Yang Jian: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeYang Jian: Oral Questions — Questions to Ministers[Sitting date: 20 October 2015. Volume:709;Page:7334. Text is incorporated into the Bound Volume.]1.Dr JIAN YANG (National) to the Minister of Finance: Does he stand by his statement regarding the Government’s fiscal approach that “we decided to support the most vulnerable maintain benefits and focus on better public services rather than cut spending”?Hon BILL ENGLISH (Minister of Finance): Yes and a measure of the reasonable effectiveness of that approach has been that in 2014-15 the Government did achieve a surplus despite having at one stage a deficit of minus 9 percent of GDP. That means that right across the public services as we have focused on the effectiveness of spending we have continued to make ongoing investment in public services such as health and education and also ongoing investment of a considerable scale in the administrative systems of Government whether that be tax ACC the delivery of benefits and so on. And in Budget 2015 this enabled us to increase benefits above the rate of inflation for the first time since 1972.Dr Jian Yang: How has the Government’s management of its finances allowed it to help more New Zealanders to get ahead?Hon BILL ENGLISH: It has enabled us to have some choices about where the small amounts of new money are directed. For instance there has been an extension of free doctors visits and prescriptions to children aged under 13 paid parental leave has been extended ACC levies have been reduced by $2 billion we are increasing benefit payments as I said for the first time in 40 years and the HomeStart programme has been taken up vigorously by young New Zealanders particularly in provincial areas where it enables them to buy their own homes.Dr Jian Yang: How does New Zealand’s economic outlook compare with Treasury’s most recent forecasts and what impact does this have on the Government’s fiscal strategy?Hon BILL ENGLISH: Since the 2015 Budget forecast we have seen some significant changes: a significantly lower international dairy price; now lower real economic growth particularly in the first half of 2015; inflation lower for longer than was expected; and a weaker world economic outlook. Although there are now promising signs that after a dip in the first half of the year parts of the economy are now picking up again—for instance the services and manufacturing sector—it is likely that those changes since the Budget will have an impact on Government revenue and therefore an impact on the Government’s fiscal balance. So the Government will focus on what we can control and that is prudent expenditure management.Dr Jian Yang: What reports has he received showing growth in services and manufacturing?Hon BILL ENGLISH: Services make up around 70 percent of the economy. Yesterday the BNZ and Business New Zealand released their BNZ - BusinessNZ Performance of Services Index for September which showed the largest expansion in services activity in 8 years with sales and new orders particularly strong. The BNZ - BusinessNZ Performance of Manufacturing Index released last week shows that September was the 36th consecutive month of growth in manufacturing—the longest run of growth in manufacturing since the series began in 2002. These are positive signs for the economy. However the forecast in Budget 2015 did forecast even stronger growth for both of these sectors and that is why despite these positive signs slower growth may impact on the Government’s books.Rt Hon Winston Peters: Why did the Minister agree to the questioner’s statement “rather than cut spending” when there have been in excess of 58 spending cuts including cutting the funding contributions to the New Zealand Superannuation Fund?Hon BILL ENGLISH: There has certainly been money moved around—no doubt about that.Hon Member: Oh that is the understatement of the day.Hon BILL ENGLISH: That is becausewe believe unlike the Labour Party that if you are spending taxpayers’ money on something that does not work you should stop doing it. [Interruption] I know that those members regard that as evil but actually we think wasting taxpayers’ money is pretty bad.