Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Volume:619;Page:14796] 
4.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: What reports has he received on the state of the economy? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I have received a number of reports that confirm New Zealand’s growth performance continues to outperform the OECD average with growth for the March year of 3.6 percent. On top of that terms-of-trade improvements have meant real gross national disposable income growth per capita was 4 percent. And of course unemployment is now the second-lowest in the OECD—not in the top half but in the top tenth of the OECD. 
Clayton Cosgrove 
: What other data analysis and further reports has he received in respect of the economy? 
Hon Dr MICHAEL CULLEN 
: The chairman of the Business Roundtable Rob McLeod—following his wise decision not to be a National Party candidate—says that the last 12 months have been a litany of success. The biggest indicator of the success of the economy is that the Opposition has demoted the finance portfolio on to the second bench so its members can watch the economy keep on growing. 
Mr SPEAKER 
: That is enough of that. It invites retaliation and I do not want that. I will have to allow a certain amount of it now of course. 
John Key 
: If the state of the economy is so strong will the Minister categorically rule out further increases in company personal or GST tax rates in the medium future or are reports that we see in the paper that the company rates are likely to rise to be believed? 
Hon Dr MICHAEL CULLEN 
: I can give the member a categorical assurance that those taxation rates are not going to rise. He would be better off to join the Government in supporting the growth in productivity and higher savings that he has referred to quite rightly as the real issues for economic growth in New Zealand. 
Rt Hon Winston Peters 
: If the economy is so great why are we as New Zealanders paying the highest interest rates in the developed world why are we getting 30 percent less on average than Australians in terms of our salaries and wages and why do we have one-fifth of the exports per capita of a country such as Ireland? 
Hon Dr MICHAEL CULLEN 
: I will take the last question first. I said to the member before that we have one-fifth of the imports per capita that Ireland has as well. It is the nature of the Irish economy— 
Rt Hon Winston Peters 
: Oh no no. 
Hon Dr MICHAEL CULLEN 
: Oh yes yes. I suspect the member should go and have another look at those numbers. On the point of the gap that has built up over some 25 years the biggest growth in the gap between Australia and New Zealand in per capita incomes was between 1984 and 1993—the period of economic restructuring. On the first question the member should understand as a former Treasurer that interest rates are high when the economy is growing very strongly. That is the nature of monetary policy. 
Hon Richard Prebble 
: Has he received reports from Treasury of the likely impact on the New Zealand economy of oil prices remaining above US$40 a barrel; if so is he prepared to let us know what those reports indicate and perhaps to table them in the House? 
Hon Dr MICHAEL CULLEN 
: I think it is fair to say that I have had only quite general reports around the possibility of that continuing. To a substantial extent for the New Zealand economy that is offset by other commodity prices also being very high and that is obviously feeding back into strong export incomes for New Zealand. But certainly I think it is fair to say that the high level of oil prices is the largest single threat to the growth of the world economy at the present time not simply to the economy of New Zealand.