Ross Jami-Lee: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRoss Jami-Lee: Oral Questions — Questions to Ministers[Sitting date: 25 March 2015. Volume:704;Page:2569. Text is incorporated into the Bound Volume.]3.JAMI-LEE ROSS (National—Botany)to the Minister of Finance: What reports has he received on progress the New Zealand economy is making in reducing its external debt position?Hon STEVEN JOYCE (Associate Minister of Finance)on behalf of theMinister of Finance: The latest balance of payments data issued by Statistics New Zealand shows that New Zealand is making some good progress in reducing its external debt. Our net external debt fell by $900 million in the December quarter of 2014 to 59.4 percent of GDP. That is the lowest level for 11 years. In addition the maturity profile of New Zealand’s external debt has lengthened considerably which means that we are less vulnerable to short-term changes in global financial markets. The report also shows that the current account deficit in the year to December was 3.3 percent of GDP. Although this was an increase on the previous quarter largely due to falling dairy prices the deficit is much less than half of that delivered by the previous Government in the late 2000s.Jami-Lee Ross: How is the savings behaviour of households contributing to New Zealand’s overall improving debt position?Hon STEVEN JOYCE: Households are making a positive contribution to New Zealand’s improving overall position. In fact households have had positive savings for 5 consecutive years now in the 5 years to March 2014. That has not happened since the early 1990s. The Statistics New Zealand figures show that before 2010—so that period from 1995 to 2010—household savings had been negative in all but 1 year. Household savings totalled $11.6 billion over the last 5 years which is a major turn-round on the $15.5 billion in net borrowing over the 5 years previously. This was the result of resilience by households a Government policy of encouraging savings and a rebalancing of the economy.Jami-Lee Ross: What economic factors have influenced the ability of households to make these household savings?Hon STEVEN JOYCE: The growing economy is continuing to support more jobs and higher incomes. Statistics New Zealand figures show that in 2014 there were 80000 new jobs created across the country. Average wages rose 2.5 percent last year. Since this Government came into office in late 2008 average wages have increased by more than 20 percent to $56000 compared with the rate of inflation which over the same period went up around 11 percent. In December 2014 the labour market participation rate increased to a record 69.7 percent and unemployment at 5.7 percent is lower than most other developed economies. The growing economy is helping New Zealand families in many ways but the Government still has more work to do to drive further gains for the longer term.Dr David Clark: Can he confirm that this Government has borrowed more money than Muldoon’s and in fact more money than any other Government in New Zealand history?Hon STEVEN JOYCE: No I do not have those numbers for the member today. But I would say to him that given we had the global financial crisis and the Canterbury earthquakes it would make sense to have borrowed some money. And given the value of the New Zealand dollar now compared with then that would also make—if the member is suggesting that we should not have borrowed for the Canterbury earthquakes that would be news to the people of Christchurch. If he considers we should not have borrowed for the global financial crisis that would have been news to vulnerable New Zealanders.Dr Shane Reti: How is the growing economy helping regions such as Northland?Hon STEVEN JOYCE: Good question. Recent figures across a range of indicators highlight the benefits to regions like Northland from the Government’s strong economic management—in particular strong GDP growth above the national average in the year to March 2014 and 7500 new jobs in the region across a range of roles in the last year including 6600 full-time positions. That is the second-highest employment growth in the country for the December quarter last year. These are all strong signs of a positive turn-round under this Government in the Northland region. But of course we are not done and we will continue to help regions through initiatives such as the Korean free-trade agreement which will deliver real benefits to exporters in regions like Northland allowing them to invest in more jobs and deliver higher wages.David Seymour: How would New Zealand’s net external indebtedness be affected by a large increase in low-quality Government spending and therefore the non-tradable sector as it did between 2004 and 2009?Hon STEVEN JOYCE: That is a very good question the member raises. He is right to raise the period 2004 to 2009 because what we saw was a big increase in low-quality spending a big increase in external debt a crowding out of the private sector and big increases of our net international liabilities towards 80 to 85 percent of GDP.