Shanks Katrina: Questions for Oral Answer — Questions to Ministers Questions to Members 
Text is incorporated into the Bound Volume 
Shanks Katrina: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Sitting date: 16 October 2012. Volume:684;Page:5799. Text is incorporated into the Bound Volume.] 
3. 
KATRINA SHANKS (National) 
 to the  
Minister of Finance 
: What are the main features of the Government’s plan to build a more competitive economy based on more savings higher exports and less debt? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has a number of aspects to our plan. The first is to focus on economic growth as illustrated by the recent publication of a series of documents outlining our initiatives to support business growth. The second is to focus on a path back to surplus so that Government debt will stop increasing. The third is to provide better public services and a more productive public sector and the fourth is to rebuild Christchurch. Basically the Government’s plan is roughly on track. 
Katrina Shanks 
: What results has he seen of progress in the Government’s programme to build a more competitive economy? 
Hon BILL ENGLISH 
: In the face of some headwinds from the global economy we have been able to make progress with a number of deep-seated problems in the economy. Inflation is under control and as we have seen today the cost of living is rising by just 0.8 percent according to the CPI for September which came out this morning. Our fiscal policy is roughly on track. We have growth of 2.6 percent which is in the range of 2 to 3 percent that we have talked about for some time. A net 57000 more New Zealanders now have jobs than 2 years ago and household savings are continuing to rise. 
Katrina Shanks 
: What reports has he received on the impact of the current global economic situation and its likely impact on New Zealand? 
Hon BILL ENGLISH 
: In recent weeks there have been a number of forecasts relevant to the global economy that have been more subdued than earlier on in the year. The forecasts indicate that Europe and emerging economies in particular are likely to grow more slowly than expected. We have yet to see how that impact will flow through to New Zealand. Treasury is going into another forecasting round for the half-year update that will be released in December. 
Katrina Shanks 
: What reports has he received on alternative policy approaches that would leave New Zealanders worse off pushing up their cost of living? 
Hon BILL ENGLISH 
: I have been surprised at reports that political parties that have been advocating in the past that the cost of living was rising too rapidly are advocating essentially that the Reserve Bank should start printing money now. Of course that would have the effect of driving up the cost of living further particularly for the most vulnerable. 
Dr Russel Norman 
: Has he seen the 2010 IMF report entitled  
Rethinking Macroeconomic Policy 
 which finds that “Central banks in small open economies”—like New Zealand—“should openly recognize that exchange rate stability is part of their objective function.” not just inflation targeting; and does he agree with the IMF that the New Zealand dollar is overvalued by about 15 percent which is damaging the export sector? 
Hon BILL ENGLISH 
: Yes I have seen the report and the Government has said a number of times that the level of the exchange rate is providing quite a strong headwind for the rebalancing of the New Zealand economy. However one cannot really argue about stability. In fact one of the issues of the exchange rate is that it has been relatively high now for 4 or 5 years. It is to the credit of our exporters that they have been sufficiently resilient to be able to grow export volume and value in any case.