Young Jonathan: Questions for Oral Answer — Questions to Ministers 
Young Jonathan: Questions for Oral Answer — Questions to Ministers 
[Volume:674;Page:20379] 
1. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Finance 
: What implication does the United States’ credit rating downgrade have for the New Zealand economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The downgrade and subsequent financial market volatility confirm that we live in risky and uncertain times. Finance markets are sending a clear message to New Zealand and to any Government that they have no appetite for Governments that cannot get on top of their fiscal or debt problems or for policies that require more debt and borrowing. The Government has focused on getting its own books in order returning to Budget surplus by 2014-15 at which point debt will peak and we will be able to reduce debt as a proportion of GDP. 
Jonathan Young 
: How is New Zealand placed to deal with the global uncertainty compared with other countries? 
Hon BILL ENGLISH 
: Global uncertainty will affect our economy one way or another but we are relatively better placed than other developed countries. We will be one of the few countries that kept net Government debt below 30 percent of GDP and one of the few that will be looking at Budget surpluses within a few years but just as important is that we have worked to stabilise our financial system and get our economy in shape to be more competitive to support our export efforts. Also New Zealand households have got the message and started saving. 
Jonathan Young 
: How do the current threats from global market uncertainty compare with those from the global financial crisis in 2008? 
Hon BILL ENGLISH 
: I would hope that the threats from the current uncertainty will not reach the scale of the threats of the financial crisis in 2008. Whatever happens we are better placed to withstand these challenges than 3 years ago. One of the reasons is that the Government’s books are now in better shape. Our largest trading partners Australia and China are two of the world’s better-performing economies and the Reserve Bank and the Government learnt a lot from the last crisis about how to handle any similar crisis in the future. 
Jonathan Young 
: What policies would put New Zealand’s relatively strong economic and fiscal position at risk? 
Hon BILL ENGLISH 
: Any policy that requires the Government to borrow more than is currently projected on volatile world financial markets and any policies that make it harder rather than easier for our exporters to earn a living from the rest of the world. For instance a wide range of complicated tax system changes or reducing returns to KiwiSavers would send New Zealand backwards. 
Hon John Boscawen 
: Does he agree that if the changes he made in this year’s Budget had been made in each of his two earlier Budgets New Zealand would be much better placed to weather the global financial uncertainty created by this downgrade; if not why not? 
Hon BILL ENGLISH 
: In its first two Budgets the Government did make significant changes because the fiscal mess left behind by the previous Government was not widely understood but because the Government took careful and considered decisions we were able to prevent a situation where Government spending was going through the roof. It looked like our debt would continue rising with no end and sensible decisions over those three Budgets have corrected that situation so we are much less vulnerable now. One could argue that we should have done more sooner but at the bottom of the New Zealand recession we believed that would be harmful to the New Zealand economy.