Parker David: Questions for Oral Answer — Questions to Ministers Questions to Members 
Text is incorporated into the Bound Volume 
Parker David: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Sitting date: 17 October 2012. Volume:684;Page:5884. Text is incorporated into the Bound Volume.] 
5. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: When he said yesterday that with a “relatively high” exchange rate our exporters “have been sufficiently resilient to be able to grow export volumes and value” did he mean that all export sectors have been growing and according to Statistics New Zealand in 2008 dollars what is the percentage change in exports of simply and elaborately transformed manufactured goods from the 2008 to 2012 financial years? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 To the first part of the member’s question what I meant was that exporters have been sufficiently resilient to be able to grow export volumes and value and indeed that is what has been happening. To the second part of his question I am advised by Statistics New Zealand that there is no existing series that perfectly covers his request. In fact it does not make a lot of sense to deflate exports by the Consumers Price Index but a close approximation can be made from the export volume index for non-food manufactured goods. This series shows manufacturing exports in constant dollar terms which is what the member appears to be after. The series shows that there has been an increase in manufacturing export volumes of 3.9 percent between the year to June 2008 and the year to June 2012 despite the recession and a global financial crisis. 
Hon David Parker 
: Why is the Minister using volume terms? Is it because outside of primary products in real terms manufacturing is declining? In fact there is a 14 percent decline in simply transformed manufactured exports and a 10 percent decline in elaborately transformed manufactured exports. Is he not aware of that? 
Hon BILL ENGLISH 
: We can have a contest of different statistics if the member likes. The fact is that the Statistics New Zealand series of export volume for non-food manufactured goods shows an increase even in constant dollar terms. Total exports have been rising after a bit of a dip from the global financial crisis. The value of exports has risen 13 percent in the last 2 years. Both volumes and prices have risen over that time. As I have pointed out in the answer to an earlier question the number of people employed in manufacturing did drop in the last 2 years of the previous Government’s time in office but actually since 2009 it has fluctuated between 245000 and 255000 people. So the member can look as hard as he likes but it will be difficult for him to create a sense of crisis for manufacturing. 
Hon David Parker 
: If according to his own Government statistics department there has been a 14 percent decline and a 10 percent decline in value in simply and elaborately transformed manufacturing exports but he still thinks the sector is doing well how much more would exports in these sectors have to decline in value before he thought there was a serious problem? 
Hon BILL ENGLISH 
: There may be categories of manufacturing exports that have declined. That is the nature of the recovery that we are in. Some businesses are doing well; some are doing poorly. Some sectors are doing well; some are doing poorly. The fact is that for manufacturing the measure that means the most in my view is the number of people employed in it and the number of people employed in it declined in the last 2 years of the previous Labour Government. Since 2009 it has fluctuated between 245000 and 255000 people so there is not a crisis in manufacturing over job losses. There is a lot of pressure on exporters who are trying to be profitable despite the global financial problems. 
Hon David Parker 
: Given that the International Monetary Fund’s most recent  
World Economic Outlook 
 said that New Zealand’s current account deficit this year will be second worst after Greece and in 2013 and 2017 is projected by the IMF to be the worst in the developed world how can he sit back and not take seriously the decline in non-primary manufacturing and the related job losses? 
Hon BILL ENGLISH 
: As has been pretty clear we dispute the member’s conclusion. The fact is that the job numbers in manufacturing have been remarkably constant despite the global financial crisis and worldwide recession. That is a tribute to the businesses and their staff who have shown remarkable resilience and attention to productivity and profitability and have maintained hundreds of thousands of jobs through one of the worst economic times we have seen in decades. 
Hon David Cunliffe 
: With New Zealand’s current account deficit forecast by the IMF to be the worst in the developed world next year and with inflation for the year at 0.8 percent below the target range of the Reserve Bank does he now agree that boosting exports should be a higher priority than further reductions in inflation? 
Hon BILL ENGLISH 
: The effective decisions about the interest rates will actually be made by the Governor of the Reserve Bank. The Government and the new governor re-signed a policy targets agreement that is not substantially different from the one that was in place before or in fact the one that was in place under the previous Labour Government. It is up to the governor to make those kinds of decisions about whether he believes interest rates should be raised or lowered. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Actually the question was carefully worded to seek his opinion asking “does he now agree” and it was on a policy matter not on an operational matter to do with inflation control because it addressed the balance— 
Mr SPEAKER 
: Order! I hear the member but I think the member is experienced enough to recognise in the Minister’s answer that the Minister answered all that a Minister of Finance can. The member knows that under the current New Zealand legislation it is not a matter for the Minister of Finance to even express opinions on those matters. Ministers of Finance need to be careful about expressing opinions on those matters. They are the responsibility of the Governor of the Reserve Bank. 
Hon David Cunliffe 
: Given that the policy targets agreement that the Minister has just referred to sets a midpoint target of 2 percent inflation per annum and given that inflation is now at 0.8 percent below the bottom end of the target range may I repeat: does he believe that promoting exports and the use of policy tools by his ministry Treasury and not the Reserve Bank would now take a higher priority in his Government’s policy programme than achieving further reductions of inflation by compressing the economy further into a rut? 
Hon BILL ENGLISH 
: I am not quite sure what the last bit means but the Government has focused strongly since taking office on reinforcing the competitiveness of our export industries. They lost a lot of competitiveness through the first decade of this century. In the light of the global financial crisis and recession around the world it is vital that we continue the programme laid out in a number of documents that have been published and some that will be published on the Business Growth Agenda which is designed to enable our businesses to more easily make the decision to invest to expand to employ more people to make profits and also to pay tax and the Government will stay focused on that.