Bakshi Kanwaljit Singh: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeBakshi Kanwaljit Singh: Oral Questions — Questions to Ministers[Sitting date: 08 December 2015. Volume:710;Page:8597. Text is incorporated into the Bound Volume.]1.KANWALJIT SINGH BAKSHI (National) to the Minister of Finance: What upcoming announcements will the Government deliver on the economic and fiscal outlook?Hon BILL ENGLISH (Minister of Finance): Treasury will update its Economic and Fiscal Update as part of the Half-Year Economic and Fiscal Update next week on 15 December. A lot has changed since May when the forecasts were last done with growth a bit lower than expected in the first half of 2015 lower commodity prices lower interest rates lower inflation and a lower exchange rate. Although there are some risks to the economic outlook recent lifts in business and consumer confidence including in the rural sector along with further growth in the manufacturing and servicing sectors support an outlook for moderate growth of 2 to 2.5 percent over the next few years.Kanwaljit Singh Bakshi: What reports has the Minister received confirming that the Government is continuing to control its spending and how is this reflected in the Government’s financial statements?Hon BILL ENGLISH: Financial reporting covering short periods of time can give fluctuating results but the Government accounts issued today for the first 4 months of the financial year to October show that the operating balance is around $690 million better than expected back in the Budget. The residual cash position is around $900 million better than forecast. Spending has fallen from 35 percent of GDP 4 years ago to around 30 percent this year while at the same time we are getting better public services which goes to show the benefits of being thoughtful when spending has to be restrained.David Seymour: Is the Minister looking forward to receiving the next long-term fiscal outlook from Treasury?Hon BILL ENGLISH: Well I am not sure whether my enthusiasm for it matches Treasury’s because I always think that long-term economic forecasting is somewhat speculative. Treasury almost always paints a picture that we are going to hell in a handbasket and that politicians had better do something about it.Kanwaljit Singh Bakshi: What is the outlook for continuing jobs and wages growth for New Zealand families over the next 5 years?Hon BILL ENGLISH: In the short term: pretty good. New Zealand has among the highest labour-market participation rates and the highest unemployment rates in the OECD—a sign that the labour market is performing pretty well. Outcomes for young people are strong with the rate of 15 to 19-year-olds who are not in employment education or training at the lowest level ever recorded. Wages are up 3.1 percent well ahead of inflation of 0.4 percent.Kanwaljit Singh Bakshi: What are some of the consequences of low inflation including for the spending power of New Zealand households?Hon BILL ENGLISH: For households price stability is generally welcome as it means more spending power from their take-home pay with inflation currently at 0.4 percent and wage increases of up to 2 to 3 percent. However lower inflation means less tax revenue and that does put pressure on the Government’s finances.David Seymour: Will the Minister cancel Treasury’s programme of producing long-term fiscal outlooks in light of his answer that they are merely speculative?Hon BILL ENGLISH: No in fact they are a statutory obligation of Treasury. They do give an indication of where Government would end up if it stayed on its current track and I am pleased to say that long-term forecasts based on this Government’s current track look reasonably manageable. The long-term forecast based on the track that the previous Labour Government was on looked completely out of control.