Wilkinson Kate: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeWilkinson Kate: Questions for Oral Answer — Questions to Ministers[Sitting date: 08 May 2013. Volume:689;Page:9633. Text is incorporated into the Bound Volume.]3.Hon KATE WILKINSON (National—Waimakariri) to theMinister of Finance: What reports has he received on the Government’s finances?Hon BILL ENGLISH (Minister of Finance): Treasury has this week issued Crown accounts for the 9 months to 31 March. The operating deficit before gains and losses for this period was $5 billion which is $273 million smaller than the forecast back in December. Net core Crown debt is $1.4 billion lower than the forecast at 27.9 percent of GDP. This illustrates that the favourable patterns of good control of expenditure and gradually increasing revenue are bedding in. The Budget next week will confirm the Government remains on track to surplus in 2014-15.Hon Kate Wilkinson: What are the main reasons for Crown accounts being better than expected?Hon BILL ENGLISH: They are slightly better than expected and the reason is improved revenues and ongoing careful management of expenditure across the public sector. Core Crown tax revenue was $535 million higher than forecast due to PAYE on wages and salaries being $187 million above forecast and tax on other income of individuals around $406 million above forecast. Core Crown expenses were slightly below forecast. This is encouraging and broadly consistent with the quarterly employment survey released yesterday which showed hourly earnings are up 2.1 percent in the year to March and employment growth of 1.8 percent in the year to March.Hon Kate Wilkinson: What does the Government’s financial performance say about the track to surplus and how will this deliver benefits to New Zealand households?Hon BILL ENGLISH: These numbers released the other day indicate that the Government is on track to surplus consistent with Budgets over the last couple of years. By comparison the 2009 Budget indicated net Government debt would exceed 60 percent of GDP or more than twice current levels by the early 2020s if we have maintained the spending track at that time. The benefits to households come both in the improvement in public services despite the fact that money has been tight and secondly in lower interest rates for longer because the Government is spending carefully. New Zealand households are enjoying the lowest interest rates since 1964 and the Government of course will do what it can to ensure that that situation continues.Hon David Parker: Given the Reserve Bank Governor’s warning about rampant house price inflation and the effects of increased lending on the exchange rate and an already enormous current account deficit will he acknowledge as the Governor of the Reserve Bank did again today that a capital gains tax would help significantly?Hon BILL ENGLISH: No because that member’s version of a capital gains tax would not cover most housing. I do not know why Labour persists in the belief that a capital gains tax that exempts housing is somehow going to make a difference to housing.Rt Hon Winston Peters: Is it a fact that the overseas aid announced in Budget 2012 has been massively underspent by $94 million and how many other Budget 2012 items have been deliberately manipulated to get an artificial result of the type he is boasting today?Hon BILL ENGLISH: There is no deliberate manipulation but I would imagine that in the overseas aid budget like many others across the public sector Ministers and officials have become much more aware of the need to focus their expenditure on what is effective rather than just on spending more and more money. I would congratulate the Minister of Foreign Affairs on showing the same tendencies as are benefiting the whole public sector.Rt Hon Winston Peters: If that is the case what was the background behind the 2012 announcement that had the expenditure at $94 million more than is currently being spent or was there no work done at all about that budget and if that is the case why did he announce it in 2012?Hon BILL ENGLISH: I cannot answer the member’s question in detail. What I can say is that there has been discussion in past Budgets about how to ensure that the reasonably significant increase in foreign aid would sit with guaranteeing effective expenditure. If the member wants more detailed answers then he is free to put in a written question or seek the answers through a select committee.Hon Kate Wilkinson: What reports has he seen about changing data in relation to key economic policies?Hon BILL ENGLISH: I have seen one report regarding the Government’s share offer programme. It confirms earlier suggestions by the Opposition that public opposition to this policy was overwhelming. In fact the referendum which they said had over 400000 signatures turned out to have 100000 signatures on it that were not real—an error rate of 25 percent which even for Labour and the Greens is pretty high.