3. Question No. 3—FinanceHon PAUL GOLDSMITH (National) to the Minister of FinanceQuestion No. 3—Finance3. Hon PAUL GOLDSMITH (National) to the Minister of Finance: What responsibility if any does he take for the fall in annual GDP growth from 3.2 percent in the June 2018 quarter to 2.1 percent in the June 2019 quarter?Hon DAVID PARKER (Associate Minister of Finance) on behalf of the Minister of Finance: On behalf of the Minister in fact New Zealand's headline measure of annual GDP growth is 2.4 percent for the year to June 2019 quarter. As noted by the Minister yesterday the drop in the annual rate of economic growth in the current cycle started at the end of 2016 under the previous Government. I do take responsibility for the Government's investments and policies that mean the New Zealand economy continues to grow more strongly than Australia the UK Canada Japan the EU and the OECD average despite global headwinds. Similarly this Government takes responsibility for an economy where wages are rising at their fastest rate in a decade higher than inflation and where job growth has been strong even where the economy is close to full employment. The economy is in good shape.Hon Paul Goldsmith: What is the role of domestic factors in the slow-down in economic growth that we're seeing?Hon DAVID PARKER: Um Mr Speaker the—Hon Member: Doesn't know!SPEAKER: Order! Who was that?Hon DAVID PARKER: The Governor of the Reserve Bank in respect of New Zealand's economic conditions paid particular attention to global economic conditions having weakened slightly further over the past three months saying that those higher tariffs—and I'm quoting from the document—declining global trade rates and ongoing policy uncertainty have suppressed global demand"  and that this is expected to have an effect on the New Zealand economy.Hon Paul Goldsmith: Point of order Mr Speaker. Point of order.SPEAKER: No you don't need a point of order. I am going to ask the Minister to answer the question.Hon DAVID PARKER: Could I ask for the question to be repeated?SPEAKER: Sure and without the assistance at the beginning of the question from people on my left.Hon Paul Goldsmith: What is the role of domestic factors in the slow-down in economic growth that we are seeing?Hon DAVID PARKER: I would say it is dominated by overseas matters rather than domestic matters. I would note that in respect of the domestic factors that feed into economic growth interest rates are at historic lows unemployment is low and we're in Budget surplus. There is a fiscal stimulus that the Governor of the Reserve Bank has also noted is helping hold up demand in the New Zealand economy as a consequence of the last Budget.Hon Paul Goldsmith: Does he agree with the Governor of the Reserve Bank that the slow-down in growth reflects "weak business investment and soft household spending"?Hon DAVID PARKER: No.Hon Paul Goldsmith: Was the Governor wrong to say in the Monetary Policy Statement "Our recent discussions with firms have highlighted that policy uncertainty has supressed investment"?Hon DAVID PARKER: On the subject of policy uncertainty we've recently added to certainty through the passing of the zero carbon bill through the signing of the China free-trade agreement upgrade and through the new infrastructure pipeline report that came out this week. Those of course improved policy certainty for those wanting to invest.Hon Paul Goldsmith: Was the Governor right to say in the Monetary Policy Statement "Uncertainty about future environmental policy and infrastructure investment plans" are two of the reasons businesses gave for why it was difficult to invest in this current environment?Hon DAVID PARKER: As the quote the member just read out says the Reserve Bank wasn't saying that for themselves. They were saying that some of the people that they had consulted reported that. As a Government we don't accept that there is policy uncertainty in respect of environmental matters suppressing investment and indeed—Alastair Scott: Sure is. Didn't you see them outside today?Hon DAVID PARKER: Well actually they were calling for less investment in forestry not more.SPEAKER: Mr Scott! Mr Scott I was outside. Don't bring me into the debate. Thank you.Hon Paul Goldsmith: Will policy uncertainty be increased by the revelation this week that the Deputy Prime Minister and the head of the Public Service haven't spoken directly to each other since the formation of this Government?Hon DAVID PARKER: They don't need to. That's the responsibility of the Minister for State Services. Hon Paul Goldsmith: How can a Government operate competently if senior Ministers and officials don't talk?SPEAKER: Well no no—I think it has gone too broad. I probably should have stopped the member on the last occasion. I think the member is pretty well aware that he was lucky to get the last one and he's not going to get this one.Hon Paul Goldsmith: Does he think his Government's cancellation of National's tax cuts have contributed to the soft household spending that the Governor identified as the cause of the slow-down?Hon DAVID PARKER: Quite the reverse. Those tax cuts that would have favoured the wealthy would have seen less of that money recycled into the economy spent on consumption that supports the economy than the tax advantages that were given to low to middle income people who spend that money into the economy rather than put it under the bed.Hon Paul Goldsmith: Does he regard somebody on the median wage as wealthy?Hon DAVID PARKER: I can't say what the member does but I do find it ironic that the member who's well known for laissez-faire hands-off non-interventionist do-nothing economic policy comes to this House and calls for more.Hon Paul Goldsmith: Does he think that increased petrol taxes have contributed to the soft household spending that the Governor identified as a reason for the slowing economy?Hon DAVID PARKER: As that member ought to know every dollar that is collected in petrol tax is spent on land transport so the overall effect on the economy is neutral."