Foss Craig: Questions for Oral Answer — Questions to Ministers Questions to Members 
Foss Craig: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:669;Page:16383] 
2. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What reports has he received on the economic outlook and the Government’s financial position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Today the Government released the Half Year Economic and Fiscal Update and its first Investment Statement. These documents show that economic growth will be steady and show an improvement in the Government’s fiscal position though the fiscal position this year is worse than was expected at the 2010 Budget. The figures confirm that the events of the past 6 months particularly the Canterbury earthquake and more subdued domestic recovery have taken this year’s deficit to the outer limits of what is acceptable to the Government. However we remain on track to achieve surpluses by 2015-16 as expected in the Budget. 
Craig Foss 
: What is New Zealand’s main challenge as identified in the Half Year Economic and Fiscal Update? 
Hon BILL ENGLISH 
: Unquestionably our most significant challenge is to reduce the vulnerability to overseas financial markets that was caused by the extent of our overseas lending. Our main challenge is to increase national savings. The Government can play a role by producing more saving and less borrowing and we can also encourage New Zealanders to lock in their change in habits over the past couple of years a change that has indicated quite a dramatic shift to spending less and saving more. Early in the new year the Government will be hearing from the Savings Working Group which was set up 6 months ago and we will be considering decisions then. 
Craig Foss 
: How will Budget 2011 take further steps to address the issues highlighted in today’s economic update? 
Hon BILL ENGLISH 
: Budget 2011 will lock in a reasonably sharp improvement from the significant deficit this year. In fact the forecast today shows that we expect the Government deficit to halve in Budget 2011 reducing to around 2.8 percent of GDP. We will also be pressing on with our six-point economic programme including extensive investment in infrastructure increasing the efficiency of the public sector and supporting business with innovation and trade. We will also be considering work from the Welfare Working Group and the Housing Shareholders Advisory Group and we will be publishing the second  
National Infrastructure Plan 
. 
Craig Foss 
: What does the Government’s first Investment Statement show? 
Hon BILL ENGLISH 
: The Government’s first Investment Statement shows the extent of assets owned by New Zealand taxpayers which New Zealand taxpayers have funded through paying their PAYE tax their power bills their petrol tax and their road-user charges. The Crown owns $223 billion worth of assets. It is by far the largest owner of assets in the country—about five times the size of the New Zealand Exchange. By 2015 it expects those assets will grow by $33 billion which includes investment in schools hospitals broadband electricity generation and roads; extensive rail investment; and accumulating financial assets. We owe it to taxpayers to manage this very large resource much better than it has been managed in the past. 
Craig Foss 
: How do today’s economic projections compare with those of other forecasters? 
Hon BILL ENGLISH 
: This morning the New Zealand Institute of Economic Research released the consensus forecasts which are on the whole very similar to those of Treasury. They show growth of about 2.1 percent this year rising to 3.5 percent next year. Probably more important they show unemployment falling steadily to 5 percent over the next couple of years and wage growth accelerating to about 3 percent in 2012-13 comfortably ahead of inflation.