Hayes John: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeHayes John: Questions for Oral Answer — Questions to Ministers[Sitting date: 03 December 2013. Volume:695;Page:15114. Text is incorporated into the Bound Volume.]2.JOHN HAYES (National—Wairarapa) to theMinister of Finance: What reports has he received on business confidence and the outlook for investment and jobs?Hon BILL ENGLISH (Minister of Finance): ANZ last week released its ANZ Business Outlook for November. The report shows that a net 61 percent of businesses are optimistic about the year ahead which is just below a 15-year high. The retail sector is the most optimistic recording the largest lift in confidence in November to a 19-yearhigh. A net 39 percent of agricultural firms expect increased activity which is also a 19-year high suggesting a broad-based improvement in business confidence. A net 47 percent of firms expect increased activity in their own businesses and that is around a 14-year high. Investment intentions and hiring intentions are at the highest in 10 years. ANZ noted that this result suggests positive growth prospects for jobs and the economy because businesses have the confidence to invest more money and employ more people.John Hayes: What other reports has he received on New Zealand’s improving economic outlook and how are interest rates expected to respond to higher growth?Hon BILL ENGLISH: The New Zealand Institute of Economic Research recently released its quarterly predictions. It forecast a continuing recovery with growth of 3 percent next year in line with forecasts from the Reserve Bank and Treasury. It forecast that economic growth is likely to deliver more investment more jobs and more wage increases. Firms are advertising and hiring more and hours worked in the economy have now recovered back to pre-recession levels. The New Zealand Institute of Economic Research expects interest rates to rise in 2014 as higher growth starts to hit capacity constraints in the economy. This has been clearly signalled by the Reserve Bank for some time and businesses are generally anticipating some interest rate increases.John Hayes: How are business confidence and hiring intentions translating into more jobs and higher economic growth?Hon BILL ENGLISH: There is an ongoing improvement in the outlook for jobs. In the year to September employment increased by 53700 new jobs and wages grew faster than expected and were ahead of inflation. Unemployment fell to 6.2 percent in September but it is still too high. New Zealand’s annual economic growth is currently 2.5 percent but as it picks up and companies follow through on their intentions to hire more people we would expect to see the creation of yet more jobs. Overall this picture is reasonably encouraging but there is plenty more work to do.John Hayes: What steps is the Government taking to build on this improved business and consumer confidence to help deliver investment jobs and growth?Hon BILL ENGLISH: The Government is continuing a broad programme of microeconomic reform designed to support businesses to make the decision to invest another dollar and employ another person. That programme has set out over 300 initiatives in the Business Growth Agenda. This is contributing to business confidence but the credit for recovery belongs to people in New Zealand’s workplaces who have been resilient and productive through difficult times. They will be looking forward to the prospects of more workers alongside them in the workplace higher wage increases and some dividends from economic growth.Hon David Parker: Does the same New Zealand Institute of Economic Research report for December from which he just quoted say that “Auckland house prices have surged to unprecedented levels relative to history and international experience …” that the average house price in Auckland now costs 10 times the average household income compared with the historic norm of three to four times and that “There is more borrowing and the risk from a potential fall in house prices is high.”; if it does say that does this imbalance in the economy together with declining rates in homeownership not show that National’s housing policy is in disarray?Hon BILL ENGLISH: No it does not show that. Auckland housing is too expensive. That is why the Government started 3 years ago on a programme that has led to the announcement just a few weeks ago of several thousand opportunities for new development and several thousand more will be announced before Christmas. I look forward to the Opposition supporting the Government’s housing accords its ResourceManagement Act reforms and its attempts to free up the supply of new housing to make housing more affordable for New Zealanders.