Barry Maggie: Questions for Oral Answer — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeBarry Maggie: Questions for Oral Answer — Questions to Ministers Questions to Members[Sitting date: 27 June 2013. Volume:691;Page:11355. Text is incorporated into the Bound Volume.]1.MAGGIE BARRY (National—North Shore)to theMinister of Finance: How has the Government’s economic plan helped New Zealand families to get ahead since the recession five years ago?Hon STEVEN JOYCE (Acting Minister of Finance):I can confirm that the Government’s economic plan is helping families in many ways. The Government has clearly set out a strong plan for the economy. We have stuck to that plan and we have taken New Zealanders with us as the latest polls confirm. The plan is about responsibly managing the Government’s finances so that New Zealanders’ taxes are spent wisely on the services that they need. It is about building a more competitive and productive economy to create more jobs raise incomes and build opportunities here in New Zealand. It is about delivering better public services for families such as schools hospitals and keeping communities safe and it is about rebuilding Christchurch so that Canterbury families can get their lives back on track.Maggie Barry: What are some of the signs of progress with the Government’s economic programme?Hon STEVEN JOYCE: There are several positive indicators. Firstly the economy grew by 2.4 percent in the 12 months to 31 March. This is better than most developed countries. Secondly there are around 50000 more jobs in the economy than there were 2 years ago. Thirdly the cost of living is increasing by less than 1 percent—its lowest rate in more than 13 years. Fourthly the unemployment levels have been the lowest they have been since the global financial crisis but of course there is still more work to do there. The Government is on track to surplus in 2014-15 so that we can start repaying debt on behalf of New Zealanders. All of these things are very positive for New Zealand families.Maggie Barry: What do the latest official statistics show about growth in wages?Hon STEVEN JOYCE: The quarterly employment survey from Statistics New Zealand shows that average full-time weekly wages including overtime rose 2.6 percent over the last year. This compares with inflation over the last year of only 0.9 percent. Over the last 2 years the average wage including overtime has risen 6.1 percent and that compares with 2.4 percent inflation over those 2 years. Of course every individual has their own particular circumstances but it is quite clear that on average wages have been rising considerably faster than the cost of living which is an important indicator that families are getting ahead.Maggie Barry: How have wages in the manufacturing sector performed in the past year and how does that compare with the situation in 2008?Hon STEVEN JOYCE: The average wage in the manufacturing sector including overtime increased 5.2 percent or in other words twice as fast as wages in the economy as a whole. In fact since the beginning of 2009 the average wage in the manufacturing sector has risen a total of 18 percent making it the second-strongest sector of the economy in terms of wage growth. That strong wage growth is in marked contrast with the situation in 2008 when manufacturing wages fell by 0.3 percent while inflation was running at 3 percent. So again it is clear that manufacturing is in much better shape now than it was during the manufacturing crisis of 2008.Rt Hon Winston Peters: Did he read the economist Bernard Hickey’s article in theHerald on Sunday last weekend where he said “[New Zealand’s] real per capita GDP is still 1.3 percent below 2007’s. Most of the gains in any economic recovery have gone to the top few percent”; given that why should anybody believe a word he said just now?Hon STEVEN JOYCE: I can stand corrected but I am pretty sure that Mr Hickey is not an economist; he is a journalist. Of course although journalists are wonderful people generally I am not sure that I would take their recommendations always on economic matters.Rt Hon Winston Peters: Did he read further where Mr Hickey recalling the similarity with New Zealand said of the US recovery that the incomes of the top 1 percent rose over 11 percent while the real incomes of the bottom 99 percent fell 0.4 percent which meant the top 1 percent captured 121 percent of the economic recovery in that country as he says happened here; given that why would anybody believe a word he is saying in the House today?Hon STEVEN JOYCE: I think the idea that you could just lay out some statistics in regard to the US economy and somehow translate that to the New Zealand economy suggests that that is actually quite a big leap of faith to make. Can I confirm for the member that I read a number of economists but it is fair to say that there are two columnists whose work I do not bother reading too much because the level of accuracy is concerning—one is Mr Hickey and one is Mr Oram.Hon David Parker: Having dismissed the American comparison does he agree with the OECD that in New Zealand “Income inequality is higher than the OECD average.” and “There is a considerable gap between the richest and poorest. The top 20 percent of the population earn five times as much as the bottom 20 percent.”