Hayes Joanne: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeHayes Joanne: Oral Questions — Questions to Ministers[Sitting date: 02 June 2015. Volume:706;Page:4161. Text is incorporated into the Bound Volume.]1.JOANNE HAYES (National)to the Minister of Finance: What reports has he received about the economy’s performance in the lead-up to the Budget last month?Hon BILL ENGLISH (Minister of Finance):I have received a number of reports including Treasury’s Monthly Economic Indicators report for May. It confirms that for the most part the domestic economy started 2015 on a solid footing. Job growth remained strong in the March quarter buoyed by above-average levels of business confidence and activity expectations. Treasury also noted that New Zealand’s robust relative economic performance has strengthened net migration inflows while also enticing more people into the labour force with a record high participation rate.Joanne Hayes: What do more recent trends in business confidence show and how do these trends compare with historical averages?Hon BILL ENGLISH: The ANZ’s latest Business Outlook survey shows that business confidence and firms’ expectations for employment investment and overall activity are easing. However as ANZ noted these indicators are receding from high levels. The lower confidence levels are more in line with the moderate growth outlook underpinning the Budget forecasts. Confidence in the agricultural sector has understandably eased now that lower dairy prices have been confirmed and it looks as if the construction industry is adapting to a flattening out of strong growth.Joanne Hayes: What lessons does he take from recent trends in business confidence in other economic indicators?Hon BILL ENGLISH: I think the main lesson is that when you are a small open economy there are always going to be events happening in the world that are working against economic growth as well as events that are working for economic growth. That is why the idea that the Government should second-guess which industries ought to grow is just nonsense because we could never quite figure out what the right mix is meant to be. Instead this Government is committed to protecting and improving the economy’s resilience so that we can adapt to whatever happens. One of the natural buffers is the floating exchange rate. In July last year the New Zealand dollar reached US88c; today it is around US71c. Even when one sector such as dairy has lower prices other sectors such as tourism international education the wine industry information and communications technology and high-tech manufacturing continue to register strong growth—all of which are creating new jobs.Joanne Hayes: What approach did the Government take to ensure that the benefits of the growing economy were shared by some of the most vulnerable New Zealand families?Hon BILL ENGLISH: The Budget outlines a future of moderate growth in a resilient economy. That gives us the opportunity to make choices that frankly other developed countries do not have. In this Budget we decided to offer some more support to the lowest-income families and also to work to help more of the parents of our most vulnerable children into work. That is why we have increased obligations on those on a benefit to be available for work and why we have provided extra childcare support.