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: 25 August 2015. Volume:708;Page:6074. Text is incorporated into the Bound Volume.]4.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by his statement that “risks arising from Greece and China have receded somewhat and that there has been an improvement in the outlook for our trading partners. That is positive for the New Zealand outlook”?Hon BILL ENGLISH (Minister of Finance): I stand by my full statement at the time it was made and I will alert the member to what that statement was although he already knows. In response to a question about Treasury’s advice on global risks I said: “Overall Treasury concludes that risks arising from Greece and China have receded somewhat and that there has been an improvement in the outlook for our trading partners.” Of course there have been some indications in the last week or two that the risk associated with China may in fact be growing rather than shrinking. We are reliant on the Chinese Government’s track record of being able to manage pretty difficult and challenging financial and economic circumstances. We are yet to see whether it can for instance push against the tide of a falling stock market. Then we will find out whether that makes any difference to New Zealand.Grant Robertson: Did he challenge that advice from Treasury given that he provided it to the House less than 2 weeks ago on the same day that China had the largest devaluation of its currency since its modern exchange rate system was introduced and in the same week that it was confirmed that around 30 percent of the value of the Chinese sharemarket had been lost?Hon BILL ENGLISH: We are always debating these issues and not just with Treasury. In fact I have had the opportunity to discuss them with the Chinese Minister of Finance Mr Lou Jiwei who indicated his own challenges in trying to understand exactly what was happening in the Chinese economy. The Chinese Government has like many other Governments taken extraordinary monetary and financial measures to keep growth going in its economy. At some stage those measures will start to unwind. Who knows—it might be this week. But the markets may flatten out in the next few weeks and it may be 6 months before it happens again. No one really knows.Grant Robertson: I raise a point of order Mr Speaker. I asked a specific question—Mr SPEAKER: Order! No I listened very carefully to the answer. I think that the question was addressed on this occasion. The member has further supplementary questions; he can use them.Jami-Lee Ross: What reports of alternative strategies for the New Zealand economy has the Minister seen?Hon BILL ENGLISH: Unfortunately I see two regular reports from a particular group that on each headline that might be negative for the economy panics declares a crisis and demands that all previous plans be changed and replaced. I could give the House a clue as to what that particular—Mr SPEAKER: Order! This answer is not going to help the order of the House.Grant Robertson: Why did he make the comment about China’s outlook being “reasonably positive” when data released the same week that he made that comment saw an 8 percent drop year on year in exports from China and an 8 percent drop year on year in imports into China?Hon BILL ENGLISH: As I said in my answer to an earlier question I was asked what reports we had seen about these risks and I quoted Treasury’s most recent advice—granted it may not update it 2 hours ahead of every Chinese Government data release. These things seem to have been moving pretty quickly recently. So I am happy to provide the member with an updated risk assessment on China. But as I said having talked to the finance Minister for China and having listened to his concerns about how to assess exactly what is going on in that vast and complex economy I am somewhat sceptical that we will be able to predict what is going to happen there.Grant Robertson: Does he share the view of the Prime Minister that the slowdown in China is more of an issue for Australia than it is for New Zealand; if so does he not think that a slowdown in our biggest export market which is bad news for our second-biggest export market might also be bad news for us?Hon BILL ENGLISH: I think yes and yes.Grant Robertson: Given that First NZ Capital’s assessment that the risk of a recession in New Zealand has been heightened by slowing growth in China the dairy price slump and stalling business confidence does he still believe that he does not need a plan B for the New Zealand economy?Hon BILL ENGLISH: In the first place I do not necessarily agree with First NZ Capital’s assessment of the probability of recession but that is a matter for debate. As I have pointed out to the member the Government is following a plan at the heart of which is our ability to adapt to changing global circumstances. The country is not going to change its plans every single day that the Labour Party says there is a crisis. Like most people in New Zealand the Government takes a medium-term view of our economic prospects and behaves consistently to maximise those prospects. That is what many households and businesses today are doing despite the fact that they have read headlines in the paper that the Labour Party is calling a crisis and that everyone else sees as volatility in financial markets that may or may not affect their business.Grant Robertson: In light of that answer why is he ignoring the calls of 75 percent of chief executive officers who responded to the “Mood of the Boardroom” survey bank economists and Federated Farmers who are all calling for a plan B for the economy; or is he just so arrogant that he thinks he has got it all right?Hon BILL ENGLISH: As I said—I think it was in the House last week—having chatted to one or two of the people claimed to be calling for a plan B none of them could actually tell me what plan B was. The Government’s plan is that if circumstances change significantly then it would alter some policy settings as appropriate. So we are monitoring what is happening in the global economy but we are not losing sight of the fundamental stability required for this economy to thrive and to deliver jobs and more income to New Zealand households.