4. Business Confidence—Actions and ReportsHon PAUL GOLDSMITH (National) to the Minister of FinanceBusiness Confidence—Actions and Reports4. Hon PAUL GOLDSMITH (National) to the Minister of Finance: Does he still hold the view that recent falls in business confidence surveys reflect an issue around perception"?Hon Dr DAVID CLARK (Associate Minister of Finance) on behalf of the Minister of Finance: Businesses will always have issues that affect their confidence. For example in the latest ANZ survey the number one issue for businesses was access to skilled staff which this Government is committed to addressing. My reference to perception was in regard to periods of high economic growth that occurred at the same time as low levels of business confidence. Analysis by the economist Ganesh Nana shows that business confidence was pessimistic in 82 of 99 months between 2000 and 2008 but that the economy grew by an average of 3.2 percent a year over that period. In contrast business confidence was optimistic 87 of 95 months between 2009 and 2017 but GDP grew at just an average of 1.98 percent per year.Hon Paul Goldsmith: Does he believe that the ANZ's own activity index which measures firms' expectations of their own activity provides a useful gauge of future GDP growth?Hon Dr DAVID CLARK: Yes in referencing that positive measure I point the member to this comment from the ANZ economists that "Going forward we expect tailwinds in the form of fiscal stimulus and strong terms of trade will see the economy continue to grow at about par." So here we have economists saying the economy will grow at par which if reports I've heard are correct has obviously upset the National Party so much that they've doubled down on their efforts to talk down the economy.Hon Paul Goldsmith: What message does he take from the latest Own Activity Index figure being at the same level as 2009 when the New Zealand economy was in the middle of the global financial crisis?Hon Dr DAVID CLARK: I think history will say that the economy did grow after that period so the confidence that people had in 2009 was well placed. But going forward as the economists have said we expect tailwinds in the form of fiscal stimulus and strong terms of trade will see the economy continue to grow about par. I can do no better than to repeat the experts on this matter.Hon Paul Goldsmith: Is he concerned at all that in yesterday's ANZ business confidence survey business confidence fell by a further 12 percent bringing the net figure to negative 39 percent and the Own Activity Index fell by a further 4 percent?Hon Dr DAVID CLARK: I'll note that the Own Activity measure is still positive and also that all of the conditions that contribute to economic growth are strong. Business investment: in the GDP figures released last week business investment grew by 5.5 percent in the year to March 2018 compared to an annual growth rate of just 3.9 percent in the year to March 2017. Unemployment is forecast to keep falling wages are forecast to rise faster than before the election and business investment is forecast to continue to grow at nearly 5 percent per year.Hon Paul Goldsmith: Does he think his Government bears any responsibility for these falls in business confidence?Hon Dr DAVID CLARK: The Government will accept all praise for the growing confidence in the economy and the forecasts which show that unemployment will keep falling that wages are forecast to rise and that business investment is forecast to continue to grow at nearly 5 percent.Hon Paul Goldsmith: Other than simply stating that he wants to "transition" to a more "sustainable productive and inclusive economy" what actual policies does he have that will resuscitate dying business confidence?Hon Dr DAVID CLARK: I reject the member's characterisation at the end but I'm happy to talk about the Government's plans and actions because I would note as I have at the outset that the respondents said their biggest concern in that survey was finding skilled staff in the ANZ survey. That didn't happen overnight; it took years of inaction for New Zealand's skills deficits to appear. We are dedicated to closing the deficits we inherited and I want to congratulate my colleague the Minister of Immigration Iain Lees-Galloway who yesterday announced the creation of a KiwiBuild skills shortage list. The Government is also prioritising trades training and apprenticeships with our fees-free policy. And today we're announcing a record 10-year investment strategy for our nationwide transport infrastructure which is fully funded and will give the construction sector certainty about our long-term commitment to using transport policy as a key component of our economic plan. We delivered a fiscally responsible Budget and a healthy surplus which sets aside money for a rainy day—SPEAKER: OK. That's enough thank you.Hon Paul Goldsmith: Does he not consider that the uncertainty that this Government is generating is a driver of falling confidence—and he mentioned the access to skills? That uncertainty flows from a clear promise from this Government to substantially reduce immigration which has now been overturned leading to uncertainty as to whether there is any relationship between what the Government promised and what it actually does.Hon Dr DAVID CLARK: Of course I reject the member's characterisation of all of that and point to the indicators ahead of good sound growth. This is a Government that manages the economy well. It's got a track record of doing that and it will continue to do so.Hon James Shaw: Would he agree that if the Opposition is correct that there is a causal relationship between business confidence and economic growth and if the Minister's figures are also correct that in times of higher growth under Labour-led Governments when business confidence is low but in times of lower growth under National-led Governments confidence is high then currently low business confidence is surely a sign of continued high economic growth in the future?SPEAKER: The member will resume his seat. [Interruption] Sorry I'm just dealing with the ruling. I think it was a good attempt but I don't think the member asking the question quite got to an area of clear ministerial responsibility.Hon Iain Lees-Galloway: Is immigration the only source of skills for the New Zealand labour market or is it important that Governments invest in providing people who are underutilised such as the 12 percent of New Zealanders who are currently underutilised—SPEAKER: Question not a speech please.Hon Iain Lees-Galloway: —with the skills they need to engage in the labour market?Hon Dr DAVID CLARK: I agree with the member that we need to build skills and that's why this Government is prioritising trades training and apprenticeships with the fees-free policy and I congratulate the member on his own initiatives in that regard.Rt Hon Winston Peters: Was the Minister saying in his primary answer that it was both a matter of perception and bias to the extent that the previous administration was borrowing at six times the level of their inherited debt the economy was going to hell in a handbasket and still confidence was going up?SPEAKER: Order! He might be responsible for what he was saying but again I think it's inviting the Minister to stray into areas outside his responsibility.Hon James Shaw: I raise a point of order Mr Speaker. This is just a point of clarification in relation to your ruling Mr Speaker which is that the primary question to the Minister was about the Minister's understanding of issues of perception around the causal relationship between business confidence and economic growth or the lack thereof. My supplementary question was directly about the Minister's views on the causal relationship between business confidence and economic growth or the lack thereof.SPEAKER: And what I am saying is that I'm not convinced that the member was actually asking a question as opposed to making a political statement."