1. Economy—Half Year Economic and Fiscal UpdateJAMI-LEE ROSS (National—Botany) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSEconomy—Half Year Economic and Fiscal Update1. JAMI-LEE ROSS (National—Botany) to the Minister of Finance: What announcements has he made showing the Government is on track to continue delivering surpluses and supporting a growing economy?Hon BILL ENGLISH (Minister of Finance): Today I released Treasury's Half Year Economic and Fiscal Update. Treasury forecasts a surplus of $473 million this year including the expected costs of the Kaikōura earthquake. It forecasts economic growth to an average of around 3 percent over the next 5 years—a bit higher than in Budget 2016—and growing surpluses.Jami-Lee Ross: What are the Half Year Economic and Fiscal Update forecasts for employment and wages?Hon BILL ENGLISH: Treasury forecasts that unemployment will drop from 4.9 percent currently to around 4.3 percent by 2020. It expects another 150000 jobs to be created over that period which looks a reasonable forecast given that over the last 3 years there have been 250000 new jobs and it expects the average wage to increase by a further $7500 to $66000 a year confirming a pattern of moderate but consistent income increases for households.Jami-Lee Ross: What are the main reasons for the improvement in Treasury's forecasts since the Budget?Hon BILL ENGLISH: The economy is growing just a bit faster than was expected back in June. There are higher levels of construction activity stronger tourism flows a growing population and ongoing low interest rates.Rt Hon Winston Peters: If the Governor of the Reserve Bank admits to a select committee yesterday that the growth rate is not 3.5 or 3 percent but when you factor in 2 percent population growth something like half of that why cannot the Minister be honest with the country and say the same thing?Hon BILL ENGLISH: We can say exactly the same thing because that is the fact of the matter. The difference between the Government and the member is that we think New Zealanders staying home is good and the New Zealand First Party seems to think it would be better if they all went to Australia.Stuart Smith: What is Treasury's advice on the impact of the Kaikōura earthquake?Hon BILL ENGLISH: As that member would know better than anyone in the House the earthquake has had a major impact on families and businesses in his electorate. However the earthquakes are not expected to disrupt the overall momentum of the economy. Treasury estimates that the total cost of the extensive Government support to the affected communities and the rebuilding of transport links will be $2 billion to $3 billion. In this financial year the Government is booking a cost of around $1 billion because that is what we expect to spend before June next year mainly on supporting Earthquake Commission (EQC) claims and on the immediate response and recovery.Grant Robertson: Why has he not taken the advice of current and former leadership aspirants from the National Party to take tax cuts off the table?Hon BILL ENGLISH: The Government announced its policy at the last Budget. This week we are having a bit of an internal discussion over changes in leadership and whatever the result of the leadership contest the Government will consider those options.Grant Robertson: In light of projections of almost no real wage growth in the next 2 years in the Half Year Economic and Fiscal Update today and house prices increasing by 13.5 percent when will working New Zealanders actually see the real benefits of economic growth?Hon BILL ENGLISH: They have been seeing real benefits of economic growth for the last 4 or 5 years. There are a lot different ways of measuring it but superannuitants for instance have had consistent increases—almost double the rate of inflation—because their increases are tied to the average wage which tells you the average wage has been going up faster than inflation.