1. PESETA SAM LOTU-IIGA (National—Maungakiekie) Link to this
to the Minister of Finance
What reports has he received on unemployment forecasts?
Hon BILL ENGLISH (Minister of Finance) Link to this
Unemployment is clearly rising as the impact of the global downturn is felt in New Zealand. I have seen widely divergent projections of where unemployment might peak, ranging from projections from Business and Economic Research Ltd, which believes that unemployment will rise to double digits, to projections from others who believe that it will barely rise to 5 percent. None of these forecasts is new. Since before Christmas there have been forecasts of a substantial increase in unemployment, and, unfortunately, those forecasts are proving to be correct. Frankly, the focus of the Government is not on the forecast but on taking action that will make some difference to people who may be threatened with losing their jobs.
Peseta Sam Lotu-Iiga Link to this
What measures is the Government taking in the short term to lessen the impact of rising unemployment?
The Government has taken a number of initiatives to take the sharp edges off the downturn. As of 26 March, 1,303 people are participating in the ReStart scheme, which was announced several months ago. This scheme enables people to retain their Working for Families payments and their accommodation supplement for a period of up to 16 weeks after they become unemployed. There have also been other wider-ranging measures, including a $480 million package for small and medium sized businesses, and the round of tax cuts on 1 April were designed to put money in people’s pockets and prop up the economy through the recession.
Peseta Sam Lotu-Iiga Link to this
What measures is the Government taking in the longer term to ensure full employment?
The one thing we need to be able to offer to those who have lost their jobs is the prospect that they will get another job back. The only way new jobs will be created, coming out of this recession, is if businesses are confident enough to invest in those new jobs. The Government has outlined a wide-ranging programme designed to lift our growth rate as we come out of the recession, including investment in infrastructure and a wide range of regulatory changes to areas such as the Resource Management Act and the Overseas Investment Act, as well as focusing on the Government running its own services much more effectively than it has in the past.
Hon David Cunliffe Link to this
Can the Minister confirm that the latest New Zealand Institute of Economic Research survey shows further deterioration, with a net 36 percent of firms intending to lay off staff in the next 3 months, a net 51 percent—the worst result in 30 years—reporting a decline in profitability, and that Treasury has now confirmed estimates of a further 60,000 unemployed by the end of this year, and that that is now worse than Treasury’s previous worst-case scenario?
Yes, I have seen those forecasts about what might happen, and they are all concerning, although I have to say they are not a surprise. Since before Christmas, when most of our trading partners went into coordinated recession, there had been forecasts of rising unemployment. As a community and a country we are now facing the reality of those forecasts becoming facts, and that is significant numbers of people losing their jobs. It is the Government’s intent to help cushion those people from the worst effects of the recession, at the same time as gearing up this economy to come out of that recession and create new jobs.
Peseta Sam Lotu-Iiga Link to this
What previous strategies to address unemployment is the Minister aware of, and how successful were they?
Unemployment is not new in New Zealand. It turns out that we have just passed the 20th anniversary of a previous job summit when the then Minister of Employment, Mr Goff, participated in a special 1-day ministerial conference over employment. It was 20 years ago, but the things he said are still relevant. Mr Goff said: “Any sector in the economy who thinks it can get better salaries without a rise in productivity ought to think again, because the impact of that is to have people in jobs with high wages but a hell of a lot more people out of jobs.” I think Labour’s spokespeople could take notice of that advice.
Hon David Cunliffe Link to this
Speaking of the Job Summit, is the Minister aware of a recent ShapeNZ survey that shows that nearly two-thirds of New Zealanders regard this Government’s Job Summit as either ineffective or unproven, that over 20 percent of New Zealanders believe they will lose their own jobs this year, and that most New Zealanders regard the Government’s economic performance as either neutral or negative; and does he therefore agree with the well-known right-wing tip sheet Trans Tasman that says: “Some within National’s ranks”—that will be Mr Power—“fear that the party could come down with a thud as winter’s grip takes hold and unemployment climbs rapidly.” It goes on to say: “John Key and Bill English don’t appear to be singing from the same sunny song sheet.”?
Mr SPEAKER