?Hon STEVEN JOYCE: There is undoubtedly income inequality between the top income earners and the lower income earners by definition.Hon David Parker: Is it getting worse?Hon STEVEN JOYCE: You did not ask that question Mr Parker. But my key point is that the answer to that is to do things that encourage investment and growth of jobs in the New Zealand economy. This Government is in many ways doing that across a range of industries and it is interesting to contrast that with the view of the Opposition which is basically to oppose every approach that the Government takes to grow jobs in this economy.Jacinda Ardern: In light of that answer can the Minister confirm for the House that both income and asset inequality are getting worse under National?Hon STEVEN JOYCE: No I cannot.Dr Russel Norman: In light of the Minister’s statement that the Government is taking actions to improve investment in the New Zealand economy has he read the submission by InternetNZ on the Government Communications Security Bureau and Related Legislation Amendment Bill currently before the Intelligence and Security Committee where InternetNZ says that New Zealand’s internet economy is at risk of going backwards as a result of this bill?Hon STEVEN JOYCE: No I have not. What I can tell the member is that the information and communications technology industry in New Zealand is growing partially in response to the Government’s policy around the Ultra-fast Broadband Initiative and the Rural Broadband Initiative and partly in response to the general settings of the economy. In a broader sense the Government is focused on things like resource management law changes to speed up investment the building of an international convention centre in Auckland oil and gas exploration on the North Island’s East Coast investment by international companies reforms to allow aquaculture development speeding up mining exploration on the West Coast and increasing irrigation and agricultural intensification to name just a few that the Government is in favour of and the Opposition is against—and they try to lecture us about jobs.Dr Russel Norman: Does the Acting Minister of Finance stand by the statement of Bill English from Budget 2010 where Mr English said “New Zealand’s largest single vulnerability is now its large and growing net external liabilities.”; if so is he concerned by the projections that were in his Budget from this year which show that New Zealand’s net external liabilities would grow from $150 billion this year to $208 billion by 2017?Hon STEVEN JOYCE: Of course I read his Budgets on a nightly basis to keep up with his wisdom. I think that this weekend I am reading Budget 2013 again because it is a wonderful Budget. But in regard to the member’s concerns with international liabilities of course we share those concerns particularly if they are about investment in the New Zealand economy. But I have good news for the member because the balance of payments has just come out and international liabilities have dropped again under this Government. Our international liabilities are now significantly lower than they were when that member was propping up the previous Labour Government.Dr Russel Norman: Is the Minister concerned that under the projections in his own Budget and under the economic projections that were contained in the Budget of only a month or so ago New Zealand’s current account deficit will increase from $10 billion a year or about 5 percent of GDP to $17 billion a year by 2017 or about 6.5 percent of GDP and that that will mean according to the International Monetary Fund that New Zealand has the second-worst current account deficit amongst developed countries in the whole world?Hon STEVEN JOYCE: Firstly it would probably still be lower than it was under the previous Government. But the member makes a valid point about the importance of encouraging a rebalancing of the New Zealand economy and that is why this Government is focused on the things I outlined earlier which I note he is against like oil and gas exploration international investment reforms to encourage aquaculture development encouraging mining development increasing irrigation building an international convention centre and changing the resource management laws to speed up investment. These are all things—Rt Hon Winston Peters: I raise a point of order Mr Speaker. He was asked a question on the rapidly growing current account deficit—from $10 billion to $17 billion. That requires an explanation not a diatribe of things that are not true.Mr SPEAKER: Order! [Interruption ] No I do not need any assistance from the Minister. The member is to cease interrupting an answer with a point of order that is not valid. The Minister was explaining reasons why he thought over time the current account deficit could come down.