Young Jonathan: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Young Jonathan: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 27 February 2013. Volume:687;Page:8233. Text is incorporated into the Bound Volume.] 
1. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Finance 
: What is the Government doing to encourage investment business growth and jobs? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the Minister of Finance: Today in Auckland the Minister for Economic Development and I released the sixth and final progress report in the Government’s Business Growth Agenda. This latest report which is called  
Building Capital Markets 
 updates on 50 initiatives that the Government is working on to provide a productive and efficient environment for both investors and the borrowers of capital for jobs and growth. Together with the five previous progress reports which were on export markets innovation skills infrastructure and natural resources the Government has now spelt out more than 300 initiatives that it has prioritised to assist businesses to become more competitive on the international playing field and to help them to be profitable and to invest and grow. It is only when that happens that we get the job growth that we are all working to see. 
Jonathan Young 
: Why were capital markets in particular chosen as a topic for the Business Growth Agenda? 
Hon STEVEN JOYCE 
: The global financial crisis brought home to everyone how imperative it is that markets function well because we have seen around the world what happens when they do not. Compared with other countries our public equity markets are small as a percentage of GDP. For example our listed market capitalisation is equivalent to about 30 percent of the size of our economy compared with 85 percent in Australia and nearly 120 percent in the United States so even though New Zealanders are saving more than they have in the past they may not yet be taking advantage of investment opportunities that are open to them. We are working to encourage that because we have an ambitious target of lifting exports to 40 percent of GDP by 2025. That will require an extra $160 billion to $200 billion of new productive capital or around 70 to 90 percent more than is currently invested in the export sector and that is what we are working on through the capital markets report. 
Jonathan Young 
: What needs to happen to reduce the cost of capital? 
Hon STEVEN JOYCE 
: There is a broad range of areas we are working on to reduce the real interest rate premium that makes debt in New Zealand more expensive than in places like Australia or the US. In particular factors that influence our borrowing costs being higher include our small capital markets our higher levels of national indebtedness volatility in the exchange rate and low domestic savings compared with investment. We are seeing those ameliorated over time as we are proceeding through the Business Growth Agenda. For its own part the Government also must continue with its responsible fiscal management. As well reforms like those planned for the Resource Management Act will help create an environment that encourages investment in the New Zealand economy. 
Hon David Parker 
: Why should New Zealanders believe him when he says he is going to grow exports and jobs when data released by Statistics New Zealand today shows the value of manufactured exports fell by nearly 7 percent and we know that 17000 jobs were lost in the manufacturing sector in the past year? 
Hon STEVEN JOYCE 
: I see the member is not referring to the fact that there was only 1 month’s data but he is a trainspotter so he always likes to find something that can talk the New Zealand economy down. The reality is that both our goods exports and our services exports have grown over the last few years. In relation to job losses in manufacturing the reality is that with increased mechanisation in manufacturing we have had that job loss situation for the last 40 years. 
Hon David Parker 
: Has the Minister of Finance seen the latest forecasts from the New Zealand Institute of Economic Research which see the current account deficit blowing out to more than 8 percent of GDP in 4 years; if so why is he sticking to a plan that has failed to rebalance the economy towards exports and jobs? 
Hon STEVEN JOYCE 
: Well I did notice that the New Zealand Institute of Economic Research report is expecting significantly higher growth over the next 2 years. I would also note that if the balance of payments deficit did get to 8 percent—and we are not predicting that and neither is Treasury—it would be at levels last seen only under the previous Labour Government. In terms of a plan I would back this plan as against that plan which is the one-page plan released by the Hon David Parker. It calls to change gear.