Ross Jami-Lee: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRoss Jami-Lee: Oral Questions — Questions to Ministers[Sitting date: 29 July 2015. Volume:707;Page:5415. Text is incorporated into the Bound Volume.]1.JAMI-LEE ROSS (National—Botany) to the Minister of Finance: How has the New Zealand economy been affected by recent international economic developments?Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of theMinister of Finance: Tēnā koe Mr Speaker. There are a range of international events that have an impact on our economy. Some of those are positive; some of those are negative. The best news on the international economy is the strength of the US which is in the best shape it has been in for 7 years. Recent events in Europe and Asia could have implications for New Zealand although Greece at least seems to have settled down for the time being. Of course the international dairy price is now around 40 percent lower than it was at its recent peak in March although this is offset somewhat by the recent fall in the exchange rate. For the dairy sector times are turning out tougher—and perhaps for longer—than industry experts were forecasting earlier this year. A fall in prices of that magnitude on a sector that makes up around 20 percent of our exports will have flow-on effects to growth.Jami-Lee Ross: How is the fall in the exchange rate affecting other sectors of the economy?Hon STEVEN JOYCE: The exchange rate is now down around 25 percent against the US dollar compared with this time last year. That is supporting all exporters not just dairy. Industries that were forced to become more efficient when the exchange rate was US88c are now of course more profitable with the exchange rate at US65c. The lower exchange rate will for example benefit the information and communications technology sector which has been growing at the rate of 9 percent a year since 2008 and now contributes around 1.7 percent of GDP. Information and communications technology exports have grown at 14 percent a year over the last 6 years and now exceed $930 million. It will also help international education which is worth $2.85 billion annually to New Zealand. The number of international students enrolled to study in New Zealand grew 13 percent last year which is the highest level since 2004.Jami-Lee Ross: What other factors are supporting solid sustained economic growth?Hon STEVEN JOYCE: The Reserve Bank recently cut interest rates to 3 percent and there are widespread expectations that there will be further reductions. As well as of course helping businesses and families with their debt the lower interest rates make it easier for businesses to borrow and finance expansion. We have a number of industries that are in expansion at the moment. The tourism industry for example is now worth 7 percent of GDP. More people are coming to New Zealand staying longer and spending more. Last year international visitor numbers increased by 7 percent to just under 3 million people which is up 18 percent on 2008. Visitor spending increased by 13 percent to reach $7.45 billion. That is expected to further increase over the next few years.Jami-Lee Ross: What else has the Reserve Bank had to say about the outlook for the New Zealand economy?Hon STEVEN JOYCE: In a speech today the Governor of the Reserve Bank highlighted several factors that are supporting economic growth. These include the lower interest rates I mentioned continued high levels of migration and labour force participation ongoing growth in construction and continued strength in the services sector. Indeed the BNZ services index for June indicated solid growth in the services industry and it makes up around two-thirds of our economy. In the speech the governor also set out the bank’s view that the economy is growing at around 2.5 percent per year. That is consistent with the sustainable growth rates this Government is expecting.Chris Hipkins: I raise a point of order Mr Speaker. I just have a quick question for you—Mr SPEAKER: Order! No it is not a question for me; it is a point of order.Chris Hipkins: No no it is a question for you Mr Speaker.Mr SPEAKER: Order! The member started by saying he had a question for me. This is a time for the Opposition and members of Parliament to question Ministers. If the member has a point of order I am only too happy to listen to it.Chris Hipkins: I have a question of order for you Mr Speaker. My question of order for you is whether in light of the leeway given to the Minister in his answers Opposition members will be given leeway today in the length of their questions.Mr SPEAKER: That will depend on the circumstances at the time. I was expecting perhaps an Opposition question at that stage but—Grant Robertson: Well why not?Mr SPEAKER: Well I did not get one did I?Grant Robertson: Only too happy to oblige Mr Speaker. Does the Minister agree with Graeme Wheeler in his speech today that global dairy prices have some time more to go down or does he agree with that other industry commentator John Key that they will “come right some time soon”?Hon STEVEN JOYCE: I think a number of people including the Reserve Bank Governor have sought to estimate future dairy prices in recent times. One thing that is important to notice for the member though is that the New Zealand dollar has tracked reasonably closely to international dairy prices and that has had the effect of mitigating the lower dairy prices.Grant Robertson: In light of his comments on the dairy industry does he support the view of Tim Groser that the Government should sign the Trans-Pacific Partnership agreement only if there is “commercially meaningful access” for the dairy industry into other markets; if so what would that entail?Hon STEVEN JOYCE: The member is showing a certain amount of naivety if he suggests we negotiate a trade agreement from the floor of any Parliament let alone this one. This Government will support the Trans-Pacific Partnership agreement if it brings net material benefit to this country as every other trade deal has—every other trade deal has. Of course that used to be the view of the New Zealand Labour Party.