Scott Alastair: Oral Questions — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeScott Alastair: Oral Questions — Questions to Ministers Questions to Members[Sitting date: 05 November 2014. Volume:701;Page:637. Text is incorporated into the Bound Volume.]3.DAVID BENNETT (National—Hamilton East) on behalf ofALASTAIR SCOTT (National—Wairarapa)to the Minister of Finance: What recent reports has he received on whether recent economic growth is creating capacity and inflation pressures within the economy?Hon BILL ENGLISH (Minister of Finance):Treasury’s latest monthly report notes that although the economy is growing near capacity inflation is running below expected levels. This can be partly explained by falling prices in the tradable sector due to a strong New Zealand dollar and weak international inflation. They also note that the housing market is cooling. Increases in house prices are slowing with the annual increase in the year to September down to 4.1 percent and the number of sales lower than a year ago. All of this indicates that cost of living increases will remain in check while the economy continues to grow and support more jobs and higher incomes.David Bennett: How is the current low inflation environment combined with continued high levels of business and consumer confidence influencing the outlook for employment and investment?Hon BILL ENGLISH: Positively. We have reported today that the unemployment rate fell to 5.4 percent in September down from 5.6 percent in June. There were 18000 more people employed in the September quarter and the labour force participation rate—that is the number of people available for work which is already at historical highs and higher than most other countries in the developed world—actually increased fractionally to 69 percent. Statistics New Zealand noted that rising employment is more than keeping up with growing population at a time when the population is growing at a record level. Although business and consumer confidence have come off their highs they remain at elevated levels. There are strong employment intentions among businesses. For example the quarterly survey of the New Zealand Institute of Economic Research reported that a net 18 percent of firms expect to increase staff numbers and the ANZ job advertisement series shows that job ads are at their highest levels since 2006. All of this is promising for more new jobs in addition to the decreasing unemployment rate we have seen today.David Bennett: How does the Minister expect the current positive economic outlook will benefit New Zealand households and families?Hon BILL ENGLISH: It has always been the Government’s view that the figures from month to month or quarter to quarter are not that important. What matters is the longer-term trend. We have an opportunity to lock in sustainable growth with relatively low interest rates and relatively low inflation at a time when the economy continues to grow. In its pre-election fiscal update Treasury forecast around 150000 extra jobs by mid-2018. It also predicted the annual average wage to increase by around $6600 to $62000 over that period. This will have a positive impact for households if cost of living increases remain low and we can continue to support good conditions for best business investment and new jobs. All of this will help household budgets.