1. Economy—GrowthDAVID BENNETT (National—Hamilton East) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSEconomy—Growth1. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What reports has he received on the economy?Hon BILL ENGLISH (Minister of Finance): Today Statistics New Zealand released the GDP figures showing the New Zealand economy grew by 0.9 percent in the June quarter and by 3.6 percent in the year to 30 June. This puts New Zealand's growth rate at third in the developed world behind Luxembourg and the Slovak Republic. Overall growth was broad-based with 11 of 16 industry sectors growing and 15 of those sectors growing over the previous year which shows that the New Zealand economy is continuing to diversify and growth is broad-based.David Bennett: What were the main drivers of economic growth in the year to June?Hon BILL ENGLISH: Unsurprisingly growth was driven by construction or led by construction which grew 5.1 percent over the quarter. Residential construction is up 10 percent over the year reinforcing the fact that New Zealand is in a significant building boom. Growth was broad-based. Even though the dairy sector has been doing it tough exports were up $3 billion and in the last quarter exports grew at the fastest rate in 18 years. This growth means that the value of the New Zealand economy passed the quarter of a trillion mark for the first time ever.David Bennett: How does New Zealand's growth rate compare with the average among OECD countries?Hon BILL ENGLISH: A lot of OECD countries are caught in a situation of pretty high public debt high unemployment and relatively low growth rates so the average for the OECD is just 1.6 percent. Our rate of 3.6 percent compares with 2.2 percent in the United Kingdom 1.2 percent in the US and 0.8 percent in Japan. It is a solid result for the economy but there are many risks around and if we want to continue to deliver higher incomes and more jobs for households there is plenty to do.Grant Robertson: Is it not correct that our real per capita growth of 0.7 percent puts us behind Germany Canada the United States the UK and Japan and is not real per person growth the measure that his Budget says we should be looking at?Hon BILL ENGLISH: As we have discussed at some length actually in the House it is another measure of the economy and in the long run per capita income matters a lot. At the moment it is not surprising it is a bit soft because we have faster population growth than any of those countries. So with a surge in population and New Zealanders staying home rather than leaving it is not surprising income growth per head is softer but as immigration turns down it is quite likely that that number will rise again.David Bennett: How does the growing economy help support vulnerable New Zealand families?Hon BILL ENGLISH: The Household Incomes Report recently published by the Ministry of Social Development notes that a growing economy is having a noticeable impact particularly on measures of hardship helping those who are in not quite so severe hardship and those who describe themselves as just getting by". However it is still the case that even in a growing economy those who are suffering persistent deprivation do not see an automatic uplift from higher growth rates which is why the Government has such an active programme of working with the most vulnerable to deal with the barriers that they face particularly getting into work but also to getting better incomes."