Goldsmith Paul: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeGoldsmith Paul: Questions for Oral Answer — Questions to Ministers[Sitting date: 08 August 2013. Volume:692;Page:12517. Text is incorporated into the Bound Volume.]2.PAUL GOLDSMITH (National)to theMinister of Finance: What recent reports has he received on the economy?Hon BILL ENGLISH (Minister of Finance):Yesterday Statistics New Zealand released for the first time a number of different indicators of employment and unemployment. Although the unemployment rate increased slightly to 6.4 percent it was below the 6.8 percent of a year ago. Employment growth was up by 8000 in the quarter following an increase of 38000 in the previous quarter indicating a reasonably solid improvement in the labour market. The results also show 6000 more young people were studying in the June quarter with the number of youth not in employment education or training falling to the lowest level since the beginning of 2008. The quarterly employment survey showed an extra 65400 jobs in the economy over the past 2 years. This confirms a moderately improving labour market although the data does move around from quarter to quarter.Paul Goldsmith: What other reports has he received on the economy that support expectations of an improving overall trend in the economy?Hon BILL ENGLISH: Treasury this week issued its monthlyEconomic Indicators report for July. It concludes that indicators are signalling moderate GDP growth depending on the ongoing impact of the drought earlier this year. But of course the confidence surveys ask people in the economy what they think is happening and those surveys show that confidence remains elevated and that companies intend to hire more people and invest more funds which should provide a solid base for growth in the second half of 2013. Treasury notes there are signs that the recovery will become more broad-based as growth in building activity benefits local manufacturers and the agricultural sector bounces back from the drought.Paul Goldsmith: What did Treasury’s monthlyEconomic Indicators report say about the employment market particularly the impact of increases in business confidence on new jobs?Hon BILL ENGLISH: We get new jobs only when businesses do make the decision to invest another dollar and employ another person. Treasury noted that healthy levels of business confidence are translating into stronger hiring intentions and into investment intentions. Quoting from the New Zealand Institute of Economic Research quarterly survey Treasury notes that the labour market appears to be recovering even though that recovery is gradual. A net 9 percent of firms intend to employ more staff over the next quarter—for instance firms continue to report that skilled labour is difficult to find particularly in Canterbury.Hon Clayton Cosgrove: What long-term certainty is there for the people of Southland and what are the benefits for taxpayers and the economy as a whole in respect of the deal with Rio Tinto which one reduces the notice period for closing the smelter; two reduces the price the smelter pays for electricity; and three includes a one-off payment of $30 million of taxpayers’ money to Rio Tinto in order for the Government to hasten the sale of Meridian Energy which does nothing to stop Rio Tinto from leveraging the taxpayer and the Government yet again on or before 1 January 2017?Hon Gerry Brownlee: It’s the new candidate for Invercargill!Mr SPEAKER: Order! I have called the Minister.Hon BILL ENGLISH: Because they will not have him in Christchurch East—best to go somewhere they do not know him.Mr SPEAKER: Order! Would the Minister address the question.Hon BILL ENGLISH: I disagree with the member. Rio Tinto has negotiated a commercial contract with Meridian Energy where Meridian Energy has weighed up the benefits of retaining a major customer that uses 40 percent of its electricity against the opportunities to sell that electricity to other buyers. The Government’s contribution provides certainty for Invercargill for 800 workers and certainty for the electricity market and it will provide some certainty for investors in the Meridian Energy float. I dare say that if the announcement today were no deal and the smelter was closing then the Labour Party would say the Government should have intervened.