Hauiti Claudette: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeHauiti Claudette: Questions for Oral Answer — Questions to Ministers[Sitting date: 06 May 2014. Volume:698;Page:17475. Text is incorporated into the Bound Volume.]1.CLAUDETTE HAUITI (National) to theMinister of Finance: How will the Budget next week help to lock in the benefits of sustainable economic growth to support more jobs and higher incomes for New Zealanders?Hon BILL ENGLISH (Minister of Finance): The Budget next week will set out the next steps in the Government’s programme which will build on the good economic momentum that New Zealanders have seen over the past year or so. It will show growing fiscal surpluses through to 2018 starting with a small surplus in 2014-15 and show debt beginning to decline as a percentage of the economy. Together with households and businesses the Government will continue its programme of policy that supports the delivery of more jobs and higher incomes. We are seeing positive results. Employment is rising across the board. Wages on average are increasing ahead of the cost of living. Interest rates are near 50-year lows. The current account deficit is less than half what it was 6 years ago. Consumer and business confidence is high. Also lastweek we heard that exports in March passed $5 billion for the first time and annual exports exceeded $50 billion for the first time.Claudette Hauiti: How is the higher growth outlook for the economy translating into higher wages for New Zealanders?Hon BILL ENGLISH: Everyone’s situation is different and there are New Zealand families who are finding the economy challenging. But the benefits of a sustainably growing economy are tangible. Over the past 2 years the average full-time wage—that is by the measure used to adjust national superannuation every year—has increased from $51700 to $54700 an increase of $3000. Treasury’s preliminary Budget forecasts show that the average wage will rise further to almost $62300 by 2018 another increase of $7600 over the next 4 years. The forecasts also show that around 170000 more people will be working by 2018 at the same time as the average wage will be running $7600 higher than today.Claudette Hauiti: What other steps will the Government take in the Budget to help support sustainable economic growth more jobs and higher incomes over the next few years?Hon BILL ENGLISH: Two of the risks to the sustained economic recovery would be a blowout in Government spending and a runaway housing market. The Government is committed to thoughtful targeted spending not a large-scale spend-up which would put pressure on interest rates for households and businesses. We will also continue to work to increase the supply of land and new housing to the housing market so that it can meet the unprecedented demand particularly from the sharp turn-round in migration figures.Claudette Hauiti: What measures would erode the good progress made in helping wages to increase faster than the cost of living over recent years?Hon BILL ENGLISH: There are a number of possible measures but I have seen one recently that involves cutting take-home pay by 15 percent forcing New Zealanders into a compulsory savings scheme with contributions up to 15 percent. I heard a radio report yesterday where one person said: “I probably have more mortgage debt than I’ve got long-term savings to be honest so part of the way we save is to pay down our mortgage.” That person was David Cunliffe but he wants to take that choice away from all other Kiwis.Hon David Parker: Given that Treasury is forecasting that New Zealand’s current account deficit under his economic settings will worsen in the coming years is he concerned that his Government is simply repeating the same mistakes of the last four decades with a worsening external deficit and whistling in the wind as more and more money flows into the housing market rather than the productive sector?Hon BILL ENGLISH: We are certainly keen to avoid the mistakes of the last Labour Government on whose watch the current account deficit doubled from 4 percent to 8 percent. In fact Treasury does regularly forecast the current account deficit to get worse but it keeps getting better and I am sure the member will be keen to see that laid out for him on Budget day.Dr Russel Norman: Does the Minister understand that the ongoing damage being done to the New Zealand environment under the policies of his Government will undermine New Zealand’s economic performance in the long term?Hon BILL ENGLISH: No because the statement is incorrect. Under this Government we have introduced regulation of the exclusive economic zone which did not exist before. There was no environmental regulation in our larger economic zone in the ocean—one of the largest in the world. It is now comprehensively regulated. Secondly through a collaborative process which a lot of the supporters of the member’s party have participated in through the Land and Water Forum we areintroducing comprehensive regulation of the quality of our fresh water. That has never been done before. It is designed to ensure we get the right balance between the use of our natural resources our environmental quality and our economic opportunities.Dr Russel Norman: Does the Minister understand that under the water regulations promulgated by his Government New Zealand rivers can have 4½ times as much nitrogen as the Yangtze River in China and how does he think that will affect New Zealand’s brand being clean and green?Hon BILL ENGLISH: No I do not agree with that. There has just been an extensive consultation with the public and prior to that with all the interest groups that wanted to participate about exactly what the standards of freshwater quality should be. Certainly there are some challenges but there is general agreement on what those bottom lines ought to be and what exceptions there could be to them. We hope that the member will have the opportunity to support this Government in legislating and regulating for the first time ever for a comprehensive framework for the quality of fresh water in every water body in New Zealand.Dr Russel Norman: Does the Minister understand that the water regulations his Government is proposing would make water so toxic that it would not be safe to swim in and it would be safe only to wade in because it is a wading standard rather than a swimming standard and how well does he think that will go down in our export markets for our “100% Pure New Zealand” “clean green” brand?Hon BILL ENGLISH: I think the member is trying to dramatise this issue for his own political benefit. The fact is that we are setting up a process that will allow New Zealanders community by community to grapple with the hard issues of what the quality of their local freshwater supply ought to be. The member’s description of the existing or proposed quality is simply wrong. There has been plenty of public debate about this. There will be plenty more. In the end it will be decided community by community consistent with some national bottom lines.