Cunliffe David: Questions for Oral Answer — Questions to Ministers Questions to Members 
Cunliffe David: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:671;Page:17613] 
6. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Who was right: the Prime Minister who predicted that the New Zealand economy would grow “reasonably aggressively” in 2010-11 or the last four quarterly NZIER consensus forecast updates for GDP which have progressively declined from 3.2 percent to just 0.8 percent for the year to March 2011? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Prime Minister was certainly correct. His comments were made in March 2009 and he said that he believed that growth in 2010 would be positive. It turns out that for the 2010 calendar year growth was about 1.5 percent. At the time the trough was negative 2.8 percent so it was aggressive growth from a low trough. 
Hon David Cunliffe 
: Which of the following three quarters of growth in 2010 would he classify as aggressive: June’s 0.1 percent September’s minus 0.2 percent or December’s 0.2 percent? Is it more accurate to describe these figures as indicating that the economy has come to a standstill? 
Hon BILL ENGLISH 
: A standstill would I think be zero growth. For the 2010 calendar year we had 1.5 percent growth. That was not as high as we would have liked or was expected actually 12 months ago but given the depth of the recession when the economy actually shrank by 2.8 percent it was not a bad effort. The reasons the economy has been growing more slowly have been rehearsed here many times: people are paying off debt they are restricting their spending and our exports are growing. That is the right direction for the New Zealand economy. 
Hon David Cunliffe 
: When he criticised as conservative Treasury’s prediction of just 0.4 percent extra growth over 4 years as a result of his $14 billion tax cut was this quarter’s meagre 0.2 percent what he was hoping for? 
Hon BILL ENGLISH 
: Using the word “conservative” is not a criticism; it is actually in the current circumstances wise. 
Hon David Cunliffe 
: Was Treasury correct when it forecast that 66 percent of the GDP write-downs expected over the next 4 years are unrelated to either of the earthquakes and are in fact the result of a failing economy? 
Hon BILL ENGLISH 
: I think Treasury has been quite straightforward. The flatter growth it is expecting this year is roughly one-third because of the earthquake and two-thirds because people are saving more than expected being more careful with their spending than expected and doing less borrowing than expected. Those are sensible decisions by New Zealand households. It means that the economy is flatter in the short term but in the longer term it is a stronger platform for better economic performance. 
Hon Sir Roger Douglas 
: With real gross national disposable income per person effectively the same today as it was 6 years ago when will he move to ensure that the drivers of economic growth are given a higher priority in the Government policy settings than they are receiving? 
Hon BILL ENGLISH 
: The member is right to point out that the combination of bad policy from the previous Government an early start to the New Zealand recession and then the global financial crisis means that incomes are only now getting back to where they were 4 to 6 years ago. From the Government’s point of view attaining economic growth is our top priority as it will help us deal with issues like the Christchurch recovery but we are going about it in a reasonably considered and moderate way. 
Hon David Cunliffe 
: In light of today’s flat GDP figures what exactly is his plan to create jobs to lift incomes and to give New Zealanders just a glimmer of hope for a better future? 
Hon BILL ENGLISH 
: It could take some time to outline every detail of that plan but the member will be familiar with some aspects of it such as our extensive investment in infrastructure making the public sector more efficient the significant tax changes that were announced last year and a focus on education standards and skills as well as strong support for the business community through research and innovation. 
Hon Sir Roger Douglas 
: With economic progress and growth so dependent on private ownership competitive markets efficient capital markets and low taxes when will these policy aspects be given more prominence by the Government? 
Hon BILL ENGLISH 
: We believe they are given prominence by the Government. The member and his party believe that the Government should be much more aggressive about those aspects. That is just one of the differences between National and ACT but it does not stop us from working constructively with the member’s party to move ahead in that direction.