Henare Tau: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeHenare Tau: Questions for Oral Answer — Questions to Ministers[Sitting date: 29 May 2013. Volume:690;Page:10481. Text is incorporated into the Bound Volume.]2.Hon TAU HENARE (National) to theMinister of Finance: What measures did Budget 2013 take to help build economic growth based on more exports productive investment and sustainable jobs?Hon BILL ENGLISH (Minister of Finance): Quite a number including the Government remaining on track to surplus which will help keep interest rates lower than they otherwise would have been and will free up resources for private sector investment—in particular signalling a path of significant reductions in ACC levies. The Budget also provided $400 million over 4 years for an internationally focused growth package including considerable extra investment in research and development tourism and international education. There were significant measures to address the issue of housing affordability and the potential damage that a housing bubble could do to the broader balanced economy.Hon Tau Henare: What other measures has the Government taken since we won in 2008 to support the rebalancing of the economy?Hon BILL ENGLISH: One of the early measures the Government took was to get the Government’s own house in order and get control of runaway Government spending which jumped by 50 percent in the 5 years to 2008 without any obvious impact on the kinds of social problems or other investments that the Government makes. There were no revenue streams to pay for that kind of massive increase in spending. Since then we have focused on better public services—on the idea that better results from public services will help fix the Government’s books and help rebalance the economy. Other measures have included a tax package in 2010 that reduced taxes on work savings and investment and increased taxes on consumption and property speculation. Just this year on 1 April minimum KiwiSaver contributions were increased to 3 percent for both individuals and employers.Hon Tau Henare: Given the Government’s focus on building more sustainable growth what progress is being made in rebalancing the economy towards more exports more savings and increased productive investment?Hon BILL ENGLISH: Of course we would prefer to have made more progress. The tradable sector has grown since September 2010 at about the same rate as the non-tradable sector and households are saving a bit more. As I said before to the member contributions to KiwiSaver were increased on 1 April. This has been a considerable improvement on the previous few years. The tradable sector actually went into recession around 2005 before the rest of the world under the previous Government. It has taken some time for us to fix the damage done by the Labour Government to New Zealand’s productive capacity. [Interruption]Hon David Parker: Correct. Has the Minister seen the latest forecast from the New Zealand Institute of Economic Research which forecasts that under his mismanagement the current account deficit which is already the worst in the developed world will increase to 10 percent of GDP in 2017—$25 billion—while export growth slumps and unemployment stays high; if so how does that point to anything other than his failure to rebalance the economy?Hon BILL ENGLISH: Well that is a forecast and we can argue about whether we agree with it or not. If the member looks at the facts though the current account deficit right now is about 4 percent which is half—half—the level that it was when the Labour Government was in charge. I would call that progress.Hon Tau Henare: What alternative approaches would damage current progress in rebalancing the economy towards exports and productive investment?Hon BILL ENGLISH: We know what those approaches are because we saw them in action from about 2005 onwards. They include high rates of increased Government spending; wasteful Government spending; more costs and taxes for households and businesses; and more Government control of more of the economy in a way that chills private sector investment and destroys the kind of confidence that underpins jobs and growth. The Government is very pleased to see rising business confidence and a growing willingness by New Zealand businesses to create more jobs by investing more cash.