Adams Amy: Questions for Oral Answer — Questions to Ministers 
Adams Amy: Questions for Oral Answer — Questions to Ministers 
[Volume:673;Page:19227] 
1. 
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: What reports has he received on the economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 More good news. This morning the Reserve Bank issued its Monetary Policy Statement. It confirms the early signs of an economic recovery. GDP has probably increased modestly through the first half of 2011 despite the impact of the Christchurch earthquake. The bank expects the pace of growth to pick up supported by high commodity prices and a number of other factors including the earthquake rebuild. Businesses are expected to increase their staff hiring and capital investment. 
Amy Adams 
: What are the Reserve Bank’s economic growth forecasts for the next few years? 
Hon BILL ENGLISH 
: It is predicating GDP growth of 1.2 percent in the year to March 2011 2.5 percent in the next 12 months and 4.6 percent to March 2013. The expected growth in export volumes has remained about the same as the central bank projected in March. Private consumption growth has been revised upwards. These forecasts are about the same as if not slightly more positive than the Treasury forecasts in the Budget. 
Hon David Cunliffe 
: Is he aware that the Governor of the Reserve Bank has just confirmed to the Finance and Expenditure Committee that the only reason that the Reserve Bank is more optimistic than his own officials is the high commodity prices which themselves are surrounded by downside risk? 
Hon BILL ENGLISH 
: The fact that our terms of trade are about the highest that they have been in a long time is a reason for optimism and of course there is a risk that commodity prices could drop back. I think the more important point is that the Reserve Bank forecasts are roughly the same as Treasury’s forecasts which are roughly the same as those of most other economists. The Opposition’s assertion that the forecasts are widely optimistic is probably overly pessimistic. 
Amy Adams 
: How do the Reserve Bank economic growth forecasts compare with the Treasury forecasts that accompanied the Budget last month? 
Hon BILL ENGLISH 
: The Reserve Bank’s forecasts are a bit stronger than Treasury’s. They forecast 2.5 percent growth in the next year whereas Treasury forecasts 1.8 percent. But I must say that forecasts do not make an economy grow. What makes an economy grow are the decisions that New Zealand households and businesses make and my sense is that they are becoming increasingly confident but not overconfident about the prospects for this economy. That is more important than the forecasts. 
Hon David Cunliffe 
: Does the Minister agree with commentary in the  
New Zealand Herald  
and on www.interest.co.nz which says nothing is being done to correct the current account imbalance nothing is being done to correct the growing international debt nothing is being done to create jobs and it is time that someone did something? 
Hon BILL ENGLISH 
: No I do not and I am still waiting to see what the “something” is. 
Amy Adams 
: What is the Reserve Bank’s outlook for job growth over the next few years and what measures is the Government taking to support new jobs? 
Hon BILL ENGLISH 
: Again the Reserve Bank is expecting about the same level of job growth as was forecast in the Budget which is around 35000 new jobs a year. That is actually not exceptional for New Zealand; that was the average rate of job creation for the 15 years from 1990 to 2005. The Government is doing everything it can to give businesses the confidence to invest grow and create new jobs. The indications are that the combination of positive leadership from the Government and a sound Budget is helping with business confidence.