Foss Craig: Questions for Oral Answer — Questions to Ministers 
Foss Craig: Questions for Oral Answer — Questions to Ministers 
[Volume:665;Page:13111] 
2. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What reports has he received on the economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I am advised that the Government has made good progress since the election in 2008. We have seen off the worst of the recession at the same time as protecting New Zealanders from the sharpest edges of that recession. We have taken major steps towards making our tax system fairer and more supportive of savings investment and exports. However our external liabilities still remain of significant concern. We owe foreign lenders around $170 billion and that is forecast to rise to $250 billion in the absence of policy to improve it. 
Craig Foss 
: Why is it necessary to lift the level of national savings? 
Hon BILL ENGLISH 
: Put simply New Zealand has a history of spending more than it earns but that was exacerbated particularly since 2005 under the management of the previous Government. Since 2000 external liabilities have almost doubled from just under $100 billion to almost $180 billion today and they are projected to reach $250 billion within 5 years. No household business or Government can continue to increase its debt levels for ever. Servicing those liabilities already costs around $10 billion in a normal year. That is $200 million a week paid by the New Zealand Government households and businesses to foreigners simply to pay the interest. 
Craig Foss 
: What would be the consequences of allowing these current trends to continue? 
Hon BILL ENGLISH 
: We could let this trend continue at a more rapid speed as it did after about 2004 but of course that would lead us into the same territory as countries such as Greece Spain and Ireland where they have been forced to go through pretty dramatic restructurings. This Government has decided to pursue a course of considered and consistent change—that is a gradual adjustment—while New Zealanders learn to spend a bit less save a bit more and invest in the trading part of our economy which is exports and tourism. If we pursue that course over 4 or 5 years we will have an orderly adjustment with the least possible pain to our community. 
Hon David Parker 
: If the Minister has been so concerned about the level of external liabilities why has it taken him 2 years in Government and two Budgets before even the appointment of a committee to resolve the problem? 
Hon BILL ENGLISH 
: Because in Budget 2010 we took a big and significant step to start resolving these issues with the changes in our tax system. We have also embarked on a programme of significant investment in infrastructure cutting red tape lifting the performance of the Public Service supporting business innovation and raising educational standards all of which are necessary. 
Craig Foss 
: Does he believe there is widespread support for a lift in national savings levels? 
Hon BILL ENGLISH 
: Yes I think there is just as New Zealanders are learning to contain— 
Mr SPEAKER 
: I apologise to the Minister. A Government member asked the Minister a question and has a right to hear the answer. The level of interjection is unacceptable. Members know—I do not think I am wrong—who I am looking at in respect of the level of interjection. Please a little more courtesy. 
Hon BILL ENGLISH 
: I think there is widespread support for it. In fact for the first time in a good decade we are seeing New Zealand households actually increase their savings. I hear that even the Opposition members grudgingly accept the need for less spending and more savings. We only wish they had seen that when they were in Government; when they were in Government New Zealand’s external liabilities rose to $170 billion. 
Hon David Parker 
: Does the Minister really think that all New Zealanders came down in the last shower of rain and that this is somehow news to the Opposition just as it seems to be news to the Government? 
Mr SPEAKER 
: The question I admit allows—[ 
Interruption 
] I have not called the Minister yet. The question I must admit is a broad primary question. I guess the Minister is happy to answer it if he feels he is responsible for showers of rain. 
Hon BILL ENGLISH 
: I think New Zealanders have a good fundamental grasp of our economic outlook. That is why they voted out a Government that was damaging the economy and voted in a Government that could fix it up. That is why they support the progress we are making.