENGLISH: It is pretty positive. Although unemployment has risen a bit there has been consistent new job creation. What has gone with that are fairly consistent increases in incomes across New Zealand households in the range of 2 to 3 percent and well ahead of inflation which is around half a percent.Grant Robertson: How does he think it has been a successful year for the economy when exports as a percentage of GDP have slipped to their lowest levels since 1997 and he is going in the opposite direction of the target this Government has set for itself?Hon BILL ENGLISH: I do not necessarily agree with the member’s numbers. As we discussed at the select committee this morning a number of adjustments have occurred in the economy. One is that the exchange rate has dropped a long way in the last 12 months which signals a positive outlook for our exports over the next few years. Interest rates are at 50-year lows and a significant portion of resource has been directed where it should be and that is to increasing the supply of housing and infrastructure because when people are showing up we cannot say to them: “There are no houses for you. The money has been spent on manufacturing exports.” We have to supply the housing.Grant Robertson: Does he really think it has been a successful year for the economy when there are still 305000 children living in poverty because if the economy is meant to do anything at all is it not supposed to give all New Zealanders a decent shot at life?Hon BILL ENGLISH: Yes I do think it has been a successful year for the economy. Secondly in respect of children the hundreds of thousands of children in our lowest income households on 1 April will get the benefits of a growing economy and that is the increase of $25 a week in their benefit levels. The Government’s welfare reforms mean that today there are over 40000 fewer children living in a benefit household than just 2 or 3 years ago.