3. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
What reports, if any, has he seen about business confidence in New Zealand?
Hon BILL ENGLISH (Minister of Finance) Link to this
Reports this year have shown that business confidence was in freefall until just recently. Business confidence measures appear to be stabilising, although, I must say, at very low levels. Well, in fact, they were falling so fast that they had to stabilise somewhere.
Hon David Cunliffe Link to this
Does the Minister believe that the Prime Minister’s “sunny disposition” is justified when business confidence has been in freefall and is now at its lowest level since 1974, when 65 percent of businesses think the situation will worsen further, and when half are reporting falls in their output and a third have cut staff in the last 3 months, adding to Treasury’s projection of 60,000 more jobless by Christmas; or can he explain to the House what part of those numbers the “tweet” next to him does not understand?
Somehow, the Opposition members seem to be surprised about this situation. For several months forecasts have shown that a coordinated world recession will have an effect on the world economy. I can only confirm what the Prime Minister says, which is that everywhere we go businesses say “Thank God there’s a National Government and we got rid of Labour.”
Chris TremainWhat measures has the Government taken to ensure that the recent stabilisation of business confidence is sustained and upturned?
The Government is putting in place a range of measures that in the shorter term are designed to assist New Zealand businesses through a recession, but, just as important, in the longer term are designed to build their confidence that this economy is one in which they can invest. Unless businesses invest new money, we will not see new jobs to replace those that are lost. In the shorter term, we have implemented a package of measures worth $480 million over 4 years to assist small to medium sized businesses, we brought forward a range of major infrastructure projects, and on 1 April we delivered a tax cut to 1.5 million New Zealanders.
Hon David Cunliffe Link to this
Which of these measures will do more to turn round the historic lows in business confidence revealed by the New Zealand Institute of Economic Research yesterday: a cycleway that the Minister will not fully fund this year, next year, or the year after; a 9-day working fortnight policy that excludes 99 percent of Kiwi businesses; or tax cuts that shift demand from low and medium income earners who need it and would spend it to upper income earners who do not and will not?
What will lift business confidence over the next 12 or 18 months will be the continued programme of an active Government that is making decisions quickly about things that make a real difference to the business environment. That is how we will get new jobs to replace the jobs that are being lost now.
Hon David Cunliffe Link to this
Is the Minister aware that the active Rudd Government in Australia is once again stepping up by injecting massive stimulus into that economy through a combination of income boosts for needy families and bold plans for infrastructure, and why does he not admit that his Government’s double act of irrelevant PR gimmicks by the Prime Minister and dour fiscal conservatism from him is likely only to further undermine confidence and drive New Zealand deeper into recession?
The Opposition finance spokesperson could do a bit better than that, I would have thought. When the New Zealand Government announces a bold plan for broadband, he criticises every aspect of it; when the Australians do it, he calls it a bold plan for infrastructure.
Hon Sir Roger Douglas Link to this
What policy actions does the Minister intend to take to ensure that foreign bank lenders are more likely to roll over debt owed to them by New Zealand companies when it falls due for repayment?
This issue will be less of a challenge in New Zealand than, perhaps, in other countries, but there is no doubt that global banks are deglobalising. Where Governments increasingly own them, they are putting pressure on those banks to lend in their home markets rather than here. The most important thing we can do is to continue to underpin the stability of financial markets and the relatively favourable credit conditions that are enjoyed in the New Zealand banking system. But this issue is one of any number of risks to the availability of credit in New Zealand, as it is in other countries.