O'Connor Simon: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeO'Connor Simon: Questions for Oral Answer — Questions to Ministers[Sitting date: 07 May 2014. Volume:698;Page:17560. Text is incorporated into the Bound Volume.]2.SIMON O’CONNOR (National—Tāmaki) to theMinister of Finance: What reports has he received on the New Zealand economy and how do those reports fit with the economic outlook to be presented in the Budget next week?Hon BILL ENGLISH (Minister of Finance): The OECD has just released its latest country report on New Zealand which says the economy is in good shape. Amongst other points it says that “economic growth continues to be strong but so far inflation pressures have remained muted thanks to renewed currency strength and moderate wage increases.” The OECD also says that the Government is on track to a small surplus next year. That follows the IMF making a favourable report on New Zealand recently. These reports are consistent with an economic picture that puts New Zealand back on its feet and delivering gains for New Zealand families.Simon O’Connor: What does the OECD’s latest country report on New Zealand say about the outlook for the current account and how does this outlook compare with New Zealand’s current account position 6 years ago?Hon BILL ENGLISH: The OECD paints a much-improved picture for the current account certainly compared with the record deficits New Zealand was running up to 2008. It expects New Zealand’s current account deficit to fall to 3.3 percent by December this year. It then expects the current account deficit to shrink further to 2.7 percent of GDP next year. I cannot help thinking that this improvement is directly related to the Labour Party saying it is a crisis. This is not only considerably better than deficits of around 8 percent of GDP in the years up to 2008 but much better than the situation that Treasury has been forecasting since Budget 2009 where it predicted a deficit of 5.5 percent for 2013 and it actually turned out to be about 3.5 percent.Simon O’Connor: How is the higher growth outlook for the economy translating into more jobs for New Zealanders and what will the Budget forecast be for jobs over the next 4 years?Hon BILL ENGLISH: Interestingly the household labour force figures released today showing that 84000 more people were employed in the year to 2014 indicate that we are on track to deliver the 170000 new jobs discussed back in Budget 2010. The quarterly employment survey also out today showed that average wages increased by 2.5 percent in the year well ahead of inflation of 1.5 percent. Labour market participation—that is the proportion of the working-age population available for work—increased to 69.3 percent which is the highest level ever recorded in this series. Alongside that high participation rate unemployment remained steady at 6 percent in March.Simon O’Connor: What steps will the Government take in the Budget to further support sustainable economic growth and keep interest rates lower than they otherwise might be?Hon BILL ENGLISH: We will assist in keeping interest rates lower by being disciplined with fiscal policy—that is with Government spending and revenue—and by ensuring that we can get more houses built more quickly to prevent a runaway housing market. We would expect that if we can meet these conditions we will do much better than in the run-up to 2008 when first mortgages reached 11 percent Government spending was out of control and the housing market was running away.