Tremain Chris: Questions for Oral Answer — Questions to Ministers 
Tremain Chris: Questions for Oral Answer — Questions to Ministers 
[Volume:652;Page:1136] 
2.  
CHRIS TREMAIN (National—Napier) 
 to the  
Minister for Infrastructure 
: What steps has the Government recently taken to help address current economic challenges and contribute to driving up New Zealand’s long-term economic competitiveness? 
Hon BILL ENGLISH (Minister for Infrastructure) 
: 
 This morning I was pleased to join the Prime Minister and three other Ministers in confirming almost $500 million worth of publicly funded housing transport and education infrastructure projects. This is the first tranche of what will be a number of projects committing funding of up to $5 billion that has been allocated over the next 3 or 4 years. 
Chris Tremain 
: Why were these projects chosen? 
Hon BILL ENGLISH 
: These projects were chosen because they represent quality investments of public money and also because they were among the few projects that were actually ready to go. I was surprised and disappointed to find that most of the announcements made by the previous Government about infrastructure spending related to projects that were unfunded and nowhere near ready to go. 
Hon David Cunliffe 
: Has the Minister seen any reports on the comparative size of the stimulus injected by the so-called rolling maul of announcements of which today’s infrastructure package was one; if so can he confirm that although the Australian Government has introduced stimulus initiatives of about 4.5 percent of GDP and the US of about 5.5 percent of GDP this Government’s stimulus initiative in this package makes up less than 1 percent of GDP? 
Hon BILL ENGLISH 
: As the member will know New Zealand has a significant fiscal stimulus—at least in comparison with the Australian and the US Governments—of around 4 percent of GDP over the next couple of years. The difference is that New Zealand went into recession 12 months earlier than those Governments under the previous Government. The 2008 Budget cut taxes increased spending significantly which means that by now when the recession is deepening the New Zealand Government unfortunately has a lot fewer options than those Governments. 
Chris Tremain 
: How will the projects announced this morning benefit the economy? 
Hon BILL ENGLISH 
: The projects will benefit the economy in two ways. First of all they will provide some short-term stimulus; they will soak up some jobs in a sector where jobs are being lost—that is the construction sector. But secondly and probably just as important we need to get this economy ready for recovery. After 10 years of misdirected and complacent policy these projects represent quality investments that will help lift the productivity of the New Zealand economy. 
Hon David Cunliffe 
: What is the basis of the Government’s estimate of 2000 jobs to be created by this package and retained over 2 years; and why when Treasury has estimated that at least 68000 New Zealanders will lose their jobs in the next 15 months does he think that that is in any way an adequate response? 
Hon BILL ENGLISH 
: These projects will have the effect of helping to retain some jobs and perhaps creating opportunities for those who have already lost their jobs. We have never said that we will be able to roll back the unemployment that is forecast for this year. The member quoted Australia; at the same time as the Australian Government announced its significant stimulus it also announced that unemployment was likely to reach over 7 percent. This along with other measures the Government has taken will help protect people from the sharp edges of recession and send us along the road of lifting our economic capacity so this economy can grow when this recession is over. 
Chris Tremain 
: What reports has the Minister seen on alternative approaches? 
Hon Dr Michael Cullen 
: Roger Douglas’s latest package? 
Hon BILL ENGLISH 
: Well I have seen that report! Quite a lot of public discussion has been reflected in questions today about the difference between stimulus packages in New Zealand and in Australia. The net result of the 2008 Budget tax cuts to come on 1 April and the Government’s allocations to infrastructure spending mean that the stimulus in the New Zealand economy is comparable to that in Australia and the US. It is just that it has not been announced in such a dramatic way mainly because New Zealand started in recession 12 months ahead of those countries and we had an election around the time of the financial crisis. 
Hon David Cunliffe 
: I seek leave to table an article from the  
New Zealand Herald 
 on 19 December 2008 reporting Treasury forecasts of between 68000 and 87000 new unemployed in New Zealand over the next year. 
Mr SPEAKER 
: Is there any objection to that document being tabled? There is none. 
Document by leave laid on the Table of the House. 
Hon David Cunliffe 
: I seek leave to table a transcript of an article by the New Zealand Press Association on  
One News 
 today reporting the Government’s estimate of only 2000 jobs created by this so-called infrastructure package. 
Mr SPEAKER 
: Is there any objection to that document being tabled? There is objection to that. 
Hon Sir Roger Douglas 
: Could the Minister explain to the House why given the experience of the last 10 years when the Labour Government reduced productivity in this country from 3 percent to less than 1 percent as a result of its policies of redistribution the Government is planning to spend so much of the $500 million on infrastructure in what can only be described as low-quality low-growth projects? 
Hon BILL ENGLISH 
: I compliment the member on his analysis of the misdirected policies of the last 10 years but I disagree with his description of these projects.