Macindoe Tim: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeMacindoe Tim: Oral Questions — Questions to Ministers[Sitting date: 10 December 2014. Volume:702;Page:1322. Text is incorporated into the Bound Volume.]3.TIM MACINDOE (National—Hamilton West)to the Minister of Finance: What progress has the Government made in delivering on its economic objectives for 2014?Hon BILL ENGLISH (Minister of Finance):The Government has made good progress in its economic objectives for 2014. However there is much more to be done in a world facing significant challenges from low growth rates particularly in Europe and Japan too much debt and lower commodity prices. New Zealand is relatively well placed. Our economy grew by 3.9 percent in the year ended June 2014 one of the highest growth rates in the developed world. Updated GDP figures will be released next week and they are expected to confirm that this solid growth will continue. This is delivering benefits to hard-working Kiwis. Average wages have increased by around $3000 in the past 2 years to nearly $55700 and the average ordinary-time weekly wage is forecast to grow to $62300 by 2018 from $55700 today.Tim Macindoe: How are the benefits of the Government’s economic programme being reflected in the labour market and how do average wage increases compare with the cost of living changes?Hon BILL ENGLISH: In the past year alone 72000 jobs were created across New Zealand and Treasury forecasts more than 150000 further jobs over the next 4 years. Back in Budget 2011 Treasury predicted 171000 new jobs up to June 2015. So far we are 12000 new jobs ahead of that prediction made in 2011. These new jobs are bringing down unemployment which has fallen to 5.4 percent and should continue to fall to under 5 percent. Cost of living increases for New Zealand families have been low. Average hourly earnings increased by 2.3 percent in the last year compared with inflation of 1 percent.Tim Macindoe: How is the Government’s economic programme helping to keep interest rates lower for longer?Hon BILL ENGLISH: The Government has some influence on interest rates and we are using that influence where we can. In the first place we are limiting our operating allowance—that is our additional discretionary spending in our Budgets—to an average of $1.5 billion over the next 3 years rather than having a spend-up because the economy is better. Secondly we are focusing strongly on increasing the supply of housing to housing markets across New Zealand so that we can help to moderate the housing cycle and therefore moderate the inflation cycle. We seem to be doing a lot better as a country than in 2008 when floating mortgage rates reached 11 percent—a bit less than twice what they are today.Rt Hon Winston Peters: What effect will continuing Russian sanctions which have displaced 3 billion litres of European milk have upon Treasury projections for a return to surplus in 2015 2016 and 2017?Hon BILL ENGLISH: I think as the member knows they will probably have a negative impact. We need to keep it in perspective though. Although the dairy industry is a large successful industry—it represents about 7 percent of our GDP—and is under pressure the other 93 percent is in pretty good shape and that will offset some of those negative effects.Rt Hon Winston Peters: Does he agree with the Prime Minister that New Zealand dairy exporters taking advantage of the gap left by other nations’ trade sanctions on Russia is a “terrible look”; if so why?Hon BILL ENGLISH: Yes because the Prime Minister has remarkable insight and intuition at all times.Rt Hon Winston Peters: Can I take a moment to have a laugh?Mr SPEAKER: No the member can take a moment to ask a supplementary question.Rt Hon Winston Peters: Will he be so lofty and principled if in 2 years’ time we have a banking crisis precipitated by low returns coming to the New Zealand dairy industry as they are right now and getting worse; if so why?Hon BILL ENGLISH: You know a lot of the things that you worry about in this world just do not happen quite as badly as you think they will. I think that the dairy industry is a pretty resilient industry. The New Zealand economy is a pretty resilient economy. Yes there may be some tougher times ahead but although that might bother the member we are confident New Zealand can find its way through even a period of lower dairy prices.