Scott Alastair: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeScott Alastair: Oral Questions — Questions to Ministers[Sitting date: 01 April 2015. Volume:704;Page:2787. Text is incorporated into the Bound Volume.]2.ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: What reports has he received showing how the performance of the New Zealand economy is translating into benefits for New Zealand families?Hon BILL ENGLISH (Minister of Finance): Yesterday ANZ released its economic outlook report for March. It indicated that the momentum of last year’s economic growth is likely to continue into this year and it expects 3 percent growth for this year. It points out that there are risks to the New Zealand economy related to low energy and low commodity prices but it expects job growth wage growth and continued low interest rates which for households means job security moderate wage increases and a greater ability to repay debt rather than pay higher interest rates.Alastair Scott: What measures come into effect today that will directly benefit New Zealand families?Hon BILL ENGLISH: The prospect of sustainable economic growth means that the Government is able to act to support families. So from 1 April paid parental leave will increase by 2 weeks to 16 weeks and by another 2 weeks on 1 April next year. The parental tax credit will rise from $150 a week to $220 and the entitlement will increase from 8 to 10 weeks. Average ACC work levies will fall to 90 cents from 95 cents. The HomeStart scheme starts on 1 April which will enable around 90000 New Zealanders to be assisted to buy their first homes. New Zealand superannuation will increase by another 2 percent meaning that it has increased by 31 percent since April 2008 more than double the inflation rate.Dr David Clark: In light of the primary question when considering how the performance of the New Zealand economy is translating into benefits for New Zealand families has he considered the household labour force survey which shows growing unemployment in every region of New Zealand since his Government came to power?Hon BILL ENGLISH: On “Planet Labour” there was no global financial crisis but in New Zealand there was. So just to remind the member: unemployment went up pretty sharply in 2008 2009 and 2010 and it has been dropping fairly consistently since. It is still too high although I might notice that it is significantly lower than Australia’s where unemployment is rising which accounts for the fact that many New Zealanders are voting with their feet and staying home and coming home because they have a good prospect of getting a job here.David Seymour: How is it that the Government can afford to hand out so much money and index so many benefits on 1 April and yet does nothing to index tax thresholds to inflation for the benefit of the people paying for it all?Hon BILL ENGLISH: That is a fair question and as I think was indicated by my colleague the Minister for Economic Development last week that is something that will be discussed in the context of future options for moderate tax reductions for New Zealanders. But I might say that at the moment inflation is around zero and that is enforcing a discipline on the Government because we are not collecting more tax because of fiscal drag which is a very unusual if not unique set of circumstances. But this Government is a responsible manager of the Government’s finances and we will try to deal with that pressure.David Seymour: In light of the Minister’s reference to a unique set of circumstances where fiscal drag is low is this not the perfect time to make the switch and index tax brackets to inflation?Hon BILL ENGLISH: No it is not the perfect time but it is the perfect time to start such a discussion.Alastair Scott: How is the Government able to deliver to households the benefits of sustained growth in the economy?Hon BILL ENGLISH: We can deliver some benefits of sustained growth but I must say that for most households it is their workplace that is delivering those benefits such as more job security in a growing economy; moderate wage increases year on year which over time will lift our average wage by $5000 to $6000 over the next 4 years; and of course the general economy in which interest rates are lower than they might otherwise have been and that gives households more opportunity to pay off debt. The Government can contribute of course through its fiscal policy where we believe that the measures such as those that are coming in on 1 April are moderate but supportive of families and that is some of the benefit that they get from a well-managed economy.Alastair Scott: What did the ANZ report say about risks to the economy?Hon BILL ENGLISH: I think it pointed out some of the risks that have been discussed in the House before. Part of that is very important and it is around the outlook for our trading partners. So with China and Australia both economies have some question marks as to their rates of growth. There are also question marks over the current low commodity prices particularly in the dairy industry and the extent to which they stay low or bounce back to what we would regard as a long-run acceptable and normal price level. Fortunately the New Zealand economy is resilient. It has proven it can deal with headwinds as it has done over the last 4 or 5 years quite successfully and we have every confidence that even if some of these risks eventuate we will be able to handle them.