Adams Amy: Questions for Oral Answer — Questions to Ministers 
Adams Amy: Questions for Oral Answer — Questions to Ministers 
[Volume:656;Page:5225] 
2.  
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: What steps is the Government taking to increase New Zealand’s productivity and economic performance? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 New Zealand’s annual labour productivity growth averaged 1.3 percent between 2000 and 2008 the lowest level for several decades. During this period significant imbalances were allowed to build up in the economy and they simply cannot be allowed to continue. The Government has set out a medium-term plan to improve New Zealand’s economic performance including investment in productive infrastructure improving the business environment delivering better and smarter public services better education and skills training and investing in innovation and business assistance. 
Amy Adams 
: What feedback has he received on the Government’s economic plan? 
Hon BILL ENGLISH 
: I have seen a number of positive reports including one recent one from Business New Zealand which described the Government’s growth plan as outlined by the Prime Minister 2 weeks ago as relevant and timely. Businesses are consistently indicating that they look forward to engaging with the Government and they support quick implementation of a number of the practical decisions the Government has made to increase economic performance. 
Hon David Cunliffe 
: In view of the need for a clear plan to improve economic performance and protect jobs does he continue to stand by Treasury estimates presented to the Finance and Expenditure Committee earlier this year that state that the Government’s fiscal stimulus to the economy represents 5 percent of GDP and puts New Zealand in the top five countries of the OECD for the magnitude of its anti-recession measures? 
Hon BILL ENGLISH 
: That estimate of GDP is probably a bit high because since then the Government cancelled the last third of its tax cut package. Nevertheless the general point is correct in that the New Zealand Government has implemented a significant stimulus package as is illustrated by the fact that we have to borrow somewhere between $30 billion and $40 billion over the next 4 years to support public services and entitlements and keep the economy ticking along during the recession. 
Amy Adams 
: What alternative approaches to managing the economy has he seen? 
Hon BILL ENGLISH 
: I have to say that not that many are credible. There is some legitimate debate about the size of the stimulus package and some debate about whether the Government should cut its spending more quickly than it is. The Opposition occasionally hints at the idea that it would spend a lot more money on the way through this recession or that it would invest a lot more in infrastructure. But it is not clear who is in charge of Opposition policy or what direction it is trying to follow. 
Amy Adams 
: What recent comments has the Minister seen summarising the serious economic imbalances now facing New Zealand? 
Hon BILL ENGLISH 
: I will quote from a speech I heard earlier this month that covered a few of the main problems: “I do not pretend that our record was perfect or deny that there were significant issues unresolved. Our current account deficit was stubbornly high and the savings deficit while responding well to KiwiSaver was unsustainable. Productivity growth was too low and that is an issue we must work together to resolve.” I must compliment David Cunliffe on identifying some of the major legacy issues his Government left behind. 
Hon Sir Roger Douglas 
: In what way will increasing Government expenditure as a percentage of GDP improve productivity and enable us to raise our living standards to Australian levels by 2025? 
Hon BILL ENGLISH 
: Some of that expenditure will do so directly for instance through investment in productive infrastructure and longer-term objectives like national standards for literacy and numeracy. But as in other developed countries Governments have spent considerable amounts of money on stimulus through a recession. As the economy comes out of recession Governments will have to pull back on their spending and that is why the 2009 Budget took the first steps towards constraining Government expenditure as we come out of the recession.