McClay Todd: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
McClay Todd: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 19 June 2012. Volume:681;Page:3035. Text is incorporated into the Bound Volume.] 
1. 
TODD McCLAY (National—Rotorua) 
 to the  
Minister of Finance 
: How is the Government’s economic programme helping New Zealand manage through current global uncertainty? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government continues to focus on its longer-term programme for increasing New Zealand’s growth prospects by continuing investment in new infrastructure increasing investment in science and innovation improving incentives to get New Zealanders out of welfare and back into work and increasing public sector productivity and results. In addition the Government is managing financial uncertainty working with the Reserve Bank to introduce stronger requirements on banks and assisting those banks in accumulating cash reserves and pre-funding debt to protect themselves against any interruption of access to international borrowing. 
Todd McClay 
: What are the anticipated effects of recent elections in Greece for New Zealand? 
Hon BILL ENGLISH 
: There are no particular effects directly. The election in Greece is just one of any number of factors that are creating uncertainty in the global environment. It does appear that there has been a positive reaction to the election result in Greece. Nevertheless Greece has significant very deep-seated problems and it is not yet clear that those problems will be able to be resolved. New Zealand continues to focus on our own ability to grow our own economy bearing in mind that each week there could well be a different version of the problems in Europe in our media but Europe makes up only about 20 percent of our trade. 
Todd McClay 
: What reports have you recently received on the New Zealand economy? 
Hon BILL ENGLISH 
: There have been a number of reports that reflect the degree of uncertainty that we all face—both Government and businesses and our trading partners. The International Monetary Fund gave a report recently that suggested that the Government had the balance about right between supporting the economy through difficult times and getting back to surplus. There have been a range of other reports of forecasts trying to work out what is going to happen over the next few years and that range of forecasts reflects the high degree of uncertainty that we are all dealing with. 
Hon David Parker 
: If the Government’s economic programme is working why are New Zealand’s exports dropping and wages growing more slowly than in most economies outside of Europe? 
Hon BILL ENGLISH 
: The Government has set out to rebalance the economy away from an economy driven by excessive debt excessive consumption and high levels of Government expenditure towards a focus on savings investments exports and worth. Because of the global uncertainty it has been difficult to make as much progress as we would all want. However we remain focused on more jobs and higher incomes for New Zealanders whatever the world throws at us. 
Hon David Parker 
: If reducing debt is his Government’s answer to global uncertainty why is it that New Zealand’s net international liabilities are set to grow by $70 billion between 2011 and 2016? 
Hon BILL ENGLISH 
: I think it is positive that all New Zealanders understand the need to reduce debt and New Zealand households are well ahead of the New Zealand Government in that respect. Household debt had started to drop a couple of years ago and continues to drop. Currently the Government debt is still rising rapidly. Because we are running deficits by 2014-15 we would hope that we are able to stop the increase in Government debt in respect of the external liabilities that are part of the long-running challenge for New Zealand to rebalance the economy to earning a living—earning it before we spend it—and not borrowing to make up for less income than our spending. 
Todd McClay 
: What effect will events in Europe have on the Government’s plan to return to surplus by 2014-15? 
Hon BILL ENGLISH 
: The Government has committed to a return to surplus in 2014-15 and will not let this target slip lightly. We are not prepared to cause long-term damage to the economy simply for the purpose of achieving that target if it happens that global events mean that our revenue drops sharply. However it is very difficult to predict not only what will happen in Europe but what would be the effects of any particular event in Europe. That is why we are focusing on what we can control which is our own productivity our own competitiveness and our own Government spending and in all those respects we are making moderate progress.