McClay Todd: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeMcClay Todd: Questions for Oral Answer — Questions to Ministers[Sitting date: 15 May 2013. Volume:690;Page:9927. Text is incorporated into the Bound Volume.]1.TODD McCLAY (National—Rotorua) to theMinister of Finance: How will the Budget continue the Government’s ongoing programme to deliver jobs and growth for the New Zealand economy?Hon BILL ENGLISH (Minister of Finance): The Government will build on its four priorities for this term including responsibly managing the Government’s finances and building a more productive and competitive economy to deliver jobs and growth. Over the last 4½ years we have taken a number of steps towards those priorities including reducing company tax reducing tax on work and savings increasing tax on consumption and property cutting red tape for business and getting the Government’s own finances in shape to keep interest rates lower and take pressure off the exchange rate. The Budget will continue the practice over the last four Budgets of consistentlyinvesting in new infrastructure in science and innovation in our schools and in health care and continuing to provide further reduction in business costs.Todd McClay: What reports has he received on employment and wage growth in the New Zealand economy?Hon BILL ENGLISH: We have received moderately positive reports last week through the quarterly employment survey and the household labour force survey. Unemployment fell to 6.2 percent in the March quarter with 15000 fewer people unemployed at the same time as there was an increase in the labour market participation rate. The quarterly employment survey shows around 30000 more jobs in the last year and 50000 more jobs in the last 2 years. Weekly earnings increased by 2.5 percent in the year to March with the largest increase in manufacturing where apparently there is a crisis but earnings went up 4.3 percent. This compares with an increase in the cost of living of less than 1 percent over the same period.Todd McClay: How does growth in New Zealand compare with the outlook in Australia?Hon BILL ENGLISH: It is reasonably similar despite the fact that Australia is benefiting from the highest terms of trade it has seen in many generations. Economic growth in Australia is forecast at around 3 percent over the next 4 years which means that Australia is expected to do better than most of the developed world. This is encouraging because Australia is our largest trading partner and we are expecting comparable growth in New Zealand. However we are focused on what we need to do here in New Zealand and tomorrow’s Budget will confirm that we are on track.Hon David Parker: Is the reason he is no longer saying that he is “sticking to a plan that is working” that 200000 people have left for Australia and only 8000 jobs have been created of the 170000 he promised at the last election?Hon BILL ENGLISH: No we are sticking to a plan that is working. In respect of jobs there is no doubt that the 2012 job growth was weaker than we would have liked and certainly weaker than those who were looking for new jobs would have liked. However the prospects for job growth have picked up in 2013 and I guess that is the point. We are better to stick to a plan that involves expanding our productive sector and our exports and our savings and to not take up a plan to spend more tax more and throttle our export industries which is the Labour-Greens plan.Andrew Williams: Is it part of the Government’s growth strategy to achieve pay parity with Australia given that the earnings gap with Australia has increased by $58.18 under this National Government?Hon BILL ENGLISH: Yes we still do. We still are aiming—and I would expect New Zealand Governments will for the next decade—to close the earnings gap with Australia. It is telling that in last night’s Budget Australia put some of its tax cuts off for several years which means that the gap in real after-tax incomes is likely to be closing a bit more over the next couple of years because our policy remains on track.Hon Dr Pita Sharples: Given that Māori are disproportionately affected across unemployment how will the Budget reduce Māori unemployment?Hon BILL ENGLISH: In the first place because the growth prospects in the economy look pretty positive and in the most recent employment figures Māori unemployment began to drop; and secondly because the Government has invested in this Budget $43 million over the next 4 years which is a major expansion of Māori and Pasifika trade training of 3000 places. I want to give due credit to the Minister for his strong advocacy for this policy.Andrew Williams: Does the Minister concede that the only real growth under this Government has been the growth in the number of New Zealanders going to Australia?Hon BILL ENGLISH: No. Of course as the member I think probably knows the number of New Zealanders going to Australia is generally related to the difference in growth rates. So when we had a recession and Australia did not more New Zealanders went to Australia. Now that the gap between our growth rates has closed right up I think you would expect to see the outflow reduce reasonably substantially over the next 4 or 5 years.Andrew Williams: What does he say to the 11 percent of 20 to 24-year-olds who after 4 years under this Government are still yet to see any of the jobs and growth promised by this Government?Hon BILL ENGLISH: I would say to them that we can now look to the future with some optimism. Unfortunately in their time since leaving school they have had to bear the burden of one of the worst recessions in a generation but compared with young people in almost any other developed country their prospects are positive and we are right behind them.Todd McClay: What recent reports has he received about the Government’s economic programme?Hon BILL ENGLISH: Just overnight the IMF put out its country report on New Zealand. That report is very favourable—well it is favourable; I would not say very favourable but it is favourable—about the approach that the New Zealand Government has taken to the management of the economy and particularly to the management of the Government’s books. In fact it believes that the speed at which we have reduced our deficit and headed to surplus is about right and that the actions the Government has taken are reinforcing the growth prospects for the economy.Andrew Williams: What does he say to the people of Northland who have an unemployment rate of 10 percent overall and in the case of young Māori—[Interruption]Mr SPEAKER: Order! Allow the member to ask his question.Andrew Williams: Could I repeat the question?Mr SPEAKER: The member can start his question again.Andrew Williams: What does he say to the people of Northland who have an unemployment rate of 10 percent and in the case of young Māori where it is two or three times that level in terms of what jobs and growth they will get promised by this Government?Hon BILL ENGLISH: I think we would say to them that they will benefit from Government policies that would do two things. One is building a highway north of Auckland up to the North. The second thing is that they should support the Government’s oil and gas programme in the North and not support political parties that are trying to stop the highway to the North and are trying to stop the oil and gas programme because Labour the Greens and the Mana party are trying to destroy jobs in Northland; not create them.Andrew Williams: So how can he give this series of answers when under this Government the number of children living in benefit-dependent households has increased by 32000?Mr SPEAKER: Hon Bill English in so far as he is responsible.Hon BILL ENGLISH: In the first place there was an increase in benefit numbers when we had a recession. I might say that was in contrast to what was going on under the previous Government when even though the economy was booming benefit numbers went up. [Interruption] The Government’s welfare reforms and housing reforms are focused strongly on reducing that dependency and there will be more evidence of that in the Budget tomorrow.