1. Government Financial Position—SurplusMELISSA LEE (National) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSGovernment Financial Position—Surplus1. MELISSA LEE (National) to the Minister of Finance: What reports has he received on the Government's fiscal position?Hon STEVEN JOYCE (Minister of Finance): The latest Government accounts have been released today for the 10 months to 30 April and show a surplus of $2.5 billion helped by higher than expected revenue. It must be noted that around $1 billion of this surplus is due to the annual peak and provisional tax assessments and estimates occurring a month earlier than expected. Treasury and Inland Revenue expect this to be reversed in the May statements; therefore it is important not to take too much from a single month's figures. Nevertheless the accounts overall do underline the Government's improving fiscal position. Melissa Lee: How did this month's financial results affect the expected out-turn for the full year?Hon STEVEN JOYCE: Treasury's current expectations are that the forecast surplus for the 2016-17 year of $1.6 billion is on track. This improving fiscal position which has now occurred over a number of years is the result of New Zealand companies making the most of the current economic conditions and getting out and competing successfully on the world stage. The Government's strong economic plan is giving companies the confidence to invest and expand hire more staff and increase production.Melissa Lee: What is the forecast surplus track for the Crown over the next 4 years?Hon STEVEN JOYCE: Last month's Budget Economic and Fiscal Update shows we have made good progress in restoring the health of the Crown accounts over the last few years. Operating balance before gains and losses (OBEGAL) surpluses are forecast to rise from an estimated $1.6 billion this year to $7.2 million by 2020-21. However the residual cash position is different mainly because of the massive infrastructure investments we are making in new infrastructure for a growing country. Over the next 4 years the net residual cash position is currently expected to be basically zero.Grant Robertson: Given the fiscal position he has outlined does he think it is fair that over the next 5 years average real wages are set to grow by 1.3 percent in total which calculates to a real increase for an average worker of 8c an hour a year?Hon STEVEN JOYCE: We will have to see how that estimate plays out. That is Treasury's forecast. My view is that it will grow faster than that as it has over the last few years where wages have been growing at approximately twice the rate of inflation.Grant Robertson: Given the fiscal position he has outlined does it surprise him that unemployment will not drop below 5 percent for the next 2 years?Hon STEVEN JOYCE: The member may not have been updated but actually it is below 5 percent now in fact as a result of the March quarter of the household labour force survey. The good news for the member is that the employment rate is at 76.1 percent for all people aged 15 to 64 which is a record for New Zealand. This Government has now the second-highest rate of employment in the OECD and as a result more and more people are joining the labour force. I am very pleased with that.Melissa Lee: How is the Government's strong fiscal position helping to deliver for New Zealanders?Hon STEVEN JOYCE: The Government's strong economic plan means we get to make the sorts of choices we were able to make in the Budget that has just been delivered. The Government is investing $7 billion of money over 4 years in improving public services as well as $4 billion in new money for additional infrastructure taking the total investment over the next 4 years to $32.5 billion and of course there is the $2 billion a year Family Incomes Package which has received reasonably broad support from across the Parliament. It is only with a consistent economic plan that we will continue to have the capacity to make more positive decisions into the future.