Bennett David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeBennett David: Questions for Oral Answer — Questions to Ministers[Sitting date: 15 April 2014. Volume:698;Page:17217. Text is incorporated into the Bound Volume.]1.DAVID BENNETT (National—Hamilton East) to theMinister of Finance: How will the Budget next month help to lock in the benefits of sustainable economic growth to support more jobs and higher incomes for New Zealanders?Hon BILL ENGLISH (Minister of Finance): The Budget will set out the next steps in the Government’s programme. It will build on the current good economic momentum where we are seeing positive results such as employment rising across the board wages on average increasing ahead of the cost of living and consumer and business confidence at higher levels than for some time. The Budget will also show growing fiscal surpluses starting with a small surplus in 2014-15. Generally it will reinforce the positive conditions that are encouraging households to pay off debt businesses to invest and New Zealanders to take up new jobs.David Bennett: How is the higher growth outlook for the economy translating into higher wages for New Zealanders?Hon BILL ENGLISH: The benefits of a sustainable and growing economy of course can be tangible to households. For instance if you use the average full-time wage which is the basis of the means of calculating our level of superannuation over the past 2 years the average full-time wage has increased from $51700 a year to $54700 a year which is an increase of $3000 in the average wage over the last 2 years. If New Zealand can achieve the growth that Treasury is forecasting then the average wage will rise to around $62200 by 2018. That would mean another average wage increase of $7500. [Interruption]Mr SPEAKER: Order! I am just waiting for Andrew Little.David Bennett: What other steps will the Government take in the Budget to help support sustainable economic growth more jobs and higher incomes over the next few years?Hon BILL ENGLISH: With the growing economy some rise in interest rates is inevitable but if we learn the lesson from the last economic cycle up to 2008 we know that Government going on a spend-up when interest rates are already rising can only make interest rates go even higher affecting household budgets and reducing the incentives on business to invest in new jobs. So the Budget next month will not be about a big spend-up; it will be about thoughtful targeted spending which means that the Reserve Bank will not need to further tighten monetary policy pushing up interest rates.David Bennett: Why is it important that interest rates do not return to their elevated levels in 2008 when floating home mortgage rates reached almost 11 percent?Hon BILL ENGLISH: I am pleased the member realises it is important because the Opposition parties clearly do not. Restricting interest rate increases makes a significant contribution to household budgets. Every 1 percentage point movement in mortgage interest rates is worth around $40 a week or $2000 a year for a family with a $200000 mortgage. This is why the Government is going to be careful with its spending to help keep mortgage rates at reasonable levels after a lengthy period at 50-year lows. Imagine the effect on interest rates if we had the same increase in Government spending as the previous Government around $2.5 billion or $3 billion per Budget. That would push interest rates up sharply.Hon David Parker: If as he keeps claiming things are going so well where has the $1.1 billion worth of missing tax revenue in the 8 months to February 2014 gone?Hon BILL ENGLISH: The first thing to remember is that tax revenue has increased around 5 percent compared with last year which shows the benefits of a growing economy. We have growing tax revenue. It just has not increased quite as quickly as Treasury forecast that it would. Some of that tax revenue it believes is sitting in the tax pooling system and some of it is lower GST which could be caused by the fact that in Christchurch there are large claims coming through for GST on insurance payouts and long lags until that money is used to build houses when the GST would come back.