Parker David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeParker David: Questions for Oral Answer — Questions to Ministers[Sitting date: 14 May 2013. Volume:690;Page:9841. Text is incorporated into the Bound Volume.]6.Hon DAVID PARKER (Labour)to the Minister of Finance: Does he stand by his Budget 2012 statement “We are moving towards growth that is driven by savings exports and productive investment in the parts of the economy that trade with the rest of the world”?Hon BILL ENGLISH (Minister of Finance):Yes and I thank the member for asking about the rebalancing of the economy. Yes I stand by that statement. Savings are up exports are up and investment is up. New Zealand is one of the faster-growing economies in the OECD. That has been in the face of headwinds that have made the process of rebalancing considerably more difficult—for instance a high exchange rate. Employment is rising unemployment is falling New Zealanders are saving more and paying down debt and real wages are increasing. This is a reasonably positive backdrop for this week’s Budget.Hon David Parker: How do double-digit house price inflation in our two largest centres and a current account deficit that is the worst in the developed world demonstrate that “We are moving towards growth that is driven by savings exports and productive investment in the parts of the economy that trade with the rest of the world.”?Hon BILL ENGLISH: Of course those are risks to the rebalancing of the economy which is why the Government is attacking them vigorously. I would hope that the Opposition will support the Government’s efforts to increase the supply of housing in Auckland instead of running poster campaigns against the Minister of Housing who understands the problem and is working with the Auckland Council to help resolve it.Hon David Parker: Why is he claming that economic growth is driven by savings exports and productive investment when in the last quarter of 2012 the tradable sector of the economy shrank and when merchandise exports declined in the year to March 2013 with non-primary exports down by another 6.4 percent causing misery to those who have lost their jobs as a consequence?Hon BILL ENGLISH: I cannot confirm those numbers. What I can confirm is the direction the Government has set and some progress in that direction despite the headwinds. What I can tell the House though is that pursuing policies of shutting down the mining industry strangling the dairy industry borrowing more money and Governments spending a lot more is not a recipe for rebalancing the economy.Todd McClay: What is the recent history of output in the tradable sector?Hon BILL ENGLISH: It is interesting if you look back through what were apparently the good times in the early 2000s. The tradable sector—that is the sector exposed to the rest of the world’s economy—went into recession in 2006. This was quite an achievement given the state of the world economy at the time. The tradable sector was then hit by the global financial crisis and it did not start growing again having gone into recession in 2006 until 2010. Since then it has grown at about the same rate as the domestic sectors of the economy reflecting in part the Canterbury earthquakes rebuild’s $40 billion contribution to the non-tradable sector. The Government is playing its part in building a productive and competitive economy by backing the businesses that export that invest and that employ people.Hon David Parker: Would lower power prices for businesses assist economic growth driven by exports and investment in the parts of the economy that trade with the rest of the world?Hon BILL ENGLISH: Well they might but I have not seen any indication that the Opposition’s policy would achieve lower power prices. In fact its climate change policy guarantees that power prices will go up.Hon David Parker: Given that National’s efforts to rebalance the economy have patently failed when will he follow the advice of the OECD the IMF the Reserve Bank and the Labour Party and implement pro-growth tax reform through a capital gains tax?Hon BILL ENGLISH: Because those other three entities that are not the Labour Party do not agree with the Labour Party. They advocate a comprehensive capital gains tax. The Labour Party advocates a capital gains tax that exempts housing and is imposed on every productive growing business in New Zealand. So it does not become a tax on capital gains; it becomes a tax on successful businesses.Hon David Parker: Would the Minister prefer a capital gains tax that included the family home?Hon BILL ENGLISH: That is why this Government has not put a capital gains tax on—but that is what all those other organisations advocate. A policy of more spending financed by a capital gains tax by the Government more regulation by the Government more borrowing by the Government and shutting down productive industries as he advocates would not work.Hon David Parker: I raise a point of order Mr Speaker. That was very interesting but that was not my question. The Minister in the earlier answer said they want the family home included. So I asked him whether the Minister would prefer a capital gains tax with the family home included. He has not answered that question.Mr SPEAKER: I thought the Minister said no right at the very start and others have confirmed that that is the case. I think the question was very adequate—Hon David Parker: I raise a point of order Mr Speaker. I listened very carefully to that question. So did my colleague Annette King. That is not what I heard. If you are trying to interpolate the Minister’s answer that is not appropriate.Hon Gerry Brownlee: It is a very interesting argument being run by David Parker but the point here is that that is their policy and previously Ministers have been asked not to comment on it. The reality is that the Minister of Finance said that we do not have a policy on capital gains in this particular area. That has to be a full answer.Mr SPEAKER: We are moving on. The question has been adequately addressed.Grant Robertson: I raise a point of order Mr Speaker. Just speaking to that contribution from the Leader of the House it is my understanding of the rules of the House that if a Minister brings a matter into a supplementary answer as the Minister did it is allowable to ask supplementary questions about that material.Mr SPEAKER: And—[Interruption] No I do not need further—Hon Gerry Brownlee: That is true but it is not appropriate to use a question to ask advice from the Minister of Finance about your policy.Mr SPEAKER: Order! On the point raised by Grant Robertson the question was certainly not out of order.