﻿Mr SPEAKER: Question No 3, Paul Foster-Bell.
PAUL FOSTER-BELL (National) to the Minister of Finance:
What recent reports has he received highlighting
the resilience of the NZ economy?
Hon BILL ENGLISH (Minister of Finance):
Standard and Poor’s recently affirmed NZ’s foreign currency
long-term sovereign credit rating at AA, with a stable outlook.
It pointed out NZ’s monetary and fiscal flexibility,
a resilient economy, public policy stability,
and a sound financial sector.
It acknowledged NZ’s high external debt and the possibility
that foreign investors might become less willing
to fund banks at reasonable interest rates.
However, it believes NZ’s banks will retain ready access
to external markets. NZ’s fiscal framework was rated
as credible and strong, according to all three
major credit rating agencies.
Paul Foster-Bell: What was Standard and Poor’s assessment
of the outlook for the NZ economy?
Hon BILL ENGLISH: Standard and Poor’s says the rating outlook
remains stable, reflecting its expectation that NZ’s fiscal performance
will continue to improve.
Its assessment is that growth will slow to the low 2 percents
in 2015-16, down from an estimated 3% in the year to 30 June 2015.
Residential and other construction activity
is likely to remain a key driver of growth, and lower currency
and falling interest rates should help to support economic growth.
Standard and Poor’s says that NZ benefits from a high-income
and resilient economy, drawing on decades of structural reforms.
Overall, this is a reasonably positive assessment of the economy.
Grant Robertson: When the last three ANZ Truckometer reports
have been titled “Potholes”, “Flat Tyre”, and “Warning: Dip Ahead”,
and the last three ANZ business confidence surveys have been titled
“Below the Belt”, “Flagging”, and—
Mr SPEAKER: Order! Can I have the question.
Grant Robertson: —“Slippery Slopes”, is it not time for him
to stop patronising NZers and start getting real
about the state of the economy?
Hon BILL ENGLISH: I read past the first line of all those reports,
which is a time-consuming activity approximating work—
Hon Steven Joyce: It’s called work.
Hon BILL ENGLISH: —it is work; that is what work is—
and I do not share quite as negative an attitude as ANZ does.
But NZers do not need to be told that things are a bit difficult.
If you are dairy farming this week, it is cold and wet, the price is low,
and you do not need politicians pontificating about how tough it is.
Paul Foster-Bell: What reports has he received showing continuing
moderate wage and employment growth in the NZ economy?
Hon BILL ENGLISH: Although the outlook for the economy has softened,
Treasury’s latest Monthly Economic Indicators report
says that data released in August points to a moderation
in growth over the June quarter,
and growth for the calendar year to 2015 is expected to be
around 2%. That is below the Budget forecast that Treasury made.
Total employment in the year to 30 June, though, was up by 3%,
and total weekly earnings increased by 5.3%.
So up until 30 June jobs have been growing and weekly earnings
have grown, both significantly ahead of inflation.
Grant Robertson: If he did read past the title
of the latest ANZ business confidence survey, did he see
this graph here, which the Prime Minister described
as being positive, or was he reading it upside down?
Hon BILL ENGLISH: Yes, I did see the graph,
and I am surprised and somewhat impressed that the member did—
Hon Steven Joyce: It was further down the page.
Hon BILL ENGLISH: —because it was a bit further down the page;
that is right. But having seen the graph, the Government
has come to the conclusion that it is not the right thing to panic
and go on about a crisis. The right thing to do
is to support our businesses
and our farms to export, invest, and employ more people.
[MEMBERS INTERJECT]
Paul Foster-Bell: How does NZ’s macroeconomic resilience
compare internationally?
Hon BILL ENGLISH: There are a number of indicators that,
together, indicate a resilient economy— those being a broadly balanced
Government Budget, net debt less than 40%, economic growth
greater than 1.5%, and scope to further cut interest rates
should the economic situation worsen. These are not high
economic hurdles, but NZ meets all those criteria.
In fact, there are only four other OECD countries that meet
the criteria of having a broadly balanced Government Budget,
net debt less than 40%, economic growth greater than 1.5%,
and scope to cut interest rates. Those other countries are Australia,
Norway, Iceland, and South Korea. So by those measures this economy
is as well placed as any to handle global turbulence.
Mr SPEAKER: Question no 4.
Subtitles by the Amara.org community