Hayes John: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeHayes John: Questions for Oral Answer — Questions to Ministers[Sitting date: 05 September 2013. Volume:693;Page:13312. Text is incorporated into the Bound Volume.]1.JOHN HAYES (National—Wairarapa) to theMinister of Finance: What steps is the Government taking to build a productive and competitive economy in view of the contraction in the tradable sector and negative growth in manufacturing seen in the mid-2000s?Hon BILL ENGLISH (Minister of Finance): A wide range of measures is designed to build productivity and competitiveness increase savings and exports and increase productive investment. Much of the detail in this programme is set out in the Business Growth Agenda documents which detail over 300 initiatives that support jobs and assist businesses to become internationally competitive. I would recommend to all of Parliament that those documents be read because it is a thorough and comprehensive programme. I had been hoping we would get some suggestions from the current Labour leadership contenders about good economic policy we could add to it but so far none have eventuated.John Hayes: What evidence has he seen of improving competitiveness of New Zealand businesses?Hon BILL ENGLISH: New Zealand businesses have done very well over recent years given the headwinds of an elevated exchange rate a domestic recession induced by the last Government the global financial crisis and a serious drought earlier this year. As I have gone around the country I have had the same experience as I am sure all members have of companies telling us stories about how they have been able to innovate and how they have become more flexible and more adaptable. Yesterday I receivedThe Global Competitiveness Report which showed New Zealand has risen five places in its ranking on competitiveness—Rt Hon Winston Peters: Where are we?Hon BILL ENGLISH: —to 18th in the world which is still too low as I am sure the member would agree. This does however for the first time put New Zealand ahead of Australia.John Hayes: What areas requiring further work were identified inThe Global Competitiveness Report?Hon BILL ENGLISH: The report identified a couple of areas that I think actually needed a bit more information about what is happening in New Zealand. The report referred to the supply of infrastructure. Well we have one of the better planned more certain infrastructure projects in the developed world—fully funded and rolling out despite the fact that we have been at it for 5 years for a further 5 to 7 years. Secondly we were rated low on capacity to innovate. I think we should test that conclusion with whoever puts the index together because we see plenty of evidence around the country that our businesses can and do innovate and certainly a substantial and consistently growing Government investment in innovation.John Hayes: What progress can the Minister report on growth in the manufacturing sector particularly compared with the manufacturing sector’s performance in the mid-2000s?Hon BILL ENGLISH: The manufacturing sector has been the beneficiary of some political attention including from Opposition parties so I thought I would just check the facts on this. There is an index called the BNZ-Business New Zealand Performance of Manufacturing Index which is actually a globally used index and at the moment it stands at 59.5. Any value above 50 shows growth and 59.5 is among the highestreadings in the world. All five of the sub-indices are showing growth including the employment index at 53.1. I thought that we should compare this with a time when manufacturing was apparently going quite well. In 2008 the performance of manufacturing index was 35.9 the lowest value in series history. I presume that was the result of the accumulated effects of the support of policies of the last Government where it hit the lowest level ever in 2008. Now it stands at the highest level ever.Hon David Parker: Is the Minister aware that the index that he has just quoted is dominated by the increase in construction manufacturing out of Christchurch and that in truth manufactured exports out of the primary sector are lower than they were in 2008 in real terms and lower than they were last year as well?Hon BILL ENGLISH: I would want to go and check the assertions the member makes because I do not know for sure whether they are true or false. But it does seem odd that a party that says it represents working people thinks that a—Hon David Parker: I raise a point of order Mr Speaker. The Minister of Finance has said he does not know and I think that is a sufficient answer. The rest is just political.Mr SPEAKER: If the member does not want any further development of the answer then I will accept that on this occasion.Rt Hon Winston Peters: If the objective of the Government is to build a productive and competitive economy in view of the contraction in the tradable sector as Mr Hayes so wisely asks at what point will the Government do something to stop the rise in our dollar which some economists say will go to US90c or will it still persist with loan-to-value lending aimed at the hyper housing market of Auckland but which [Interruption]—I said 2014—persists right around the country even though there is not a housing crisis in those parts of the country?Hon BILL ENGLISH: I know the member has a real depth of knowledge on this topic but I think we should try to get at least a pretty clear factual base. I think the member’s contention was reasonable that 6 months ago it looked like the dollar was heading to US90c but actually since then it has dropped from the mid-80s—around US84c—down to US77c or US78c. That is actually not a bad place for the New Zealand dollar to be so I would have to say at the moment that I do not think there is a problem for which we need his kind of solution.