Parker David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeParker David: Questions for Oral Answer — Questions to Ministers[Sitting date: 06 May 2014. Volume:698;Page:17487. Text is incorporated into the Bound Volume.]10.Hon DAVID PARKER (Deputy Leader—Labour) to theMinister of Finance: Does he stand by his statement that “we’ve done a lot of work to rebalance our economy towards exports savings and investment in a bid to lift sustainable economic growth”; if so what is the current level of household savings in New Zealand?Hon BILL ENGLISH (Minister of Finance): Yes I do stand by that statement and I will tell the member why. We are seeing a range of positive indicators in the economy: 66000 more jobs in the last year; wages on average up 2.8 percent which is well ahead of inflation; economic growth of 3.1 percent which is up 0.9 percent on the December 2013 quarter; an increase in manufacturing a sector that added 14300 jobs in 2013; and investment in plant and machinery which Statistics New Zealand reports is now at its highest level ever. Alongside that exports are reaching $50 billion which is a figure quoted by my colleague Minister Joyce. On the household savings rate the most recent data shows it at minus 0.7 percent of household income. That compares with an average of minus 4.5 percent in the 5 years from 2003 to 2008 when all that member’s theories were tried out.Hon David Parker: Does he agree with the Prime Minister that “a lower exchange rate will enable us to promote economic growth faster.” And that “the most likely way to achieve a more realistic exchange rate is one where we see an example of good monetary policy where interest rates are lower and that is why taking pressure off that is important.”?Hon BILL ENGLISH: Yes I do agree with the Prime Minister. We are on track to have significantly lower interest rates through this cycle than the last—Iain Lees-Galloway: No the interest rates are going up.Hon BILL ENGLISH: Well the member talks as if interest rates today are a huge problem. In fact they are just above the lowest interest rates we have had since Keith Holyoake started out being Prime Minister back in the 1960s. That is how low they have been. We will certainly avoid reaching almost 11 percent first mortgage rates which is the level that they reached under the previous Labour Government which tried out all the theories that this member is now proposing to try out again. Doing the same thing over and over again with the same results particularly when they are negative is a form of insanity.Hon David Parker: Speaking of Mr Muldoon I seek leave—Mr SPEAKER: Order! Is this a point of order?Hon David Parker: It is. I seek leave to table a press release from the time showing that actually Mr Muldoon killed universal savings—Mr SPEAKER: Order! The member is now trifling with the point of order process. I will ask him to deliver his supplementary question.Hon David Parker: Does he accept that Treasury’s forecasts for the current account deficit to head north of 5 percent within 2 years on his current economic settings show that he has not successfully rebalanced the economy towards exports savings and investment?Hon BILL ENGLISH: No and I will tell the member why. For each of the last 3 years Treasury has forecast that the current account deficit will go back to about 6 percent. Today it is just over 3 percent so Treasury has been consistently wrong in its forecasts. I know the member would prefer it to be right but it has been wrong. It forecast the current account deficit to be 6 percent today—in fact it is closer to 3 percent. Some economists say it will go under 3 percent to 2.5 percent. That will be very disappointing to the Labour Party particularly when it left it with an average of minus 8 percent for the last 3 years it was in Government. Labour tried all the member’s theories as recently as 2005-08. They did not work then and we will certainly avoid trying to implement them now.Tim Macindoe: What reports has the Minister received on proposals that would do very little if anything to rebalance the economy towards exports savings and investment?Mr SPEAKER: In so far as there is ministerial responsibility I call the Hon Bill English.Hon BILL ENGLISH: I have received reports about a proposal that concerns me as the Minister of Finance because it would force hard-working Kiwis who are struggling to pay their mortgage to give up 15 percent of their take-home pay in order to put it into KiwiSaver. I can report though that the proposal is confusing. Asked about how much the compulsory KiwiSaver rate would have to rise for the proposal to have any impact on interest rates one senior source told Radio New Zealand National this morning: “I’m not in a position to give you a particular number on that point.” Asked again he then said: “I don’t have that number on me.” as if he had left it back in the locker somewhere. He then added unusually and exceptionally: “I’m not going to make up a number.” But that was David Cunliffe.Mr SPEAKER: Order! That answer is quite long enough.Hon David Parker: Does he agree with the 2007 version of Bill English who said that rural communities like Southland are “paying the price” of a high exchange rate; the 2012 version of Bill English who said that the exchange rate is a “headwind for exporters”; the 2013 version of Bill English who said that “The exchange rate is still too high.”; or the current version of Bill English who now says that a lower exchange rate would be toxic?Hon BILL ENGLISH: All of them because I am pleased to tell the member I have improved with age.