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: 28 May 2013. Volume:690;Page:10391. Text is incorporated into the Bound Volume.]2.Hon KATE WILKINSON (National—Waimakariri) to theMinister of Finance: How did the Budget on 16 May contribute to the Government’s economic programme?Hon BILL ENGLISH (Minister of Finance): The Budget provided further momentum right across the Government’s economic programme built on considerable progress over the last four Budgets. In particular it progressed the Government’s four priorities for this term: getting back to surplus a more competitive economy better public services and rebuilding Christchurch. The Budget continues to focus on imbalances that are part of the recovery such as the pick-up in house prices but which could threaten the recovery.Hon Kate Wilkinson: What has been the Government’s approach to implementing its economic programme and what do recent indicators show about progress?Hon BILL ENGLISH: The Government has focused on moderate and consistent change over time in order to manage New Zealand out of the difficult circumstances of the recession and the earthquakes but at the same time to invest in improving our capacity for growth in the future. The Government’s plan is working as international bodies such as the IMF have recognised. In the last year New Zealand grew at about the same rate as Australia which is higher than most other developed economies and looking out over the next couple of years New Zealand has better prospects than most developed economies and probably moderately better prospects than Australia.Hon Kate Wilkinson: How does the current economic outlook as set out in the Budget compare with the position the Government inherited in 2008?Hon BILL ENGLISH: The economy is in much better shape and compared with other countries there is a sense that New Zealand has been dealing with some of the key issues that are going to dog other developed economies for the next decade. Five years ago New Zealand was in deep recession the global economy was in crisis Government spending was out of control and Treasury forecasts showed never-ending deficits andsoaring debt—and that was before the Christchurch earthquakes hit which are going to have an impact of about 20 percent of GDP. So the Government’s plan has been to get on top of those issues in the short term and build our long-term capacity for growth.Hon Kate Wilkinson: What independent reports has he received on the Budget in the Government’s wider economic programme?Hon BILL ENGLISH: The reports on the Budget have generally supported the Government’s economic direction but I would be the first to give the credit to New Zealanders—their businesses and households—who have proven to be so resilient and have actually made the decisions that have enabled New Zealand to get back on its feet. The Employers and Manufacturers Association commented on the Government’s returning the books to surplus giving business confidence. Business New Zealand says a careful and measured approach to spending is also showing benefits as well as the focus on competitiveness through innovation infrastructure internationalisation and skills. Even the Children’s Commissioner who is generally a critic of the Government has said there is much to be impressed with in the Budget despite the Government’s constrained finances.Dr Russel Norman: Given that New Zealand’s net international debt will increase by $61 billion over 5 years under the Budget projections and economic plan that he released does he consider that an increase in net debt of $61 billion over 5 years is a sustainable economic strategy?Hon BILL ENGLISH: I think that in the context of the recession there has been a significant build-up of Government debt and that is what has—Dr Russel Norman: I raise a point of order Mr Speaker. I am terribly sorry to interrupt the Minister but it was about New Zealand’s net international investment position—the debt of New Zealand not the Government’s debt position.Mr SPEAKER: Order! Allow the Minister to answer the question.Hon BILL ENGLISH: If the member was really concerned about that he would support the asset sales which are enabling us to buy public assets without borrowing money off foreign bankers. Why is he so keen on foreign bankers?Dr Russel Norman: I raise a point of order Mr Speaker. It was not a political question at all; it was a very straight question about New Zealand’s net debt increasing by $61 billion. I asked the Minister whether he thought this was a sustainable strategy. He is opening by just attacking me. It has got nothing to do with me. It is about his Government.Mr SPEAKER: No I think the Minister adequately addressed the question that was asked.