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PQ 5 Economy—Export Sector Performance

5. Economy—Export Sector Performance and Government Financial Position

[Sitting date: 29 July 2014. Volume:700;Page:4. Text is subject to correction.]

5. Hon DAVID PARKER (Deputy Leader - Labour) to the Minister of Finance : Will the forecasts in the Treasury PREFU include the effects of the recent fall in the overall value of exports, including log and dairy price drops?

Hon BILL ENGLISH (Minister of Finance): That will be a matter for Treasury. As the member knows, the Pre-election Economic and Fiscal Update is a fully independent forecast by Treasury. I am sure it will reflect a range of economic data, like 84,000 new jobs in the year to March, an increase in average weekly wages of 3.2 percent against inflation of 1.5 percent, GDP growth of 3.8 percent in the year to March, the current account deficit down to 2.8 percent, and the lowest net international investment position of 65 percent of GDP.

Hon David Parker : I raise a point of order, Mr Speaker. I think he is finished.

Mr SPEAKER : Order! That is the second time consecutively that the member has taken the opportunity to tell me that. I will judge when an answer is going on too long. It is for me to do so, not for the member.

Hon David Parker : Is the level of exports as a percentage of GDP higher or lower now than when he took office?

Hon BILL ENGLISH : I would have to check those numbers, but, as usual, on “Planet Labour” there was no global recession, so Labour always counts the pre-recession numbers and compares them with today’s. What I can tell the member—

Mr SPEAKER : Order! On this occasion, the question now has been answered. [Interruption] Order! I have concluded the answer.

Hon David Parker : I seek leave to table a table showing that export—

Mr SPEAKER : The source of the document?

Hon David Parker : The department of statistics’ figures.

Mr SPEAKER : No, if it is the department of statistics, those figures are freely available to all members.

Hon David Parker : Given that exports have dropped as a percentage of GDP, does he now accept that National is failing to achieve its promise to raise exports as a percentage of GDP—its promise being to raise them to 40 percent of GDP by 2025—given that they have fallen from 33 percent when he took office to 29 percent now, and that the Treasury forecast shows them falling even further to just 26 percent of GDP?

Hon BILL ENGLISH : No. What I can tell the member is that in the year to June, the value of exported goods increased by 12 percent to a record high of $51.2 billion. Actually, our export sector has done a remarkably good job in the face of the stiff headwinds of a high exchange rate. New Zealanders have been able to buy more with their Kiwi dollar than ever, and exporters have continued to create jobs, make profits, and pay tax, and they should be supported for it, not criticised for it.

Hon David Parker : Why does he think that the narrowing of New Zealand’s exports towards primary products that have now collapsed in value was a good idea?

Hon BILL ENGLISH : I simply disagree with the member, but it would not surprise me if the policy of the Labour-Greens Opposition was that the dairy industry should be shut down and should not sell—

Mr SPEAKER : Order! [Interruption] Order!

Louise Upston : How does the Minister expect the Pre-election Economic and Fiscal Update of 2014 to compare with forecasts in Treasury’s Pre-election Economic and Fiscal Update of 2008, which was delivered under the previous Government?

Hon BILL ENGLISH : The Treasury Pre-election Economic and Fiscal Update under the Labour Government said this: “Households and businesses have come under increasing cost pressures—electricity, interest rates, fuel and food—which are dampening private consumption and firm profitability.” It also said: “We are now expecting weaker economic growth ... slower growth in tax revenue and higher Government expenditure. Combined with increases in the costs of some existing policies, these factors lead to sustained operating balance deficits”. I am pleased that this Pre-election Economic and Fiscal Update will not say any of these things. In fact, it will say the opposite in every respect.

Hon David Parker : Given that exports have peaked and are now dropping, 147,000 people are still unemployed, wages are stagnant, homeownership rates are dropping, and severe child poverty is increasing, why does he refuse to tackle the imbalances in the economy?

Hon BILL ENGLISH : We are tackling the imbalances in the New Zealand economy, including the reference the member has made to inequality. In fact, there has been slight improvement in the measures of income equality in New Zealand.

Sue Moroney : No, there hasn’t.

Hon BILL ENGLISH : I know the Opposition does not like hearing it, but actually it is flat to better, despite the fact that we have had a major recession. We will be campaigning hard for the right to improve the performance of the economy and to improve equality in the economy.

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