Adams Amy: Questions for Oral Answer — Questions to Ministers 
Adams Amy: Questions for Oral Answer — Questions to Ministers 
[Volume:673;Page:19503] 
1. 
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: What reports has he received on the economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Emerging evidence suggests that despite the February earthquake the economy has been on track and perhaps a little stronger than expected in the first part of 2011. Manufacturing volumes rose by 1.9 percent in the March quarter following a 3.7 percent increase in December. Retail sale volumes rose 0.9 percent in March wholesale trade was up 2.8 percent and consumer confidence has lifted. This resilience in the face of adversity highlights the many positives supporting the economy. These include high export prices strong demand growth from Asia lowest interest rates for 45 years and a credible path back to surplus for the Government’s accounts. 
Amy Adams 
: What do the latest New Zealand Institute of Economic Research consensus forecasts show? 
Hon BILL ENGLISH 
: The consensus forecasts are a blend of forecasts from 11 different forecasting organisations. They show GDP growth over the next year to be about 2 percent followed by 4 percent in the year following that; a large lift in residential investment growing by 38 percent in the June 2013 year reflecting the Christchurch rebuild; interest rates staying low; and the Government’s Budget balance improving. 
Amy Adams 
: How do these projections compare with those in Budget 2011? 
Hon BILL ENGLISH 
: They are fairly similar. The private sector forecast covered by the New Zealand Institute of Economic Research consensus is quite close to those prepared by Treasury. For instance it forecasts employment rising by 3.8 percent and Treasury picks about 3.6 percent. Its average consumer price index forecast for inflation is identical to Treasury’s. 
Hon John Boscawen 
: Has the gap between GDP per capita in Australia and GDP per capita in New Zealand narrowed or widened since his Government came to office; or does he not know? 
Hon BILL ENGLISH 
: I cannot give the member the precise figures but in the first quarter of this year it has probably narrowed because our economy looks like it has grown a bit and the Australian economy has shrunk. However a quarter-to-quarter measure is almost irrelevant. In the long term we believe that sound policies and careful and considered decision-making will mean that over time we will close the gap with Australia and the resilience that this economy has shown in recent times is a positive indicator of that. 
Hon John Boscawen 
: I raise a point of order Mr Speaker. The member started by saying that he could not give me a precise answer. I was not asking for a precise answer. I was simply asking whether the gap has narrowed or widened or alternatively if the Minister did not know that— 
Mr SPEAKER 
: I heard the Minister say distinctly that although he could not give the precise figures he believed that during the first quarter of this year the gap had probably narrowed. He gave an answer. 
Hon John Boscawen 
: I raise a point of order Mr Speaker. He answered in connection with the first quarter. I specifically said “since his Government came to office”. I was asking whether the gap has narrowed or widened since his Government first came to office. 
Mr SPEAKER 
: And he said he does not have those precise figures. The primary question asked what reports he has received on the economy. The member cannot expect the Minister to have that kind of specific detailed information. 
Hon David Cunliffe 
: Does he recall replying to a similar question to this primary question in September 2009: “I have received reports indicating that the economy is showing some early signs of recovery” or the one in October 2009 to which he replied: “In recent weeks a number of reports have confirmed an early sign of pick-up in business confidence.” or the one in March 2010 when he replied: “It is important we convert the early start to recovery into a permanent lift” or the one in July 2010 which turned out to be a year of zero growth when he said that the economy was “making very significant progress” and the Government was “working to get this economy on its feet” or is it his habit— 
Mr SPEAKER 
: I want to hear the question. It is a bit long. [ 
Interruption 
] I apologise to the member. The question is a little longer than usual but there is a pattern to it and I do want to hear the question and I want his own colleagues to let him be heard. We will not start the question again. 
Hon David Cunliffe 
: You anticipated my point of order. Not wanting to miss the punchline I ask is his habit of counting his chickens before they have hatched one of the reasons why Standard and Poor’s has kept his Government’s credit rating on negative outlook? 
Hon BILL ENGLISH 
: I do recall those answers and I am impressed with what an upbeat and aspirational Government we have been through some very tough times. 
Amy Adams 
: What factors would put the forecast return to growth at risk? 
Hon BILL ENGLISH 
: There are always risks to the future prospects of this economy—for instance this week there are critical meetings in Europe where they are trying to grapple with the problem of the potential default of Greece and if that were to occur then the markets in which we borrow significantly and regularly could be disrupted. There are also risks closer to home. We could undermine recovery if for instance half-baked spending promises led to soaring debt. That would be bad for the economy. 
Hon David Cunliffe 
: Given his aspirational reply to my earlier supplementary question is it now he who is dancing from cloud to cloud or has he seen the new immigration report from Statistics New Zealand that shows chippies plumbers and other building industry professionals are leaving the country at a rate of 20 a day and over 4000 have left since the first Christchurch earthquake and how will Christchurch rebuilding happen if his Government makes no effort to retain the skilled workforce we need to undertake that work? 
Hon BILL ENGLISH 
: I have not seen those figures. In the first place it is the responsibility of the companies that expect to rebuild Christchurch to ensure that they have skills. Of course it will be tight because they are competing with very very large salaries particularly those in Western Australia where something like $250 billion worth of capital projects are in the pipeline. However we are confident that we have the resources of both funding and skills to rebuild Christchurch. 
Hon John Boscawen 
: Has the gap between GDP per capita in Australia and GDP per capita in New Zealand narrowed or widened since his Government came to office or does he not know? 
Hon BILL ENGLISH 
: I cannot give the member those precise figures but as the member knows the Government wants to close the gap with Australia by 2025. In any given year or two the gap might move one way or the other as for instance in the last quarter it has probably moved in favour of New Zealand. Our policies are focused on a longer-term increase in New Zealand’s growth potential and we are putting in place policies such as investment in infrastructure a major tax change and a very efficient public sector which will enable us to achieve that increase. 
Hon John Boscawen 
: Has the Government instigated any investigation into how South Canterbury Finance was underwritten by the taxpayer to the tune of $1.7 billion now that its president for life has been charged with over 50 counts of fraud including theft? 
Hon BILL ENGLISH 
: I could not comment at all on the matters regarding South Canterbury Finance that are now before the court but the existence of the guarantee not of South Canterbury Finance but of its depositors which is a different thing came into existence in the financial crisis in late 2008. As I recall the whole of Parliament supported that guarantee being put in place to prevent financial contagion which could have potentially brought down much larger financial institutions such as our banks. On reflection New Zealand is in a much stronger position than many developed countries because we did not have a banking collapse.