Shaw James: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeShaw James: Oral Questions — Questions to Ministers[Sitting date: 16 February 2016. Volume:711;Page:8972. Text is incorporated into the Bound Volume.]2.JAMES SHAW (Co-Leader—Green) to the Minister of Finance: Has he read recent economic reports from ASB and Westpac and is he planning on doing anything differently as a result?Hon BILL ENGLISH (Minister of Finance): Yes and no. Both of the reports make reasonably balanced comments about the economy although I disagree with some of the negativity in the ASB report.James Shaw: And in light of his response to Mr Robertson’s question previously does he agree with ASB’s chief economist Nick Tuffley who says that population increases account for much of New Zealand’s economic growth at present; and why after 7 years of his economic leadership does New Zealand still lack a strong diversified export economy?Hon BILL ENGLISH: In answer to the member’s question the issue is what the point of the analysis is. A year or two ago the Opposition parties were saying there is no growth without the dairy industry then it was saying there is no growth without the Canterbury rebuild and now it is saying there is no growth without population growth. Well if you take out all of the things that are growing you end up with no growth.James Shaw: In light of that answer how can he say that the New Zealand economy is strong and it has a diversified export economy when the recent downturn in one sector alone has left a $17 billion hole in the economy?Hon BILL ENGLISH: It must be a diversified economy if we can have a pretty sharp slump in dairy prices and still have 2 percent growth a 60000 net migration inflow a flourishing tourism sector and big growth in employment such that the unemployment number has dropped to under 5.5 percent. That tells you we do have a diversified economy that is not totally dependent on dairy prices.James Shaw: So then does he agree with Westpac economists Dominic Stephens Anne Boniface and David Morgan who recently found that his Government’s exclusion of agriculture from the emissions trading scheme “skews the way resources are allocated in the economy and puts farmers at risk by avoiding the difficult choices that they are going to have to make at some point in the future.”?Hon BILL ENGLISH: No. I agree with the Government’s approach which is a pretty practical one which is that there is not much point in taxing one of our most globally competitive industries when at the moment at least there is not the technology available to enable them to reduce emissions. But the Government is investing millions along with 30 or so other countries in finding solutions for agricultural emissions.James Shaw: So then does he also disagree with Westpac which found that the lack of a proper price on carbon also skews investment even within the agricultural sector resulting in long-term land use decisions favouring dairying over cleaner alternatives like forestry and sheep farming.Hon BILL ENGLISH: If you are following through the theory of putting a price on them that may be the case. But we have decided not to tax them when they cannot take measures to reduce their carbon emissions. What I would say though on the agricultural sector is that constraints such as nitrate loadings are starting to have a considerable impact on land-use decisions in agriculture to the benefit of the quality of our fresh water. I think we should take the opportunity to congratulate the farming sector on the gritty way it is coming to grips with those pretty challenging issues.James Shaw: Let me be clear: is he disagreeing with the Westpac report on the nature of emissions trading schemes and the exclusion of agriculture?Hon BILL ENGLISH: No what I said was if you were putting a price on agricultural emissions then the lack of the price follows the logic of that criticism. The Government however has decided not to do it for the reason that I said which is that while there is no technology available to the farming community to change its emissions profile the Government has decided not to pointlessly tax a globally competitive industry.James Shaw: Let me just repeat the last question—Mr SPEAKER: Order! We do not need the lead-in—[Interruption] Order! It is perfectly OK to repeat the last question if the member wants to use another supplementary question that way but we do not need the lead-in to the supplementary question.James Shaw: How can he justify excluding considering agriculture from the current emissions trading system review when it so clearly creates big imbalances in the New Zealand economy?Hon BILL ENGLISH: We do not believe that it creates large imbalances in the New Zealand economy. The Greens have just got to listen to themselves. They have been complaining that the carbon price is too low—far too low. So even if we had decided to impose carbon pricing on agriculture it would have had the effect their spokesman pointed out in the select committee this morning—that the price is too low to make much difference. So even if we had followed Green policy it would not have had an impact.Rt Hon John Key: Has the Minister of Finance seen any reports on the logic of someone who would argue that they are worried about the economy but want to put a big fat tax on export-orientated parts of the economy but do not want to support the single thing that would make the economy go faster and that is the Trans-Pacific Partnership and exposure—Mr SPEAKER: Order! There is no need to answer that. That question was designed—[Interruption] Order!Rt Hon John Key: It was such a good question.Mr SPEAKER: Well it was not such a good question. For a start it was too long.