Henare Tau: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Henare Tau: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 07 November 2012. Volume:685;Page:6345. Text is incorporated into the Bound Volume.] 
1. 
Hon TAU HENARE (National) 
 to the  
Minister of Finance 
: What reports has he received on the Government’s financial position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Crown’s financial statements for the 3 months to 30 September were issued today. They confirm that the Government is keeping its spending under control but that revenue can be affected by the uncertain global economic situation and its impact on New Zealand. For example in the first 3 months of this fiscal year Crown tax revenue was $295 million below forecast and core Crown interest revenue was $147 million lower than expected. This was partially offset by Crown expenses being $200 million below forecast including slightly lower than forecast welfare expenses. The operating deficit before gains and losses was $2 billion for the 3-month period. 
Hon Tau Henare 
: What approach is the Government taking to ensure it continues to carefully manage its finances so it does return to surplus? 
Hon BILL ENGLISH 
: The Government’s target is to return to surplus by 2014-15 so that we will then have choices about repaying debt resuming contributions to the New Zealand Superannuation Fund or targeting more investment in priority public services. To achieve this we will need to keep on top of the factors we can control such as remaining prudent with any new spending and borrowing. We will also continue to focus very strongly on delivering more public services even where there is less money to ensure that we support those who need our services. This is important in a world where economic conditions are unpredictable and could have unpredictable impacts on New Zealand Government revenue. 
Hon Tau Henare 
: What reports has he received on the global economic situation and its likely impact on New Zealand and Government finances? 
Hon BILL ENGLISH 
: Earlier this week Treasury published its monthly  
Economic Indicators 
 for November focusing on global growth. It notes that more than 5 years after the onset of the financial crisis the world economy is performing again below expectation. World economic growth in the first half of 2012 was generally below IMF forecasts and the latest forecast for world output issued last month contained further downward revisions. If global growth does remain weaker than expected it would affect New Zealand’s growth and Government finances. 
Hon Tau Henare 
: How is New Zealand’s economy performing compared with most other developed economies and what policy prescription would put this performance at risk? 
Hon BILL ENGLISH 
: We continue to perform at moderate levels but nevertheless better than most other developed countries. In the first half of this year New Zealand grew by 1.6 percent which is higher than growth rates in the US Japan Canada the UK and the euro area over the same period. Our quarterly growth rate is about the same as Australia’s. Policies that would put this at risk would include borrowing more spending more and printing money which would fuel costs for households and businesses and put jobs at risk. 
Hon David Parker 
: How can the Minister stand in this House and pretend that it is good news that the Government deficit of $2.1 billion is $490 million—or 27 percent—higher than he projected in his Budget just months ago? 
Hon BILL ENGLISH 
: I am not saying it is good news; I am just saying it is the news. It is the news and it is a snapshot in a long journey towards repairing the damage that the previous Labour Government did to the economy and to Government finances. 
Hon David Parker 
: Is it correct that in addition to an increasing Government deficit the New Zealand economy is running the second-worst current account deficit in the developed world this year and is projected by the IMF to have the worst current account deficit in the developed world next year; if it is correct does he agree with the Governor of the Reserve Bank Mr Wheeler that that is far too high? 
Hon BILL ENGLISH 
: On the first issue of course we want to see the Government deficit coming back. It was $18 billion 2 years ago it was $9 billion last year and we are on the track towards about $7 billion for this year and a $2 billion deficit the following year. Quarterly figures are not pushing us off that track. In respect of the current account deficit I would take more notice of what the member said if it had not been the case that under his Government it doubled from 4 percent to 8 percent which were the worst levels New Zealand has ever had. That was from the party that is now preaching the loudest about fixing it.