Korako Nuk: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeKorako Nuk: Oral Questions — Questions to Ministers[Sitting date: 26 August 2015. Volume:708;Page:6153. Text is incorporated into the Bound Volume.]1.NUK KORAKO (National) to the Minister of Finance: How is the Government’s fiscal strategy supporting resilience in the New Zealand economy?Hon BILL ENGLISH (Minister of Finance): It was important to support the economy during the global financial crisis and the Canterbury earthquakes and during that period the Government ran up considerable debt but following these events we have worked hard to turn the Government’s finances round. The latest forecasts are that Government debt will plateau at about 26 percent of GDP before falling to 20 percent of GDP by 2020. This compares with current net debt levels of around 20 percent in Australia 38 percent in Canada and 80 percent in the UK and the US. The Government aims to get on top of debt so that we are in a position to respond to any significant economic shocks in the future.Nuk Korako: How does New Zealand’s macroeconomic resilience compare internationally?Hon BILL ENGLISH: Using information from the OECD Treasury has collated a list of countries that have the following features of macroeconomic resilience: a broadly balanced Government Budget net debt that is less than 40 percent of GDP economic growth that is greater than 1.5 percent and scope to further cut interest rates. New Zealand meets all of these criteria and in fact there are only four other OECD countries that meet those criteria: Australia Norway Iceland and South Korea. So this illustrates that New Zealand is in a good position to deal with any turbulence in the global economy.Nuk Korako: How does the Government’s fiscal strategy affect inflation interest rates and the exchange rate?Hon BILL ENGLISH: Responsible fiscal management can reduce inflationary pressure. It gives the Reserve Bank more scope to cut interest rates which supports businesses to invest and helps families with their mortgages. Lower interest rates can also influence a lower exchange rate and that has certainly happened in the last 6 months or so in New Zealand. Low inflation lower interest rates and a lower exchange rate right now are helping to support moderate sustained growth of around 2 to 2.5 percent.Nuk Korako: How does sustained moderate economic growth translate into more jobs and higher incomes for New Zealand families? [Interruption]Mr SPEAKER: Order! There were a number of complaints to my office about the level of interjection and noise yesterday. Yesterday it was coming from all sides of the House. To date there has been a strong level of interjection from my left which must not continue. I invite the member to ask that third supplementary question again.Nuk Korako: How does sustained moderate economic growth translate into more jobs and higher incomes for New Zealand families?Hon BILL ENGLISH: Although there has been a great deal of interest in fluctuations in international financial markets New Zealand remains on track for moderate economic growth. There have been 69000 more jobs created in the last year—200000 since early 2011. The average wage is now $57000 up $10000 since 2008 and up 3.2 percent over the last year. That is against a background of inflation of 0.3 percent. The Business Growth Agenda also offers a wide range of initiatives designed to support businesses to invest further and hire more people.Grant Robertson: Is it correct that every forecast of the economy released in the last few months means that he will fail to even reach the downside scenario of the Budget in terms of growth unemployment and debt?Hon BILL ENGLISH: No not necessarily. What is pretty important is that the right adjustments are occurring in the economy so growth is a bit softer. But lower interest rates and a significantly lower exchange rate are likely to support moderate and sustained growth and we will get an update in December on Treasury’s view of it and an update on the Reserve Bank’s view several times before then.Rt Hon Winston Peters: If things are going so fine why does he have to get up every day in this House and try to tell us how well things are happening and going—and if it was happening it would be obvious without him every day trying to defend the situation?Mr SPEAKER: The Hon Bill English—the first part of that question.Hon BILL ENGLISH: It is because I am so concerned for the welfare of Opposition party members who look panicked crisis-driven and deeply anxious about this economy. I am pleased to see the member is looking a bit more relaxed this week than last week as a result of the Government’s assurances.