Barry Maggie: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeBarry Maggie: Questions for Oral Answer — Questions to Ministers[Sitting date: 19 September 2013. Volume:693;Page:13541. Text is incorporated into the Bound Volume.]1.MAGGIE BARRY (National—North Shore) to theMinister of Finance: What reports has he received on the economy?Hon BILL ENGLISH (Minister of Finance): This morning Statistics New Zealand released GDP data for the second quarter of 2013. The New Zealand economy grew by 0.2 percent in that quarter with the effects of one of the more serious droughts in a generation having a major influence on that result. Annual growth was 2.5 percent. That is consistent with the Government’s aspirations for growth of 2 to 3 percent which is sufficient to support more jobs and moderate increases in incomes. Previous GDP growth numbers have been revised upwards. So growth for the year is slightly above both our expectations and market expectations. Given the circumstances of a significant drought this result shows broader-based growth in the economy and it is likely to continue.Maggie Barry: What were the main factors affecting growth in the June quarter?Hon BILL ENGLISH: I have already referred to the drought earlier this year which saw the largest fall in dairy production volumes in 24 years. Offsetting the drought was a growth in eight out of 11 service industries: an increase in retail accommodation and restaurants focused mainly in retailing; a 2.6 percent increase in business services; and construction activity increased by 2.3 percent mainly in infrastructure. This is further evidence of the Government’s substantial and ongoing investment in infrastructure growth. Private consumption grew by 1.5 percent in the quarter. There was a small reduction in manufacturing output for the quarter related to the drought. But overall despite Opposition allegations that manufacturing is in crisis it grew 1.6 percent for the year.Maggie Barry: How does New Zealand’s growth in the last year compare with other countries’ and what is the outlook for the economy?Hon BILL ENGLISH: Our annual growth of 2.5 percent is ahead of the US on 1.6 percent the UK on 1.5 percent Canada on 1.4 percent Japan on 1.3 percent and the euro area on minus 0.5 percent. I think our numbers are roughly the same if not slightly better than Australia’s and Singapore’s. The outlook for the economy continues to be positive. We are looking at consensus forecasts of 2 to 3 percent growth over the next 3 years. This will support continued growth in new jobs and moderate increases in incomes. However although this is an encouraging outlook it is important that we stick to policy that is going to make it easier for businesses to continue to invest anotherdollar and employ another person because that is what will improve the welfare of our households.Hon David Parker: Given that our export and import substitution industries declined by 2.3 percent in the June quarter does he agree that our economy is overly dependent on the weather and that although the sporting hopes of the country in the America’s Cup rely upon the weather the destiny of our economy ought not?Hon BILL ENGLISH: No I do not agree. I knew that Labour was against jobs but being against our agricultural industries seems a bit bizarre for a party that aspires to take part in economic debate in New Zealand. The fact is that this result shows precisely the opposite of what the member is saying. It shows a broad-based recovery where a lot of our non-agricultural businesses including our service industries are showing promising signs of growth. If we stick to the track we are on I believe that it will lead to further diversification of our economy. But let us not knock the success of our core protein production industries. They will be core to New Zealand’s success for the next two decades.Maggie Barry: What steps is the Government taking to build a more productive and competitive economy and to increase growth?Hon BILL ENGLISH: Well we are continuing to focus on managing the Government’s finances responsibly on improving the productivity of the 25 percent of the economy the Government controls directly so that when we put taxpayers’ money into our social services we get better protection for vulnerable families more achievement for our young people and better health services for our older people. That contributes to a competitive economy and increased growth. We are also continuing with a broad programme to reduce costs for business cut red tape continue to invest in innovation and do whatever we can to keep interest rates lower for longer so that it will be easier for businesses to hire more people.