Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 02 June 2016. Volume:714;Page:11634. Text is incorporated into the Bound Volume.]4.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the statement in the Budget Economic and Fiscal Update that “growth in average income (or output) per person (i.e. GDP per capita) is what matters for achieving higher material living standards”?Hon BILL ENGLISH (Minister of Finance):Yes I do agree; that is a measure of material living standards. As I have explained to the member many times right at the moment growth in per capita income or per capita GDP is a bit lower because of the surge in population growth. If the forecasts that Treasury has made come to pass and migration and population growth drop off then I am sure that he will be severely disappointed to see per capita incomes growing faster in future years.Grant Robertson: What is the forecast real GDP per capita in Budget 2016 for 2016 and 2017?Hon BILL ENGLISH: I do not have that detail to hand but I imagine it is around 0.6 or 0.7 per year on the basis that there is 2 percent population growth which is pretty strong—in fact about the fastest-growing population that we have had in many decades—and which we regard as a measure of success. The Government is ambitious that New Zealand be a place that people want to live and work and we are certainly achieving that ambition for New Zealand.Grant Robertson: Is real GDP per capita of less than 1 percent over the next 2 years going to deliver meaningful higher living standards for New Zealanders?Hon BILL ENGLISH: Yes and those New Zealanders will have the opportunity to be part of an economy where the population is growing at 2 percent which we regard as successful. But they also have the reassurance of knowing that if migration drops off these numbers will increase.Grant Robertson: How is he delivering meaningful gains to New Zealanders’ standards of living when real GDP per capita has grown by 0.5 percent—i.e. less than 1 percent—in the period 2009 to 2015?Hon BILL ENGLISH: It is not so much a matter of what I am doing; it is what people are doing by voting with their feet—that is the 30000 New Zealanders a year who used to decamp to Australia are staying here and New Zealand is increasingly seen as a desirable stable growing economy and it is attracting interest from all around the world from people who want to turn up here. We regard that as a good thing.Rt Hon Winston Peters: If $11 billion in the Government’s words is required for defence in the next 10 years where was that accounted for in his last Budget projections?Mr SPEAKER: Order! I just cannot see how that question relates. Can I have the question read again because it is quite a deviation from the original.Rt Hon Winston Peters: Well it is about forecasts.Mr SPEAKER: No let us have the question.Rt Hon Winston Peters: If in the Government’s words $11 billion will be required on defence spending over the next decade where was any of that accounted for in the last Budget projections?Hon BILL ENGLISH: The member can be reassured that it is in the Budget although not set out in quite the way that matches that description. Defence has a long-term funding track for the first time ever which is leading to a much more efficient and focused Defence Force and each year it gets roughly a $100 million increase in its baseline. Over 10 years that is roughly about—that roughly adds up to a lot of money.Grant Robertson: Why in the face of such poor per capita GDP did he deliver a Budget that in the words of the Westpac economist team has a net reduction in the allowances for new operational and capital spending over the next 4 years?Hon BILL ENGLISH: I do not know what the Westpac people are talking about frankly in relation to a net reduction because as the finance Minister I can tell you that all the numbers are going up—some of them a bit faster than might be absolutely ideal from a finance Minister’s point of view. I do not know how many times I have to explain to the member that the low per capita income is a function of the surge in population growth. We regard the surge in population growth as a success not a problem—as success. This is what we want to see; 30000 New Zealanders who used to go to Australia staying home. Under a Labour-Greens coalition I am sure they all will pick up sticks and leave and will get—Mr SPEAKER: Order! That part is not going to help the order of this House.Grant Robertson: Why has he presented a Budget described as “a fiscal mirage” by Westpac and as “breathtakingly visionless” by Business and Economic Research Ltd (BERL) when what New Zealand needed was a Budget that actually invests in New Zealand’s future?Hon BILL ENGLISH: I simply disagree with both of them. Neither BERL nor Westpac sets Government policy and in this case they also happen to be wrong.