Young Jonathan: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Young Jonathan: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 16 February 2012. Volume:677;Page:485. Text is incorporated into the Bound Volume.] 
3. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Finance 
: What reports has the Government issued on the economy? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the Minister of Finance: The Government has today issued the Budget Policy Statement for 2012. It confirms the Government’s clear and comprehensive economic plan for the next 3 years which will make our economy more competitive so it can fulfil its potential. Within this plan the Government has set out four main priorities to help achieve this. They are to continue to responsibly manage the Government’s finances by returning to surplus and keeping debt under control; to continue to implement economic policies that build a more competitive export-focused economy; to deliver better public services to New Zealanders within a tight fiscal Budget; and to rebuild our second-biggest city Christchurch. 
Jonathan Young 
: How will the Government’s economic plan be reflected in Budget 2012? 
Hon STEVEN JOYCE 
: As the Budget Policy Statement says Budget 2012 will be first and foremost about sticking to the Government’s economic plan. It is important that we do that to build a stronger more competitive economy that supports more sustainable jobs and higher incomes and ensures that New Zealand starts to pay its way in the world. Indeed the Government’s Budget priorities throughout this parliamentary term will be about sticking to that plan. 
Jonathan Young 
: What does the Budget Policy Statement say about the outlook for the New Zealand economy? 
Hon STEVEN JOYCE 
: The Budget Policy Statement sets out some updated forecasts from Treasury. They show that New Zealand’s economic outlook although somewhat weaker than forecast in the pre-election update in October remains positive. Our terms of trade are expected to remain high. Our largest trading partners particularly China and Australia are among the stronger-performing countries in the world. And the rebuilding of Christchurch will provide impetus to the economy in coming years. However there is a risk that events offshore particularly in Europe could have a negative impact on the New Zealand economy. The Government continues to monitor those events closely. 
Hon David Parker 
: Does the Budget Policy Statement show a rising current account deficit as well as higher Government debt and lower growth in the coming years than were promised by National during the election? 
Hon STEVEN JOYCE 
: The Budget Policy Statement does show a worsening economic situation which has a negative impact on the balance of payments and one or two of the other matters the member raises. And that has effectively caused as stated in the Budget Policy Statement a delay to the Canterbury rebuild brought about by the additional seismic activity and also the more troubling clouds in Europe in the economies over there. So those things all have an impact on the predictions in this particular statement. 
Jonathan Young 
: And how is the latest economic outlook expected to impact on the Government’s finances? 
Hon STEVEN JOYCE 
: The Budget Policy Statement forecasts show that the Government remains on track to post a $370 million surplus in 2014-15 to keep net debt below 30 percent of GDP and to reduce this to 20 percent of GDP by 2020-21. Given the events in Europe and the weakened outlook for global growth this forecast is understandably smaller than was forecast in the pre-election update but the Government does remain on its fiscal track to surplus. It will however require disciplined control of spending and tight management of our capital allocations. For example we have conferred net zero capital allowances for each of the next five Budgets requiring new investments to be funded from capital freed up from the balance sheet rather than by additional borrowing.