8. Question No. 8—Economic DevelopmentHon TODD McCLAY (National—Rotorua) to the Minister for Economic DevelopmentQuestion No. 8—Economic Development8. Hon TODD McCLAY (National—Rotorua) to the Minister for Economic Development: Does he consider manufacturing to be crucial to boosting jobs and growing our exports"; if so is he concerned that under this Government manufacturing confidence has fallen to its lowest level since December 2008? Hon PHIL TWYFORD (Minister for Economic Development): Yes the two drivers the New Zealand Institute of Economic Research cited when releasing that survey were the deterioration in global outlook and labour market capacity. However the member should note that despite these global headwinds New Zealand's manufacturing sector expanded faster in June than in May: the June performance of manufacturing index reading of 51.3 was up from 50.4 in May. This compares favourably to Australia the UK Japan China and the eurozone which all contracted in May. Hon Todd McClay: Well then how does he explain this fall in manufacturing confidence to a net negative of 57 when manufacturers are now as pessimistic as they were during the global financial crisis? Hon PHIL TWYFORD: Well the study that the member quotes is somewhat subjective—it's based on self-reporting by manufacturers—but there's no question that the deterioration in global outlook and the labour market capacity that that report cited are behind the fall in sentiment. The work to deliver the manufacturing workforce over the last decade simply wasn't done and now businesses are paying the price for that. That is why my colleague Chris Hipkins is working on reforms to vocational education to ensure that businesses get the skilled workers that they require. Since 2009 there's been a reduction of about 2000 people enrolling in manufacturing and related programmes in both provider-based and work-based programmes. Hon Todd McClay: When will his Government have an actual plan to support New Zealand businesses given that manufacturing confidence has fallen a whopping 73 points since his Government took office? Hon PHIL TWYFORD: Well we have inherited a failure to invest in the workforce. We are working with industry to improve productivity and reorient the economy away from a heavy reliance on population growth and high levels of property speculation. Now no one can turn that situation around in only 18 months but in spite of a very challenging global environment actual manufacturing output has increased under this Government and we are putting in place the building blocks that manufacturers need. We've got industry transformation—SPEAKER: Order! Order! Far too much. Hon Todd McClay: Well isn't it actually Government policies like industrial relations reform increasing powers for unions higher taxes and increasing costs that are responsible for these plummeting levels of business confidence especially in the manufacturing sector? Hon PHIL TWYFORD: No. I reject the premise of the member's question—SPEAKER: That's it. Thank you. Hon Chris Hipkins: I raise a point of order Mr Speaker. I think that when a member asks a long question with a whole lot of assertion in it you do actually need to allow the Minister a chance to respond to the assertions that were contained in the question. SPEAKER: Yeah and I think in the previous answer I let it run for far too long and if you take the two answers together the Minister is still quite a long way ahead. Hon Todd McClay: Does he agree with the former Labour Party finance spokesman Grant Robertson who said in 2015 on business confidence "If Labour was in government our KiwiBuild programme would be under way and we would make sure the economy stopped drifting any further." and if so as the newly appointed economic development Minister will KiwiBuild be part of his plan to rescue the economy? Hon PHIL TWYFORD: We are putting in place the programmes that New Zealand manufacturers need to give them a strong platform for growth. We've got industry transformation plans including in wood processing and food and beverage. We are reforming the skills and vocational education sector to give manufacturers the skilled workers they need. We've ramped up research and development spending though the tax credits. There is Reserve Bank reform. We have extended the brightline test and shut down the loopholes for property speculation. This Government is putting in place the framework for a productive economy. SPEAKER: OK. Thank you."