Bennett David: Questions for Oral Answer — Questions to Ministers 
Bennett David: Questions for Oral Answer — Questions to Ministers 
[Volume:668;Page:14843] 
1. 
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Finance 
: What trends are evident in the Government’s latest financial statements? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The financial statements for the year ended 30 June 2010 show that the Government is generally on track with its fiscal management. The fact that core Crown expenses were flat at $64 billion from one year to the next indicates we are getting on top of expenditure control. The residual cash deficit increased slightly from $8.6 billion to $9 billion for the year ended in June. This deficit is forecast to rise to $13.3 billion for the 2010-11 financial year. 
David Bennett 
: What trends in net Crown debt were highlighted in the Government’s latest annual accounts? 
Hon BILL ENGLISH 
: Net Crown debt is increasing as the Government absorbs the shock of the recent recession on its own books helping to protect New Zealanders from the sharp edges of that recession. Core Crown debt is now around $27 billion or just over 14 percent of GDP. That debt will continue to rise because this year the Government expects there will be a cash deficit of around $13 billion. However we cannot keep running deficits or increasing debt forever and that is why the Government has a 5 or 6-year track towards a surplus involving tight control of Government spending. 
Hon David Cunliffe 
: Can he tell hard-working Kiwis why he has borrowed an extra three-quarters of a billion dollars in the last 2 months to pay for his economic mismanagement? 
Hon BILL ENGLISH 
: No. Fortunately a lot of hard-working Kiwis understand just how much this Government needs to do to correct the economic mismanagement of the previous Government and to deal with the recession. That is why the Government’s economic policies are broadly supported. 
David Bennett 
: What do the latest forecasts show about the likely path for the economy and the Government’s finances? 
Hon BILL ENGLISH 
: Treasury is currently working on forecasts which will be published at the half-year update on 14 December. As I told the Finance and Expenditure Committee today tax receipts for July and August were lower than forecast. I am told that the September tax receipts are up a bit clawing back some of the difference. It is difficult to draw detailed conclusions from just 2 or 3 months’ worth of data but I would expect that in the half-year update tax revenue will be a bit softer and that may flow through to the rest of the Government accounts. 
David Bennett 
: What positive signs is he seeing from the nature of the current economic recovery? 
Hon BILL ENGLISH 
: Well many—many positive signs. As we have talked about in the House this economy needs to be rebalanced away from excessive property speculation excessive Government spending and excessive personal consumption. The early signs of the recovery are promising. Private consumption is pretty much flat because New Zealanders are saving a good deal more than they were. Although that has meant a more muted economic recovery in the short term it is laying a stronger platform for sustainable economic recovery in the long term. 
Hon David Cunliffe 
: Why did he tell the Finance and Expenditure Committee today that there was “no V-shaped recovery” when the Prime Minister said it would be aggressive; and who is right: he and the Governor of the Reserve Bank who think the recovery is slow and fragile or his boss whom he describes as floating from cloud to cloud? 
Hon BILL ENGLISH 
: As we have gone over this issue about 10 times in the House and the select committee I will explain it again. The Prime Minister made his comments in early 2009 and he was correct; the economy turned round from a 2.5 percent contraction to about a 2 percent growth rate. Like other developed economies as New Zealand households have increased their savings dramatically it has meant that they have less to spend. That is why retailers and the construction industry are finding it tough.