Parker David: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Parker David: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 11 December 2012. Volume:686;Page:7322. Text is incorporated into the Bound Volume.] 
5. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Compared to 2012 does the Reserve Bank forecast the New Zealand dollar (as measured by the Trade Weighted Index) to strengthen or weaken in the next two years and does he believe this will make New Zealand exporters more competitive or less competitive? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yesterday the Reserve Bank recorded the trade-weighted index at 74.5. Its forecasts issued recently forecast that this will fall to 72.0 by March 2015. All other things being equal the forecast fall in the exchange rate will increase the competitiveness of exporters. By comparison the same index increased by 9 percent between March 2007 and March 2008 the period the member may recall. 
Hon David Parker 
: In respect of that period has he read reports of a politician in 2007 warning—and I quote—that “the New Zealand economy could not sustain exchange rates at US74c.” and further saying that “it would lead to substantial job losses and closures.” and was that politician the then Leader of the Opposition John Key? 
Hon BILL ENGLISH 
: Yes I do and that is exactly the point. Fortunately the National Government took over the economic levers in late 2008. Since then we have focused relentlessly on the competitiveness of our businesses and undoing the damage of the previous Government and that is why our exporters have sustained a higher exchange rate. They have shown great resilience over the last few years and with the Government’s continued backing their performance will continue to improve. 
Hon David Parker 
: If it is all going so well why do the Reserve Bank Treasury and various economic forecasters show our current account deficit getting worse? 
Hon BILL ENGLISH 
: Compared with the period 2006 to 2008 when the current account deficit was 8 percent or above—that is minus 8 percent or above—the forecasts now show it peaking at around 5.5 or 6 percent which is a considerable improvement. But there is no doubt and where we do agree with the member that the relatively high exchange rate is making it more difficult for this economy to rebalance more towards exports and away from domestic consumption. Our response to that is to focus on the competitiveness of our businesses. Every time we try to do something to make it easier for businesses to employ people the Opposition opposes it because fundamentally it is against growth— 
Mr SPEAKER 
: Order! 
Hon David Parker 
: How does he propose to reduce our current account deficit when because of the overvalued currency exporting is forecast to get even harder resulting in even more job losses and imports are forecast to become even cheaper harming our local industries yet monetary policy conditions continue to be myopically focused primarily on inflation? 
Hon BILL ENGLISH 
: Actually the monetary policy conditions have been loosening somewhat because our banks are finding that the costs of raising money on the international market are dropping and this is being reflected in mortgage interest rates continuing to drop to the lowest levels that they have been at in 50 years. New Zealanders who go and borrow money today are paying less than they have at any time in the last 50 years. But in respect of the current account deficit if we could just lower it we would but actually we cannot. We are focusing on supporting our businesses to be competitive and assisting them to make the decision to employ another person invest another dollar and sell another product successfully in our exports markets. One thing we will not be doing is hiring more photocopiers to print money which is the Opposition’s policy. 
Mr SPEAKER 
: Order! 
John Hayes 
: What reports has he seen on alternative proposals for managing the New Zealand dollar? 
Hon BILL ENGLISH 
: I have seen reports that the best way to deal with the challenges of the New Zealand economy is to print money because that looks easier than actually making our economy more competitive. We completely disagree with those reports. They come from the Greens-Labour Opposition and I think it is what it regards as “new thinking” about how to manage an economy. We are totally opposed to it. 
Hon David Parker 
: In light of that last answer can the Minister point to any example where the Labour Party has called for the printing of money? Because I do not know of it. 
Hon BILL ENGLISH 
: I am not responsible for that but I can say that the senior— 
Hon David Parker 
: I raise a point of order Mr Speaker. The accusation was made in the last answer that the Labour Party had been doing exactly that and I am asking him to clarify— 
Mr SPEAKER 
: Order! I hear the member. I think given what the Minister had said the question was not unreasonable because Ministers can be questioned on anything they include in their answer. The question was a straight question of the Minister: whether he had seen any evidence—was it—of the Labour Party arguing for the printing of money as part of economic policy. I would like the Minister the Hon Bill English to answer. 
Hon BILL ENGLISH 
: What I can say is that the senior economic spokesperson for the Opposition— 
Mr SPEAKER 
: Order! Order! The Minister made a statement. He is being questioned on it. It is a straight question on it. He should answer it. The question is about whether or not the Minister had seen any evidence where the Labour Party had called for the printing of money. 
Hon BILL ENGLISH 
: It may be the case that I have been confused between the senior economic spokesperson for the Opposition and the Labour Party finance spokesman and I will concede it is possible that the Labour Party has not said that. What it has said is that it is breaking up the bipartisan consensus over monetary policy and it is going to go in a different direction. The Greens have said that that direction is printing money. 
Mr SPEAKER 
: Order! I gave members of the Opposition the chance to question the Minister on a matter that was important to them and I do not think the interjections are actually that helpful and they will now stop. [ 
Interruption 
] That is not helpful either.