1. AARON GILMORE (National) Link to this
to the Minister of Finance
What recent reports has he received on the economy?
Hon BILL ENGLISH (Minister of Finance) Link to this
I have seen today’s household labour force survey, which puts our unemployment rate at 6 percent. This represents a 1 percent rise from 30 March and is the largest quarterly rise since 1988. It is slightly higher than predicted, but not a surprise, given that we are in the midst of the largest global recession since the 1930s. One of the reasons for the higher than expected figure is the larger than usual number of people who joined the workforce in the June quarter. These figures should make it clear there can be no complacency about what will be required to turn this economy round to provide new jobs for all those people who have lost jobs.
The best thing for people who have lost a job is the hope they can get another one. As it happens, forward-looking indicators such as business and consumer confidence have improved over the last 6 months. The basic picture is that the economy shows signs of stabilising, and we are hoping that it will start to grow again towards the end of this year and into the beginning of next year, after a recession that has lasted about 18 months.
Hon David Cunliffe Link to this
Can the Minister tell the House which other countries have recently recorded the highest quarterly increase in unemployment in 21 years, and can he now confirm that New Zealand’s unemployment rate has skyrocketed to exceed that of Australia’s?
I cannot actually tell the member which other countries. It is unlikely there will be many, because New Zealand is the only country that was already in a recession, caused by the economic mismanagement of his Government, followed by a global recession. That is why we are doing everything we can to turn the economy round, after a decade of mismanagement, so that people who lost their jobs can get another job.
The most direct impact is that the Government is, over the next 4 years, borrowing $40 billion to pump into the economy in the form of investment in infrastructure, preserving existing entitlements, and maintaining public services through the bottom of a recession. That $40 billion will also finance packages such as the $152 million youth unemployment package, which will provide 17,000 jobs and training opportunities for young people over the next 18 months.
Hon David Cunliffe Link to this
Will the Minister now concede that his Government, to use his own words, “was too complacent;” “did not do enough, early enough”; and “did not take the real sharp edges off unemployment”; if not, when can New Zealanders expect to see this Government’s economic plan return New Zealand to growth?
No, I do not accept that. The 2009 Budget, as I have just said, laid out a track whereby the Government is borrowing $40 billion over the next few years to pump into the economy—
Well, it is one of the more significant stimulus packages in the developed world. Alongside that, the Government has initiated a rolling maul of programmes that are supporting people who were made redundant, and providing jobs for people through the insulation scheme and, more recently, the Job Ops scheme.
We have been pleased to see that the quarterly employment survey released this week backs up the anecdotal evidence that many employers are working as hard as they can to keep people on. For instance, a survey released this week suggests that many employers are choosing to reduce employees’ work hours and keep wage rises static, rather than lay off staff, and the Government has supported this flexible approach through its innovative 9-day fortnight scheme. It is worth noting that even at the new level of unemployment announced today, unemployment in New Zealand is lower than in the US, Europe, and the UK.